American Campus Communities Inc. Reports Second Quarter 2006 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 ended June June: see month. 30, 2006. Highlights --Quarterly FFOM FFOM Fraction Fermentescible des Ordures Ménagères FFOM Fellow of the Faculty of Occupational Medicine (Royal College of Physicians, London) of $6.0 million, or $0.30 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, compared to $3.9 million, or $0.30 per fully diluted share, in the second quarter of 2005. --Increased 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 by 6.5 percent over the second quarter 2005. --Increased same store owned off-campus pre-leasing for the 2006-2007 academic year to 96 percent as of June 30, 2006 compared to 90 percent as of June 30, 2005. --Successful integration of the 13-property Royal portfolio including pre-leasing for Fall 2006 at 87 percent as of June 30, 2006. --Expanded third-party services business into Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of with the commencement of a management contract for Southern Alberta Southern Alberta is a region located in the Canadian province of Alberta. As of the year 2004, the region's population was approximately 272,017[1][2]. Institute of Technology. --Increased third-party services pipeline with the Department of the Navy's selection of a joint venture between ACC and Hunt ELP to negotiate for the development and management of the Hampton Roads Hampton Roads, roadstead, 4 mi (6.4 km) long and 40 ft (12.2 m) deep, SE Va., through which the waters of the James, Nansemond, and Elizabeth rivers pass into Chesapeake Bay. Military Unaccompanied un·ac·com·pa·nied adj. 1. Going or acting without companions or a companion: unaccompanied children on a flight. 2. Music Performed or scored without accompaniment. Housing project. Second Quarter 2006 Operating Results Revenue for the 2006 second quarter totaled $29.2 million, up 46.1 percent from $20.0 million in the 2005 second quarter. Net loss for the 2006 second quarter totaled $2.1 million, or $0.12 per fully diluted share, compared with a net loss of $1.8 million, or $0.14 per fully diluted share, for the same quarter in 2005. Operating income for the quarter increased $2.1 million or 71 percent, over the prior year quarter primarily due to the addition of the Royal portfolio and two new development projects placed into service. This increase was offset by an increase in interest expense, which resulted in an overall increase in net loss over the prior year quarter. The increase in interest expense was due to debt assumed in connection with the Royal portfolio acquisition, as well as increased interest expense incurred under the company's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, which was used to fund a portion of the Royal portfolio acquisition and the continued development of two owned off-campus properties. FFO FFO See: Funds from operations for the 2006 second quarter totaled $4.8 million, or $0.24 per fully diluted share, compared with $2.5 million, or $0.20 per fully diluted share, for the second quarter 2005. FFOM for the 2006 second quarter totaled $6.0 million, or $0.30 per fully diluted share, compared with $3.9 million, or $0.30 per fully diluted share, for the second quarter 2005. A reconciliation of FFO and FFOM to net income is shown on Table 3. NOI for same store owned off-campus properties was $8.6 million in the quarter, up 6.5 percent from $8.1 million in the 2005 second quarter. NOI for the total owned off-campus property portfolio increased 56.8 percent to $12.7 million for the quarter from $8.1 million in the comparable period of 2005, primarily due to the impact of the Royal portfolio acquisition and a development property placed into service during 2005. "The strength of our core business continues with this being the seventh straight quarter of same store NOI growth of approximately five percent or more when compared to same quarter prior year," said Bill Bayless, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and president of American Campus Communities. "Additionally, our leasing for the upcoming fall semester se·mes·ter n. One of two divisions of 15 to 18 weeks each of an academic year. [German, from Latin (cursus) s is going extremely well with our owned off campus portfolio currently pre-leased at 95 percent. During the quarter, we also saw significant movement in our third-party services pipeline with the Navy's selection of our joint venture with Hunt ELP to negotiate for the development and management of the Hampton Roads Military Unaccompanied Housing project. This project should allow us to leverage off of our existing third-party infrastructure, as the development and management of single, enlisted en·list·ed adj. Of, relating to, or being a member of a military rank below a commissioned officer or warrant officer. enlisted Adjective military housing is virtually identical to student housing." Portfolio Update Leasing status for our owned off-campus portfolio is 97 percent applied for and 95 percent pre-leased for the 2006-2007 academic year as of July July: see month. 28, 2006. The Department of the Navy has selected a joint venture between ACC and Hunt ELP the right to exclusively negotiate for the Hampton Roads Military Unaccompanied Housing project. The project is expected to include the management of 722 existing Navy apartments and the development of more than 1,100 new apartments units. New construction as well as management of the existing housing is expected to commence after congressional notification and execution of the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. partnership agreements. In May 2006, ACC commenced management of 459 beds of student housing for the Southern Alberta Institute of Technology in Calgary Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Canada. Additionally, ACC will be manager of the 720-bed residence hall project that is scheduled to open in August 2007. Callaway Villas, a 704-bed community opening this Fall 2006 and serving students attending Texas A&M University, is currently 102 percent applied for and 99 percent pre-leased. As of June 30, 2006, construction was 91 percent complete. As anticipated, the Village at Newark project received Planning Board Noun 1. planning board - a board appointed to advise the chief administrator advisory board governance, governing body, organisation, administration, brass, establishment, organization - the persons (or committees or departments etc. approval to increase the bed count from 812 to 838. As of June 30, 2006, construction was 45 percent complete. Full completion is scheduled for Summer 2007 and occupancy is expected to occur in Fall 2007. The University of New Orleans History UNO was founded in 1958 as the New Orleans branch of Louisiana State University, originally as "Louisiana State University in New Orleans" or "LSUNO", but became more independent and changed the name to "University of New Orleans" in 1974. continues to be an active on-campus on-campus adjective Referring to an on-site site of a medical complex with multiple buildings. Cf 'Off campus.'. third-party development project. In July, the project received unanimous approval from the Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. Joint Legislative Budget Committee
authorizing the sale of bonds to finance the development. Closing and
commencement of construction is scheduled for third quarter 2006, and
occupancy is anticipated in Fall 2007.Regarding the development at the University of Hawaii (body, education) University of Hawaii - A University spread over 10 campuses on 4 islands throughout the state. http://hawaii.edu/uhinfo.html. See also Aloha, Aloha Net. , Manoa, ACC has completed abatement A reduction, a decrease, or a diminution. The suspension or cessation, in whole or in part, of a continuing charge, such as rent. With respect to estates, an abatement is a proportional diminution or reduction of the monetary legacies, a disposition of property by will, when and demolition Demolition is the opposite of construction: the tearing-down of buildings and other structures. It contrasts with deconstruction, which is the taking down of a building while carefully preserving valuable elements for re-use. of the existing Frear Hall. The proposed 810-bed new development received unanimous approval by the Honolulu City Council The Honolulu City Council is the legislative branch of the City & County of Honolulu and is considered the second most powerful parliamentary body in the State of Hawaiʻ Zoning Committee on July 25 and will be presented to the full City Council on August 16, 2006. The project is currently targeting a construction start in the first quarter 2007. Supplemental Information and Earnings Conference Call Supplemental financial and operating information, as well as this release, are available in the investor relations Investor relations The process by which the corporation communicates with its investors. section of the American Campus Communities website, www.americancampuscommunities.com. In addition, the company will host a conference call to discuss second quarter results and the 2006 outlook on Wednesday, August 2, 2006 at 10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (9:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT ). To participate by telephone, call 866-770-7129 passcode 24730367 at least five minutes prior to the call. To listen to the live broadcast, go to www.americancampuscommunities.com or www.earnings.com at least 15 minutes prior to the call so that required audio software can be downloaded. Informational slides in the form of the supplemental analyst package can be accessed via the website. A replay of the conference call will be available beginning two hours after the end of the call until August 9, 2006 by dialing 888-286-8010 or 617-801-6888 passcode 89543448. The replay also will be available for 30 days at www.americancampuscommunities.com and at www.earnings.com. The call will also be available as a podcast (iPOD broadCAST) An audio broadcast that has been converted to an MP3 file or other audio file format for playback in a digital music player or computer. The "pod" in podcast was coined from "iPod," the predominant portable, digital music player, and although podcasts are on www.REITcafe.com and on the company's website shortly after the call. Non-GAAP Financial Measures As defined by NAREIT NAREIT National Association of Real Estate Investment Trusts , FFO represents income (loss) before allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as to minority interests (computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), excluding gains (or losses) from sales of property, plus real estate-related depreciation and amortization (excluding amortization of loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. costs) and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates 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) , rental rates, operating costs operating costs npl → gastos mpl operacionales , development activities and interest costs, providing perspective not immediately apparent from net income. We compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs Equity REIT A Real Estate Investment Trust that assumes ownership status in the property it invests in enabling investors of the REIT to earn dividends on rental income from the property and appreciation in property resale. Antithesis of a Mortgage REIT. and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. As noted above, FFO excludes GAAP historical cost depreciation and amortization of real estate and related assets because these GAAP items assume that the value of real estate diminishes over time. However, unlike the ownership of our owned off-campus properties, the unique features of our ownership interest in our on-campus participating properties cause the value of these properties to diminish over time. For example, since the ground leases under which we operate the participating properties require the reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. from operations of specified amounts for capital expenditures and for the repayment of debt while our interest in these properties terminates upon the repayment of the debt, such capital expenditures do not increase the value of the property to us and mortgage debt amortization only increases the equity of the ground lessor One who rents real property or Personal Property to another. A lessor of land is a landlord. Cross-references Landlord and Tenant. lessor n. the owner of real property who rents it to a lessee pursuant to a written lease. . Accordingly, when considering our FFO, we believe it is also a meaningful measure of our performance to modify FFO to exclude the operations of our on-campus participating properties and to consider their impact on performance by including only that portion of our revenues from those properties that are reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of our share of net cash flow and the management fees that we receive, both of which increase and decrease with the operating measure of the properties, a measure we refer to as FFOM. The company defines property NOI as property revenues less direct property operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , excluding depreciation, but including allocated corporate general and administrative expenses. 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 REIT See: Real Estate Investment Trust REIT See 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 38 student housing communities containing approximately 22,900 beds. Including its owned properties, the company provides management and leasing services at a total of 52 properties with approximately 31,700 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 by such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including risks and uncertainties inherent in the national economy, the real estate industry in general, and in our specific markets; the effect of terrorism or the threat of terrorism; legislative or regulatory changes including changes to laws governing 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; 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 Balance Sheets
(dollars in thousands)
June 30, December 31,
2006 2005
------------ ------------
Assets (unaudited)
Investments in real estate:
Owned off-campus properties, net $696,439 $417,098
On-campus participating properties, net 78,445 80,370
------------ ------------
Investments in real estate, net 774,884 497,468
Cash and cash equivalents 9,482 24,641
Restricted cash 13,336 9,502
Student contracts receivable, net 1,708 2,610
Other assets 23,127 16,641
------------ ------------
Total assets $822,537 $550,862
============ ============
Liabilities and stockholders' equity
Liabilities:
Secured debt $429,792 $291,646
Unsecured revolving credit facility 81,200 --
Accounts payable and accrued expenses 13,631 7,983
Other liabilities 29,797 25,155
------------ ------------
Total liabilities 554,420 324,784
Minority interests 34,085 2,851
Stockholders' equity:
Common stock 172 172
Additional paid in capital 254,103 233,388
Accumulated earnings and dividends (20,914) (10,817)
Accumulated other comprehensive income 671 484
------------ ------------
Total stockholders' equity 234,032 223,227
------------ ------------
Total liabilities and stockholders' equity $822,537 $550,862
============ ============
Table 2
American Campus Communities Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited, dollars in thousands, except share and per share data)
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenues:
Owned off-campus
properties $23,608 $14,764 $43,095 $27,253
On-campus
participating
properties 3,497 3,133 9,479 8,626
Third-party
development
services 1,096 1,332 2,734 1,977
Third-party
management
services 691 562 1,353 1,272
Resident
services 345 216 665 420
------------ ------------ ------------ ------------
Total revenues 29,237 20,007 57,326 39,548
Operating
expenses:
Owned off-campus
properties 11,245 6,873 19,394 12,009
On-campus
participating
properties 2,255 1,986 4,205 3,861
Third-party
development and
management
services 1,426 1,573 3,064 3,037
General and
administrative 1,824 1,925 3,411 3,289
Depreciation and
amortization 7,178 4,450 12,453 7,874
Ground/facility
leases 246 240 438 452
------------ ------------ ------------ ------------
Total operating
expenses 24,174 17,047 42,965 30,522
------------ ------------ ------------ ------------
Operating income 5,063 2,960 14,361 9,026
Non-operating
income and
(expenses):
Interest income 144 44 329 102
Interest expense (7,066) (4,634) (12,402) (8,442)
Amortization of
deferred
financing costs (389) (276) (744) (522)
Other non-operating
income -- -- -- 430
------------ ------------ ------------ ------------
Total non-operating
expenses (7,311) (4,866) (12,817) (8,432)
------------ ------------ ------------ ------------
(Loss) income
before income
taxes, minority
interests, and
discontinued
operations (2,248) (1,906) 1,544 594
Income tax benefit -- 102 -- --
Minority interests 181 12 53 (75)
------------ ------------ ------------ ------------
(Loss) income from
continuing
operations (2,067) (1,792) 1,597 519
Discontinued
operations:
Loss
attributable to
discontinued
operations -- -- -- (2)
Gain from
disposition of
real estate -- -- -- 5,883
------------ ------------ ------------ ------------
Total
discontinued
operations -- -- -- 5,881
------------ ------------ ------------ ------------
Net (loss) income $(2,067) $(1,792) $1,597 $6,400
============ ============ ============ ============
Net (loss) income
per share:
Basic $(0.12) $(0.14) $0.09 $0.51
============ ============ ============ ============
Diluted $(0.12) $(0.14) $0.08 $0.51
============ ============ ============ ============
Weighted average
common shares
outstanding:
Basic 17,221,896 12,626,118 17,215,870 12,624,142
============ ============ ============ ============
Diluted 19,542,559 12,747,118 18,914,672 12,785,413
============ ============ ============ ============
Table 3
American Campus Communities Inc. and Subsidiaries
Calculation of FFO and FFOM
(unaudited, dollars in thousands, except share and per share data)
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net (loss) income $(2,067) $(1,792) $1,597 $6,400
Minority interests (181) (12) (53) 75
Gain from
disposition of
real estate -- -- -- (5,883)
Real estate-related
depreciation and
amortization 7,043 4,344 12,198 7,670
------------ ------------ ------------ ------------
Funds from
operations
("FFO") 4,795 2,540 13,742 8,262
Elimination of
operations from
on-campus
participating
properties:
Net loss
(income) from
on-campus
participating
properties 1,470 1,241 115 (69)
Amortization of
investment in
on-campus
participating
properties (1,014) (883) (2,046) (1,762)
------------ ------------ ------------ ------------
5,251 2,898 11,811 6,431
Modifications to
reflect
operational
performance of
on-campus
participating
properties:
Our share of net
cash flow(a) 246 240 438 452
Management fees 166 158 444 421
On-campus
participating
properties
development
fees(b) 305 585 305 815
------------ ------------ ------------ ------------
Impact of
on-campus
participating
properties 717 983 1,187 1,688
------------ ------------ ------------ ------------
Funds from
Operations --
modified for
operational
performance of
on-campus
participating
properties
("FFOM") $5,968 $3,881 $12,998 $8,119
============ ============ ============ ============
FFO per share --
diluted $0.24 $0.20 $0.73 $0.65
============ ============ ============ ============
FFOM per share --
diluted $0.30 $0.30 $0.69 $0.64
============ ============ ============ ============
Weighted average
common shares
outstanding --
diluted 19,645,287 12,800,721 18,914,672 12,785,413
============ ============ ============ ============
(a) 50 percent of the properties' net cash available for distribution
after payment of operating expenses, debt service (including
repayment of principal) and capital expenditures. Represents
amounts accrued for the interim periods.
(b) Development and construction management fees, including
construction savings earned under the general construction
contract, related to the Cullen Oaks Phase II on-campus
participating property completed in August 2005.
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