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 FIRST QUARTER 2006 RESULTS
MEMPHIS, TENNESSEE, MAY 8, 2006 -- Education Realty Trust, Inc. (NYSE: EDR), one
of America's largest owners and operators of collegiate student housing, today
reported financial results for the quarter ended March 31, 2006.
Among its highlights, Education Realty Trust reported:
o Funds from operations (FFO) of $8.4 million or $0.30 per dilutive
share for the first quarter, a 12 percent increase over FFO of $7.5
million, or $.26 per dilutive share, for the fourth quarter 2005;
o Quarterly revenues of $30.0 million, an 8 percent increase over
revenues of $27.9 million in the fourth quarter of 2005;
o Average occupancy of 95 percent for the quarter ended March 31, 2006,
up from 93 percent for the quarter ended March 31, 2005 and even with
the fourth quarter 2005;
o Stronger pre-leasing for the 2006/2007 academic year, with 72 percent
of all beds pre-leased compared to 68 percent at owned communities and
65 percent at managed communities on May 1, 2005;
o Average rental rates for the upcoming 2006/2007 academic year
approximately 4 percent higher than current leases;
o Planned construction starts this month on three development consulting
projects, including a joint-venture development two blocks from the
University of North Carolina-Greensboro;
o Maintained a regular quarterly cash dividend at $.2975 per share, in
line with the company's target dividend of $1.19 per share for 2006;
FIRST QUARTER 2006 OPERATING RESULTS
Operating results in the accompanying financial tables combine the results of
EDR's predecessor for the period January 1 through January 30, 2005 and EDR
since its initial public offering (IPO) and acquisition of 21 collegiate
communities on January 31, 2005 through March 31, 2005. These results are
compared to operating results of EDR for the quarter ended March 31, 2006, which
include the subsequent acquisition of 18 collegiate communities in 2005 and
early 2006. Due to the substantial growth through acquisitions late in 2005 and
early 2006 and other activity related to EDR's IPO, comparisons of operating
results for the first quarter 2005 with those of the first quarter of 2006 are
of limited value.
Revenues for the quarter ended March 31, 2006 were $30.0 million, an 8 percent
increase over the $27.9 million of revenues for the quarter ended December 31,
2005. The increase was driven by $3.4 million of lease revenue related to the
13-property Place Properties portfolio purchase in January offset by $0.7
million decrease in operating expense reimbursements, $0.2 million drop in
development revenue due to project timing, and an approximate $0.5 million drop
in lease revenue.
Operating expenses excluding depreciation and amortization were $14.9 million
for the first quarter of 2006, a 6 percent decrease from $15.8 million for the
fourth quarter of 2005. The decrease resulted from a reduction in student
leasing operations of $1.2 million and a $0.7 million decrease in reimbursable
operating expenses offset by a $0.9 million increase in G&A expenses mostly
related to Sarbanes Oxley and compensation expense increases. Depreciation
increased $3.6 million to $9.2 million primarily as a result of the Place
Properties acquisition in January 2006. Non-operating expenses were up $2.8
million over the fourth quarter 2005 to $6.9 million for the quarter ended March
31, 2006 due to interest expense increases from the January 2006 Place
Properties acquisition.
Funds from operations (FFO) for the first quarter were $8.4 million, or $0.30
per dilutive share compared to $7.5 million, or $0.26 per dilutive share for the
fourth quarter 2005, a 12 percent gain.
Weighted average dilutive shares outstanding for the first quarter 2006 and
fourth quarter 2005 were approximately 28.2 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, 2005.
Paul O. Bower, chairman, president and chief executive officer of EDR stated:
"We posted another solid quarter, marked by good FFO growth and controlled
operating expenses. We are very pleased with the pre-leasing for the upcoming
academic year, both in terms of the increase in beds pre-leased at this time
compared with this time last year, but also in terms of the increase in rental
rates. We have successfully integrated the Place Properties portfolio and are
poised to use our operating leverage to drive FFO increases from that
acquisition. We have added solid third party development projects during the
quarter that provide us with financial upside in the operating earnings and
potential appreciation from those projects while at the same time minimizing our
cash investment. Overall, we believe we have achieved stability as a public
company that will allow us to continue to meet earnings targets and fund our
dividend at anticipated levels."
OCCUPANCY AND LEASING
Physical occupancy at all properties in the EDR portfolio of collegiate
communities was 94.6 percent as of March 31, 2006, up from 92.6 percent for the
comparable period in 2005. The physical occupancy rate represents a weighted
average of the month-end occupancies for the three months ended March 31.
Economic occupancy at all properties in the EDR portfolio was 95.1 percent as of
March 31, 2006, up from 92.3 percent for the comparable quarter in 2005. The
economic occupancy rate is calculated by dividing net apartment rents for the
quarter by market rent for the quarter ended March 31.
As of April 30, 2006, physical occupancy statistics show occupancy across the
portfolio of EDR owned communities and EDR managed communities at 93.5 percent,
up 4 percentage points from 89.8 percent as of April 30, 2005.
The following are additional details about EDR's occupancy at April 30, 2006:
o At the seven EDR predecessor communities, occupancy was 91.2 percent
at April 30, 2006, up from 89.2 percent on April 30, 2005.
o At the 14 communities acquired from JPI, occupancy was 94.5 percent at
April 30, 2006, up from 93.3 percent on April 30, 2005.
o At the five communities acquired by EDR subsequent to its IPO,
occupancy was 94.8 percent at April 30, 2006, up from 88.8 percent on
April 30, 2005.
o At 13 communities in regional markets acquired from Place Properties
L.P. of Atlanta, occupancy was 94.7 percent at April 30, 2006, up from
87.6 percent on April 30, 2005.
Physical occupancy at communities in the EDR managed portfolio was also higher.
Occupancy was 91.8 percent at properties managed by Allen & O'Hara Education
Services, Inc., the EDR property management subsidiary, as of April 30, 2006, up
from 86.5 percent a year ago.
For the upcoming 2006-2007 academic year, as of May 1, 2006, the company has
pre-leased approximately 72 percent of its beds, compared to approximately 68
percent pre-leased as of May 1, 2005. The following are additional details about
pre-leasing activities for the upcoming academic year:
o At EDR owned communities, 71.9 percent of the beds are pre-leased for
fall 2006 compared to 67.9 percent of the beds pre-leased a year ago
for the fall of 2005.
o At EDR managed communities, 72.5 percent of available beds are
pre-leased for fall 2006 compared to 65.6 percent pre-leased a year
ago.
o At 13 communities acquired from Place Properties in January, 62
percent of available beds are pre-leased for fall 2006 compared to 64
percent pre-leased a year ago.
ACQUISITION AND DEVELOPMENT ACTIVITY
In January 2006, EDR completed its previously announced purchase of 13
collegiate communities in six states for a contract price of $195 million from
Place Properties LP of Atlanta.
EDR expects to continue evaluate high-quality, purpose-built collegiate student
housing for possible investment during 2006. So far this year, the company has
evaluated 29 properties for possible purchase.
In April 2006, EDR announced its participation in a joint venture development of
a new 204-unit, 600-bed off-campus collegiate community at the University of
North Carolina-Greensboro slated to open in 2007. In the joint venture, EDR's
taxable REIT subsidiary will provide development and construction management
services. EDR will guarantee certain construction debt, in exchange for an
interest in the student housing community. EDR also recently announced its
selection as co-developer of a 319-unit, 849-bed off-campus community planned to
open in 2008 adjacent to the north campus at the University of Michigan in Ann
Arbor.
In addition, 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.
Six projects with 4,368 beds are in development or under construction. They
include:
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 beds is scheduled to start
in June 2006.
o INDIANA UNIVERSITY OF PENNSYLVANIA, where a $51 million bond issue is
scheduled to close and construction is scheduled to begin this month
on the first of a multi-phase, $250 million project 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 an opening
this month.
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.
o UNIVERSITY OF LOUISVILLE, where construction is on schedule for the
fall 2006 opening of a 359-bed residential suites and Greek
organizations building.
PROPERTY MANAGEMENT UPDATE
Allen & O'Hara Education Services Inc. is actively engaged in the initial
leasing activities at soon-to-be-completed properties in Birmingham, Denver and
Louisville. Blazer Hall at UAB in Birmingham is scheduled to open later this
month and Campus Village in Denver and Community Park at the University of
Louisville are slated to open in later this summer.
SUPPLEMENTAL INFORMATION
The company has scheduled a conference call for interested parties for Tuesday,
May 9, 2006, with Chairman, CEO and President Paul Bower, Executive Vice
President and CFO Randy Brown and Executive Vice President and Chief Investment
Officer Craig Cardwell, who will discuss the company's results. The call is set
to begin at 11 a.m. Eastern Time.
The conference call will be accessible by telephone and through the Internet. To
access the call, participants from within the U.S. may dial 866.770.7146 and
participants from outside the U.S. may dial 617.213.8068. The pass code for this
call is 25143739. Participants who prefer may access the call via the Internet
at 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 shortly after its
completion on May 9 through May 16, 2006. To access the rebroadcast, the
domestic number is 888.286.8010, the international number is 617.801.6888 and
the pass code is 68802427. 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 for MP3 player download through www.reitcafe.com.
ABOUT EDUCATION REALTY TRUST
Education Realty Trust, Inc. (NYSE: EDR) is a real estate investment trust that
owns, manages and develops high-quality collegiate student housing. Led by a
team with more than 170 years of shared industry experience, EDR is one of
America's largest owners and operators of collegiate student housing. Its
portfolio includes 36,637 beds at 59 properties in 21 states. For more
information please visit the company's Web site at www.educationrealty.com.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: Statements about the company's business that are not historical facts are
"forward-looking statements." Forward-looking statements are based on current
expectations. You should not rely on our forward-looking statements because the
matters they describe are subject to known and unknown risks and uncertainties
that could cause the company's future results, performance, or achievements to
differ significantly from the results, performance, or achievements expressed or
implied by such statements. Such risks are set forth under the captions "Item
1A. Risk Factors" and "Forward-Looking Statements" in our annual report on Form
10-K and under the caption "Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations" (or similar captions) in our
quarterly reports on Form 10-Q, and as described in our other filings with the
Securities and Exchange Commission. 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
<Table>
<Caption>
March 31, 2006 December 31, 2005
---------------- -----------------
Consolidated Consolidated
Education Realty Education Realty
Trust, Inc. Trust, Inc.
---------------- -----------------
(Unaudited)
Assets
Student housing properties, net $ 814,145 $ 620,305
Corporate office furniture, net 933 991
Cash and cash equivalents 4,311 61,662
Restricted cash 10,004 6,738
Student contracts receivable, net 262 470
Receivable from affiliates 61 --
Management fee receivable from third party 272 552
Goodwill and other intangibles, net 3,400 3,546
Other assets 8,105 9,785
--------- ---------
Total assets $ 841,493 $ 704,049
========= =========
Liabilities and stockholder's equity
Liabilities
Mortgage loans, net of unamortized premium/discount $ 426,472 $ 328,335
Long term debt 50,000 --
Accounts payable and accrued expenses 8,915 9,370
Accounts payable affiliates -- 225
Deferred revenue 6,079 7,660
--------- ---------
Total liabilities 491,466 345,590
--------- ---------
Minority interest 28,157 27,926
--------- ---------
Commitments and contingencies -- --
Stockholder's equity:
Common stock, $0.01 par value, 200,000,000 shares
authorized, 26,272,889 and 26,263,889
shares issued and outstanding as of March 31, 2006
and December 31, 2005, respectively 263 263
Preferred shares, $0.01 par value, 50,000,000 shares
authorized, no shares issues and outstanding --
Additional paid in capital 343,781 351,664
Loan to unitholder (5,996) (5,996)
Warrants 375 375
Accumulated deficit (16,553) (15,773)
--------- ---------
Total stockholder's equity 321,870 330,533
--------- ---------
Total liabilities and stockholder's equity $ 841,493 $ 704,049
========= =========
</Table>
EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES AND
EDUCATION REALTY TRUST PREDECESSOR CONDENSED
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(Amounts in thousands except share and per share data)
<Table>
<Caption>
Education Realty Education Realty Education Realty Education Realty
Trust, Inc. Trust, Inc. Trust Predecessor Trust Consolidated
Consolidated Consolidated Combined & Combined
------------------ ------------------ ---------------- ------------------
Three months ended Three months ended January 1 to Three months ended
March 31, 2006 March 31, 2005 January 30, 2005 March 31, 2005
------------------ ------------------ ---------------- ------------------
(unaudited) (unaudited) (unaudited)
REVENUES:
Student housing leasing revenue $ 22,534 $ 12,088 $ 1,503 $ 13,591
Student housing food service revenue 968 588 269 857
Other leasing revenue 3,434 -- -- --
Third-party development services 555 9 -- 9
Third-party management services 699 289 103 392
Operating expense reimbursements 1,795 686 671 1,357
------------ ------------ ------- --------
Total revenues 29,985 13,660 2,546 16,206
------------ ------------ ------- --------
OPERATING EXPENSES:
Student housing leasing operations 9,289 4,903 524 5,427
Student housing food service operations 859 520 255 775
General and administrative 2,980 5,177 367 5,544
Depreciation and amortization 9,153 5,759 260 6,019
Reimbursable operating expenses 1,795 686 671 1,357
------------ ------------ ------- --------
Total operating expenses 24,076 17,045 2,077 19,122
------------ ------------ ------- --------
Operating income (loss) 5,909 (3,385) 469 (2,916)
NONOPERATING EXPENSES:
Interest expense 6,870 2,577 479 3,056
Exit fees on early repayment of mortgages -- 1,084 -- 1,084
Amortization of deferred financing costs 274 116 -- 116
Interest income (209) (279) -- (279)
------------ ------------ ------- --------
Total nonoperating expenses 6,935 3,498 479 3,977
------------ ------------ ------- --------
Loss before equity in earnings of unconsolidated
entities, income taxes, and minority
interest (1,026) (6,883) (10) (6,893)
Equity in earnings of unconsolidated entities 283 71 27 98
------------ ------------ ------- --------
Income (loss) before income taxes and minority
interest (743) (6,812) 17 (6,795)
Income tax benefit (104) (66) -- (66)
------------ ------------ ------- --------
Net income (loss) before minority interest (639) (6,746) 17 (6,729)
Minority Interest 141 (431) -- (431)
------------ ------------ ------- --------
Net income (loss) $ (780) $ (6,315) $ 17 $ (6,298)
============ ============ ======= ========
Net loss per share - basic & diluted $ (0.03) $ (0.29)
============ ============
Weighted-average common shares outstanding
- Basic and diluted 26,268,389 21,853,599
============ ============
</Table>
EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
CALCULATION OF FFO AND FFOA
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA, UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED THREE MONTHS ENDED JANUARY 1 TO
MARCH 31, 2006 MARCH 31, 2005 JANUARY 30, 2005
------------------ ------------------ -----------------
(EDR Consolidated) (EDR Consolidated) (EDR Predecessor)
------------------ ------------------ -----------------
Net income (loss) $ (780) $ (6,315) $ 17
Real estate related depreciation and amortization 9,069 5,702 260
Minority interest 141 (431) --
------------ ------------ ----
FUNDS FROM OPERATIONS ("FFO") 8,430 (1,044) 277
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) -- 411 --
------------ ------------ ----
Impact of IPO related transactions -- 5,524 --
------------ ------------ ----
FUNDS FROM OPERATIONS -- ADJUSTED ("FFOA") $ 8,430 $ 4,490 $277
============ ============ ====
FFO per share -- weighted average dilutive stocks/units $ 0.30 $ (0.04)
FFOA per share -- weighted average dilutive stocks/units $ 0.30 $ 0.19
Weighted average dilutive shares/units 28,203,007 23,962,182
FFO per share -- dilutive stocks/units $ 0.30 $ (0.04)
FFOA per share -- dilutive stocks/units $ 0.30 $ 0.19
Total potentially dilutive common and restricted stock and
partnership units 28,351,682 23,962,182
============ ============
</Table>
- ------------------------
(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.