Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - AMERICAN CAMPUS COMMUNITIES INC | ex991-q32017earningsrelease.htm |
| 8-K - 8-K - AMERICAN CAMPUS COMMUNITIES INC | form8-kq32017earningsrelea.htm |
Supplemental
Analyst Package
3Q 2017
October 23, 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
Portfolio Overview 8
Investment Update 9
Owned Development Update 10
Presale Development Update 11
Third-Party Development Update 12
Management Services Update 13
Capital Structure 14
Interest Coverage 15
Capital Allocation – Long Term Funding Plan 16
2017 Outlook - Summary 17
2017 Outlook - Changes from Previous Guidance 18
Detail of Property Groupings 19
Definitions 20
Investor Information 22
Financial Highlights
($ in thousands, except share and per share data)
1
Operating Data Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 $ Change % Change 2017 2016 $ Change % Change
Total revenues $ 196,938 $ 196,411 $ 527 0.3% $ 568,884 $ 582,389 $ (13,505) (2.3%)
Operating income 17,575 29,278 (11,703) (40.0%) 79,404 121,419 (42,015) (34.6%)
Net (loss) income attributable to ACC1 (1,312) 9,644 (10,956) (113.6%) 29,976 73,669 (43,693) (59.3%)
Net (loss) income per share - basic (0.01) 0.07 0.21 0.57
Net (loss) income per share - diluted (0.01) 0.07 0.21 0.56
Funds From Operations ("FFO")2 58,975 61,146 (2,171) (3.6%) 213,449 214,642 (1,193) (0.6%)
FFO per share - diluted2 0.43 0.46 (0.03) (6.5%) 1.56 1.65 (0.09) (5.5%)
Funds From Operations - Modified ("FFOM")2 61,175 60,441 734 1.2% 216,858 210,804 6,054 2.9%
FFOM per share - diluted2 0.44 0.45 (0.01) (2.2%) 1.59 1.62 (0.03) (1.9%)
Market Capitalization and Unsecured Notes Covenants3 September 30, 2017 December 31, 2016
Debt to total market capitalization 31.2% 24.1%
Net debt to EBITDA4 6.4x 5.4x
Unencumbered asset value to total asset value 83.0% 81.0%
Total debt to total asset value 35.8% 31.3%
Secured debt to total asset value 8.4% 9.8%
Unencumbered asset value to unsecured debt 303.1% 378.2%
Interest coverage4 4.4x 4.5x
1. Excluding net loss from dispositions of real estate and impairment charges, net income attributable to ACC for the nine months ended September 30, 2017 would have been $45.9 million.
Excluding net gains from dispositions of real estate, net income attributable to ACC for the nine months ended September 30, 2016 would have been $56.3 million.
2. Refer to page 4 for a reconciliation to net income, the most directly comparable GAAP measure.
3. Refer to the definitions outlined on pages 20 and 21 for detailed definitions of terms appearing on this page.
4. Refer to calculations on page 15, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
Consolidated Balance Sheets
($ in thousands)
2
September 30, 2017 December 31, 2016
(unaudited)
Assets
Investments in real estate:
Wholly-owned properties, net $ 6,262,077 $ 5,427,014
Wholly-owned properties held for sale — 25,350
On-campus participating properties, net 83,095 85,797
Investments in real estate, net 6,345,172 5,538,161
Cash and cash equivalents 16,341 22,140
Restricted cash 25,824 24,817
Student contracts receivable, net 15,531 8,428
Other assets1 284,023 272,367
Total assets $ 6,686,891 $ 5,865,913
Liabilities and equity
Liabilities:
Secured mortgage, construction and bond debt $ 662,874 $ 688,195
Unsecured notes 1,190,296 1,188,737
Unsecured term loans 646,675 149,065
Unsecured revolving credit facility 266,440 99,300
Accounts payable and accrued expenses 79,612 76,614
Other liabilities2 214,918 158,437
Total liabilities 3,060,815 2,360,348
Redeemable noncontrolling interests 112,270 55,078
Equity:
American Campus Communities, Inc. and
Subsidiaries stockholders' equity:
Common stock 1,364 1,322
Additional paid in capital 4,321,228 4,118,842
Common stock held in rabbi trust (2,944) (975)
Accumulated earnings and dividends (816,360) (670,137)
Accumulated other comprehensive loss (3,195) (4,067)
Total American Campus Communities, Inc. and
3,500,093 3,444,985Subsidiaries stockholders' equity
Noncontrolling interests - partially owned properties 13,713 5,502
Total equity 3,513,806 3,450,487
Total liabilities and equity $ 6,686,891 $ 5,865,913
1. As of September 30, 2017, other assets include approximately $9.4 million related to net deferred financing costs on our revolving credit facility and the net value of in-place leases.
2. As of September 30, 2017, other liabilities include approximately $64.6 million in deferred revenue and fee income.
Consolidated Statements of Comprehensive Income
(Unaudited, $ in thousands, except share and per share data)
3
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 $ Change 2017 2016 $ Change
Revenues
Wholly-owned properties $ 183,569 $ 185,694 $ (2,125) $ 531,556 $ 546,078 $ (14,522)
On-campus participating properties 6,799 6,758 41 23,128 23,018 110
Third-party development services 3,566 773 2,793 4,697 3,929 768
Third-party management services 2,291 2,376 (85) 7,193 7,039 154
Resident services 713 810 (97) 2,310 2,325 (15)
Total revenues 196,938 196,411 527 568,884 582,389 (13,505)
Operating expenses
Wholly-owned properties 99,423 100,602 (1,179) 249,552 257,175 (7,623)
On-campus participating properties 3,923 3,784 139 11,080 10,125 955
Third-party development and management services 3,879 3,340 539 11,789 10,638 1,151
General and administrative1 8,684 5,375 3,309 25,200 16,810 8,390
Depreciation and amortization 61,125 52,067 9,058 169,391 159,486 9,905
Ground/facility leases 2,329 1,965 364 7,151 6,736 415
Provision for real estate impairment2 — — — 15,317 — 15,317
Total operating expenses 179,363 167,133 12,230 489,480 460,970 28,510
Operating income 17,575 29,278 (11,703) 79,404 121,419 (42,015)
Nonoperating income and (expenses)
Interest income 1,259 1,272 (13) 3,723 4,026 (303)
Interest expense (18,654) (19,016) 362 (47,944) (61,762) 13,818
Amortization of deferred financing costs (1,146) (1,344) 198 (3,197) (5,238) 2,041
(Loss) gain from disposition of real estate — — — (632) 17,409 (18,041)
Total nonoperating expense (18,541) (19,088) 547 (48,050) (45,565) (2,485)
(Loss) income before income taxes (966) 10,190 (11,156) 31,354 75,854 (44,500)
Income tax provision (267) (345) 78 (791) (1,035) 244
Net (loss) income (1,233) 9,845 (11,078) 30,563 74,819 (44,256)
Net income attributable to noncontrolling interests (79) (201) 122 (587) (1,150) 563
Net (loss) income attributable to ACC, Inc. and
$ (1,312) $ 9,644 $ (10,956) $ 29,976 $ 73,669 $ (43,693)Subsidiaries common stockholders
Other comprehensive income (loss)
Change in fair value of interest rate swaps and other 233 1,271 (1,038) 872 (162) 1,034
Comprehensive (loss) income $ (1,079) $ 10,915 $ (11,994) $ 30,848 $ 73,507 $ (42,659)
Net (loss) income per share attributable to ACC, Inc.
and Subsidiaries common stockholders
Basic $ (0.01) $ 0.07 $ 0.21 $ 0.57
Diluted $ (0.01) $ 0.07 $ 0.21 $ 0.56
Weighted-average common shares outstanding
Basic 136,421,198 130,786,985 134,708,361 128,239,294
Diluted 136,421,198 131,568,371 135,585,850 129,034,401
1. The nine months ended September 30, 2017 include $4.5 million of contractual executive separation and retirement charges incurred in the first and second quarter of 2017 with regard to the retirement of the company's former
Chief Financial Officer. The three and nine months ended September 30, 2017 include $2.9 million in transaction costs related to our initial investment in the Core Spaces/DRW joint ventures. Refer to pages 9 and 11.
2. Represents an impairment charge recorded in the second quarter of 2017 for one wholly-owned property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4
million mortgage loan that matured in August 2017.
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 currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million
mortgage loan that matured in August 2017.
2. 50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures. Represents actual amounts
accrued for the interim periods, which is included in ground/facility leases expense in the consolidated statements of comprehensive income (refer to page 3).
3. The three and nine months ended September 30, 2017 amounts represent transaction costs related to our initial investment in the Core Spaces/DRW joint ventures. Refer to pages 9 and 11.
4. Represents contractual executive separation and retirement charges incurred in the first and second quarter of 2017 with regard to the retirement of the company's former Chief Financial Officer.
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 $ Change 2017 2016 $ Change
Net (loss) income attributable to ACC, Inc. and
$ (1,312) $ 9,644 $ (10,956) $ 29,976 $ 73,669 $ (43,693)Subsidiaries common stockholders
Noncontrolling interests 85 201 (116) 593 1,150 (557)
Loss (gain) from disposition of real estate — — — 632 (17,409) 18,041
Elimination of provision for real estate impairment1 — — — 15,317 — 15,317
Real estate related depreciation and amortization 60,202 51,301 8,901 166,931 157,232 9,699
Funds from operations ("FFO") attributable to
58,975 61,146 (2,171) 213,449 214,642 (1,193)common stockholders and OP unitholders
Elimination of operations of on-campus participating properties
Net loss (income) from on-campus participating properties 479 365 114 (1,373) (1,702) 329
Amortization of investment in on-campus participating properties (1,892) (1,839) (53) (5,621) (5,493) (128)
57,562 59,672 (2,110) 206,455 207,447 (992)
Modifications to reflect operational performance of on-campus
participating properties
Our share of net cashflow2 452 351 101 1,987 2,216 (229)
Management fees 306 304 2 1,046 1,027 19
Contribution from on-campus participating properties 758 655 103 3,033 3,243 (210)
Property acquisition costs3 2,855 114 2,741 2,855 114 2,741
Contractual executive separation and retirement charges4 — — — 4,515 — 4,515
Funds from operations-modified ("FFOM") attributable to
$ 61,175 $ 60,441 $ 734 $ 216,858 $ 210,804 $ 6,054common stockholders and OP unitholders
FFO per share - diluted $ 0.43 $ 0.46 $ 1.56 $ 1.65
FFOM per share - diluted $ 0.44 $ 0.45 $ 1.59 $ 1.62
Weighted-average common shares outstanding - diluted 138,328,932 132,877,380 136,686,611 130,407,761
Wholly-Owned Properties Results of Operations
($ in thousands)
5
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 $ Change % Change 2017 2016 $ Change % Change
Wholly-owned properties revenues
Same store properties $ 162,776 $ 160,636 $ 2,140 1.3% $ 490,177 $ 478,327 $ 11,850 2.5%
New properties 20,637 4,187 16,450 39,774 4,291 35,483
Sold and held for sale properties1 869 21,681 (20,812) 3,915 65,785 (61,870)
Total revenues2 $ 184,282 $ 186,504 $ (2,222) (1.2%) $ 533,866 $ 548,403 $ (14,537) (2.7%)
Wholly-owned properties operating expenses
Same store properties3 4 $ 87,902 $ 85,126 $ 2,776 3.3% $ 227,993 $ 220,724 $ 7,269 3.3%
New properties 11,232 2,242 8,990 19,152 2,400 16,752
Sold and held for sale properties1 5 289 13,234 (12,945) 2,407 34,051 (31,644)
Total operating expenses $ 99,423 $ 100,602 $ (1,179) (1.2%) $ 249,552 $ 257,175 $ (7,623) (3.0%)
Wholly-owned properties net operating income
Same store properties6 $ 74,874 $ 75,510 $ (636) (0.8%) $ 262,184 $ 257,603 $ 4,581 1.8%
New properties 9,405 1,945 7,460 20,622 1,891 18,731
Sold and held for sale properties1 580 8,447 (7,867) 1,508 31,734 (30,226)
Total net operating income $ 84,859 $ 85,902 $ (1,043) (1.2%) $ 284,314 $ 291,228 $ (6,914) (2.4%)
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2017 and 2016, which are not conducting or planning to conduct
substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of September 30, 2017. Refer to page 19 for detail of our same store groupings.
1. Includes properties sold in 2016 and 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan
that matured in August 2017.
2. Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income.
3. Refer to page 6 for detail of same store operating expenses.
4. Excluding expenses of $1.9 million incurred during the third quarter of 2017 associated with Hurricanes Harvey and Irma, same store wholly-owned operating expenses for the three and nine months
ended September 30, 2017 would have increased by 1.0% and 2.4%, respectively.
5. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
6. The three and nine months ended September 30, 2017 include a reduction of $272,000 and $548,000, respectively, related to 41 beds damaged by a fire occurring at one same store property in March
2017 and a reduction in beds available for lease at one same store property renovated during the summer months. The fire damaged beds are being rebuilt and are anticipated to be available for
occupancy in Spring 2018. Losses incurred in relation to the fire are covered by the company's business interruption insurance policy. Proceeds from this policy are anticipated to be received and
recorded in 2018. Excluding the effects of these items and $1.9 million of expenses incurred during the third quarter of 2017 associated with Hurricanes Harvey and Irma, same store wholly-owned net
operating income for the three and nine months ended September 30, 2017 would have increased 2.0% and 2.7%, respectively.
Same Store Wholly-Owned Properties Operating Expenses
($ in thousands, except per bed amounts)
6
Three Months Ended September 30,
2017 2016
Total Per Bed
% Change
From Prior
Year
% of Total
Operating
Expenses Total Per Bed
% of Total
Operating
Expenses
Property taxes $ 16,829 $ 228 2.9% 19% $ 16,356 $ 221 19%
General & administrative and other1 17,843 241 0.7% 21% 17,722 240 21%
Utilities2 16,182 219 —% 18% 16,178 219 19%
Payroll3 16,602 225 (0.3)% 19% 16,656 225 20%
Repairs and maintenance4 16,179 219 15.7% 18% 13,982 189 16%
Marketing5 2,648 36 0.9% 3% 2,625 36 3%
Insurance 1,619 22 0.7% 2% 1,607 22 2%
Total same store wholly-owned operating expenses6 $ 87,902 $ 1,190 3.3% 100% $ 85,126 $ 1,152 100%
Same store wholly-owned beds 73,871
Nine Months Ended September 30,
2017 2016
Total Per Bed
% Change
From Prior
Year
% of Total
Operating
Expenses Total Per Bed
% of Total
Operating
Expenses
Property taxes $ 49,701 $ 673 3.2% 22% $ 48,142 $ 652 22%
General & administrative and other1 48,660 658 1.2% 21% 48,077 651 22%
Utilities2 47,480 643 2.5% 21% 46,328 627 21%
Payroll3 43,950 595 1.7% 19% 43,222 585 20%
Repairs and maintenance4 25,354 343 11.3% 11% 22,780 308 10%
Marketing5 8,032 109 8.7% 4% 7,390 100 3%
Insurance 4,816 65 0.6% 2% 4,785 65 2%
Total same store wholly-owned operating expenses6 $ 227,993 $ 3,086 3.3% 100% $ 220,724 $ 2,988 100%
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 September 30, 2017. Refer to page 19 for detail of our same store groupings.
1. 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.
2. Represents gross expenses prior to any recoveries from tenants, which are reflected in wholly-owned properties revenues.
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 and approximately $1.9 million of costs incurred during the third quarter of 2017 primarily related to cleanup and repairs for water
intrusion, roofing and landscaping at the company's communities located in Texas and Florida as a result of Hurricanes Harvey and Irma. Excluding expenses incurred in relation to Hurricanes Harvey and
Irma, repairs and maintenance expenses for the three and nine months ended September 30, 2017 would have increased by 2.1% and 3.0%, respectively.
5. Includes costs related to property marketing campaigns associated with our ongoing leasing efforts.
6. Excluding expenses of $1.9 million incurred during the third quarter of 2017 associated with Hurricanes Harvey and Irma, total same store wholly-owned operating expenses for the three and nine months
ended September 30, 2017 would have increased by 1.0% and 2.4%, respectively.
Seasonality of Operations
($ in thousands, except per bed amounts)
7
Three Months Ended
Total/Weighted Average-
September 30, 2016 December 31, 2016 March 31, 2017 June 30, 2017 September 30, 2017 Last 12 Months
2017 same store properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ 701 $ 728 $ 727 $ 710 $ 715 $ 721
Other income per occupied bed per month1 85 57 58 69 86 67
Total revenue per occupied bed $ 786 $ 785 $ 785 $ 779 $ 801 $ 788
Average number of owned beds 73,871 73,871 73,857 2 73,773 2 73,753 2 73,814
Average physical occupancy for the quarter 92.2% 97.6% 97.1% 92.0% 91.9% 94.6%
Total revenue $ 160,636 $ 169,743 $ 168,853 $ 158,548 $ 162,776 $ 659,920
Property operating expenses 85,126 70,918 70,118 69,973 87,902 298,911
Net operating income $ 75,510 $ 98,825 $ 98,735 $ 88,575 $ 74,874 $ 361,009
Operating margin 47.0% 58.2% 58.5% 55.9% 46.0% 54.7%
2017 new properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ 798 $ 787 $ 778 $ 787 $ 784 $ 783
Other income per occupied bed per month1 40 43 42 59 68 57
Total revenue per occupied bed $ 838 $ 830 $ 820 $ 846 $ 852 $ 840
Average number of owned beds 1,910 3,868 3,900 4,559 9,382 5,427
Average physical occupancy for the quarter 87.2% 93.2% 93.4% 87.9% 86.1% 89.1%
Total revenue $ 4,187 $ 8,980 $ 8,965 $ 10,172 $ 20,637 $ 48,754
Property operating expenses 2,242 3,252 3,533 4,387 11,232 22,404
Net operating income $ 1,945 $ 5,728 $ 5,432 $ 5,785 $ 9,405 $ 26,350
Operating margin 46.5% 63.8% 60.6% 56.9% 45.6% 54.0%
ALL PROPERTIES
Revenue per occupied bed
Rental revenue per occupied bed per month $ 703 $ 731 $ 730 $ 714 $ 722 $ 724
Other income per occupied bed per month1 84 57 57 69 84 67
Total revenue per occupied bed $ 787 $ 788 $ 787 $ 783 $ 806 $ 791
Average number of owned beds 75,781 77,739 77,757 78,332 83,135 79,241
Average physical occupancy for the quarter 92.1% 97.3% 96.9% 91.7% 91.2% 94.2%
Total revenue $ 164,823 $ 178,723 $ 177,818 $ 168,720 $ 183,413 $ 708,674
Property operating expenses 87,368 74,170 73,651 74,360 99,134 321,315
Net operating income $ 77,455 $ 104,553 $ 104,167 $ 94,360 $ 84,279 $ 387,359
Operating margin 47.0% 58.5% 58.6% 55.9% 46.0% 54.7%
Sold and held for sale properties3
Total revenue $ 21,681 $ 11,472 $ 1,892 $ 1,154 $ 869 $ 15,387
Property operating expenses4 13,234 5,951 1,306 812 289 8,358
Net operating income $ 8,447 $ 5,521 $ 586 $ 342 $ 580 $ 7,029
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2017 and 2016, which are not conducting or planning to conduct substantial development,
redevelopment, or repositioning activities, and are not classified as held for sale as of September 30, 2017. Refer to page 19 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 fire damaged beds currently being rebuilt that will be available for occupancy in Spring 2018 and beds renovated during the summer months.
These beds have been removed to appropriately reflect revenue per occupied bed as they did not contribute revenue for the related period.
3. Includes properties sold in 2016 and 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017.
4. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
Portfolio Overview
8
Rental Revenue per
Physical Occupancy at Fall 2017 Occupied Bed for
Design September 30, Occupancy Final Rental Revenue Academic Year1
Property Type Beds 2017 2016 Change Rate Change Change 2017 / 2018 2016 / 2017
2018 Same Store Wholly-owned Properties
Final Fall 2016 occupancy of 98% or greater 53,154 98.3% 99.8% (1.5%) 4.0% 2.5% $ 774 $ 744
Final Fall 2016 occupancy between 95% and 98% 9,086 94.6% 96.9% (2.3%) 1.1% (1.2%) 625 619
Final Fall 2016 occupancy less than 95% 15,531 92.2% 87.8% 4.4% (0.7%) 3.7% 743 749
Subtotal - 2018 Same Store Wholly-owned Properties 77,771 96.6% 97.2% (0.6%) 2.9% 2.3% $ 751 $ 730
New Wholly-owned Properties
2017 Acquisition Properties2 2,626 96.5% n/a n/a n/a n/a $ 790 n/a
2017 Development Deliveries3 7,454 83.2% n/a n/a n/a n/a 737 n/a
Subtotal - New Wholly-owned Properties 10,080 86.6% n/a n/a n/a n/a $ 752 n/a
Total - Wholly-owned Properties 87,851 95.5% n/a n/a n/a n/a $ 751 n/a
On Campus Participating Properties 5,086 98.6% 97.9% 0.7%
Note: The same store grouping presented above represents properties that will be classified as same store properties in 2018. This represents properties owned and operating for both of the entire years
ended December 31, 2017 and 2018, which are not conducting or planning to conduct substantial development or redevelopment activities, and are not classified as held for sale. This same store grouping
is presented for purposes of disclosing the final leasing results for the 2017/2018 academic year. Refer to page 19 for detail of our same store groupings.
1. Represents average rental revenue per occupied bed for the academic years presented.
2. Includes four properties acquired in 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 additional information on property acquisitions.
3. Includes ten wholly-owned properties that completed construction and opened for occupancy in August 2017. Refer to page 10 for more information about these development properties.
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 —
Bridges @ 11th Seattle, WA University of Washington 258 October 11, 2017 —
1,240 $ 222,900 $ —
Core Spaces / DRW Portfolio1
Hub Eugene Eugene, OR University of Oregon 513 August 14, 2017 $ —
State Fort Collins, CO Colorado State University 665 August 14, 2017 —
The James2 Madison, WI University of Wisconsin - Madison 850 September 13, 2017 —
Hub U District Seattle2 Seattle, WA University of Washington 248 Q4 2017 —
2,276 $ 281,769 $ —
3,516 $ 504,669 $ —
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 $ —
1. As part of this transaction, the company also acquired three projects under-construction and scheduled for completion in September 2018. Refer to page 11.
2. The company is acquiring an initial interest in the two properties through a joint venture with Core Spaces/DRW Real Estate Investments for $135.7 million. The remaining interest in both properties is
subject to further purchase options exercisable in the fourth quarter of 2019 for an amount to be determined by fair market value, expected to approximate $68.8 million.
Owned Development Update
($ in thousands)
10
RECENTLY COMPLETED PROJECTS
Project Total Project Opened for
Project Location Primary University Served Type Beds Cost1 Occupancy
Tooker House Tempe, AZ Arizona State University ACE 1,594 $ 105,500 August 2017
Sky View Flagstaff, AZ Northern Arizona University ACE 626 58,200 August 2017
University Square Prairie View, TX Prairie View A&M University ACE 466 25,900 August 2017
U Centre on Turner Columbia, MO University of Missouri Off-campus 718 69,600 August 2017
U Pointe on Speight Waco, TX Baylor University Off-campus 700 51,800 August 2017
21Hundred @ Overton Park Lubbock, TX Texas Tech University Off-campus 1,204 82,700 August 2017
Suites at 3rd Champaign, IL University of Illinois Off-campus 251 25,200
2
August 2017
U Club Binghamton Phase II Binghamton, NY SUNY Binghamton University Off-campus 562 56,900 August 2017
Callaway House Apartments Norman, OK University of Oklahoma Off-campus 915 90,700 August 2017
U Centre on College Clemson, SC Clemson University Off-campus 418 42,700 August 2017
7,454 $ 609,200
OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION
As of September 30, 2017
Project Estimated Land and Total Costs Scheduled
Project Location Primary University Served Type Beds Project Cost1 CIP3 Other4 Incurred Completion
Gladding Residence Center Richmond, VA Virginia Commonwealth Univ. ACE 1,524 $ 95,700 $ 60,215 $ — $ 60,215 August 2018
Irvington House Indianapolis, IN Butler University ACE 648 38,900 16,656 — 16,656 August 2018
Greek Leadership Village Tempe, AZ Arizona State University ACE 957 69,600 24,032 — 24,032 August 2018
Bancroft Residence Hall Berkeley, CA University of California, Berkeley ACE 781 98,700 44,570 — 44,570 August 2018
NAU Honors College Flagstaff, AZ Northern Arizona University ACE 636 43,400 14,999 38 15,037 August 2018
U Club Townhomes Oxford, MS University of Mississippi Off-campus 528 44,300 11,845 5,115 16,960 August 2018
SUBTOTAL - 2018 DELIVERIES 5,074 $ 390,600 $ 172,317 $ 5,153 $ 177,470
Columbus Avenue Student Apts. Boston, MA Northeastern University ACE 825 $ 153,400 $ 30,753 $ — $ 30,753 August 2019
191 College Auburn, AL Auburn University Off-campus 495 59,300 6,081 5,435 11,516 July 2019
SUBTOTAL - 2019 DELIVERIES 1,320 $ 212,700 $ 36,834 $ 5,435 $ 42,269
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 $ 80,000 Fall 2019
USC Health Sciences Phase II Los Angeles, CA University of Southern California ACE Q1/Q2 2019 297 42,000 Fall 2020
1,339 $ 122,000
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. Project Cost excludes the costs of the construction of such facilities, as they will be reimbursed by the universities.
2. The primary amenity package for the property is located at the neighboring Tower at Third property. Total Project Cost includes approximately $1.4 million in renovations to the amenity space.
3. The total construction in progress (“CIP”) balances above and on page 11 exclude $4.2 million related to ongoing renovation projects at operating properties.
4. 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.
5. Does not include land parcels in seven university markets totaling $40.6 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 $10.3 million incurred as of September 30, 2017 for owned development pipeline projects.
Presale Development Update
($ in thousands)
11
PRESALE DEVELOPMENT PROJECTS UNDER CONSTRUCTION
As of September 30, 2017
Project Estimated Land and Total Costs Scheduled
Project Location Primary University Served Type Beds Project Cost CIP1 Other2 Incurred Completion
The Edge - Stadium Centre3 Tallahassee, FL Florida State University Off-campus 412 $ 42,600 $ 15,430 $ 615 $ 16,045 August 2018
Core Spaces / DRW Portfolio4
Hub Ann Arbor Ann Arbor, MI University of Michigan Off-campus 310
Hub Flagstaff Flagstaff, AZ Northern Arizona University Off-campus 591
Hub West Lafayette West Lafayette, IN Purdue University Off-campus 599
1,500 $ 240,000 $ 44,628 $ 19,329 $ 63,957 September 2018
1,912 $ 282,600 $ 60,058 $ 19,944 $ 80,002
1. The total construction in progress (“CIP”) balances above and on page 10 exclude $4.2 million related to ongoing renovation projects at operating properties.
2. 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.
3. 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.
4. The company funded an initial investment of $24.2 million through a joint venture with Core Spaces/DRW Real Estate Investments in August 2017. Including the initial investment, the company expects to invest a
total of $240 million over a two year period. The company expects to increase its investment by $130.6 million upon delivery of the assets and to exercise an option to purchase the remaining ownership interests in
the properties in the third quarter of 2019 for an amount to be determined by fair market value, expected to approximate $85.2 million.
Third-Party Development Update
($ in thousands)
12
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 $ Change 2017 2016 $ Change
Development services revenue $ 3,566 $ 773 $ 2,793 $ 4,697 $ 3,929 $ 768
% of total revenue 1.8% 0.4% 0.8% 0.7%
RECENTLY COMPLETED PROJECTS
Project Location Primary University Served Beds Total Fees Completed
Momentum Village Phase II Corpus Christi, TX Texas A&M University Corpus Christi 560 $ 2,300 August 2017
Esperanza Hall San Antonio, TX Texas A&M University San Antonio 382 1,100 August 2017
942 $ 3,400
CONTRACTED PROJECT IN PROGRESS
Fees Earned Fees Remaining Fees
as of Earned in as of Scheduled
Project Location Primary University Served Beds Total Fees September 30, 2017 Current Year September 30, 2017 Completion
University of California Irvine Phase IV Irvine, CA University of California, Irvine 1,441 $ 5,900 $ 2,872 $ 2,872 $ 3,028 August 2019
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 a parking garage, academic center 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 Q4 2017 $1,400
University of Illinois - Chicago Chicago, IL Third-party Q4 2017 Fall 2019 $5,100
University of Arizona Honors College3 Tucson, AZ Third-party Q4 2017 Fall 2019 $2,700
Louisville Village Site Louisville, KY ACE TBD Fall 2019 n/a
University of California, Berkeley Berkeley, CA TBD TBD TBD TBD
Management Services Update
($ in thousands)
13
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 $ Change 2017 2016 $ Change
Management services revenue $ 2,291 $ 2,376 $ (85) $ 7,193 $ 7,039 $ 154
% of total revenue 1.2% 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 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 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 $150,000 per year.
4. In November 2016, the company sold a portfolio of 19 properties to Saban Real Estate Group. The company continued to manage 11 of the properties during a transition period subsequent to the
sale for up to five months. The transition period concluded on March 31, 2017.
Capital Structure as of September 30, 2017
($ in millions, except per share data)
14
Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule
Total Debt1 $ 2,763
Total Equity Market Value2 6,104
Total Market Capitalization $ 8,867
Debt to Total Market Capitalization 31.2%
Net Debt to EBITDA3 6.4x
Total Asset Value4 $ 7,725
Unencumbered Asset Value $ 6,415
Unencumbered Asset Value to Total Asset Value 83.0%
Requirement Current Ratio
Total Debt to Total Asset Value ≤ 60% 35.8%
Secured Debt to Total Asset Value ≤ 40% 8.4%
Unencumbered Asset Value to Unsecured Debt > 150% 303.1%
Interest Coverage3 > 1.5x 4.4x
Weighted Average
Principal Average Term To
Outstanding1 Interest Rate Maturity
Fixed Rate Mortgage Loans $ 524 4.8%5 3.6 Yrs
Construction Loans 22 4.2% 2.3 Yrs
Unsecured Revolving Credit Facility 266 2.4% 4.5 Yrs
Unsecured Term Loans6 650 2.3% 2.7 Yrs
Unsecured Notes 1,200 3.8% 5.1 Yrs
On-Campus Participating Properties 101 5.0% 14.8 Yrs
Total/Weighted Average $ 2,763 3.5% 4.5 Yrs
Variable Rate Debt as % of Total Debt7 34.0%
Note – refer to the definitions outlined on pages 20 and 21 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 $20.7 million, unamortized original issue discount on unsecured notes of $1.7 million, and unamortized deferred
financing costs of $15.8 million.
2. Based on share price of $44.15 and fully diluted share count of 138,261,100 as of September 30, 2017. Assumes conversion of 1,084,644 common and preferred Operating Partnership units and 813,728 unvested restricted
stock awards.
3. Refer to calculations on page 15, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
4. Excludes accumulated depreciation of $1.1 billion and receivables and intangible assets, net of accumulated amortization, of $61.9 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 3.8%.
6. In September 2017, the company closed on a new $300 million term loan which matures in September 2018. Proceeds were used to fund the company's initial investments in the Core Spaces/DRW Portfolio as disclosed on
pages 9 and 11.
7. The company's variable rate debt consists of the unsecured revolving credit facility, unsecured term loans and construction loans for presale developments.
Weighted Average Interest Rate Of Debt Maturing Each Year
Fixed Rate
Mortgage
Loans
6.3% 3.8% 0.0% 5.6% 5.2% 4.0% 0.0% 4.5% 0.0% 3.7%
Total
Debt 6.3% 2.8% 4.4% 3.6% 4.0% 2.5% 3.9% 4.3% 7.6% 3.9%
+
Interest Coverage
($ in thousands)
15
Three Months Ended
December 31, March 31, June 30, September 30, Last Twelve
2016 2017 2017 2017 Months
Net income (loss) attributable to ACC, Inc. and Subsidiaries common stockholders $ 25,392 $ 34,050 $ (2,762) $ (1,312) $ 55,368
Net income attributable to noncontrolling interests 412 399 109 79 999
Interest expense 16,925 14,717 14,573 18,654 64,869
Income tax provision 115 257 267 267 906
Depreciation and amortization 51,901 52,323 55,943 61,125 221,292
Amortization of deferred financing costs 1,282 1,028 1,023 1,146 4,479
Share-based compensation 2,222 4,256 4,646 2,499 13,623
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") $ 112,197 $ 107,030 $ 89,748 $ 82,458 $ 391,433
Pro-forma adjustments to EBITDA1 34,814
Adjusted EBITDA $ 426,247
Interest Expense from consolidated statement of comprehensive income $ 16,925 $ 14,717 $ 14,573 $ 18,654 $ 64,869
Amortization of mortgage debt premiums/discounts 2,454 2,010 2,010 2,113 8,587
Capitalized interest 3,302 4,411 5,677 3,455 16,845
Change in accrued interest payable 3,320 (2,203) 1,981 (4,048) (950)
Cash Interest Expense $ 26,001 $ 18,935 $ 24,241 $ 20,174 $ 89,351
Pro-forma adjustments to Cash Interest Expense1 6,775
Adjusted Interest Expense $ 96,126
Interest Coverage 4.4x
Note: refer to the definitions outlined on pages 20 and 21 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)
16
Sources and Uses for Acquisition and Development Pipelines - As of September 30, 2017
Estimated Project Total Costs Remaining
Estimated Capital Uses: Cost Incurred Capital Needs
Acquisition and Development Pipeline1:
2017 Acquisition of Bridges @ 11th - Subsequent to September 30, 2017 $ 64 $ — $ 64
2018 Developments Underway2 433 194 239
2019 Developments Underway or Expected to Start in Current Year 293 53 240
Core Spaces / DRW Portfolio Transaction:
Core Spaces / DRW Acquisition - 2017 Funding3 306 265 41
Core Spaces / DRW Acquisition - 2018 Funding4 131 — 131
Core Spaces / DRW Acquisition - 2019 Funding5 154 — 154
Total $ 1,381 $ 512 $ 869
Estimated Sources: Capital Sources
Cash and Cash Equivalents as of September 30, 2017 $ 16
Estimated Cash Flow Available for Investment - through 20196 130
Targeted Asset Dispositions and/or Joint Ventures through 20197 400 - 450
Remaining Capital Needs8 323 - 273
Total $ 869
Selected Credit Metrics9
Credit Metric: September 30, 2017 Pro Forma10
Total Debt to Total Asset Value 35.8% 34.7% - 38.5%
Net Debt to EBITDA11 6.4x 5.8x - 6.6x
Note: This analysis demonstrates anticipated funding for the developments currently underway or with expected starts in the current year. Estimated Capital Uses also
includes acquisitions completed for which the company has expected future funding commitments. As future developments commence or acquisitions occur, 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. Also includes the purchase price of completed acquisitions.
2. Includes the presale development project The Edge - Stadium Centre, as disclosed on page 11.
3. Includes Core Spaces/DRW Portfolio acquisition, as disclosed on page 9, and the initial investments in the joint ventures with Core Spaces/DRW Real Estate Investments, as disclosed on page 11.
4. Includes the additional investment in the joint venture with Core Spaces/DRW Real Estate Investments to be made upon delivery of the assets, as disclosed on page 11.
5. Includes the exercise of the option to purchase the remaining interest in the joint ventures with Core Spaces/DRW Real Estate Investments as disclosed on pages 9 and 11.
6. 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 $57.9 million, which is then annualized over the
remaining 9 quarters through the end of 2019.
7. Dispositions and/or joint ventures are targeted for core assets with assumed nominal cap rates ranging from 4.25% - 5.0%.
8. Remaining capital needs are expected to come from a mix of debt, equity, and dispositions.
9. Refer to definitions outlined on pages 20 and 21 for detailed definitions of terms appearing on this page.
10. Ratios represent the pro forma impact of development deliveries and funding alternatives assumed in the Sources and Uses table. The lower end of the pro forma leverage ranges assumes remaining capital
needs are funded with equity, while the higher end assumes funding with debt. Actual ratios will vary based on the timing of construction funding and ultimate mix of sources from debt, equity, or dispositions.
11. Refer to page 15 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure.
2017 Outlook - Summary1
($ in thousands, except share and per share data)
17
Prior Current2
Low High Low High
Net income $ 103,400 $ 116,500 $ 92,900 $ 98,700
Noncontrolling interests 1,700 1,900 1,100 1,200
Loss from disposition of real estate3 — — 650 650
Elimination of provision for real estate impairment4 — — 15,300 15,300
Depreciation and amortization 211,700 211,700 217,600 217,600
Funds from operations ("FFO") $ 316,800 $ 330,100 $ 327,550 $ 333,450
Elimination of operations from on-campus participating properties (11,700) (12,100) (11,750) (12,350)
Contribution from on-campus participating properties 4,100 4,700 4,200 4,400
Contractual executive separation and retirement charges5 4,550 4,550 4,500 4,500
Property acquisition costs6 — — 2,850 2,850
Elimination of effect of transfer of asset to lender7 — — (15,200) (15,200)
Funds from operations - modified ("FFOM") $ 313,750 $ 327,250 $ 312,150 $ 317,650
Net income per share - diluted $ 0.76 $ 0.86 $ 0.68 $ 0.72
FFO per share - diluted $ 2.34 $ 2.44 $ 2.39 $ 2.43
FFOM per share - diluted $ 2.32 $ 2.42 $ 2.28 $ 2.32
Weighted-average common shares outstanding - diluted 135,500,000 135,500,000 137,100,000 137,100,000
1. The company believes that the financial results for the fiscal year ending December 31, 2017 may be affected by, among other factors:
• national and regional economic trends and events;
• the timing of acquisitions and/or dispositions;
• 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 finalization of property tax rates and assessed values in certain jurisdictions.
2. Refer to page 18 for details on changes in assumptions used to determine the revised guidance range.
3. Represents loss from one property disposed of during the second quarter of 2017. Refer to page 9.
4. Represents an impairment charge recorded in the second quarter of 2017 for one-wholly owned property currently in receivership that is in the process of being transferred to the lender in settlement of the
property's $27.4 million mortgage loan that matured in August 2017.
5. Represents contractual executive separation and retirement charges incurred with regard to the retirement of the company's former Chief Financial Officer, recognized in the first and second quarter 2017.
6. Represents transaction costs related to our initial investment in the Core Spaces/DRW transaction. Refer to pages 9 and 11.
7. Includes a $27.4 million gain on the extinguishment of debt of one wholly-owned property being transferred to the lender in settlement of the property's mortgage loan as described above, and a $12.2
million loss expected to be incurred as a result of the transfer.
2017 Property Net Operating Income Prior Current Significant Changes From Previous Guidance
Low High Low High Property net operating income revised to reflect:
Wholly-owned properties: • Removal of one property from the original 2017 same store group due to the property’s anticipated
transfer to the lender in Q4 2017 in settlement of the property’s $27.4 million mortgage loan that matured in
August 2017. The property’s anticipated contribution to 2017 net operating income is currently included in
2017 dispositions net operating income.
2017 same store properties1
Revenue $ 669,100 $ 673,800 $ 662,000 $ 663,000
Operating expenses (299,100) (297,600) (300,000) (298,100) • Completion of lease-up for 2017/2018 academic year and year to date property operating performance.
Net operating income 370,000 376,200 362,000 364,900 • $2.6 million in lost same store net operating income due to an additional $2.0 million in expenses incurred
as a result of hurricanes Harvey and Irma, beds damaged by a fire at one wholly-owned property and beds
not available for occupancy at one wholly-owned property due to renovation activity during the summer
months.
2017 new properties net operating income 34,400 35,500 42,000 42,500 • Timing and amount of acquisition activity.
2017 dispositions net operating income 600 600 1,600 1,600
Total wholly-owned properties net operating income $ 405,000 $ 412,300 $ 405,600 $ 409,000
2017 same store net operating income growth 3.6% 5.3% 1.6% 2.4% Excluding the $2.6 million of lost same store net operating income discussed above, same store net
operating income growth would be 2.3% at the low end and 3.1% at the high end.AY 2017/2018 final leasing results - occupancy 96.55% 98.75% 96.6%
AY 2017/2018 final leasing results - rental rate 3.15% 2.65% 2.9%
Dispositions2 $25,600 $53,000
Development deliveries $603,100 $609,200
Third-party Services Prior Current
Low High Low High
Third-party development services revenue $ 6,200 $ 9,600 $ 11,000 $ 11,100 Current third-party development services revenue amount assumes all remaining awarded projects targeting
commencement in 2017 will close and commence construction during the fourth quarter of 2017.Third-party management services revenue $ 9,600 $ 10,400 $ 9,400 $ 9,600
Third-party development and mgmt. services expenses $ (15,000) $ (15,500) $ (15,500) $ (15,100)
Corporate Expenses and Other Prior Current
Low High Low High
Net income:
General and administrative expenses $ 27,400 $ 27,800 $ 31,200 $ 30,500 Current range for general and administrative expenses includes $2.9 million of acquisition costs for the Core
Spaces/DRW transaction which are added back for purposes of calculating FFOM (refer to page 4).Ground/facility leases expense:
ACE properties 6,900 6,900 7,100 7,100
On-campus participating properties 2,700 3,100 2,700 2,900
Total ground/facility leases expense 9,600 10,000 9,800 10,000
Interest income3 4,100 5,000 4,900 4,900
Interest expense4 60,600 59,500 65,800 65,500 Interest expense and amortization of deferred financing costs have been revised to reflect the issuance of the
new $300 million term loan in September 2017 to finance the initial investment in the Core Spaces/DRW
transaction, the timing of the October 2017 $400 million bond issuance approximately two months earlier
than anticipated, and an additional $0.9 million of unanticipated interest expense related to the property in
receivership incurred while working with the lender to finalize the transfer of the property in settlement of the
property's $27.4 million mortgage loan.
Capitalized interest 16,400 16,300 16,000 16,000
Amortization of deferred financing costs3 4,000 4,000 4,500 4,500
Income tax provision 1,100 1,100 1,100 1,100
FFOM:
Corporate depreciation 3,600 3,200 3,700 3,700
Contribution from on-campus participating properties 4,100 4,700 4,200 4,400
Contractual executive separation and retirement charges5 4,550 4,550 4,500 4,500
Property acquisition costs — — 2,850 2,850
2017 Outlook - Changes from Previous Guidance
($ in thousands, except share and per share data)
18
1. Refer to page 19 for detail of the 2017 same store and new property groupings.
2. Includes the disposition of one wholly-owned property disposed of during the second quarter of 2017, and one wholly-owned property currently in receivership that is in the process of being transferred to the lender in settlement of the
property's $27.4 million mortgage loan.
3. Excludes on-campus participating properties.
4. Net of capitalized interest and excluding on-campus participating properties.
5. Represents contractual executive separation and retirement charges incurred with regard to the retirement of the company's former Chief Financial Officer, recognized in the first and second quarter 2017.
Detail of Property Groupings
As of September 30, 2017
19
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 5 3,010 5 3,010
2017 Development Deliveries 10 7,454 10 7,454
2018 Development Deliveries 10 6,986 10 6,986
2019 Development Deliveries 2 1,320 2 1,320
Total Wholly-owned Properties 124 73,871 36 22,670 133 77,771 27 18,770
Total # of Wholly-owned Properties Excluded1 1
Total Wholly-owned Design Beds Excluded1 860
Grand Total # of Wholly-owned Properties (All Groupings) 161
Grand Total Wholly-owned Design Beds (All Groupings) 97,401
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 September 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 final leasing results 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 that matured 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.
20
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.
21
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
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 / Nikita Bely J.P. Morgan Securities (212) 622-6682 / (212) 622-0695 anthony.paolone@jpmorgan.com / nikita.bely@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.
22
Forward-looking Statements and Non-GAAP Financial Measures
In addition to historical information, this supplemental package contains forward-looking statements under the applicable federal securities law. These statements are based on management’s current expectations and
assumptions regarding markets in which American Campus Communities operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are not
guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. For discussions of some risks and uncertainties that could cause actual results to differ materially from those
expressed or implied by the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2016 under
the heading “Risk Factors” and under the heading “Business - Forward-looking Statements” and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking
statements, including our expected 2017 operating results, whether as a result of new information, future events, or otherwise.
This presentation 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”). Refer to definitions outlined on pages 20 and 21 for a detailed explanation of terms appearing in
the supplement. The Company presents this financial information because it considers each item an important supplemental measure of its operating performance and believes it is frequently used by securities analysts,
investors and other interested parties in the evaluation of REITs. These measures should not be considered as alternatives to net income or loss computed in accordance with GAAP as an indicator of the Company's
financial performance or to cash flow from operating activities 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.