EXHIBIT 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On October 8, 2014, Education Realty Operating Partnership, LP, a subsidiary of Education Realty Trust, Inc. (the "Company" or "EdR") and one of its subsidiaries, completed the sale of the collegiate housing community known as The Pointe at South Florida, located in Tampa, Florida, to Vesper USF LLC (an affiliate of Vesper Acquisition LLC, and collectively "Vesper") for $31 million in cash (the "Disposition"). The following unaudited pro forma condensed consolidated financial statements are based upon the historical financial statements of the Company, adjusted to reflect the Disposition.
Education Realty Trust, Inc. and Subsidiaries
Pro forma condensed consolidated balance sheet
As of September 30, 2014 (Unaudited)
(Amounts in thousands, except share and per share data) |
| | | | | | | | | | | | |
| | EdR (a) | | Pro Forma Adjustments | | | EdR Pro Forma |
| Assets: | |
| | | | | |
| Collegiate housing properties, net | $ | 1,619,531 |
| | $ | (28,079 | ) | (b) | | $ | 1,591,452 |
|
| Collegiate housing properties - held for sale, net | 27,834 |
| | | | | 27,834 |
|
| Assets under development | 69,635 |
| | | | | 69,635 |
|
| Corporate office furniture, net | 3,382 |
| | | | | 3,382 |
|
| Cash and cash equivalents | 18,422 |
| | 29,746 |
| (c) | | 48,168 |
|
| Restricted cash | 13,482 |
| | | | | 13,482 |
|
| Student contracts receivable, net | 2,058 |
| | (43 | ) | (d) | | 2,015 |
|
| Receivable from managed third parties | 16 |
| | | | | 16 |
|
| Notes receivable | 375 |
| | | | | 375 |
|
| Goodwill and other intangibles, net | 3,712 |
| | | | | 3,712 |
|
| Other assets | 54,457 |
| | | | | 54,457 |
|
| Total assets | $ | 1,812,904 |
| | $ | 1,624 |
| | | $ | 1,814,528 |
|
| | | | | | | |
| Liabilities: | |
| | | | | |
| Mortgage and construction debt, net of unamortized premium | $ | 336,114 |
| | $ | — |
| | | $ | 336,114 |
|
| Unsecured revolving credit facility | 210,000 |
| | | | | 210,000 |
|
| Unsecured term loans | 187,500 |
| | | | | 187,500 |
|
| Accounts payable | 5,252 |
| | (177 | ) | (e) | | 5,075 |
|
| Accrued expenses | 64,881 |
| | (237 | ) | (f) | | 64,644 |
|
| Deferred revenue | 25,517 |
| | (160 | ) | (g) | | 25,357 |
|
| Total liabilities | 829,264 |
| | (574 | ) | | | 828,690 |
|
| | | | | | | |
| Commitments and contingencies | — |
| | | | | — |
|
| | | | | | | |
| Redeemable noncontrolling interests | 12,052 |
| | (17 | ) | (h) | | 12,035 |
|
| | | | | | | |
| Equity: | |
| | | | | |
| Common stock, $0.01 par value per share, 200,000,000 shares authorized, 142,402,758 shares issued and outstanding as of September 30, 2014 | 1,424 |
| | | | | 1,424 |
|
| Preferred shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding | — |
| | | | | — |
|
| Additional paid-in capital | 1,033,860 |
| | | | | 1,033,860 |
|
| Accumulated deficit | (64,306 | ) | | 2,215 |
| (i) | | (62,091 | ) |
| Accumulated other comprehensive loss | (2,414 | ) | | | | | (2,414 | ) |
| Total Education Realty Trust, Inc. stockholders’ equity | 968,564 |
| | 2,215 |
| | | 970,779 |
|
| Noncontrolling interests | 3,024 |
| | | | | 3,024 |
|
| Total equity | 971,588 |
| | 2,215 |
| | | 973,803 |
|
| Total liabilities and equity | $ | 1,812,904 |
| | $ | 1,624 |
| | | $ | 1,814,528 |
|
| | | | | | | |
See accompanying notes to the pro forma condensed consolidated financial statements.
Education Realty Trust, Inc. and Subsidiaries
Pro forma condensed consolidated statement of comprehensive income (loss)
Nine months ended September 30, 2014 (Unaudited)
(Amounts in thousands, except per share data)
|
| | | | | | | | | | | | |
| | EdR (j) | | Pro Forma Adjustments (k) | | | EdR Pro Forma |
| Revenues: | |
| | |
| | | |
|
| Collegiate housing leasing revenue | $ | 144,677 |
| | $ | 3,923 |
| | | $ | 140,754 |
|
| Third-party development consulting services | 5,264 |
| | | | | 5,264 |
|
| Third-party management services | 2,856 |
| | | | | 2,856 |
|
| Operating expense reimbursements | 6,492 |
| | | | | 6,492 |
|
| Total revenues | 159,289 |
| | 3,923 |
| | | 155,366 |
|
| Operating expenses: | |
| | |
| | | |
|
| Collegiate housing leasing operations | 70,062 |
| | 2,254 |
| | | 67,808 |
|
| Development and management services | 6,964 |
| | | | | 6,964 |
|
| General and administrative | 7,520 |
| | | | | 7,520 |
|
| Depreciation and amortization | 42,928 |
| | 1,093 |
| | | 41,835 |
|
| Ground lease expense | 6,162 |
| | | | | 6,162 |
|
| Impairment loss on collegiate housing properties | 12,734 |
| | | | | 12,734 |
|
| Reimbursable operating expenses | 6,492 |
| | | | | 6,492 |
|
| Total operating expenses | 152,862 |
| | 3,347 |
| | | 149,515 |
|
| | | | | | | |
| Operating income | 6,427 |
| | 576 |
| | | 5,851 |
|
| | | | | | | |
| Nonoperating expenses: | |
| | |
| | | |
|
| Interest expense | 15,076 |
| | | | | 15,076 |
|
| Amortization of deferred financing costs | 1,533 |
| | | | | 1,533 |
|
| Interest income and other nonoperating income | (9,638 | ) | | | | | (9,638 | ) |
| Gain on insurance settlement | (8,133 | ) | | | | | (8,133 | ) |
| Loss on extinguishment of debt | 892 |
| | | | | 892 |
|
| Total nonoperating expenses | (270 | ) | | — |
| | | (270 | ) |
| Income before equity in losses of unconsolidated entities, income taxes and gain on sale of collegiate housing communities | 6,697 |
| | 576 |
| | | 6,121 |
|
| Equity in losses of unconsolidated entities | (370 | ) | | | | | (370 | ) |
| Income before income taxes and gain on sale of collegiate housing communities | 6,327 |
| | 576 |
| | | 5,751 |
|
| Income tax expense | 598 |
| | | | | 598 |
|
| Income (loss) from continuing operations before gain on sale of collegiate housing communities | 5,729 |
| | 576 |
| | | 5,153 |
|
| Gain on sale of collegiate housing communities | 19,322 |
| | | | | 19,322 |
|
| Net income | 25,051 |
| | 576 |
| | | 24,475 |
|
| Less: Net income attributable to the noncontrolling interests | 393 |
| | 5 |
| (l) | | 388 |
|
| Net income attributable to Education Realty Trust, Inc. | $ | 24,658 |
| | $ | 571 |
| | | $ | 24,087 |
|
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
|
| | | | | | | | | | | | |
| | EdR (j) | | Pro Forma Adjustments (k) | | | EdR Pro Forma |
| Income attributable to Education Realty Trust, Inc. common stockholders per share – basic and diluted: | | | | | | |
| Continuing operations | $ | 0.20 |
| | | | | $ | 0.20 |
|
| Net income attributable to Education Realty Trust, Inc. common stockholders per share | $ | 0.20 |
| | | | | $ | 0.20 |
|
| Distributions per share of common stock | $ | 0.34 |
| | | | | $ | 0.34 |
|
| | | | | | | |
| Weighted average common shares outstanding – basic | 124,019 |
| | | | | 124,019 |
|
| Weighted average common shares outstanding – diluted | 125,057 |
| | | | | 125,057 |
|
| | | | | | | |
| | | | | | | |
| Amounts attributable to Education Realty Trust, Inc. – common stockholders: | |
| | | | | |
|
| Income from continuing operations, net of noncontrolling interests | $ | 24,658 |
| | | | | $ | 24,658 |
|
| Net income attributable to Education Realty Trust, Inc. | $ | 24,658 |
| | | | | $ | 24,658 |
|
| | | | | | | |
| Comprehensive income (loss): | | | | | | |
| Net income | $ | 25,051 |
| | | | | $ | 25,051 |
|
| Other comprehensive loss: | | | | | | |
| Loss on cash flow hedging derivatives | (2,414 | ) | | | | | (2,414 | ) |
| Comprehensive loss | 22,637 |
| | | | | 22,637 |
|
| Less: comprehensive income attributable to the noncontrolling interests | 393 |
| | | | | $ | 393 |
|
| Comprehensive loss attributable to Education Realty Trust, Inc. | $ | 22,244 |
| | | | | $ | 22,244 |
|
See accompanying notes to the pro forma condensed consolidated financial statements.
Education Realty Trust, Inc. and Subsidiaries
Pro forma consolidated statement of operations
Year ended December 31, 2013 (Unaudited)
(Amounts in thousands, except for share and per share data)
|
| | | | | | | | | | | | |
| | EdR (m) | | Pro Forma Adjustments (n) | | | EdR Pro Forma |
| Revenues: | |
| | |
| | | |
|
| Collegiate housing leasing revenue | $ | 167,476 |
| | $ | 5,192 |
| | | $ | 162,284 |
|
| Third-party development consulting services | 2,989 |
| | | | | 2,989 |
|
| Third-party management services | 3,697 |
| | | | | 3,697 |
|
| Operating expense reimbursements | 10,214 |
| | | | | 10,214 |
|
| Total revenues | 184,376 |
| | 5,192 |
| | | 179,184 |
|
| Operating expenses: | |
| | |
| | | |
|
| Collegiate housing leasing operations | 79,957 |
| | 2,787 |
| | | 77,170 |
|
| Development and management services | 6,477 |
| | | | | 6,477 |
|
| General and administrative | 7,678 |
| | | | | 7,678 |
|
| Depreciation and amortization | 48,098 |
| | 1,407 |
| | | 46,691 |
|
| Ground lease expense | 7,622 |
| | | | | 7,622 |
|
| Reimbursable operating expenses | 10,214 |
| | | | | 10,214 |
|
| Total operating expenses | 160,046 |
| | 4,194 |
| | | 155,852 |
|
| | | | | | | |
| Operating income | 24,330 |
| | 998 |
| | | 23,332 |
|
| | | | | | | |
| Nonoperating expenses: | |
| | | | | |
|
| Interest expense | 17,526 |
| | | | | 17,526 |
|
| Amortization of deferred financing costs | 1,758 |
| | | | | 1,758 |
|
| Loss on extinguishment of debt | — |
| | | | | — |
|
| Interest income | (447 | ) | | | | | (447 | ) |
| Total nonoperating expenses | 18,837 |
| | — |
| | | 18,837 |
|
| Income before equity in losses of unconsolidated entities, income taxes and discontinued operations | 5,493 |
| | 998 |
| | | 4,495 |
|
| Equity in (losses) of unconsolidated entities | (203 | ) | | | | | (203 | ) |
| Income before income taxes and discontinued operations | 5,290 |
| | 998 |
| | | 4,292 |
|
| Income tax expense | 203 |
| | | | | 203 |
|
| Income from continuing operations | 5,087 |
| | 998 |
| | | 4,089 |
|
| Discontinued operations: | |
| | |
| | | |
|
| Loss from operations of discontinued operations | (4,369 | ) | | | | | (4,369 | ) |
| Gain on sale of collegiate housing property | 3,913 |
| | | | | 3,913 |
|
| Loss from discontinued operations | (456 | ) | | — |
| | | (456 | ) |
| Net income | 4,631 |
| | 998 |
| | | 3,633 |
|
| Less: Net income attributable to the noncontrolling interests | 308 |
| | 7 |
| (o) | | 301 |
|
| Net income attributable to Education Realty Trust, Inc. | $ | 4,323 |
| | $ | 991 |
| | | $ | 3,332 |
|
| | | | | | | |
| | | | | | | |
| | | | | | | |
|
| | | | | | | | | | | | |
| | EdR (m) | | Pro Forma Adjustments (n) | | | EdR Pro Forma |
| Earnings per share information: | |
| | | | | |
|
| Income attributable to Education Realty Trust, Inc. common stockholders per share – basic and diluted: | |
| | | | | |
|
| Continuing operations | $ | 0.04 |
| | | | | $ | 0.03 |
|
| Net income (loss) attributable to Education Realty Trust, Inc. common stockholders per share | $ | 0.04 |
| | | | | $ | 0.03 |
|
| Weighted average common shares outstanding – basic | 114,431,996 |
| | | | | 114,431,996 |
|
| Weighted average common shares outstanding – diluted | 115,469,596 |
| | | | | 115,469,596 |
|
| Amounts attributable to Education Realty Trust, Inc. – common stockholders: | |
| | | | | |
| Income from continuing operations, net of noncontrolling interests | $ | 4,776 |
| | | | | $ | 3,785 |
|
| Loss from discontinued operations, net of noncontrolling interests | (453 | ) | | | | | (453 | ) |
| Net income | $ | 4,323 |
| | | | | $ | 3,332 |
|
See accompanying notes to the pro forma condensed consolidated financial statements.
Education Realty Trust, Inc. and Subsidiaries
Notes to pro forma condensed consolidated financial statements (Unaudited)
On October 8, 2014, the Company completed the Disposition pursuant to that certain sales agreement, dated August 15, 2014, by and between the Company and Vesper Acquisition LLC. The unaudited pro forma financial information is presented to illustrate the effect of the Disposition on the Company’s historical financial position and operating results. The unaudited pro forma condensed consolidated balance sheet is as of September 30, 2014 and is based upon our historical statements after giving effect to the Disposition as if it had occurred on September 30, 2014. The unaudited pro forma condensed consolidated statement of comprehensive income (loss) for the nine months ended September 30, 2014 and the unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2013 are based upon our historical statements for such periods after giving effect to the Disposition as if it had occurred on January 1 of the earliest period presented. The unaudited pro forma financial information should be read in conjunction with our historical consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014.
The preparation of the unaudited pro forma condensed consolidated financial information is based upon financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates.
The unaudited pro forma condensed consolidated financial information is provided for illustrative purposes only and does not purport to represent what the actual results of our operations or financial position would have been had the Disposition occurred on the respective dates assumed, nor is it necessarily indicative of our future operating results or financial position. However, the pro forma adjustments reflected in the accompanying unaudited pro forma condensed consolidated financial information reflect estimates and assumptions that our management believes to be reasonable.
The unaudited pro forma condensed consolidated balance sheet at September 30, 2014 reflects the following as if the transactions occurred on September 30, 2014:
| |
| a. | Reflects the Company’s unaudited condensed consolidated balance sheet as of September 30, 2014 as reported in our Form 10-Q as of September 30, 2014. |
| |
| b. | Adjustment to reflect the decrease in collegiate housing properties, net of accumulated depreciation. |
| |
| c. | Estimated net cash proceeds from the sale, after prorations and closing costs. |
| |
| d. | Adjustment to reflect the portion of student contracts receivable sold. |
| |
| e. | Adjustment to reflect the decrease in accounts payable for the liabilities assumed by Vesper. |
| |
| f. | Adjustment to reflect the decrease in accrued expenses for the liabilities assumed by Vesper. |
| |
| g. | Adjustment to reflect the decrease in deferred revenue assumed by Vesper. |
| |
| h. | Reflects the amount of the approximate gain on the Disposition attributable to the units of Education Realty Operating Partnership, LP that are redeemable at the option of the unitholder. |
| |
| i. | Reflects the approximate gain on the Disposition, net of the portion attributable noncontrolling interests. |
The unaudited pro forma condensed consolidated statement of comprehensive income (loss) for the nine months ended September 30, 2014 reflects the following:
| |
| j. | Reflects the Company’s historical unaudited condensed consolidated statement of comprehensive income (loss) for the nine months ended September 30, 2014. |
| |
| k. | Reflects the Community's historical unaudited statement of comprehensive income (loss) for the nine months ended September 30, 2014. |
| |
| l. | Represents corresponding adjustment to noncontrolling interests related to pro forma adjustments to income/(loss) before noncontrolling interests. |
The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2013 reflect the following:
| |
| m. | Reflects the Company’s historical consolidated statements of operations for the year ended December 31, 2013. |
| |
| n. | Reflects the Community's historical unaudited statement of operations for the year ended December 31, 2013. |
| |
| o. | Represents corresponding adjustment to noncontrolling interests related to pro forma adjustments to income/(loss) before noncontrolling interests. |
