Exhibit 99.1
American Campus Communities Inc. Reports Second Quarter 2005 Financial
Results
AUSTIN, Texas--(BUSINESS WIRE)--Aug. 10, 2005--American Campus
Communities Inc. (NYSE:ACC) today announced the following financial
results for the quarter ending June 30, 2005.
Highlights
-- Quarterly FFOM of $0.30 per fully diluted share, including a
$0.03 per share non-recurring severance charge.
-- Increase in net operating income ("NOI") for same store owned
off-campus properties of 14.1 percent over second quarter
2004.
-- Priced 4.6 million share common stock offering, including full
exercise of overallotment, for estimated net proceeds of $96.0
million, which closed subsequent to the end of the quarter.
-- Purchased land and received development approvals for a
704-bed owned off-campus community serving students attending
Texas A&M University.
-- Awarded two third-party development projects on the campuses
of the University of New Orleans and Blinn College.
-- Pre-leased the owned off-campus development at SUNY Buffalo to
100 percent for the upcoming 2005-2006 academic year.
-- Continued the strong pre-leasing of the company's owned
off-campus portfolio for the 2005-2006 academic year achieving
90 percent occupancy as of June 30, 2005 and 98 percent
occupancy as of August 5, 2005.
2005 Operating Results
Revenue for the 2005 second quarter totaled $20.0 million, up 45
percent from $13.8 million in the 2004 second quarter. Net loss for
the quarter totaled $1.8 million, or $0.14 per fully diluted share.
This net loss was attributable primarily to the amortization of
intangible assets recorded in relation to acquisitions made in the
first quarter 2005, the expiration of nine-month leases at the
on-campus participating properties during the quarter, and a
non-recurring severance charge. FFO for the quarter totaled $2.5
million, or $0.20 per fully diluted share. FFOM totaled $3.9 million,
or $0.30 per fully diluted share. A reconciliation of FFO and FFOM to
net income (loss) is shown on Table 3.
NOI for same store owned off-campus properties was $4.5 million in
the quarter, up 14.1 percent from $4.0 million in the 2004 second
quarter. NOI for the total owned off-campus property portfolio
increased 104 percent, to $8.1 million from $4.0 million in the
comparable period of 2004, primarily due to the impact of acquired
properties and the increase in same store NOI. For purposes of
calculating NOI for our property portfolio, the company defines NOI as
property revenues less property operating expenses, excluding
depreciation.
For the six months ended June 30, 2005, revenues totaled $39.5
million, up 36 percent from $29.2 million in 2004. Net income for the
year-to-date period totaled $6.4 million, or $0.51 per fully diluted
share. FFO for the year-to-date period totaled $8.3 million, or $0.65
per fully diluted share, and FFOM totaled $8.1 million, or $0.64 per
fully diluted share. A reconciliation of FFO and FFOM to net income
(loss) is shown on Table 3.
"We are pleased to report another quarter of solid performance,
including our strong pre-leasing activity for the upcoming academic
year and a third consecutive period of double-digit same store NOI
growth compared to the prior year," commented Bill Bayless, CEO and
president of American Campus Communities. "We have also made
substantial gains in our third-party development services pipeline,
and feel confident that we will continue to be recognized as a leader
in this segment of our business."
Subsequent to the Quarter End
The company commenced construction of Callaway Villas, a 704-bed
luxury student community servicing students attending Texas A&M
University. This project is located just one block from campus,
featuring differentiated town home unit plans and is scheduled for
completion in August 2006, with occupancy expected to occur in
conjunction with the beginning of the 2006-2007 academic year.
The company continued development activity on the Village at
Newark, an approximately 812-bed project in Newark, New Jersey,
entering into a ground lease agreement for the two-acre development
site and executing a joint venture agreement with Titan Investments.
This project is located across the street from the New Jersey
Institute of Technology, two blocks from Rutgers University and within
walking distance of Essex County Community College. Site demolition
has been completed with construction scheduled to commence this fall.
The community is scheduled to open for occupancy in August of 2007,
with the potential for partial occupancy in August of 2006 or January
of 2007, dependent upon construction progress.
The company also began pre-development and design services for
third-party development awards on the campuses of the University of
New Orleans and Blinn College. In addition, the company was awarded,
and is in negotiations related to a third-party development project on
the campus of the University of Hawaii. The Blinn College and
University of Hawaii development projects also have the potential for
the company to provide third-party management services.
In addition, American Campus Communities has been awarded and
commenced third-party pre-development services and initial operations
management for The Inn at Auraria in Denver, Colorado, where occupancy
is scheduled for fall 2006. The company will subsequently manage the
completed community. Furthermore, the company has been awarded or
engaged to provide pre-development, design, and construction
administration services on two additional projects with the West
Virginia University System.
Capital Markets Activity
During the quarter, the company announced the pricing of a common
stock offering, which increased in size due to investor demand.
Subsequent to the quarter end, the company closed on the 4.6
million-share offering, including a full exercise of the underwriters'
overallotment, for estimated net proceeds of $96.0 million.
Approximately $50.2 million of the proceeds was used to pay off the
company's balance on its revolving credit facility. The remainder of
the proceeds will be used to fund the acquisition and development of
student housing properties and general corporate purposes. This
offering will be reflected in the company's financial statements for
the third quarter 2005.
As previously announced, the company amended its existing $75
million secured revolving credit facility maturing in August 2007. The
$100 million amended facility is now unsecured, at a lower interest
cost, and contains more favorable financial covenants.
2005 Outlook
Based on the judgment and current expectations of the management
team, the company is adjusting its previously stated guidance
resulting from the consummation of the July 5, 2005 4.6 million-share
common stock offering. The company expects that for the full-year 2005
net income will range from $0.56 to $0.60 per fully diluted share, FFO
will range from $1.24 to $1.30 per fully diluted share, and FFOM will
range from $1.15 to $1.23 per fully diluted share.
Diluted average common shares utilized in the company's original
2005 guidance were 12.7 million shares, while the revised guidance
utilizes 15.1 million shares as a result of the timing of the common
stock offering. The impact of the issuance of the additional shares
and revised guidance is illustrated below (dollars in thousands):
Low High
------------------- -------------------
Dollars Per Share Dollars Per Share
--------- --------- --------- ---------
Original 2005 FFOM guidance $16,800 $1.32 $18,150 $1.42
========= ========= ========= =========
Revised 2005 FFOM guidance $17,400 $1.15 $18,600 $1.23
========= ========= ========= =========
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 to net
income is shown on 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 Web site,
www.americancampuscommunities.com. In addition, the company will host
a conference call to discuss second quarter results and the 2005
outlook on Thursday, August 11, 2005 at 11:00 a.m. EDT (10:00 a.m.
CDT). To participate by telephone, call 800-289-0572 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 Web site. A replay of the
conference call will be available beginning two hours after the end of
the call until August 18, 2005 by dialing 888-203-1112 or 719-457-0820
pass code 8772949. The replay also will be available for 30 days at
www.americancampuscommunities.com and at www.earnings.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 25 student
housing communities containing approximately 16,300 beds. Including
its owned properties, the company provides management and leasing
services at a total of 44 properties with more than 27,600 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)
June 30, 2005 Dec. 31, 2004
------------- -------------
Assets (unaudited)
Investments in real estate:
Owned off-campus properties, net $397,419 $272,450
On-campus participating properties, net 77,317 68,064
------------- -------------
Investments in real estate, net 474,736 340,514
Cash and cash equivalents 3,864 4,050
Restricted cash and short-term investments 13,479 9,816
Student contracts receivable, net 1,059 2,164
Other assets 14,118 11,084
------------- -------------
Total assets $507,256 $367,628
============= =============
Liabilities and stockholders' equity
Liabilities:
Secured debt $287,161 $201,014
Unsecured revolving credit facility 50,225 --
Accounts payable and accrued expenses 7,872 5,443
Other liabilities 25,938 20,294
------------- -------------
Total liabilities 371,196 226,751
Minority interests 2,580 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 133,559 136,259
Accumulated earnings and dividends (355) 1,802
Accumulated other comprehensive income 150 42
------------- -------------
Total stockholders' equity 133,480 138,229
------------- -------------
Total liabilities and stockholders' equity $507,256 $367,628
============= =============
Table 2
American Campus Communities Inc. and Subsidiaries
and American Campus Predecessor
Consolidated & Combined Statements of Operations
(unaudited, dollars in thousands, except share and per share data)
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
2005 2004 2005 2004
----------- ---------- ----------- ----------
Revenues:
Owned off-campus
properties $14,764 $7,726 $27,253 $15,715
On-campus
participating
properties 3,133 3,202 8,626 8,495
Third-party
development services 1,332 2,503 1,977 4,201
Third-party management
services 562 400 1,272 772
Resident services 216 -- 420 --
----------- ---------- ----------- ----------
Total revenues 20,007 13,831 39,548 29,183
Operating expenses:
Owned off-campus
properties 6,873 3,744 12,009 7,203
On-campus
participating
properties 1,986 2,041 3,861 3,841
Third-party
development and
management services 1,573 1,527 3,037 2,791
General and
administrative 1,925 555 3,289 1,008
Depreciation and
amortization 4,450 2,272 7,874 4,531
Ground/facility leases 240 221 452 362
----------- ---------- ----------- ----------
Total operating expenses 17,047 10,360 30,522 19,736
----------- ---------- ----------- ----------
Operating income 2,960 3,471 9,026 9,447
Non-operating income and
(expenses):
Interest income 44 12 102 25
Interest expense (4,634) (4,189) (8,442) (8,470)
Amortization of
deferred financing
costs (276) (144) (522) (288)
Other non-operating
income -- -- 430 --
----------- ---------- ----------- ----------
Total non-operating
expenses (4,866) (4,321) (8,432) (8,733)
----------- ---------- ----------- ----------
(Loss) income before
income tax benefit,
minority interests, and
discontinued operations (1,906) (850) 594 714
Income tax benefit 102 -- -- --
Minority interests 12 23 (75) 44
----------- ---------- ----------- ----------
(Loss) income from
continuing operations (1,792) (827) 519 758
Discontinued operations:
Loss attributable to
discontinued
operations -- (135) (2) (190)
(Loss) gain from
disposition of real
estate -- (39) 5,883 (39)
----------- ---------- ----------- ----------
Total discontinued
operations -- (174) 5,881 (229)
----------- ---------- ----------- ----------
Net (loss) income $(1,792) $(1,001) $6,400 $529
=========== ========== =========== ==========
(Loss) income per share
-- basic and diluted $(0.14) $0.51
=========== ===========
Weighted average common
shares outstanding:
Basic 12,626,118 12,624,142
=========== ===========
Diluted 12,747,118 12,785,413
=========== ===========
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 Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
2005 2004 2005 2004
----------- ---------- ----------- ----------
Net (loss) income $(1,792) $(1,001) $6,400 $529
Minority interests (12) (23) 75 (44)
Loss from disposition of
real estate -- 39 (5,883) 39
Real estate-related
depreciation and
amortization 4,344 2,288 7,670 4,565
----------- ---------- ----------- ----------
Funds from operations
("FFO") 2,540 1,303 8,262 5,089
Elimination of
operations from
on-campus participating
properties:
Net loss (income) from
on-campus participating
properties 1,241 1,227 (69) (58)
Amortization of
investment in
on-campus participating
properties (883) (856) (1,762) (1,710)
----------- ---------- ----------- ----------
2,898 1,674 6,431 3,321
Modifications to reflect
operational performance
of on-campus participating
properties:
Our share of net cash
flow(a) 240 221 452 396
Management fees 158 155 421 428
On-campus participating
properties
development fees(b) 585 -- 815 --
----------- ---------- ----------- ----------
Impact of on-campus
participating
properties 983 376 1,688 824
----------- ---------- ----------- ----------
Funds from Operations
-- modified for
operational performance
of on-campus
participating
properties ("FFOM") $3,881 $2,050 $8,119 $4,145
=========== ========== =========== ==========
FFO per share -- basic
and diluted $0.20 $0.65
=========== ===========
FFOM per share
Basic $0.31 $0.64
=========== ===========
Diluted $0.30 $0.64
=========== ===========
Weighted average common
shares outstanding:
Basic 12,626,118 12,624,142
=========== ===========
Diluted 12,747,118 12,785,413
=========== ===========
(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, which is currently
under development with a scheduled completion date of August 2005.
Table 4
American Campus Communities Inc. and Subsidiaries
2005 Outlook
(unaudited, dollars in thousands, except share and per share data)
Revised 2005 Outlook(a)
Low High
-------- --------
Net income $8,450 $9,000
Minority interests 80 90
Gain on disposition of real estate (5,800) (5,900)
Depreciation and amortization 14,920 15,210
Amortization of acquired intangible assets 1,100 1,200
-------- --------
Funds from operations ("FFO") 18,750 19,600
Elimination of operations from on-campus
participating properties (4,000) (3,900)
Modifications to reflect operational performance of
on-campus participating properties 2,650 2,900
-------- --------
Funds from operations - modified for operational
performance of on-campus participating properties
("FFOM") $17,400 $18,600
======== ========
Weighted average common shares outstanding --
diluted 15,075 15,075
======== ========
Net income per average common share -- diluted $0.56 $0.60
======== ========
FFO per average common share -- diluted $1.24 $1.30
======== ========
FFOM per average common share -- diluted $1.15 $1.23
======== ========
(a) Assumes that (1) the company will complete $0 to $30 million of
off-campus property acquisitions during the fourth quarter of
2005, (2) University Village at Sweet Home and Cullen Oaks Phase
II developments being placed into service on schedule, (3) the
company will generate third-party development and management
revenues from $7.5 million to $8.5 million, (4) the 2005-2006
academic year lease-up is based upon current pre-leasing and
rental rate trends, and (5) the cost of Sarbanes-Oxley compliance
at 2005 year-end will be approximately $0.5 million.
CONTACT: American Campus Communities Inc., Austin
Brian Nickel, 512-732-1000
or
Financial Relations Board
Georganne Palffy, 312-640-6768