American Campus Communities, Inc. Reports 2004 Fourth-Quarter and Full-Year Financial Results.AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Campus Communities, Inc. (NYSE NYSE See: New York Stock Exchange :ACC See adaptive cruise control. ), today announced the following financial results for the quarter and year ending December December: see month. 31, 2004. Highlights --Fourth Quarter 2004 Net Income of $3.3 million and FFO FFO See: Funds from operations of $0.48 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share exceeds previous guidance. --Fourth Quarter 2004 FFOM FFOM Fraction Fermentescible des Ordures Ménagères FFOM Fellow of the Faculty of Occupational Medicine (Royal College of Physicians, London) per fully diluted share of $0.36 in line with previous guidance. --Fourth Quarter 2004 Net Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. ("NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics ") for same-store owned off-campus properties increased 15 percent over fourth quarter 2003. --Third party management services revenues in fourth quarter 2004 increased 115 percent over prior year quarter. --Closed and commenced construction on Cullen Cul·len , Countée 1903-1946. American poet whose collections Colors (1926) and Copper Sun (1927) established him as a leading figure of the Harlem Renaissance. Oaks, a $17.0 million on-campus on-campus adjective Referring to an on-site site of a medical complex with multiple buildings. Cf 'Off campus.'. participating property at the University of Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , scheduled to open in Fall 2005. --Assumed third-party management responsibilities of two properties serving students attending Florida State University Florida State University, at Tallahassee; coeducational; chartered 1851, opened 1857. Present name was adopted in 1947. Special research facilities include those in nuclear science and oceanography. and Central Michigan University Central Michigan University, at Mount Pleasant, Mich.; coeducational; est. 1892 as a normal school, became Central State Teachers College in 1927, achieved university status in 1959. The university maintains a forest that is used for botanical and biological research. . Fourth-Quarter 2004 Operating Results Revenue for the 2004 fourth quarter totaled $18.2 million, up 19 percent from $15.2 million in the 2003 fourth quarter. Net income for 2004 fourth quarter, totaled $3.3 million, or $0.26 per fully diluted share, compared with a net loss of $0.4 million in the 2003 fourth quarter. The increase in net income was primarily due to the opening of new, owned properties at Temple University, California State University Enrollment  at Fresno Fresno (frĕz`nō), city (1990 pop. 354,202), seat of Fresno co., S central Calif.; inc. 1885. Settled in 1872 as a station on the Central Pacific RR, Fresno profited from irrigated farming as early as the 1880s. and California State University at San Bernardino San Bernardino, city, United StatesSan Bernardino (săn bûr'nədē`nō), city (1990 pop. 164,164), seat of San Bernardino co., S Calif., at the foot of the San Bernardino Mts.; inc. 1854. in August 2004. FFO for the quarter totaled $6.2 million, or $0.48 per fully diluted share. FFOM totaled $4.5 million, or $0.36 per fully diluted share. A reconciliation of FFO and FFOM to net income is shown on Table 4. NOI for same-store owned off-campus properties was $4.6 million in the 2004 fourth quarter, up $0.6 million from the 2003 fourth quarter. "Our strong fourth-quarter performance benefited from the opening of three new developments, a 15 percent increase in same-store NOI on our owned off-campus properties, and occupancy rates Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) exceeding 97 percent for our owned properties," said Bill Bayless, ACC President and Chief Executive Officer. "We're we're Contraction of we are. we're we are also continuing to see numerous development and acquisition opportunities that complement our growth strategy of owning high-quality properties in close proximity PROXIMITY. Kindred between two persons. Dig. 38, 16, 8. to college and university campuses." Full-Year 2004 Operating Results For the year ended December 31, 2004, the company's revenue totaled $60.8 million, an increase of 6 percent over revenue of $57.1 million in 2003. A net loss of $1.3 million was reported for the 2004 full year, compared with a net loss of $0.9 million a year-earlier. FFO and FFOM for the 2004 full year totaled $8.6 million and $6.5 million, respectively. A reconciliation of FFO and FFOM to net income is shown in Table 4. NOI for same-store owned off-campus properties in 2004 totaled $16.4 million, compared to $16.2 million in 2003. Full-year 2004 results reflect expenses totaling approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.6 million related to certain transactions occurring in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the company's IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. and related formation transactions. Excluding the charges related to the IPO and formation transactions, net income, FFO and FFOM for the year ended December 31, 2004 would have been $1.3 million, $11.2 million and $9.1 million, respectively. Recent Activities Since the end of the 2004 fourth quarter, the company: --Completed the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of its University Village property to California State University, San Bernardino California State University, San Bernardino is a state-funded university in San Bernardino, California, part of the California State University System. The university was founded in 1965. Enrollment annually tops 16,000 and is on pace to reach more than 20,000 by 2010. for an option price of $28.3 million. --Closed the acquisition of five student housing properties in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and containing a total of 1,656 beds for an aggregate purchase price of approximately $53.5 million, including the assumption of approximately $35.4 million in fixed-rate mortgage debt. --Signed an agreement to purchase Cityparc at Fry Street, a 418-bed student housing community located in close proximity to the University of North Texas, to be acquired for a purchase price of approximately $19.2 million, including approximately $11.8 million of existing fixed-rate mortgage debt. --Signed an agreement to purchase the Exchange at Gainesville Gainesville. 1 City (1990 pop. 84,770), seat of Alachua co., N central Fla.; inc. 1869. The Univ. of Florida is a major source of employment in the city. Agriculture and the manufacture of electronic equipment add to the economy. , a 1,044-bed student housing community located in close proximity to the University of Florida University of Florida is the third-largest university in the United States, with 50,912 students (as of Fall 2006) and has the eighth-largest budget (nearly $1.9 billion per year). UF is home to 16 colleges and more than 150 research centers and institutes. , for a total purchase price of approximately $47.5 million. The property is unencumbered Unencumbered Property that is not subject to any creditor claims or liens. Notes: For example, if a house is owned free and clear (meaning the owner owes no mortgage to anyone), it is unencumbered. by debt. 2005 Outlook Based on the judgment and current expectations of the management team, the company is narrowing the range of its previous 2005 FFOM guidance and is lowering its previous 2005 FFO guidance. This is due to several factors, including : --A delay in closing the acquisition of the five-property portfolio in Florida, which we had anticipated closing in mid-December Noun 1. mid-December - the middle part of December period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" Dec, December - the last (12th) month of the year 2004 and was closed in February February: see month. 2005, this impacted 2005 FFO and FFOM by approximately 3 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . --The exercise of the option by California State University - San Bernardino to purchase our University Village property, which closed on January January: see month. 5, 2005. This resulted in capital being inactive in·ac·tive adj. 1. Not active or tending to be active. 2. a. Not functioning or operating; out of use: inactive machinery. b. pending redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. which lowered FFO and FFOM by approximately 3 to 7 cents per share. --Our previous guidance had treated the development fee revenue from the Cullen Oaks Phase II project as third party service revenue as at that time we were pursuing this project in that structure. Our current guidance reflects this as an on-campus participating property structure and accordingly this development fee revenue is substantially eliminated in consolidation - this resulted in lowering of FFO by approximately 4 to 5 cents per share. The company now expects that full-year 2005 net income will range from $0.72 to $0.78 per fully diluted share, FFO will range from $1.42 to $1.50 per fully diluted share, and FFOM will range from $1.32 to $1.42 per fully diluted share. A reconciliation of the range provided for projected net income to projected FFO and FFOM for the year ending December 31, 2005 is shown in Table 5. We expect that the company's financial results for the year ended December 31, 2005 will be affected by national and regional economic trends and events, the acquisition of properties, the ability of the company to be awarded development projects and the timing of such awards, the amount of income recognized by the taxable REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). subsidiary and any corresponding income tax expense, and other factors. Supplemental Information and Earnings Conference Call Supplemental financial and operating information, as well as this earnings news release, is available at the investor relations Investor relations The process by which the corporation communicates with its investors. section of American Campus Communities' website, www.americancampuscommunities.com. In addition, the company will host a conference call to discuss fourth quarter results and the 2005 outlook on Wednesday Wednesday: see week. , March 2, 2005 at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy (10 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. ). To participate by telephone, call 800-810-0924 or 913-981-4900 at least five minutes prior to the call. To listen to the live broadcast, go to www.americancampuscommunities.com or www.fulldisclosure.com at least 15 minutes prior to the call so that required audio software can be downloaded. Informational slides to accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. prepared remarks during the conference call as well as a supplemental analyst package can be accessed at the websites. A replay of the conference call will be available beginning two hours after the end of the call until March 9, 2005 by dialing 888-203-1112 or 719-457-0820, pass code 9400162. The replay also will be available for 30 days at www.americancampuscommunities.com and at www.fulldisclosure.com. About American Campus Communities American Campus Communities, Inc. is one of the largest developers, owners and managers of high-quality student housing communities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management, leasing and management of student housing properties. American Campus Communities owns and manages a portfolio of 22 student housing communities containing approximately 14,100 beds. Including its owned properties, the company provides management and leasing services at a total of 41 properties with more than 25,400 beds located on or near college and university campuses. Additional information is available at www.americancampuscommunities.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements, which express the current beliefs and expectations of management. Except for historical information, the matters discussed in this news release are forward-looking statements and can be identified by the use of the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "result" and similar expressions. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including risks and uncertainties inherent in the national economy, the real estate industry in general, and in our specific markets; the effect of terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. or the threat of terrorism; legislative or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes including changes to laws governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. REITS REITS Real Estate Investors of the Tri-States (Harrison, TN) ; our dependence on key personnel whose continued service is not guaranteed; availability of qualified acquisition and development targets; availability of capital and financing; rising interest rates; rising insurance rates; impact of ad valorem According to value. The term ad valorem is derived from the Latin ad valentiam, meaning "to the value." It is commonly applied to a tax imposed on the value of property. and income taxation; changes in generally accepted accounting principals; and our continued ability to successfully lease and operate our properties. While we believe these forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. These forward-looking statements are made as of the date of this news release, and we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Table 1
American Campus Communities, Inc. and Subsidiaries
Consolidated & Combined Balance Sheets
(unaudited, dollars in thousands, except share and per share data)
December 31,
-----------------------------
2004 2003
-------------- --------------
Assets
Investments in real estate:
Owned off-campus properties, net $272,450 $222,907
On-campus participating properties,
net 68,064 77,689
-------------- --------------
Investments in real estate, net 340,514 300,596
Cash and cash equivalents 4,050 5,227
Restricted cash and short-term
investments 9,816 9,503
Student contracts receivable, net 2,164 2,355
Other assets 11,084 12,885
-------------- --------------
Total assets $367,628 $330,566
============== ==============
Liabilities and stockholders' and
Predecessor owners' equity
Liabilities:
Mortgage loans, bonds payable and
lines of credit $201,014 $275,598
Accounts payable and accrued expenses 5,443 3,966
Other liabilities 20,294 23,092
-------------- --------------
Total liabilities 226,751 302,656
Minority interests 2,648 252
Stockholders' and Predecessor owners'
equity:
Common stock, $0.01 par value,
800,000,000 shares authorized,
12,615,000 shares issued and
outstanding 126 --
Additional paid in capital 136,259 --
Accumulated earnings and dividends 1,802 --
Accumulated other comprehensive income
(loss) 42 (197)
Predecessor owners' equity -- 27,855
-------------- --------------
Total stockholders' and Predecessor
owners' equity 138,229 27,658
-------------- --------------
Total liabilities and stockholders' and
Predecessor owners' equity $367,628 $330,566
============== ==============
Table 2
American Campus Communities, Inc. and Subsidiaries
Consolidated & Combined Statements of Operations
(unaudited, dollars in thousands, except share and per share data)
Quarter Ended December 31,
------------------------------
2004 2003
--------------- --------------
Revenues:
Owned off-campus properties $10,455 $7,699
On-campus participating properties 5,595 5,578
Third-party development services 1,065 1,600
Third-party management services 798 371
Resident services 268 --
--------------- --------------
Total revenues 18,181 15,248
Operating expenses:
Owned off-campus properties 4,446 3,728
On-campus participating properties 2,082 2,099
Third-party development and management
services 1,422 1,448
General and administrative 1,314 1,561
Depreciation and amortization 2,823 2,237
Ground lease 148 187
--------------- --------------
Total operating expenses 12,235 11,260
--------------- --------------
Operating income 5,946 3,988
Non-operating income and (expenses):
Interest income 25 15
Interest expense (3,550) (4,299)
Amortization of deferred financing
costs (232) (140)
Other non-operating income 653 --
--------------- --------------
Total non-operating expenses (3,104) (4,424)
--------------- --------------
Income (loss) before taxes, minority
interests and discontinued operations 2,842 (436)
Income tax provision (29) --
Minority interests (30) 41
--------------- --------------
Income (loss) from continuing operations 2,783 (395)
Discontinued operations:
Income attributable to discontinued
operations 557 2
Gain from disposition of real estate -- 16
--------------- --------------
Total discontinued operations 557 18
--------------- --------------
Net income (loss) $3,340 $(377)
=============== ==============
Earnings per share, basic and fully
diluted:
Net income per share $0.26
===============
Weighted average common shares
outstanding:
Basic 12,622,145
===============
Diluted 12,743,145
===============
Table 3
American Campus Communities, Inc. and Subsidiaries
Consolidated & Combined Statements of Operations
(unaudited, dollars in thousands)
Year Ended December 31,
-----------------------------
2004 2003
-------------- --------------
Revenues:
Owned off-campus properties $35,115 $31,514
On-campus participating properties 17,418 16,482
Third-party development services 5,803 7,939
Third-party management services 2,105 1,189
Resident services and other 382 12
-------------- --------------
Total revenues 60,823 57,136
Operating expenses:
Owned off-campus properties 16,861 15,272
On-campus participating properties 7,900 7,925
Third-party development and management
services 5,543 5,389
General and administrative 5,234 2,749
Depreciation 9,973 8,868
Ground lease 812 489
-------------- --------------
Total operating expenses 46,323 40,692
-------------- --------------
Operating income 14,500 16,444
Non-operating income and (expenses):
Interest income 82 71
Interest expense (16,698) (16,940)
Amortization of deferred financing
costs (1,211) (558)
Other non-operating income 927 --
-------------- --------------
Total non-operating expenses (16,900) (17,427)
-------------- --------------
Loss before taxes, minority interests
and discontinued operations (2,400) (983)
Income tax benefit 728 --
Minority interests 100 16
-------------- --------------
Loss from continuing operations (1,572) (967)
Discontinued operations:
Income attributable to discontinued
operations 272 7
(Loss) gain from disposition of real
estate (39) 16
-------------- --------------
Total discontinued operations 233 23
-------------- --------------
Net loss $(1,339) $(944)
============== ==============
Table 4
American Campus Communities, Inc. and Subsidiaries
Calculation of FFO and FFOM
(unaudited, dollars in thousands, except share and per share data)
Quarter Ended Year Ended
-------------- --------------
12/31/04 12/31/04
-------------- --------------
Net income (loss) $3,340 $(1,339)
Minority interests 30 (100)
Loss from disposition of real estate -- 39
Real estate-related depreciation and
amortization 2,791 10,009
-------------- --------------
Funds from Operations ("FFO") 6,161 8,609
Elimination of operations from on-campus
participating properties:
Net income from on-campus
participating properties (1,179) (270)
Amortization of investment in
on-campus participating properties (871) (3,531)
-------------- --------------
(2,050) (3,801)
Modifications to reflect operational
performance of on-campus participating
properties:
Our share of net cash flow (a) 148 772
Management fees 274 860
On-campus participating properties
development fees (b) 15 15
-------------- --------------
Impact of on-campus participating
properties 437 1,647
-------------- --------------
Funds from Operations--Modified for
operational performance of on-campus
participating properties ("FFOM") $4,548 $6,455
============== ==============
FFO per share--basic $0.49
==============
FFO per share--diluted $0.48
==============
FFOM per share--basic and diluted $0.36
==============
Weighted average common shares
outstanding:
Basic 12,622,145
==============
Diluted 12,743,145
==============
(a) 50 percent of the properties' net cash available for distribution
after payment of operating expenses, debt service (including
repayment of principal) and capital expenditures. Amounts indicate
actual cash received for the year-to-date periods and amounts
accrued for the interim periods.
(b) Development and construction management fees related to the Cullen
Oaks Phase II on-campus participating property.
Table 5
American Campus Communities, Inc. and Subsidiaries
2005 Outlook(a)
(unaudited, dollars in thousands, except per share data)
Low High
-------------- -------------
Net income $9,200 $9,900
Gain on disposition of property (5,400) (5,600)
Minority interests 50 150
Depreciation and amortization 13,900 14,100
Amortization of intangible acquired
assets 400 600
-------------- -------------
Funds from Operations ("FFO") 18,150 19,150
Elimination of operations of on-campus
participating properties:
Net income from on-campus
participating properties (500) (400)
Amortization of investment in
on-campus participating properties (3,500) (3,500)
-------------- -------------
(4,000) (3,900)
Modifications to reflect operational
performance of on-campus participating
properties:
Our share of net cash flow 800 900
Development fees earned on Cullen Oaks 1,050 1,100
Management fees 800 900
-------------- -------------
Impact of on-campus participating
properties 2,650 2,900
-------------- -------------
Funds from operations--Modified for
operational performance of on-campus
participating properties ("FFOM") $16,800 $18,150
============== =============
Weighted average common shares
outstanding--diluted 12,744 12,744
============== =============
Net income per share--diluted $0.72 $0.78
============== =============
FFO per share--diluted $1.42 $1.50
============== =============
FFOM per share--diluted $1.32 $1.42
============== =============
(a) Assumes that (1) the company will complete current contracted
acquisitions by mid-year at current contract terms without effect
of fair value adjustments that may be necessary, (2) University
Village at Sweet Home will open on-time and on-budget, and that 50
percent of the project costs will be permanently financed upon
completion, (3) the on-campus participating construction property
Cullen Oaks Phase II will open on-time and on-budget, (4) the
company will enter into contracts for third-party development and
construction projects that generate revenues consistent with 2004
levels, (5) the 2005-2006 academic year lease-up will be at
similar rates and occupancy levels as experienced in the current
academic year, (6) the cost of Sarbanes-Oxley compliance at 2005
year-end will be approximately $0.5 million, and (7) the interest
rate on our floating rate debt will not increase more than 75
basis points in 2005.
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