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Section 1: 8-K (8-K)

Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 21, 2017
AMERICAN CAMPUS COMMUNITIES, INC.
(Exact name of Registrant as specified in its Charter)
Maryland
001-32265
76-0753089
(State or other jurisdiction of
incorporation or organization)
(Commission file number)

(I.R.S. Employer
Identification Number)

12700 Hill County Blvd., Suite T-200, Austin, Texas 78738
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (512) 732-1000

Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




 
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 21, 2017, American Campus Communities, Inc. (the “Company”) issued a press release (the “Earnings Release”) announcing, among other things, earnings for the quarter ended December 31, 2016. The text of the Earnings Release is included as Exhibit 99.1 to this Current Report.

The Earnings Release is furnished pursuant to Item 2.02 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 7.01 REGULATION FD DISCLOSURE
 
On February 21, 2017, the Company disclosed a supplemental analyst package in connection with its earnings conference call for the quarter ended December 31, 2016 which will take place on February 22, 2017. A copy of the supplemental analyst package is attached hereto as Exhibit 99.2.

The supplemental analyst package is furnished pursuant to Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

     The list of exhibits is incorporated herein by reference to the Exhibit Index.




SIGNATURE(S)
 
Pursuant to the Requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
AMERICAN CAMPUS COMMUNITIES, INC.
 
 
 
 
 
 
 
 
Date: February 22, 2017
 
By: 
/s/ Jonathan A. Graf
 
 
 
 
 
Jonathan A. Graf 
 
 
 
 
 
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
 
 
 
 
 
 
 
 




Exhibit Index
 

Exhibit No.
 
Description
EX-99.1
 
Earnings Release Dated February 21, 2017
EX-99.2
 
Supplemental Analyst Package –Fourth Quarter 2016


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1
MEDIA RELEASE
38172109_acclogocolora05.jpg

American Campus Communities, Inc. Reports Fourth Quarter
and Year End 2016 Financial Results

Achieves 12th consecutive year of same store growth in rental rate, rental revenue and NOI.

AUSTIN, Texas--(BUSINESS WIRE)-February 21, 2017--American Campus Communities, Inc. (NYSE:ACC) today announced the following financial results for the quarter and year ended December 31, 2016.
Highlights
Fourth Quarter 2016
Reported net income attributable to ACC of $25.4 million or $0.19 per fully diluted share, versus $28.4 million or $0.25 per fully diluted share in the fourth quarter 2015.
Reported quarterly FFOM of $86.9 million or $0.65 per fully diluted share versus $79.1 million or $0.69 per fully diluted share in the fourth quarter prior year.
Increased same store wholly-owned Net Operating Income (NOI) by 2.1 percent over the fourth quarter 2015.
Achieved same store wholly-owned average physical occupancy of 97.6 percent for the fourth quarter 2016 compared to 98.1 percent for the fourth quarter 2015.
Preleased the same store wholly-owned portfolio for the upcoming 2017-2018 academic year to 66.3 percent applied for and 60.0 percent leased as of February 17, 2017 with a current projected rental rate increase of 2.9 percent. This compares to 64.0 percent applied for and 59.3 percent leased for the same date prior year.
Commenced construction on U Club Townhomes, a 528-bed pedestrian development that will serve students attending the University of Mississippi and executed a presale agreement for The Edge, a 412-bed pedestrian development that will serve students attending Florida State University. Both core developments target delivery in Fall 2018.
Commenced construction on three previously announced American Campus Equity (ACE)® developments on the campuses of the University of California, Berkeley, Northeastern University in Boston and Arizona State University. The developments are expected to total 2,563 on-campus beds and target delivery in Fall 2018 and Fall 2019.
Continued capital recycling activity, closing on the sale of a non-core portfolio of 19 assets for $508 million to Saban Real Estate Group.
Awarded two Multifamily Pillars of the Industry Awards by the National Association of Home Builders including Best Repositioning of a Multifamily Asset for The Castilian, an off campus residence hall located across the street from The University of Texas at Austin campus.  

 









Full Year 2016
Reported net income attributable to ACC of $99.1 million or $0.75 per fully diluted share, versus $116.0 million or $1.02 per fully diluted share for the full year 2015.
Reported full year FFOM of $297.7 million or $2.27 per fully diluted share compared to $269.3 million or $2.36 per fully diluted share for the full year 2015.
Increased same store wholly-owned NOI by 3.4 percent over the year ended December 31, 2015.
Completed construction and delivered seven owned development assets totaling $314.9 million into service. The seven new core pedestrian communities contain 3,191 beds and are located an average of less than one-tenth of a mile from their respective campuses.
Commenced or continued construction on 17 owned-development and presale development projects totaling $1.1 billion. The projects target delivery in Fall 2017, 2018 and 2019 and contain 13,129 beds with an average distance to campus of 0.1 miles.
Acquired two core assets located pedestrian to campus for a total purchase price of $63.1 million. The high quality communities are located an average of less than one-tenth of a mile to campus, average 1.5 years old, and join existing assets in their respective markets, creating opportunities for multi-asset market efficiencies.
Completed significant capital recycling activities with the disposition of 21 non-core assets totaling $581.8 million. These non-core assets average over 16 years old and are located an average of 1.6 miles from their respective campuses.
“As we close out 2016, we are pleased to have completed the strategic disposition of our non-core assets, refining our best-in-class portfolio into one consisting almost exclusively of core Class A products located pedestrian to Tier 1 universities,” said Bill Bayless, American Campus Communities CEO. “Looking forward to 2017, we are excited about the opportunity for significant value creation through accelerating same store NOI growth, forecasted achievement of our 55 percent NOI margin goal and the continued expansion of our high-yielding development pipeline of core pedestrian assets.”
Fourth Quarter Operating Results
Revenue for the 2016 fourth quarter totaled $204.0 million, an increase of 0.9 percent from $202.2 million in the fourth quarter 2015 and operating income for the quarter totaled $51.7 million versus $53.7 million in the prior year fourth quarter. The increase in revenue was primarily due to growth resulting from recently completed development properties, increased rental rates for the 2016-2017 academic year, and property acquisitions completed in 2016, offset by the loss of revenue associated with 21 properties sold during 2016. The decrease in operating income was primarily due to a provision for real estate impairment associated with one property classified as held for sale at December 31, 2016. Net income for the 2016 fourth quarter totaled $25.4 million, or $0.19 per fully diluted share, compared with net income of $28.4 million, or $0.25 per fully diluted share, for the same quarter in 2015. FFO for the 2016 fourth quarter totaled $78.0 million, or $0.58 per fully diluted share, a decrease of 19.4 percent per share, as compared to $82.6 million, or $0.72 per fully diluted share for the same quarter in 2015. FFOM for the 2016 fourth quarter was $86.9 million, or $0.65 per fully diluted share, a decrease of 5.8 percent per share, as compared to $79.1 million, or $0.69 per fully diluted share for the same quarter in 2015. A reconciliation of FFO and FFOM to net income is provided in Table 3.
NOI for same store wholly-owned properties was $87.0 million in the quarter, up 2.1 percent from $85.2 million in the 2015 fourth quarter. Same store wholly-owned property revenues increased by 2.5 percent over the 2015 fourth quarter due to an increase in average rental rates for the 2016-2017 academic year. Same store wholly-owned property operating expenses increased by 3.0 percent over the prior year quarter. NOI for the total wholly-owned portfolio increased 1.1 percent to $110.1 million for the quarter from $108.9 million in the comparable period of 2015. A reconciliation of same store NOI to total NOI is provided in Table 4.






Portfolio Update
Developments
During the quarter and subsequent to quarter end, the company made significant advancements with regard to its pipeline of core developments, commencing construction on three on-campus ACE developments with expected deliveries in Fall 2018 and 2019, in addition to commencing construction on one core off-campus development and executing one presale agreement for a core development targeting delivery in Fall 2018. The five core development projects total $408.6 million.
In total, the company continues to progress on the construction of its 17 owned-development and presale development projects with expected deliveries in Fall 2017, 2018 and 2019. The developments total approximately $1.1 billion, are all core Class A assets located on or pedestrian to campus in their respective markets, averaging 0.1 miles to campus, and are on track to achieve a stabilized development yield in the range of 6.5 - 7.0 percent. The 10 new owned development projects scheduled to open Fall 2017, totaling $603.1 million, are preleased at an average of 33.2 percent for the upcoming academic year as of February 17, 2017.
Off-Campus Owned
During the quarter, the company executed a $42.6 million presale agreement for The Edge, a 412-bed pedestrian development that will serve students attending Florida State University. The project is located adjacent to the company’s existing four Stadium Centre assets, allowing the group to efficiently operate as a single property upon opening in Fall 2018. The new project targets a 6.25 percent standalone nominal yield while offering the opportunity for additional yield through multi-asset efficiencies. As part of the presale agreement, the company is responsible for the management, operations and initial lease up of the project while the developer retains delivery and construction cost risk.
Subsequent to quarter end, the company commenced construction on U Club Townhomes, a $44.3 million development serving students attending the University of Mississippi. Upon opening in Fall 2018, the 528-bed community will be the closest to campus large-scale purpose-built student housing property in the market. In addition to proximity to campus, the community features a large community center including an Academic Success Center, state-of-the-art fitness center and social gathering space.
American Campus Equity (ACE)
During the quarter, the company commenced construction on Bancroft Residence Hall, a previously announced $98.7 million ACE project on the University of California, Berkeley campus. The 781-bed community is primarily expected to house first-year students and will be located on the south side of the University’s main campus, directly across from Haas Pavilion and the newly renovated Student Union. The development will feature eight stories of modern student accommodations, approximately 7,000 square feet of urban retail space on the ground floor, and amenity space including an 11,000 square foot community center with an Academic Success Center, state-of-the-art fitness center, and modern student recreation lounges. The community is targeting a LEED® Gold designation by the US Green Building Council and targets delivery in Fall 2018.
Subsequent to quarter end, the company commenced construction on Columbus Avenue Student Apartments, an ACE project on the campus of Northeastern University in Boston. The $153.4 million community will provide 825 modern beds and will feature student focused amenities including an Academic Success Center, social and recreational lounges and fitness center. The development is located in a premier pedestrian location of core campus, in the heart of Boston, a city boasting more than 50 colleges and universities serving over 250,000 students and represents the first large-scale student housing project to begin construction in the city under Mayor Walsh’s initiative to improve the residential experience for students throughout the city. The community is targeting a LEED Gold designation by the US Green Building Council and targets delivery in Fall 2019. Upon completion of the Columbus Avenue Student Housing community and Bancroft Residence Hall, the company expects to have developed a total of 23 LEED certified projects including 10 achieving LEED Gold designation.
Subsequent to quarter end, the company commenced construction on Greek Leadership Village, a $69.6 million seventh-phase ACE project on the Arizona State University campus. The 957-bed development is slated for occupancy in Fall 2018 and will replace Cholla Apartments whose 648 beds have been demolished. The new development is located in a premier location on the eastside of core campus and is primarily intended to serve as housing for the Greek community and other student groups while also being available as part of the




university’s live-on expectation for first-year students.
Acquisitions
As previously announced, during 2016 the company acquired two core pedestrian assets, expanding the company’s presence in two markets. In August, the company acquired University Crossings - Charlotte, a 546-bed infill property located directly across from the main entrance to the University of North Carolina at Charlotte. The community initially opened for occupancy in Fall 2014 and joins two pedestrian ACC properties in the market. Additionally, in October, the company acquired U Point, a 163-bed property that opened for occupancy in August 2016 and is located in a prime downtown location pedestrian to Syracuse University and in close proximity to our existing Park Point asset. Totaling $63.1 million, these core acquisitions offer the potential for operational efficiencies by expanding the company’s presence in existing markets, and in the case of U Point, offers an unusual value creation opportunity resulting from an academic year 2016 opening occupancy of only 85 percent at a significant rental rate discount to other comparable properties in the market, despite superior floor plans and a premium amenity package in a prime location. After total investment of $3.2 million of upfront capital improvements, the acquisitions target a year-one cap rate of 5.2 percent nominal and 4.9 percent economic with stabilized third-year cap rates targeting 6.8 percent nominal and 6.4 percent economic reflecting the significant upside potential. In addition, multiple property market efficiencies are expected to generate additional yields of 25 to 50 basis points above the going-in cap rates.
Dispositions
During the quarter, the company closed on the sale of a non-core portfolio of 19 assets containing 12,083 beds for $508 million to Saban Real Estate Group. The transaction included the prepayment of $197.3 million of secured mortgage debt and represented an average economic cap rate of 6.1 percent based on in-place rental revenue, escalated trailing-12 operating expenses and historical average capital expenditures. The company will provide third party management for 11 of the assets during a transition period with the management of six assets transitioning to the buyer on February 1, 2017 and management of the remaining five assets transitioning on April 1, 2017.
Subsequent to quarter end, the company continued its capital recycling efforts, executing a contract for the disposition of The Province, a 657-bed non-core property serving students attending Wright State University. The transaction is anticipated to close during the second quarter but remains subject to the satisfaction of various contingencies and closing conditions.
Capital Recycling Summary
The company previously announced its intent to strategically target its non-core assets for disposition during 2016, representing as much as $600 million in total sales. When including properties sold during 2016 and the asset currently under contract for sale, the company will have completed its 2016 capital recycling program, selling over $600 million of non-core properties. Proceeds from the completed sales were used for the reduction of debt including prepayment of $197.3 million of secured mortgage debt, as noted above, and the retirement of a $200 million term loan, which was scheduled to mature in January 2017, creating additional capacity for the company to execute on its high-yielding development pipeline.
Third-Party Services
Consistent with the originally anticipated development timeline, the company completed and delivered a 340-bed third-party development project on the campus of Oregon State University Cascades in December.
Capital Markets
Subsequent to quarter end, the company amended and expanded its senior unsecured revolving credit facility, increasing the facility size to $700 million and extending the maturity date to March 15, 2022. The amended facility has an accordion feature that allows the company to expand the facility by up to an additional $500 million, subject to the satisfaction of certain conditions. Borrowing rates under the credit facility float at a margin over LIBOR plus an annual facility fee with spreads reflecting current market terms, which are more favorable than those contained in the prior facility. Both the margin and the facility fee are priced on a grid that is tied to the company’s credit rating. Based on the company’s current Baa2/BBB rating, the annual facility fee is 20 basis points and the LIBOR margin is 100 basis points, a reduction of 10 basis points.





At-The-Market (ATM) Share Offering Program
During the quarter, the company sold 250 thousand shares of common stock under the ATM program at a weighted average price of $51.51 per share for net proceeds of approximately $12.7 million. For the full year, the company sold 1.5 million shares of common stock at a weighted average price of $51.07 per share for net proceeds of approximately $75.1 million. Subsequent to quarter end, the company sold an additional 1.0 million shares of common stock at a weighted average price of $50.06 per share for net proceeds of approximately $51.6 million. Total gross proceeds of $128.3 million have been raised under the ATM program in 2016 and 2017 leaving approximately $372 million of capacity under the current program.
2017 Outlook
The company believes that the financial results for the fiscal year ending December 31, 2017 may be affected by, among other factors:
national and regional economic trends and events;
the timing of acquisitions and/or dispositions;
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 success of releasing the company’s owned properties for the 2017-2018 academic year.
Based upon these factors, management anticipates that fiscal year 2017 FFO will be in the range of $2.34 to $2.44 per fully diluted share and FFOM will be in the range of $2.32 to $2.42 per fully diluted share. For additional details regarding the company’s 2017 outlook, please see pages 17-18 of the Supplemental Analyst Package 4Q 2016. All guidance is based on the current expectations and judgment of the company’s management team.
A reconciliation of the range provided for projected net income to projected FFO and FFOM for the fiscal year ending December 31, 2017 is included in Table 5.
Supplemental Information and Earnings Conference Call
Supplemental financial and operating information, as well as this release, are available in the investor relations section of the American Campus Communities website, www.americancampus.com. In addition, the company will host a conference call to discuss fourth quarter and year end results and the 2017 outlook on Wednesday, February 22, 2017 at 10 a.m. EST (9:00 a.m. CST). Participants from within the U.S. may dial 888-317-6003 passcode 2996525, and participants outside the U.S. may dial 412-317-6061 passcode 2996525 at least 10 minutes prior to the call.
To listen to the live broadcast, go to www.americancampus.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 one hour after the end of the call until March 8, 2017 by dialing 877-344-7529 (domestic) or 412-317-0088 (international) conference number 10098057. The replay also will be available for one year at www.americancampus.com. The call will also be available as a podcast on www.REITcafe.com and on the company’s website shortly after the call.






Non-GAAP Financial Measures
The National Association of Real Estate Investment Trusts ("NAREIT") currently defines Funds from Operations ("FFO") as net income or loss attributable to common shares computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses from depreciable operating property sales, impairment charges and real estate depreciation and amortization, 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. We also believe it is meaningful to present a measure we refer to as FFO-Modified, or FFOM, which reflects certain adjustments related to the economic performance of our on-campus participating properties and excludes property acquisition costs, contractual executive separation and retirement charges, and other non-cash items, as we determine in good faith. FFO and FFOM should not be considered as alternatives to net income or 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 are these measures indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.
The company defines property NOI as property revenues less direct property operating expenses, excluding depreciation, but including allocated corporate general and administrative expenses.
About American Campus Communities
American Campus Communities, Inc. is the largest owner, manager and developer of high-quality student housing communities in the United States. The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management and operational management of student housing properties. As of December 31, 2016, American Campus Communities owned 154 student housing properties containing approximately 95,200 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 203 properties with approximately 132,000 beds. Visit www.americancampus.com.
Forward-Looking Statements
In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which American Campus operates, management's beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict






Table 1
American Campus Communities, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
 
 
December 31, 2016
 
December 31, 2015
 
 
(unaudited)
 
 
Assets
 
 
 
 
 
 
 
 
 
Investments in real estate:
 
 
 
 
Wholly-owned properties, net
 
$
5,427,014

 
$
5,522,271

Wholly-owned properties held for sale
 
25,350

 
55,354

On-campus participating properties, net
 
85,797

 
90,129

Investments in real estate, net
 
5,538,161

 
5,667,754

 
 
 
 
 
Cash and cash equivalents
 
22,140

 
16,659

Restricted cash
 
24,817

 
33,675

Student contracts receivable, net
 
8,428

 
18,475

Other assets1 2
 
272,367

 
269,685

 
 
 
 
 
Total assets
 
$
5,865,913

 
$
6,006,248

 
 
 
 
 
Liabilities and equity
 
 

 
 

 
 
 
 
 
Liabilities:
 
 

 
 

Secured mortgage, construction and bond debt2
 
$
688,195

 
$
1,094,962

Unsecured notes2
 
1,188,737

 
1,186,700

Unsecured term loans2
 
149,065

 
597,719

Unsecured revolving credit facility
 
99,300

 
68,900

Accounts payable and accrued expenses
 
76,614

 
71,988

Other liabilities3
 
158,437

 
144,811

Total liabilities
 
2,360,348

 
3,165,080

 
 
 
 
 
Redeemable noncontrolling interests
 
55,078

 
59,511

 
 
 
 
 
Equity:
 
 

 
 

American Campus Communities, Inc. and Subsidiaries
  stockholders’ equity:
 
 
 
 
Common stock
 
1,322

 
1,124

Additional paid in capital
 
4,118,842

 
3,325,806

Treasury stock
 
(975
)
 
(403
)
Accumulated earnings and dividends
 
(670,137
)
 
(550,501
)
Accumulated other comprehensive loss
 
(4,067
)
 
(5,830
)
Total American Campus Communities, Inc. and
  Subsidiaries stockholders’ equity
 
3,444,985

 
2,770,196

  Noncontrolling interests – partially owned properties
 
5,502

 
11,461

Total equity
 
3,450,487

 
2,781,657

 
 
 
 
 
Total liabilities and equity
 
$
5,865,913

 
$
6,006,248


1. 
As of December 31, 2016, other assets include approximately $2.8 million related to net deferred financing costs on our revolving credit facility and the net value of in-place leases.
2. 
Beginning in 2016, deferred financing costs associated with secured mortgage, construction and bond debt, unsecured notes, and unsecured term loans are subject to new accounting guidance and are presented as a direct reduction to the carrying value of the debt. Prior period amounts have been reclassified to conform to the current period presentation.
3. 
As of December 31, 2016, other liabilities include approximately $44.4 million in deferred revenue and fee income.




Table 2
American Campus Communities, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(dollars in thousands, except share and per share data)

 
 
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
 
2016
 
2015
 
2016
 
2015
 
 
(unaudited)
 
(unaudited)
 
 
Revenues
 
 
 
 
 
 
 
 
Wholly-owned properties
 
$
189,314

 
$
187,268

 
$
735,392

 
$
704,909

On-campus participating properties
 
10,415

 
10,117

 
33,433

 
31,586

Third-party development services
 
677

 
1,786

 
4,606

 
4,964

Third-party management services
 
2,685

 
2,227

 
9,724

 
8,813

Resident services
 
881

 
800

 
3,206

 
3,109

Total revenues
 
203,972

 
202,198

 
786,361

 
753,381

 
 
 
 
 
 
 
 
 
Operating expenses
 
 

 
 

 
 
 
 

Wholly-owned properties
 
80,121

 
79,164

 
337,296

 
331,836

On-campus participating properties
 
3,322

 
3,270

 
13,447

 
12,437

Third-party development and management services
 
3,895

 
3,792

 
14,533

 
14,346

General and administrative
 
5,683

 
5,171

 
22,493

 
20,838

Depreciation and amortization
 
51,901

 
54,685

 
211,387

 
208,788

Ground/facility leases
 
2,431

 
2,391

 
9,167

 
8,232

Provision for real estate impairment
 
4,895

 

 
4,895

 

Total operating expenses
 
152,248

 
148,473

 
613,218

 
596,477

 
 
 
 
 
 
 
 
 
Operating income
 
51,724

 
53,725

 
173,143

 
156,904

 
 
 
 
 
 
 
 
 
Nonoperating income and (expenses)
 
 

 
 

 
 
 
 

Interest income
 
1,455

 
1,125

 
5,481

 
4,421

Interest expense
 
(16,925
)
 
(24,162
)
 
(78,687
)
 
(87,789
)
Amortization of deferred financing costs
 
(1,282
)
 
(1,518
)
 
(6,520
)
 
(5,550
)
Gain from disposition of real estate
 
3,788

 

 
21,197

 
52,699

Loss from early extinguishment of debt
 
(12,841
)
 

 
(12,841
)
 
(1,770
)
Other nonoperating income
 

 

 

 
388

Total nonoperating expense
 
(25,805
)
 
(24,555
)
 
(71,370
)
 
(37,601
)
 
 
 
 
 
 
 
 
 
Income before income taxes
 
25,919

 
29,170

 
101,773

 
119,303

Income tax provision
 
(115
)
 
(310
)
 
(1,150
)
 
(1,242
)
Net income
 
25,804

 
28,860

 
100,623

 
118,061

Net income attributable to noncontrolling interests
 
(412
)
 
(501
)
 
(1,562
)
 
(2,070
)
Net income attributable to ACC, Inc. and
  Subsidiaries common stockholders
 
$
25,392

 
$
28,359

 
$
99,061

 
$
115,991

Other comprehensive income
 
 

 
 

 
 
 
 

Change in fair value of interest rate swaps and other
 
1,925

 
2,907

 
1,763

 
464

Comprehensive income
 
$
27,317

 
$
31,266

 
$
100,824

 
$
116,455

Net income per share attributable to ACC, Inc.
  and Subsidiaries common shareholders
 
 

 
 

 
 
 
 

Basic
 
$
0.19

 
$
0.25

 
$
0.76

 
$
1.03

 
 
 
 
 
 
 
 
 
Diluted
 
$
0.19

 
$
0.25

 
$
0.75

 
$
1.02

 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
 

 
 

 
 
 
 

Basic
 
132,175,589

 
112,343,835

 
129,228,748

 
111,987,361

 
 
 
 
 
 
 
 
 
Diluted
 
132,950,306

 
113,001,039

 
130,018,729

 
114,032,222

 
 
 
 
 
 
 
 
 





Table 3
American Campus Communities, Inc. and Subsidiaries
Consolidated Statements of Funds from Operations
(unaudited, dollars in thousands, except share and per share data)
 
 
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
 
2016
 
2015
 
2016
 
2015
Net income attributable to ACC, Inc. and Subsidiaries
  common stockholders
 
$
25,392

 
$
28,359

 
$
99,061

 
$
115,991

Noncontrolling interests
 
412

 
501

 
1,562

 
2,070

Gain from disposition of real estate
 
(3,788
)
 

 
(21,197
)
 
(52,699
)
Elimination of provision for real estate impairment1
 
4,895

 

 
4,895

 

Real estate related depreciation and amortization
 
51,044

 
53,766

 
208,276

 
206,019

Funds from operations ("FFO") attributable to common stockholders and OP unitholders
 
77,955

 
82,626

 
292,597

 
271,381

 
 
 
 
 
 
 
 
 
Elimination of operations of on-campus participating properties
 
 

 
 

 
 

 
 

Net income from on-campus participating properties
 
(3,492
)
 
(3,030
)
 
(5,194
)
 
(4,236
)
Amortization of investment in on-campus participating properties
 
(1,850
)
 
(1,803
)
 
(7,343
)
 
(7,034
)
 
 
72,613

 
77,793

 
280,060

 
260,111

Modifications to reflect operational performance of on-campus participating properties
 
 

 
 

 
 

 
 

Our share of net cash flow2
 
794

 
853

 
2,964

 
3,118

Management fees
 
476

 
467

 
1,503

 
1,424

Contribution from on-campus participating properties
 
1,270

 
1,320

 
4,467

 
4,542

 
 
 
 
 
 
 
 
 
Property acquisition costs
 
212

 

 
326

 
2,836

Elimination of loss from early extinguishment of debt3
 
12,841

 

 
12,841

 
1,770

Funds from operations-modified ("FFOM") attributable to common stockholders and OP unitholders
 
$
86,936

 
$
79,113

 
$
297,694

 
$
269,259

 
 
 
 
 
 
 
 
 
FFO per share – diluted
 
$
0.58

 
$
0.72

 
$
2.23

 
$
2.38

 
 
 
 
 
 
 
 
 
FFOM per share – diluted
 
$
0.65

 
$
0.69

 
$
2.27

 
$
2.36

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding - diluted
 
134,120,391

 
114,513,960

 
131,340,992

 
114,141,997

 
 
 
 
 
 
 
 
 

1.
Represents an impairment charge recorded for The Province - Dayton, a wholly-owned property classified as held for sale as of December 31, 2016.
2.
50% 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, which is included in ground/facility leases expense in the consolidated statements of comprehensive income (refer to Table 2).
3.
Represents losses associated with the early pay-off of mortgage loans for four properties sold during the twelve months ended December 31, 2015 and nine properties sold during the twelve months ended December 30, 2016. Such costs are excluded from gains from disposition of real estate reported in accordance with GAAP. However, we view the losses from early extinguishment of debt associated with the sales of real estate as an incremental cost of the sale transactions because we extinguished the debt in connection with the consummation of the sale transactions and we had no intent to extinguish the debt absent such transactions. We believe that adjusting FFOM to exclude these losses more appropriately reflects the results of our operations exclusive of the impact of our disposition transactions.







Table 4
American Campus Communities, Inc. and Subsidiaries
Wholly-Owned Properties Results of Operations
(unaudited, dollars in thousands)


 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
 
2016
 
2015
 
$ Change
 
% Change
 
2016
 
2015
 
$ Change
 
% Change
Wholly-owned properties revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties
$
150,873

 
$
147,251

 
$
3,622

 
2.5
%
 
$
576,760

 
$
559,390

 
$
17,370

 
3.1
%
New properties
28,812

 
18,097

 
10,715

 
 
 
88,399

 
38,340

 
50,059

 
 
Sold and held for sale properties1
10,510

 
22,720

 
(12,210
)
 
 
 
73,439

 
110,288

 
(36,849
)
 
 
Total revenues2
$
190,195

 
$
188,068

 
$
2,127

 
1.1
%
 
$
738,598

 
$
708,018

 
$
30,580

 
4.3
%
Wholly-owned properties operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties
$
63,878

 
$
62,006

 
$
1,872

 
3.0
%
 
$
264,054

 
$
257,094

 
$
6,960

 
2.7
%
New properties
10,915

 
7,103

 
3,812

 
 
 
36,163

 
20,775

 
15,388

 
 
Sold and held for sale properties1 3
5,328

 
10,055

 
(4,727
)
 
 
 
37,079

 
53,967

 
(16,888
)
 
 
Total operating expenses
$
80,121

 
$
79,164

 
$
957

 
1.2
%
 
$
337,296

 
$
331,836

 
$
5,460

 
1.6
%
Wholly-owned properties net operating income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties
$
86,995

 
$
85,245

 
$
1,750

 
2.1
%
 
$
312,706

 
$
302,296

 
$
10,410

 
3.4
%
New properties
17,897

 
10,994

 
6,903

 
 
 
52,236

 
17,565

 
34,671

 
 
Sold and held for sale properties1
5,182

 
12,665

 
(7,483
)
 
 
 
36,360

 
56,321

 
(19,961
)
 
 
Total net operating income
$
110,074

 
$
108,904

 
$
1,170

 
1.1
%
 
$
401,302

 
$
376,182

 
$
25,120

 
6.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2016 and 2015, which are not conducting or planning to conduct substantial development or redevelopment activities, and are not classified as held for sale as of December 31, 2016.
1. 
Includes 20 properties sold in 2015, along with 21 properties sold during 2016. Also includes one property classified as held for sale as of December 31, 2016.
2. 
Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income.
3. 
Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.






Table 5
American Campus Communities, Inc. and Subsidiaries
2017 Outlook1 
(dollars in thousands, except share and per share data)

 
 
Low
 
High
 
 
 
 
 
Net income
 
$
103,400

 
$
116,500

Noncontrolling interests
 
1,700

 
1,900

Depreciation and amortization
 
211,700

 
211,700

Funds from operations ("FFO")
 
$
316,800

 
$
330,100

 
 
 
 
 
Elimination of operations from on-campus participating properties
 
(11,700
)
 
(12,100
)
Contribution from on-campus participating properties
 
4,100

 
4,700

Contractual executive separation and retirement charges2
 
4,550

 
4,550

Funds from operations - modified ("FFOM")
 
$
313,750

 
$
327,250

 
 
 
 
 
Net income per share - diluted
 
$
0.76

 
$
0.86

 
 
 
 
 
FFO per share - diluted
 
$
2.34

 
$
2.44

 
 
 
 
 
FFOM per share - diluted
 
$
2.32

 
$
2.42

 
 
 
 
 
Weighted-average common shares outstanding - diluted
 
135,500,000

 
135,500,000

 
 
 
 
 

1.
The company believes that the financial results for the fiscal year ending December 31, 2017 may be affected by, among other factors:
national and regional economic trends and events;
the timing of acquisitions and/or dispositions;
interest rate risk;
the timing of commencement 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 contractual executive separation and retirement charges to be incurred with regards to the retirement of the company's Chief Financial Officer, be recognized in the first and second quarter 2017.




CONTACT: American Campus Communities, Inc., Austin
Ryan Dennison, 512-732-1000


(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

ex992q42016supplementala
Supplemental Analyst Package 4Q 2016 February 21, 2017


 
Table of Contents Financial Highlights 1 Consolidated Balance Sheets 2 Consolidated Statements of Comprehensive Income 3 Consolidated Statements of Funds from Operations 4 Wholly-Owned Properties Results of Operations 5 Same Store Wholly-Owned Properties Operating Expenses 6 Seasonality of Operations 7 2017 / 2018 Leasing Status 9 Investment Update 10 Owned Development Update 11 Third-Party Development Update 12 Management Services Update 13 Capital Structure 14 Interest Coverage 15 Capital Allocation – Long Term Funding Plan 16 2017 Outlook - Summary 17 2017 Outlook – Detail 18 Detail of Property Groupings 19 Definitions 20 Investor Information 22


 
Financial Highlights ($ in thousands, except share and per share data) 1 Operating Data Three Months Ended December 31, Year Ended December 31, 2016 2015 $ Change % Change 2016 2015 $ Change % Change Total revenues $ 203,972 $ 202,198 $ 1,774 0.9 % $ 786,361 $ 753,381 $ 32,980 4.4 % Operating income 51,724 53,725 (2,001 ) (3.7 )% 173,143 156,904 16,239 10.3 % Net income attributable to ACC1 25,392 28,359 (2,967 ) (10.5 )% 99,061 115,991 (16,930 ) (14.6 )% Net income per share - basic 0.19 0.25 0.76 1.03 Net income per share - diluted 0.19 0.25 0.75 1.02 Funds From Operations ("FFO")2 77,955 82,626 (4,671 ) (5.7 )% 292,597 271,381 21,216 7.8 % FFO per share - diluted2 0.58 0.72 (0.14 ) (19.4 )% 2.23 2.38 (0.15 ) (6.3 )% Funds From Operations - Modified ("FFOM")2 86,936 79,113 7,823 9.9 % 297,694 269,259 28,435 10.6 % FFOM per share - diluted2 0.65 0.69 (0.04 ) (5.8 )% 2.27 2.36 (0.09 ) (3.8 )% Market Capitalization and Unsecured Notes Covenants3 December 31, 2016 December 31, 2015 Debt to total market capitalization 24.1% 38.2% Net debt to EBITDA4 5.4x 7.4x Unencumbered asset value to total asset value 81.0% 71.3% Total debt to total asset value 31.3% 42.8% Secured debt to total asset value 9.8% 15.4% Unencumbered asset value to unsecured debt 378.2% 260.5% Interest coverage4 4.5x 3.7x 1. Excluding net gains from dispositions of real estate, impairment charges and losses from the early extinguishment of debt, net income attributable to ACC for the three months ended December 31, 2016 and 2015 would have been $39.3 million and $28.4 million, respectively. Excluding net gains from dispositions of real estate, impairment charges and losses from the early extinguishment of debt, net income attributable to ACC for the years ended December 31, 2016 and 2015 would have been $95.6 million and $65.1 million, respectively. 2. Refer to page 4 for a reconciliation to net income, the most directly comparable GAAP measure. 3. Refer to the definitions outlined on pages 20 and 21 for detailed definitions of terms appearing on this page. 4. Refer to calculations on page 15, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.


 
Consolidated Balance Sheets ($ in thousands) 2 December 31, 2016 December 31, 2015 (unaudited) Assets Investments in real estate: Wholly-owned properties, net $ 5,427,014 $ 5,522,271 Wholly-owned properties held for sale 25,350 55,354 On-campus participating properties, net 85,797 90,129 Investments in real estate, net 5,538,161 5,667,754 Cash and cash equivalents 22,140 16,659 Restricted cash 24,817 33,675 Student contracts receivable, net 8,428 18,475 Other assets1 2 272,367 269,685 Total assets $ 5,865,913 $ 6,006,248 Liabilities and equity Liabilities: Secured mortgage, construction and bond debt2 $ 688,195 $ 1,094,962 Unsecured notes2 1,188,737 1,186,700 Unsecured term loans2 149,065 597,719 Unsecured revolving credit facility 99,300 68,900 Accounts payable and accrued expenses 76,614 71,988 Other liabilities3 158,437 144,811 Total liabilities 2,360,348 3,165,080 Redeemable noncontrolling interests 55,078 59,511 Equity: American Campus Communities, Inc. and Subsidiaries stockholders' equity: Common stock 1,322 1,124 Additional paid in capital 4,118,842 3,325,806 Treasury stock (975 ) (403 ) Accumulated earnings and dividends (670,137 ) (550,501 ) Accumulated other comprehensive loss (4,067 ) (5,830 ) Total American Campus Communities, Inc. and 3,444,985 2,770,196 Subsidiaries stockholders' equity Noncontrolling interests - partially owned properties 5,502 11,461 Total equity 3,450,487 2,781,657 Total liabilities and equity $ 5,865,913 $ 6,006,248 1. As of December 31, 2016, other assets include approximately $2.8 million related to net deferred financing costs on our revolving credit facility and the net value of in-place leases. 2. Beginning in 2016, deferred financing costs associated with secured mortgage, construction and bond debt, unsecured notes, and unsecured term loans are subject to new accounting guidance and are presented as a direct reduction to the carrying value of the debt. Prior period amounts have been reclassified to conform to the current period presentation. 3. As of December 31, 2016, other liabilities include approximately $44.4 million in deferred revenue and fee income.


 
Consolidated Statements of Comprehensive Income ($ in thousands, except share and per share data) 3 Three Months Ended December 31, Year Ended December 31, 2016 2015 $ Change 2016 2015 $ Change Revenues (unaudited) (unaudited) Wholly-owned properties $ 189,314 $ 187,268 $ 2,046 $ 735,392 $ 704,909 $ 30,483 On-campus participating properties 10,415 10,117 298 33,433 31,586 1,847 Third-party development properties 677 1,786 (1,109 ) 4,606 4,964 (358 ) Third-party management services 2,685 2,227 458 9,724 8,813 911 Resident services 881 800 81 3,206 3,109 97 Total revenues 203,972 202,198 1,774 786,361 753,381 32,980 Operating expenses Wholly-owned properties 80,121 79,164 957 337,296 331,836 5,460 On-campus participating properties 3,322 3,270 52 13,447 12,437 1,010 Third-party development and management services 3,895 3,792 103 14,533 14,346 187 General and administrative 5,683 5,171 512 22,493 20,838 1,655 Depreciation and amortization 51,901 54,685 (2,784 ) 211,387 208,788 2,599 Ground/facility leases 2,431 2,391 40 9,167 8,232 935 Provision for real estate impairment 4,895 — 4,895 4,895 — 4,895 Total operating expenses 152,248 148,473 3,775 613,218 596,477 16,741 Operating income 51,724 53,725 (2,001 ) 173,143 156,904 16,239 Nonoperating income and (expenses) Interest income 1,455 1,125 330 5,481 4,421 1,060 Interest expense (16,925 ) (24,162 ) 7,237 (78,687 ) (87,789 ) 9,102 Amortization of deferred financing costs (1,282 ) (1,518 ) 236 (6,520 ) (5,550 ) (970 ) Gain from disposition of real estate 3,788 — 3,788 21,197 52,699 (31,502 ) Loss from early extinguishment of debt (12,841 ) — (12,841 ) (12,841 ) (1,770 ) (11,071 ) Other nonoperating income — — — — 388 (388 ) Total nonoperating expense (25,805 ) (24,555 ) (1,250 ) (71,370 ) (37,601 ) (33,769 ) Income before income taxes 25,919 29,170 (3,251 ) 101,773 119,303 (17,530 ) Income tax provision (115 ) (310 ) 195 (1,150 ) (1,242 ) 92 Net income 25,804 28,860 (3,056 ) 100,623 118,061 (17,438 ) Net income attributable to noncontrolling interests (412 ) (501 ) 89 (1,562 ) (2,070 ) 508 Net income attributable to ACC, Inc. and $ 25,392 $ 28,359 $ (2,967 ) $ 99,061 $ 115,991 $ (16,930 ) Subsidiaries common stockholders Other comprehensive income Change in fair value of interest rate swaps and other 1,925 2,907 (982 ) 1,763 464 1,299 Comprehensive income $ 27,317 $ 31,266 $ (3,949 ) $ 100,824 $ 116,455 $ (15,631 ) Net income per share attributable to ACC, Inc. and Subsidiaries common stockholders Basic $ 0.19 $ 0.25 $ 0.76 $ 1.03 Diluted $ 0.19 $ 0.25 $ 0.75 $ 1.02 Weighted-average common shares outstanding Basic 132,175,589 112,343,835 129,228,748 111,987,361 Diluted 132,950,306 113,001,039 130,018,729 114,032,222


 
Consolidated Statements of Funds from Operations (Unaudited, $ in thousands, except share and per share data) 4 1. Represents an impairment charge recorded for The Province - Dayton, a wholly-owned property classified as held for sale as of December 31, 2016. 2. 50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures. Represents actual cash received for the year-to-date periods and amounts accrued for the interim periods, which is included in ground/facility leases expense in the consolidated statements of comprehensive income (refer to page 3). 3. Represents losses associated with the early pay-off of mortgage loans for four properties sold during the twelve months ended December 31, 2015 and nine properties sold during the twelve months ended December 30, 2016. Such costs are excluded from gains from disposition of real estate reported in accordance with GAAP. However, the company views the losses from early extinguishment of debt associated with the sales of real estate as an incremental cost of the sale transactions because we extinguished the debt in connection with the consummation of the sale transactions and had no intent to extinguish the debt absent such transactions. The company believes that adjusting FFOM to exclude these losses more appropriately reflects the results of its operations exclusive of the impact of our disposition transactions. Three Months Ended December 31, Year Ended December 31, 2016 2015 $ Change 2016 2015 $ Change Net income attributable to ACC, Inc. and $ 25,392 $ 28,359 $ (2,967 ) $ 99,061 $ 115,991 $ (16,930 ) Subsidiaries common stockholders Noncontrolling interests 412 501 (89 ) 1,562 2,070 (508 ) Gain from disposition of real estate (3,788 ) — (3,788 ) (21,197 ) (52,699 ) 31,502 Elimination of provision for real estate impairment1 4,895 — 4,895 4,895 — 4,895 Real estate related depreciation and amortization 51,044 53,766 (2,722 ) 208,276 206,019 2,257 Funds from operations ("FFO") attributable to 77,955 82,626 (4,671 ) 292,597 271,381 21,216 common stockholders and OP unitholders Elimination of operations of on-campus participating properties Net income from on-campus participating properties (3,492 ) (3,030 ) (462 ) (5,194 ) (4,236 ) (958 ) Amortization of investment in on-campus participating properties (1,850 ) (1,803 ) (47 ) (7,343 ) (7,034 ) (309 ) 72,613 77,793 (5,180 ) 280,060 260,111 19,949 Modifications to reflect operational performance of on-campus participating properties Our share of net cashflow2 794 853 (59 ) 2,964 3,118 (154 ) Management fees 476 467 9 1,503 1,424 79 Contribution from on-campus participating properties 1,270 1,320 (50 ) 4,467 4,542 (75 ) Property acquisition costs 212 — 212 326 2,836 (2,510 ) Elimination of loss from early extinguishment of debt3 12,841 — 12,841 12,841 1,770 11,071 Funds from operations-modified ("FFOM") attributable to $ 86,936 $ 79,113 $ 7,823 $ 297,694 $ 269,259 $ 28,435 common stockholders and OP unitholders FFO per share - diluted $ 0.58 $ 0.72 $ 2.23 $ 2.38 FFOM per share - diluted $ 0.65 $ 0.69 $ 2.27 $ 2.36 Weighted-average common shares outstanding - diluted 134,120,391 114,513,960 131,340,992 114,141,997


 
Wholly-Owned Properties Results of Operations ($ in thousands) 5 Three Months Ended December 31, Year Ended December 31, 2016 2015 $ Change % Change 2016 2015 $ Change % Change Wholly-owned properties revenues Same store properties $ 150,873 $ 147,251 $ 3,622 2.5 % $ 576,760 $ 559,390 $ 17,370 3.1 % New properties 28,812 18,097 10,715 88,399 38,340 50,059 Sold and held for sale properties1 10,510 22,720 (12,210 ) 73,439 110,288 (36,849 ) Total revenues2 $ 190,195 $ 188,068 $ 2,127 1.1 % $ 738,598 $ 708,018 $ 30,580 4.3 % Wholly-owned properties operating expenses Same store properties3 $ 63,878 $ 62,006 $ 1,872 3.0 % $ 264,054 $ 257,094 $ 6,960 2.7 % New properties 10,915 7,103 3,812 36,163 20,775 15,388 Sold and held for sale properties1 4 5,328 10,055 (4,727 ) 37,079 53,967 (16,888 ) Total operating expenses $ 80,121 $ 79,164 $ 957 1.2 % $ 337,296 $ 331,836 $ 5,460 1.6 % Wholly-owned properties net operating income Same store properties $ 86,995 $ 85,245 $ 1,750 2.1 % $ 312,706 $ 302,296 $ 10,410 3.4 % New properties 17,897 10,994 6,903 52,236 17,565 34,671 Sold and held for sale properties1 5,182 12,665 (7,483 ) 36,360 56,321 (19,961 ) Total net operating income $ 110,074 $ 108,904 $ 1,170 1.1 % $ 401,302 $ 376,182 $ 25,120 6.7 % Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2016 and 2015, which are not conducting or planning to conduct substantial development or redevelopment activities, and are not classified as held for sale as of December 31, 2016. Refer to page 19 for detail of our same store groupings. 1. Includes 20 properties sold in 2015, along with 21 properties sold during 2016, which are disclosed on page 10. Also includes one property classified as held for sale as of December 31, 2016. 2. Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income. 3. See page 6 for detail of same store operating expenses. 4. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.


 
Same Store Wholly-Owned Properties Operating Expenses ($ in thousands, except per bed amounts) 6 Three Months Ended December 31, 2016 2015 Total Per Bed % Change From Prior Year % of Total Operating Expenses Total Per Bed % of Total Operating Expenses General & administrative and other1 $ 14,972 $ 223 2.0 % 24 % $ 14,677 $ 219 24 % Property taxes2 14,188 212 4.1 % 22 % 13,632 204 22 % Utilities3 14,640 219 3.7 % 23 % 14,120 211 23 % Payroll4 11,718 175 (2.3 )% 18 % 11,996 179 19 % Repairs and maintenance5 4,478 67 10.9 % 7 % 4,039 60 7 % Marketing6 2,470 37 16.1 % 4 % 2,128 32 3 % Insurance 1,412 21 (0.1 )% 2 % 1,414 21 2 % Total same store wholly-owned operating expenses $ 63,878 $ 954 3.0 % 100 % $ 62,006 $ 926 100 % Same store wholly-owned beds 66,993 Year Ended December 31, 2016 2015 Total Per Bed % Change From Prior Year % of Total Operating Expenses Total Per Bed % of Total Operating Expenses General & administrative and other1 $ 58,575 $ 874 3.4 % 22 % $ 56,637 $ 846 22 % Property taxes2 57,865 864 5.3 % 22 % 54,953 820 21 % Utilities3 56,651 846 2.3 % 21 % 55,379 827 22 % Payroll4 50,774 758 0.0 % 19 % 50,797 758 20 % Repairs and maintenance5 25,334 378 1.1 % 10 % 25,065 374 10 % Marketing6 9,303 139 10.3 % 4 % 8,434 126 3 % Insurance 5,552 83 (4.8 )% 2 % 5,829 87 2 % Total same store wholly-owned operating expenses $ 264,054 $ 3,942 2.7 % 100 % $ 257,094 $ 3,838 100 % Same store wholly-owned beds 66,993 Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2016 and 2015, which are not conducting or planning to conduct substantial development or redevelopment activities, and are not classified as held for sale as of December 31, 2016. Refer to page 19 for detail of our same store groupings. 1. Includes security costs, shuttle costs, and property-level general and administrative costs as well as an allocation of costs related to corporate management and oversight. Also includes acquisition integration costs, bad debt, food service, and other miscellaneous expenses. 2. The increase over the prior year is primarily due to additional property tax expense resulting from higher than anticipated property tax assessments in various markets. 3. Represents gross expenses prior to any recoveries from tenants, which are reflected in wholly-owned properties revenues. 4. Includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff. 5. Includes general maintenance costs such as interior painting, routine landscaping, pest control, fire protection, snow removal, elevator maintenance, roof and parking lot repairs, and other miscellaneous building repair costs. Also includes costs related to the annual turn process. The increase over the prior year three month period is primarily attributable to non-routine occurrences at certain properties. 6. Includes costs related to property marketing campaigns associated with our ongoing leasing efforts. The increase over the prior year is primarily related to fourth quarter 2016 marketing activities designed to drive leasing velocity for the upcoming 2017/2018 academic year.


 
Seasonality of Operations ($ in thousands, except per bed amounts) 7 Three Months Ended Total/Weighted Average- December 31, 2015 March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Last 12 Months 2016 same store properties Revenue per occupied bed Rental revenue per occupied bed per month $ 692 $ 691 $ 676 $ 688 $ 714 $ 693 Other income per occupied bed per month1 55 54 65 84 55 64 Total revenue per occupied bed $ 747 $ 745 $ 741 $ 772 $ 769 $ 757 Average number of owned beds 66,993 66,993 66,993 66,993 66,993 66,993 Average physical occupancy for the quarter 98.1 % 97.6 % 92.0 % 92.0 % 97.6 % 94.8 % Total revenue $ 147,251 $ 146,117 $ 137,097 $ 142,673 $ 150,873 $ 576,760 Property operating expenses 62,006 61,515 61,570 77,091 63,878 264,054 Net operating income $ 85,245 $ 84,602 $ 75,527 $ 65,582 $ 86,995 $ 312,706 Operating margin 57.9 % 57.9 % 55.1 % 46.0 % 57.7 % 54.2 % 2016 new properties Revenue per occupied bed Rental revenue per occupied bed per month $ 787 $ 784 $ 785 $ 789 $ 805 $ 792 Other income per occupied bed per month1 74 71 69 80 66 71 Total revenue per occupied bed $ 861 $ 855 $ 854 $ 869 $ 871 $ 863 Average number of owned beds 7,738 7,738 7,738 9,648 11,613 9,184 Average physical occupancy for the quarter 90.5 % 91.7 % 91.9 % 92.1 % 95.0 % 92.9 % Total revenue $ 18,097 $ 18,195 $ 18,223 $ 23,169 $ 28,812 $ 88,399 Property operating expenses 7,103 7,114 6,928 11,206 10,915 36,163 Net operating income $ 10,994 $ 11,081 $ 11,295 $ 11,963 $ 17,897 $ 52,236 Operating margin 60.8 % 60.9 % 62.0 % 51.6 % 62.1 % 59.1 % ALL PROPERTIES Revenue per occupied bed Rental revenue per occupied bed per month $ 702 $ 700 $ 687 $ 700 $ 728 $ 704 Other income per occupied bed per month1 56 56 66 84 56 65 Total revenue per occupied bed $ 758 $ 756 $ 753 $ 784 $ 784 $ 769 Average number of owned beds 74,731 74,731 74,731 76,641 78,606 76,177 Average physical occupancy for the quarter 97.3 % 97.0 % 92.0 % 92.0 % 97.2 % 94.6 % Total revenue $ 165,348 $ 164,312 $ 155,320 $ 165,842 $ 179,685 $ 665,159 Property operating expenses 69,109 68,629 68,498 88,297 74,793 300,217 Net operating income $ 96,239 $ 95,683 $ 86,822 $ 77,545 $ 104,892 $ 364,942 Operating margin 58.2 % 58.2 % 55.9 % 46.8 % 58.4 % 54.9 % Sold and held for sale properties2 Total revenue $ 22,720 $ 22,192 $ 20,075 $ 20,662 $ 10,510 $ 73,439 Property operating expenses3 10,055 10,222 9,224 12,305 5,328 37,079 Net operating income $ 12,665 $ 11,970 $ 10,851 $ 8,357 $ 5,182 $ 36,360 Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2016 and 2015, which are not conducting or planning to conduct substantial development or redevelopment activities, and are not classified as held for sale as of December 31, 2016. Refer to page 19 for detail of our same store groupings. 1. Other income is all income other than Net Student Rent. This includes, but is not limited to, utility income, damages, parking income, summer conference rent, application and administration fees, income from retail tenants, etc. 2. Includes 21 properties sold during 2016, which are disclosed on page 10. Also includes one property classified as held for sale as of December 31, 2016. 3. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.


 
Seasonality of Operations - Build-up to 2017 Same Store Grouping ($ in thousands, except per bed amounts) 8 Three Months Ended Total/Weighted Average- March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Last 12 Months 2016 same store properties1 Revenue per occupied bed Rental revenue per occupied bed per month $ 691 $ 676 $ 688 $ 714 $ 693 Other income per occupied bed per month2 54 65 84 55 64 Total revenue per occupied bed $ 745 $ 741 $ 772 $ 769 $ 757 Average number of owned beds 66,993 66,993 66,993 66,993 66,993 Average physical occupancy for the quarter 97.6 % 92.0 % 92.0 % 97.6 % 94.8 % Total revenue $ 146,117 $ 137,097 $ 142,673 $ 150,873 $ 576,760 Property operating expenses 61,515 61,570 77,091 63,878 264,054 Net operating income $ 84,602 $ 75,527 $ 65,582 $ 86,995 $ 312,706 Operating margin 57.9 % 55.1 % 46.0 % 57.7 % 54.2 % 2017 new same store properties3 Revenue per occupied bed Rental revenue per occupied bed per month $ 784 $ 785 $ 787 $ 813 $ 793 Other income per occupied bed per month2 67 68 89 77 75 Total revenue per occupied bed $ 851 $ 853 $ 876 $ 890 $ 868 Average number of owned beds 7,738 7,738 7,738 7,738 7,738 Average physical occupancy for the quarter 91.7 % 91.9 % 93.3 % 96.0 % 93.2 % Total revenue $ 18,108 $ 18,205 $ 18,982 $ 19,833 $ 75,128 Property operating expenses 7,041 6,843 8,967 7,667 30,518 Net operating income $ 11,067 $ 11,362 $ 10,015 $ 12,166 $ 44,610 Operating margin 61.1 % 62.4 % 52.8 % 61.3 % 59.4 % 2017 SAME STORE PROPERTIES Revenue per occupied bed Rental revenue per occupied bed per month $ 700 $ 687 $ 698 $ 725 $ 703 Other income per occupied bed per month2 55 66 85 57 65 Total revenue per occupied bed $ 755 $ 753 $ 783 $ 782 $ 768 Average number of owned beds 74,731 74,731 74,731 74,731 74,731 Average physical occupancy for the quarter 97.0 % 92.0 % 92.1 % 97.4 % 94.6 % Total revenue $ 164,225 $ 155,302 $ 161,655 $ 170,706 $ 651,888 Property operating expenses 68,556 68,413 86,058 71,545 294,572 Net operating income $ 95,669 $ 86,889 $ 75,597 $ 99,161 $ 357,316 Operating margin 58.3 % 55.9 % 46.8 % 58.1 % 54.8 % Note: The purpose of the table above is to provide a build-up to the 2017 same store property grouping. Refer to page 19 for detail of our same store groupings. 1. This section presents operating results for the 2016 same store properties from page 7. 2. Other income is all income other than Net Student Rent. This includes, but is not limited to, utility income, damages, parking income, summer conference rent, application and administration fees, income from retail tenants, etc. 3. Includes twelve properties opened, acquired or renovated in 2015 that will become part of the same store grouping for 2017.


 
2017 / 2018 Leasing Status 9 Current Year Prior Year Applications + Rentable % of Rentable % of Rentable Design Final Fall 2016 Applications + Leases Leases1 Beds2 Beds Beds Beds Occupancy3 2018 Same Store Wholly-owned Properties Final Fall 2016 occupancy of 98% or greater 39,364 53,033 74.2% 73.1% 53,154 99.8% Final Fall 2016 occupancy between 95% and 98% 4,882 9,057 53.9% 51.6% 9,086 96.9% Final Fall 2016 occupancy less than 95% 7,697 16,282 47.3% 40.5% 16,391 88.5% Total 2018 Same Store Wholly-owned Properties 51,943 78,372 66.3% 64.0%4 78,631 97.1% New Wholly-owned Properties5 3,116 7,383 42.2% n/a 7,454 n/a Total - Wholly-owned Properties 55,059 85,755 64.2% n/a 86,085 n/a Current Year Prior Year Initial Current Rentable % of Rentable % of Rentable Design Final Fall 2016 Projected Rate Projected Rate Leases Leases1 Beds2 Beds Beds Beds Occupancy3 Increase Increase6 2018 Same Store Wholly-owned Properties Final Fall 2016 occupancy of 98% or greater 36,025 53,033 67.9% 67.7% 53,154 99.8% Final Fall 2016 occupancy between 95% and 98% 4,574 9,057 50.5% 49.0% 9,086 96.9% Final Fall 2016 occupancy less than 95% 6,427 16,282 39.5% 37.0% 16,391 88.5% Total 2018 Same Store Wholly-owned Properties 47,026 78,372 60.0% 59.3%4 78,631 97.1% 2.9% 2.9% New Wholly-owned Properties5 2,453 7,383 33.2% n/a 7,454 n/a n/a n/a Total - Wholly-owned Properties 49,479 85,755 57.7% n/a 86,085 n/a 2.9% 2.9% Note: The same store grouping presented above for purposes of disclosing the pre-leasing status for the upcoming 2017/2018 academic year represents properties that will be classified as same store properties in 2018. Refer to page 19 for detail of our same store groupings. 1. As of February 17, 2017 for current year and February 17, 2016 for prior year. 2. Rentable beds exclude beds needed for on-site staff. 3. As of September 30, 2016. 4. Properties not owned or under ACC management during the prior year, or properties whose leasing progress is not comparable to the prior year as a result of plans to renovate or redevelop the property, are excluded for purposes of calculating the prior year percentage of rentable beds. 5. Properties currently under construction with an anticipated delivery date of Fall 2018 are not included because these properties will not begin undertaking leasing activities until Fall 2017. 6. Projected rate increase reflects projected rental rates anticipated to be achieved through the end of the company's leasing cycle, up to targeted occupancy.


 
Investment Update ($ in thousands) 10 ACQUISITIONS Assumed Project Location Primary University Served Beds Closing Date Purchase Price Mortgage Debt University Crossings Charlotte, NC University of North Carolina 546 August 31, 2016 $ — U Point Syracuse, NY Syracuse University 163 October 13, 2016 — 709 $ 63,100 $ — DISPOSITIONS Outstanding Project Location Primary University Served Beds Closing Date Sales Price Mortgage Debt The Edge Orlando, FL University of Central Florida 930 March 11, 2016 $ — University Village Sacramento, CA California State University 394 March 24, 2016 — 1,324 $ 73,800 $ — Portfolio Disposition Abbott Place East Lansing, MI Michigan State University 654 November 15, 2016 — Burbank Commons Baton Rouge, LA Louisiana State University 532 November 15, 2016 — Campus Corner Bloomington, IN Indiana University 796 November 15, 2016 — Campus Way Tuscaloosa, AL University of Alabama 680 November 15, 2016 — Forest Village and Woodlake Columbia, MO University of Missouri 704 November 15, 2016 — Garnet River Walk West Columbia, SC University of South Carolina 476 November 15, 2016 16,586 Grindstone Canyon Columbia, MO University of Missouri 384 November 15, 2016 13,700 Lions Crossing State College, PA Penn State University 696 November 15, 2016 — Nittany Crossing State College, PA Penn State University 684 November 15, 2016 — Pirates Place Townhomes Greenville, NC East Carolina University 528 November 15, 2016 4,020 The Centre Kalamazoo, MI Western Michigan University 700 November 15, 2016 19,875 The Cottages of Baton Rouge Baton Rouge, LA Louisiana State University 1,290 November 15, 2016 62,158 The Cottages of Columbia Columbia, MO University of Missouri 513 November 15, 2016 19,341 U Club Cottages Baton Rouge, LA Louisiana State University 308 November 15, 2016 15,336 University Club & The Grove1 Tallahassee, FL Florida State University 736 November 15, 2016 — University Crescent Baton Rouge, LA Louisiana State University 612 November 15, 2016 24,150 University Heights Birmingham, AL University of Alabama at Birmingham 528 November 15, 2016 — University Manor Greenville, NC East Carolina University 600 November 15, 2016 — University Oaks Columbia, SC University of South Carolina 662 November 15, 2016 22,150 12,083 $ 508,000 $ 197,316 TOTAL DISPOSITIONS 13,407 $ 581,800 $ 197,316 HELD FOR SALE2 Anticipated Project Location Primary University Served Beds Closing Date3 The Province - Dayton Dayton, OH Wright State University 657 Q2 2017 1. Property consists of two phases. 2. This property has met all necessary criteria required to be classified as held for sale under generally accepted accounting principles (GAAP) as of December 31, 2016. Concurrent with this classification this property was recorded at the lower of cost or fair value less estimated selling costs which resulted in an impairment charge of $4.9 million. The net book value of this property is included in wholly-owned properties held for sale on the consolidated balance sheet as of December 31, 2016 (refer to page 2). 3. The closing of the transaction is subject to the satisfaction of various contingencies and closing conditions.


 
Owned Development Update ($ in thousands) 11 OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION As of December 31, 2016 Project Estimated Land and Total Costs Scheduled Project Location Primary University Served Type Beds Project Cost1 CIP2 Other3 Incurred Completion Arizona State Univ. Res. Hall Tempe, AZ Arizona State University ACE 1,594 $ 107,800 $ 67,725 $ 1,048 $ 68,773 August 2017 Sky View Flagstaff, AZ Northern Arizona University ACE 626 56,600 31,189 610 31,799 August 2017 University Square Prairie View, TX Prairie View A&M University ACE 466 26,800 14,778 284 15,062 August 2017 U Centre on Turner Columbia, MO University of Missouri Off-campus 718 69,100 36,036 14,675 50,711 August 2017 U Pointe on Speight Waco, TX Baylor University Off-campus 700 49,800 22,543 5,156 27,699 August 2017 21Hundred @ Overton Park Lubbock, TX Texas Tech University Off-campus 1,204 81,600 43,781 17,722 61,503 August 2017 Suites at 3rd Champaign, IL University of Illinois Off-campus 251 25,000 10,395 996 11,391 August 2017 U Club Binghamton Phase II Binghamton, NY SUNY Binghamton University Off-campus 562 55,800 23,407 12,622 36,029 August 2017 Callaway House Apartments Norman, OK University of Oklahoma Off-campus 915 89,100 39,490 13,314 52,804 August 2017 U Centre on College Clemson, SC Clemson University Off-campus 418 41,500 25,408 275 25,683 August 2017 SUBTOTAL - 2017 DELIVERIES 7,454 $ 603,100 $ 314,752 $ 66,702 $ 381,454 Virginia Commonwealth Univ. Richmond, VA Virginia Commonwealth Univ. ACE 1,524 $ 95,700 $ 14,020 $ — $ 14,020 August 2018 Schwitzer Hall Indianapolis, IN Butler University ACE 648 38,900 2,416 — 2,416 August 2018 Greek Leadership Village Tempe, AZ Arizona State University ACE 957 69,600 — 3,107 3,107 August 2018 Bancroft Residence Hall Berkeley, CA University of California, Berkeley ACE 781 98,700 11,286 — 11,286 August 2018 U Club Townhomes Oxford, MS University of Mississippi Off-campus 528 44,300 — 5,883 5,883 August 2018 SUBTOTAL - 2018 DELIVERIES 4,438 $ 347,200 $ 27,722 $ 8,990 $ 36,712 Columbus Avenue Student Apts. Boston, MA Northeastern University ACE 825 $ 153,400 $ — $ 3,868 $ 3,868 August 2019 SUBTOTAL - 2019 DELIVERIES 825 $ 153,400 $ — $ 3,868 $ 3,868 PRESALE DEVELOPMENT PROJECT UNDER CONSTRUCTION As of December 31, 2016 Project Estimated Land and Total Costs Scheduled Project Location Primary University Served Type Beds Project Cost CIP2 Other3 Incurred Completion The Edge - Stadium Centre4 Tallahassee, FL Florida State University Off-campus 412 $ 42,600 $ 1,934 $ 400 $ 2,334 August 2018 OWNED DEVELOPMENT PIPELINE5 Project Anticipated Approx. Estimated Targeted Project Location Primary University Served Type Commencement Targeted Beds Project Cost1 6 Completion Carbondale Development Carbondale, IL Southern Illinois University Off-campus TBD 650 $ 32,000 TBD 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. The 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”) balance above excludes $5.1 million related to ongoing renovation projects at operating properties. 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. In December 2016, the company entered into a pre-sale agreement to purchase The Edge - Stadium Centre, a property which will be completed in August 2018. 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 is including this property in its consolidated financial statements. Estimated project cost includes purchase price, elected upgrades and transaction costs. 5. Does not include undeveloped land parcels in seven university markets totaling $34.6 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 $4.1 million incurred as of December 31, 2016 for owned development pipeline projects.


 
Third-Party Development Update ($ in thousands) 12 Three Months Ended December 31, Year Ended December 31, 2016 2015 $ Change 2016 2015 $ Change Development services revenue $ 677 $ 1,786 $ (1,109 ) $ 4,606 $ 4,964 $ (358 ) % of total revenue 0.3 % 0.9 % 0.6 % 0.7 % RECENTLY COMPLETED PROJECTS Project Location Primary University Served Beds Total Fees Completed Oregon State Univ. Cascades Bend, OR Oregon State University 340 $ 1,900 December 2016 CONTRACTED PROJECTS IN PROGRESS Fees Earned Fees Remaining Fees as of Earned in as of Scheduled Project Location Primary University Served Beds Total Fees December 31, 2016 Current Year December 31, 2016 Completion Momentum Village Phase II Corpus Christi, TX Texas A&M University Corpus Christi 560 $ 2,300 $ 1,580 $ 1,580 $ 720 August 2017 Esperanza Hall San Antonio, TX Texas A&M University San Antonio 382 1,100 735 735 365 August 2017 942 $ 3,400 $ 2,315 $ 2,315 $ 1,085 1. 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. 2. Under the terms of a Consultant Agreement, and with the consent of the University’s Board of Regents, the company will earn fees for the performance of advisory services related to a not-for-profit entity’s purchase of a 1,790-bed apartment community for the benefit of the University. ON-CAMPUS AWARD PIPELINE1 Anticipated Anticipated Targeted Estimated Project Location Financing Structure Commencement Completion Fees Texas A&M University Corpus Christi2 Corpus Christi, TX Third-party n/a 2017/2018 $1,400 Louisville Village Site Louisville, KY ACE TBD Fall 2019 n/a Northern Kentucky University Highland Heights, KY Third-party Q4 2017/Q1 2018 Fall 2019 TBD La Salle University Philadelphia, PA Third-party TBD TBD TBD


 
Management Services Update ($ in thousands) 13 Three Months Ended December 31, Year Ended December 31, 2016 2015 $ Change 2016 2015 $ Change Management services revenue $ 2,685 $ 2,227 $ 458 $ 9,724 $ 8,813 $ 911 % of total revenue 1.3 % 1.1 % 1.2 % 1.2 % NEW / PENDING MANAGEMENT CONTRACTS Actual or Approximate Stabilized Anticipated Project Location Primary University Served Beds Annual Fees1 Commencement The Nest Chicago, IL Northeastern Illinois University 440 $ 170 August 2016 Garden Village2 Berkeley, CA University of California, Berkeley 236 120 August 2016 Centennial Place Toronto, Canada Centennial College 742 170 September 2016 Collegeview Commons3 Ontario, Canada Conestoga College 487 50 September 2016 Parkside Toronto, Canada Ryerson University 597 173 November 2016 Saban Real Estate Group4 Various Various 7,060 284 November 2016 Momentum Village Phase II Corpus Christi, TX Texas A&M University Corpus Christi 560 180 August 2017 Esperanza Hall San Antonio, TX Texas A&M University San Antonio 382 100 August 2017 Collegeview Commons Phase II Ontario, Canada Conestoga College 513 50 September 2017 CampusOne5 Toronto, Canada University of Toronto 892 291 September 2017 Texas A&M University Corpus Christi Corpus Christi, TX Texas A&M University Corpus Christi 1790 480 2017/2018 13,699 $ 2,068 DISCONTINUED MANAGEMENT CONTRACTS 2016 Fee Contribution Prior to Project Location Primary University Served Beds Termination Discontinued As Of 3170 & 3190 Donnelly Windsor, Ontario University of Windsor 117 $ 4 April 2016 675 Richmond London, Ontario University of Western Ontario 451 16 April 2016 West Village Suites Hamilton, Ontario McMaster University 449 45 July 2016 The Luxe Waterloo, Ontario University of Waterloo 955 92 July 2016 Village Suites Oshawa, Ontario Durham College 588 51 July 2016 Centennial Toronto, Canada Centennial College 368 42 September 2016 2,928 $ 250 1. Stabilized annual fees are dependent upon the achievement of anticipated occupancy levels. 2. The stabilized annual fee amount does not include an initial operations fee of $40,000 earned in August 2016. Subsequent to August 2016, the stabilized annual fee will be approximately $120,000 per year. 3. The stabilized annual fee amount does not include an initial operations fee of $90,000 earned from December 2015 through August 2016. Subsequent to August 2016, the stabilized annual fee will be approximately $50,000 per year. 4. In November 2016, the company sold a portfolio of 19 properties to Saban Real Estate Group. Refer to page 10 for disposition details. The company will continue to manage 11 of the properties during a transition period subsequent to the sale for up to five months. The stabilized annual fee amount does not include management fees of $220,000 earned in Q4 2016. The company anticipates management fees of approximately $284,000 to be earned during Q1 2017 after which the transition period will conclude. 5. The stabilized annual fee amount does not include an initial operations fee of $60,000 earned from February 2017 through August 2017. Subsequent to August 2017, the stabilized annual fee will be approximately $291,000 per year.


 
Capital Structure as of December 31, 2016 ($ in millions, except per share data) 14 Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule Total Debt1 $ 2,114 Total Equity Market Value2 6,674 Total Market Capitalization $ 8,788 Debt to Total Market Capitalization 24.1% Net Debt to EBITDA3 5.4x Total Asset Value4 $ 6,766 Unencumbered Asset Value $ 5,482 Unencumbered Asset Value to Total Asset Value 81.0% Requirement Current Ratio Total Debt to Total Asset Value ≤ 60% 31.3% Secured Debt to Total Asset Value ≤ 40% 9.8% Unencumbered Asset Value to Unsecured Debt > 150% 378.2% Interest Coverage3 > 1.5x 4.5x Weighted Average Principal Average Term To Outstanding Interest Rate Maturity Fixed Rate Mortgage Loans $ 560 4.8%5 4.2 Yrs Unsecured Revolving Credit Facility6 99 2.0% 1.2 Yrs Unsecured Term Loans7 150 2.0% 4.1 Yrs Unsecured Notes 1,200 3.8% 5.8 Yrs On-Campus Participating Properties 105 5.1% 15.3 Yrs Total/Weighted Average $ 2,114 3.9% 5.5 Yrs Variable Rate Debt as % of Total Debt8 4.7 % Note – refer to the definitions outlined on pages 20 and 21 for detailed definitions of terms appearing on this page. 1. Excludes net unamortized debt premiums related to mortgage loans assumed in connection with acquisitions of $26.8 million, unamortized original issue discount on unsecured notes of $1.9 million, and unamortized deferred financing costs of $14.1 million. 2. Based on share price of $49.77 and fully diluted share count of 134,105,233 as of December 31, 2016. Assumes conversion of 1,106,644 common and preferred Operating Partnership units and 773,101 unvested restricted stock awards. 3. Refer to calculations on page 15, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures. 4. Excludes accumulated depreciation of $941.2 million and receivables and intangible assets, net of accumulated amortization, of $41.2 million. 5. Including the amortization of net debt premiums related to mortgage loans assumed in connection with property acquisitions, the effective interest rate for fixed rate mortgage loans is 3.5%. 6. In January 2017, the company amended and extended its senior unsecured revolving credit facility, increasing the facility from $500 million to $700 million and extending the maturity date from March 2018 to March 2022.The amended facility has an accordion feature that allows the company to expand the facility by up to an additional $500 million, subject to the satisfaction of certain conditions. 7. In November 2016, the company repaid the $200 million term loan maturing January 2017 using proceeds from the sale of a 19-property portfolio. Refer to page 10 for disposition details. 8. As of December 31, 2016, the company’s variable rate debt consisted of the unsecured revolving credit facility as the company’s $150 million term loan maturing March 2021 was subject to an interest rate swap. In January 2017 the interest rate swap expired and the company’s term loan became classified as variable rate debt. Weighted Average Interest Rate Of Debt Maturing Each Year Fixed Rate Mortgage Loans 6.3% 4.2% - 5.6% 5.2% 4.0% - 4.5% - 3.7% Total Debt 6.3% 3.3% - 3.6% 3.9% 4.0% 3.9% 4.3% 7.6% 3.9% +


 
Interest Coverage ($ in thousands) 15 Three Months Ended March 31, June 30, September 30, December 31, Last Twelve 2016 2016 2016 2016 Months Net income attributable to ACC, Inc. and Subsidiaries common stockholders $ 45,587 $ 18,438 $ 9,644 $ 25,392 $ 99,061 Net income attributable to noncontrolling interests 622 327 201 412 1,562 Interest expense 22,627 20,119 19,016 16,925 78,687 Income tax provision 345 345 345 115 1,150 Depreciation and amortization 53,716 53,703 52,067 51,901 211,387 Amortization of deferred financing costs 2,542 1,352 1,344 1,282 6,520 Share-based compensation 2,651 2,842 2,328 2,222 10,043 Provision for real estate impairment — — — 4,895 4,895 Loss on early extinguishment of debt — — — 12,841 12,841 Gain from disposition of real estate (17,409 ) — — (3,788 ) (21,197 ) Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") $ 110,681 $ 97,126 $ 84,945 $ 112,197 $ 404,949 Pro-forma adjustments to EBITDA1 (19,279 ) Adjusted EBITDA $ 385,670 Interest Expense from consolidated statement of comprehensive income $ 22,627 $ 20,119 $ 19,016 $ 16,925 $ 78,687 Amortization of mortgage debt premiums/discounts 3,236 3,188 3,104 2,454 11,982 Capitalized interest 2,090 3,565 3,301 3,302 12,258 Change in accrued interest payable 4,884 (4,275 ) (1,778 ) 3,320 2,151 Cash Interest Expense $ 32,837 $ 22,597 $ 23,643 $ 26,001 $ 105,078 Pro-forma adjustments to Cash Interest Expense1 (19,741 ) Adjusted Interest Expense $ 85,337 Interest Coverage 4.5x Note: refer to the definitions outlined on pages 20 and 21 for detailed definitions of terms appearing on this page. 1. Adjustment to reflect all acquisitions, development deliveries, dispositions, debt repayments and debt refinancings as if such transactions had occurred on the first day of the 12 month period presented.


 
Capital Allocation – Long Term Funding Plan ($ in millions) 16 Sources and Uses for Development - As of December 31, 2016 Estimated Development Capital Uses: Estimated Project Total Costs Remaining Development Pipeline1 Cost Incurred Capital Needs 2017 Developments Underway $ 603 $ 381 $ 222 2018 Developments Underway or Expected to Start in Current Year2 390 39 351 2019 Developments Underway or Expected to Start in Current Year 153 4 149 Total $ 1,146 $ 424 $ 722 Estimated Sources: Capital Sources Cash and Cash Equivalents $ 22 Estimated Cash Flow Available for Investment - through 20193 147 Equity Raised via ATM subsequent to December 31, 2016, to-date 52 Remaining Capital Needs4 501 Total $ 722 Selected Credit Metrics5 Credit Metric: December 31, 2016 Pro Forma6 Total Debt to Total Asset Value 31.3% 28.3% - 35.0% Net Debt to EBITDA7 5.4x 4.5x - 5.7x 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, free cash available for investment, and capital market transactions. 1. Includes development 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 page 11. 2. Includes the pre-sale development project disclosed on page 11. 3. Available cash flow is derived from disclosures in our 2015 Form 10-K and is calculated as net cash provided by operating activities of $261.0 million less dividend payments of $178.5 million, less principal payments on debt of $14.5 million, less recurring capital expenditures of $19.4 million. Calculation results in available cash flow for investment in 2015 of $49.0 million, which is then annualized over the remaining 12 quarters through the end of 2019. 4. Remaining capital needs are expected to come from a mix of debt, equity, and dispositions, including the proceeds from the sale of one property classified as held for sale as of December 31, 2016, which is anticipated to close in Q2 2017. 5. Refer to definitions outlined on pages 20 and 21 for detailed definitions of terms appearing on this page. 6. 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 and ultimate mix of sources from debt, equity, or dispositions. 7. Refer to page 15 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure.


 
2017 Outlook - Summary1 ($ in thousands, except share and per-share data) 17 Low High Net income $ 103,400 $ 116,500 Noncontrolling interests 1,700 1,900 Depreciation and amortization 211,700 211,700 Funds from operations ("FFO") $ 316,800 $ 330,100 Elimination of operations from on-campus participating properties (11,700 ) (12,100 ) Contribution from on-campus participating properties 4,100 4,700 Contractual executive separation and retirement charges2 4,550 4,550 Funds from operations - modified ("FFOM") $ 313,750 $ 327,250 Net income per share - diluted $ 0.76 $ 0.86 FFO per share - diluted $ 2.34 $ 2.44 FFOM per share - diluted $ 2.32 $ 2.42 Weighted-average common shares outstanding - diluted 135,500,000 135,500,000 1. The company believes that the financial results for the fiscal year ending December 31, 2017 may be affected by, among other factors: • national and regional economic trends and events; • the timing of acquisitions and/or dispositions; • interest rate risk; • the timing of commencement 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 contractual executive separation and retirement charges to be incurred with regards to the retirement of the company's Chief Financial Officer, to be recognized in the first and second quarter 2017.


 
2017 Outlook – Detail ($ in thousands, except share and per share data) 18 1. Refer to page 19 for detail of the 2017 same store and new property groupings. 2. Includes one property classified as held for sale as of December 31, 2016 that is anticipated to close in Q2 of 2017. See page 10. 3. Net of capitalized interest and excluding on-campus participating properties. The 2017 guidance ranges assume a $400 million fourth quarter bond offering. 4. Excludes on-campus participating properties. 5. Represents contractual executive separation and retirement charges to be incurred with regards to the retirement of the company's Chief Financial Officer, to be recognized in the first and second quarter 2017. Components of 2017 Property Net Operating Income Third-party Services Low High % Change From 2016 Low High Wholly-owned properties Third-party development services revenue $ 6,200 $ 9,600 2017 same store properties1 Third-party management services revenue $ 9,600 $ 10,400 Revenue $ 669,100 $ 673,800 2.6% - 3.4% Third-party development and mgmt. services expenses $ 15,000 $ 15,500 Operating expenses (299,100 ) (297,600 ) 1.5% - 1.0% Net operating income 370,000 376,200 3.6% - 5.3% Corporate Expenses and Other 2017 new properties net operating income1 34,400 35,500 Low High 2017 speculative dispositions net operating income2 600 600 Net income: Total wholly-owned properties net operating income $ 405,000 $ 412,300 General and administrative expenses $ 27,400 $ 27,800 Ground/facility leases expense: ACE properties $ 6,900 $ 6,900 2017 Property Net Operating Income Guidance Assumptions On-campus participating properties 2,700 3,100 Low High Timing Total ground/facility leases expense $ 9,600 $ 10,000 AY 2017/2018 final leasing results - occupancy 96.55% 98.75% Fall 2017 Interest income $ 4,100 $ 5,000 AY 2017/2018 final leasing results - rental rate 3.15% 2.65% Fall 2017 Interest expense3 $ 60,600 $ 59,500 Development Deliveries $ 603,100 $ 603,100 See page 11 Capitalized interest $ 16,400 $ 16,300 Amortization of deferred financing costs4 $ 4,000 $ 4,000 Income tax provision $ 1,100 $ 1,100 FFOM: Corporate depreciation $ 3,600 $ 3,200 Contribution from on-campus participating properties $ 4,100 $ 4,700 Contractual executive separation and retirement charges5 $ 4,550 $ 4,550


 
Detail of Property Groupings As of December 31, 2016 19 2016 Grouping 2017 Grouping 2018 Grouping Same Store Properties New Properties Same Store Properties New Properties Same Store Properties New Properties # of Design # of Design # of Design # of Design # of Design # of Design Properties Beds Properties Beds Properties Beds Properties Beds Properties Beds Properties Beds Properties Purchased or Developed Prior to January 1, 2015 113 66,993 113 66,993 113 66,993 2015 Acquisition Properties 7 3,535 7 3,535 7 3,535 2015 Development Deliveries 4 3,187 4 3,187 4 3,187 2015 Redevelopment Property 1 1,016 1 1,016 1 1,016 2016 Development Deliveries 7 3,191 7 3,191 7 3,191 2016 Acquisition Properties 2 709 2 709 2 709 2017 Development Deliveries 10 7,454 10 7,454 10 7,454 2018 Development Deliveries 4 3,365 4 3,365 4 3,365 Total Wholly-owned Properties 113 66,993 35 22,457 125 74,731 23 14,719 134 78,631 14 10,819 Total # Held for Sale Wholly-owned Properties 1 Total Held for Sale Wholly-owned Design Beds 657 Grand Total # of Wholly-owned Properties (All Groupings) 149 Grand Total Wholly-owned Design Beds (All Groupings) 90,107 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. 2016: The 2016 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2016 and 2015. This same store grouping is used for purposes of presenting our 2016 same store operating results. 2017: The 2017 same store grouping represents properties that will be owned and operating for both of the entire calendar years ended December 31, 2017 and 2016. This same store grouping will be used for purposes of presenting our 2017 same store operating results. 2018: The 2018 same store grouping represents properties that will be 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 and our leasing status updates for the 2017/2018 academic year.


 
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 wholly-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 bond covenants and other key ratios. 20


 
Definitions GAAP Accounting principles generally accepted in the United States of America. Interest Coverage* Adjusted EBITDA / Adjusted Interest Expense. Net Debt* Total Debt less Cash. Net Debt to EBITDA* Net Debt divided by Adjusted EBITDA. Net Operating Income “NOI” Property revenues less direct property operating expenses, excluding depreciation, but including allocated corporate general and administrative expenses. On-campus Participating Properties A transaction structure whereby the company enters into long-term ground/facility lease agreements with Universities to develop, construct, and operate student housing communities. Under the terms of the leases, title to the constructed facilities is held by the University/lessor and such lessor receives 50% of net cash flows, as defined, on an annual basis through the term of the lease. Physical Occupancy Occupied beds, including staff accommodations, divided by Design Beds. Rentable Beds Design beds less beds used by on-site staff. Same Store Grouping Wholly-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 activities, and are not classified as held for sale as of the current quarter end date. 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. 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 bond covenants and other key ratios. 21


 
Investor Information Corporate Headquarters Investor Relations American Campus Communities, Inc. Tel: (512) 732-1000 Ryan Dennison (512) 732-1000 12700 Hill Country Blvd., Suite T-200 Fax: (512) 732-2450 SVP, 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 Jon Graf Chief Financial Officer Kim Voss Chief Accounting Officer William Talbot Chief Investment Officer Research Coverage Jacob Kilstein Argus Research Company (646) 747-5447 jkilstein@argusresearch.com Jeffery Spector / Juan Sanabria Bank of America / Merrill Lynch (646) 855-1363 / (646) 855-1589 jeff.spector@baml.com / juan.sanabria@baml.com Ryan Meliker / Michael Kodesch Canaccord Genuity (212) 389-8094 / (212) 389-8095 rmeliker@canaccordgenuity.com / mkodesch@canaccordgenuity.com Thomas Lesnick / Ryan Wineman Capital One (571) 633-8191 / (571) 633-8414 thomas.lesnick@capitalone.com / ryan.wineman@capitalone.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 / Gwen Clark Evercore ISI (212) 446-9462 / (212) 446-5611 steve.sakwa@evercoreisi.com / gwen.clark@evercoreisi.com David Corak FBR & Co. (703) 312-1610 dcorak@fbr.com Andrew Rosivach / Jeff Pehl Goldman Sachs (212) 902-2796 / (212) 357-4474 andrew.rosivach@gs.com / jeffrey.pehl@gs.com Ryan Burke Green Street Advisors (949) 640-8780 rburke@greenst.com Carol Kemple Hilliard Lyons (502) 588-1839 ckemple@hilliard.com Aaron Hecht JMP Securities (415) 835-3963 ahecht@jmpsecurities.com Anthony Paolone / Emil Shalmiyev J.P. Morgan Securities (212) 622-6682 / (212) 622-6615 anthony.paolone@jpmorgan.com / emil.shalmiyev@jpmorgan.com Jordan Sadler / Austin Wurschmidt KeyBanc Capital Markets (917) 368-2280 / (917) 368-2311 jsadler@keybanccm.com / awurschmidt@key.com Drew Babin Robert W. Baird & Co. (215) 553-7816 dbabin@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. 22


 
Forward-looking Statements In addition to historical information, this supplemental package contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which American Campus operates, management's beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.


 
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