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EXHIBIT 99.1
F O R I M M E D I A T E R E L E A S E Media Contact: Bob Hetherington
901.682.1360
bhether@earthlink.net
Financial Contact: Randall H. Brown
901.259.2500
rbrown@edrtrust.com
EDUCATION REALTY REPORTS FOURTH QUARTER AND YEAR END RESULTS
MEMPHIS, TENN., MARCH 10, 2006 (PRIMEZONE) -- Education Realty Trust, Inc.
(NYSE:EDR), America's most experienced provider of collegiate student housing,
today announced financial results for the quarter and year ended December 31,
2005.
Highlights
o Fourth quarter earnings per share of $.08, compared to a net loss of
$.33 per share for the third quarter and $.80 per share for the first
eight months of operations as a public company.
o Fourth quarter funds from operations (FFO) of $.26 per potentially
diluted share, compared to $.03 per share for third quarter and $.20
for first eight months of operations as a public company.
o Maintained quarterly cash dividend at $.30 per share and affirmed 2006
target dividend of $1.19 per share.
o Year end occupancy of 94 percent compared to 90 percent at December
31, 2004.
o Completed acquisition of 13 student housing communities with 5,894
beds in six states, increasing its total portfolio to 59 properties
with 36,637 beds.
o Pre-leased 47.3 percent of beds for 06/07 academic year as of March 6,
2006 compared to 40.7 percent pre-leased at March 6, 2005 for 05/06
academic year.
o Average rental rate on leases executed for the 06-07 academic year
approximately 4 percent higher, as of March 6, 2006, than the average
rental rate on 05/06 academic year leases.
Fourth Quarter and Year End Operating Results
Year end operating results discussed in this press release combine the operating
results of EDR since closing of its initial public offering (IPO) and
acquisition of its properties on January 31, 2005 and the operating results of
its predecessor for the period January 1 through January 30, 2005. These results
are compared to the operating results of EDR's predecessor for the year ended
December 31, 2004, which do not include the operations of 14 student housing
communities acquired from JPI Investment Company, L.P. at the time of the IPO
and 5 student housing communities acquired since the IPO. Accordingly,
comparisons of 2005 quarterly and annual operating results to 2004 periods are
not meaningful.
Revenues for the fourth quarter were $27.9 million, a 17% increase over third
quarter revenues. Operating expenses for the fourth quarter were $21.7 million,
a $5 million, or approximately 19%, improvement over operating expenses of $26.7
million for the third quarter. Accordingly, operating income for the fourth
quarter was $6.2 million compared to a $2.9 million operating loss for the third
quarter, a $9.1 million quarter-to-quarter improvement in profitability. For the
fourth quarter, net
income was $2 million, or $.08 per share, compared to a net loss of $7.2
million, or $.33 per share for the third quarter.
Funds from operations (FFO) for the fourth quarter were $7.5 million, or $.26
per potentially dilutive share and operating partnership unit, compared to
$975,000, or $.03 per potentially dilutive share and operating partnership unit
for the third quarter, an 866% improvement. Potentially dilutive shares and
operating partnership units outstanding for purposes of calculating FFO per
share/unit for both the third and fourth quarters were approximately 28.3
million. A reconciliation of FFO to net income is included in the financial
tables accompanying this press release. For a definition of FFO and a statement
by management regarding the reasons for and significance of reporting FFO as a
measure of performance, see Management's Discussion and Analysis of Financial
Condition and Results of Operations in EDR's annual report on 10-K for the year
ended December 31, 2004.
Paul O. Bower, chairman, chief executive officer and president of EDR, stated:
"We believe that in the fourth quarter we turned the corner in our transition
from private operators to a public company. Our revenue growth was strong, our
expenses stabilized and we avoided the one-time charges from the prior quarters
of operations."
"Moreover, our management team has refocused on the day-to-day business,
generally free from the distractions of being a new public company and the time
commitment that was required in landing the Place portfolio and raising the
money to close the acquisition," said Bower. "We are seeing numerous
opportunities for revenue growth, and we are confident that our 54 years of
experience in the student housing business will allow us to capitalize on these
opportunities in a way that increases shareholder value."
For the year ended December 31, 2005, revenues were $87.2 million and operating
expenses were $87.7 million, resulting in a 2005 net loss from operations of
$0.5 million. Net loss for the year ended December 31, 2005 was $15.5 million,
or $.67 per share. Included in the annual net loss were one-time costs
associated with the IPO of approximately $5.1 million.
For the year ended December 31, 2005, FFO were $13.1 million, or approximately
$.46 per potentially dilutive share and operating partnership unit. FFO adjusted
for one-time IPO charges were $19.5 million, or $.69 per potentially dilutive
share and operating partnership unit.
Occupancy and Leasing
At quarter and year end, the properties comprising the EDR student housing
portfolio had an occupancy rate of 94.3 percent, up from 90.3 percent at the
same time a year ago.
Among the components of the EDR portfolio:
o At the seven EDR predecessor properties, occupancy was 92.4 percent,
up from 90.7 percent at December 31, 2004.
o At the 14 properties acquired from JPI at the time of the IPO,
occupancy was 94.7 percent, up from 91.8 percent at December 31, 2004.
o At the five properties acquired by EDR since the IPO, occupancy was
95.4 percent, up from 84.8 percent at December 31, 2004.
Occupancy rates at properties EDR manages for third-party owners also jumped in
2005 over 2004. As of December 31, 2005, occupancy was 92.7 percent at
properties managed by Allen & O'Hara Education Services, Inc., EDR's property
management subsidiary, up from 84.7 percent a year ago.
As of March 6, 2006, the company reported the following leasing statistics for
the upcoming 2006-2007 academic year:
o Student beds at properties owned by EDR at year end are 47.3 percent
pre-leased, up from 40.7 percent a year ago.
o Student beds at properties managed by EDR's property management
company subsidiary, Allen & O'Hara Education Services, Inc., are 45.5
percent pre-leased, up from 36.7 percent a year ago.
o Student beds at the 13 student housing communities acquired from Place
Properties in January are 44.2 percent pre-leased, up from 43.6
percent a year ago.
Development Activity
EDR continues to provide development consulting services for student housing
communities at six college campuses in the East, South and West through its
development company subsidiary, Allen & O'Hara Development Company, LLC.
Development projects at year end included:
o Slippery Rock University in Pennsylvania, where construction of two
buildings with 700 student beds is ahead of schedule for an August
2006 opening and two more buildings with 690 student beds are slated
to open in late 2006 and summer of 2007. Design is underway on Phase
II buildings with 1,000 more student beds, and construction is set to
start in 2007.
o California University of Pennsylvania, where construction of 447 beds
of on-campus student housing continues toward on-time completion in
August 2006 and where construction of 352-bed Phase II is scheduled to
start in June 2006.
o Indiana University of Pennsylvania, where a $52.5 million bond issue
is scheduled to close and construction is scheduled to begin May 1 on
the first phase of a four-phase scope of work to replace all on-campus
student housing.
o University of Alabama -- Birmingham, where construction of a 190-
unit, 753-bed Blazer Hall continues on time and on budget toward a
spring 2006 opening and where EDR's property management company
subsidiary, Allen & O'Hara Education Services Inc., will manage the
on-campus community.
o University of Colorado at Denver, where construction is ahead of
schedule on the 685-bed Campus Village Apartments adjacent to the
Auraria Higher Education Center, a shared campus with Metropolitan
State College and Community College of Denver. Campus Village will
open in the summer instead of the fall of 2006 and Allen & O'Hara
Education Services Inc. will manage the community.
o University of Louisville, where construction is on schedule for the
fall 2006 opening of a 359-bed residential suites and Greek
organizations building. Allen & O'Hara Education Services Inc. will
manage the community.
Property Management Update
Allen & O'Hara Education Services Inc. is actively engaged in the initial
leasing of properties in Birmingham, Denver and Louisville. Blazer Hall at UAB
in Birmingham, Campus Village in Denver and Community Park at the University of
Louisville are slated to open later this year. As of March 6, 2006, 32.3 percent
of the available beds at the three properties are pre-leased for the 2006-2007
academic year.
Acquisition Activity
On January 6, 2006, EDR completed its previously announced purchase from Place
Properties of 13 collegiate communities in six states for $195 million in cash,
stock and assumed debt. The properties are expected to generate a conservatively
estimated 7.2 percent return.
EDR evaluated potential acquisitions of purpose-built Class A student housing
valued at about $2 billion during calendar 2005 and expects to evaluate a
similar amount during 2006.
Supplemental Information and Quarterly Conference Call
A copy of this media release, a self-directed investor presentation and a
supplemental packet of financial and operating information are available at the
company's web site, www.educationrealty.com. EDR will host an earnings
conference call for interested parties today Friday, March 10, 2006, beginning
at 11 a.m. Eastern Time. During the call, EDR Chairman, CEO and President Paul
O. Bower, Executive Vice President and CFO Randall H. Brown and Executive Vice
President and Chief Investment Officer Craig L. Cardwell will review the
company's 2005 results and discuss the business outlook for 2006.
To access the call, participants from within the U.S. may dial 866.700.6067 and
participants from outside the U.S. may dial 617.213.8834. The pass code for this
call is 28373289. Participants who prefer to listen to the call and view an
accompanying slide presentation via the Internet may log on to
www.educationrealty.com or www.earnings.com, or institutional investors may log
on to www.streetevents.com prior to the call.
A taped rebroadcast of the earnings call will be available approximately one
hour following its completion on March 10 through March 17, 2006. To access the
rebroadcast, the domestic number is 888.286.8010, the international number is
617.801.6888 and the pass code is 38354987. A replay of the call will also be
available at www.educationrealty.com or www.earnings.com for 30 days following
the call. The call will also be available as a podcast on www.reitcafe.com.
About Education Realty Trust
Education Realty Trust is one of America's largest owners and operators of
collegiate student housing, owning and/or managing approximately 36,637 beds at
59 properties near campuses around the country. For more information about EDR,
please visit the company's Web site at www.educationrealty.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:
Statements in this release regarding Education Realty Trust's business that are
not historical facts are "forward-looking statements." Forward-looking
statements are based on current expectations and involve a number of known and
unknown risks and uncertainties that could cause EDR's future results,
performance, or achievements to differ significantly from the results,
performance, or achievements expressed or implied by such forward-looking
statements. For a discussion of additional risks and uncertainties, which could
cause actual results to differ from those contained in the forward-looking
statements, see the "Business-Risk Factors" section of EDR's annual report on
Form 10-K for the year ended December 31, 2004. Forward-looking statements speak
only as of the date on which they are made, and EDR undertakes no obligation to
update publicly or revise any forward-looking statement, whether as a result of
new information, future developments, or otherwise.
EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED AND COMBINED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------------------------
CONSOLIDATED CONSOLIDATED COMBINED
EDR EDR EDR PREDECESSOR
---------------- ---------------- -----------------
(Unaudited)
ASSETS
Student housing properties, net $ 620,305 $ -- $83,785
Corporate office furniture, net 991 -- --
Cash and cash equivalents 61,662 1 2,883
Restricted cash and short-term investments 6,738 -- 1,102
Student contracts receivable, net 470 -- 87
Management fee receivable from third party, net 552 -- 161
Goodwill and other intangibles, net 3,214 -- --
Other assets 10,117 3,790 856
--------- ------- -------
Total assets $ 704,049 $ 3,791 $88,874
========= ======= =======
LIABILITIES AND STOCKHOLDERS' AND PREDECESSOR OWNERS' EQUITY
Liabilities:
Mortgage loans, net of premium/discount $ 328,335 $ -- $81,111
Revolving line of credit -- 497 --
Note payable to affiliate -- -- 485
Accounts payable and accrued expenses 9,371 -- 1,642
Accounts payable affiliate 225 3,515 799
Deferred revenue 7,660 -- 3,048
--------- ------- -------
Total liabilities 345,591 4,012 87,085
Minority interest 27,926 -- --
Commitments and contingencies
Stockholders' and predecessor owners' equity:
Common stock, $.01 par value, 200,000,000 shares
authorized, 26,263,889 shares issued and outstanding as
of Dec. 31, 2005 263 -- --
Preferred shares, $0.01 par value, 50,000,000 shares
authorized, no shares issued and outstanding -- -- --
Unearned deferred compensation (2,470) -- --
Additional paid in capital 354,134 1 --
Loan to unitholder (5,996) -- --
Warrants 375 -- --
Accumulated deficit (15,774) (222) --
Predecessor owners' equity -- -- 1,789
--------- ------- -------
Total stockholders' and predecessor owners' equity 330,532 (221) 1,789
--------- ------- -------
Total liabilities and stockholders' and predecessor owners' equity $ 704,049 $ 3,791 $88,874
========= ======= =======
EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
EDR EDR
CONSOLIDATED PREDECESSOR COMBINED
------------------- ----------------------
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------ --------------------
(Unaudited) (Unaudited)
REVENUES:
Student housing leasing revenue $ 23,045 $4,707
Student housing restaurant revenue 888 897
Third-party development services 786 4
Third-party management services 710 370
Operating expense reimbursements 2,485 1,365
------------ ------
TOTAL REVENUES 27,914 7,343
OPERATING EXPENSES:
Student housing leasing operations 11,284 1,586
Student housing restaurant 826 800
General and administrative 1,549 825
Depreciation and amortization 5,521 791
Reimbursable operating expenses 2,485 1,365
------------ ------
TOTAL OPERATING EXPENSES 21,665 5,367
OPERATING INCOME 6,249 1,976
NONOPERATING EXPENSES:
Interest 4,298 1,408
Amortization of deferred financing costs 238 41
Interest income (673) --
------------ ------
TOTAL NONOPERATING EXPENSES 3,863 1,449
INCOME BEFORE EQUITY IN EARNINGS OF UNCONSOLIDATED ENTITIES,
INCOME TAXES AND MINORITY INTEREST 2,386 527
EQUITY IN EARNINGS OF UNCONSOLIDATED ENTITIES 293 69
------------ ------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 2,679 596
INCOME TAXES 327 --
------------ ------
NET INCOME BEFORE MINORITY INTEREST 2,352 596
MINORITY INTEREST 344 --
------------ ------
NET INCOME $ 2,008 $ 596
============ ======
EARNINGS PER SHARE INFORMATION:
Net Income per share -- basic and diluted $ 0.08
============
Weighted average common shares outstanding - basic and diluted 26,259,639
============
EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (contd.)
(AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
EDR AND
EDUCATION REALTY EDR
EDR TRUST PREDECESSOR EDR PREDECESSOR
CONSOLIDATED COMBINED CONSOLIDATED COMBINED
----------------- ----------------- ----------------- ----------------
JANUARY 31 TO JANUARY 1 TO YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 JANUARY 30, 2005 DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- ---------------- ----------------- -----------------
(Unaudited) (Unaudited) (Unaudited)
REVENUES:
Student housing leasing revenue $ 74,374 $ 1,503 $ 75,877 $ 17,896
Student housing restaurant revenue 3,222 269 3,491 3,137
Third-party development services 1,759 -- 1,759 392
Third-party management services 1,865 103 1,968 1,326
Operating expense reimbursements 6,023 671 6,694 5,223
------------ ------- -------- --------
TOTAL REVENUES 87,243 2,546 89,789 27,974
OPERATING EXPENSES:
Student housing leasing operations 40,196 524 40,720 7,645
Student housing restaurant 3,020 255 3,275 2,899
General and administrative 9,547 377 9,924 3,545
Depreciation and amortization 28,908 260 29,168 3,120
Reimbursable operating expenses 6,023 671 6,694 5,223
------------ ------- -------- --------
TOTAL OPERATING EXPENSES 87,694 2,087 89,781 22,432
OPERATING INCOME (LOSS) (451) 459 8 5,542
NONOPERATING EXPENSES:
Interest 15,885 479 16,364 5,623
Exit fees on early repayment of mortgages 1,084 -- 1,084 --
Amortization of deferred financing costs 820 -- 820 163
Interest income (1,303) -- (1,303) --
------------ ------- -------- --------
TOTAL NONOPERATING EXPENSES 16,486 479 16,965 5,786
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF
UNCONSOLIDATED ENTITIES, INCOME TAXES AND
MINORITY INTEREST (16,937) (20) (16,957) (244)
EQUITY IN EARNINGS OF UNCONSOLIDATED ENTITES 853 27 880 1,002
------------ ------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTEREST (16,084) 7 (16,077) 758
INCOME TAXES 497 -- 497 --
------------ ------- -------- --------
NET INCOME (LOSS) BEFORE MINORITY INTEREST (16,581) 7 (16,574) 758
MINORITY INTEREST (1,040) -- (1,040) --
------------ ------- -------- --------
NET INCOME (LOSS) $ (15,541) $ 7 $(15,534) $ 758
============ ======= ======== ========
EARNINGS PER SHARE INFORMATION:
Loss per share -- basic and diluted $ (0.67)
============
Weighted average common shares
outstanding-basic and diluted 23,063,110
============
EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
CALCULATION OF FFO AND FFOA
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS THREE MONTHS JANUARY 31 JANUARY 1 TWELVE MONTHS
ENDED ENDED TO TO ENDED
DEC. 31, 2005 DEC. 31, 2004 DEC. 31, 2005 DEC. 31, 2005 DEC. 31, 2004
------------- ------------- ------------- ------------- -------------
(EDR (EDR (EDR (EDR and EDR (EDR
Consolidated) Predecessor) Consolidated) Predecessor) Predecessor)
------------- ------------- -------------- ------------ ------------
Net income (loss) $ 2,008 $ 596 $ (15,541) $ 7 $ 758
Real estate related depreciation and
amortization 5,458 784 28,636 260 3,110
------------ --------- ------------ -------- -------
FUNDS FROM OPERATIONS ("FFO") 7,466 1,380 13,095 267 3,868
Elimination of one-time IPO related
transactions:
Charge for profit interest units -- -- 4,039 -- --
Write-off of fees associated with
repayment of mortgage debt -- -- 1,084 -- --
Loss of deferred revenue due to
purchase accounting (1) -- -- 1,233 -- --
------------ --------- ------------ -------- -------
Impact of IPO related transactions -- -- 6,356 -- --
------------ --------- ------------ -------- -------
FUNDS FROM OPERATIONS -- ADJUSTED
("FFOA") $ 7,466 $ 1,380 $ 19,451 $ 267 $ 3,868
============ ========= ============ ======== =======
FFO per share -- weighted average
stocks/units $ 0.27 $ 0.52
FFOA per share -- weighted average
stocks/units $ 0.27 $ 0.78
Weighted average shares/units 28,150,867 24,941,717
FFO per share -- potentially dilutive
stocks/units $ 0.26 $ 0.46
FFOA per share -- potentially dilutive
stocks/units $ 0.26 $ 0.69
Total potentially dilutive common and
restricted stock and partnership
units 28,302,228 28,302,228
============ ============
- ------------------------
(1) Represents the balance of deferred straight-lined rents and service fees at
the time of the Formation Transactions and IPO that would have been recognized
by the company during the subsequently reported period had it already owned the
properties. Generally accepted accounting principles do not allow such revenue
items to be carried forward in an acquisition, resulting in this one-time,
non-recurring loss of revenue.
2006 OUTLOOK
CONSOLIDATED & COMBINED STATEMENT OF FUNDS FROM OPERATIONS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
For the Year Ending
December 31, 2006
------------------------------------
Low Range High Range
---------- ----------
Net income (loss) $ (11,621) $ (10,191)
Real estate related depreciation and amortization 39,192 39,192
---------- ---------
FUNDS FROM OPERATIONS ("FFO") $ 27,571 $ 29,001
========== =========
FFO per share -- potentially dilutive stocks/units $ 0.97 $ 1.02
========== =========
Total potentially dilutive common and restricted stock
and partnership units 28,302,228
==========
- ------------------------
The fiscal 2006 guidance is based on our judgment and current expectations. The
guidance is forward looking and exclusive of any financing or capital
transactions and any acquisitions other than the Place portfolio acquisition.
Actual results may be affected by many factors, including, but not limited to,
the following: (i) the leasing rates and occupancy levels achieved at our
student housing communities; (ii) the realization of development services
revenue relating to the timing of construction activity of our on-campus
development projects; (iii) the amount of income recognized by the taxable REIT
subsidiary and any corresponding income tax expense; (iv) interest rate risk and
(v) the start-up costs related to the compliance with Section 404 of the
Sarbanes-Oxley Act.