Exhibit 99.1
American Campus Communities, Inc. Reports
First Quarter 2005 Financial Results
AUSTIN, Texas--(BUSINESS WIRE)--May 3, 2005--American Campus Communities,
Inc. (NYSE:ACC), today announced the following financial results for the quarter
ending March 31, 2005.
Highlights
-- Increase in net income to $8.2 million during the quarter, up
from $1.5 million in the first quarter of 2004, primarily due
to a $5.9 million gain recognized on the sale of our
University Village property to California State University,
San Bernardino.
-- Closed on the acquisition of seven student housing properties
with a total of 3,118 beds, for a total combined contract
purchase price of $120.2 million.
-- Quarterly FFOM of $0.33 per fully diluted share or $4.2
million, compared to $2.1 million in the prior year first
quarter.
-- Increase in Net Operating Income ("NOI") for same-store owned
off-campus properties of 12.4 percent from first quarter 2004.
(We define NOI as property revenues less property operating
expenses, excluding depreciation).
-- Increase of 91 percent in third party management services
revenues over the prior year first quarter.
-- Commencement of a $38.4 million renovation of historic Fenn
Tower on the Cleveland State University campus, with
third-party development and construction management services
fees to total $1.5 million.
-- Selected via a competitive process by Arizona State University
and Hope International University to provide design,
development and management services on each of their
respective campuses.
First Quarter 2005 Operating Results
Revenue for the 2005 first quarter totaled $19.5 million, up 27 percent
from $15.4 million in the 2004 first quarter. Net income for the quarter totaled
$8.2 million, or $0.65 per fully diluted share, compared with $1.5 million in
the comparable period of 2004. FFO for the quarter totaled $5.7 million, or
$0.45 per fully diluted share. FFOM totaled $4.2 million, or $0.33 per fully
diluted share. A reconciliation of FFO and FFOM to net income is shown on Table
3. NOI for same-store owned off-campus properties was $5.1 million in the
quarter, up from $4.5 million in the 2004 first quarter. NOI for the total owned
off-campus property portfolio increased 62 percent, to $7.4 million from $4.5
million in comparable period of 2004, primarily due to the impact of the seven
properties acquired during the quarter and the increase in same-store NOI. "Our
operating results continued the strong performance witnessed in the fourth
quarter, in particular our same-store owned off-campus property NOI growth of
12.4 percent," said Bill Bayless, ACC President and Chief Executive Officer.
"Consistent with our stated goals and objectives for growth, we closed on seven
high quality well-located off-campus student-housing projects, all servicing
universities with solid future demographics. We are very excited about our
success in winning development awards at ASU and Hope International University.
Both of these projects have the potential to consist of multiple phases over the
next two to five years. These awards further establish our reputation for strong
capabilities in this area."
Portfolio Update and Acquisition Activity
As previously announced, during the quarter the company completed the
disposition of its University Village property to California State University,
San Bernardino for the option price of $28.3 million. The company also closed on
the acquisition of seven properties during the quarter for a total combined
contract purchase price of approximately $120.2 million, not including
transaction costs of approximately $1.8 million, estimated initial capital
expenditures of approximately $1.3 million and estimated initial integration
expenses of approximately $0.2 million necessary to bring the properties up to
our operating standards. Included in these acquisitions were: the five student
housing properties collectively known as the Proctor Portfolio, which serve
students at Florida State University, Florida A&M University and the University
of Florida; City Parc at Fry Street, serving students at the University of North
Texas; and Exchange at Gainesville (to be renamed), serving students at the
University of Florida.
During the quarter, the company was selected in a national competitive
award process to provide design, development and management services for Arizona
State University, and was also awarded the design and development of student
housing on the Hope International University campus in Fullerton, California.
These awards demonstrate American Campus Communities' ability to create
full-service solutions encompassing the planning, design, development and
management of modern student housing for colleges and university systems
nationally.
2005 Outlook
Based on the judgment and current expectations of the management team, the
company is reaffirming its previously stated guidance and expects that for
full-year 2005 net income will range from $0.72 to $0.78 per fully diluted
share, FFO will range from $1.42 to $1.50 per fully diluted share, and FFOM will
range from $1.32 to $1.42 per fully diluted share. The financial results for the
year ended December 31, 2005 may be affected by: national and regional economic
trends and events; the timing of acquisitions; the re-leasing of our properties;
interest rate risk; the timing 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. A reconciliation of
expected 2005 FFO and FFOM was provided in the company's press release dated
March 1, 2005 announcing fourth quarter and full year 2004 financial results as
well as in the company's current report on Form 8-K filed with the Securities
and Exchange Commission on March 4, 2005.
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 first quarter results and the 2005
outlook on Wednesday, May 4, 2005 at 12:00 p.m. EDT (11:00 a.m. CDT). To
participate by telephone, call 800-919-9193 at least five minutes prior to the
call.
To listen to the live broadcast, go to www.americancampuscommunities.com or
www.fulldisclosure.com at least 15 minutes prior to the call so that required
audio software can be downloaded. Informational slides to accompany prepared
remarks during the conference call as well as the supplemental analyst package
can be accessed at the website. A replay of the conference call will be
available beginning two hours after the end of the call until May 11, 2005 by
dialing 888-203-1112, pass code 5475983. The replay also will be available for
30 days at www.americancampuscommunities.com and at www.fulldisclosure.com.
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 24
student housing communities containing approximately 15,600 beds. Including its
owned properties, the company provides management and leasing services at a
total of 43 properties with more than 26,900 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, except share and per share data)
March 31, December 31,
2005 2004
------------- ------------
Assets (unaudited)
Investments in real estate:
Owned off-campus properties, net $385,359 $272,450
On-campus participating properties, net 70,271 68,064
------------- ------------
Investments in real estate, net 455,630 340,514
Cash and cash equivalents 6,425 4,050
Restricted cash and short-term investments 7,382 9,816
Student contracts receivable, net 3,013 2,164
Other assets 14,037 11,084
------------- ------------
Total assets $486,487 $367,628
============= ============
Liabilities and stockholders' equity
Liabilities:
Debt $314,385 $201,014
Accounts payable and accrued expenses 5,280 5,443
Other liabilities 22,793 20,294
------------- ------------
Total liabilities 342,458 226,751
Minority interests 2,649 2,648
Stockholders' equity:
Common stock, $0.01 par value,
800,000,000 shares authorized,
12,615,000 shares issued and
outstanding 126 126
Additional paid in capital 135,150 136,259
Accumulated earnings and dividends 5,717 1,802
Accumulated other comprehensive income 387 42
------------- ------------
Total stockholders' equity 141,380 138,229
------------- ------------
Total liabilities and stockholders'
equity $486,487 $367,628
============= ============
Table 2
American Campus Communities, Inc. and Subsidiaries
Consolidated & Combined Statements of Operations
(unaudited, dollars in thousands, except share and per share data)
Three Months Ended
March 31,
--------------------------
2005 2004
------------- ------------
Revenues:
Owned off-campus properties $12,489 $7,989
On-campus participating properties 5,493 5,293
Third-party development services 645 1,698
Third-party management services 710 372
Resident services 204 --
------------- ------------
Total revenues 19,541 15,352
Operating expenses:
Owned off-campus properties 5,136 3,459
On-campus participating properties 1,875 1,800
Third-party development and management
services 1,464 1,264
General and administrative 1,364 453
Depreciation and amortization 3,424 2,259
Ground lease 212 141
------------- ------------
Total operating expenses 13,475 9,376
------------- ------------
Operating income 6,066 5,976
Non-operating income and (expenses):
Interest income 58 13
Interest expense (3,808) (4,281)
Amortization of deferred financing costs (246) (144)
Other non-operating income 430 --
------------- ------------
Total non-operating expenses (3,566) (4,412)
------------- ------------
Income before taxes, minority interests and
discontinued operations 2,500 1,564
Income tax provision (102) --
Minority interests (87) 21
------------- ------------
Income from continuing operations 2,311 1,585
Discontinued operations:
Loss attributable to discontinued
operations (2) (55)
Gain from disposition of real estate 5,883 --
------------- ------------
Total discontinued operations 5,881 (55)
------------- ------------
Net income $8,192 $1,530
============= ============
Income per share - basic and diluted $0.65
=============
Weighted average common shares
outstanding:
Basic 12,622,145
=============
Diluted 12,769,939
=============
Table 3
American Campus Communities, Inc. and Subsidiaries
Calculation of FFO and FFOM
(unaudited, dollars in thousands, except share and per share data)
Three Months Ended
March 31,
--------------------------
2005 2004
------------- ------------
Net income $8,192 $1,530
Minority interests 87 (21)
Gain from disposition of real estate (5,883) --
Real estate-related depreciation and
amortization 3,326 2,277
------------- ------------
Funds from Operations ("FFO") 5,722 3,786
Elimination of operations from on-campus
participating properties:
Net income from on-campus participating
properties (1,310) (1,285)
Amortization of investment in on-campus
participating properties (879) (854)
------------- ------------
3,533 1,647
Modifications to reflect operational
performance of on-campus participating
properties:
Our share of net cash flow (a) 212 175
Management fees 263 273
On-campus participating properties
development fees (b) 230 --
------------- ------------
Impact of on-campus participating
properties 705 448
------------- ------------
Funds from Operations--Modified for
operational performance of on-campus
participating properties ("FFOM") $4,238 $2,095
============= ============
FFO per share--basic and diluted $0.45
=============
FFOM per share
Basic $0.34
=============
Diluted $0.33
=============
Weighted average common shares
outstanding:
Basic 12,622,145
=============
Diluted 12,769,939
=============
(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
amounts accrued for the interim periods.
(b) Development and construction management fees related to the
Cullen Oaks Phase II on-campus participating property.
CONTACT: American Campus Communities, Inc., Austin
At the Company:
Brian Nickel, 512-732-1000
or
At the Financial Relations Board:
Georganne Palffy, 312-640-6768