Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - AMERICAN CAMPUS COMMUNITIES INC | ex991-q22017earningsrelease.htm |
| 8-K - 8-K - AMERICAN CAMPUS COMMUNITIES INC | form8-kq22017earningsrelea.htm |
Supplemental
Analyst Package
2Q 2017
July 24, 2017
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
2017 / 2018 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
2017 Outlook - Summary 16
2017 Outlook - Detail 17
Detail of Property Groupings 18
Definitions 19
Investor Information 21
Financial Highlights
($ in thousands, except share and per share data)
1
Operating Data Three Months Ended June 30, Six Months Ended June 30,
2017 2016 $ Change % Change 2017 2016 $ Change % Change
Total revenues $ 179,008 $ 185,983 $ (6,975) (3.8)% $ 371,946 $ 385,978 $ (14,032) (3.6)%
Operating income 12,610 39,106 (26,496) (67.8)% 61,829 92,141 (30,312) (32.9)%
Net (loss) income attributable to ACC1 (2,762) 18,438 (21,200) (115.0)% 31,288 64,025 (32,737) (51.1)%
Net (loss) income per share - basic and diluted (0.02) 0.14 0.23 0.50
Funds From Operations ("FFO")2 68,507 71,650 (3,143) (4.4)% 154,474 153,496 978 0.6%
FFO per share - diluted2 0.50 0.54 (0.04) (7.4)% 1.14 1.19 (0.05) (4.2)%
Funds From Operations - Modified ("FFOM")2 72,503 72,195 308 0.4% 155,683 150,363 5,320 3.5%
FFOM per share - diluted2 0.53 0.54 (0.01) (1.9)% 1.15 1.16 (0.01) (0.9)%
Market Capitalization and Unsecured Notes Covenants3 June 30, 2017 December 31, 2016
Debt to total market capitalization 26.5% 24.1%
Net debt to EBITDA4 6.0x 5.4x
Unencumbered asset value to total asset value 82.2% 81.0%
Total debt to total asset value 32.6% 31.3%
Secured debt to total asset value 9.2% 9.8%
Unencumbered asset value to unsecured debt 350.2% 378.2%
Interest coverage4 4.3x 4.5x
1. Excluding net loss from dispositions of real estate and impairment charges, net income attributable to ACC for the three and six months ended June 30, 2017 would have been $13.2 million and
$47.2 million, respectively. Excluding net gains from dispositions of real estate, net income attributable to ACC for the six months ended June 30, 2016 would have been $46.6 million.
2. Refer to page 4 for a reconciliation to net income, the most directly comparable GAAP measure.
3. Refer to the definitions outlined on pages 19 and 20 for detailed definitions of terms appearing on this page.
4. Refer to calculations on page 14, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
Consolidated Balance Sheets
($ in thousands)
2
June 30, 2017 December 31, 2016
(unaudited)
Assets
Investments in real estate:
Wholly-owned properties, net $ 5,805,403 $ 5,427,014
Wholly-owned properties held for sale — 25,350
On-campus participating properties, net 82,940 85,797
Investments in real estate, net 5,888,343 5,538,161
Cash and cash equivalents 25,476 22,140
Restricted cash 28,319 24,817
Student contracts receivable, net 7,447 8,428
Other assets1 275,388 272,367
Total assets $ 6,224,973 $ 5,865,913
Liabilities and equity
Liabilities:
Secured mortgage, construction and bond debt $ 680,556 $ 688,195
Unsecured notes 1,189,775 1,188,737
Unsecured term loans 347,417 149,065
Unsecured revolving credit facility 142,286 99,300
Accounts payable and accrued expenses 62,547 76,614
Other liabilities2 179,342 158,437
Total liabilities 2,601,923 2,360,348
Redeemable noncontrolling interests 55,344 55,078
Equity:
American Campus Communities, Inc. and
Subsidiaries stockholders' equity:
Common stock 1,363 1,322
Additional paid in capital 4,312,413 4,118,842
Common stock held in rabbi trust (1,688) (975)
Accumulated earnings and dividends (754,660) (670,137)
Accumulated other comprehensive loss (3,428) (4,067)
Total American Campus Communities, Inc. and
3,554,000 3,444,985Subsidiaries stockholders' equity
Noncontrolling interests - partially owned properties 13,706 5,502
Total equity 3,567,706 3,450,487
Total liabilities and equity $ 6,224,973 $ 5,865,913
1. As of June 30, 2017, other assets include approximately $7.7 million related to net deferred financing costs on our revolving credit facility and the net value of in-place leases.
2. As of June 30, 2017, other liabilities include approximately $42.6 million in deferred revenue and fee income.
Consolidated Statements of Comprehensive Income
(Unaudited, $ in thousands, except share and per share data)
3
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 $ Change 2017 2016 $ Change
Revenues
Wholly-owned properties $ 169,156 $ 174,682 $ (5,526) $ 347,987 $ 360,384 $ (12,397)
On-campus participating properties 6,171 6,214 (43) 16,329 16,260 69
Third-party development properties 675 2,121 (1,446) 1,131 3,156 (2,025)
Third-party management services 2,288 2,253 35 4,902 4,663 239
Resident services 718 713 5 1,597 1,515 82
Total revenues 179,008 185,983 (6,975) 371,946 385,978 (14,032)
Operating expenses
Wholly-owned properties 75,172 77,722 (2,550) 150,129 156,573 (6,444)
On-campus participating properties 3,892 3,299 593 7,157 6,341 816
Third-party development and management services 3,827 3,560 267 7,910 7,298 612
General and administrative1 9,782 6,126 3,656 16,516 11,435 5,081
Depreciation and amortization 55,943 53,703 2,240 108,266 107,419 847
Ground/facility leases 2,465 2,467 (2) 4,822 4,771 51
Provision for real estate impairment2 15,317 — 15,317 15,317 — 15,317
Total operating expenses 166,398 146,877 19,521 310,117 293,837 16,280
Operating income 12,610 39,106 (26,496) 61,829 92,141 (30,312)
Nonoperating income and (expenses)
Interest income 1,232 1,475 (243) 2,464 2,754 (290)
Interest expense (14,573) (20,119) 5,546 (29,290) (42,746) 13,456
Amortization of deferred financing costs (1,023) (1,352) 329 (2,051) (3,894) 1,843
(Loss) gain from disposition of real estate (632) — (632) (632) 17,409 (18,041)
Total nonoperating expense (14,996) (19,996) 5,000 (29,509) (26,477) (3,032)
(Loss) income before income taxes (2,386) 19,110 (21,496) 32,320 65,664 (33,344)
Income tax provision (267) (345) 78 (524) (690) 166
Net (loss) income (2,653) 18,765 (21,418) 31,796 64,974 (33,178)
Net income attributable to noncontrolling interests (109) (327) 218 (508) (949) 441
Net (loss) income attributable to ACC, Inc. and
$ (2,762) $ 18,438 $ (21,200) $ 31,288 $ 64,025 $ (32,737)Subsidiaries common stockholders
Other comprehensive income (loss)
Change in fair value of interest rate swaps and other 155 (23) 178 639 (1,433) 2,072
Comprehensive (loss) income $ (2,607) $ 18,415 $ (21,022) $ 31,927 $ 62,592 $ (30,665)
Net (loss) income per share attributable to ACC, Inc.
and Subsidiaries common stockholders
Basic and diluted $ (0.02) $ 0.14 $ 0.23 $ 0.50
Weighted-average common shares outstanding
Basic 134,614,418 130,456,923 133,837,748 126,951,454
Diluted 134,614,418 131,240,667 134,745,192 127,753,492
1. The three and six months ended June 30, 2017 include $3.4 million and $4.5 million, respectively, of contractual executive separation and retirement charges incurred with regard to the retirement of the company's Chief
Financial Officer.
2. Represents an impairment charge recorded for one wholly-owned property that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan due to mature in August 2017.
Consolidated Statements of Funds from Operations
(Unaudited, $ in thousands, except share and per share data)
4
1. Represents an impairment charge recorded for a wholly-owned property that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan due to mature
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 page 3).
3. 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 Chief Financial Officer.
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 $ Change 2017 2016 $ Change
Net (loss) income attributable to ACC, Inc. and
$ (2,762) $ 18,438 $ (21,200) $ 31,288 $ 64,025 $ (32,737)Subsidiaries common stockholders
Noncontrolling interests 109 327 (218) 508 949 (441)
Loss (gain) from disposition of real estate 632 — 632 632 (17,409) 18,041
Elimination of provision for real estate impairment1 15,317 — 15,317 15,317 — 15,317
Real estate related depreciation and amortization 55,211 52,885 2,326 106,729 105,931 798
Funds from operations ("FFO") attributable to
68,507 71,650 (3,143) 154,474 153,496 978common stockholders and OP unitholders
Elimination of operations of on-campus participating properties
Net loss (income) from on-campus participating properties 1,395 1,097 298 (1,852) (2,067) 215
Amortization of investment in on-campus participating properties (1,869) (1,831) (38) (3,729) (3,654) (75)
68,033 70,916 (2,883) 148,893 147,775 1,118
Modifications to reflect operational performance of on-campus
participating properties
Our share of net cashflow2 778 1,015 (237) 1,535 1,865 (330)
Management fees 272 264 8 740 723 17
Contribution from on-campus participating properties 1,050 1,279 (229) 2,275 2,588 (313)
Contractual executive separation and retirement charges3 3,420 — 3,420 4,515 — 4,515
Funds from operations-modified ("FFOM") attributable to
$ 72,503 $ 72,195 $ 308 $ 155,683 $ 150,363 $ 5,320common stockholders and OP unitholders
FFO per share - diluted $ 0.50 $ 0.54 $ 1.14 $ 1.19
FFOM per share - diluted $ 0.53 $ 0.54 $ 1.15 $ 1.16
Weighted-average common shares outstanding - diluted 136,602,368 132,638,808 135,851,836 129,159,380
Wholly-Owned Properties Results of Operations
($ in thousands)
5
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 $ Change % Change 2017 2016 $ Change % Change
Wholly-owned properties revenues
Same store properties $ 158,548 $ 154,379 $ 4,169 2.7% $ 327,401 $ 317,691 $ 9,710 3.1%
New properties 10,172 17 10,155 19,137 104 19,033
Sold and held for sale properties1 1,154 20,999 (19,845) 3,046 44,104 (41,058)
Total revenues2 $ 169,874 $ 175,395 $ (5,521) (3.1%) $ 349,584 $ 361,899 $ (12,315) (3.4%)
Wholly-owned properties operating expenses
Same store properties3 $ 69,973 $ 67,747 $ 2,226 3.3% $ 140,091 $ 135,598 $ 4,493 3.3%
New properties 4,387 85 4,302 7,920 158 7,762
Sold and held for sale properties1 4 812 9,890 (9,078) 2,118 20,817 (18,699)
Total operating expenses $ 75,172 $ 77,722 $ (2,550) (3.3%) $ 150,129 $ 156,573 $ (6,444) (4.1%)
Wholly-owned properties net operating income
Same store properties5 $ 88,575 $ 86,632 $ 1,943 2.2% $ 187,310 $ 182,093 $ 5,217 2.9%
New properties 5,785 (68) 5,853 11,217 (54) 11,271
Sold and held for sale properties1 342 11,109 (10,767) 928 23,287 (22,359)
Total net operating income $ 94,702 $ 97,673 $ (2,971) (3.0%) $ 199,455 $ 205,326 $ (5,871) (2.9%)
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 June 30, 2017. Refer to page 18 for detail of our same store groupings.
1. Includes properties sold in 2016 and 2017, and one property that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan due to mature in August
2017.
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.
4. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
5. The three and six months ended June 30, 2017 include a reduction of $90,000 and $132,000, respectively, related to 41 beds damaged by a fire occurring at one of our same store properties in March
2017. The damaged beds are being rebuilt and are anticipated to be available for occupancy in Fall 2017 through Spring 2018. In future quarters, we anticipate a reduction to same store net operating
income of approximately $30,000 per month until such time as the damaged beds are rebuilt and available for occupancy. These losses are covered by the company’s business interruption insurance
policy, although proceeds from this policy are not anticipated to be received and recorded until 2018.
Same Store Wholly-Owned Properties Operating Expenses
($ in thousands, except per bed amounts)
6
Three Months Ended June 30,
2017 2016
Total Per Bed
% Change
From Prior
Year
% of Total
Operating
Expenses Total Per Bed
% of Total
Operating
Expenses
Property taxes $ 16,515 $ 224 2.4% 24% $ 16,121 $ 218 24%
Utilities1 15,417 209 4.6% 22% 14,746 200 22%
General & administrative and other2 15,615 211 1.8% 22% 15,340 208 23%
Payroll3 13,627 184 2.9% 19% 13,249 179 19%
Repairs and maintenance4 4,655 63 4.3% 7% 4,461 60 7%
Marketing5 2,544 34 13.2% 4% 2,247 30 3%
Insurance 1,600 22 1.1% 2% 1,583 22 2%
Total same store wholly-owned operating expenses $ 69,973 $ 947 3.3% 100% $ 67,747 $ 917 100%
Same store wholly-owned beds 73,871
Six Months Ended June 30,
2017 2016
Total Per Bed
% Change
From Prior
Year
% of Total
Operating
Expenses Total Per Bed
% of Total
Operating
Expenses
Property taxes $ 32,872 $ 445 3.4% 23% $ 31,786 $ 430 23%
Utilities1 31,298 424 3.8% 22% 30,150 408 22%
General & administrative and other2 30,817 417 1.5% 22% 30,355 411 22%
Payroll3 27,348 370 2.9% 20% 26,566 360 20%
Repairs and maintenance4 9,175 124 4.3% 7% 8,798 119 7%
Marketing5 5,384 73 13.0% 4% 4,765 65 4%
Insurance 3,197 43 0.6% 2% 3,178 43 2%
Total same store wholly-owned operating expenses $ 140,091 $ 1,896 3.3% 100% $ 135,598 $ 1,836 100%
Same store wholly-owned beds 73,871
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 June 30, 2017. 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. Includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff.
4. 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.
5. Includes costs related to property marketing campaigns associated with our ongoing leasing efforts.
Seasonality of Operations
($ in thousands, except per bed amounts)
7
Three Months Ended
Total/Weighted Average-
June 30, 2016 September 30, 2016 December 31, 2016 March 31, 2017 June 30, 2017 Last 12 Months
2017 same store properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ 690 $ 701 $ 728 $ 727 $ 710 $ 717
Other income per occupied bed per month1 66 85 57 58 69 67
Total revenue per occupied bed $ 756 $ 786 $ 785 $ 785 $ 779 $ 784
Average number of owned beds 73,871 73,871 73,871 73,857 2 73,773 2 73,843
Average physical occupancy for the quarter 92.1% 92.2% 97.6% 97.1% 92.0% 94.7%
Total revenue $ 154,379 $ 160,636 $ 169,743 $ 168,853 $ 158,548 $ 657,780
Property operating expenses 67,747 85,126 70,918 70,118 69,973 296,135
Net operating income $ 86,632 $ 75,510 $ 98,825 $ 98,735 $ 88,575 $ 361,645
Operating margin 56.1% 47.0% 58.2% 58.5% 55.9% 55.0%
2017 new properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ — $ 798 $ 787 $ 778 $ 787 $ 786
Other income per occupied bed per month1 — 40 43 42 59 47
Total revenue per occupied bed $ — $ 838 $ 830 $ 820 $ 846 $ 833
Average number of owned beds — 1,910 3,868 3,900 4,559 3,559
Average physical occupancy for the quarter — 87.2% 93.2% 93.4% 87.9% 90.8%
Total revenue $ 17 3 $ 4,187 $ 8,980 $ 8,965 $ 10,172 $ 32,304
Property operating expenses 85 3 2,242 3,252 3,533 4,387 13,414
Net operating income $ (68) 3 $ 1,945 $ 5,728 $ 5,432 $ 5,785 $ 18,890
Operating margin N/A 46.5% 63.8% 60.6% 56.9% 58.5%
ALL PROPERTIES
Revenue per occupied bed
Rental revenue per occupied bed per month $ 690 $ 703 $ 731 $ 730 $ 714 $ 720
Other income per occupied bed per month1 66 84 57 57 69 66
Total revenue per occupied bed $ 756 $ 787 $ 788 $ 787 $ 783 $ 786
Average number of owned beds 73,871 75,781 77,739 77,757 78,332 77,402
Average physical occupancy for the quarter 92.1% 92.1% 97.3% 96.9% 91.7% 94.5%
Total revenue $ 154,396 $ 164,823 $ 178,723 $ 177,818 $ 168,720 $ 690,084
Property operating expenses 67,832 87,368 74,170 73,651 74,360 309,549
Net operating income $ 86,564 $ 77,455 $ 104,553 $ 104,167 $ 94,360 $ 380,535
Operating margin 56.1% 47.0% 58.5% 58.6% 55.9% 55.1%
Sold and held for sale properties4
Total revenue $ 20,999 $ 21,681 $ 11,472 $ 1,892 $ 1,154 $ 36,199
Property operating expenses5 9,890 13,234 5,951 1,306 812 21,303
Net operating income $ 11,109 $ 8,447 $ 5,521 $ 586 $ 342 $ 14,896
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 June 30, 2017. 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. The decrease in the average number of owned beds from the prior quarter is due to beds that are currently being rebuilt or renovated, and will be available for occupancy in Fall 2017 through Spring 2018. These beds have been
removed to appropriately reflect revenue per occupied bed as they did not contribute revenue for the related period.
3. Represents nonrefundable application fees and administrative expenses incurred in relation to properties under development.
4. Includes properties sold in 2016 and 2017, and one property that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan due to mature in August 2017.
5. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
2017 / 2018 Leasing Status
8
Current Year Prior Year
Applications + Rentable % of Rentable % of Rentable Design Final Fall 2016
Applications + Leases Leases1 Beds2 Beds Beds Beds Occupancy3
2018 Same Store Wholly-owned Properties
Final Fall 2016 occupancy of 98% or greater 53,865 53,040 101.6% 104.3% 53,154 99.8%
Final Fall 2016 occupancy between 95% and 98% 8,729 9,056 96.4% 99.6% 9,086 96.9%
Final Fall 2016 occupancy less than 95% 14,423 15,429 93.5% 85.1% 15,531 88.7%
Total 2018 Same Store Wholly-owned Properties 77,017 77,525 99.3% 100.0%4 77,771 97.2%
New Wholly-owned Properties5 6,865 7,980 86.0% n/a 8,052 n/a
Total - Wholly-owned Properties 83,882 85,505 98.1% n/a 85,823 n/a
Current Year Prior Year Initial Current
Rentable % of Rentable % of Rentable Design Final Fall 2016 Projected Rate Projected Rate
Leases Leases1 Beds2 Beds Beds Beds Occupancy3 Increase Increase6
2018 Same Store Wholly-owned Properties
Final Fall 2016 occupancy of 98% or greater 51,083 53,040 96.3% 98.1% 53,154 99.8%
Final Fall 2016 occupancy between 95% and 98% 8,294 9,056 91.6% 93.8% 9,086 96.9%
Final Fall 2016 occupancy less than 95% 13,537 15,429 87.7% 78.9% 15,531 88.7%
Total 2018 Same Store Wholly-owned Properties 72,914 77,525 94.1% 93.8%4 77,771 97.2% 2.9% 2.9%
New Wholly-owned Properties5 6,232 7,980 78.1% n/a 8,052 n/a n/a n/a
Total - Wholly-owned Properties 79,146 85,505 92.6% n/a 85,823 n/a 2.9% 2.9%
Note: The same store grouping presented above for purposes of disclosing the pre-leasing status for the upcoming 2017/2018 academic year represents properties that will be classified as same store
properties in 2018. Refer to page 18 for detail of our same store groupings.
1. As of July 21, 2017 for current year and July 21, 2016 for prior year.
2. Rentable beds exclude beds needed for on-site staff.
3. As of September 30, 2016.
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. Includes 2017 development deliveries and one property acquired in the second quarter of 2017. Excludes TWELVE at U District, a multi-family property that was acquired in the second quarter of 2017,
which the company plans to convert to by-the-bed leasing over the next two leasing cycles. Refer to page 9 for details on 2017 acquisitions.
6. Projected rate increase reflects projected rental rates anticipated to be achieved through the end of the company's leasing cycle, up to targeted occupancy.
Investment Update
($ in thousands)
9
ACQUISITIONS
Assumed
Project Location Primary University Served Beds Closing Date Purchase Price Mortgage Debt
The Arlie Arlington, TX University of Texas at Arlington 598 April 5, 2017 $ —
TWELVE at U District Seattle, WA University of Washington 384 June 9, 2017 —
982 $ 158,500 $ —
DISPOSITIONS
Outstanding
Project Location Primary University Served Beds Closing Date Sales Price Mortgage Debt
The Province - Dayton Dayton, OH Wright State University 657 April 25, 2017 $ 24,988 $ —
Owned Development Update
($ in thousands)
10
OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION
As of June 30, 2017
Project Estimated Land and Total Costs Scheduled
Project Location Primary University Served Type Beds Project Cost1 CIP2 Other3 Incurred Completion
Tooker House Tempe, AZ Arizona State University ACE 1,594 $ 107,800 $ 91,666 $ 1,248 $ 92,914 August 2017
Sky View Flagstaff, AZ Northern Arizona University ACE 626 56,600 51,902 617 52,519 August 2017
University Square Prairie View, TX Prairie View A&M University ACE 466 26,800 23,920 291 24,211 August 2017
U Centre on Turner Columbia, MO University of Missouri Off-campus 718 69,100 49,908 14,686 64,594 August 2017
U Pointe on Speight Waco, TX Baylor University Off-campus 700 49,800 40,417 5,256 45,673 August 2017
21Hundred @ Overton Park Lubbock, TX Texas Tech University Off-campus 1,204 81,600 58,267 17,735 76,002 August 2017
Suites at 3rd Champaign, IL University of Illinois Off-campus 251 25,000 20,780 1,000 21,780 August 2017
U Club Binghamton Phase II Binghamton, NY SUNY Binghamton University Off-campus 562 55,800 39,960 12,631 52,591 August 2017
Callaway House Apartments Norman, OK University of Oklahoma Off-campus 915 89,100 67,443 13,495 80,938 August 2017
U Centre on College Clemson, SC Clemson University Off-campus 418 41,500 39,819 344 40,163 August 2017
SUBTOTAL - 2017 DELIVERIES 7,454 $ 603,100 $ 484,082 $ 67,303 $ 551,385
Virginia Commonwealth Univ. Richmond, VA Virginia Commonwealth Univ. ACE 1,524 $ 95,700 $ 40,082 $ — $ 40,082 August 2018
Schwitzer Hall Indianapolis, IN Butler University ACE 648 38,900 8,882 — 8,882 August 2018
Greek Leadership Village Tempe, AZ Arizona State University ACE 957 69,600 14,181 — 14,181 August 2018
Bancroft Residence Hall Berkeley, CA University of California, Berkeley ACE 781 98,700 28,099 — 28,099 August 2018
NAU Honors College Flagstaff, AZ Northern Arizona University ACE 636 43,400 7,497 — 7,497 August 2018
U Club Townhomes Oxford, MS University of Mississippi Off-campus 528 44,300 4,891 5,115 10,006 August 2018
SUBTOTAL - 2018 DELIVERIES 5,074 $ 390,600 $ 103,632 $ 5,115 $ 108,747
Columbus Avenue Student Apts. Boston, MA Northeastern University ACE 825 $ 153,400 $ 21,558 $ — $ 21,558 August 2019
191 College Auburn, AL Auburn University Off-campus 495 59,300 2,667 5,435 8,102 July 2019
SUBTOTAL - 2019 DELIVERIES 1,320 $ 212,700 $ 24,225 $ 5,435 $ 29,660
PRESALE DEVELOPMENT PROJECT UNDER CONSTRUCTION
As of June 30, 2017
Project Estimated Land and Total Costs Scheduled
Project Location Primary University Served Type Beds Project Cost CIP2 Other3 Incurred Completion
The Edge - Stadium Centre4 Tallahassee, FL Florida State University Off-campus 412 $ 42,600 $ 11,561 $ 481 $ 12,042 August 2018
OWNED DEVELOPMENT PIPELINE5
Project Anticipated Approx. Estimated Targeted
Project Location Primary University Served Type Commencement Targeted Beds Project Cost1 6 Completion
University of Arizona Honors College Tucson, AZ University of Arizona ACE Q4 2017 1,042 $ 97,000 Fall 2019
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 $22.2 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. In December 2016, the company entered into a pre-sale agreement to purchase The Edge - Stadium Centre, a property which will be completed in August 2018. The company is 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. Estimated project cost includes purchase price, elected upgrades and transaction costs.
5. Does not include land parcels in seven university markets totaling $40.5 million. 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.
6. Estimated Project Cost includes land and other predevelopment costs of $9.3 million incurred as of June 30, 2017 for owned development pipeline projects.
Third-Party Development Update
($ in thousands)
11
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 $ Change 2017 2016 $ Change
Development services revenue $ 675 $ 2,121 $ (1,446) $ 1,131 $ 3,156 $ (2,025)
% of total revenue 0.4% 1.1% 0.3% 0.8%
CONTRACTED PROJECTS IN PROGRESS
Fees Earned Fees Remaining Fees
as of Earned in as of Scheduled
Project Location Primary University Served Beds Total Fees June 30, 2017 Current Year June 30, 2017 Completion
Momentum Village Phase II Corpus Christi, TX Texas A&M University Corpus Christi 560 $ 2,300 $ 2,026 $ 446 $ 274 August 2017
Esperanza Hall San Antonio, TX Texas A&M University San Antonio 382 1,100 940 205 160 August 2017
942 $ 3,400 $ 2,966 $ 651 $ 434
1. 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.
2. Under the terms of a Consultant Agreement, and with the consent of the University’s Board of Regents, the company will earn fees for the performance of advisory services related to a not-for-profit entity’s
purchase of a 1,790-bed apartment community for the benefit of the University.
3. The University of Arizona Honors College project includes the construction of office facilities and a student recreation and wellness center as part of the overall development project. These components will be
owned, managed and funded by the University, and the company anticipates earning third-party development fees for its role in providing development services for those components of the project.
ON-CAMPUS AWARD PIPELINE1
Anticipated Anticipated Targeted Estimated
Project Location Financing Structure Commencement Completion Fees
Texas A&M University Corpus Christi2 Corpus Christi, TX Third-party n/a Q3/Q4 2017 $1,400
University of Illinois - Chicago Chicago, IL Third-party Q4 2017/Q1 2018 Fall 2019 $4,800
University of California Irvine Phase IV Irvine, CA Third-party Q3/Q4 2017 Fall 2019 $5,900
Louisville Village Site Louisville, KY ACE TBD Fall 2019 n/a
University of Arizona Honors College Tucson, AZ Third-party Q4 2017 Fall 2019 $1,100
Student Center3
University of Arizona Honors College Tucson, AZ Third-party TBD TBD TBD
Office3
University of California, Berkeley Berkeley, CA TBD TBD TBD TBD
Management Services Update
($ in thousands)
12
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 $ Change 2017 2016 $ Change
Management services revenue $ 2,288 $ 2,253 $ 35 $ 4,902 $ 4,663 $ 239
% of total revenue 1.3% 1.2% 1.3% 1.2%
NEW / PENDING MANAGEMENT CONTRACTS
Actual or
Approximate Stabilized Anticipated
Project Location Primary University Served Beds Annual Fees1 Commencement
Momentum Village Phase II Corpus Christi, TX Texas A&M University Corpus Christi 560 $ 180 August 2017
Esperanza Hall San Antonio, TX Texas A&M University San Antonio 382 100 August 2017
Collegeview Commons Phase II Ontario, Canada Conestoga College 513 50 September 2017
CampusOne2 Toronto, Canada University of Toronto 892 291 September 2017
Texas A&M University Corpus Christi Corpus Christi, TX Texas A&M University Corpus Christi 1,790 480 Q3/Q4 2017
Annex at Laurier3 Ontario, Canada University of Ottawa 503 150 August 2018
4,640 $ 1,251
DISCONTINUED MANAGEMENT CONTRACTS
2017 Fee
Contribution
Prior to
Project Location Primary University Served Beds Termination Discontinued As Of
Saban Real Estate Group4 Various Various 7,060 $ 278 March 2017
SUNO - New Orleans New Orleans, LA Southern University at New Orleans 698 75 June 2017
Indiana University - Purdue University Fort Wayne Fort Wayne, IN Indiana University - Purdue University Fort Wayne 1,204 150 September 2017
8,962 $ 503
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 $60,000 anticipated to be earned from February 2017 through August 2017. Subsequent to August 2017, the stabilized
annual fee is anticipated to be approximately $291,000 per year.
3. The stabilized annual fee amount does not include an initial operations fee of $90,000 anticipated to be earned from July 2017 through July 2018. Subsequent to July 2018, the stabilized annual fee
is anticipated to be approximately $150,000 per year.
4. In November 2016, the company sold a portfolio of 19 properties to Saban Real Estate Group. The company continued to manage 11 of the properties during a transition period subsequent to the
sale for up to five months. The transition period concluded on March 31, 2017.
Capital Structure as of June 30, 2017
($ in millions, except per share data)
13
Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule
Total Debt1 $ 2,354
Total Equity Market Value2 6,539
Total Market Capitalization $ 8,893
Debt to Total Market Capitalization 26.5%
Net Debt to EBITDA3 6.0x
Total Asset Value4 $ 7,211
Unencumbered Asset Value $ 5,927
Unencumbered Asset Value to Total Asset Value 82.2%
Requirement Current Ratio
Total Debt to Total Asset Value ≤ 60% 32.6%
Secured Debt to Total Asset Value ≤ 40% 9.2%
Unencumbered Asset Value to Unsecured Debt > 150% 350.2%
Interest Coverage3 > 1.5x 4.3x
Weighted Average
Principal Average Term To
Outstanding Interest Rate Maturity
Fixed Rate Mortgage Loans $ 556 4.8%5 3.7 Yrs
Construction Loan 1 3.7% 2.6 Yrs
Unsecured Revolving Credit Facility 142 2.3% 4.7 Yrs
Unsecured Term Loans6 350 2.3% 4.4 Yrs
Unsecured Notes 1,200 3.8% 5.4 Yrs
On-Campus Participating Properties 105 5.1% 14.8 Yrs
Total/Weighted Average $ 2,354 3.8% 5.2 Yrs
Variable Rate Debt as % of Total Debt7 21.0%
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 $22.8 million, unamortized original issue discount on unsecured notes of $1.8 million, and unamortized deferred
financing costs of $14.7 million.
2. Based on share price of $47.30 and fully diluted share count of 138,242,190 as of June 30, 2017. Assumes conversion of 1,106,644 common and preferred Operating Partnership units and 819,354 unvested restricted stock
awards.
3. Refer to calculations on page 14, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
4. Excludes accumulated depreciation of $1.0 billion and receivables and intangible assets, net of accumulated amortization, of $53.4 million.
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 3.6%.
6. In June 2017, the company closed on a $200 million term loan which matures in June 2022.
7. The company's variable rate debt consists of the unsecured revolving credit facility and the unsecured term loans.
Weighted Average Interest Rate Of Debt Maturing Each Year
Fixed Rate
Mortgage
Loans
6.3% 4.2% 0.0% 5.6% 5.2% 4.0% 0.0% 4.5% 0.0% 3.7%
Total
Debt 6.3% 4.2% 0.0% 3.6% 4.0% 2.4% 3.9% 4.3% 7.6% 3.9%
+
Interest Coverage
($ in thousands)
14
Three Months Ended
September 30, December 31, March 31, June 30, Last Twelve
2016 2016 2017 2017 Months
Net income (loss) attributable to ACC, Inc. and Subsidiaries common stockholders $ 9,644 $ 25,392 $ 34,050 $ (2,762) $ 66,324
Net income attributable to noncontrolling interests 201 412 399 109 1,121
Interest expense 19,016 16,925 14,717 14,573 65,231
Income tax provision 345 115 257 267 984
Depreciation and amortization 52,067 51,901 52,323 55,943 212,234
Amortization of deferred financing costs 1,344 1,282 1,028 1,023 4,677
Share-based compensation 2,328 2,222 4,256 4,646 13,452
Provision for real estate impairment — 4,895 — 15,317 20,212
Loss on early extinguishment of debt — 12,841 — — 12,841
(Gain) loss from disposition of real estate — (3,788) — 632 (3,156)
Earnings Before Interest, Taxes, Depreciation,
and Amortization ("EBITDA") $ 84,945 $ 112,197 $ 107,030 $ 89,748 $ 393,920
Pro-forma adjustments to EBITDA1 (5,851)
Adjusted EBITDA $ 388,069
Interest Expense from consolidated statement of comprehensive income $ 19,016 $ 16,925 $ 14,717 $ 14,573 $ 65,231
Amortization of mortgage debt premiums/discounts 3,104 2,454 2,010 2,010 9,578
Capitalized interest 3,301 3,302 4,411 5,677 16,691
Change in accrued interest payable (1,778) 3,320 (2,203) 1,981 1,320
Cash Interest Expense $ 23,643 $ 26,001 $ 18,935 $ 24,241 $ 92,820
Pro-forma adjustments to Cash Interest Expense1 (1,855)
Adjusted Interest Expense $ 90,965
Interest Coverage 4.3x
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
Sources and Uses for Development - As of June 30, 2017
Estimated Project Total Costs Remaining
Estimated Capital Uses for Development Pipeline1: Cost Incurred Capital Needs
2017 Developments Underway $ 603 $ 551 $ 52
2018 Developments Underway2 433 121 312
2019 Developments Underway or Expected to Start in Current Year 310 39 271
Total $ 1,346 $ 711 $ 635
Estimated Sources: Capital Sources
Cash and Cash Equivalents and Equity ATM proceeds subsequent to June 30, 2017 $ 27
Estimated Cash Flow Available for Investment - through 20193 145
Remaining Capital Needs4 463
Total $ 635
Selected Credit Metrics5
Credit Metric: June 30, 2017 Pro Forma6
Total Debt to Total Asset Value 32.6% 30.1% - 36.0%
Net Debt to EBITDA7 6.0x 4.9x - 5.9x
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, free cash available for investment, and capital market transactions.
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.
2. Includes the presale development project disclosed on page 10.
3. Available cash flow is derived from disclosures in our 2016 Form 10-K and is calculated as net cash provided by operating activities of $308.1 million less dividend payments of $218.7 million, less
principal payments on debt of $15.1 million, less recurring capital expenditures of $16.4 million. Calculation results in available cash flow for investment in 2016 of $57.9 million, which is then
annualized over the remaining 10 quarters through the end of 2019.
4. Remaining capital needs are expected to come from a mix of debt, equity, and dispositions.
5. Refer to definitions outlined on pages 19 and 20 for detailed definitions of terms appearing on this page.
6. Ratios represent the pro forma impact of development deliveries and funding alternatives assumed in the Sources and Uses table. The lower end of the pro forma leverage ranges assumes
remaining capital needs are funded with equity, while the higher end assumes funding with debt. Actual ratios will vary based on the timing of construction funding and ultimate mix of sources from
debt, equity, or dispositions.
7. Refer to page 14 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure.
2017 Outlook - Summary1
($ in thousands, except share and per share data)
16
Low High
Net income $ 103,400 $ 116,500
Noncontrolling interests 1,700 1,900
Depreciation and amortization 211,700 211,700
Funds from operations ("FFO") $ 316,800 $ 330,100
Elimination of operations from on-campus
participating properties (11,700) (12,100)
Contribution from on-campus participating properties 4,100 4,700
Contractual executive separation and retirement charges2 4,550 4,550
Funds from operations - modified ("FFOM") $ 313,750 $ 327,250
Net income per share - diluted $ 0.76 $ 0.86
FFO per share - diluted $ 2.34 $ 2.44
FFOM per share - diluted $ 2.32 $ 2.42
Weighted-average common shares outstanding -
diluted 135,500,000 135,500,000
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;
• 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;
• the finalization of property tax rates and assessed values in certain jurisdictions; and
• the success of releasing the company's owned properties for the 2017-2018 academic year.
2. Represents contractual executive separation and retirement charges incurred with regard to the retirement of the company's Chief Financial Officer, recognized in the first and second quarter 2017.
2017 Outlook - Detail
($ in thousands, except share and per share data)
17
1. Refer to page 18 for detail of the 2017 same store and new property groupings.
2. Includes disposition of The Province - Dayton which closed in the second quarter of 2017. See page 9.
3. Net of capitalized interest and excluding on-campus participating properties. The 2017 guidance ranges assume a $400 million fourth quarter bond offering.
4. Excludes on-campus participating properties.
5. Represents contractual executive separation and retirement charges incurred with regard to the retirement of the company's Chief Financial Officer, recognized in the first and second quarter 2017.
Components of 2017 Property Net Operating Income Third-party Services
Low High % Change From 2016 Low High
Wholly-owned properties Third-party development services revenue $ 6,200 $ 9,600
2017 same store properties1 Third-party management services revenue $ 9,600 $ 10,400
Revenue $ 669,100 $ 673,800 2.6% - 3.4% Third-party development and mgmt. services expenses $ 15,000 $ 15,500
Operating expenses (299,100) (297,600) 1.5% - 1.0%
Net operating income 370,000 376,200 3.6% - 5.3%
Corporate Expenses and Other
2017 new properties net operating income1 34,400 35,500 Low High
2017 speculative dispositions net operating income2 600 600 Net income:
Total wholly-owned properties net operating income $ 405,000 $ 412,300 General and administrative expenses $ 27,400 $ 27,800
Ground/facility leases expense:
ACE properties $ 6,900 $ 6,900
2017 Property Net Operating Income Guidance Assumptions On-campus participating properties 2,700 3,100
Low High Timing Total ground/facility leases expense $ 9,600 $ 10,000
AY 2017/2018 final leasing results - occupancy 96.55% 98.75% Fall 2017 Interest income $ 4,100 $ 5,000
AY 2017/2018 final leasing results - rental rate 3.15% 2.65% Fall 2017 Interest expense3 $ 60,600 $ 59,500
Development Deliveries $ 603,100 $ 603,100 See page 10 Capitalized interest $ 16,400 $ 16,300
Amortization of deferred financing costs4 $ 4,000 $ 4,000
Income tax provision $ 1,100 $ 1,100
FFOM:
Corporate depreciation $ 3,600 $ 3,200
Contribution from on-campus participating properties $ 4,100 $ 4,700
Contractual executive separation and retirement charges5 $ 4,550 $ 4,550
Detail of Property Groupings
As of June 30, 2017
18
2017 Grouping 2018 Grouping
Same Store Properties New Properties Same Store Properties New Properties
# of Design # of Design # of Design # of Design
Properties Beds Properties Beds Properties Beds Properties Beds
Properties Purchased or Developed
Prior to January 1, 2016 124 73,871 124 73,871
2016 Development Deliveries 7 3,191 7 3,191
2016 Acquisition Properties 2 709 2 709
2017 Acquisition Properties 2 982 2 982
2017 Development Deliveries 10 7,454 10 7,454
2018 Development Deliveries 7 5,486 7 5,486
2019 Development Deliveries 2 1,320 2 1,320
Total Wholly-owned Properties 124 73,871 30 19,142 133 77,771 21 15,242
Total # of Wholly-owned Properties Excluded1 1
Total Wholly-owned Design Beds Excluded1 860
Grand Total # of Wholly-owned Properties (All Groupings) 155
Grand Total Wholly-owned Design Beds (All Groupings) 93,873
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.
2017: The 2017 same store grouping represents properties owned and operating for both of the entire calendar 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 June 30, 2017. This same store grouping will be used for purposes of
presenting our 2017 same store operating results.
2018: The 2018 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2018 and 2017. This same store grouping will be
used for purposes of presenting our 2018 same store operating results and our leasing status updates for the 2017/2018 academic year.
1. Includes a wholly-owned property that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan due to mature in August 2017.
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, contractual executive separation and retirement charges 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 unsecured notes 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, which are not conducting or planning to
conduct substantial development or redevelopment, or repositioning activities, and are not classified as held for sale as of the current
period-end.
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, the original issued discount on unsecured notes, and deferred financing
costs.
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 unsecured notes 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 SVP, Capital Markets and Investor
Relations
rdennison@americancampus.com
Austin, Texas 78738 www.americancampus.com
Executive Management
Bill Bayless Chief Executive Officer
Jim Hopke President
Jennifer Beese Chief Operating Officer
Daniel Perry Chief Financial Officer
William Talbot Chief Investment Officer
Kim Voss Chief Accounting Officer
Research Coverage
Jacob Kilstein Argus Research Company (646) 747-5447 jkilstein@argusresearch.com
Jeffery Spector / Juan Sanabria Bank of America / Merrill Lynch (646) 855-1363 / (646) 855-1589 jeff.spector@baml.com / juan.sanabria@baml.com
Ryan Meliker / Peter Abramowitz Canaccord Genuity (212) 389-8094 / (212) 389-8053 rmeliker@canaccordgenuity.com / pabramowitz@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 steve.sakwa@evercoreisi.com / gwen.clark@evercoreisi.com
David Corak FBR & Co. (703) 312-1610 dcorak@fbr.com
Andrew Rosivach / Jeff Pehl Goldman Sachs (212) 902-2796 / (212) 357-4474 andrew.rosivach@gs.com / jeffrey.pehl@gs.com
Ryan Burke Green Street Advisors (949) 640-8780 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 J.P. Morgan Securities (212) 622-6682 anthony.paolone@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. (610) 238-6634 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
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 and Non-GAAP Financial Measures
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.
This presentation also contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”). These items include earnings before interest, tax,
depreciation and amortization ("EBITDA"), net operating income (“NOI”), funds from operations (“FFO”) and FFO-Modified (“FFOM”). The National Association of Real Estate Investment Trusts (“NAREIT”) currently
defines FFO as 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. The Company presents FFO because it considers FFO an important supplemental measure of its operating performance and believes it is
frequently used by securities analyst, investors and other interested parties in evaluation of REITs, many of which present FFO when reporting their results. 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 its
liquidity, nor are these measures indicative of funds available to fund its cash needs, including its ability to pay dividends or make distributions. The Company defines property NOI as property revenues less direct
property operating expenses, excluding depreciation, but including allocated corporate general and administrative expenses.