Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - AMERICAN CAMPUS COMMUNITIES INC | ex991-q12018earningsrelease.htm |
| 8-K - 8-K - AMERICAN CAMPUS COMMUNITIES INC | form8-kq12018earningsrelea.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
Owned Development Update S-8
Presale Development Update S-9
Third-Party Development Update S-10
Management Services Update S-11
Capital Structure S-12
Interest Coverage S-13
Capital Allocation – Long Term Funding Plan S-14
2018 Outlook - Summary S-15
2018 Outlook - Detail S-16
Detail of Property Groupings S-18
Definitions S-19
Investor Information S-21
Table of Contents
Q1 Supplemental Package
APRIL 23, 2018
Financial Highlights
($ in thousands, except share and per share data)
S-1
Operating Data Three Months Ended March 31,
2018 2017 $ Change % Change
Total revenues $ 220,409 $ 192,938 $ 27,471 14.2%
Operating income 50,406 49,219 1,187 2.4%
Net income attributable to ACC 25,927 34,050 (8,123) (23.9%)
Net income per share - basic 0.19 0.25
Net income per share - diluted 0.18 0.25
Funds From Operations ("FFO")1 89,827 85,967 3,860 4.5%
FFO per share - diluted1 0.65 0.64 0.01 1.6%
Funds From Operations - Modified ("FFOM")1 85,788 83,180 2,608 3.1%
FFOM per share - diluted1 0.62 0.62 — —%
Market Capitalization and Unsecured Notes Covenants2 March 31, 2018 December 31, 2017
Debt to total market capitalization 37.0% 34.8%
Net debt to EBITDA3 7.0x 6.8x
Unencumbered asset value to total asset value 83.5% 83.7%
Total debt to total asset value 38.6% 38.0%
Secured debt to total asset value 8.2% 8.2%
Unencumbered asset value to unsecured debt 275.2% 280.1%
Interest coverage3 4.4x 4.2x
1. Refer to page S-4 for a reconciliation to net income, the most directly comparable GAAP measure.
2. Refer to the definitions outlined on pages S-19 and S-20 for detailed definitions of terms appearing on this page.
3. Refer to calculations on page S-13, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
Consolidated Balance Sheets
($ in thousands)
S-2
March 31, 2018 December 31, 2017
(unaudited)
Assets
Investments in real estate:
Owned properties, net $ 6,543,564 $ 6,450,364
On-campus participating properties, net 81,008 81,804
Investments in real estate, net 6,624,572 6,532,168
Cash and cash equivalents 55,502 41,182
Restricted cash 28,485 23,590
Student contracts receivable, net 9,726 9,170
Other assets1 288,667 291,260
Total assets $ 7,006,952 $ 6,897,370
Liabilities and equity
Liabilities:
Secured mortgage, construction and bond debt, net $ 682,295 $ 664,020
Unsecured notes, net 1,586,501 1,585,855
Unsecured term loans, net 647,414 647,044
Unsecured revolving credit facility 218,000 127,600
Accounts payable and accrued expenses 52,932 53,741
Other liabilities1 212,754 187,983
Total liabilities 3,399,896 3,266,243
Redeemable noncontrolling interests 126,999 132,169
Equity:
American Campus Communities, Inc. and
Subsidiaries stockholders' equity:
Common stock 1,366 1,364
Additional paid in capital 4,332,471 4,326,910
Common stock held in rabbi trust (2,817) (2,944)
Accumulated earnings and dividends (872,281) (837,644)
Accumulated other comprehensive loss (2,236) (2,701)
Total American Campus Communities, Inc. and
3,456,503 3,484,985Subsidiaries stockholders' equity
Noncontrolling interests - partially owned properties 23,554 13,973
Total equity 3,480,057 3,498,958
Total liabilities and equity $ 7,006,952 $ 6,897,370
1. For purposes of calculating net asset value at March 31, 2018, the company excludes other assets of approximately $7.3 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 $47.3 million related to deferred revenue and fee income.
Consolidated Statements of Comprehensive Income
(Unaudited, $ in thousands, except share and per share data)
S-3
Three Months Ended March 31,
2018 2017 $ Change
Revenues
Owned properties $ 205,532 $ 178,831 $ 26,701
On-campus participating properties 10,443 10,158 285
Third-party development services 846 456 390
Third-party management services 2,731 2,614 117
Resident services 857 879 (22)
Total revenues 220,409 192,938 27,471
Operating expenses
Owned properties 88,060 74,957 13,103
On-campus participating properties 3,425 3,265 160
Third-party development and management services 4,198 4,083 115
General and administrative1 6,699 6,734 (35)
Depreciation and amortization 64,779 52,323 12,456
Ground/facility leases 2,842 2,357 485
Total operating expenses 170,003 143,719 26,284
Operating income 50,406 49,219 1,187
Nonoperating income and (expenses)
Interest income 1,223 1,232 (9)
Interest expense (23,684) (14,717) (8,967)
Amortization of deferred financing costs (1,414) (1,028) (386)
Total nonoperating expense (23,875) (14,513) (9,362)
Income before income taxes 26,531 34,706 (8,175)
Income tax provision (281) (257) (24)
Net income 26,250 34,449 (8,199)
Net income attributable to noncontrolling interests (323) (399) 76
Net income attributable to ACC, Inc. and
$ 25,927 $ 34,050 $ (8,123)Subsidiaries common stockholders
Other comprehensive income
Change in fair value of interest rate swaps and other 465 484 (19)
Comprehensive income $ 26,392 $ 34,534 $ (8,142)
Net income per share attributable to ACC, Inc.
and Subsidiaries common stockholders
Basic $ 0.19 $ 0.25
Diluted $ 0.18 $ 0.25
Weighted-average common shares outstanding
Basic 136,525,557 133,052,444
Diluted 137,499,963 133,986,322
1. The three months ended March 31, 2017 include $1.1 million of contractual executive separation and retirement charges incurred in the first quarter of 2017 with regard to the retirement of the company's former Chief Financial
Officer.
Consolidated Statements of Funds from Operations
(Unaudited, $ in thousands, except share and per share data)
S-4
1. 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).
2. Represents contractual executive separation and retirement charges incurred in the first quarter of 2017 with regard to the retirement of the company's former Chief Financial Officer.
Three Months Ended March 31,
2018 2017 $ Change
Net income attributable to ACC, Inc. and
$ 25,927 $ 34,050 $ (8,123)Subsidiaries common stockholders
Noncontrolling interests 322 399 (77)
Real estate related depreciation and amortization 63,578 51,518 12,060
Funds from operations ("FFO") attributable to
89,827 85,967 3,860common stockholders and OP unitholders
Elimination of operations of on-campus participating properties
Net income from on-campus participating properties (3,369) (3,247) (122)
Amortization of investment in on-campus participating properties (1,942) (1,860) (82)
84,516 80,860 3,656
Modifications to reflect operational performance of on-campus
participating properties
Our share of net cashflow1 795 757 38
Management fees 477 468 9
Contribution from on-campus participating properties 1,272 1,225 47
Contractual executive separation and retirement charges2 — 1,095 (1,095)
Funds from operations-modified ("FFOM") attributable to
$ 85,788 $ 83,180 $ 2,608common stockholders and OP unitholders
FFO per share - diluted $ 0.65 $ 0.64
FFOM per share - diluted $ 0.62 $ 0.62
Weighted-average common shares outstanding - diluted 138,534,412 135,092,966
Owned Properties Results of Operations
($ in thousands)
S-5
Three Months Ended March 31,
2018 2017 $ Change % Change
Owned properties revenues
Same store properties $ 181,137 $ 177,731 $ 3,406 1.9%
New properties 24,503 87 24,416
Sold and held for sale properties1 749 1,892 (1,143)
Total revenues2 $ 206,389 $ 179,710 $ 26,679 14.8%
Owned properties operating expenses
Same store properties3 4 $ 76,689 $ 73,401 $ 3,288 4.5%
New properties 10,804 250 10,554
Sold and held for sale properties1 5 567 1,306 (739)
Total operating expenses $ 88,060 $ 74,957 $ 13,103 17.5%
Owned properties net operating income
Same store properties4 $ 104,448 $ 104,330 $ 118 0.1%
New properties 13,699 (163) 13,862
Sold and held for sale properties1 182 586 (404)
Total net operating income $ 118,329 $ 104,753 $ 13,576 13.0%
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2018 and 2017, which are not conducting or planning to conduct
substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of March 31, 2018. Refer to page S-18 for detail of our same store groupings.
1. Includes one property sold in 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 approximately $0.5 million related to excessive winter storms, same store operating expenses would have increased by only 3.8% and same store NOI would have increased by
0.6%.
5. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
Same Store Owned Properties Operating Expenses
($ in thousands, except per bed amounts)
S-6
Three Months Ended March 31,
2018 2017
Total Per Bed
% Change
From Prior
Year
% of Total
Operating
Expenses Total Per Bed
% of Total
Operating
Expenses
Property taxes1 $ 18,306 $ 235 8.5% 24% $ 16,870 $ 217 23%
Utilities2 3 17,384 224 4.6% 23% 16,612 214 22%
General & administrative and other4 16,179 208 1.3% 21% 15,964 205 22%
Payroll5 14,551 187 0.7% 19% 14,444 186 20%
Repairs and maintenance6 3 5,221 67 8.5% 7% 4,811 62 7%
Marketing7 3,303 43 12.0% 4% 2,948 38 4%
Insurance 1,745 22 (0.4%) 2% 1,752 22 2%
Total same store owned operating expenses3 $ 76,689 $ 986 4.5% 100% $ 73,401 $ 944 100%
Same store owned beds 77,771
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2018 and 2017, which are not conducting or planning to conduct substantial
development, redevelopment, or repositioning activities, and are not classified as held for sale as of March 31, 2018. Refer to page S-18 for detail of our same store groupings.
1. The increase over the prior year is primarily due to additional property tax expense resulting from higher property tax assessments in various markets, and increases related to 2016 development deliveries that
were assessed at full value for the first time.
2. Represents gross expenses prior to any recoveries from tenants, which are reflected in owned properties revenues.
3. The increase over the prior year is primarily due to $0.5 million of higher than expected costs related to excessive winter storms. Excluding these costs, same store repairs and maintenance and utilities
expenses would have increased by only 0.1% and 4.0%, respectively, and total same store owned operating expenses would have increased by only 3.8%.
4. Includes security costs, shuttle costs, and property-level general and administrative costs as well as an allocation of costs related to corporate management and oversight. Also includes acquisition integration
costs, bad debt, food service, and other miscellaneous expenses.
5. Includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff.
6. Includes general maintenance costs such as interior painting, routine landscaping, pest control, fire protection, snow removal, elevator maintenance, roof and parking lot repairs, and other miscellaneous
building repair costs.
7. Includes costs related to property marketing campaigns associated with our ongoing leasing efforts.
Seasonality of Operations
($ in thousands, except per bed amounts)
S-7
Three Months Ended
Total/Weighted Average-
March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 March 31, 2018 Last 12 Months
2018 same store properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ 730 $ 713 $ 719 $ 750 $ 749 $ 734
Other income per occupied bed per month1 56 68 85 58 58 67
Total revenue per occupied bed $ 786 $ 781 $ 804 $ 808 $ 807 $ 801
Average number of owned beds 77,757 77,673 77,653 77,741 77,771 77,710
Average physical occupancy for the quarter 96.9% 91.7% 91.5% 96.8% 96.2% 94.0%
Total revenue $ 177,731 $ 166,887 $ 171,390 $ 182,466 $ 181,137 $ 701,880
Property operating expenses 73,401 73,284 91,847 72,823 76,689 314,643
Net operating income $ 104,330 $ 93,603 $ 79,543 $ 109,643 $ 104,448 $ 387,237
Operating margin 58.7% 56.1% 46.4% 60.1% 57.7% 55.2%
2018 new properties
Revenue per occupied bed
Rental revenue per occupied bed per month $ — $ 858 $ 780 $ 813 $ 808 $ 806
Other income per occupied bed per month1 — 101 75 59 54 61
Total revenue per occupied bed $ — $ 959 $ 855 $ 872 $ 862 $ 867
Average number of owned beds — 659 5,482 10,843 10,970 6,989
Average physical occupancy for the quarter — 96.7% 85.5% 87.2% 86.4% 86.8%
Total revenue $ 87 2 $ 1,833 $ 12,023 $ 24,729 $ 24,503 $ 63,088
Property operating expenses 250 2 1,076 7,287 9,663 10,804 28,830
Net operating income $ (163) 2 $ 757 $ 4,736 $ 15,066 $ 13,699 $ 34,258
Operating margin N/A 41.3% 39.4% 60.9% 55.9% 54.3%
ALL PROPERTIES
Revenue per occupied bed
Rental revenue per occupied bed per month $ 730 $ 714 $ 722 $ 758 $ 755 $ 739
Other income per occupied bed per month1 57 69 84 58 58 67
Total revenue per occupied bed $ 787 $ 783 $ 806 $ 816 $ 813 $ 806
Average number of owned beds 77,757 78,332 83,135 88,584 88,741 84,699
Average physical occupancy for the quarter 96.9% 91.7% 91.2% 95.6% 95.0% 93.4%
Total revenue $ 177,818 $ 168,720 $ 183,413 $ 207,195 $ 205,640 $ 764,968
Property operating expenses 73,651 74,360 99,134 82,486 87,493 343,473
Net operating income $ 104,167 $ 94,360 $ 84,279 $ 124,709 $ 118,147 $ 421,495
Operating margin 58.6% 55.9% 46.0% 60.2% 57.5% 55.1%
Sold and held for sale properties3
Total revenue $ 1,892 $ 1,154 $ 869 $ 848 $ 749 $ 3,620
Property operating expenses4 1,306 812 289 391 567 2,059
Net operating income $ 586 $ 342 $ 580 $ 457 $ 182 $ 1,561
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2018 and 2017, which are not conducting or planning to conduct substantial development,
redevelopment, or repositioning activities, and are not classified as held for sale as of March 31, 2018. Refer to page S-18 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. Represents nonrefundable application fees and administrative expenses incurred in relation to properties under development.
3. Includes one property sold in 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017.
4. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.
Owned Development Update
($ in thousands)
S-8
OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION
As of March 31, 2018
Project Estimated Land and Total Costs Scheduled
Project Location Primary University Served Type Beds Project Cost1 CIP2 Other3 Incurred Occupancy
Gladding Residence Center Richmond, VA Virginia Commonwealth Univ. ACE 1,524 $ 95,700 $ 85,279 $ 1,010 $ 86,289 August 2018
Irvington House Indianapolis, IN Butler University ACE 648 38,900 28,169 3 28,172 August 2018
Greek Leadership Village Tempe, AZ Arizona State University ACE 957 69,600 45,764 572 46,336 August 2018
David Blackwell Hall Berkeley, CA University of California, Berkeley ACE 781 98,700 74,959 325 75,284 August 2018
NAU Honors College Flagstaff, AZ Northern Arizona University ACE 636 43,400 33,829 579 34,408 August 2018
U Club Townhomes Oxford, MS University of Mississippi Off-campus 528 44,300 29,142 5,712 34,854 August 2018
SUBTOTAL - 2018 DELIVERIES 5,074 $ 390,600 $ 297,142 $ 8,201 $ 305,343
191 College Auburn, AL Auburn University Off-campus 495 $ 59,300 $ 12,893 $ 5,434 $ 18,327 July 2019
Columbus Avenue Student Apts. Boston, MA Northeastern University ACE 825 153,400 61,713 — 61,713 August 2019
University of Arizona Honors College4 Tucson, AZ University of Arizona ACE 1,056 84,700 7,524 8,401 15,925 August 2019
SUBTOTAL - 2019 DELIVERIES 2,376 $ 297,400 $ 82,130 $ 13,835 $ 95,965
OWNED DEVELOPMENT PIPELINE5
Project Anticipated Approx. Estimated Targeted
Project Location Primary University Served Type Commencement Targeted Beds Project Cost1 6 Occupancy
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 $8.1 million related to ongoing renovation projects at operating properties and $145.6 million related to presale development projects on page S-
9.
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 $0.3 million incurred as of March 31, 2018 for owned development pipeline projects.
Presale Development Update1
($ in thousands)
S-9
PRESALE DEVELOPMENT PROJECTS UNDER CONSTRUCTION
Amount Funded Remaining
Project Purchase as of Purchase Price Scheduled
Project Location Primary University Served Type Beds Price2 March 31, 20183 to be Funded Occupancy
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
959 Franklin5 Eugene, OR University of Oregon Off-campus 443 70,600 16,123 54,477 September 2019
SUBTOTAL - 2019 DELIVERIES 783 $ 107,300 $ 16,476 $ 90,824
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.
5. The company executed the presale agreement with the developer in March 2018, at which time it provided $15.6 million of mezzanine financing to the project.
Third-Party Development Update
($ in thousands)
S-10
Three Months Ended March 31,
2018 2017 $ Change
Development services revenue $ 846 $ 456 $ 390
% of total revenue 0.4% 0.2%
CONTRACTED PROJECTS IN PROGRESS
Fees Earned Fees Remaining Fees
as of Earned in as of Scheduled
Project Location Primary University Served Beds Total Fees March 31, 2018 Current Year March 31, 2018 Completion
University of California Irvine Phase IV Irvine, CA University of California, Irvine 1,441 $ 5,900 $ 3,221 $ 209 $ 2,679 August 2019
University of Arizona Honors College1 Tucson, AZ University of Arizona — 1 2,400 1,434 241 966 July 2019
University of Illinois - Chicago Chicago, IL University of Illinois, Chicago 548 5,100 3,011 346 2,089 July 2019
1,989 $ 13,400 $ 7,666 $ 796 $ 5,734
1. 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.
2. 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.
3. 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 PIPELINE2
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 3
Riverside, CA Third-party Q4 2018 Fall 2020 $4,700
University of California - Riverside North
District Phase I3
Riverside, CA Third-party Q1 2019 Fall 2021 $8,000
Goldman School of Public Policy Berkeley, CA Third-party Q4 2018 / Q1 2019 Fall 2021 $2,900
Prairie View A&M University Phase IX Prairie View, TX Third-party TBD TBD TBD
Management Services Update
($ in thousands)
S-11
Three Months Ended March 31,
2018 2017 $ Change
Management services revenue $ 2,731 $ 2,614 $ 117
% of total revenue 1.2% 1.4%
NEW / PENDING MANAGEMENT CONTRACTS
Actual or
Approximate Stabilized Anticipated
Project Location Primary University Served Beds Annual Fees1 Commencement
University of Illinois - Chicago Chicago, IL University of Illinois, Chicago 548 $ 240 August 2019
University of California Irvine Phase IV Irvine, CA University of California, Irvine 1,441 630 September 2019
1,989 $ 870
DISCONTINUED MANAGEMENT CONTRACTS
2018 Fee
Contribution
Prior to
Project Location Primary University Served Beds Termination Discontinued As Of
SAIT Residence Alberta, Canada Southern Alberta Institute of Technology 1,171 $ 111 May 2018
University Village Dallas, TX University of Texas - Dallas 2,551 422 October 2018
University Commons Dallas, TX University of Texas - Dallas 2,222 354 October 2018
5,944 $ 887
1. Stabilized annual fees are dependent upon the achievement of anticipated occupancy levels.
Capital Structure as of March 31, 2018
($ in millions, except per share data)
S-12
Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule
Total Debt1 $ 3,137
Total Equity Market Value2 5,350
Total Market Capitalization $ 8,487
Debt to Total Market Capitalization 37.0%
Net Debt to EBITDA3 7.0x
Total Asset Value4 $ 8,131
Unencumbered Asset Value 6,792
Unencumbered Asset Value to Total Asset Value 83.5%
Requirement Current Ratio
Total Debt to Total Asset Value ≤ 60% 38.6%
Secured Debt to Total Asset Value ≤ 40% 8.2%
Unencumbered Asset Value to Unsecured Debt > 150% 275.2%
Interest Coverage3 > 1.5x 4.4x
Weighted Average
Principal Average Term To
Outstanding1 Interest Rate Maturity
Fixed Rate Mortgage Loans $ 484 4.7%5 3.4 Yrs
Construction Loans6 85 4.6% 0.5 Yrs
Unsecured Revolving Credit Facility 218 3.0% 4.0 Yrs
Unsecured Term Loans 650 2.8% 2.2 Yrs
Unsecured Notes 1,600 3.7% 5.9 Yrs
On-Campus Participating Properties 100 5.0% 14.3 Yrs
Total/Weighted Average $ 3,137 3.7% 4.7 Yrs
Variable Rate Debt as % of Total Debt7 30.4%
Note – refer to the definitions outlined on pages S-19 and S-20 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 $17.5 million, unamortized original issue discount on unsecured notes of $1.9 million, and unamortized deferred
financing costs of $18.5 million.
2. Based on share price of $38.62 and fully diluted share count of 138,525,147 as of March 31, 2018. Assumes conversion of 1,016,196 common and preferred Operating Partnership units and 908,312 unvested restricted stock
awards.
3. Refer to calculations on page S-13, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.
4. Excludes accumulated depreciation of $1.2 billion and receivables and intangible assets, net of accumulated amortization, of $50.4 million.
5. Including the amortization of net debt premiums related to mortgage loans assumed in connection with property acquisitions, the effective interest rate for fixed rate mortgage loans is 3.9%.
6. Construction loans are associated with presale developments and are an obligation of the third-party developer. In accordance with accounting guidance, the company is including the presale development properties and any
associated debt in its consolidated financial statements. The debt will be paid off by the developer using proceeds from the company's purchase of the properties.
7. The company's variable rate debt consists of the unsecured revolving credit facility, unsecured term loans and construction loans for presale developments.
Weighted Average Interest Rate Of Debt Maturing Each Year
Fixed Rate
Mortgage
Loans
3.9% 0.0% 5.6% 5.2% 4.0% 0.0% 4.5% 0.0% 0.0% 3.7%
Total
Debt 3.3% 4.5% 3.6% 4.2% 3.0% 3.9% 4.3% 7.6% 0.0% 3.7%
Interest Coverage
($ in thousands)
S-13
Three Months Ended
June 30, September 30, December 31, March 31, Last Twelve
2017 2017 2017 2018 Months
Net (loss) income attributable to ACC, Inc. and Subsidiaries common stockholders $ (2,762) $ (1,312) $ 39,062 $ 25,927 $ 60,915
Net income attributable to noncontrolling interests 109 79 496 323 1,007
Interest expense 14,573 18,654 23,178 23,684 80,089
Income tax provision 267 267 198 281 1,013
Depreciation and amortization 55,943 61,125 65,564 64,779 247,411
Amortization of deferred financing costs 1,023 1,146 1,422 1,414 5,005
Share-based compensation 4,646 2,499 2,453 3,443 13,041
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") $ 89,748 $ 82,458 $ 132,373 $ 119,851 $ 424,430
Pro-forma adjustments to EBITDA1 14,577
Adjusted EBITDA $ 439,007
Interest Expense from consolidated statement of comprehensive income $ 14,573 $ 18,654 $ 23,178 $ 23,684 $ 80,089
Amortization of mortgage debt premiums/discounts 2,010 2,113 1,692 1,522 7,337
Capitalized interest 5,677 3,455 2,313 3,020 14,465
Change in accrued interest payable 1,981 (4,048) (1,935) (7,204) (11,206)
Cash Interest Expense $ 24,241 $ 20,174 $ 25,248 $ 21,022 $ 90,685
Pro-forma adjustments to Cash Interest Expense1 9,355
Adjusted Interest Expense $ 100,040
Interest Coverage 4.4x
Note: refer to the definitions outlined on pages S-19 and S-20 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-14
Sources and Uses for Development - As of March 31, 2018
Estimated Project Total Costs Remaining
Estimated Capital Uses: Cost Incurred Capital Needs
Development and Presale Development Pipeline1:
2018 Developments Underway $ 433 $ 306 $ 127
2019 Developments Underway or Expected to Start in Current Year 405 112 293
Core Spaces / DRW Portfolio Transaction:
Presale Developments - 2018 Funding2 131 — 131
Presale Developments - 2019 Funding3 154 — 154
Total $ 1,123 $ 418 $ 705
Estimated Sources: Capital Sources
Cash and Cash Equivalents as of March 31, 2018 $ 56
Estimated Cash Flow Available for Investment - through 20194 91
Targeted Asset Dispositions or Joint Ventures in Guidance5 400
Remaining Capital Needs6 158
Total $ 705
Selected Credit Metrics7
Credit Metric: March 31, 2018 Pro Forma8
Total Debt to Total Asset Value 38.6% 36.5% - 38.3%
Net Debt to EBITDA9 7.0x 6.2x - 6.5x
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-8 and S-9.
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-9.
3. Includes the exercise of the option to purchase the remaining interest in the joint ventures with Core Spaces/DRW Real Estate Investments.
4. Available cash flow is derived from disclosures in our 2017 Form 10-K and is calculated as net cash provided by operating activities of $319.9 million less dividend payments of $236.5 million, less principal
payments on debt of $12.8 million, less recurring capital expenditures of $18.5 million. Calculation results in available cash flow for investment in 2017 of $52.1 million, which is then annualized over the
remaining 7 quarters through the end of 2019.
5. Estimated proceeds from dispositions or the sale of joint venture interests in core assets.
6. Remaining capital needs are expected to come from a mix of debt, equity, dispositions and joint ventures.
7. Refer to definitions outlined on pages S-19 and S-20 for detailed definitions of terms appearing on this page.
8. Ratios represent the pro forma impact of development deliveries and funding alternatives assumed in the Sources and Uses table. The lower end of the pro forma leverage ranges assumes remaining capital
needs are funded with equity, while the higher end assumes funding with debt. Actual ratios will vary based on the timing of construction funding, future cash flow available for investment, and the ultimate mix of
sources from debt, equity, joint ventures, or dispositions.
9. Refer to page S-13 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure.
2018 Outlook - Summary1
($ in thousands, except share and per share data)
S-15
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 As Reported 2018 Guidance
Three Months Ended
March 31, 2018 Low High % Change From 2017
Owned properties:
2018 same store properties1
Revenue $ 181,137 $ 713,100 $ 717,600 2.1% - 2.7%
Operating expenses (76,689) (321,500) (319,300) 3.3% - 2.5%
Net operating income 104,448 391,600 398,300 1.1% - 2.9%
2018 new properties net operating income 13,699 70,000 71,500
2018 dispositions net operating income2 182 400 400
Total owned properties net operating income $ 118,329 $ 462,000 $ 470,200
Same Store Properties Lease-up Assumptions 2018 Guidance
Low High
AY 2018/2019 final leasing results - rental revenue growth3 2.9% 4.4%
2018 Property Transaction Assumptions As Reported 2018 Guidance
March 31, 2018 Low High
Development deliveries N/A $ 390,600 $ 390,600
Presale developments - funding4 $ — $ 173,200 $ 173,200
Joint venture or dispositions $ — $ 400,000 $ 400,000
2018 Outlook - Detail
($ in thousands, except share and per share data)
S-16
1. Refer to page S-18 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. 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.
Third-party Services As Reported 2018 Guidance
Three Months Ended
March 31, 2018 Low High
Third-party development services revenue $ 846 $ 7,000 $ 10,200
Third-party management services revenue $ 2,731 $ 9,500 $ 10,300
Third-party development and mgmt. services expenses $ 4,198 $ 15,700 $ 16,100
Corporate Expenses and Other As Reported 2018 Guidance
Three Months Ended
March 31, 2018 Low High
Net income:
General and administrative expenses $ 6,699 $ 26,500 $ 27,200
Ground/facility leases expense:
ACE properties $ 2,047 $ 8,900 $ 8,900
On-campus participating properties 795 2,700 3,100
Total ground/facility leases expense $ 2,842 $ 11,600 $ 12,000
Interest income $ 1,223 $ 4,900 $ 4,900
Interest expense1 2 $ 23,684 $ 94,100 $ 95,600
Capitalized interest $ 3,020 $ 11,900 $ 11,700
Amortization of deferred financing costs1 $ 1,414 $ 5,400 $ 5,400
Income tax provision $ 281 $ 1,000 $ 1,000
FFO / FFOM:
Corporate depreciation3 $ 1,029 $ 4,400 $ 4,400
Contribution from on-campus participating properties $ 1,272 $ 4,150 $ 4,750
Overhead related to on-campus participating properties3 $ 347 $ 1,400 $ 1,400
Joint venture partners' share of FFO4 $ 173 $ 12,800 $ 9,500
2018 Outlook - Detail
($ in thousands, except share and per share data)
S-17
1. Amounts have been updated from original guidance to include on-campus participating properties. There is no impact on the previously reported guidance range. On-campus participating properties' amounts
included in the 2018 guidance range for interest expense and amortization of deferred financing costs are $5.0 million and $0.1 million, respectively.
2. Net of capitalized interest.
3. Represents expenses not added back in the calculation of FFOM.
4. Represents the joint venture partners' share of FFO, including the anticipated 2018 joint venture transaction.
Detail of Property Groupings
As of March 31, 2018
S-18
2018 Grouping 2019 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, 2017 133 77,771 133 77,771
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 5 3,159 5 3,159
Total Owned Properties 133 77,771 32 21,115 150 88,741 15 10,145
Total # of Owned Properties Excluded1 1
Total Owned Design Beds Excluded1 860
Grand Total # of Owned Properties (All Groupings) 166
Grand Total Owned Design Beds (All Groupings) 99,746
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.
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.
2019: The 2019 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2019 and 2018. This same store grouping will be used for purposes of
presenting our 2019 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-19
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-20
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
Andrew Rosivach / Jeff Pehl Goldman Sachs (212) 902-2796 / (212) 357-4474 andrew.rosivach@gs.com / jeffrey.pehl@gs.com
John Pawlowski / Ryan Lumb Green Street Advisors (949) 640-8780 / (949) 640-8780 jpawlowski@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-21
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, 2017
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.