Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document
falsefalse00012836300001357369 0001283630 2019-10-14 2019-10-14 0001283630 acc:AmericanCampusCommunitiesOperatingPartnershipLimitedPartnershipMember 2019-10-14 2019-10-14
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): October 14, 2019


AMERICAN CAMPUS COMMUNITIES, INC.
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP LP
(Exact name of Registrant as specified in its Charter)
Maryland
001-32265
76-0753089
Maryland
333-181102-01
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)

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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:                                                                                   
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common stock, par value $.01 per share
ACC
New York Stock Exchange




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

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.





ITEM 7.01 REGULATION FD DISCLOSURE 

On October 14, 2019 American Campus Communities American Campus Communities, Inc. (NYSE:ACC) (the “Company”), issued a press release announcing final leasing results for the 2019-2020 academic year and revised earnings guidance for the year ended December 31, 2019. The text of the press release is included as Exhibit 99.1 to this Current Report. Information regarding the final leasing results is included as Exhibit 99.2 of this Current Report. Information regarding the Company’s revised earnings guidance is included as Exhibits 99.3 and 99.4 of this Current Report.

Such information is furnished pursuant to Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, 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 Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.


ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

The list of exhibits is incorporated herein by reference to the Exhibit Index.
Exhibit No.
 
Description
 
Press Release dated October 14, 2019
 
Portfolio Overview
 
2019 Outlook - Summary
 
2019 Outlook - Changes from Previous Guidance
 
 
 


















SIGNATURES

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:
October 14, 2019
 
 
By: 
/s/ Kim K. Voss
 
 
 
 
 
Kim K. Voss
 
 
 
 
 
Executive Vice President, Chief Accounting Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP LP
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By: 
/s/ Kim K. Voss
 
 
 
 
 
Kim K. Voss
 
 
 
 
 
Executive Vice President, Chief Accounting Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1

MEDIA RELEASE
                                                                         400367907_acclogocolora1014.jpg

American Campus Communities Provides Interim Update
    
Increases midpoint of annual FFOM per share guidance; announces final leasing results


Austin, TX, October 14, 2019 - American Campus Communities, Inc. (NYSE: ACC), the nation’s largest owner and manager of high-quality student housing properties, today provided an update to the company’s 2019 outlook, increasing the midpoint of FFOM per share guidance by $0.02, and provided leasing results for the 2019-2020 academic year in conjunction with the company’s participation in the 2019 National Multifamily Housing Council (NMHC) Student Housing Conference. Additionally, the company is providing an update on the anticipated level of capital recycling activity for the remainder of 2019.

2019 Outlook

The company is increasing its 2019 outlook primarily to reflect the completion of the Fall 2019 lease-up, previously released financial results and anticipated results for the remainder of the year. Based upon these and other factors, management anticipates that 2019 FFO will be in the range of $2.61 to $2.63 and FFOM will be in the range of $2.40 to $2.44 per fully diluted share, respectively. This revision increases the FFOM guidance midpoint by $0.02.

A reconciliation of the range provided for projected net income to projected FFO and FFOM for the fiscal year ended December 31, 2019 is included in Exhibit 99.2 and additional details regarding the company’s updated 2019 outlook are included in Exhibit 99.3.

All guidance is based on the current expectations and judgment of the company's management team.

Academic Year 2019-2020 Leasing Results

As of September 30, 2019, the company’s 2020 same store portfolio was 97.4 percent leased, an increase of 40 basis points as compared to 97.0 percent leased as of September 30, 2018, with 1.4 percent rental rate growth over in-place rents. The results represent 1.7 percent opening rental revenue growth. This 1.7 percent rental revenue growth includes 100 percent of the performance of the Austin portfolio, which is owned 55 percent by the company and 45 percent by a joint venture partner. Adjusted to include only the company’s 55 percent share of the Austin portfolio, the effective rental revenue growth which flows through to FFOM is 2.0 percent. Additionally, when excluding the Austin portfolio, the company’s remaining 66 same store markets achieved 2.4 percent opening rental revenue growth, in-line with the midpoint of the financial guidance for those markets.

The company’s new owned properties, which represent 2019 development and presale development properties, were 98.1 percent leased as of September 30, 2019. Additional details regarding the company’s 2019-2020 academic year leasing results are included in Exhibit 99.2.






“We are pleased to increase the midpoint of our fiscal 2019 guidance, driven by better than anticipated operating performance to-date, improved occupancy in the spring and summer months facilitated by advancements in our Next Gen systems and business intelligence initiatives, and outperformance in our 2018 and 2019 development properties,” said Bill Bayless, American Campus Communities CEO. “Overall, the Fall 2019 same store lease-up finished within our expectations. We remain encouraged with the broad industry fundamentals, as 66 of our 67 same store markets, which excludes the Austin market, achieved 2.4 percent opening rental revenue growth in total. We have also generated significant returns in Austin and expect the market to continue to perform well over the long-term as it absorbs new supply.”

Capital Recycling Update

The company has executed a letter of intent for the sale of one asset with anticipated proceeds of $100 million. In addition, the company is in negotiations for the sale of another property with proceeds of approximately $150 million. While these transactions have not been completed, the disposition of these previously acquired assets is expected to represent a low 4 percent economic cap rate.

“The student housing transaction environment remains vibrant with core assets trading in the low 4 percent cap rate range. Executing on the anticipated dispositions at these levels is currently our most attractive source of external capital,” said William Talbot, American Campus Communities CIO. “The continued value and attractiveness of student housing to institutional real estate investors provides us with the opportunity to recycle capital into higher return developments at yields of 6.25 percent and above. This is exemplified by our 2019 new developments in Boston, Auburn and Tucson, which are expected to exceed our targeted yields and generate significant net asset value for our shareholders.”

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 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 June 30, 2019, American Campus Communities owned 169 student housing properties containing approximately 108,800 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 203 properties with approximately 133,100 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, 2018 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 2019 operating results, whether as a result of new information, future events, or otherwise.

AT THE COMPANY    
Ryan Dennison
Investor Relations
(512) 732-1000




(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

ex992portfoliooverviewr2
Portfolio Overview 1 Exhibit 99.2 ($ in thousands, except share and per share data) Rental Revenue per Leasing Status as of Fall 2019 Leased Bed for Design September 30, Final Rental Revenue Academic Year 2 Property Type Beds 2019 2018 Rate Change Change 2019 / 2020 2018 / 2019 2020 Same Store Owned Properties 93,702 97.4% 97.0% 1.4% 1.7% 3 $788 $777 New Owned Properties 4 3,159 98.1% n/a n/a n/a $1,074 n/a Total - Owned Properties 96,861 97.4% 97.0% n/a n/a $797 n/a Note: The same store grouping presented above represents the properties that will be classified as same store properties in 2020. This represents properties owned and operating for both of the entire years ended December 31, 2019 and 2020, which are not conducting or planning to conduct substantial development or redevelopment activities, and are not classified as held for sale. This same store grouping is presented for purposes of disclosing the final leasing results for the 2019/2020 academic year, which will have a significant effect on our results of operations for the year ended December 31, 2020. 1. Represents leasing status for the 2019 / 2020 academic year as of September 30, 2019, as compared to prior academic year occupancy and rental rates as of September 30, 2018. 2. Represents average rental revenue per leased bed for the academic years presented. 3. Adjusted to include only the company's 55 percent share of the Austin portfolio, the effective rental revenue growth which flows through to FFOM is 2.0 percent. 4. Includes 2019 development deliveries and presale development projects.


 
(Back To Top)

Section 4: EX-99.3 (EXHIBIT 99.3)

ex9932019outlooksummaryr
2019 Outlook - Summary 1 Exhibit 99.3 ($ in thousands, except share and per share data) Prior Guidance Current Guidance 2 Low High Low High Net income 3 $ 74,600 $ 86,700 $ 102,500 $ 106,300 Noncontrolling interests 900 1,000 500 500 Depreciation and amortization 258,200 259,100 259,000 259,000 Funds from operations ("FFO") $ 333,700 $ 346,800 $ 362,000 $ 365,800 Elimination of operations from on-campus participating properties (14,100) (13,700) (14,400) (14,000) Contribution from on-campus participating properties 5,500 6,100 4,800 5,400 Elimination of gain from extinguishment of debt 3 — — (21,000) (21,000) Elimination of FFO from property in receivership 3 — — 1,900 1,900 Transaction costs 4 800 800 600 600 Funds from operations - modified ("FFOM") $ 325,900 $ 340,000 $ 333,900 $ 338,700 Net income per share - diluted $ 0.54 $ 0.62 $ 0.74 $ 0.77 FFO per share - diluted $ 2.40 $ 2.50 $ 2.61 $ 2.63 FFOM per share - diluted $ 2.35 $ 2.45 $ 2.40 $ 2.44 Weighted-average common shares outstanding - diluted 138,866,100 138,866,100 138,866,100 138,866,100 1. Refer to Item 7 in the company's Form 10-K for the year ended December 31, 2018 for a detailed definition of FFO and FFOM. The company believes that the financial results for the fiscal year ended December 31, 2019 may be affected by, among other factors: • national and regional economic trends and events; • interest rate risk; • university enrollment, funding and policy trends; • the timing of acquisitions, dispositions or joint venture activity; • 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; • 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 and stabilize acquired and/or developed 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. Refer to Exhibit 99.4 for details on changes in assumptions used to determine the revised guidance range. 3. In July 2019, an owned property was transferred to the lender in settlement of the property's $27.4 million mortgage loan. The gain resulting from the transfer as well as the operating results of the property during the receivership period have been eliminated when calculating FFOM in order to more accurately present the company's anticipated operating results for 2019. 4. Represents transaction costs related to the closing of two presale development properties.


 
(Back To Top)

Section 5: EX-99.4 (EXHIBIT 99.4)

ex9942019outlookchangesf
Exhibit 99.4 2019 Outlook - Changes from Previous Guidance ($ in thousands, except share and per share data) FFO Guidance Prior Guidance Current Guidance Significant Changes from Previous Guidance and Assumptions Year Ended Year Ended December 31, 2019 December 31, 2019 Low High Low High Owned properties: 2019 same store properties: Same store revenue $ 797,700 $ 802,700 $ 798,200 $ 800,700 Owned property guidance revised to reflect final leasing results for the 2019/2020 % growth 2.2 % 2.9 % 2.3 % 2.6 % academic year and anticipated property operating performance for the remainder of the year. Same store operating expenses (359,500) (356,500) (359,100) (357,600) % growth 3.1 % 2.2 % 3.0 % 2.6 % Same store net operating income ("NOI") $ 438,200 $ 446,200 $ 439,100 $ 443,100 % growth 1.5 % 3.4 % 1.7 % 2.7 % NOI impact from dispositions revised to reflect the disposition of properties not 2019 new properties NOI $ 44,700 $ 45,900 $ 46,900 $ 47,500 anticipated in prior guidance (refer to revised capital recycling assumptions detailed in 2019 NOI impact from dispositions and other 1 2 (100) (100) (1,400) (1,400) footnote 1 below). Also includes NOI contributed from previously disclosed dispositions Total owned properties NOI $ 482,800 $ 492,000 $ 484,600 $ 489,200 and recurring professional fees related to the operation of the ACC/Allianz joint venture. Third-party development services revenue $ 13,400 $ 16,400 $ 14,200 $ 14,200 Third-party development services revenue revised to eliminate fee income from two Third-party management services revenue $ 12,800 $ 13,600 $ 12,400 $ 13,200 projects now anticipated to commence construction in 2020. Third-party development and mgmt. services expenses $ (20,100) $ (20,500) $ (19,700) $ (20,100) General and administrative expenses $ (29,800) $ (30,500) $ (29,700) $ (30,400) Ground/facility leases expense $ (14,100) $ (14,500) $ (13,300) $ (13,800) Less: OCPP ground/facility leases expense $ 3,300 $ 3,700 $ 2,700 $ 3,100 Interest income 3 $ 3,600 $ 3,600 $ 3,600 $ 3,600 Interest expense 2 $ (110,000) $ (111,200) $ (111,300) $ (111,300) Interest expense revised to reflect the June 2019 issuance of $400 million senior Less: OCPP interest expense $ 4,900 $ 4,900 $ 5,100 $ 5,100 unsecured notes with a 3.3% coupon and a lower interest rate environment for the year 3 than anticipated in prior guidance. Interest expense is net of $11.9 million of capitalized Amortization of deferred financing costs $ (4,700) $ (4,800) $ (4,900) $ (4,900) interest. Corporate depreciation 4 $ (5,300) $ (5,300) $ (4,800) $ (4,800) OCPP overhead $ (1,600) $ (1,600) $ (1,500) $ (1,500) Income tax provision $ (1,100) $ (1,100) $ (1,100) $ (1,100) Joint Ventures ("JV"): Existing JV partners' share of FFO 5 $ (11,200) $ (11,200) $ (9,700) $ (9,700) Existing JV partners’ share of FFO revised to reflect final 2019/2020 academic year Speculative JV partner's share of FFO 1 $ (3,300) $ (400) $ — $ — leasing results for the ACC/Allianz JV portfolio and the portfolio’s anticipated operating performance for the remainder of the year. Contribution from OCPP 6 $ 5,500 $ 6,100 $ 4,800 $ 5,400 Elimination of property in receivership 2 $ — $ — $ 1,900 $ 1,900 Transaction costs 7 $ 800 $ 800 $ 600 $ 600 FFOM per share - diluted $ 2.35 $ 2.45 $ 2.40 $ 2.44 1. Revisions to NOI impact from dispositions and speculative JV partner’s share of FFO reflect the anticipated disposition of properties for proceeds of approximately $250 million, while prior guidance included the sale of a minority JV interest in a portfolio of properties for proceeds of $90 to $180 million. 2. Current guidance figures include the operating results of one property transferred to the lender in July 2019 that is eliminated when calculating FFOM and therefore was not included in original guidance estimates. The property contributed a net operating loss of $0.1 million and $1.8 million in interest expense through the date of the transfer. 3. Excluding on-campus participating properties ("OCCPs"). 4. Represents depreciation expense not added back in the calculation of FFO as per the NAREIT definition of FFO. 5. Current guidance includes existing JV partners' share of net income of $1.1 million plus their share of real estate depreciation expense of $8.6 million for a total share of FFO of $9.7 million. 6. Includes the company's 50% share of OCPP net cash flow and management and development fees received. 7. Represents transaction costs related to the closing of two presale development properties.


 
(Back To Top)