Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - AMERICAN CAMPUS COMMUNITIES INC | ex991-q42020earningsrelease.htm |
| 8-K - 8-K - AMERICAN CAMPUS COMMUNITIES INC | acc-20210222.htm |
Financial Highlights S-1 Consolidated Balance Sheets S-2 Consolidated Statements of Comprehensive Income S-3 Consolidated Statements of Funds from Operations ("FFO") S-5 Owned Properties Results of Operations S-7 Same Store Owned Properties Operating Expenses S-8 Seasonality of Operations S-9 Seasonality of Operations - Build-up to 2021 Same Store Grouping S-10 Investment Update S-11 Owned Development Update S-12 Third-Party Development Update S-13 Management Services Update S-14 Capital Structure S-15 Interest Coverage S-16 Capital Allocation – Long Term Funding Plan (2021 - 2023) S-17 Outlook - Summary (Q1 2021) S-18 Outlook - Detail (Q1 2021) S-19 Detail of Property Groupings S-20 Definitions S-21 Investor Information S-23 Table of Contents Q4 Supplemental Package February 22, 2021
Financial Highlights ($ in thousands, except share and per share data) S-1 Operating Data Three Months Ended December 31, Year Ended December 31, 2020 2019 $ Change % Change 2020 2019 $ Change % Change Total revenues $ 232,958 $ 255,835 $ (22,877) (8.9%) $ 870,584 $ 943,042 $ (72,458) (7.7%) Operating income 51,111 55,743 (4,632) (8.3%) 187,344 179,890 7,454 4.1% Net income attributable to ACC 24,807 24,720 87 0.4% 72,803 84,969 (12,166) (14.3%) Net income per share - basic 0.18 0.18 0.51 0.61 Net income per share - diluted 0.18 0.18 0.51 0.60 Funds From Operations - ("FFO") 1 89,900 89,779 121 0.1% 281,088 350,292 (69,204) (19.8%) FFO per share - diluted 1 0.65 0.65 — —% 2.02 2.52 (0.50) (19.8%) Funds From Operations - Modified ("FFOM") 1 81,773 99,404 (17,631) (17.7%) 275,495 336,172 (60,677) (18.0%) FFOM per share - diluted 1 0.59 0.72 (0.13) (18.1%) 1.98 2.42 (0.44) (18.2%) Market Capitalization and Unsecured Notes Covenants 2 December 31, 2020 December 31, 2019 Debt to total market capitalization 37.8% 34.3% Net debt to EBITDA 3 8.3x 6.7x Unencumbered asset value to total asset value 86.5% 82.5% Total debt to total asset value 41.2% 39.8% Secured debt to total asset value 7.4% 9.1% Unencumbered asset value to unsecured debt 255.3% 269.5% Interest coverage 3 3.5x 3.8x 1. Refer to page S-5 for a reconciliation to net income, the most directly comparable GAAP measure. 2. Refer to the definitions outlined on pages S-21 and S-22 for detailed definitions of terms appearing on this page. 3. Refer to calculations on page S-16, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
Consolidated Balance Sheets ($ in thousands) S-2 December 31, 2020 December 31, 2019 (unaudited) Assets Investments in real estate: Owned properties, net $ 6,721,744 $ 6,694,715 On-campus participating properties, net 69,281 75,188 Investments in real estate, net 6,791,025 6,769,903 Cash and cash equivalents 54,017 54,650 Restricted cash 19,955 26,698 Student contracts receivable, net 11,090 13,470 Operating lease right of use assets 1 457,573 460,857 Other assets 1 197,500 234,176 Total assets $ 7,531,160 $ 7,559,754 Liabilities and equity Liabilities: Secured mortgage and bond debt, net $ 646,827 $ 787,426 Unsecured notes, net 2,375,603 1,985,603 Unsecured term loans, net 199,473 199,121 Unsecured revolving credit facility 371,100 425,700 Accounts payable and accrued expenses 85,070 88,411 Operating lease liabilities 2 486,631 473,070 Other liabilities 2 185,352 157,368 Total liabilities 4,350,056 4,116,699 Redeemable noncontrolling interests 24,567 104,381 Equity: American Campus Communities, Inc. and Subsidiaries stockholders' equity: Common stock 1,375 1,373 Additional paid in capital 4,472,170 4,458,456 Common stock held in rabbi trust (3,951) (3,486) Accumulated earnings and dividends (1,332,689) (1,144,721) Accumulated other comprehensive loss (22,777) (16,946) Total American Campus Communities, Inc. and 3,114,128 3,294,676 Subsidiaries stockholders' equity Noncontrolling interests - partially owned properties 42,409 43,998 Total equity 3,156,537 3,338,674 Total liabilities and equity $ 7,531,160 $ 7,559,754 1. For purposes of calculating net asset value ("NAV") at December 31, 2020, the company excludes other assets of approximately $2.6 million related to net deferred financing costs on its revolving credit facility and the net value of in-place leases, as well as operating lease right of use assets disclosed above. 2. For purposes of calculating NAV at December 31, 2020, the company excludes other liabilities of approximately $48.3 million related to deferred revenue and fee income, as well as operating lease liabilities disclosed above.
Consolidated Statements of Comprehensive Income ($ in thousands, except share and per share data) S-3 Three Months Ended December 31, Year Ended December 31, 2020 2019 $ Change 2020 2019 $ Change Revenues (unaudited) (unaudited) Owned properties 1 $ 217,311 $ 238,908 $ (21,597) $ 818,298 $ 877,565 $ (59,267) On-campus participating properties 9,710 11,558 (1,848) 29,906 36,346 (6,440) Third-party development services 2,012 662 1,350 7,543 13,051 (5,508) Third-party management services 3,168 3,818 (650) 12,436 12,936 (500) Resident services 757 889 (132) 2,401 3,144 (743) Total revenues 232,958 255,835 (22,877) 870,584 943,042 (72,458) Operating expenses (income) Owned properties 93,713 95,896 (2,183) 378,454 390,664 (12,210) On-campus participating properties 3,164 3,443 (279) 13,521 15,028 (1,507) Third-party development and management services 5,455 5,786 (331) 21,700 19,915 1,785 General and administrative 2 8,311 8,486 (175) 36,874 31,081 5,793 Depreciation and amortization 67,724 68,546 (822) 267,703 275,046 (7,343) Ground/facility leases 3,480 4,151 (671) 13,513 14,151 (638) (Gain) loss from disposition of real estate, net — (229) 229 (48,525) 53 (48,578) Provision for impairment 3 — 14,013 (14,013) — 17,214 (17,214) Total operating expenses 181,847 200,092 (18,245) 683,240 763,152 (79,912) Operating income 51,111 55,743 (4,632) 187,344 179,890 7,454 Nonoperating income (expenses) Interest income 363 831 (468) 2,939 3,686 (747) Interest expense (28,500) (28,855) 355 (112,507) (111,287) (1,220) Amortization of deferred financing costs (1,368) (1,347) (21) (5,259) (5,012) (247) (Loss) gain from extinguishment of debt 4 — — — (4,827) 20,992 (25,819) Other nonoperating income 5 3,243 — 3,243 3,507 — 3,507 Total nonoperating expenses (26,262) (29,371) 3,109 (116,147) (91,621) (24,526) Income before income taxes 24,849 26,372 (1,523) 71,197 88,269 (17,072) Income tax provision (216) (524) 308 (1,349) (1,507) 158 Net income 24,633 25,848 (1,215) 69,848 86,762 (16,914) Net loss (income) attributable to noncontrolling interests 174 (1,128) 1,302 2,955 (1,793) 4,748 Net income attributable to ACC, Inc. and $ 24,807 $ 24,720 $ 87 $ 72,803 $ 84,969 $ (12,166) Subsidiaries common stockholders Other comprehensive income (loss) Change in fair value of interest rate swaps and other 1,837 1,983 (146) (5,831) (12,549) 6,718 Comprehensive income $ 26,644 $ 26,703 $ (59) $ 66,972 $ 72,420 $ (5,448) Net income per share attributable to ACC, Inc. and Subsidiaries common stockholders Basic $ 0.18 $ 0.18 $ 0.51 $ 0.61 Diluted $ 0.18 $ 0.18 $ 0.51 $ 0.60 Weighted-average common shares outstanding Basic 137,632,091 137,404,752 137,588,964 137,295,837 Diluted 138,725,378 138,372,433 138,710,430 138,286,778 Refer to the next page for footnote explanations.
Consolidated Statements of Comprehensive Income ($ in thousands, except share and per share data) S-4 1. Refer to page S-7 for more detail regarding the impact of the COVID-19 pandemic on revenues for our same store portfolio. 2. General and administrative expenses for the twelve months ended December 31, 2020 include $1.1 million related to the settlement of a litigation matter. 3. The three and twelve months ended December 31, 2019 amounts represent a non-cash impairment charge for an intangible asset related to a property tax incentive arrangement at one owned property. The twelve months ended December 31, 2019 amount also includes an impairment charge recorded in March 2019 concurrent with the classification of one owned property as held for sale. 4. The twelve months ended December 31, 2020 amount represents the loss associated with the January 2020 redemption of the company's $400 million 3.35% Senior Notes originally scheduled to mature in October 2020. The twelve months ended December 31, 2019 amount represents the gain on the extinguishment of debt associated with a property that was transferred to the lender in settlement of the property's mortgage loan in July 2019. 5. In October 2020, the company received full repayment of the outstanding balance of a loan receivable, including accrued interest, totaling $55.0 million. As a result of the early repayment of the note, the company recorded a gain totaling $2.1 million which is included in other nonoperating income on the accompanying consolidated statements of comprehensive income. The loan was acquired in 2013 and generated annual interest income of approximately $2.9 million prior to its repayment. The three and twelve months ended December 31, 2020 also include a gain of $1.1 million related to the settlement of a litigation matter.
Consolidated Statements of Funds from Operations ("FFO") (Unaudited, $ in thousands, except share and per share data) S-5 Three Months Ended December 31, Year Ended December 31, 2020 2019 $ Change 2020 2019 $ Change Net income attributable to ACC, Inc. and Subsidiaries common stockholders $ 24,807 $ 24,720 $ 87 $ 72,803 $ 84,969 $ (12,166) Noncontrolling interests' share of net (loss) income (174) 1,128 (1,302) (2,955) 1,793 (4,748) Joint Venture ("JV") partners' share of FFO JV partners' share of net loss (income) 272 (1,030) 1,302 3,259 (1,398) 4,657 JV partners' share of depreciation and amortization (1,911) (2,156) 245 (7,747) (8,644) 897 (1,639) (3,186) 1,547 (4,488) (10,042) 5,554 (Gain) loss from disposition of real estate — (229) 229 (48,525) 53 (48,578) Elimination of provision for real estate impairment — — — — 3,201 (3,201) Total depreciation and amortization 67,724 68,546 (822) 267,703 275,046 (7,343) Corporate depreciation 1 (818) (1,200) 382 (3,450) (4,728) 1,278 FFO attributable to common stockholders and OP unitholders 89,900 89,779 121 281,088 350,292 (69,204) Elimination of operations of on-campus participating properties ("OCPPs") Net income from OCPPs (3,510) (4,449) 939 (3,716) (6,587) 2,871 Amortization of investment in OCPPs (2,050) (2,046) (4) (8,015) (8,380) 365 84,340 83,284 1,056 269,357 335,325 (65,968) Modifications to reflect operational performance OCPPs Our share of net cashflow 2 (273) 1,004 (1,277) 1,359 3,067 (1,708) Management fees and other 727 652 75 1,873 2,249 (376) Contribution from OCPPs 454 1,656 (1,202) 3,232 5,316 (2,084) Transaction costs 3 — 451 (451) — 598 (598) Elimination of loss (gain) from extinguishment of debt 4 — — — 4,827 (20,992) 25,819 Elimination of provision for impairment of intangible asset 5 — 14,013 (14,013) — 14,013 (14,013) Elimination of litigation settlements 6 (1,100) — (1,100) — — — Elimination of gain from early repayment of loan receivable 7 (2,136) — (2,136) (2,136) — (2,136) Elimination of FFO from property in receivership 8 — — — — 1,912 (1,912) Stockholder engagement and other proxy advisory costs 9 215 — 215 215 — 215 Funds from operations-modified ("FFOM") attributable to $ 81,773 $ 99,404 $ (17,631) $ 275,495 $ 336,172 $ (60,677) common stockholders and OP unitholders FFO per share - diluted $ 0.65 $ 0.65 $ 2.02 $ 2.52 FFOM per share - diluted $ 0.59 $ 0.72 $ 1.98 $ 2.42 Weighted-average common shares outstanding - diluted 139,229,095 138,876,150 139,214,147 138,860,311 Refer to the next page for footnote explanations.
Consolidated Statements of Funds from Operations ("FFO") (Unaudited, $ in thousands, except share and per share data) 1. Represents depreciation on corporate assets not added back for purposes of calculating FFO. 2. 50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures which is included in ground/facility leases expense in the consolidated statements of comprehensive income (refer to page S-3). During the three months ended December 31, 2020, the company waived its right to one property's 50% share of the net cash flow for the 2019-2020 academic year, which resulted in a $0.6 million reversal of contribution from OCPPs. 3. The three and twelve months ended December 31, 2019 amounts represent transaction costs incurred in connection with the closing of presale development transactions. 4. The twelve months ended December 31, 2020 amount represents the loss associated with the January 2020 redemption of the company's $400 million 3.35% Senior Notes originally scheduled to mature in October 2020. The twelve months ended December 31, 2019 amount represents the gain on the extinguishment of debt associated with a property that was transferred to the lender in settlement of the property's mortgage loan in July 2019. 5. Represents a non-cash impairment charge for an intangible asset related to a property tax incentive arrangement at one owned property. 6. The three months ended December 31, 2020 amount represents a $1.1 million gain associated with the settlement of a litigation matter, which is included in other nonoperating income on the accompanying consolidated statements of comprehensive income. The twelve months ended December 31, 2020 amount represents the gain recorded during the fourth quarter 2020, offset by litigation settlement expense of $1.1 million recorded in the first quarter 2020 for another matter which is included in general and administrative expenses in the accompanying consolidated statements of comprehensive income. For purposes of calculating FFOM for the twelve months ended December 31, 2020, the two amounts offset each other for a net effect of $0. 7. In October 2020, the company received full repayment of the outstanding balance of a loan receivable, including accrued interest, totaling $55.0 million. As a result of the early repayment of the note, the company recorded a gain totaling $2.1 million which is included in other nonoperating income on the accompanying consolidated statements of comprehensive income. The loan was acquired in 2013 and generated annual interest income of approximately $2.9 million prior to its repayment. 8. Represents FFO for an owned property that was transferred to the lender in July 2019 in settlement of the property's mortgage loan. 9. Represents consulting, legal, and other related costs incurred in relation to stockholder engagement activities in preparation for the company’s 2021 annual stockholders' meeting. S-6
Owned Properties Results of Operations 1 ($ in thousands) S-7 Three Months Ended December 31, Year Ended December 31, 2020 2019 $ Change % Change 2020 2019 $ Change % Change Owned properties revenues Same store properties 2 $ 204,068 $ 224,328 $ (20,260) (9.0%) $ 775,929 $ 841,523 $ (65,594) (7.8%) New properties 14,000 10,583 3,417 42,069 15,693 26,376 Sold and held for sale properties 3 — 4,886 (4,886) 2,701 23,493 (20,792) Total revenues 4 $ 218,068 $ 239,797 $ (21,729) (9.1%) $ 820,699 $ 880,709 $ (60,010) (6.8%) Owned properties operating expenses Same store properties 5 $ 88,378 $ 90,237 $ (1,859) (2.1%) $ 359,553 $ 371,926 $ (12,373) (3.3%) New properties 5,254 3,608 1,646 17,520 7,400 10,120 Other 6 81 128 (47) 364 338 26 Sold and held for sale properties 3 7 — 1,923 (1,923) 1,017 11,000 (9,983) Total operating expenses $ 93,713 $ 95,896 $ (2,183) (2.3%) $ 378,454 $ 390,664 $ (12,210) (3.1%) Owned properties net operating income Same store properties $ 115,690 $ 134,091 $ (18,401) (13.7%) $ 416,376 $ 469,597 $ (53,221) (11.3%) New properties 8,746 6,975 1,771 24,549 8,293 16,256 Other 6 (81) (128) 47 (364) (338) (26) Sold and held for sale properties 3 7 — 2,963 (2,963) 1,684 12,493 (10,809) Total net operating income $ 124,355 $ 143,901 $ (19,546) (13.6%) $ 442,245 $ 490,045 $ (47,800) (9.8%) 1. Refer to page S-20 for detail of our store groupings. 2. The most significant impacts to our same store property revenues resulting from COVID-19 are as follows: – Approximately $1.5 million and $18.7 million in rent refunds and/or early lease terminations was provided to tenants at our on-campus ACE properties and certain off-campus residence halls during the three and twelve months ended December 31, 2020, respectively; – Approximately $0.9 million and $13.6 million in rent was forgiven during the three and twelve months ended December 31, 2020, respectively, as part of our Resident Hardship Program for residents and families at our same store properties who experienced financial hardship due to COVID-19; – Approximately $3.7 million and $19.5 million of the decrease during the three and twelve months ended December 31, 2020, respectively, as compared to the prior year was a result of lost summer camp and conference revenue, waived fees, an increase in the provision for uncollectible accounts resulting from rent delinquencies, and other items related to COVID-19; – Approximately $18.6 million and $27.2 million of the decrease in revenues as compared to the amount initially anticipated prior to the impact of COVID-19 for the three and twelve months ended December 31, 2020, respectively, was due to the decrease in occupancy from the 2020-2021 academic year lease-up. 3. Includes properties sold in 2019 and 2020 and one property that was transferred to the lender in July 2019 in settlement of the property's mortgage loan. 4. Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income. 5. Refer to page S-8 for detail of same store operating expenses. 6. Includes professional fees related to the operation of consolidated joint ventures that are included in owned properties operating expenses in the consolidated statements of comprehensive income (refer to page S-3). 7. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
Same Store Owned Properties Operating Expenses 1 2 ($ in thousands, except per bed amounts) S-8 Three Months Ended December 31, 2020 2019 Total Per Bed % Change From Prior Year % of Total Operating Expenses Total Per Bed % of Total Operating Expenses Property taxes $ 22,582 $ 245 8.1% 25% $ 20,885 $ 226 23% Payroll 18,125 197 5.1% 21% 17,239 187 19% General & administrative and other 17,269 187 (17.4%) 20% 20,909 227 23% Utilities 17,637 191 (9.8%) 20% 19,548 212 22% Repairs and maintenance 6,789 74 23.4% 8% 5,503 60 6% Marketing 3,009 33 (21.5%) 3% 3,835 42 4% Insurance 2,967 32 28.0% 3% 2,318 25 3% Total same store owned operating expenses $ 88,378 $ 959 (2.1) % 100 % $ 90,237 $ 979 100 % Same store owned beds 92,193 Year Ended December 31, 2020 2019 Total Per Bed % Change From Prior Year % of Total Operating Expenses Total Per Bed % of Total Operating Expenses Property taxes $ 88,368 $ 959 4.2% 25% $ 84,783 $ 919 23% Payroll 72,406 785 0.3% 20% 72,187 783 19% General & administrative and other 70,335 763 (10.8%) 20% 78,842 855 21% Utilities 68,674 745 (7.3%) 19% 74,107 804 20% Repairs and maintenance 36,614 397 1.7% 10% 36,018 391 10% Marketing 12,184 132 (28.5%) 3% 17,044 185 5% Insurance 10,972 119 22.7% 3% 8,945 97 2% Total same store owned operating expenses $ 359,553 $ 3,900 (3.3) % 100 % $ 371,926 $ 4,034 100 % Same store owned beds 92,193 1. Refer to the definition of operating expenses on page S-22 for a detailed description of items included in the various expense categories. 2. Refer to page S-20 for detail of our same store groupings.
Seasonality of Operations 1 ($ in thousands, except per bed amounts) S-9 Three Months Ended Total/Weighted Average- December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Last 12 Months 2020 Same Store Properties Average number of owned beds 92,193 92,193 92,193 92,193 92,193 92,193 Average physical occupancy for the quarter 97.4 % 97.0 % 85.1 % 84.9 % 90.2 % 89.3 % Rental revenue per occupied bed per month 2 $ 783 $ 777 $ 700 $ 732 $ 774 $ 747 Rental revenue $ 210,989 $ 208,484 $ 164,806 $ 171,832 $ 193,211 $ 738,333 Other income 3 13,339 11,283 4,560 10,896 10,857 37,596 Total revenue $ 224,328 $ 219,767 $ 169,366 $ 182,728 $ 204,068 $ 775,929 Property operating expenses 90,237 88,113 82,112 100,950 88,378 359,553 Net operating income $ 134,091 $ 131,654 $ 87,254 $ 81,778 $ 115,690 $ 416,376 Operating margin 59.8 % 59.9 % 51.5 % 44.8 % 56.7 % 53.7 % 2020 New Properties Average number of owned beds 3,159 3,159 3,678 5,022 5,642 4,375 Average physical occupancy for the quarter 98.8 % 97.7 % 69.9 % 52.9 % 61.6 % 67.4 % Rental revenue per occupied bed per month 2 $ 1,069 $ 1,067 $ 1,050 $ 1,188 $ 1,107 $ 1,102 Rental revenue $ 10,010 $ 9,876 $ 8,101 $ 9,466 $ 11,541 $ 38,984 Other income 3 573 467 21 138 2,459 3,085 Total revenue $ 10,583 $ 10,343 $ 8,122 $ 9,604 $ 14,000 $ 42,069 Property operating expenses 3,608 3,291 3,589 5,386 5,254 17,520 Net operating income $ 6,975 $ 7,052 $ 4,533 $ 4,218 $ 8,746 $ 24,549 Operating margin 65.9 % 68.2 % 55.8 % 43.9 % 62.5 % 58.4 % ALL PROPERTIES Average number of owned beds 95,352 95,352 95,871 97,215 97,835 96,568 Average physical occupancy for the quarter 97.5 % 97.0 % 84.6 % 83.2 % 88.6 % 88.3 % Rental revenue per occupied bed per month 2 $ 792 $ 787 $ 711 $ 747 $ 787 $ 759 Rental revenue $ 220,999 $ 218,360 $ 172,907 $ 181,298 $ 204,752 $ 777,317 Other income 3 13,912 11,750 4,581 11,034 13,316 40,681 Total revenue $ 234,911 $ 230,110 $ 177,488 $ 192,332 $ 218,068 $ 817,998 Property operating expenses 93,845 91,404 85,701 106,336 93,632 377,073 Net operating income $ 141,066 $ 138,706 $ 91,787 $ 85,996 $ 124,436 $ 440,925 Operating margin 60.1 % 60.3 % 51.7 % 44.7 % 57.1 % 53.9 % Sold properties and other 4 Total revenue $ 4,886 $ 2,701 $ — $ — $ — $ 2,701 Property operating expenses 2,051 1,070 48 182 81 1,381 Net operating income (loss) $ 2,835 $ 1,631 $ (48) $ (182) $ (81) $ 1,320 1. Refer to page S-20 for detail of our store groupings. 2. Rental revenue per occupied bed per month is calculated based upon our net student rental revenue earned during the respective quarter divided by average monthly occupied beds over the periods presented. 3. 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, and the provision for uncollectible accounts. 4. Includes properties sold during the periods presented and costs related to the operation of consolidated joint ventures as noted on page S-7.
Seasonality of Operations - Build-up to 2021 Same Store Grouping 1 ($ in thousands, except per bed amounts) S-10 Three Months Ended Total/Weighted Average- March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Last 12 Months 2020 Same Store Properties 2 Average number of owned beds 92,193 92,193 92,193 92,193 92,193 Average physical occupancy for the quarter 97.0% 85.1% 84.9% 90.2% 89.3% Rental revenue per occupied bed per month $ 777 $ 700 $ 732 $ 774 $ 747 Rental revenue $ 208,484 $ 164,806 $ 171,832 $ 193,211 $ 738,333 Other income 3 11,283 4,560 10,896 10,857 37,596 Total revenue $ 219,767 $ 169,366 $ 182,728 $ 204,068 $ 775,929 Property operating expenses 88,113 82,112 100,950 88,378 359,553 Net operating income $ 131,654 $ 87,254 $ 81,778 $ 115,690 $ 416,376 Operating margin 59.9% 51.5% 44.8% 56.7% 53.7% 2021 New Same Store Properties 4 Average number of owned beds 3,159 3,159 3,159 3,159 3,159 Average physical occupancy for the quarter 97.7% 81.2% 76.1% 98.5% 88.4% Rental revenue per occupied bed per month $ 1,067 $ 1,052 $ 1,166 $ 1,097 $ 1,096 Rental revenue $ 9,877 $ 8,094 $ 8,411 $ 10,238 $ 36,620 Other income 3 277 (69) 10 415 633 Total revenue $ 10,154 $ 8,025 $ 8,421 $ 10,653 $ 37,253 Property operating expenses 2,952 2,778 3,537 2,912 12,179 Net operating income $ 7,202 $ 5,247 $ 4,884 $ 7,741 $ 25,074 Operating margin 70.9% 65.4% 58.0% 72.7% 67.3% 2021 SAME STORE PROPERTIES Average number of owned beds 95,352 95,352 95,352 95,352 95,352 Average physical occupancy for the quarter 97.0% 85.0% 84.6% 90.5% 89.3% Rental revenue per occupied bed per month $ 787 $ 711 $ 745 $ 786 $ 757 Rental revenue $ 218,361 $ 172,900 $ 180,243 $ 203,449 $ 774,953 Other income 3 11,560 4,491 10,906 11,272 38,229 Total revenue $ 229,921 $ 177,391 $ 191,149 $ 214,721 $ 813,182 Property operating expenses 91,065 84,890 104,487 91,290 371,732 Net operating income $ 138,856 $ 92,501 $ 86,662 $ 123,431 $ 441,450 Operating margin 60.4% 52.1% 45.3% 57.5% 54.3% 1. Refer to page S-20 for detail of same store groupings. 2. This section presents operating results for the 2020 same store properties from page S-9. 3. 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, and the provision for uncollectible accounts. 4. Includes five development properties opened in 2019 that will become part of the same store grouping for 2021.
Investment Update ($ in thousands) DISPOSITIONS Project Location Primary University Served Beds Closing Date Sales Price Extinguished Mortgage Debt The Varsity College Park, MD University of Maryland 901 March 20, 2020 $ 148,000 $ — S-11
Owned Development Update ($ in thousands) S-12 1. Does not include land parcels in eleven markets totaling $77.5 million. 2. 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 or ground lessors. Such spaces include but are not limited to dining, childcare, retail, academic, and office facilities. Total and Estimated Project Cost excludes the costs of the construction of such facilities, as they will be reimbursed by the ground lessors. 3. Includes $359.5 million in construction in progress "CIP" and excludes $2.5 million of CIP balances related to ongoing renovation projects at operating properties. Total consolidated CIP as of December 31, 2020 was $362.0 million. 4. Phase III, with estimated project costs of $54.4 million and 984 beds, was completed in January 2021. Phase IV, with estimated project costs of $84.5 million and 1,521 beds, is scheduled for occupancy in May 2021. Phase V, with estimated project costs of $51.5 million and 864 beds, is scheduled for occupancy in August 2021. 5. Phase VI, with estimated project costs of $61.3 million and 867 beds, is scheduled for occupancy in January 2022. Phase VII, with estimated project costs of $90.3 million and 1,632 beds, is scheduled for occupancy in May 2022. Phase VIII, with estimated project costs of $41.4 million and 736 beds, is scheduled for occupancy in August 2022. 6. Phase IX, with estimated project costs of $81.5 million and 1,473 beds, is scheduled for occupancy in January 2023. Phase X, with estimated project costs of $41.2 million and 736 beds, is scheduled for occupancy in May 2023. OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION 1 Project Location Primary University / Market Served Project Type Beds Estimated Project Cost 2 Total Costs Incurred as of December 31, 2020 3 Scheduled Completion Disney College Program Phases III-V 4 Orlando, FL Walt Disney World® Resort ACE 3,369 $ 190,400 $ 180,096 Jan, May & Aug 2021 Disney College Program Phases VI-VIII 5 Orlando, FL Walt Disney World® Resort ACE 3,235 193,000 127,986 Jan, May & Aug 2022 Disney College Program Phases IX-X 6 Orlando, FL Walt Disney World® Resort ACE 2,209 122,700 55,522 Jan & May 2023 8,813 $ 506,100 $ 363,604
Third-Party Development Update ($ in thousands) S-13 Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 $ Change 2020 2019 $ Change Development services revenue $ 2,012 1 $ 662 $ 1,350 $ 7,543 1 $ 13,051 $ (5,508) % of total revenue 0.9 % 0.3 % 0.9 % 1.4 % 1. The three months ended December 31, 2020 amount includes $0.4 million and $0.6 million of construction savings revenue related to one project delivered in Fall 2019 and one project delivered in Fall 2020, respectively. The twelve months ended December 31, 2020 amount includes $1.7 million and $0.6 million of construction savings revenue related to three projects delivered in Fall 2019 and one project delivered in Fall 2020, respectively. 2. These awards relate to speculative development projects that are subject to final determination of feasibility, negotiation, final award, procurement rules and other applicable law, execution and closing of definitive agreements on terms acceptable to the company, and fluctuations in the construction and financing markets. Anticipated commencement and fees are dependent upon the availability of project financing, which is affected by current capital market conditions. Anticipated commencement and targeted completion dates for certain projects have been and continue to be delayed due to disruption associated with COVID-19. 3. These projects include multiple phases to be completed over several years. The full scope, transaction structure, feasibility, fees, and timing will be negotiated. CONTRACTED PROJECTS IN PROGRESS Project Location Primary University Served Beds Total Fees Fees Earned as of December 31, 2020 Fees Earned in Current Year Remaining Fees as of December 31, 2020 Scheduled Completion University of California - Riverside North District Phase I Riverside, CA University of California, Riverside 1,502 $ 6,700 $ 4,892 $ 1,058 $ 1,808 September 2021 Georgetown University - Capitol Campus Housing Washington, D.C. Georgetown University 476 3,000 1,751 1,751 1,249 August 2022 1,978 $ 9,700 $ 6,643 $ 2,809 $ 3,057 ON-CAMPUS AWARD PIPELINE 2 Project Location Anticipated Financing Structure Anticipated Commencement Targeted Completion Estimated Fees Concordia University Phase II Austin, TX Third-party Q1 2021 Fall 2022 $1,300 Upper Hearst Development for the Goldman School of Public Policy Berkeley, CA Third-party 2021 / 2022 Summer 2023 / 2024 $3,000 University of California Irvine Phase V Irvine, CA Third-party 2021 / 2022 Summer 2023 / 2024 $5,200 Princeton University Lake Campus Graduate Housing Princeton, NJ Third-party Q4 2021 / Q1 2022 Fall 2023 $6,000 MIT Family & Graduate Housing Cambridge, MA ACE Q4 2021 Fall 2024 N/A Northeastern University - Phase II Boston, MA ACE Q1 / Q2 2022 Fall 2024 N/A University of California Berkeley Master Development - Phase I Berkeley, CA ACE 2022 Fall 2024 N/A University of California Berkeley Master Development - Future Phases 3 Berkeley, CA TBD TBD TBD TBD University of California Riverside Master Development 3 Riverside, CA Third-party TBD TBD TBD West Virginia University Master Development 3 Morgantown, WV TBD TBD TBD TBD Virginia Commonwealth University (Honors College) Richmond, VA TBD TBD TBD TBD
Management Services Update ($ in thousands) S-14 Three Months Ended December 31, Year Ended December 31, 2020 2019 $ Change 2020 2019 $ Change Management services revenue $ 3,168 $ 3,818 $ (650) $ 12,436 $ 12,936 $ (500) % of total revenue 1.4 % 1.5 % 1.4 % 1.4 % 1. Stabilized annual fees are dependent upon the achievement of normalized occupancy levels which are not expected to occur during the 2020-2021 academic year as a result of COVID-19. 2. The stabilized annual fee amount does not include an initial operations fee of $140,000 earned from May 2019 through July 2020. NEW / PENDING MANAGEMENT CONTRACTS Project Location Primary University / Market Served Approximate Beds Stabilized Annual Fees 1 Actual or Anticipated Commencement The Oasis KGI Commons Claremont, CA Keck Graduate Institute 419 $ 235 April 2020 University View II Prairie View, TX Prairie View A&M University 540 190 August 2020 The Cambridge at College Station College Station, TX Texas A&M University 552 220 August 2020 Dundee Residence Hall and Glasgow Dining Hall Riverside, CA University of California, Riverside 820 440 September 2020 The Village 2 Henderson, NV Nevada State College 342 100 October 2020 University of California - Riverside North District Phase I Riverside, CA University of California, Riverside 1,502 540 September 2021 Georgetown University - Capitol Campus Housing Washington, D.C. Georgetown University 476 400 September 2022 4,651 $ 2,125 DISCONTINUED MANAGEMENT CONTRACTS Project Location Primary University / Market Served Beds 2020 Fee Contribution Prior to Termination Discontinued As Of The Rixey Arlington, VA Marymount University 531 $ 4 January 2020 Spinner Place Burlington, VT University of Vermont 312 17 April 2020 Independence Place Columbus, GA Columbus State University 555 150 April 2021 1,398 $ 171
1. Refer to the definitions outlined on pages S-21 and S-22 for detailed definitions of terms appearing on this page. 2. Excludes net unamortized debt premiums related to mortgage loans assumed in connection with acquisitions of $1.7 million, unamortized original issue discount on unsecured notes of $5.8 million, and unamortized deferred financing costs of $20.3 million. 3. Based on share price of $42.77 and fully diluted share count of 139,228,404 as of December 31, 2020. Assumes conversion of 503,717 common and preferred Operating Partnership units and 1,092,596 unvested restricted stock awards. 4. Refer to calculations on page S-16, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures. 5. Excludes accumulated depreciation of $1.8 billion, receivables and intangible assets, net of accumulated amortization, of $64.8 million, and lease-related right of use assets of $457.6 million. 6. Includes $330.0 million of mortgage debt related to the ACC / Allianz joint venture of which the company has a 55% interest. 7. 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 4.0%. 8. The company's variable rate debt consists of the unsecured revolving credit facility and $2.1 million of mortgage debt at one of our on-campus participating properties. 9. In February 2021, $24.0 million of on-campus participating property mortgage debt scheduled to mature in 2021 was refinanced, which extended the maturity to February 2028. Capital Structure as of December 31, 2020 1 ($ in millions, except per share data) S-15 Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule Total Debt ² $ 3,617 Total Equity Market Value ³ 5,955 Total Market Capitalization 9,572 Debt to Total Market Capitalization 37.8% Net Debt to EBITDA ⁴ 8.3x Total Asset Value ⁵ $ 8,772 Unencumbered Asset Value 7,585 Unencumbered Asset Value to Total Asset Value 86.5% Requirement Current Ratio Total Debt to Total Asset Value ≤ 60% 41.2% Secured Debt to Total Asset Value ≤ 40% 7.4% Unencumbered Asset Value to Unsecured Debt > 150% 255.3% Interest Coverage ⁴ > 1.5x 3.5x Principal Outstanding ² Weighted Average Interest Rate Average Term To Maturity Mortgage Loans ⁶ $ 563 4.2% 7 5.3 Yrs Unsecured Revolving Credit Facility 371 1.4% 1.2 Yrs Unsecured Term Loan 200 2.5% 1.5 Yrs Unsecured Notes 2,400 3.7% 6.2 Yrs On-Campus Participating Properties 83 4.7% 12.7 Yrs Total/Weighted Average $ 3,617 3.5% 5.5 Yrs Variable Rate Debt as % of Total Debt 8 10.3 % Weighted Average Interest Rate Of Debt Maturing Each Year Fixed Rate Debt 4.9% 2.7% 3.8% 4.2% N/A 3.7% 3.6% 4.1% N/A 3.4% Total Debt 4.7% 1.9% 3.8% 4.2% 7.6% 3.7% 3.6% 4.1% N/A 3.4%
Interest Coverage 1 ($ in thousands) S-16 Three Months Ended March 31, June 30, September 30, December 31, Last Twelve 2020 2020 2020 2020 Months Net income (loss) attributable to ACC, Inc. and Subsidiaries common stockholders $ 80,855 $ (13,344) $ (19,515) $ 24,807 $ 72,803 Net income (loss) attributable to noncontrolling interests 1,206 (2,078) (1,909) (174) (2,955) Interest expense 27,783 27,168 29,056 28,500 112,507 Income tax provision 379 381 373 216 1,349 Depreciation and amortization 66,169 66,441 67,369 67,724 267,703 Amortization of deferred financing costs 1,287 1,255 1,349 1,368 5,259 Share-based compensation 3,988 4,439 3,502 3,495 15,424 Loss on extinguishment of debt 4,827 — — — 4,827 Gain from disposition of real estate (48,525) — — — (48,525) Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") $ 137,969 $ 84,262 $ 80,225 $ 125,936 $ 428,392 Pro-forma adjustments to EBITDA 2 26 Adjusted EBITDA $ 428,418 Interest Expense from consolidated statement of comprehensive income $ 27,783 $ 27,168 $ 29,056 $ 28,500 $ 112,507 Amortization of mortgage debt premiums/discounts 1,411 1,000 1,000 1,317 4,728 Capitalized interest 3,246 3,396 2,833 2,654 12,129 Change in accrued interest payable 2,886 (3,638) (322) (6,761) (7,835) Cash Interest Expense $ 35,326 $ 27,926 $ 32,567 $ 25,710 $ 121,529 Pro-forma adjustments to Cash Interest Expense 2 1,670 Adjusted Interest Expense $ 123,199 Interest Coverage 3.5x 1. Refer to pages S-21 and S-22 for detailed definitions of terms appearing on this page. 2. 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 (2021 - 2023) ($ in millions) S-17 Sources and Uses for Development - As of December 31, 2020 Estimated Project Total Costs Remaining Estimated Capital Uses1: Cost Incurred Capital Needs Disney Internships & College Program Housing Phases III-V (2021 deliveries) $ 190 $ 180 $ 10 Phases VI-VIII (2022 deliveries) 193 128 65 Phases IX-X (2023 deliveries) 123 56 67 Total $ 506 $ 364 $ 142 Estimated Sources through 2023: Capital Sources Cash and Cash Equivalents as of December 31, 2020 $ 54 Estimated Cash Flow Available for Investment - through 2023 2 245 Anticipated Debt (Repayment) / Funding - through 2023 3 (534) to (334) Anticipated Capital Recycling and/or Equity Funding - through 2023 3 377 to 177 Total $ 142 Selected Credit Metrics 4 Credit Metric: December 31, 2020 Pro Forma 5 Total Debt to Total Asset Value 41.2% 34.8% - 37.8% Net Debt to EBITDA 6 8.3x 5.7x - 6.1x Note: This analysis demonstrates anticipated funding for the developments currently committed, underway, or with expected starts in the current year. As future developments commence, they are expected to be funded via additional dispositions, joint ventures, free cash available for investment, and capital market transactions. For purposes of calculating the pro forma Net Debt to EBITDA ratio, EBITDA has been normalized for the COVID-19 related impacts on revenue and operating expenses during 2020 and assumes the underwritten EBITDA for the development properties being delivered in 2020 and beyond. 1. Includes owned 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 S-12. 2. Available cash flow is derived from disclosures in our 2019 Form 10-K and is calculated as net cash provided by operating activities of $370.4 million, excluding changes in working capital of $8.7 million plus interest rate swap related items of $12.0 million, less dividend payments of $258.6 million, less principal payments on debt of $11.9 million, less recurring capital expenditures of $21.5 million. Calculation results in available cash flow for investment in 2019 of $81.7 million, which is then annualized over the remaining 12 quarters through the end of 2023. The global disruption associated with the COVID-19 pandemic could have a material impact on the company's future cash flows and liquidity position, the magnitude of which is uncertain. Therefore, no assurances can be made that future cash flows will be consistent with historical levels. 3. Reflects the company's current anticipated capital sources to fund committed developments through 2023. The actual mix of capital sources may vary based on prevailing capital market conditions and the company's balance sheet management strategy. 4. Refer to definitions outlined on pages S-21 and S-22 for detailed definitions of terms appearing on this page. 5. Ratios represent the pro forma impact of development deliveries and funding alternatives assumed in the Sources and Uses table. The lower end of the pro forma leverage ranges assumes remaining capital needs in excess of debt are funded with equity, while the higher end assumes remaining needs in excess of debt are funded with dispositions. Actual ratios will vary based on the timing of construction funding, future cash flow available for investment, and the ultimate mix of sources from debt, equity, joint ventures, or dispositions. 6. Refer to page S-16 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure.
Outlook - Summary (Q1 2021) 1 ($ in thousands, except share and per share data) S-18 Q1 2021 Guidance Low High Net income $ 12,400 $ 15,600 Noncontrolling interests' share of net income 300 300 Joint Venture ("JV") partners' share of FFO JV partners' share of net income (300) (300) JV partners' share of depreciation and amortization (1,900) (1,900) (2,200) (2,200) Total depreciation and amortization 67,800 67,800 Corporate depreciation (800) (800) FFO 77,500 80,700 Elimination of operations from on-campus participating properties ("OCPP") (4,800) (4,800) Contribution from OCPPs 1,100 1,100 Stockholder engagement and other proxy advisory costs 2 900 900 Funds from operations - modified ("FFOM") $ 74,700 $ 77,900 Net income per share - diluted $ 0.09 $ 0.11 FFO per share - diluted $ 0.56 $ 0.58 FFOM per share - diluted $ 0.54 $ 0.56 Weighted-average common shares outstanding - diluted 139,576,200 139,576,200 1. The company believes that the financial results for the three months ended March 31, 2021 may be affected by a number of factors, many of which are directly related to the ongoing financial impacts associated with COVID-19. Such factors include: • national and regional economic trends and events; • the level of lease terminations, rent refunds, and/or abatements granted to student and commercial tenants; • economic hardship experienced by student and commercial tenants and its ultimate effect on rent collections and thus the provision for uncollectible accounts; • canceled or delayed third-party development projects; • reduced revenues at our third-party managed properties resulting in reduced third-party management fee income; • the impact of any stimulus payments that may be received by the company, our tenants, and/or our University partners under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and any future similar governmental actions; • any increase in, or reduction to, operating expenses as a result of COVID-19; • the amount of leasing and related fees earned for the 2021-2022 academic year, which are affected by the timing and velocity of the company’s leasing process; • the timing and amount of any acquisitions, dispositions or joint venture activity; • interest rate risk; • the timing of commencement and completion of construction on owned development projects; • university enrollment, funding and policy trends; • the amount of income recognized by the taxable REIT subsidiaries and any corresponding income tax expense; • the outcome of legal proceedings arising in the normal course of business; and • the finalization of property tax rates and assessed values in certain jurisdictions. 2. Represents consulting, legal, and other related costs incurred in relation to stockholder engagement activities in preparation for the company’s 2021 annual stockholders' meeting.
S-19 1. Refer to page S-20 for detail of the 2021 same store and new property groupings. 2. Includes $0.9 million in reimbursed payroll and other operating costs for the Walt Disney World® College Program management contract. Outlook - Detail (Q1 2021) ($ in thousands, except share and per share data) FFOM Guidance Assumptions & Other Three Months Ended March 31, 2021 Low High Owned properties ¹ 2021 same store properties Same store revenue $ 212,500 $ 214,400 % growth (7.6) % (6.8) % Same store operating expenses (92,000) (91,100) Includes approximately $0.4 million in estimated costs associated with the recent extreme winter weather % growth 1.0 % — % Same store net operating income ("NOI") $ 120,500 $ 123,300 % growth (13.2) % (11.2) % 2021 new properties NOI $ 400 $ 800 Includes ($1.1) - ($0.8) million in the first quarter of negative NOI contribution from the completed phases of the Disney College Program project. Other $ (100) $ (100) Includes recurring professional fees related to the operation of the ACC/Allianz joint venture. Total owned properties NOI $ 120,800 $ 124,000 Third-party development services revenue $ 1,500 $ 1,500 Includes $0.7 million to be recognized upon commencement of the Concordia University Phase II third-party development project during the first quarter. Third-party management services revenue ² $ 2,900 $ 3,100 Third-party development and mgmt. services expenses ² $ (5,600) $ (5,700) General and administrative expenses $ (10,800) $ (11,000) Includes $0.9 million related to stockholder engagement and other proxy related expenses incurred during the first quarter which will be eliminated for purposes of calculating FFOM. Ground/facility leases expense $ (3,600) $ (3,600) Less: OCPP ground/facility leases expense $ 500 $ 500 Interest income $ 100 $ 100 Excludes on-campus participating properties ("OCPPs") for the purposes of calculating FFOM. Decrease in interest income primarily due to the October 2020 repayment of a $52.8 million note receivable previously held by the company, which historically represented approximately $2.9 million of annual interest income. Interest expense $ (29,000) $ (28,900) Net of $2.6 million of capitalized interest. Less: OCPP interest expense $ 1,000 $ 1,000 Amortization of deferred financing costs $ (1,300) $ (1,300) Excluding OCPPs for the purposes of calculating FFOM. Corporate depreciation $ (800) $ (800) Represents depreciation expense not added back in the calculation of FFO as per the NAREIT definition of FFO. OCPP overhead $ (500) $ (500) Income tax provision $ (300) $ (300) JV partners' share of net income $ (300) $ (300) For the purposes of calculating NAV, the company excludes $11.3 million of annual NOI and $148.5 million of mortgage debt related to consolidated joint venture partners' share of NOI and any mortgage debt.JV partners' share of depreciation and amortization $ (1,900) $ (1,900) Contribution from OCPP $ 1,100 $ 1,100 Includes the company's 50% share of OCPP net cash flow and management and development fees received, as per the definition of FFOM on page S-21. Stockholder engagement and other proxy advisory costs $ 900 $ 900 FFOM per share - diluted $ 0.54 $ 0.56
Detail of Property Groupings As of December 31, 2020 S-20 2020 Grouping 2021 Grouping Same Store Properties New Properties Same Store Properties New Properties # of Properties Design Beds # of Properties Design Beds # of Properties Design Beds # of Properties Design Beds Properties Purchased or Developed Prior to January 1, 2019 152 92,193 152 92,193 2019 Development Deliveries 5 3,159 5 3,159 2020 Development Deliveries 1 3 2,483 3 2,483 2021 Development Deliveries 1 — 3,369 — 3,369 2022 Development Deliveries 1 — 3,235 — 3,235 2023 Development Deliveries 1 — 2,209 — 2,209 Total Owned Properties 152 92,193 8 14,455 157 95,352 3 11,296 Grand Total # of Owned Properties (All Groupings) 160 Grand Total Owned Design Beds (All Groupings) 106,648 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. 2020: The 2020 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2020 and 2019. This same store grouping will be used for purposes of presenting our 2020 same store operating results. 2021: The 2021 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2021 and 2020. This same store grouping will be used for purposes of presenting our 2021 same store operating results. 1. The Disney College Program project will be delivered in multiple phases over several years with initial deliveries occurring in 2020 and full development completion expected in 2023. All phases are counted as one property in the table above and will not be included in the same store grouping until stabilization occurs. As of February 2021, three phases have been completed totaling 2,611 beds.
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 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, the elimination of real estate transaction costs, and other items, as we determine in good faith, that do not reflect our core operations on a comparative basis. 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. 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 an allocation of costs related to corporate management and oversight. * These definitions are provided for purposes of calculating the company’s unsecured notes covenants and other key ratios. S-21
Definitions 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. Operating Expenses General & administrative and other expenses include 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, food service, and other miscellaneous expenses. Utilities expense represents gross expenses prior to any recoveries from tenants, which are reflected in owned properties revenues. Payroll expense includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff. Repairs and maintenance expense 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. Marketing expense includes costs related to property marketing campaigns associated with our ongoing leasing efforts. 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 Properties owned and operating for both of the entire annual periods presented, which are not conducting or planning to conduct substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of the current period-end. Includes the full operating results of properties owned through joint ventures in which the company has a controlling financial interest and which are consolidated for financial reporting purposes. 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, intangibles, and right of use assets, of our consolidated subsidiaries, all determined in accordance with GAAP. Total Debt* Total consolidated debt calculated in accordance with GAAP, including finance 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. S-22
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 Angus Kelleher Argus Research Company (203) 548-9892 akelleher@argusresearch.com Jeffery Spector Bank of America / Merrill Lynch (646) 855-1363 jeff.spector@baml.com Neil Malkin Capital One (571) 633-8191 neil.malkin@capitalone.com Michael Bilerman / Nick Joseph Citigroup Equity Research (212) 816-1383 / (212) 816-1909 michael.bilerman@citi.com / nicholas.joseph@citi.com Derek Johnston / Tom Hennessy Deutsche Bank Securities, Inc. (212) 250-5683 / (212) 250-4063 derek.johnston@db.com / tom.hennessy@db.com Steve Sakwa / Samir Khanal Evercore ISI (212) 446-9462 / (212) 888-3796 steve.sakwa@evercoreisi.com / samir.khanal@evercoreisi.com Richard Skidmore Goldman Sachs & Co. (801) 741-5459 richard.skidmore@gs.com John Pawlowski / Alan Peterson Green Street Advisors (949) 640-8780 / (949) 640-8780 jpawlowski@greenstreetadvisors.com / apeterson@greenstreetadvisors.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@key.com / awurschmidt@key.com Alexander Goldfarb / Daniel Santos Piper Sandler & Co. (212) 466-7937 / (212) 466-7927 alexander.goldfarb@psc.com / daniel.santos@psc.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. S-23
Forward-looking Statements and Non-GAAP Financial Measures In addition to historical information, this press release contains forward-looking statements under the applicable federal securities law. These statements are based on management’s current expectations and assumptions regarding markets in which American Campus Communities, Inc. (the “company”) operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward- looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. These risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward looking-statements include those related to the COVID-19 pandemic, about which there are still many unknowns, including the duration of the pandemic and the extent of its impact, and those discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019 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 2021 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 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.