Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - AMERICAN CAMPUS COMMUNITIES INC | ex991-q42017earningsrelease.htm |
| 8-K - 8-K - AMERICAN CAMPUS COMMUNITIES INC | form8-kq42017earningsrelea.htm |
Financial Highlights S-1
Consolidated Balance Sheets S-2
Consolidated Statements of Comprehensive Income S-3
Consolidated Statements of Funds from Operations S-4
Owned Properties Results of Operations S-5
Same Store Owned Properties Operating Expenses S-6
Seasonality of Operations S-7
Investment Update S-9
Owned Development Update S-10
Presale Development Update S-11
Third-Party Development Update S-12
Management Services Update S-13
Capital Structure S-14
Interest Coverage S-15
Capital Allocation – Long Term Funding Plan S-16
2018 Outlook - Summary S-17
2018 Outlook - Detail S-18
Detail of Property Groupings S-19
Definitions S-20
Investor Information S-22
Table of Contents
Q4 Supplemental Package
FEBRUARY 20, 2018
Financial Highlights
($ in thousands, except share and per share data)
S-1
Operating Data Three Months Ended December 31, Year Ended December 31,
2017 2016 $ Change % Change 2017 2016 $ Change % Change
Total revenues $ 227,563 $ 203,972 $ 23,591 11.6% $ 796,447 $ 786,361 $ 10,086 1.3%
Operating income 63,134 51,724 11,410 22.1% 142,538 173,143 (30,605) (17.7%)
Net income attributable to ACC1 39,062 25,392 13,670 53.8% 69,038 99,061 (30,023) (30.3%)
Net income per share - basic 0.28 0.19 0.50 0.76
Net income per share - diluted 0.28 0.19 0.50 0.75
Funds From Operations ("FFO")2 103,909 77,955 25,954 33.3% 317,358 292,597 24,761 8.5%
FFO per share - diluted2 0.75 0.58 0.17 29.3% 2.31 2.23 0.08 3.6%
Funds From Operations - Modified ("FFOM")2 99,576 86,936 12,640 14.5% 316,434 297,694 18,740 6.3%
FFOM per share - diluted2 0.72 0.65 0.07 10.8% 2.31 2.27 0.04 1.8%
Market Capitalization and Unsecured Notes Covenants3 December 31, 2017 December 31, 2016
Debt to total market capitalization 34.8% 24.1%
Net debt to EBITDA4 6.8x 5.4x
Unencumbered asset value to total asset value 83.7% 81.0%
Total debt to total asset value 38.0% 31.3%
Secured debt to total asset value 8.2% 9.8%
Unencumbered asset value to unsecured debt 280.1% 378.2%
Interest coverage4 4.2x 4.5x
1. Excluding net gains from dispositions of real estate, impairment charges and losses from the early extinguishment of debt, net income attributable to ACC for the three months ended December 31,
2016 would have been $39.3 million. Excluding net gains and losses from dispositions of real estate, impairment charges and losses from the early extinguishment of debt, net income attributable
to ACC for the years ended December 31, 2017 and 2016 would have been $85.0 million and $95.6 million, respectively.
2. Refer to page S-4 for a reconciliation to net income, the most directly comparable GAAP measure.
3. Refer to the definitions outlined on pages S-20 and S-21 for detailed definitions of terms appearing on this page.
4. Refer to calculations on page S-15, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
Consolidated Balance Sheets
($ in thousands)
S-2
December 31, 2017 December 31, 2016
(unaudited)
Assets
Investments in real estate:
Owned properties, net $ 6,450,364 $ 5,427,014
Owned properties held for sale — 25,350
On-campus participating properties, net 81,804 85,797
Investments in real estate, net 6,532,168 5,538,161
Cash and cash equivalents 41,182 22,140
Restricted cash 23,590 24,817
Student contracts receivable, net 9,170 8,428
Other assets1 291,260 272,367
Total assets $ 6,897,370 $ 5,865,913
Liabilities and equity
Liabilities:
Secured mortgage, construction and bond debt $ 664,020 $ 688,195
Unsecured notes 1,585,855 1,188,737
Unsecured term loans 647,044 149,065
Unsecured revolving credit facility 127,600 99,300
Accounts payable and accrued expenses 53,741 76,614
Other liabilities1 187,983 158,437
Total liabilities 3,266,243 2,360,348
Redeemable noncontrolling interests 132,169 55,078
Equity:
American Campus Communities, Inc. and
Subsidiaries stockholders' equity:
Common stock 1,364 1,322
Additional paid in capital 4,326,910 4,118,842
Common stock held in rabbi trust (2,944) (975)
Accumulated earnings and dividends (837,644) (670,137)
Accumulated other comprehensive loss (2,701) (4,067)
Total American Campus Communities, Inc. and
3,484,985 3,444,985Subsidiaries stockholders' equity
Noncontrolling interests - partially owned properties 13,973 5,502
Total equity 3,498,958 3,450,487
Total liabilities and equity $ 6,897,370 $ 5,865,913
1. For purposes of calculating net asset value at December 31, 2017, the company excludes other assets of approximately $8.8 million related to net deferred financing costs on its revolving credit facility and the
net value of in-place leases and other liabilities of approximately $47.8 million related to deferred revenue and fee income.
Consolidated Statements of Comprehensive Income
($ in thousands, except share and per share data)
S-3
Three Months Ended December 31, Year Ended December 31,
2017 2016 $ Change 2017 2016 $ Change
Revenues (unaudited) (unaudited)
Owned properties $ 207,154 $ 189,314 $ 17,840 $ 738,710 $ 735,392 $ 3,318
On-campus participating properties 10,817 10,415 402 33,945 33,433 512
Third-party development services 6,064 677 5,387 10,761 4,606 6,155
Third-party management services 2,639 2,685 (46) 9,832 9,724 108
Resident services 889 881 8 3,199 3,206 (7)
Total revenues 227,563 203,972 23,591 796,447 786,361 10,086
Operating expenses
Owned properties 82,877 80,121 2,756 332,429 337,296 (4,867)
On-campus participating properties 3,304 3,322 (18) 14,384 13,447 937
Third-party development and management services 3,436 3,895 (459) 15,225 14,533 692
General and administrative1 6,186 5,683 503 31,386 22,493 8,893
Depreciation and amortization 65,564 51,901 13,663 234,955 211,387 23,568
Ground/facility leases 3,062 2,431 631 10,213 9,167 1,046
Provision for real estate impairment2 — 4,895 (4,895) 15,317 4,895 10,422
Total operating expenses 164,429 152,248 12,181 653,909 613,218 40,691
Operating income 63,134 51,724 11,410 142,538 173,143 (30,605)
Nonoperating income and (expenses)
Interest income 1,222 1,455 (233) 4,945 5,481 (536)
Interest expense (23,178) (16,925) (6,253) (71,122) (78,687) 7,565
Amortization of deferred financing costs (1,422) (1,282) (140) (4,619) (6,520) 1,901
Gain (loss) from disposition of real estate — 3,788 (3,788) (632) 21,197 (21,829)
Loss from early extinguishment of debt — (12,841) 12,841 — (12,841) 12,841
Total nonoperating expense (23,378) (25,805) 2,427 (71,428) (71,370) (58)
Income before income taxes 39,756 25,919 13,837 71,110 101,773 (30,663)
Income tax provision (198) (115) (83) (989) (1,150) 161
Net income 39,558 25,804 13,754 70,121 100,623 (30,502)
Net income attributable to noncontrolling interests (496) (412) (84) (1,083) (1,562) 479
Net income attributable to ACC, Inc. and
$ 39,062 $ 25,392 $ 13,670 $ 69,038 $ 99,061 $ (30,023)Subsidiaries common stockholders
Other comprehensive income
Change in fair value of interest rate swaps and other 494 1,925 (1,431) 1,366 1,763 (397)
Comprehensive income $ 39,556 $ 27,317 $ 12,239 $ 70,404 $ 100,824 $ (30,420)
Net income per share attributable to ACC, Inc.
and Subsidiaries common stockholders
Basic $ 0.28 $ 0.19 $ 0.50 $ 0.76
Diluted $ 0.28 $ 0.19 $ 0.50 $ 0.75
Weighted-average common shares outstanding
Basic 136,426,506 132,175,589 135,141,423 129,228,748
Diluted 137,238,418 132,950,306 136,002,385 130,018,729
1. The year ended December 31, 2017 includes $4.5 million of contractual executive separation and retirement charges incurred in the first and second quarter of 2017 with regard to the retirement of the company's former Chief
Financial Officer, and $2.9 million in transaction costs incurred in the third quarter of 2017 related to the company's initial investment in the Core Spaces/DRW joint ventures. Refer to pages S-9 and S-11.
2. Represents an impairment charge recorded in the fourth quarter of 2016 for a property classified as held for sale as of December 31, 2016, and an impairment charge recorded in the second quarter of 2017 for a property
currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017.
Consolidated Statements of Funds from Operations
(Unaudited, $ in thousands, except share and per share data)
S-4
1. Represents an impairment charge recorded in the fourth quarter of 2016 for a property classified as held for sale as of December 31, 2016, and an impairment charge recorded in the second quarter of
2017 for a property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017.
2. 50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures which is included in ground/facility
leases expense in the consolidated statements of comprehensive income (refer to page S-3).
3. The year ended December 31, 2017 amount represents transaction costs incurred in the third quarter of 2017 related to the company's initial investment in the Core Spaces/DRW joint ventures. Refer
to pages S-9 and S-11.
4. Represents contractual executive separation and retirement charges incurred in the first and second quarter of 2017 with regard to the retirement of the company's former Chief Financial Officer.
5. Represents losses associated with the early pay-off of mortgage loans for nine properties sold during the twelve months ended December 31, 2016. Such costs are excluded from gains from
disposition of real estate reported in accordance with GAAP. However, the company views the losses from early extinguishment of debt associated with the sales of real estate as an incremental cost
of the sale transactions because the debt was extinguished in connection with the consummation of the sale transactions and had no intent to extinguish the debt absent such transactions. The
company believes that adjusting FFOM to exclude these losses more appropriately reflects the results of its operations exclusive of the impact of our disposition transactions.
Three Months Ended December 31, Year Ended December 31,
2017 2016 $ Change 2017 2016 $ Change
Net income attributable to ACC, Inc. and
$ 39,062 $ 25,392 $ 13,670 $ 69,038 $ 99,061 $ (30,023)Subsidiaries common stockholders
Noncontrolling interests 483 412 71 1,076 1,562 (486)
(Gain) loss from disposition of real estate — (3,788) 3,788 632 (21,197) 21,829
Elimination of provision for real estate impairment1 — 4,895 (4,895) 15,317 4,895 10,422
Real estate related depreciation and amortization 64,364 51,044 13,320 231,295 208,276 23,019
Funds from operations ("FFO") attributable to
103,909 77,955 25,954 317,358 292,597 24,761common stockholders and OP unitholders
Elimination of operations of on-campus participating properties
Net income from on-campus participating properties (3,760) (3,492) (268) (5,133) (5,194) 61
Amortization of investment in on-campus participating properties (1,915) (1,850) (65) (7,536) (7,343) (193)
98,234 72,613 25,621 304,689 280,060 24,629
Modifications to reflect operational performance of on-campus
participating properties
Our share of net cashflow2 854 794 60 2,841 2,964 (123)
Management fees 488 476 12 1,534 1,503 31
Contribution from on-campus participating properties 1,342 1,270 72 4,375 4,467 (92)
Property acquisition costs3 — 212 (212) 2,855 326 2,529
Contractual executive separation and retirement charges4 — — — 4,515 — 4,515
Elimination of loss from early extinguishment of debt5 — 12,841 (12,841) — 12,841 (12,841)
Funds from operations-modified ("FFOM") attributable to
$ 99,576 $ 86,936 $ 12,640 $ 316,434 $ 297,694 $ 18,740common stockholders and OP unitholders
FFO per share - diluted $ 0.75 $ 0.58 $ 2.31 $ 2.23
FFOM per share - diluted $ 0.72 $ 0.65 $ 2.31 $ 2.27
Weighted-average common shares outstanding - diluted 138,323,062 134,120,391 137,099,084 131,340,992
Owned Properties Results of Operations
($ in thousands)
S-5
Three Months Ended December 31, Year Ended December 31,
2017 2016 $ Change % Change 2017 2016 $ Change % Change
Owned properties revenues
Same store properties $ 172,624 $ 169,743 $ 2,881 1.7% $ 662,801 $ 648,070 $ 14,731 2.3%
New properties 34,571 8,980 25,591 74,345 13,271 61,074
Sold and held for sale properties1 848 11,472 (10,624) 4,763 77,257 (72,494)
Total revenues2 $ 208,043 $ 190,195 $ 17,848 9.4% $ 741,909 $ 738,598 $ 3,311 0.4%
Owned properties operating expenses
Same store properties3 4 $ 69,640 $ 70,918 $ (1,278) (1.8%) $ 297,633 $ 291,642 $ 5,991 2.1%
New properties 12,846 3,252 9,594 31,998 5,652 26,346
Sold and held for sale properties1 5 391 5,951 (5,560) 2,798 40,002 (37,204)
Total operating expenses $ 82,877 $ 80,121 $ 2,756 3.4% $ 332,429 $ 337,296 $ (4,867) (1.4%)
Owned properties net operating income
Same store properties4 $ 102,984 $ 98,825 $ 4,159 4.2% $ 365,168 $ 356,428 $ 8,740 2.5%
New properties 21,725 5,728 15,997 42,347 7,619 34,728
Sold and held for sale properties1 457 5,521 (5,064) 1,965 37,255 (35,290)
Total net operating income $ 125,166 $ 110,074 $ 15,092 13.7% $ 409,480 $ 401,302 $ 8,178 2.0%
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2017 and 2016, which are not conducting or planning to conduct
substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of December 31, 2017. Refer to page S-19 for detail of our same store groupings.
1. Includes properties sold in 2016 and 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan
that matured in August 2017.
2. Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income.
3. Refer to page S-6 for detail of same store operating expenses.
4. Excluding expenses of $0.1 million and $2.0 million incurred during the three and twelve months ended December 31, 2017, respectively, associated with Hurricanes Harvey and Irma, same store
owned operating expenses would have decreased by 1.9% and only increased by 1.4%, respectively, and same store owned net operating income would have increased 4.3% and 3.0%, respectively.
5. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
Same Store Owned Properties Operating Expenses
($ in thousands, except per bed amounts)
S-6
Three Months Ended December 31,
2017 2016
Total Per Bed
% Change
From Prior
Year
% of Total
Operating
Expenses Total Per Bed
% of Total
Operating
Expenses
Property taxes $ 16,415 $ 222 2.5% 24% $ 16,015 217 23%
General & administrative and other1 15,777 214 (3.9%) 23% 16,424 222 23%
Utilities2 15,991 217 (1.6%) 23% 16,253 220 23%
Payroll3 12,568 170 (3.2%) 18% 12,978 176 18%
Repairs and maintenance4 4,499 61 (9.0%) 6% 4,943 67 7%
Marketing5 2,738 37 2.0% 4% 2,685 36 4%
Insurance 1,652 22 2.0% 2% 1,620 22 2%
Total same store owned operating expenses6 $ 69,640 $ 943 (1.8%) 100% $ 70,918 $ 960 100%
Same store owned beds 73,871
Year Ended December 31,
2017 2016
Total Per Bed
% Change
From Prior
Year
% of Total
Operating
Expenses Total Per Bed
% of Total
Operating
Expenses
Property taxes $ 66,116 $ 895 3.1% 22% $ 64,157 $ 869 22%
General & administrative and other1 64,437 872 (0.1%) 22% 64,501 873 23%
Utilities2 63,471 859 1.4% 21% 62,581 847 21%
Payroll3 56,518 765 0.6% 19% 56,200 761 19%
Repairs and maintenance4 29,853 404 7.7% 10% 27,723 375 10%
Marketing5 10,770 146 6.9% 4% 10,075 136 3%
Insurance 6,468 88 1.0% 2% 6,405 87 2%
Total same store owned operating expenses6 $ 297,633 $ 4,029 2.1% 100% $ 291,642 $ 3,948 100%
Same store owned beds 73,871
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2017 and 2016, which are not conducting or planning to conduct substantial
development, redevelopment, or repositioning activities, and are not classified as held for sale as of December 31, 2017. Refer to page S-19 for detail of our same store groupings.
1. Includes security costs, shuttle costs, and property-level general and administrative costs as well as an allocation of costs related to corporate management and oversight. Also includes acquisition integration
costs, bad debt, food service, and other miscellaneous expenses.
2. Represents gross expenses prior to any recoveries from tenants, which are reflected in owned properties revenues.
3. Includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff.
4. Includes general maintenance costs such as interior painting, routine landscaping, pest control, fire protection, snow removal, elevator maintenance, roof and parking lot repairs, and other miscellaneous
building repair costs. Also includes costs related to the annual turn process and approximately $0.1 million and $2.0 million of costs incurred during the three and twelve months ended December 31, 2017,
respectively, as a result of Hurricanes Harvey and Irma. Excluding expenses incurred in relation to hurricanes, repairs and maintenance expenses for the three and twelve months ended December 31, 2017
would have decreased by 11% and increased by 0.5%, respectively.
5. Includes costs related to property marketing campaigns associated with our ongoing leasing efforts.
6. Excluding expenses of $0.1 million and $2.0 million incurred during the three and twelve months ended December 31, 2017, respectively, associated with Hurricanes Harvey and Irma, total same store owned
operating expenses for the three and twelve months ended December 31, 2017 would have decreased by 1.9% and only increased by 1.4%, respectively.
Seasonality of Operations
($ in thousands, except per bed amounts)
S-7
Three Months Ended
Total/Weighted Average-
December 31, 2016 March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Last 12 Months
2017 same store properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ 728 $ 727 $ 710 $ 715 $ 747 $ 725
Other income per occupied bed per month1 57 58 69 86 59 68
Total revenue per occupied bed $ 785 $ 785 $ 779 $ 801 $ 806 $ 793
Average number of owned beds2 73,871 73,857 73,773 73,753 73,841 73,806
Average physical occupancy for the quarter 97.6% 97.1% 92.0% 91.9% 96.7% 94.4%
Total revenue $ 169,743 $ 168,853 $ 158,548 $ 162,776 $ 172,624 $ 662,801
Property operating expenses 70,918 70,118 69,973 87,902 69,640 297,633
Net operating income $ 98,825 $ 98,735 $ 88,575 $ 74,874 $ 102,984 $ 365,168
Operating margin 58.2% 58.5% 55.9% 46.0% 59.7% 55.1%
2017 new properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ 787 $ 778 $ 787 $ 784 $ 814 $ 796
Other income per occupied bed per month1 43 42 59 68 53 57
Total revenue per occupied bed $ 830 $ 820 $ 846 $ 852 $ 867 $ 853
Average number of owned beds 3,868 3,900 4,559 9,382 14,743 8,146
Average physical occupancy for the quarter 93.2% 93.4% 87.9% 86.1% 90.2% 89.2%
Total revenue $ 8,980 $ 8,965 $ 10,172 $ 20,637 $ 34,571 $ 74,345
Property operating expenses 3,252 3,533 4,387 11,232 12,846 31,998
Net operating income $ 5,728 $ 5,432 $ 5,785 $ 9,405 $ 21,725 $ 42,347
Operating margin 63.8% 60.6% 56.9% 45.6% 62.8% 57.0%
ALL PROPERTIES
Revenue per occupied bed
Rental revenue per occupied bed per month $ 731 $ 730 $ 714 $ 722 $ 758 $ 731
Other income per occupied bed per month1 57 57 69 84 58 67
Total revenue per occupied bed $ 788 $ 787 $ 783 $ 806 $ 816 $ 798
Average number of owned beds 77,739 77,757 78,332 83,135 88,584 81,952
Average physical occupancy for the quarter 97.3% 96.9% 91.7% 91.2% 95.6% 93.9%
Total revenue $ 178,723 $ 177,818 $ 168,720 $ 183,413 $ 207,195 $ 737,146
Property operating expenses 74,170 73,651 74,360 99,134 82,486 329,631
Net operating income $ 104,553 $ 104,167 $ 94,360 $ 84,279 $ 124,709 $ 407,515
Operating margin 58.5% 58.6% 55.9% 46.0% 60.2% 55.3%
Sold and held for sale properties3
Total revenue $ 11,472 $ 1,892 $ 1,154 $ 869 $ 848 $ 4,763
Property operating expenses4 5,951 1,306 812 289 391 2,798
Net operating income $ 5,521 $ 586 $ 342 $ 580 $ 457 $ 1,965
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2017 and 2016, which are not conducting or planning to conduct substantial development,
redevelopment, or repositioning activities, and are not classified as held for sale as of December 31, 2017. Refer to page S-19 for detail of our same store groupings.
1. Other income is all income other than Net Student Rent. This includes, but is not limited to, utility income, damages, parking income, summer conference rent, application and administration fees, income from retail tenants, etc.
2. The decrease in the average number of owned beds from the fourth quarter of 2016 is due to fire damaged beds that were being rebuilt and beds being renovated during the summer months. These beds have been removed to
appropriately reflect revenue per occupied bed as they did not contribute revenue for the related period. The fire damaged beds were rebuilt as of December 31, 2017 and have been leased for Spring 2018.
3. Includes properties sold in 2016 and 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017.
4. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
Seasonality of Operations - Build-up to 2018 Same Store Grouping
($ in thousands, except per bed amounts)
S-8
Three Months Ended
Total/Weighted Average-
March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Last 12 Months
2017 same store properties1
Revenue per occupied bed
Rental revenue per occupied bed per month $ 727 $ 710 $ 715 $ 747 $ 725
Other income per occupied bed per month2 58 69 86 59 68
Total revenue per occupied bed $ 785 $ 779 $ 801 $ 806 $ 793
Average number of owned beds 73,857 73,773 73,753 73,841 73,806
Average physical occupancy for the quarter 97.1% 92.0% 91.9% 96.7% 94.4%
Total revenue $ 168,853 $ 158,548 $ 162,776 $ 172,624 $ 662,801
Property operating expenses 70,118 69,973 87,902 69,640 297,633
Net operating income $ 98,735 $ 88,575 $ 74,874 $ 102,984 $ 365,168
Operating margin 58.5% 55.9% 46.0% 59.7% 55.1%
2018 new same store properties3
Revenue per occupied bed
Rental revenue per occupied bed per month $ 778 $ 774 $ 783 $ 823 $ 791
Other income per occupied bed per month2 34 51 59 39 45
Total revenue per occupied bed $ 812 $ 825 $ 842 $ 862 $ 836
Average number of owned beds 3,900 3,900 3,900 3,900 3,900
Average physical occupancy for the quarter 93.4% 86.4% 87.4% 97.6% 91.2%
Total revenue $ 8,878 $ 8,339 $ 8,614 $ 9,842 $ 35,673
Property operating expenses 3,283 3,311 3,945 3,183 13,722
Net operating income $ 5,595 $ 5,028 $ 4,669 $ 6,659 $ 21,951
Operating margin 63.0% 60.3% 54.2% 67.7% 61.5%
2018 SAME STORE PROPERTIES
Revenue per occupied bed
Rental revenue per occupied bed per month $ 730 $ 713 $ 719 $ 750 $ 728
Other income per occupied bed per month2 56 68 85 58 67
Total revenue per occupied bed $ 786 $ 781 $ 804 $ 808 $ 795
Average number of owned beds 77,757 77,673 77,653 77,741 77,706
Average physical occupancy for the quarter 96.9% 91.7% 91.5% 96.8% 94.2%
Total revenue $ 177,731 $ 166,887 $ 171,390 $ 182,466 $ 698,474
Property operating expenses 73,401 73,284 91,847 72,823 311,355
Net operating income $ 104,330 $ 93,603 $ 79,543 $ 109,643 $ 387,119
Operating margin 58.7% 56.1% 46.4% 60.1% 55.4%
Note: The purpose of the table above is to provide a build-up to the 2018 same store property grouping. Refer to page S-19 for detail of our same store groupings.
1. This section presents operating results for the 2017 same store properties from page S-7.
2. Other income is all income other than Net Student Rent. This includes, but is not limited to, utility income, damages, parking income, summer conference rent, application and administration fees, income from retail tenants, etc.
3. Includes nine properties opened, acquired or renovated in 2016 that will become part of the same store grouping for 2018.
Investment Update
($ in thousands)
S-9
ACQUISITIONS
Assumed
Project Location Primary University Served Beds Closing Date Purchase Price Mortgage Debt
The Arlie Arlington, TX University of Texas at Arlington 598 April 5, 2017 $ —
TWELVE at U District Seattle, WA University of Washington 384 June 9, 2017 —
Bridges @ 11th Seattle, WA University of Washington 258 October 11, 2017 —
1,240 $ 222,900 $ —
Core Spaces / DRW Portfolio1
The 515 Eugene, OR University of Oregon 513 August 14, 2017 $ —
State Fort Collins, CO Colorado State University 665 August 14, 2017 —
The James2 Madison, WI University of Wisconsin - Madison 850 September 13, 2017 —
Hub U District Seattle2 Seattle, WA University of Washington 248 November 7, 2017 —
2,276 $ 281,769 $ —
3,516 $ 504,669 $ —
DISPOSITIONS
Outstanding
Project Location Primary University Served Beds Closing Date Sales Price Mortgage Debt
The Province - Dayton Dayton, OH Wright State University 657 April 25, 2017 $ 24,988 $ —
1. As part of this transaction, the company also acquired three projects under construction and scheduled for completion in September 2018. Refer to page S-11.
2. The company acquired an initial interest in the two properties through a joint venture with Core Spaces/DRW Real Estate Investments for $135.7 million. The remaining interest in both properties is
subject to further purchase options exercisable in the fourth quarter of 2019 for an amount to be determined by fair market value, expected to approximate $68.8 million.
Owned Development Update
($ in thousands)
S-10
OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION
As of December 31, 2017
Project Estimated Land and Total Costs Scheduled
Project Location Primary University Served Type Beds Project Cost1 CIP2 Other3 Incurred Completion
Gladding Residence Center Richmond, VA Virginia Commonwealth Univ. ACE 1,524 $ 95,700 $ 73,913 $ 851 $ 74,764 August 2018
Irvington House Indianapolis, IN Butler University ACE 648 38,900 22,919 3 22,922 August 2018
Greek Leadership Village Tempe, AZ Arizona State University ACE 957 69,600 30,889 572 31,461 August 2018
David Blackwell Hall Berkeley, CA University of California, Berkeley ACE 781 98,700 59,912 322 60,234 August 2018
NAU Honors College Flagstaff, AZ Northern Arizona University ACE 636 43,400 24,498 382 24,880 August 2018
U Club Townhomes Oxford, MS University of Mississippi Off-campus 528 44,300 20,662 5,519 26,181 August 2018
SUBTOTAL - 2018 DELIVERIES 5,074 $ 390,600 $ 232,793 $ 7,649 $ 240,442
191 College Auburn, AL Auburn University Off-campus 495 $ 59,300 $ 10,433 $ 5,441 $ 15,874 July 2019
Columbus Avenue Student Apts. Boston, MA Northeastern University ACE 825 153,400 42,084 12 42,096 August 2019
University of Arizona Honors College4 Tucson, AZ University of Arizona ACE 1,056 84,700 4,947 8,401 13,348 August 2019
SUBTOTAL - 2019 DELIVERIES 2,376 $ 297,400 $ 57,464 $ 13,854 $ 71,318
OWNED DEVELOPMENT PIPELINE5
Project Anticipated Approx. Estimated Targeted
Project Location Primary University Served Type Commencement Targeted Beds Project Cost1 6 Completion
USC Health Sciences Phase II Los Angeles, CA University of Southern California ACE Q1/Q2 2019 297 $ 42,000 Fall 2020
1. In certain instances at ACE properties, the company agrees to construct spaces within the property that will ultimately be owned, managed, and funded by the universities. Such spaces include but are not limited
to dining, childcare, retail, academic, and office facilities. Estimated Project Cost excludes the costs of the construction of such facilities, as they will be reimbursed by the universities.
2. The total construction in progress (“CIP”) balances above exclude $3.3 million related to ongoing renovation projects at operating properties and $99.5 million related to presale development projects on page S-
11.
3. Consists of amounts incurred to purchase the land for off-campus development projects, as well as other development-related expenditures not included in CIP such as deposits, furniture, etc.
4. Land and other includes the cost of the land on which the project will reside, which was originally purchased by the company and subsequently conveyed to the University. Concurrent with the land conveyance,
the company as lessee entered into a ground lease agreement with the University.
5. Does not include land parcels in eight university markets totaling $41.6 million. Commencement of owned off-campus development projects is subject to final determination of feasibility, execution and closing on
definitive agreements, municipal approval processes, fluctuations in the construction market, and current capital market conditions. ACE awards provide the company with the opportunity to exclusively negotiate
with the subject universities. Commencement of ACE projects is subject to various levels of university board approval, final determination of feasibility, execution and closing on definitive agreements, municipal
approval processes, fluctuations in the construction market, and current capital market conditions.
6. Estimated Project Cost includes land and other predevelopment costs of $0.1 million incurred as of December 31, 2017 for owned development pipeline projects.
Presale Development Update1
($ in thousands)
S-11
PRESALE DEVELOPMENT PROJECTS UNDER CONSTRUCTION
Amount Funded Remaining
Project Purchase as of Purchase Price Scheduled
Project Location Primary University Served Type Beds Price2 December 31, 20173 to be Funded Completion
The Edge - Stadium Centre Tallahassee, FL Florida State University Off-campus 412 $ 42,600 $ 400 $ 42,200 August 2018
Core Spaces / DRW Portfolio4
Hub Ann Arbor Ann Arbor, MI University of Michigan Off-campus 310
Hub Flagstaff Flagstaff, AZ Northern Arizona University Off-campus 591
Hub West Lafayette West Lafayette, IN Purdue University Off-campus 599
1,500 $ 240,000 $ 24,208 $ 215,792 September 2018
SUBTOTAL - 2018 DELIVERIES 1,912 $ 282,600 $ 24,608 $ 257,992
Stadium Centre Phase IV Tallahassee, FL Florida State University Off-campus 340 $ 36,700 $ 353 $ 36,347 August 2019
SUBTOTAL - 2019 DELIVERIES 340 $ 36,700 $ 353 $ 36,347
1. Under the terms of a presale transaction, the company is obligated to purchase the property as long as certain construction completion deadlines and other closing conditions are met. The company is responsible
for leasing, management, and initial operations of the project while the third-party developer retains development risk during the construction period. In accordance with accounting guidance, the company includes
presale properties in its consolidated financial statements upon execution of the presale agreement with the developer.
2. Includes the contractual purchase price and ACC-elected upgrades.
3. Includes ACC's investment funded to date, earnest money and mezzanine financing if applicable.
4. The company funded an initial investment of $24.2 million through a joint venture with Core Spaces/DRW Real Estate Investments in August 2017. Including the initial investment, the company expects to invest a
total of $240 million over a two year period. The company expects to increase its investment by $130.6 million in the third quarter of 2018 upon delivery of the assets, and to exercise an option to purchase the
remaining ownership interests in the properties in the third quarter of 2019 for an amount to be determined by fair market value, expected to approximate $85.2 million.
Third-Party Development Update
($ in thousands)
S-12
Three Months Ended December 31, Year Ended December 31,
2017 2016 $ Change 2017 2016 $ Change
Development services revenue $ 6,064 $ 677 $ 5,387 $ 10,761 $ 4,606 $ 6,155
% of total revenue 2.7% 0.3% 1.4% 0.6%
RECENTLY COMPLETED PROJECTS
Project Location Primary University Served Beds Total Fees Completed
Miramar1 Corpus Christi, TX Texas A&M University - Corpus Christi 1,790 $ 1,400 December 2017
CONTRACTED PROJECT IN PROGRESS
Fees Earned Fees Remaining Fees
as of Earned in as of Scheduled
Project Location Primary University Served Beds Total Fees December 31, 2017 Current Year December 31, 2017 Completion
University of California Irvine Phase IV Irvine, CA University of California, Irvine 1,441 $ 5,900 $ 3,012 $ 3,012 $ 2,888 August 2019
University of Arizona Honors College2 Tucson, AZ University of Arizona — 2 2,400 1,193 1,193 1,207 July 2019
University of Illinois - Chicago Chicago, IL University of Illinois, Chicago 548 5,100 2,665 2,665 2,435 July 2019
1,989 $ 13,400 $ 6,870 $ 6,870 $ 6,530
1. Under the terms of a Consultant Agreement, and with the consent of the University's Board of Regents, the company earned fees for the performance of advisory services related to a not-for-profit entity's
purchase of a 1,790-bed apartment community for the benefit of the University.
2. The University of Arizona Honors College project includes the construction of a parking garage, academic center and a student recreation and wellness center as part of the overall development project. These
components will be owned, managed and funded by the University, and the company is earning third-party development fees for its role in providing development services for those components of the project.
3. These awards relate to speculative development projects that are subject to final determination of feasibility, negotiation, final award, procurement rules and other applicable law, execution and closing of
definitive agreements on terms acceptable to the company, and fluctuations in the construction and financing markets. Anticipated commencement and fees are dependent upon the availability of project
financing, which is affected by current capital market conditions.
4. The company was awarded a multi-phase development engagement with the University of California, Riverside that is anticipated to include approximately 6,000 beds that will be delivered in multiple phases
over several years. The first-phase development, Dundee Residence Hall and Glasgow Dining Hall, includes a 760-bed student residence hall and 830-seat dining facility. The next phase, University of California
- Riverside North District Phase I, is expected to include approximately 1,500 beds. All components will be owned and funded by the University, and the company anticipates earning third-party development fees
for its role in providing development services. Subsequent to completion of the development, the company will provide joint management services with the University.
ON-CAMPUS AWARD PIPELINE3
Anticipated Anticipated Targeted Estimated
Project Location Financing Structure Commencement Completion Fees
Delaware State University Dover, DE Third-party Q2 2018 Fall 2019 $2,500
Dundee Residence Hall and Glasgow
Dining Hall 4
Riverside, CA Third-party Q4 2018 Fall 2020 $4,700
University of California - Riverside North
District Phase I4
Riverside, CA Third-party Q1 2019 Fall 2021 $8,000
Goldman School of Public Policy Berkeley, CA Third-party Q1 / Q2 2019 Fall 2021 $2,900
Louisville Village Site Louisville, KY ACE TBD TBD n/a
Management Services Update
($ in thousands)
S-13
Three Months Ended December 31, Year Ended December 31,
2017 2016 $ Change 2017 2016 $ Change
Management services revenue $ 2,639 $ 2,685 $ (46) $ 9,832 $ 9,724 $ 108
% of total revenue 1.2% 1.3% 1.2% 1.2%
NEW / PENDING MANAGEMENT CONTRACTS
Actual or
Approximate Stabilized Anticipated
Project Location Primary University Served Beds Annual Fees1 Commencement
Momentum Village Phase II Corpus Christi, TX Texas A&M University Corpus Christi 560 $ 148 August 2017
Esperanza Hall San Antonio, TX Texas A&M University San Antonio 382 85 August 2017
Collegeview Commons Phase II Ontario, Canada Conestoga College 513 50 September 2017
CampusOne2 Toronto, Canada University of Toronto 892 291 September 2017
Miramar Corpus Christi, TX Texas A&M University Corpus Christi 1,790 480 December 2017
University of Illinois - Chicago Chicago, IL University of Illinois, Chicago 548 236 August 2019
University of California Irvine Phase IV Irvine, CA University of California, Irvine 1,441 630 September 2019
6,126 $ 1,920
DISCONTINUED MANAGEMENT CONTRACTS
2017 Fee
Contribution
Prior to
Project Location Primary University Served Beds Termination Discontinued As Of
Saban Real Estate Group3 Various Various 7,060 $ 278 March 2017
SUNO - New Orleans New Orleans, LA Southern University at New Orleans 698 75 June 2017
Indiana University - Purdue University Fort Wayne Fort Wayne, IN Indiana University - Purdue University Fort Wayne 1,204 150 September 2017
San Juan Villas Portales, NM Eastern New Mexico State University 267 67 December 2017
Sierra Vista Village Roswell, NM Eastern New Mexico State University 258 67 December 2017
University Village Dallas, TX University of Texas - Dallas 2,551 523 October 2018
University Commons Dallas, TX University of Texas - Dallas 2,222 476 October 2018
14,260 $ 1,636
1. Stabilized annual fees are dependent upon the achievement of anticipated occupancy levels.
2. The stabilized annual fee amount does not include an initial operations fee of $60,000 earned from February 2017 through August 2017. Subsequent to August 2017, the stabilized annual fee is
anticipated to be approximately $291,000 per year.
3. In November 2016, the company sold a portfolio of 19 properties to Saban Real Estate Group. The company continued to manage 11 of the properties during a transition period subsequent to the
sale for up to five months. The transition period concluded on March 31, 2017.
Capital Structure as of December 31, 2017
($ in millions, except per share data)
S-14
Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule
Total Debt1 $ 3,026
Total Equity Market Value2 5,673
Total Market Capitalization $ 8,699
Debt to Total Market Capitalization 34.8%
Net Debt to EBITDA3 6.8x
Total Asset Value4 $ 7,956
Unencumbered Asset Value 6,660
Unencumbered Asset Value to Total Asset Value 83.7%
Requirement Current Ratio
Total Debt to Total Asset Value ≤ 60% 38.0%
Secured Debt to Total Asset Value ≤ 40% 8.2%
Unencumbered Asset Value to Unsecured Debt > 150% 280.1%
Interest Coverage3 > 1.5x 4.2x
Weighted Average
Principal Average Term To
Outstanding1 Interest Rate Maturity
Fixed Rate Mortgage Loans $ 496 4.7%5 3.6 Yrs
Construction Loans6 52 4.4% 0.7 Yrs
Unsecured Revolving Credit Facility 128 2.7% 4.2 Yrs
Unsecured Term Loans7 650 2.4% 2.4 Yrs
Unsecured Notes8 1,600 3.7% 6.1 Yrs
On-Campus Participating Properties 100 5.0% 14.5 Yrs
Total/Weighted Average $ 3,026 3.6% 5.0 Yrs
Variable Rate Debt as % of Total Debt9 27.4%
Note – refer to the definitions outlined on pages S-20 and S-21 for detailed definitions of terms appearing on this page.
1. Excludes net unamortized debt premiums related to mortgage loans assumed in connection with acquisitions of $19.0 million, unamortized original issue discount on unsecured notes of $1.9 million, and unamortized deferred
financing costs of $18.8 million.
2. Based on share price of $41.03 and fully diluted share count of 138,258,242 as of December 31, 2017. Assumes conversion of 1,084,644 common and preferred Operating Partnership units and 810,870 unvested restricted
stock awards.
3. Refer to calculations on page S-15, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
4. Excludes accumulated depreciation of $1.1 billion and receivables and intangible assets, net of accumulated amortization, of $54.2 million.
5. Including the amortization of net debt premiums related to mortgage loans assumed in connection with property acquisitions, the effective interest rate for fixed rate mortgage loans is 3.9%.
6. Construction loans are associated with presale developments and are an obligation of the third-party developer. In accordance with accounting guidance, the company is including the presale development properties and any
associated debt in its consolidated financial statements. The debt will be paid off by the developer using proceeds from the company's purchase of the properties.
7. In September 2017, the company closed on a new $300 million term loan which matures in September 2018. Proceeds were used to fund the company's initial investments in the Core Spaces/DRW Portfolio as disclosed on
pages S-9 and S-11. At maturity, the company expects to pay off this loan with cash proceeds generated from anticipated joint venture and/or disposition transactions.
8. In October 2017, the company closed on $400 million of unsecured notes which mature in November 2027.
9. The company's variable rate debt consists of the unsecured revolving credit facility, unsecured term loans and construction loans for presale developments.
Weighted Average Interest Rate Of Debt Maturing Each Year
Fixed Rate
Mortgage
Loans
4.0% 0.0% 5.6% 5.2% 4.0% 0.0% 4.5% 0.0% 0.0% 3.7%
Total
Debt 3.1% 0.0% 3.6% 4.1% 2.7% 3.9% 4.3% 7.6% 0.0% 3.7%
Interest Coverage
($ in thousands)
S-15
Three Months Ended
March 31, June 30, September 30, December 31, Last Twelve
2017 2017 2017 2017 Months
Net income (loss) attributable to ACC, Inc. and Subsidiaries common stockholders $ 34,050 $ (2,762) $ (1,312) $ 39,062 $ 69,038
Net income attributable to noncontrolling interests 399 109 79 496 1,083
Interest expense 14,717 14,573 18,654 23,178 71,122
Income tax provision 257 267 267 198 989
Depreciation and amortization 52,323 55,943 61,125 65,564 234,955
Amortization of deferred financing costs 1,028 1,023 1,146 1,422 4,619
Share-based compensation 4,256 4,646 2,499 2,453 13,854
Provision for real estate impairment — 15,317 — — 15,317
Loss from disposition of real estate — 632 — — 632
Earnings Before Interest, Taxes, Depreciation,
and Amortization ("EBITDA") $ 107,030 $ 89,748 $ 82,458 $ 132,373 $ 411,609
Pro-forma adjustments to EBITDA1 29,656
Adjusted EBITDA $ 441,265
Interest Expense from consolidated statement of comprehensive income $ 14,717 $ 14,573 $ 18,654 $ 23,178 $ 71,122
Amortization of mortgage debt premiums/discounts 2,010 2,010 2,113 1,692 7,825
Capitalized interest 4,411 5,677 3,455 2,313 15,856
Change in accrued interest payable (2,203) 1,981 (4,048) (1,935) (6,205)
Cash Interest Expense $ 18,935 $ 24,241 $ 20,174 $ 25,248 $ 88,598
Pro-forma adjustments to Cash Interest Expense1 16,494
Adjusted Interest Expense $ 105,092
Interest Coverage 4.2x
Note: refer to the definitions outlined on pages S-20 and S-21 for detailed definitions of terms appearing on this page.
1. Adjustment to reflect all acquisitions, development deliveries, dispositions, debt repayments and debt refinancings as if such transactions had occurred on the first day of the 12 month period
presented.
Capital Allocation – Long Term Funding Plan
($ in millions)
S-16
Sources and Uses for Development - As of December 31, 2017
Estimated Project Total Costs Remaining
Estimated Capital Uses: Cost Incurred Capital Needs
Development and Presale Development Pipeline1:
2018 Developments Underway $ 433 $ 241 $ 192
2019 Developments Underway or Expected to Start in Current Year 334 72 262
Core Spaces / DRW Portfolio Transaction:
Presale Developments - 2018 Funding2 131 — 131
Presale Developments - 2019 Funding3 154 — 154
Total $ 1,052 $ 313 $ 739
Estimated Sources: Capital Sources
Cash and Cash Equivalents as of December 31, 2017 $ 41
Estimated Cash Flow Available for Investment - through 20194 116
Targeted Asset Dispositions or Joint Ventures - through 20195 400 - 450
Remaining Capital Needs6 182 - 132
Total $ 739
Selected Credit Metrics7
Credit Metric: December 31, 2017 Pro Forma8
Total Debt to Total Asset Value 38.0% 35.6% - 37.7%
Net Debt to EBITDA9 6.8x 6.0x - 6.4x
Note: This analysis demonstrates anticipated funding for the developments currently underway or with expected starts in the current year. As future developments commence,
they are expected to be funded via additional dispositions, joint ventures, free cash available for investment, and capital market transactions.
1. Includes owned development and presale projects under construction, and management’s Estimated Project Cost for future development deliveries that are expected to commence construction during the
current year, as disclosed on pages S-10 and S-11.
2. Includes the additional investment in the joint venture with Core Spaces/DRW Real Estate Investments to be made in the third quarter of 2018 upon delivery of the assets, as disclosed on page S-11.
3. Includes the exercise of the option to purchase the remaining interest in the joint ventures with Core Spaces/DRW Real Estate Investments as disclosed on pages S-9 and S-11.
4. Available cash flow is derived from disclosures in our 2016 Form 10-K and is calculated as net cash provided by operating activities of $308.1 million less dividend payments of $218.7 million, less principal
payments on debt of $15.1 million, less recurring capital expenditures of $16.4 million. Calculation results in available cash flow for investment in 2016 of $57.9 million, which is then annualized over the
remaining 8 quarters through the end of 2019.
5. Estimated proceeds from dispositions or the sale of joint venture interests in core assets.
6. Remaining capital needs are expected to come from a mix of debt, equity, dispositions and joint ventures.
7. Refer to definitions outlined on pages S-20 and S-21 for detailed definitions of terms appearing on this page.
8. Ratios represent the pro forma impact of development deliveries and funding alternatives assumed in the Sources and Uses table. The lower end of the pro forma leverage ranges assumes remaining capital
needs are funded with equity, while the higher end assumes funding with debt. Actual ratios will vary based on the timing of construction funding, future cash flow available for investment, and the ultimate mix of
sources from debt, equity, joint ventures, or dispositions.
9. Refer to page S-15 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure.
2018 Outlook - Summary1
($ in thousands, except share and per share data)
S-17
Low High
Net income $ 93,200 $ 104,200
Noncontrolling interests 1,300 1,350
Depreciation and amortization 253,400 255,200
Funds from operations ("FFO") $ 347,900 $ 360,750
Elimination of operations from on-campus participating properties (12,700) (12,300)
Contribution from on-campus participating properties 4,150 4,750
Elimination of effect of transfer of asset to lender2 (17,000) (17,000)
Funds from operations - modified ("FFOM") $ 322,350 $ 336,200
Net income per share - diluted $ 0.67 $ 0.75
FFO per share - diluted $ 2.51 $ 2.60
FFOM per share - diluted $ 2.33 $ 2.43
Weighted-average common shares outstanding - diluted 138,565,000 138,565,000
1. The company believes that the financial results for the fiscal year ending December 31, 2018 may be affected by, among other factors:
• national and regional economic trends and events;
• the success of leasing the company's owned properties for the 2018-2019 academic year;
• the timing of acquisitions, dispositions or joint venture activity;
• interest rate risk;
• the timing of commencement and completion of construction on owned development projects;
• the ability of the company to be awarded and the timing of the commencement of construction on third-party development projects;
• university enrollment, funding and policy trends;
• the ability of the company to earn third-party management revenues;
• the amount of income recognized by the taxable REIT subsidiaries and any corresponding income tax expense;
• the ability of the company to integrate acquired properties;
• the outcome of legal proceedings arising in the normal course of business; and
• the finalization of property tax rates and assessed values in certain jurisdictions.
2. Represents the net effect of a gain on the extinguishment of debt for one property being transferred to the lender in settlement of the property's $27.4 million mortgage loan, offset by a loss expected to be
incurred as a result of the transfer to the lender.
Components of 2018 Property Net Operating Income Third-party Services
Low High % Change From 2017 Low High
Owned properties:
2018 same store properties1 Third-party development services revenue $ 7,000 $ 10,200
Revenue $ 713,100 $ 717,600 2.1% — 2.7% Third-party management services revenue $ 9,500 $ 10,300
Operating expenses (321,500) (319,300) 3.3% — 2.5% Third-party development and mgmt. services expenses $ 15,700 $ 16,100
Net operating income 391,600 398,300 1.1% — 2.9%
2018 new properties net operating income 70,000 71,500 Corporate Expenses and Other
2018 dispositions net operating income2 400 400 Low High
Total owned properties net operating income $ 462,000 $ 470,200 Net income:
General and administrative expenses $ 26,500 $ 27,200
Same Store Properties Lease-up Assumptions Ground/facility leases expense:
Low High ACE properties $ 8,900 $ 8,900
AY 2018/2019 final leasing results - rental revenue growth3 2.9% 4.4% On-campus participating properties 2,700 3,100
Total ground/facility leases expense $ 11,600 $ 12,000
2018 Property Transaction Assumptions Interest income4 $ 4,900 $ 4,900
Low High Timing Interest expense5 $ 89,100 $ 90,600
Development deliveries $ 390,600 $ 390,600 See page S-10 Capitalized interest $ 11,900 $ 11,700
Presale developments - funding6 $ 173,200 $ 173,200 See page S-11 Amortization of deferred financing costs4 $ 5,300 $ 5,300
Joint venture or dispositions $ 400,000 $ 400,000 Q2 2018 Income tax provision $ 1,000 $ 1,000
FFO / FFOM:
Corporate depreciation7 $ 4,400 $ 4,400
Contribution from on-campus participating properties $ 4,150 $ 4,750
Overhead related to on-campus participating properties7 $ 1,400 $ 1,400
Joint venture partners' share of FFO8 $ 12,800 $ 9,500
2018 Outlook - Detail
($ in thousands, except share and per share data)
S-18
1. Refer to page S-19 for detail of the 2018 same store and new property groupings.
2. Includes net operating income expected to be contributed by Blanton Common through April 2018 when the property is expected to be transferred to the lender in settlement of the property's mortgage loan.
3. Rental revenue growth includes the combination of projected rental rate growth and change in occupancy.
4. Excludes on-campus participating properties.
5. Net of capitalized interest and excluding on-campus participating properties.
6. Represents funding of $42.6 million for The Edge - Stadium Centre, and an additional investment of $130.6 million in the joint venture with Core Spaces/DRW Real Estate to be made in the third quarter of 2018 upon delivery
of the assets.
7. Represents expenses not added back in the calculation of FFO.
8. Represents the joint venture partners' share of FFO, including the anticipated 2018 joint venture transaction.
Detail of Property Groupings
As of December 31, 2017
S-19
2017 Grouping 2018 Grouping
Same Store Properties New Properties Same Store Properties New Properties
# of Design # of Design # of Design # of Design
Properties Beds Properties Beds Properties Beds Properties Beds
Properties Purchased or Developed Prior to
January 1, 2016 124 73,871 124 73,871
2016 Development Deliveries 7 3,191 7 3,191
2016 Acquisition Properties 2 709 2 709
2017 Acquisition Properties 7 3,516 7 3,516
2017 Development Deliveries 10 7,454 10 7,454
2018 Development Deliveries 10 6,986 10 6,986
2019 Development Deliveries 3 2,376 3 2,376
Total Owned Properties 124 73,871 39 24,232 133 77,771 30 20,332
Total # of Owned Properties Excluded1 1
Total Owned Design Beds Excluded1 860
Grand Total # of Owned Properties (All Groupings) 164
Grand Total Owned Design Beds (All Groupings) 98,963
Note on Property Portfolio: When disclosing our number of properties and design beds as of a certain date, we include all properties that are owned and operating as of that date, as well as properties that are under
construction and anticipated to open for operations in future years. Properties that are in our development pipeline but have not yet commenced construction are not included.
2017: The 2017 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2017 and 2016. This same store grouping will be used for purposes of
presenting our 2017 same store operating results.
2018: The 2018 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2018 and 2017. This same store grouping will be used for purposes of
presenting our 2018 same store operating results.
1. Represents a property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017.
Definitions
ACE The company’s American Campus Equity program, whereby the company enters into long-term ground/facility lease agreements with
Universities to invest our capital and to develop, own, and operate on-campus student housing communities. Properties under this
structure are considered to be owned and are included in the company's consolidated financial statements.
Adjusted EBITDA* EBITDA, including pro forma adjustments to reflect acquisitions, development deliveries, and dispositions as if such transactions had
occurred on the first day of the 12-month period presented.
Adjusted Interest Expense* Interest Expense, including pro forma adjustments to reflect acquisitions, development deliveries, dispositions, debt repayments, and
debt refinancings as if such transactions had occurred on the first day of the 12-month period presented.
Cash Cash and cash equivalents, determined on a consolidated basis in accordance with GAAP.
Cash Interest Expense* Consolidated interest expense calculated in accordance with GAAP, plus amounts which have been deducted and minus amounts which
have been added for, without duplication: (i) the amortization of mark-to-market premiums/discounts on mortgage loans assumed in
connection with acquisitions; (ii) capitalized interest; and (iii) the change in accrued interest during the period presented.
Design Beds Total beds based on the original property design, generally as specified in the construction documents.
EBITDA* Consolidated net income calculated in accordance with GAAP, plus amounts which have been deducted and minus amounts which have
been added for, without duplication: (i) interest expense; (ii) provision for income taxes; (iii) depreciation, amortization and all other non-
cash items; (iv) provision for gains and losses; (v) noncontrolling interests; and (vi) extraordinary and other non-recurring items, as we
determine in good faith.
Funds from Operations
(”FFO”)
Determined based on the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts
(“NAREIT”). Calculated as consolidated net income or loss attributable to common shares computed in accordance with GAAP,
excluding gains or losses from depreciable operating property sales, plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. Also excludes non-cash impairment charges.
FFO Modified
(”FFOM”)
FFO modified to reflect certain adjustments related to the economic performance of our on-campus participating properties, and the
elimination of property acquisition costs, contractual executive separation and retirement charges and other non-cash items, as we
determine in good faith. The company believes it is meaningful to eliminate the FFO generated from the on-campus participating
properties and instead to reflect the company's 50% share of the properties' net cash flow and management and development fees
received, as this measure better reflects the economic benefit derived from the company's involvement in the operation of these
properties.
* These definitions are provided for purposes of calculating the company’s unsecured notes covenants and other key ratios.
S-20
Definitions
GAAP Accounting principles generally accepted in the United States of America.
Interest Coverage* Adjusted EBITDA / Adjusted Interest Expense.
Net Debt* Total Debt less Cash.
Net Debt to EBITDA* Net Debt divided by Adjusted EBITDA.
Net Operating Income
“NOI”
Property revenues less direct property operating expenses, excluding depreciation, but including allocated corporate general and
administrative expenses.
On-campus Participating
Properties
A transaction structure whereby the company enters into long-term ground/facility lease agreements with Universities to develop,
construct, and operate student housing communities. Under the terms of the leases, title to the constructed facilities is held by the
University/lessor and such lessor receives 50% of net cash flows, as defined, on an annual basis through the term of the lease.
Physical Occupancy Occupied beds, including staff accommodations, divided by Design Beds.
Rentable Beds Design beds less beds used by on-site staff.
Same Store Grouping Owned properties owned and operating for both of the entire annual periods presented, which are not conducting or planning to conduct
substantial development or redevelopment, or repositioning activities, and are not classified as held for sale as of the current period-end.
Secured Debt* The portion of Total Debt that is secured by a mortgage, trust, deed of trust, deed to secure indebtedness, pledge, security interest,
assignment of collateral, or any other security agreement.
Total Asset Value* Undepreciated book value of real estate assets and all other assets, excluding receivables and intangibles, of our consolidated
subsidiaries, all determined in accordance with GAAP.
Total Debt* Total consolidated debt calculated in accordance with GAAP, including capital leases and excluding mark-to-market premiums/discounts
on mortgage loans assumed in connection with acquisitions, the original issued discount on unsecured notes, and deferred financing
costs.
Total Equity Market Value Fully diluted common shares times the company’s stock price at period-end.
Unencumbered Asset Value* The sum of (i) the undepreciated book value of real estate assets which are not subject to secured debt; and (ii) all other assets,
excluding accounts receivable and intangibles, for such properties. Does not include assets of unconsolidated joint ventures.
Unsecured Debt* The portion of Total Debt that is not Secured Debt.
* These definitions are provided for purposes of calculating the company’s unsecured notes covenants and other key ratios.
S-21
Investor Information
Corporate Headquarters Investor Relations
American Campus Communities, Inc. Tel: (512) 732-1000 Ryan Dennison (512) 732-1000
12700 Hill Country Blvd., Suite T-200 Fax: (512) 732-2450 SVP, Capital Markets and Investor
Relations
rdennison@americancampus.com
Austin, Texas 78738 www.americancampus.com
Executive Management
Bill Bayless Chief Executive Officer
Jim Hopke President
Jennifer Beese Chief Operating Officer
Daniel Perry Chief Financial Officer
William Talbot Chief Investment Officer
Kim Voss Chief Accounting Officer
Research Coverage
Jeffery Spector / Juan Sanabria Bank of America / Merrill Lynch (646) 855-1363 / (646) 855-1589 jeff.spector@baml.com / juan.sanabria@baml.com
Michael Bilerman / Nick Joseph Citigroup Equity Research (212) 816-1383 / (212) 816-1909 michael.bilerman@citi.com / nicholas.joseph@citi.com
Vincent Chao / Vlad Rudnytsky Deutsche Bank Securities, Inc. (212) 250-6799 / (212) 250-6090 vincent.chao@db.com / vlad.rudnytsky@db.com
Steve Sakwa / Samir Khanal Evercore ISI (212) 446-9462 / (212) 888-3796 steve.sakwa@evercoreisi.com / samir.khanal@evercoreisi.com
David Corak / Matt Boone FBR & Co. (703) 312-1610 / (703) 312-1848 dcorak@fbr.com / mboone@fbr.com
Andrew Rosivach / Jeff Pehl Goldman Sachs (212) 902-2796 / (212) 357-4474 andrew.rosivach@gs.com / jeffrey.pehl@gs.com
Ryan Burke / Ryan Lumb Green Street Advisors (949) 640-8780 / (949) 640-8780 rburke@greenst.com / rlumb@greenst.com
Carol Kemple Hilliard Lyons (502) 588-1839 ckemple@hilliard.com
Aaron Hecht JMP Securities (415) 835-3963 ahecht@jmpsecurities.com
Anthony Paolone / Nikita Bely J.P. Morgan Securities (212) 622-6682 / (212) 622-0695 anthony.paolone@jpmorgan.com / nikita.bely@jpmorgan.com
Jordan Sadler / Austin Wurschmidt KeyBanc Capital Markets (917) 368-2280 / (917) 368-2311 jsadler@keybanccm.com / awurschmidt@key.com
Drew Babin / Alex Kubicek Robert W. Baird & Co. (610) 238-6634 / (414) 765-7311 dbabin@rwbaird.com / akubicek@rwbaird.com
Alexander Goldfarb / Daniel Santos Sandler O'Neill + Partners, L.P. (212) 466-7937 / (212) 466-7927 agoldfarb@sandleroneill.com / dsantos@sandleroneill.com
American Campus Communities, Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding American Campus Communities, Inc.'s
performance made by such analysts are theirs alone and do not represent the opinions, forecasts or predictions of the company or its management. American Campus Communities,
Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.
S-22
Forward-looking Statements and Non-GAAP Financial Measures
In addition to historical information, this supplemental package contains forward-looking statements under the applicable federal securities law. These statements are based on management’s current expectations and
assumptions regarding markets in which American Campus Communities operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are not
guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. For discussions of some risks and uncertainties that could cause actual results to differ materially from those
expressed or implied by the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2016
under the heading “Risk Factors” and under the heading “Business - Forward-looking Statements” and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking
statements, including our expected 2018 operating results, whether as a result of new information, future events, or otherwise.
This presentation contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”). These items include earnings before interest, tax, depreciation
and amortization (“EBITDA”), net operating income (“NOI”), funds from operations (“FFO”) and FFO-Modified (“FFOM”). Refer to Definitions for a detailed explanation of terms appearing in the supplement. The
Company presents this financial information because it considers each item an important supplemental measure of its operating performance and believes it is frequently used by securities analysts, investors and
other interested parties in the evaluation of REITs. These measures should not be considered as alternatives to net income or loss computed in accordance with GAAP as an indicator of the Company's financial
performance or to cash flow from operating activities computed in accordance with GAAP as an indicator of its liquidity, nor are these measures indicative of funds available to fund its cash needs, including its ability
to pay dividends or make distributions.