Exhibit 99.1
American Campus Communities Inc.
Reports Fourth Quarter and Year End 2005 Financial Results
AUSTIN, Texas--(BUSINESS WIRE)--March 1, 2006--American Campus
Communities Inc. (NYSE:ACC) today announced the following financial
results for the quarter and year ended December 31, 2005.
Highlights
-- Quarterly FFOM of $0.37 per fully diluted share, and annual
2005 FFOM of $1.26 per fully diluted share.
-- Increase in net operating income ("NOI") for same store owned
off-campus properties of 7.7 percent over the fourth quarter
2004 and 11.6 percent over the year ended December 31, 2004.
-- Increase in same store occupancy for owned off-campus
portfolio to 98.4 percent as of December 31, 2005 compared to
97.4 percent as of December 31, 2004.
-- Executed contract to acquire Royal Properties student housing
portfolio consisting of 13 existing properties with 5,710 beds
in 10 major university markets.
-- Increased total assets by 50 percent from $367.6 million as of
December 31, 2004 to $550.9 million as of December 31, 2005
through acquisitions and developments consistent with
company's investment criteria.
2005 Operating Results
Revenue for the 2005 fourth quarter totaled $26.0 million, up 43.3
percent from $18.2 million in the 2004 fourth quarter. Net income for
the 2005 fourth quarter totaled $3.9 million, or $0.22 per fully
diluted share, compared with $3.3 million, or $0.26 per fully diluted
share, for the same quarter in 2004. FFO for the 2005 fourth quarter
totaled $8.1 million, or $0.47 per fully diluted share, compared with
$6.2 million, or $0.48 per fully diluted share, for the fourth quarter
2004. FFOM for the 2005 fourth quarter totaled $6.5 million, or $0.37
per fully diluted share, compared with $4.5 million, or $0.36 per
fully diluted share, for the fourth quarter 2004. Included in the 2005
results is a gain of $0.8 million related to the sale of the company's
option to acquire a 23 percent interest in the Dobie Center.
Additionally, while aggregate dollar amounts for net income, FFO and
FFOM increased in 2005, per share amounts for net income and FFO were
impacted by the July 2005 equity offering and timing of the
redeployment of this capital. A reconciliation of FFO and FFOM to net
income is shown on Table 3.
NOI for same store owned off-campus properties was $6.8 million in
the quarter, up 7.7 percent from $6.3 million in the 2004 fourth
quarter. NOI for the total owned off-campus property portfolio
increased 59.7 percent to $10.1 million for the quarter from $6.3
million in the comparable period of 2004, primarily due to the impact
of development and acquisition properties placed into service during
the year. For purposes of calculating property NOI, the company
defines property NOI as property revenues less direct property
operating expenses, excluding depreciation and unallocated corporate
general and administrative expenses.
For the year ended December 31, 2005, revenues totaled $87.5
million, up 43.8 percent from $60.8 million in 2004. Net income for
the year-to-date period totaled $9.7 million, or $0.65 per fully
diluted share. FFO for the year-to-date period totaled $20.0 million,
or $1.33 per fully diluted share, compared with $8.6 million in 2004,
and FFOM for 2005 totaled $18.9 million, or $1.26 per fully diluted
share, compared with $6.5 million in 2004. The results for 2004
represent the financial results of the company since our August 17,
2004 initial public offering plus the financial results of our
Predecessor prior to such date. As previously stated, 2005 results
include a gain of $0.8 million related to the sale of the company's
option to acquire a 23 percent interest in the Dobie Center. In
addition, the company benefited from the timing of development
properties being placed into service in 2004 and 2005 and property
acquisitions in early 2005. A reconciliation of FFO and FFOM to net
income is shown on Table 3.
"2005 was a milestone year for us as we completed our first full
year as a public company," said Bill Bayless, CEO and president of
American Campus Communities. "Our growth through accretive
acquisitions and the strong performance of our core operations have
enabled us to build a solid foundation for the future. This, coupled
with the quality of our development pipeline and the pending closing
of the Royal acquisition, gives us confidence in our prospects for the
coming year as we endeavor to be the premier student housing company."
Portfolio Update
Callaway Villas, a 704-bed community in development that will
serve the students attending Texas A&M University in the Fall 2006, is
currently 69 percent applied for and 54 percent pre-leased.
Construction continues at The Village at Newark with completion
scheduled for May 2007 and occupancy is expected to occur in Summer
2007.
The University of New Orleans continues to be an active project,
with the University seeking necessary approvals for the commencement
of construction during the summer of 2006.
The project at Blinn College has been delayed and $0.3 million in
predevelopment costs were reserved for in the fourth quarter 2005.
2005 Capital Markets Activity
The company successfully accessed the capital markets to
strengthen its balance sheet in 2005 through the following activities:
-- Raised $102.9 million of gross proceeds through an equity
offering on July 5, 2005, consisting of the sale of 4,575,000
shares of our common stock at a price per share of $22.50,
including 575,000 shares issued as a result of the
underwriters' exercise of their over-allotment option in full
at the closing.
-- Amended the company's revolving credit facility from $75
million to $100 million and converted it from a secured to
unsecured facility.
-- Assumed and/or placed $86.0 million of fixed-rate mortgage
debt associated with acquired properties at a weighted average
interest rate of 6.2 percent.
Subsequent to Year End
On February 8, 2006, the company substantially completed its due
diligence investigation relating to the acquisition of Royal
Properties' portfolio of 13 student housing properties located in 10
growing markets containing 5,710 beds, pursuant to a Contribution and
Sale Agreement. The acquisition value of the transaction is $244.3
million which we anticipate will be paid with approximately 2,200,000
units of limited partnership interest in the Operating Partnership,
the assumption of approximately $123.6 million in fixed-rate mortgage
debt, and the remainder in cash. As part of the transaction, Michael
J. Henneman, chairman of Royal Properties, will join ACC's board of
directors. The transaction is expected to close in early March at
which time the company will issue a separate press release and
supplemental package.
The company has signed a memorandum of understanding with Arizona
State University, which clarifies the party's intent related to three
potential development components containing approximately 4,850 beds
on ASU's campus. Total project cost is estimated at $345 million and
the company intends to develop these properties as part of its owned
portfolio. The first two components of the on-campus student housing
project are scheduled to open together in Fall 2008 on land leased
from ASU.
In addition, a service agreement was signed with the University of
Hawaii - Manoa for predevelopment and construction management
services. Construction on the project is scheduled to commence during
the first quarter of 2007.
2006 Outlook
The company believes that the financial results for the fiscal
year ending December 31, 2006 will be affected by:
-- national and regional economic trends and events;
-- the timing of acquisitions;
-- interest rate risk;
-- the timing of starts and completion of owned development
projects;
-- the ability and the timing of the company to be awarded and
commence construction of third-party development projects;
-- the amount of income recognized by the taxable REIT subsidiary
and any corresponding income tax expense;
-- the ability of the company to integrate acquired properties;
-- the success of releasing the company's owned properties for
the 2006-2007 academic year; and
-- other factors
Based upon these assumptions management anticipates that fiscal
year 2006 FFO will be in the range of $1.48 to $1.62 per fully diluted
share and that FFOM will be in the range of $1.36 to $1.50 per fully
diluted share. All guidance is based on the current expectations and
judgment of the company's management team.
A reconciliation of the range provided for projected net income to
projected FFO and FFOM for the fiscal year ending December 31, 2006,
and assumptions utilized is included in Table 4.
Supplemental Information and Earnings Conference Call
Supplemental financial and operating information, as well as this
release, are available in the investor relations section of the
American Campus Communities website,
www.americancampuscommunities.com. In addition, the company will host
a conference call to discuss fourth quarter and year end results and
the 2006 outlook on Thursday, March 2, 2006 at 11 a.m. EST (10:00 a.m.
CST). To participate by telephone, call 800-638-5495 passcode 22319795
at least five minutes prior to the call.
To listen to the live broadcast, go to
www.americancampuscommunities.com or www.earnings.com at least 15
minutes prior to the call so that required audio software can be
downloaded. Informational slides in the form of the supplemental
analyst package can be accessed via the website. A replay of the
conference call will be available beginning two hours after the end of
the call until March 8, 2006 by dialing 888-286-8010 or 617-801-6888
passcode 55995904. The replay also will be available for 30 days at
www.americancampuscommunities.com and at www.earnings.com. The call
will also be available as a podcast on http://www.REITcafe.com and on
the company's website shortly after the call.
Non-GAAP Financial Measures
As defined by NAREIT, FFO represents income (loss) before
allocation to minority interests (computed in accordance with GAAP),
excluding gains (or losses) from sales of property, plus real estate
related depreciation and amortization (excluding amortization of loan
origination costs) and after adjustments for unconsolidated
partnerships and joint ventures. We present FFO because we consider it
an important supplemental measure of our operating performance and
believe it is frequently used by securities analysts, investors and
other interested parties in the evaluation of REITs, many of which
present FFO when reporting their results. FFO is intended to exclude
GAAP historical cost depreciation and amortization of real estate and
related assets, which assumes that the value of real estate diminishes
ratably over time. Historically, however, real estate values have
risen or fallen with market conditions. Because FFO excludes
depreciation and amortization unique to real estate, gains and losses
from property dispositions and extraordinary items, it provides a
performance measure that, when compared year over year, reflects the
impact to operations from trends in occupancy rates, rental rates,
operating costs, development activities and interest costs, providing
perspective not immediately apparent from net income. We compute FFO
in accordance with standards established by the Board of Governors of
NAREIT in its March 1995 White Paper (as amended in November 1999 and
April 2002), which may differ from the methodology for calculating FFO
utilized by other equity REITs and, accordingly, may not be comparable
to such other REITs. Further, FFO does not represent amounts available
for management's discretionary use because of needed capital
replacement or expansion, debt service obligations or other
commitments and uncertainties. FFO should not be considered as an
alternative to net income (loss) (computed in accordance with GAAP) as
an indicator of our financial performance or to cash flow from
operating activities (computed in accordance with GAAP) as an
indicator of our liquidity, nor is it indicative of funds available to
fund our cash needs, including our ability to pay dividends or make
distributions.
As noted above, FFO excludes GAAP historical cost depreciation and
amortization of real estate and related assets because these GAAP
items assume that the value of real estate diminishes over time.
However, unlike the ownership of our owned off-campus properties, the
unique features of our ownership interest in our on-campus
participating properties cause the value of these properties to
diminish over time. For example, since the ground leases under which
we operate the participating properties require the reinvestment from
operations of specified amounts for capital expenditures and for the
repayment of debt while our interest in these properties terminates
upon the repayment of the debt, such capital expenditures do not
increase the value of the property to us and mortgage debt
amortization only increases the equity of the ground lessor.
Accordingly, when considering our FFO, we believe it is also a
meaningful measure of our performance to modify FFO to exclude the
operations of our on-campus participating properties and to consider
their impact on performance by including only that portion of our
revenues from those properties that are reflective of our share of net
cash flow and the management fees that we receive, both of which
increase and decrease with the operating measure of the properties, a
measure we refer to as FFOM.
About American Campus Communities
American Campus Communities Inc. is one of the largest developers,
owners and managers of high-quality student housing communities in the
United States. The company is a fully integrated, self-managed and
self-administered equity real estate investment trust (REIT) with
expertise in the design, finance, development, construction
management, leasing and management of student housing properties.
American Campus Communities owns and manages a portfolio of 25 student
housing communities containing approximately 17,100 beds. Including
its owned properties, the company provides management and leasing
services at a total of 40 properties with more than 26,100 beds
located on or near college and university campuses. Additional
information is available at www.americancampuscommunities.com.
Forward-Looking Statements
This news release contains forward-looking statements, which
express the current beliefs and expectations of management. Except for
historical information, the matters discussed in this news release are
forward-looking statements and can be identified by the use of the
words "anticipate," "believe," "expect," "intend," "may," "might,"
"plan," "estimate," "project," "should," "will," "result" and similar
expressions. Such statements are based on current expectations and
involve a number of known and unknown risks and uncertainties that
could cause our future results, performance or achievements to differ
significantly from the results, performance or achievements expressed
or implied by such forward-looking statements.
Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors,
including risks and uncertainties inherent in the national economy,
the real estate industry in general, and in our specific markets; the
effect of terrorism or the threat of terrorism; legislative or
regulatory changes including changes to laws governing REITS; our
dependence on key personnel whose continued service is not guaranteed;
availability of qualified acquisition and development targets;
availability of capital and financing; rising interest rates; rising
insurance rates; impact of ad valorem and income taxation; changes in
generally accepted accounting principals; and our continued ability to
successfully lease and operate our properties. While we believe these
forward-looking statements are based on reasonable assumptions, we can
give no assurance that our expectations will be achieved. These
forward-looking statements are made as of the date of this news
release, and we undertake no obligation to update publicly or revise
any forward-looking statement, whether as a result of new information,
future developments or otherwise.
Table 1
American Campus Communities Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
December 31, December 31,
2005 2004
---------- ----------
Assets (unaudited)
Investments in real estate:
Owned off-campus properties, net $ 417,098 $ 272,450
On-campus participating properties, net 80,370 68,064
---------- ----------
Investments in real estate, net 497,468 340,514
Cash and cash equivalents 24,641 4,635
Restricted cash 9,502 9,231
Student contracts receivable, net 2,610 2,164
Other assets 16,641 11,084
---------- ----------
Total assets $ 550,862 $ 367,628
========== ==========
Liabilities and stockholders' equity
Liabilities:
Secured debt $ 291,646 $ 201,014
Accounts payable and accrued expenses 7,983 5,443
Other liabilities 25,155 20,294
---------- ----------
Total liabilities 324,784 226,751
Minority interests 2,851 2,648
Stockholders' equity:
Common stock 172 126
Additional paid in capital 233,388 138,343
Accumulated earnings and dividends (10,817) (282)
Accumulated other comprehensive income 484 42
---------- ----------
Total stockholders' equity 223,227 138,229
---------- ----------
Total liabilities and stockholders' equity $ 550,862 $ 367,628
========== ==========
Table 2
American Campus Communities Inc. and Subsidiaries and
American Campus Predecessor
Consolidated & Combined Statements of Operations
(dollars in thousands, except share and per share data)
Three Months Ended
December 31,
------------------------
2005 2004
---------- ----------
Revenues: (unaudited)
Owned off-campus properties $ 16,802 $ 10,456
On-campus participating properties 6,207 5,595
Third-party development services 1,860 1,065
Third-party management services 731 798
Resident services 449 268
---------- ----------
Total revenues 26,049 18,182
Operating expenses:
Owned off-campus properties 7,156 4,404
On-campus participating properties 2,291 2,122
Third-party development and management
services 2,323 1,422
General and administrative 1,891 1,314
Depreciation and amortization 4,328 2,823
Ground/facility leases 176 148
---------- ----------
Total operating expenses 18,165 12,233
---------- ----------
Operating income 7,884 5,949
Non-operating income and (expenses):
Interest income 327 25
Interest expense (4,607) (3,550)
Amortization of deferred financing costs (336) (232)
Other non-operating income 849 556
---------- ----------
Total non-operating expenses (3,767) (3,201)
---------- ----------
Income (loss) before income taxes,
minority interests, and discontinued
operations 4,117 2,748
Income tax (provision) benefit (180) (29)
Minority interests (79) (30)
---------- ----------
Income (loss) from continuing operations 3,858 2,689
Discontinued operations:
Income (loss) attributable to
discontinued operations - 651
Gain (loss) gain from disposition of
real estate - -
---------- ----------
Total discontinued operations - 651
---------- ----------
Net income (loss) $ 3,858 $ 3,340
========== ==========
Net income per share - basic $ 0.22 $ 0.26
========== ==========
Net income per share - diluted $ 0.22 $ 0.26
========== ==========
Weighted average common shares outstanding:
Basic 17,204,375 12,622,145
========== ==========
Diluted 17,371,328 12,743,145
========== ==========
Twelve Months Ended
December 31,
------------------------
2005 2004
---------- ----------
Revenues: (unaudited)
Owned off-campus properties $ 59,239 $ 35,115
On-campus participating properties 18,470 17,418
Third-party development services 5,854 5,803
Third-party management services 2,786 2,105
Resident services 1,125 382
---------- ----------
Total revenues 87,474 60,823
Operating expenses:
Owned off-campus properties 27,551 16,861
On-campus participating properties 8,325 7,995
Third-party development and management
services 6,969 5,543
General and administrative 6,714 5,234
Depreciation and amortization 16,471 9,973
Ground/facility leases 873 812
---------- ----------
Total operating expenses 66,903 46,418
---------- ----------
Operating income 20,571 14,405
Non-operating income and (expenses):
Interest income 825 82
Interest expense (17,368) (16,698)
Amortization of deferred financing costs (1,176) (1,211)
Other non-operating income 1,279 927
---------- ----------
Total non-operating expenses (16,440) (16,900)
---------- ----------
Income (loss) before income taxes,
minority interests, and discontinued
operations 4,131 (2,495)
Income tax (provision) benefit (186) 728
Minority interests (164) 100
---------- ----------
Income (loss) from continuing operations 3,781 (1,667)
Discontinued operations:
Income (loss) attributable to
discontinued operations (2) 367
Gain (loss) gain from disposition of
real estate 5,883 (39)
---------- ----------
Total discontinued operations 5,881 328
---------- ----------
Net income (loss) $ 9,662 $ (1,339)
========== ==========
Net income per share - basic $ 0.65 $ 0.14(a)
========== ==========
Net income per share - diluted $ 0.65 $ 0.15(a)
========== ==========
Weighted average common shares outstanding:
Basic 14,882,944 12,513,130(a)
========== ==========
Diluted 15,047,202 12,634,130(a)
========== ==========
(a) Share and per share amounts represents the period from August 17,
2004, the date of the company's initial public offering, through
December 31, 2004.
Table 3
American Campus Communities Inc. and Subsidiaries and
American Campus Predecessor Calculation of FFO and FFOM
(unaudited, dollars in thousands, except share and per share data)
Three Months Ended
December 31,
------------------------
2005 2004
---------- ----------
Net income (loss) $ 3,858 $ 3,340
Minority interests 79 30
(Gain) loss from disposition of real estate - -
Real estate-related depreciation and
amortization 4,209 2,791
---------- ----------
Funds from operations ("FFO") 8,146 6,161
Elimination of operations from on-campus
participating properties:
Net income from on-campus participating
properties (1,321) (1,179)
Amortization of investment in on-campus
participating properties (986) (871)
---------- ----------
5,839 4,111
Modifications to reflect operational
performance of on-campus participating
properties:
Our share of net cash flow (a) 176 148
Management fees 290 274
On-campus participating properties
development fees (b) 207 15
---------- ----------
Impact of on-campus participating
properties 673 437
---------- ----------
Funds from Operations--modified for
operational performance of on-campus
participating properties ("FFOM") $ 6,512 $ 4,548
========== ==========
FFO per share
Basic $ 0.47 $ 0.49
========== ==========
Diluted $ 0.47 $ 0.48
========== ==========
FFOM per share
Basic $ 0.38 $ 0.36
========== ==========
Diluted $ 0.37 $ 0.36
========== ==========
Weighted average common shares outstanding:
Basic 17,204,375 12,622,145
========== ==========
Diluted 17,371,328 12,743,145
========== ==========
Twelve Months Ended
December 31,
------------------------
2005 2004
---------- ----------
Net income (loss) $ 9,662 $ (1,339)
Minority interests 164 (100)
(Gain) loss from disposition of real estate (5,883) 39
Real estate-related depreciation and
amortization 16,032 10,009
---------- ----------
Funds from operations ("FFO") 19,975 8,609
Elimination of operations from on-campus
participating properties:
Net income from on-campus participating
properties (424) (270)
Amortization of investment in on-campus
participating properties (3,661) (3,531)
---------- ----------
15,890 4,808
Modifications to reflect operational
performance of on-campus participating
properties:
Our share of net cash flow (a) 842 797
Management fees 878 860
On-campus participating properties
development fees (b) 1,275 15
---------- ----------
Impact of on-campus participating
properties 2,995 1,672
---------- ----------
Funds from Operations--modified for
operational performance of on-campus
participating properties ("FFOM") $ 18,885 $ 6,480
========== ==========
FFO per share
Basic $ 1.34 $ 0.48(c)
========== ==========
Diluted $ 1.33 $ 0.47(c)
========== ==========
FFOM per share
Basic $ 1.27 $ 0.34(c)
========== ==========
Diluted $ 1.26 $ 0.34(c)
========== ==========
Weighted average common shares outstanding:
Basic 14,882,944 12,513,130(c)
========== ==========
Diluted 15,047,202 12,634,130(c)
========== ==========
(a) 50 percent of the properties' net cash available for distribution
after payment of operating expenses, debt service (including
repayment of principal) and capital expenditures. Represents
actual cash received for the year-to-date periods and amounts
accrued for the interim periods.
(b) Development and construction management fees, including
construction savings earned under the general construction
contract, related to the Cullen Oaks Phase II on-campus
participating property, completed in August 2005.
(c) Share and per share amounts represent the period from August 17,
2004, the date of the Company's initial public offering, through
December 31, 2004.
Table 4
American Campus Communities Inc. and Subsidiaries
2006 Outlook (a)
(unaudited, dollars in thousands, except per share data)
Low High
---------- ----------
Net income $ 2,200 $ 4,300
Minority interests 300 600
Depreciation and amortization 24,600 24,900
Amortization of acquired intangible assets 1,500 1,500
---------- ----------
Funds from operations ("FFO") 28,600 31,300
Elimination of operations from on-campus
participating properties (4,000) (4,000)
Modifications to reflect operational
performance of on-campus participating
properties 1,700 1,700
---------- ----------
Funds from operations - modified for
operational performance of on-campus
participating properties $ 26,300 $ 29,000
========== ==========
Weighted average common shares
outstanding - diluted 19,350 19,350
========== ==========
Net income per share - diluted $ 0.11 $ 0.22
========== ==========
FFO per share - diluted $ 1.48 $ 1.62
========== ==========
FFOM per share - diluted $ 1.36 $ 1.50
========== ==========
(a) Assumes that: (1) the company will complete current contracted
acquisitions during the first quarter of 2006 at current contract
terms based on preliminary fair value adjustments; (2) the company
will complete $40 to $80 million of off-campus property
acquisitions during the third and fourth quarter of 2006; (3) the
2006-2007 academic year lease-up will experience rate increases of
2% to 4% and occupancy levels of 97% to 98% as compared to the
current academic year; (4) Callaway Villas will open on-time and
on-budget; (5) the company will generate third-party development
and management revenues from $7.6 million to $10.0 million; and
(6) The University of New Orleans third-party development project
will commence construction during the summer of 2006.
CONTACT: American Campus Communities Inc., Austin
Brian Nickel, 512-732-1000
www.americancampuscommunities.com
