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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): April 23, 2018


AMERICAN CAMPUS COMMUNITIES, INC.
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP LP
(Exact name of Registrant as specified in its Charter)
Maryland
Maryland
001-32265
333-181102-01
76-0753089
56-2473181
(State or other jurisdiction of
incorporation or organization)
(Commission file number)
(I.R.S. Employer
Identification Number)

12700 Hill Country 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)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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 April 23, 2018, American Campus Communities, Inc. (the “Company”) issued a press release (the “Earnings Release”) announcing, among other things, earnings for the quarter ended March 31, 2018. 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 April 23, 2018, the Company disclosed a supplemental analyst package in connection with its earnings conference call for the quarter ended March 31, 2018 which will take place on April 24, 2018. 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

     (d) Exhibits.

Exhibit No.
 
Description
 
Earnings Release Dated April 23, 2018
 
Supplemental Analyst Package – First Quarter 2018





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.
 
 
 
 
 
 
 
 
Dated:
April 24, 2018
 
 
By: 
/s/ Kim K. Voss
 
 
 
 
 
Kim K. Voss
 
 
 
 
 
Executive Vice President, Chief Accounting Officer
 
 
 
 
 
 
 
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

MEDIA RELEASE
393144978_acclogocolora09.jpg


American Campus Communities, Inc. Reports First Quarter 2018 Financial Results


AUSTIN, Texas--(BUSINESS WIRE)-April 23, 2018--American Campus Communities, Inc. (NYSE:ACC) today announced the following financial results for the quarter ended March 31, 2018.


Highlights
  
Reported net income attributable to ACC of $25.9 million or $0.18 per fully diluted share, versus $34.1 million or $0.25 per fully diluted share in the first quarter 2017.

Reported quarterly FFOM of $85.8 million or $0.62 per fully diluted share versus $83.2 million or $0.62 per fully diluted share in the first quarter prior year.

Grew same store net operating income ("NOI") by 0.1 percent over the first quarter 2017. Revenues increased 1.9 percent and operating expenses increased 4.5 percent primarily due to the anticipated growth in property taxes combined with expenses associated with excessive winter storms. Excluding expenses of approximately $0.5 million related to these excessive winter conditions, same store operating expenses would have increased by 3.8 percent and same store NOI would have increased by 0.6 percent.

Achieved same store average physical occupancy of 96.2 percent for the first quarter 2018 compared to 96.9 percent for the first quarter 2017.

Executed a presale agreement for a new 443-bed development project located pedestrian to the University of Oregon. Upon delivery in Fall 2019, the $70.6 million asset will further diversify the company’s existing product offering and provide additional opportunities for multi-asset market efficiencies.

Began pre-development services for a proposed third-party development project on the campus of Prairie View A&M University.

Won an industry-leading five Innovator Awards at this year's Student Housing Business National Conference including Best Public/Private Partnership Development, Best Use of Green & Sustainable Construction or Development (on and off campus), Best Architecture/Design and Best Bandwidth/Connectivity Solution. Additionally, two projects acquired by American Campus Communities and developed by Core Spaces won awards for Best New Development (400 beds or fewer) and Best Architecture/Design (more than 400 beds). Since the inception of the Innovator Awards, ACC and its communities have won an industry-leading total of 31 awards, furthering its best-in-class reputation among colleges, universities and industry partners.

“Sector maturity and optimism were on display at this month’s Interface Student Housing Conference with major players across the industry reflecting on the consistency of cash flows and further growth opportunities, which are attracting record levels of capital and compressing cap rates for core assets located near major universities across the nation,” said Bill Bayless, American Campus CEO. “With the constrained equity capital environment facing most public REITs, we currently intend to selectively pursue only the highest risk-adjusted return opportunities. We plan to fund these investments via our strategic capital recycling initiatives focused



on harvesting value from our existing portfolio of core assets, through joint ventures and/or dispositions, taking advantage of the strong private market conditions.”

First Quarter Operating Results

Revenue for the 2018 first quarter totaled $220.4 million, versus $192.9 million in the first quarter 2017, and operating income for the quarter totaled $50.4 million compared to $49.2 million in the prior year first quarter. The increase in revenues and operating income was primarily due to growth resulting from increased rental rates for the 2017-2018 academic year, development properties completed in 2017 and property acquisitions completed in 2017. Net income for the 2018 first quarter totaled $25.9 million, or $0.18 per fully diluted share, compared with net income of $34.1 million, or $0.25 per fully diluted share for the same quarter in 2017. FFO for the 2018 first quarter totaled $89.8 million, or $0.65 per fully diluted share, as compared to $86.0 million, or $0.64 per fully diluted share for the same quarter in 2017. FFOM for the 2018 first quarter was $85.8 million, or $0.62 per fully diluted share as compared to $83.2 million, or $0.62 per fully diluted share for the same quarter in 2017. A reconciliation of FFO and FFOM to net income is provided in Table 3.
 
NOI for same store properties was $104.4 million in the quarter, an increase of 0.1 percent from $104.3 million in the 2017 first quarter. Same store property revenues increased by 1.9 percent and same store property operating expenses increased by 4.5 percent over the prior year quarter primarily due to anticipated growth in property taxes combined with expenses associated with excessive winter conditions. NOI for the total owned portfolio increased 13.0 percent to $118.3 million for the quarter from $104.8 million in the comparable period of 2017. A reconciliation of same store NOI to total NOI is provided in Table 4.

Portfolio Update
Developments
The company continues to progress on the construction of its 15 owned development and presale development projects with expected deliveries in Fall 2018 and 2019. The developments total approximately $1.1 billion and are all core Class A assets located on or pedestrian to campus in their respective markets. The projects average less than one-tenth of a mile to campus and remain on track to achieve stabilized development yields in the range of 6.25 - 7.0 percent for developments and 5.7 - 6.25 percent for presale developments.
Off-Campus Owned
During the quarter, the company executed a $70.6 million presale agreement for 959 Franklin, a 443-bed pedestrian development serving students attending the University of Oregon. The community is located less than one-tenth of a mile from campus and less than one-fourth of a mile from the future $1.0 billion Phil and Penny Knight Campus for Accelerating Scientific Impact. Additionally, the property is strategically positioned between the company’s two existing assets in the market, 2125 Franklin and The 515, offering opportunities for multi-asset market efficiencies upon opening in Fall 2019. With a highly diversified unit mix, including layouts ranging from studios up to 5 bedroom/5 bathroom floorplans, the property will provide additional diversification from the company’s existing assets in the market. Under 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. Upon executing the agreement, the company provided the developer with $15.6 million in mezzanine financing for the development of the project.
Potential Joint Venture
The company has executed a non-binding term sheet and is in final negotiations for the sale of a minority interest in a portfolio of owned core assets. The company expects to retain a majority ownership stake in the portfolio and to provide property and asset management services upon completion. Consistent with the company’s 2018 guidance, the transaction is anticipated to close during the second quarter, although there can be no assurance with respect to the timing of the closing of the transaction or whether the transaction will be completed. Assuming the completion of the transaction, proceeds will be used to pay down existing variable rate debt.




Third-Party Services
The company began pre-development activities for a proposed third-party on-campus development project at Prairie View A&M University. The proposed project represents the company’s ninth phase of development on the campus. The company anticipates providing management services for the project upon completion although the full scope, feasibility, fees and timing have not been finalized.
Capital Markets
At-The-Market (ATM) Share Offering Program
The company did not sell any shares under the ATM during the quarter.
2018 Outlook
The company is maintaining its previously stated guidance range for the fiscal year 2018, anticipating that FFO will be in the range of $2.51 to $2.60 per fully diluted share and FFOM will be in the range of $2.33 to $2.43 per fully diluted share. For additional details regarding the company’s 2018 outlook, please see pages S-15 through S-17 of the Supplemental Analyst Package 1Q 2018. 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, 2018 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 first quarter results and the 2018 outlook on Tuesday, April 24, 2018 at 10:00 a.m. ET (9:00 a.m. CT). The conference call may be accessed by dialing 888-317-6003 passcode 2850172, or 412-317-6061 for international participants.
To listen to the live webcast, go to www.americancampus.com at least 15 minutes prior to the call so that required audio software can be downloaded. A replay of the conference call will be available beginning one hour after the end of the call until May 8, 2018 by dialing 877-344-7529 or 412-317-0088 conference number 10117978. Additionally, the replay will be available for one year at www.americancampus.com.
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. 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 net operating income (“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 March 31, 2018, American Campus Communities owned 171 student housing properties containing approximately 104,800 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 207 properties with approximately 134,400 beds. Visit www.americancampus.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements under the applicable federal securities law. These statements are based on management’s current expectations and assumptions regarding markets in which American Campus Communities, Inc. (the “Company”) operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. For discussions of some risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2017 under the heading “Risk Factors” and under the heading “Business - Forward-looking Statements” and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statements, including our expected 2018 operating results, whether as a result of new information, future events, or otherwise.





Table 1
American Campus Communities, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
 
 
March 31, 2018
 
December 31, 2017
 
 
(unaudited)
 
 
Assets
 
 
 
 
 
 
 
 
 
Investments in real estate:
 
 
 
 
Owned properties, net
 
$
6,543,564

 
$
6,450,364

On-campus participating properties, net
 
81,008

 
81,804

Investments in real estate, net
 
6,624,572

 
6,532,168

 
 
 
 
 
Cash and cash equivalents
 
55,502

 
41,182

Restricted cash
 
28,485

 
23,590

Student contracts receivable, net
 
9,726

 
9,170

Other assets1
 
288,667

 
291,260

 
 
 
 
 
Total assets
 
$
7,006,952

 
$
6,897,370

 
 
 
 
 
Liabilities and equity
 
 

 
 

 
 
 
 
 
Liabilities:
 
 

 
 

Secured mortgage, construction and bond debt, net
 
$
682,295

 
$
664,020

Unsecured notes, net
 
1,586,501

 
1,585,855

Unsecured term loans, net
 
647,414

 
647,044

Unsecured revolving credit facility
 
218,000

 
127,600

Accounts payable and accrued expenses
 
52,932

 
53,741

Other liabilities1
 
212,754

 
187,983

Total liabilities
 
3,399,896

 
3,266,243

 
 
 
 
 
Redeemable noncontrolling interests
 
126,999

 
132,169

 
 
 
 
 
Equity:
 
 

 
 

American Campus Communities, Inc. and Subsidiaries
  stockholders’ equity:
 
 
 
 
Common stock
 
1,366

 
1,364

Additional paid in capital
 
4,332,471

 
4,326,910

Common stock held in rabbi trust
 
(2,817
)
 
(2,944
)
Accumulated earnings and dividends
 
(872,281
)
 
(837,644
)
Accumulated other comprehensive loss
 
(2,236
)
 
(2,701
)
Total American Campus Communities, Inc. and
  Subsidiaries stockholders’ equity
 
3,456,503

 
3,484,985

  Noncontrolling interests – partially owned properties
 
23,554

 
13,973

Total equity
 
3,480,057

 
3,498,958

 
 
 
 
 
Total liabilities and equity
 
$
7,006,952

 
$
6,897,370

1. 
For purposes of calculating net asset value at March 31, 2018, the company excludes other assets of approximately $7.3 million related to net deferred financing costs on its revolving credit facility and the net value of in-place leases and other liabilities of approximately $47.3 million related to deferred revenue and fee income.




Table 2
American Campus Communities, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(unaudited, dollars in thousands, except share and per share data)
 
 
Three Months Ended 
 March 31,
 
 
 
2018
 
2017
 
 
 
 
 
Revenues
 
 
 
 
 
Owned properties
 
$
205,532

 
$
178,831

 
On-campus participating properties
 
10,443

 
10,158

 
Third-party development services
 
846

 
456

 
Third-party management services
 
2,731

 
2,614

 
Resident services
 
857

 
879

 
Total revenues
 
220,409

 
192,938

 
 
 
 
 
 
 
Operating expenses
 
 

 
 

 
Owned properties
 
88,060

 
74,957

 
On-campus participating properties
 
3,425

 
3,265

 
Third-party development and management services
 
4,198

 
4,083

 
General and administrative1
 
6,699

 
6,734

 
Depreciation and amortization
 
64,779

 
52,323

 
Ground/facility leases
 
2,842

 
2,357

 
Total operating expenses
 
170,003

 
143,719

 
 
 
 
 
 
 
Operating income
 
50,406

 
49,219

 
 
 
 
 
 
 
Nonoperating income and (expenses)
 
 

 
 

 
Interest income
 
1,223

 
1,232

 
Interest expense
 
(23,684
)
 
(14,717
)
 
Amortization of deferred financing costs
 
(1,414
)
 
(1,028
)
 
Total nonoperating expense
 
(23,875
)
 
(14,513
)
 
 
 
 
 
 
 
Income before income taxes
 
26,531

 
34,706

 
Income tax provision
 
(281
)
 
(257
)
 
Net income
 
26,250

 
34,449

 
Net income attributable to noncontrolling interests
 
(323
)
 
(399
)
 
Net income attributable to ACC, Inc. and
  Subsidiaries common stockholders
 
$
25,927

 
$
34,050

 
Other comprehensive income
 
 

 
 

 
Change in fair value of interest rate swaps and other
 
465

 
484

 
Comprehensive income
 
$
26,392

 
$
34,534

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

 
 

 
 
 
 
 
 
 
Basic
 
$
0.19

 
$
0.25

 
 
 
 
 
 
 
Diluted
 
$
0.18

 
$
0.25

 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
 

 
 

 
 
 
 
 
 
 
Basic
 
136,525,557

 
133,052,444

 
 
 
 
 
 
 
Diluted
 
137,499,963

 
133,986,322

 
 
 
 
 
 
 
1. 
The three months ended March 31, 2017 include $1.1 million of contractual executive separation and retirement charges incurred in the first quarter of 2017 with regard to the retirement of the company’s former Chief Financial Officer.





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 
 March 31,
 
 
 
2018
 
2017
 
Net income attributable to ACC, Inc. and Subsidiaries
  common stockholders
 
$
25,927

 
$
34,050

 
Noncontrolling interests
 
322

 
399

 
Real estate related depreciation and amortization
 
63,578

 
51,518

 
Funds from operations (“FFO”) attributable to common stockholders and OP unitholders
 
89,827

 
85,967

 
 
 
 
 
 
 
Elimination of operations of on-campus participating properties
 
 

 
 

 
Net income from on-campus participating properties
 
(3,369
)
 
(3,247
)
 
Amortization of investment in on-campus participating properties
 
(1,942
)
 
(1,860
)
 
 
 
84,516

 
80,860

 
Modifications to reflect operational performance of on-campus participating properties
 
 

 
 

 
Our share of net cash flow1
 
795

 
757

 
Management fees
 
477

 
468

 
Contribution from on-campus participating properties
 
1,272

 
1,225

 
 
 
 
 
 
 
Contractual executive separation and retirement charges2
 

 
1,095

 
Funds from operations-modified (“FFOM”) attributable to common stockholders and OP unitholders
 
$
85,788

 
$
83,180

 
 
 
 
 
 
 
FFO per share – diluted
 
$
0.65

 
$
0.64

 
 
 
 
 
 
 
FFOM per share – diluted
 
$
0.62

 
$
0.62

 
 
 
 
 
 
 
Weighted-average common shares outstanding - diluted
 
138,534,412

 
135,092,966

 
 
 
 
 
 
 
1. 
50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures which is included in ground/facility leases expense in the consolidated statements of comprehensive income (refer to Table 2).
2. 
Represents contractual executive separation and retirement charges incurred in the first quarter of 2017 with regard to the retirement of the company’s former Chief Financial Officer.





Table 4
American Campus Communities, Inc. and Subsidiaries
Owned Properties Results of Operations
(unaudited, dollars in thousands)
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
$ Change
 
% Change
Owned properties revenues
 
 
 
 
 
 
 
Same store properties
$
181,137

 
$
177,731

 
$
3,406

 
1.9
%
New properties
24,503

 
87

 
24,416

 
 
Sold and held for sale properties1
749

 
1,892

 
(1,143
)
 
 
Total revenues2
$
206,389

 
$
179,710

 
$
26,679

 
14.8
%
Owned properties operating expenses
 
 
 
 
 
 
 
Same store properties3 4
$
76,689

 
$
73,401

 
$
3,288

 
4.5
%
New properties
10,804

 
250

 
10,554

 
 
Sold and held for sale properties1 5
567

 
1,306

 
(739
)
 
 
Total operating expenses
$
88,060

 
$
74,957

 
$
13,103

 
17.5
%
Owned properties net operating income
 
 
 
 
 
 
 
Same store properties4
$
104,448

 
$
104,330

 
$
118

 
0.1
%
New properties
13,699

 
(163
)
 
13,862

 
 
Sold and held for sale properties1
182

 
586

 
(404
)
 
 
Total net operating income
$
118,329

 
$
104,753

 
$
13,576

 
13.0
%
 
 
 
 
 
 
 
 
 
Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2018 and 2017, which are not conducting or planning to conduct substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of March 31, 2018.
1. 
Includes one property sold in 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property’s $27.4 million mortgage loan that matured in August 2017.
2. 
Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income.
3. 
The increase over prior period is primarily due to higher than expected costs associated to excessive winter storms.
4. 
Excluding expenses of approximately $0.5 million related to excessive winter storms, same store operating expenses would have increased by only 3.8% and same store NOI would have increased by 0.6%.
5. 
Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.





Table 5
American Campus Communities, Inc. and Subsidiaries
2018 Outlook1 
(dollars in thousands, except share and per share data)
 
 
Low
 
High
 
 
 
 
 
Net income
 
$
93,200

 
$
104,200

Noncontrolling interests
 
1,300

 
1,350

Depreciation and amortization
 
253,400

 
255,200

Funds from operations (“FFO”)
 
$
347,900

 
$
360,750

 
 
 
 
 
Elimination of operations from on-campus participating properties
 
(12,700
)
 
(12,300
)
Contribution from on-campus participating properties
 
4,150

 
4,750

Elimination of effect of transfer of asset to lender2
 
(17,000
)
 
(17,000
)
Funds from operations - modified (“FFOM”)
 
$
322,350

 
$
336,200

 
 
 
 
 
Net income per share - diluted
 
$
0.67

 
$
0.75

 
 
 
 
 
FFO per share - diluted
 
$
2.51

 
$
2.60

 
 
 
 
 
FFOM per share - diluted
 
$
2.33

 
$
2.43

 
 
 
 
 
Weighted-average common shares outstanding - diluted
 
138,565,000

 
138,565,000

 
 
 
 
 
1.  
The company believes that the financial results for the fiscal year ending December 31, 2018 may be affected by, among other factors:
national and regional economic trends and events;
the success of leasing the company’s owned properties for the 2018-2019 academic year;
the timing of acquisitions, dispositions or joint venture activity;
interest rate risk;
the timing of commencement and completion of construction on owned development projects;
the ability of the company to be awarded and the timing of the commencement of construction on third-party development projects;
university enrollment, funding and policy trends;
the ability of the company to earn third-party management revenues;
the amount of income recognized by the taxable REIT subsidiaries and any corresponding income tax expense;
the ability of the company to integrate acquired properties;
the outcome of legal proceedings arising in the normal course of business; and
the finalization of property tax rates and assessed values in certain jurisdictions.
2.
Represents the net effect of a gain on the extinguishment of debt for one property being transferred to the lender in settlement of the property’s $27.4 million mortgage loan, offset by a loss expected to be incurred as a result of the transfer to the lender.










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


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Section 3: EX-99.2 (EXHIBIT 99.2)

q12018supplementalanalys
Financial Highlights S-1 Consolidated Balance Sheets S-2 Consolidated Statements of Comprehensive Income S-3 Consolidated Statements of Funds from Operations S-4 Owned Properties Results of Operations S-5 Same Store Owned Properties Operating Expenses S-6 Seasonality of Operations S-7 Owned Development Update S-8 Presale Development Update S-9 Third-Party Development Update S-10 Management Services Update S-11 Capital Structure S-12 Interest Coverage S-13 Capital Allocation – Long Term Funding Plan S-14 2018 Outlook - Summary S-15 2018 Outlook - Detail S-16 Detail of Property Groupings S-18 Definitions S-19 Investor Information S-21 Table of Contents Q1 Supplemental Package APRIL 23, 2018


 
Financial Highlights ($ in thousands, except share and per share data) S-1 Operating Data Three Months Ended March 31, 2018 2017 $ Change % Change Total revenues $ 220,409 $ 192,938 $ 27,471 14.2% Operating income 50,406 49,219 1,187 2.4% Net income attributable to ACC 25,927 34,050 (8,123) (23.9%) Net income per share - basic 0.19 0.25 Net income per share - diluted 0.18 0.25 Funds From Operations ("FFO")1 89,827 85,967 3,860 4.5% FFO per share - diluted1 0.65 0.64 0.01 1.6% Funds From Operations - Modified ("FFOM")1 85,788 83,180 2,608 3.1% FFOM per share - diluted1 0.62 0.62 — —% Market Capitalization and Unsecured Notes Covenants2 March 31, 2018 December 31, 2017 Debt to total market capitalization 37.0% 34.8% Net debt to EBITDA3 7.0x 6.8x Unencumbered asset value to total asset value 83.5% 83.7% Total debt to total asset value 38.6% 38.0% Secured debt to total asset value 8.2% 8.2% Unencumbered asset value to unsecured debt 275.2% 280.1% Interest coverage3 4.4x 4.2x 1. Refer to page S-4 for a reconciliation to net income, the most directly comparable GAAP measure. 2. Refer to the definitions outlined on pages S-19 and S-20 for detailed definitions of terms appearing on this page. 3. Refer to calculations on page S-13, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures.


 
Consolidated Balance Sheets ($ in thousands) S-2 March 31, 2018 December 31, 2017 (unaudited) Assets Investments in real estate: Owned properties, net $ 6,543,564 $ 6,450,364 On-campus participating properties, net 81,008 81,804 Investments in real estate, net 6,624,572 6,532,168 Cash and cash equivalents 55,502 41,182 Restricted cash 28,485 23,590 Student contracts receivable, net 9,726 9,170 Other assets1 288,667 291,260 Total assets $ 7,006,952 $ 6,897,370 Liabilities and equity Liabilities: Secured mortgage, construction and bond debt, net $ 682,295 $ 664,020 Unsecured notes, net 1,586,501 1,585,855 Unsecured term loans, net 647,414 647,044 Unsecured revolving credit facility 218,000 127,600 Accounts payable and accrued expenses 52,932 53,741 Other liabilities1 212,754 187,983 Total liabilities 3,399,896 3,266,243 Redeemable noncontrolling interests 126,999 132,169 Equity: American Campus Communities, Inc. and Subsidiaries stockholders' equity: Common stock 1,366 1,364 Additional paid in capital 4,332,471 4,326,910 Common stock held in rabbi trust (2,817) (2,944) Accumulated earnings and dividends (872,281) (837,644) Accumulated other comprehensive loss (2,236) (2,701) Total American Campus Communities, Inc. and 3,456,503 3,484,985Subsidiaries stockholders' equity Noncontrolling interests - partially owned properties 23,554 13,973 Total equity 3,480,057 3,498,958 Total liabilities and equity $ 7,006,952 $ 6,897,370 1. For purposes of calculating net asset value at March 31, 2018, the company excludes other assets of approximately $7.3 million related to net deferred financing costs on its revolving credit facility and the net value of in-place leases and other liabilities of approximately $47.3 million related to deferred revenue and fee income.


 
Consolidated Statements of Comprehensive Income (Unaudited, $ in thousands, except share and per share data) S-3 Three Months Ended March 31, 2018 2017 $ Change Revenues Owned properties $ 205,532 $ 178,831 $ 26,701 On-campus participating properties 10,443 10,158 285 Third-party development services 846 456 390 Third-party management services 2,731 2,614 117 Resident services 857 879 (22) Total revenues 220,409 192,938 27,471 Operating expenses Owned properties 88,060 74,957 13,103 On-campus participating properties 3,425 3,265 160 Third-party development and management services 4,198 4,083 115 General and administrative1 6,699 6,734 (35) Depreciation and amortization 64,779 52,323 12,456 Ground/facility leases 2,842 2,357 485 Total operating expenses 170,003 143,719 26,284 Operating income 50,406 49,219 1,187 Nonoperating income and (expenses) Interest income 1,223 1,232 (9) Interest expense (23,684) (14,717) (8,967) Amortization of deferred financing costs (1,414) (1,028) (386) Total nonoperating expense (23,875) (14,513) (9,362) Income before income taxes 26,531 34,706 (8,175) Income tax provision (281) (257) (24) Net income 26,250 34,449 (8,199) Net income attributable to noncontrolling interests (323) (399) 76 Net income attributable to ACC, Inc. and $ 25,927 $ 34,050 $ (8,123)Subsidiaries common stockholders Other comprehensive income Change in fair value of interest rate swaps and other 465 484 (19) Comprehensive income $ 26,392 $ 34,534 $ (8,142) Net income per share attributable to ACC, Inc. and Subsidiaries common stockholders Basic $ 0.19 $ 0.25 Diluted $ 0.18 $ 0.25 Weighted-average common shares outstanding Basic 136,525,557 133,052,444 Diluted 137,499,963 133,986,322 1. The three months ended March 31, 2017 include $1.1 million of contractual executive separation and retirement charges incurred in the first quarter of 2017 with regard to the retirement of the company's former Chief Financial Officer.


 
Consolidated Statements of Funds from Operations (Unaudited, $ in thousands, except share and per share data) S-4 1. 50% of the properties’ net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures which is included in ground/facility leases expense in the consolidated statements of comprehensive income (refer to page S-3). 2. Represents contractual executive separation and retirement charges incurred in the first quarter of 2017 with regard to the retirement of the company's former Chief Financial Officer. Three Months Ended March 31, 2018 2017 $ Change Net income attributable to ACC, Inc. and $ 25,927 $ 34,050 $ (8,123)Subsidiaries common stockholders Noncontrolling interests 322 399 (77) Real estate related depreciation and amortization 63,578 51,518 12,060 Funds from operations ("FFO") attributable to 89,827 85,967 3,860common stockholders and OP unitholders Elimination of operations of on-campus participating properties Net income from on-campus participating properties (3,369) (3,247) (122) Amortization of investment in on-campus participating properties (1,942) (1,860) (82) 84,516 80,860 3,656 Modifications to reflect operational performance of on-campus participating properties Our share of net cashflow1 795 757 38 Management fees 477 468 9 Contribution from on-campus participating properties 1,272 1,225 47 Contractual executive separation and retirement charges2 — 1,095 (1,095) Funds from operations-modified ("FFOM") attributable to $ 85,788 $ 83,180 $ 2,608common stockholders and OP unitholders FFO per share - diluted $ 0.65 $ 0.64 FFOM per share - diluted $ 0.62 $ 0.62 Weighted-average common shares outstanding - diluted 138,534,412 135,092,966


 
Owned Properties Results of Operations ($ in thousands) S-5 Three Months Ended March 31, 2018 2017 $ Change % Change Owned properties revenues Same store properties $ 181,137 $ 177,731 $ 3,406 1.9% New properties 24,503 87 24,416 Sold and held for sale properties1 749 1,892 (1,143) Total revenues2 $ 206,389 $ 179,710 $ 26,679 14.8% Owned properties operating expenses Same store properties3 4 $ 76,689 $ 73,401 $ 3,288 4.5% New properties 10,804 250 10,554 Sold and held for sale properties1 5 567 1,306 (739) Total operating expenses $ 88,060 $ 74,957 $ 13,103 17.5% Owned properties net operating income Same store properties4 $ 104,448 $ 104,330 $ 118 0.1% New properties 13,699 (163) 13,862 Sold and held for sale properties1 182 586 (404) Total net operating income $ 118,329 $ 104,753 $ 13,576 13.0% Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2018 and 2017, which are not conducting or planning to conduct substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of March 31, 2018. Refer to page S-18 for detail of our same store groupings. 1. Includes one property sold in 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017. 2. Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income. 3. Refer to page S-6 for detail of same store operating expenses. 4. Excluding expenses of approximately $0.5 million related to excessive winter storms, same store operating expenses would have increased by only 3.8% and same store NOI would have increased by 0.6%. 5. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.


 
Same Store Owned Properties Operating Expenses ($ in thousands, except per bed amounts) S-6 Three Months Ended March 31, 2018 2017 Total Per Bed % Change From Prior Year % of Total Operating Expenses Total Per Bed % of Total Operating Expenses Property taxes1 $ 18,306 $ 235 8.5% 24% $ 16,870 $ 217 23% Utilities2 3 17,384 224 4.6% 23% 16,612 214 22% General & administrative and other4 16,179 208 1.3% 21% 15,964 205 22% Payroll5 14,551 187 0.7% 19% 14,444 186 20% Repairs and maintenance6 3 5,221 67 8.5% 7% 4,811 62 7% Marketing7 3,303 43 12.0% 4% 2,948 38 4% Insurance 1,745 22 (0.4%) 2% 1,752 22 2% Total same store owned operating expenses3 $ 76,689 $ 986 4.5% 100% $ 73,401 $ 944 100% Same store owned beds 77,771 Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2018 and 2017, which are not conducting or planning to conduct substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of March 31, 2018. Refer to page S-18 for detail of our same store groupings. 1. The increase over the prior year is primarily due to additional property tax expense resulting from higher property tax assessments in various markets, and increases related to 2016 development deliveries that were assessed at full value for the first time. 2. Represents gross expenses prior to any recoveries from tenants, which are reflected in owned properties revenues. 3. The increase over the prior year is primarily due to $0.5 million of higher than expected costs related to excessive winter storms. Excluding these costs, same store repairs and maintenance and utilities expenses would have increased by only 0.1% and 4.0%, respectively, and total same store owned operating expenses would have increased by only 3.8%. 4. Includes security costs, shuttle costs, and property-level general and administrative costs as well as an allocation of costs related to corporate management and oversight. Also includes acquisition integration costs, bad debt, food service, and other miscellaneous expenses. 5. Includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff. 6. Includes general maintenance costs such as interior painting, routine landscaping, pest control, fire protection, snow removal, elevator maintenance, roof and parking lot repairs, and other miscellaneous building repair costs. 7. Includes costs related to property marketing campaigns associated with our ongoing leasing efforts.


 
Seasonality of Operations ($ in thousands, except per bed amounts) S-7 Three Months Ended Total/Weighted Average- March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 March 31, 2018 Last 12 Months 2018 same store properties Revenue per occupied bed Rental revenue per occupied bed per month $ 730 $ 713 $ 719 $ 750 $ 749 $ 734 Other income per occupied bed per month1 56 68 85 58 58 67 Total revenue per occupied bed $ 786 $ 781 $ 804 $ 808 $ 807 $ 801 Average number of owned beds 77,757 77,673 77,653 77,741 77,771 77,710 Average physical occupancy for the quarter 96.9% 91.7% 91.5% 96.8% 96.2% 94.0% Total revenue $ 177,731 $ 166,887 $ 171,390 $ 182,466 $ 181,137 $ 701,880 Property operating expenses 73,401 73,284 91,847 72,823 76,689 314,643 Net operating income $ 104,330 $ 93,603 $ 79,543 $ 109,643 $ 104,448 $ 387,237 Operating margin 58.7% 56.1% 46.4% 60.1% 57.7% 55.2% 2018 new properties Revenue per occupied bed Rental revenue per occupied bed per month $ — $ 858 $ 780 $ 813 $ 808 $ 806 Other income per occupied bed per month1 — 101 75 59 54 61 Total revenue per occupied bed $ — $ 959 $ 855 $ 872 $ 862 $ 867 Average number of owned beds — 659 5,482 10,843 10,970 6,989 Average physical occupancy for the quarter — 96.7% 85.5% 87.2% 86.4% 86.8% Total revenue $ 87 2 $ 1,833 $ 12,023 $ 24,729 $ 24,503 $ 63,088 Property operating expenses 250 2 1,076 7,287 9,663 10,804 28,830 Net operating income $ (163) 2 $ 757 $ 4,736 $ 15,066 $ 13,699 $ 34,258 Operating margin N/A 41.3% 39.4% 60.9% 55.9% 54.3% ALL PROPERTIES Revenue per occupied bed Rental revenue per occupied bed per month $ 730 $ 714 $ 722 $ 758 $ 755 $ 739 Other income per occupied bed per month1 57 69 84 58 58 67 Total revenue per occupied bed $ 787 $ 783 $ 806 $ 816 $ 813 $ 806 Average number of owned beds 77,757 78,332 83,135 88,584 88,741 84,699 Average physical occupancy for the quarter 96.9% 91.7% 91.2% 95.6% 95.0% 93.4% Total revenue $ 177,818 $ 168,720 $ 183,413 $ 207,195 $ 205,640 $ 764,968 Property operating expenses 73,651 74,360 99,134 82,486 87,493 343,473 Net operating income $ 104,167 $ 94,360 $ 84,279 $ 124,709 $ 118,147 $ 421,495 Operating margin 58.6% 55.9% 46.0% 60.2% 57.5% 55.1% Sold and held for sale properties3 Total revenue $ 1,892 $ 1,154 $ 869 $ 848 $ 749 $ 3,620 Property operating expenses4 1,306 812 289 391 567 2,059 Net operating income $ 586 $ 342 $ 580 $ 457 $ 182 $ 1,561 Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2018 and 2017, which are not conducting or planning to conduct substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of March 31, 2018. Refer to page S-18 for detail of our same store groupings. 1. Other income is all income other than Net Student Rent. This includes, but is not limited to, utility income, damages, parking income, summer conference rent, application and administration fees, income from retail tenants, etc. 2. Represents nonrefundable application fees and administrative expenses incurred in relation to properties under development. 3. Includes one property sold in 2017, and one property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017. 4. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight.


 
Owned Development Update ($ in thousands) S-8 OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION As of March 31, 2018 Project Estimated Land and Total Costs Scheduled Project Location Primary University Served Type Beds Project Cost1 CIP2 Other3 Incurred Occupancy Gladding Residence Center Richmond, VA Virginia Commonwealth Univ. ACE 1,524 $ 95,700 $ 85,279 $ 1,010 $ 86,289 August 2018 Irvington House Indianapolis, IN Butler University ACE 648 38,900 28,169 3 28,172 August 2018 Greek Leadership Village Tempe, AZ Arizona State University ACE 957 69,600 45,764 572 46,336 August 2018 David Blackwell Hall Berkeley, CA University of California, Berkeley ACE 781 98,700 74,959 325 75,284 August 2018 NAU Honors College Flagstaff, AZ Northern Arizona University ACE 636 43,400 33,829 579 34,408 August 2018 U Club Townhomes Oxford, MS University of Mississippi Off-campus 528 44,300 29,142 5,712 34,854 August 2018 SUBTOTAL - 2018 DELIVERIES 5,074 $ 390,600 $ 297,142 $ 8,201 $ 305,343 191 College Auburn, AL Auburn University Off-campus 495 $ 59,300 $ 12,893 $ 5,434 $ 18,327 July 2019 Columbus Avenue Student Apts. Boston, MA Northeastern University ACE 825 153,400 61,713 — 61,713 August 2019 University of Arizona Honors College4 Tucson, AZ University of Arizona ACE 1,056 84,700 7,524 8,401 15,925 August 2019 SUBTOTAL - 2019 DELIVERIES 2,376 $ 297,400 $ 82,130 $ 13,835 $ 95,965 OWNED DEVELOPMENT PIPELINE5 Project Anticipated Approx. Estimated Targeted Project Location Primary University Served Type Commencement Targeted Beds Project Cost1 6 Occupancy USC Health Sciences Phase II Los Angeles, CA University of Southern California ACE Q1/Q2 2019 297 $ 42,000 Fall 2020 1. In certain instances at ACE properties, the company agrees to construct spaces within the property that will ultimately be owned, managed, and funded by the universities. Such spaces include but are not limited to dining, childcare, retail, academic, and office facilities. Estimated Project Cost excludes the costs of the construction of such facilities, as they will be reimbursed by the universities. 2. The total construction in progress (“CIP”) balances above exclude $8.1 million related to ongoing renovation projects at operating properties and $145.6 million related to presale development projects on page S- 9. 3. Consists of amounts incurred to purchase the land for off-campus development projects, as well as other development-related expenditures not included in CIP such as deposits, furniture, etc. 4. Land and other includes the cost of the land on which the project will reside, which was originally purchased by the company and subsequently conveyed to the University. Concurrent with the land conveyance, the company as lessee entered into a ground lease agreement with the University. 5. Does not include land parcels in eight university markets totaling $41.6 million. Commencement of owned off-campus development projects is subject to final determination of feasibility, execution and closing on definitive agreements, municipal approval processes, fluctuations in the construction market, and current capital market conditions. ACE awards provide the company with the opportunity to exclusively negotiate with the subject universities. Commencement of ACE projects is subject to various levels of university board approval, final determination of feasibility, execution and closing on definitive agreements, municipal approval processes, fluctuations in the construction market, and current capital market conditions. 6. Estimated Project Cost includes land and other predevelopment costs of $0.3 million incurred as of March 31, 2018 for owned development pipeline projects.


 
Presale Development Update1 ($ in thousands) S-9 PRESALE DEVELOPMENT PROJECTS UNDER CONSTRUCTION Amount Funded Remaining Project Purchase as of Purchase Price Scheduled Project Location Primary University Served Type Beds Price2 March 31, 20183 to be Funded Occupancy The Edge - Stadium Centre Tallahassee, FL Florida State University Off-campus 412 $ 42,600 $ 400 $ 42,200 August 2018 Core Spaces / DRW Portfolio4 Hub Ann Arbor Ann Arbor, MI University of Michigan Off-campus 310 Hub Flagstaff Flagstaff, AZ Northern Arizona University Off-campus 591 Hub West Lafayette West Lafayette, IN Purdue University Off-campus 599 1,500 $ 240,000 $ 24,208 $ 215,792 September 2018 SUBTOTAL - 2018 DELIVERIES 1,912 $ 282,600 $ 24,608 $ 257,992 Stadium Centre Phase IV Tallahassee, FL Florida State University Off-campus 340 $ 36,700 $ 353 $ 36,347 August 2019 959 Franklin5 Eugene, OR University of Oregon Off-campus 443 70,600 16,123 54,477 September 2019 SUBTOTAL - 2019 DELIVERIES 783 $ 107,300 $ 16,476 $ 90,824 1. Under the terms of a presale transaction, the company is obligated to purchase the property as long as certain construction completion deadlines and other closing conditions are met. The company is responsible for leasing, management, and initial operations of the project while the third-party developer retains development risk during the construction period. In accordance with accounting guidance, the company includes presale properties in its consolidated financial statements upon execution of the presale agreement with the developer. 2. Includes the contractual purchase price and ACC-elected upgrades. 3. Includes ACC's investment funded to date, earnest money and mezzanine financing if applicable. 4. The company funded an initial investment of $24.2 million through a joint venture with Core Spaces/DRW Real Estate Investments in August 2017. Including the initial investment, the company expects to invest a total of $240 million over a two year period. The company expects to increase its investment by $130.6 million in the third quarter of 2018 upon delivery of the assets, and to exercise an option to purchase the remaining ownership interests in the properties in the third quarter of 2019 for an amount to be determined by fair market value, expected to approximate $85.2 million. 5. The company executed the presale agreement with the developer in March 2018, at which time it provided $15.6 million of mezzanine financing to the project.


 
Third-Party Development Update ($ in thousands) S-10 Three Months Ended March 31, 2018 2017 $ Change Development services revenue $ 846 $ 456 $ 390 % of total revenue 0.4% 0.2% CONTRACTED PROJECTS IN PROGRESS Fees Earned Fees Remaining Fees as of Earned in as of Scheduled Project Location Primary University Served Beds Total Fees March 31, 2018 Current Year March 31, 2018 Completion University of California Irvine Phase IV Irvine, CA University of California, Irvine 1,441 $ 5,900 $ 3,221 $ 209 $ 2,679 August 2019 University of Arizona Honors College1 Tucson, AZ University of Arizona — 1 2,400 1,434 241 966 July 2019 University of Illinois - Chicago Chicago, IL University of Illinois, Chicago 548 5,100 3,011 346 2,089 July 2019 1,989 $ 13,400 $ 7,666 $ 796 $ 5,734 1. The University of Arizona Honors College project includes the construction of a parking garage, academic center and a student recreation and wellness center as part of the overall development project. These components will be owned, managed and funded by the University, and the company is earning third-party development fees for its role in providing development services for those components of the project. 2. These awards relate to speculative development projects that are subject to final determination of feasibility, negotiation, final award, procurement rules and other applicable law, execution and closing of definitive agreements on terms acceptable to the company, and fluctuations in the construction and financing markets. Anticipated commencement and fees are dependent upon the availability of project financing, which is affected by current capital market conditions. 3. The company was awarded a multi-phase development engagement with the University of California, Riverside that is anticipated to include approximately 6,000 beds that will be delivered in multiple phases over several years. The first-phase development, Dundee Residence Hall and Glasgow Dining Hall, includes a 760-bed student residence hall and 830-seat dining facility. The next phase, University of California - Riverside North District Phase I, is expected to include approximately 1,500 beds. All components will be owned and funded by the University, and the company anticipates earning third-party development fees for its role in providing development services. Subsequent to completion of the development, the company will provide joint management services with the University. ON-CAMPUS AWARD PIPELINE2 Anticipated Anticipated Targeted Estimated Project Location Financing Structure Commencement Completion Fees Delaware State University Dover, DE Third-party Q2 2018 Fall 2019 $2,500 Dundee Residence Hall and Glasgow Dining Hall 3 Riverside, CA Third-party Q4 2018 Fall 2020 $4,700 University of California - Riverside North District Phase I3 Riverside, CA Third-party Q1 2019 Fall 2021 $8,000 Goldman School of Public Policy Berkeley, CA Third-party Q4 2018 / Q1 2019 Fall 2021 $2,900 Prairie View A&M University Phase IX Prairie View, TX Third-party TBD TBD TBD


 
Management Services Update ($ in thousands) S-11 Three Months Ended March 31, 2018 2017 $ Change Management services revenue $ 2,731 $ 2,614 $ 117 % of total revenue 1.2% 1.4% NEW / PENDING MANAGEMENT CONTRACTS Actual or Approximate Stabilized Anticipated Project Location Primary University Served Beds Annual Fees1 Commencement University of Illinois - Chicago Chicago, IL University of Illinois, Chicago 548 $ 240 August 2019 University of California Irvine Phase IV Irvine, CA University of California, Irvine 1,441 630 September 2019 1,989 $ 870 DISCONTINUED MANAGEMENT CONTRACTS 2018 Fee Contribution Prior to Project Location Primary University Served Beds Termination Discontinued As Of SAIT Residence Alberta, Canada Southern Alberta Institute of Technology 1,171 $ 111 May 2018 University Village Dallas, TX University of Texas - Dallas 2,551 422 October 2018 University Commons Dallas, TX University of Texas - Dallas 2,222 354 October 2018 5,944 $ 887 1. Stabilized annual fees are dependent upon the achievement of anticipated occupancy levels.


 
Capital Structure as of March 31, 2018 ($ in millions, except per share data) S-12 Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule Total Debt1 $ 3,137 Total Equity Market Value2 5,350 Total Market Capitalization $ 8,487 Debt to Total Market Capitalization 37.0% Net Debt to EBITDA3 7.0x Total Asset Value4 $ 8,131 Unencumbered Asset Value 6,792 Unencumbered Asset Value to Total Asset Value 83.5% Requirement Current Ratio Total Debt to Total Asset Value ≤ 60% 38.6% Secured Debt to Total Asset Value ≤ 40% 8.2% Unencumbered Asset Value to Unsecured Debt > 150% 275.2% Interest Coverage3 > 1.5x 4.4x Weighted Average Principal Average Term To Outstanding1 Interest Rate Maturity Fixed Rate Mortgage Loans $ 484 4.7%5 3.4 Yrs Construction Loans6 85 4.6% 0.5 Yrs Unsecured Revolving Credit Facility 218 3.0% 4.0 Yrs Unsecured Term Loans 650 2.8% 2.2 Yrs Unsecured Notes 1,600 3.7% 5.9 Yrs On-Campus Participating Properties 100 5.0% 14.3 Yrs Total/Weighted Average $ 3,137 3.7% 4.7 Yrs Variable Rate Debt as % of Total Debt7 30.4% Note – refer to the definitions outlined on pages S-19 and S-20 for detailed definitions of terms appearing on this page. 1. Excludes net unamortized debt premiums related to mortgage loans assumed in connection with acquisitions of $17.5 million, unamortized original issue discount on unsecured notes of $1.9 million, and unamortized deferred financing costs of $18.5 million. 2. Based on share price of $38.62 and fully diluted share count of 138,525,147 as of March 31, 2018. Assumes conversion of 1,016,196 common and preferred Operating Partnership units and 908,312 unvested restricted stock awards. 3. Refer to calculations on page S-13, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures. 4. Excludes accumulated depreciation of $1.2 billion and receivables and intangible assets, net of accumulated amortization, of $50.4 million. 5. Including the amortization of net debt premiums related to mortgage loans assumed in connection with property acquisitions, the effective interest rate for fixed rate mortgage loans is 3.9%. 6. Construction loans are associated with presale developments and are an obligation of the third-party developer. In accordance with accounting guidance, the company is including the presale development properties and any associated debt in its consolidated financial statements. The debt will be paid off by the developer using proceeds from the company's purchase of the properties. 7. The company's variable rate debt consists of the unsecured revolving credit facility, unsecured term loans and construction loans for presale developments. Weighted Average Interest Rate Of Debt Maturing Each Year Fixed Rate Mortgage Loans 3.9% 0.0% 5.6% 5.2% 4.0% 0.0% 4.5% 0.0% 0.0% 3.7% Total Debt 3.3% 4.5% 3.6% 4.2% 3.0% 3.9% 4.3% 7.6% 0.0% 3.7%


 
Interest Coverage ($ in thousands) S-13 Three Months Ended June 30, September 30, December 31, March 31, Last Twelve 2017 2017 2017 2018 Months Net (loss) income attributable to ACC, Inc. and Subsidiaries common stockholders $ (2,762) $ (1,312) $ 39,062 $ 25,927 $ 60,915 Net income attributable to noncontrolling interests 109 79 496 323 1,007 Interest expense 14,573 18,654 23,178 23,684 80,089 Income tax provision 267 267 198 281 1,013 Depreciation and amortization 55,943 61,125 65,564 64,779 247,411 Amortization of deferred financing costs 1,023 1,146 1,422 1,414 5,005 Share-based compensation 4,646 2,499 2,453 3,443 13,041 Provision for real estate impairment 15,317 — — — 15,317 Loss from disposition of real estate 632 — — — 632 Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") $ 89,748 $ 82,458 $ 132,373 $ 119,851 $ 424,430 Pro-forma adjustments to EBITDA1 14,577 Adjusted EBITDA $ 439,007 Interest Expense from consolidated statement of comprehensive income $ 14,573 $ 18,654 $ 23,178 $ 23,684 $ 80,089 Amortization of mortgage debt premiums/discounts 2,010 2,113 1,692 1,522 7,337 Capitalized interest 5,677 3,455 2,313 3,020 14,465 Change in accrued interest payable 1,981 (4,048) (1,935) (7,204) (11,206) Cash Interest Expense $ 24,241 $ 20,174 $ 25,248 $ 21,022 $ 90,685 Pro-forma adjustments to Cash Interest Expense1 9,355 Adjusted Interest Expense $ 100,040 Interest Coverage 4.4x Note: refer to the definitions outlined on pages S-19 and S-20 for detailed definitions of terms appearing on this page. 1. Adjustment to reflect all acquisitions, development deliveries, dispositions, debt repayments and debt refinancings as if such transactions had occurred on the first day of the 12 month period presented.


 
Capital Allocation – Long Term Funding Plan ($ in millions) S-14 Sources and Uses for Development - As of March 31, 2018 Estimated Project Total Costs Remaining Estimated Capital Uses: Cost Incurred Capital Needs Development and Presale Development Pipeline1: 2018 Developments Underway $ 433 $ 306 $ 127 2019 Developments Underway or Expected to Start in Current Year 405 112 293 Core Spaces / DRW Portfolio Transaction: Presale Developments - 2018 Funding2 131 — 131 Presale Developments - 2019 Funding3 154 — 154 Total $ 1,123 $ 418 $ 705 Estimated Sources: Capital Sources Cash and Cash Equivalents as of March 31, 2018 $ 56 Estimated Cash Flow Available for Investment - through 20194 91 Targeted Asset Dispositions or Joint Ventures in Guidance5 400 Remaining Capital Needs6 158 Total $ 705 Selected Credit Metrics7 Credit Metric: March 31, 2018 Pro Forma8 Total Debt to Total Asset Value 38.6% 36.5% - 38.3% Net Debt to EBITDA9 7.0x 6.2x - 6.5x Note: This analysis demonstrates anticipated funding for the developments currently underway or with expected starts in the current year. As future developments commence, they are expected to be funded via additional dispositions, joint ventures, free cash available for investment, and capital market transactions. 1. Includes owned development and presale projects under construction, and management’s Estimated Project Cost for future development deliveries that are expected to commence construction during the current year, as disclosed on pages S-8 and S-9. 2. Includes the additional investment in the joint venture with Core Spaces/DRW Real Estate Investments to be made in the third quarter of 2018 upon delivery of the assets, as disclosed on page S-9. 3. Includes the exercise of the option to purchase the remaining interest in the joint ventures with Core Spaces/DRW Real Estate Investments. 4. Available cash flow is derived from disclosures in our 2017 Form 10-K and is calculated as net cash provided by operating activities of $319.9 million less dividend payments of $236.5 million, less principal payments on debt of $12.8 million, less recurring capital expenditures of $18.5 million. Calculation results in available cash flow for investment in 2017 of $52.1 million, which is then annualized over the remaining 7 quarters through the end of 2019. 5. Estimated proceeds from dispositions or the sale of joint venture interests in core assets. 6. Remaining capital needs are expected to come from a mix of debt, equity, dispositions and joint ventures. 7. Refer to definitions outlined on pages S-19 and S-20 for detailed definitions of terms appearing on this page. 8. Ratios represent the pro forma impact of development deliveries and funding alternatives assumed in the Sources and Uses table. The lower end of the pro forma leverage ranges assumes remaining capital needs are funded with equity, while the higher end assumes funding with debt. Actual ratios will vary based on the timing of construction funding, future cash flow available for investment, and the ultimate mix of sources from debt, equity, joint ventures, or dispositions. 9. Refer to page S-13 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure.


 
2018 Outlook - Summary1 ($ in thousands, except share and per share data) S-15 Low High Net income $ 93,200 $ 104,200 Noncontrolling interests 1,300 1,350 Depreciation and amortization 253,400 255,200 Funds from operations ("FFO") $ 347,900 $ 360,750 Elimination of operations from on-campus participating properties (12,700) (12,300) Contribution from on-campus participating properties 4,150 4,750 Elimination of effect of transfer of asset to lender2 (17,000) (17,000) Funds from operations - modified ("FFOM") $ 322,350 $ 336,200 Net income per share - diluted $ 0.67 $ 0.75 FFO per share - diluted $ 2.51 $ 2.60 FFOM per share - diluted $ 2.33 $ 2.43 Weighted-average common shares outstanding - diluted 138,565,000 138,565,000 1. The company believes that the financial results for the fiscal year ending December 31, 2018 may be affected by, among other factors: • national and regional economic trends and events; • the success of leasing the company's owned properties for the 2018-2019 academic year; • the timing of acquisitions, dispositions or joint venture activity; • interest rate risk; • the timing of commencement and completion of construction on owned development projects; • the ability of the company to be awarded and the timing of the commencement of construction on third-party development projects; • university enrollment, funding and policy trends; • the ability of the company to earn third-party management revenues; • the amount of income recognized by the taxable REIT subsidiaries and any corresponding income tax expense; • the ability of the company to integrate acquired properties; • the outcome of legal proceedings arising in the normal course of business; and • the finalization of property tax rates and assessed values in certain jurisdictions. 2. Represents the net effect of a gain on the extinguishment of debt for one property being transferred to the lender in settlement of the property's $27.4 million mortgage loan, offset by a loss expected to be incurred as a result of the transfer to the lender.


 
Components of 2018 Property Net Operating Income As Reported 2018 Guidance Three Months Ended March 31, 2018 Low High % Change From 2017 Owned properties: 2018 same store properties1 Revenue $ 181,137 $ 713,100 $ 717,600 2.1% - 2.7% Operating expenses (76,689) (321,500) (319,300) 3.3% - 2.5% Net operating income 104,448 391,600 398,300 1.1% - 2.9% 2018 new properties net operating income 13,699 70,000 71,500 2018 dispositions net operating income2 182 400 400 Total owned properties net operating income $ 118,329 $ 462,000 $ 470,200 Same Store Properties Lease-up Assumptions 2018 Guidance Low High AY 2018/2019 final leasing results - rental revenue growth3 2.9% 4.4% 2018 Property Transaction Assumptions As Reported 2018 Guidance March 31, 2018 Low High Development deliveries N/A $ 390,600 $ 390,600 Presale developments - funding4 $ — $ 173,200 $ 173,200 Joint venture or dispositions $ — $ 400,000 $ 400,000 2018 Outlook - Detail ($ in thousands, except share and per share data) S-16 1. Refer to page S-18 for detail of the 2018 same store and new property groupings. 2. Includes net operating income expected to be contributed by Blanton Common through April 2018 when the property is expected to be transferred to the lender in settlement of the property's mortgage loan. 3. Rental revenue growth includes the combination of projected rental rate growth and change in occupancy. 4. Represents funding of $42.6 million for The Edge - Stadium Centre, and an additional investment of $130.6 million in the joint venture with Core Spaces/DRW Real Estate to be made in the third quarter of 2018 upon delivery of the assets.


 
Third-party Services As Reported 2018 Guidance Three Months Ended March 31, 2018 Low High Third-party development services revenue $ 846 $ 7,000 $ 10,200 Third-party management services revenue $ 2,731 $ 9,500 $ 10,300 Third-party development and mgmt. services expenses $ 4,198 $ 15,700 $ 16,100 Corporate Expenses and Other As Reported 2018 Guidance Three Months Ended March 31, 2018 Low High Net income: General and administrative expenses $ 6,699 $ 26,500 $ 27,200 Ground/facility leases expense: ACE properties $ 2,047 $ 8,900 $ 8,900 On-campus participating properties 795 2,700 3,100 Total ground/facility leases expense $ 2,842 $ 11,600 $ 12,000 Interest income $ 1,223 $ 4,900 $ 4,900 Interest expense1 2 $ 23,684 $ 94,100 $ 95,600 Capitalized interest $ 3,020 $ 11,900 $ 11,700 Amortization of deferred financing costs1 $ 1,414 $ 5,400 $ 5,400 Income tax provision $ 281 $ 1,000 $ 1,000 FFO / FFOM: Corporate depreciation3 $ 1,029 $ 4,400 $ 4,400 Contribution from on-campus participating properties $ 1,272 $ 4,150 $ 4,750 Overhead related to on-campus participating properties3 $ 347 $ 1,400 $ 1,400 Joint venture partners' share of FFO4 $ 173 $ 12,800 $ 9,500 2018 Outlook - Detail ($ in thousands, except share and per share data) S-17 1. Amounts have been updated from original guidance to include on-campus participating properties. There is no impact on the previously reported guidance range. On-campus participating properties' amounts included in the 2018 guidance range for interest expense and amortization of deferred financing costs are $5.0 million and $0.1 million, respectively. 2. Net of capitalized interest. 3. Represents expenses not added back in the calculation of FFOM. 4. Represents the joint venture partners' share of FFO, including the anticipated 2018 joint venture transaction.


 
Detail of Property Groupings As of March 31, 2018 S-18 2018 Grouping 2019 Grouping Same Store Properties New Properties Same Store Properties New Properties # of Design # of Design # of Design # of Design Properties Beds Properties Beds Properties Beds Properties Beds Properties Purchased or Developed Prior to January 1, 2017 133 77,771 133 77,771 2017 Acquisition Properties 7 3,516 7 3,516 2017 Development Deliveries 10 7,454 10 7,454 2018 Development Deliveries 10 6,986 10 6,986 2019 Development Deliveries 5 3,159 5 3,159 Total Owned Properties 133 77,771 32 21,115 150 88,741 15 10,145 Total # of Owned Properties Excluded1 1 Total Owned Design Beds Excluded1 860 Grand Total # of Owned Properties (All Groupings) 166 Grand Total Owned Design Beds (All Groupings) 99,746 Note on Property Portfolio: When disclosing our number of properties and design beds as of a certain date, we include all properties that are owned and operating as of that date, as well as properties that are under construction and anticipated to open for operations in future years. Properties that are in our development pipeline but have not yet commenced construction are not included. 2018: The 2018 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2018 and 2017. This same store grouping will be used for purposes of presenting our 2018 same store operating results. 2019: The 2019 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2019 and 2018. This same store grouping will be used for purposes of presenting our 2019 same store operating results. 1. Represents a property currently in receivership that is in the process of being transferred to the lender in settlement of the property's $27.4 million mortgage loan that matured in August 2017.


 
Definitions ACE The company’s American Campus Equity program, whereby the company enters into long-term ground/facility lease agreements with Universities to invest our capital and to develop, own, and operate on-campus student housing communities. Properties under this structure are considered to be owned and are included in the company's consolidated financial statements. Adjusted EBITDA* EBITDA, including pro forma adjustments to reflect acquisitions, development deliveries, and dispositions as if such transactions had occurred on the first day of the 12-month period presented. Adjusted Interest Expense* Interest Expense, including pro forma adjustments to reflect acquisitions, development deliveries, dispositions, debt repayments, and debt refinancings as if such transactions had occurred on the first day of the 12-month period presented. Cash Cash and cash equivalents, determined on a consolidated basis in accordance with GAAP. Cash Interest Expense* Consolidated interest expense calculated in accordance with GAAP, plus amounts which have been deducted and minus amounts which have been added for, without duplication: (i) the amortization of mark-to-market premiums/discounts on mortgage loans assumed in connection with acquisitions; (ii) capitalized interest; and (iii) the change in accrued interest during the period presented. Design Beds Total beds based on the original property design, generally as specified in the construction documents. EBITDA* Consolidated net income calculated in accordance with GAAP, plus amounts which have been deducted and minus amounts which have been added for, without duplication: (i) interest expense; (ii) provision for income taxes; (iii) depreciation, amortization and all other non- cash items; (iv) provision for gains and losses; (v) noncontrolling interests; and (vi) extraordinary and other non-recurring items, as we determine in good faith. Funds from Operations (”FFO”) Determined based on the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). Calculated as consolidated net income or loss attributable to common shares computed in accordance with GAAP, excluding gains or losses from depreciable operating property sales, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Also excludes non-cash impairment charges. FFO Modified (”FFOM”) FFO modified to reflect certain adjustments related to the economic performance of our on-campus participating properties, and the elimination of property acquisition costs, contractual executive separation and retirement charges and other non-cash items, as we determine in good faith. The company believes it is meaningful to eliminate the FFO generated from the on-campus participating properties and instead to reflect the company's 50% share of the properties' net cash flow and management and development fees received, as this measure better reflects the economic benefit derived from the company's involvement in the operation of these properties. * These definitions are provided for purposes of calculating the company’s unsecured notes covenants and other key ratios. S-19


 
Definitions GAAP Accounting principles generally accepted in the United States of America. Interest Coverage* Adjusted EBITDA / Adjusted Interest Expense. Net Debt* Total Debt less Cash. Net Debt to EBITDA* Net Debt divided by Adjusted EBITDA. Net Operating Income “NOI” Property revenues less direct property operating expenses, excluding depreciation, but including allocated corporate general and administrative expenses. On-campus Participating Properties A transaction structure whereby the company enters into long-term ground/facility lease agreements with Universities to develop, construct, and operate student housing communities. Under the terms of the leases, title to the constructed facilities is held by the University/lessor and such lessor receives 50% of net cash flows, as defined, on an annual basis through the term of the lease. Physical Occupancy Occupied beds, including staff accommodations, divided by Design Beds. Rentable Beds Design beds less beds used by on-site staff. Same Store Grouping Owned properties owned and operating for both of the entire annual periods presented, which are not conducting or planning to conduct substantial development or redevelopment, or repositioning activities, and are not classified as held for sale as of the current period-end. Secured Debt* The portion of Total Debt that is secured by a mortgage, trust, deed of trust, deed to secure indebtedness, pledge, security interest, assignment of collateral, or any other security agreement. Total Asset Value* Undepreciated book value of real estate assets and all other assets, excluding receivables and intangibles, of our consolidated subsidiaries, all determined in accordance with GAAP. Total Debt* Total consolidated debt calculated in accordance with GAAP, including capital leases and excluding mark-to-market premiums/discounts on mortgage loans assumed in connection with acquisitions, the original issued discount on unsecured notes, and deferred financing costs. Total Equity Market Value Fully diluted common shares times the company’s stock price at period-end. Unencumbered Asset Value* The sum of (i) the undepreciated book value of real estate assets which are not subject to secured debt; and (ii) all other assets, excluding accounts receivable and intangibles, for such properties. Does not include assets of unconsolidated joint ventures. Unsecured Debt* The portion of Total Debt that is not Secured Debt. * These definitions are provided for purposes of calculating the company’s unsecured notes covenants and other key ratios. S-20


 
Investor Information Corporate Headquarters Investor Relations American Campus Communities, Inc. Tel: (512) 732-1000 Ryan Dennison (512) 732-1000 12700 Hill Country Blvd., Suite T-200 Fax: (512) 732-2450 SVP, Capital Markets and Investor Relations rdennison@americancampus.com Austin, Texas 78738 www.americancampus.com Executive Management Bill Bayless Chief Executive Officer Jim Hopke President Jennifer Beese Chief Operating Officer Daniel Perry Chief Financial Officer William Talbot Chief Investment Officer Kim Voss Chief Accounting Officer Research Coverage Jeffery Spector / Juan Sanabria Bank of America / Merrill Lynch (646) 855-1363 / (646) 855-1589 jeff.spector@baml.com / juan.sanabria@baml.com Michael Bilerman / Nick Joseph Citigroup Equity Research (212) 816-1383 / (212) 816-1909 michael.bilerman@citi.com / nicholas.joseph@citi.com Vincent Chao / Vlad Rudnytsky Deutsche Bank Securities, Inc. (212) 250-6799 / (212) 250-6090 vincent.chao@db.com / vlad.rudnytsky@db.com Steve Sakwa / Samir Khanal Evercore ISI (212) 446-9462 / (212) 888-3796 steve.sakwa@evercoreisi.com / samir.khanal@evercoreisi.com Andrew Rosivach / Jeff Pehl Goldman Sachs (212) 902-2796 / (212) 357-4474 andrew.rosivach@gs.com / jeffrey.pehl@gs.com John Pawlowski / Ryan Lumb Green Street Advisors (949) 640-8780 / (949) 640-8780 jpawlowski@greenst.com / rlumb@greenst.com Carol Kemple Hilliard Lyons (502) 588-1839 ckemple@hilliard.com Aaron Hecht JMP Securities (415) 835-3963 ahecht@jmpsecurities.com Anthony Paolone / Nikita Bely J.P. Morgan Securities (212) 622-6682 / (212) 622-0695 anthony.paolone@jpmorgan.com / nikita.bely@jpmorgan.com Jordan Sadler / Austin Wurschmidt KeyBanc Capital Markets (917) 368-2280 / (917) 368-2311 jsadler@keybanccm.com / awurschmidt@key.com Drew Babin / Alex Kubicek Robert W. Baird & Co. (610) 238-6634 / (414) 765-7311 dbabin@rwbaird.com / akubicek@rwbaird.com Alexander Goldfarb / Daniel Santos Sandler O'Neill + Partners, L.P. (212) 466-7937 / (212) 466-7927 agoldfarb@sandleroneill.com / dsantos@sandleroneill.com American Campus Communities, Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding American Campus Communities, Inc.'s performance made by such analysts are theirs alone and do not represent the opinions, forecasts or predictions of the company or its management. American Campus Communities, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations. S-21


 
Forward-looking Statements and Non-GAAP Financial Measures In addition to historical information, this supplemental package contains forward-looking statements under the applicable federal securities law. These statements are based on management’s current expectations and assumptions regarding markets in which American Campus Communities operates, operational strategies, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. For discussions of some risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2017 under the heading “Risk Factors” and under the heading “Business - Forward-looking Statements” and subsequent quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statements, including our expected 2018 operating results, whether as a result of new information, future events, or otherwise. This presentation contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”). These items include earnings before interest, tax, depreciation and amortization (“EBITDA”), net operating income (“NOI”), funds from operations (“FFO”) and FFO-Modified (“FFOM”). Refer to Definitions for a detailed explanation of terms appearing in the supplement. The Company presents this financial information because it considers each item an important supplemental measure of its operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. These measures should not be considered as alternatives to net income or loss computed in accordance with GAAP as an indicator of the Company's financial performance or to cash flow from operating activities computed in accordance with GAAP as an indicator of its liquidity, nor are these measures indicative of funds available to fund its cash needs, including its ability to pay dividends or make distributions.


 
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