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Section 1: 8-K (8-K)

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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 21, 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 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 21, 2019, American Campus Communities, Inc. (the “Company”) issued a press release (the “Earnings Release”) announcing, among other things, earnings for the quarter ended September 30, 2019. 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 October 21, 2019, the Company disclosed a supplemental analyst package in connection with its earnings conference call for the quarter ended September 30, 2019 which will take place on October 22, 2019. 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 October 21, 2019
 
Supplemental Analyst Package - Third Quarter 2019




























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:
October 22, 2019
 
 
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
400530910_acclogocolora1021.jpg


American Campus Communities, Inc. Reports Third Quarter 2019 Financial Results

Increased quarterly FFOM per share by 5 percent; announces three new on-campus development projects


AUSTIN, Texas -- (BUSINESS WIRE)—October 21, 2019--American Campus Communities, Inc. (NYSE:ACC) today announced the following financial results for the quarter ended September 30, 2019.

Highlights

Reported net income attributable to ACC of $20.2 million or $0.14 per fully diluted share, versus net loss of $2.3 million or $0.02 per fully diluted share in the third quarter 2018.

Increased FFOM per fully diluted share by 4.5 percent to $0.46 or $64.1 million, versus $0.44 or $60.6 million for the third quarter prior year.

Grew same store net operating income ("NOI") by 0.4 percent over the third quarter 2018 with revenues increasing 2.2 percent and operating expenses increasing 3.9 percent.

Achieved 1.7 percent opening rental revenue growth for 2020 same store properties upon completion of the 2019-2020 academic year lease-up. Results included 1.4 percent average rental rate growth and occupancy of 97.4 percent as of September 30, 2019 versus 97.0 percent for the same date prior year. 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.

Delivered five new owned development and presale development projects containing 3,159 beds into service for the 2019-2020 academic year. Totaling $405.9 million, this year’s development portfolio was 98.1 percent occupied as of September 30, 2019.

Awarded or directly negotiating three new on-campus development projects with Georgetown University in Washington D.C., Texas State University in San Marcos, TX and a second phase project with Northeastern University in Boston.

“We are pleased with the successful delivery of five developments this quarter. This group of new assets has already contributed to the $0.02 earnings guidance raise we recently announced,” said Bill Bayless, American Campus Communities CEO. “With our target development yields of 6.25 percent and above, and private market values for core assets trading in the low 4 percent area, these assets also generated significant net asset value for our shareholders upon delivery. As we look forward to the start of a new leasing season, we see a healthy fundamental environment with Fall 2020 new supply in our markets expected to decline approximately 20 percent from 2019 levels.”
Third Quarter Operating Results

Revenue for the 2019 third quarter totaled $227.7 million versus $213.5 million in the third quarter 2018, and operating income for the quarter totaled $27.3 million versus $21.5 million in the prior year third quarter. The increase in revenue and operating income was primarily due to increased occupancy and rental rates and growth associated with recently completed development and presale development projects. Net income for the 2019 third quarter totaled $20.2 million, or $0.14 per fully diluted share, compared with net loss of $2.3 million, or $0.02 per fully diluted share for the same quarter in 2018. FFO for the 2019 third quarter totaled



$86.0 million, or $0.62 per fully diluted share, as compared to $60.6 million, or $0.44 per fully diluted share for the same quarter in 2018. FFOM for the 2019 third quarter was $64.1 million, or $0.46 per fully diluted share, as compared to $60.6 million, or $0.44 per fully diluted share for the same quarter in 2018. A reconciliation of FFO and FFOM to net income is provided in Table 3.
 
NOI for same store properties was $91.2 million in the quarter, an increase of 0.4 percent from $90.9 million in the 2018 third quarter. Same store property revenues increased by 2.2 percent over the 2018 third quarter due primarily to an increase in occupancy and average rental rates. Same store property operating expenses increased by 3.9 percent versus the prior year quarter. NOI for the total portfolio increased 4.7 percent to $100.0 million for the quarter from $95.5 million in the comparable period of 2018. A reconciliation of same store NOI to total NOI is provided in Table 4.

Portfolio Update

Developments
During the quarter, the company placed into service five owned development and presale development assets totaling $405.9 million. As of September 30, 2019, this year’s portfolio achieved 98.1 percent occupancy. The company also progressed with construction of its $785.8 million development pipeline with expected deliveries in 2020 through 2023. These projects are all core Class A assets and remain on track to meet their targeted stabilized development yield in the range of 6.25 — 6.8 percent.
On-Campus Development Awards
The company has been awarded or is directly negotiating three new on-campus development projects through its public-private partnership platform. Pre-development activities are underway for these projects, which include anticipated third-party development projects with Georgetown University in Washington D.C. and Texas State University in San Marcos, TX, and an anticipated second phase American Campus Equity (ACE®) development with Northeastern University in Boston. The transaction structure, scope, feasibility, fees and timing have not been finalized for the proposed projects.
Capital Recycling Update

The company is under an access agreement and the buyer is completing final due diligence 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. The sale of these previously acquired assets are expected to represent a low 4 percent economic cap rate.
Capital Markets
At-The-Market (ATM) Share Offering Program
The company did not sell any shares under the ATM during the quarter.
2019 Outlook
The company is maintaining its recently increased guidance range for the fiscal year 2019, anticipating that FFO will be in the range of $2.61 to $2.63 per fully diluted share and FFOM will be in the range of $2.40 to $2.44 per fully diluted share. For additional details regarding the company’s 2019 outlook, see pages S-18 through S-19 of the Supplemental Analyst Package 3Q 2019. 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, 2019 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 third quarter results and the 2019 outlook on Tuesday, October 22, 2019 at 10:00 a.m. ET (9:00 a.m. CT). The conference call may be accessed by dialing 888-317-6003 passcode 4824168, 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 November 5, 2019 by dialing 877-344-7529 or 412-317-0088 conference number 10134878. 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 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 September 30, 2019, American Campus Communities owned 168 student housing properties containing approximately 113,400 beds. Including its owned and third-party managed properties, ACC's total managed portfolio consisted of 205 properties with approximately 140,300 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.







Table 1
American Campus Communities, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
 
 
September 30, 2019
 
December 31, 2018
 
 
(unaudited)
 
 
Assets
 
 
 
 
 
 
 
 
 
Investments in real estate:
 
 
 
 
Owned properties, net
 
$
6,759,867

 
$
6,583,397

On-campus participating properties, net
 
76,854

 
77,637

Investments in real estate, net
 
6,836,721

 
6,661,034

 
 
 
 
 
Cash and cash equivalents
 
56,218

 
71,238

Restricted cash
 
29,569

 
35,279

Student contracts receivable
 
27,360

 
8,565

Operating lease right of use assets 1
 
461,810

 

Other assets 1
 
257,304

 
262,730

 
 
 
 
 
Total assets
 
$
7,668,982

 
$
7,038,846

 
 
 
 
 
Liabilities and equity
 
 

 
 

 
 
 
 
 
Liabilities:
 
 

 
 

Secured mortgage, construction and bond debt, net
 
$
827,588

 
$
853,084

Unsecured notes, net
 
1,984,748

 
1,588,446

Unsecured term loans, net
 
199,033

 
198,769

Unsecured revolving credit facility
 
352,100

 
387,300

Accounts payable and accrued expenses
 
86,295

 
88,767

Operating lease liabilities 2
 
469,479

 

   Other liabilities 2
 
211,612

 
191,233

Total liabilities
 
4,130,855

 
3,307,599

 
 
 
 
 
Redeemable noncontrolling interests
 
157,863

 
184,446

 
 
 
 
 
Equity:
 
 

 
 

American Campus Communities, Inc. and Subsidiaries
  stockholders’ equity:
 
 
 
 
Common stock
 
1,373

 
1,370

Additional paid in capital
 
4,455,565

 
4,458,240

Common stock held in rabbi trust
 
(3,486
)
 
(3,092
)
Accumulated earnings and dividends
 
(1,104,448
)
 
(971,070
)
Accumulated other comprehensive loss
 
(18,929
)
 
(4,397
)
Total American Campus Communities, Inc. and
  Subsidiaries stockholders’ equity
 
3,330,075

 
3,481,051

  Noncontrolling interests – partially owned properties
 
50,189

 
65,750

Total equity
 
3,380,264

 
3,546,801

 
 
 
 
 
Total liabilities and equity
 
$
7,668,982

 
$
7,038,846


1.
For purposes of calculating net asset value ("NAV") at September 30, 2019, the company excludes other assets of approximately $4.9 million related to net deferred financing costs on its revolving credit facility and the net value of in-place leases and operating lease right of use assets disclosed above associated with new lease accounting guidance that was adopted by the company on January 1, 2019.
2.
For purposes of calculating NAV at September 30, 2019, the company excludes other liabilities of approximately $77.6 million related to deferred revenue and fee income, as well as operating lease liabilities disclosed above associated with new lease accounting guidance that was adopted by the company on January 1, 2019.







Table 2
American Campus Communities, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(dollars in thousands, except share and per share data)
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(unaudited)
 
(unaudited)
Revenues
 
 
 
 
 
 
 
 
Owned properties 1
 
$
211,082

 
$
202,834

 
$
638,657

 
$
597,854

On-campus participating properties 1
 
6,944

 
6,980

 
24,788

 
23,605

Third-party development services
 
5,611

 
835

 
12,389

 
3,883

Third-party management services
 
3,342

 
2,128

 
9,118

 
7,311

Resident services
 
726

 
692

 
2,255

 
2,284

Total revenues
 
227,705

 
213,469

 
687,207

 
634,937

 
 
 
 
 
 
 
 
 
Operating expenses
 
 

 
 

 
 
 
 

Owned properties 1
 
111,836

 
107,997

 
294,768

 
282,193

On-campus participating properties 1
 
3,822

 
3,875

 
11,585

 
11,030

Third-party development and management services
 
5,430

 
3,831

 
14,129

 
11,573

General and administrative  2
 
7,165

 
7,183

 
22,595

 
27,055

Depreciation and amortization
 
68,930

 
66,131

 
206,500

 
194,447

Ground/facility leases
 
3,215

 
2,951

 
10,000

 
8,526

Loss (gain) from disposition of real estate
 

 

 
282

 
(42,314
)
Provision for real estate impairment
 

 

 
3,201

 

Other operating income
 

 

 

 
(2,648
)
Total operating expenses
 
200,398

 
191,968

 
563,060

 
489,862

 
 
 
 
 
 
 
 
 
Operating income
 
27,307

 
21,501

 
124,147

 
145,075

 
 
 
 
 
 
 
 
 
Nonoperating income (expenses)
 
 

 
 

 
 
 
 

Interest income
 
960

 
1,274

 
2,855

 
3,740

Interest expense
 
(28,303
)
 
(25,185
)
 
(82,432
)
 
(72,207
)
Amortization of deferred financing costs
 
(1,315
)
 
(1,116
)
 
(3,665
)
 
(4,744
)
Gain (loss) from extinguishment of debt 3
 
20,992

 

 
20,992

 
(784
)
Other nonoperating income
 

 
570

 

 
570

Total nonoperating expenses
 
(7,666
)
 
(24,457
)
 
(62,250
)
 
(73,425
)
 
 
 
 
 
 
 
 
 
   Income (loss) before income taxes
 
19,641

 
(2,956
)
 
61,897

 
71,650

Income tax (provision) benefit 4
 
(305
)
 
219

 
(983
)
 
(2,147
)
Net income (loss)
 
19,336

 
(2,737
)
 
60,914

 
69,503

Net loss (income) attributable to noncontrolling interests
 
887

 
392

 
(665
)
 
88

Net income (loss) attributable to ACC, Inc. and
  Subsidiaries common stockholders
 
$
20,223

 
$
(2,345
)
 
$
60,249

 
$
69,591

Other comprehensive (loss) income
 
 

 
 

 
 
 
 

Change in fair value of interest rate swaps and other
 
(145
)
 
81

 
(14,532
)
 
726

Comprehensive income (loss)
 
$
20,078

 
$
(2,264
)
 
$
45,717

 
$
70,317

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

 
 
 
 

 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
0.14

 
$
(0.02
)
 
$
0.43

 
$
0.50

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
 

 
 

 
 
 
 

 
 
 
 
 
 
 
 
 
Basic
 
137,403,842

 
137,022,012

 
137,259,130

 
136,742,094

 
 
 
 
 
 
 
 
 
Diluted
 
138,375,527

 
137,022,012

 
138,257,906

 
137,660,802


1.
The company adopted new lease accounting guidance on January 1, 2019, which required the reclassification of the provision for uncollectible accounts from operating expenses to revenue. The reclassification is reflected on a prospective basis starting in the first quarter 2019, but the prior year amounts have not been reclassified. The provision for uncollectible accounts for owned properties was $3.3 million and $2.9 million for the three months ended September 30, 2019 and 2018, respectively, and was $6.1 million and $5.6 million for the nine months ended September 30, 2019 and 2018, respectively. The provision for uncollectible accounts for on-campus participating properties for the three months ended September 30, 2019 was $0.1 million, nominal for the three months ended September 30, 2018, and a $0.6 million benefit and a $0.2 million expense for the nine months ended September 30, 2019 and 2018, respectively.
2.
The nine months ended September 30, 2018 amount includes $5.8 million of transaction costs incurred in connection with the closing of the ACC / Allianz joint venture transaction in May 2018.
3.
The three and nine months ended September 30, 2019 amounts represent the gain on the extinguishment of debt associated with a property that was transferred to the lender in settlement of the property's mortgage loan in July 2019.
4.
Income tax provision / benefit for the three and nine months ended September 30, 2018 includes a $0.5 million benefit and a $1.3 million provision, respectively, related to an estimated taxable gain resulting from the ACC / Allianz joint venture transaction which closed in May 2018.




Table 3
American Campus Communities, Inc. and Subsidiaries
Consolidated Statements of Funds from Operations (“FFO”)
(unaudited, dollars in thousands, except share and per share data)
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2019
 
2018
 
2019
 
2018
Net income (loss) attributable to ACC, Inc. and Subsidiaries
  common stockholders
 
$
20,223

 
$
(2,345
)
 
$
60,249

 
$
69,591

Noncontrolling interests' share of net (loss) income
 
(887
)
 
(392
)
 
665

 
(88
)
Joint venture partners' share of FFO
 
(1,175
)
 
(1,563
)
 
(6,856
)
 
(2,100
)
Loss (gain) from disposition of real estate
 

 

 
282

 
(42,314
)
Elimination of provision for real estate impairment
 

 

 
3,201

 

Total depreciation and amortization
 
68,930

 
66,131

 
206,500

 
194,447

Corporate depreciation 1
 
(1,135
)
 
(1,261
)
 
(3,528
)
 
(3,420
)
FFO attributable to common stockholders and OP unitholders
 
85,956

 
60,570

 
260,513

 
216,116

Elimination of operations of on-campus participating properties
 
 

 
 

 
 
 
 

Net loss (income) from on-campus participating properties
 
424

 
436

 
(2,138
)
 
(1,715
)
Amortization of investment in on-campus participating properties
 
(2,289
)
 
(1,962
)
 
(6,334
)
 
(5,856
)
 
 
84,091

 
59,044

 
252,041

 
208,545

Modifications to reflect operational performance of on-campus participating properties
 
 

 
 

 
 

 
 

Our share of net cashflow 2
 
353

 
644

 
2,063

 
2,232

Management fees and other
 
369

 
302

 
1,597

 
1,058

Contribution from on-campus participating properties
 
722

 
946

 
3,660

 
3,290

 
 
 
 
 
 
 
 
 
Transaction costs 3
 
147

 
(232
)
 
147

 
7,586

Elimination of (gain) loss from extinguishment of debt 4
 
(20,992
)
 

 
(20,992
)
 
784

Elimination of gain from litigation settlement 5
 

 

 

 
(2,648
)
Elimination of FFO from property in receivership 6
 
104

 
842

 
1,912

 
2,037

Funds from operations-modified (“FFOM”) attributable to common stockholders and OP unitholders
 
$
64,072

 
$
60,600

 
$
236,768

 
$
219,594

 
 
 
 
 
 
 
 
 
FFO per share – diluted
 
$
0.62

 
$
0.44

 
$
1.88

 
$
1.56

 
 
 
 
 
 
 
 
 
FFOM per share – diluted
 
$
0.46

 
$
0.44

 
$
1.71

 
$
1.58

 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - diluted
 
138,879,244

 
138,585,384

 
138,854,970

 
138,569,643

 
 
 
 
 
 
 
 
 

1.
Represents depreciation on corporate assets not added back for purposes of calculating FFO.
2.
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).
3.
The three months ended September 30, 2019 amount represents transaction costs incurred in connection with the closing of one presale transaction in August 2019. The three months ended September 30, 2018 amount represents transaction costs incurred in connection with the closing of a presale transaction in August 2018, net of an adjustment to estimated state income tax related to a tax gain resulting from the ACC / Allianz real estate joint venture transaction in May 2018. The nine months ended September 30, 2018 amount includes the costs discussed above in addition to transaction costs incurred in connection with the closing of the ACC / Allianz real estate joint venture transaction.
4.
Represents gains and losses associated with the extinguishment of mortgage loans due to real estate disposition transactions, including the sale of partial ownership interests in properties and the transfer of an owned property to the lender in satisfaction of the property's mortgage loan. Such costs are excluded from gains from disposition of real estate reported in accordance with GAAP.
5.
Represents a gain related to cash proceeds received from a litigation settlement.
6.
Represents FFO for an owned property that was transferred to the lender in July 2019 in settlement of the property's mortgage loan.




Table 4
American Campus Communities, Inc. and Subsidiaries
Owned Properties Results of Operations1 
(unaudited, dollars in thousands)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
$ Change
 
% Change
 
2019
 
2018
 
$ Change
 
% Change
Owned properties revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties
$
194,005

 
$
189,791

 
$
4,214

 
2.2
%
 
$
589,581

 
$
573,187

 
$
16,394

 
2.9
%
New properties
17,799

 
9,337

 
8,462

 
 
 
49,116

 
9,594

 
39,522

 
 
Sold and held for sale properties 2
4

 
1,547

 
(1,543
)
 
 
 
2,215

 
11,774

 
(9,559
)
 
 
Total revenues 3 4
$
211,808

 
$
200,675

 
$
11,133

 
5.5
%
 
$
640,912

 
$
594,555

 
$
46,357

 
7.8
%
Owned properties operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties 
$
102,805

 
$
98,929

 
$
3,876

 
3.9
%
 
$
271,817

 
$
265,102

 
$
6,715

 
2.5
%
New properties
8,886

 
4,831

 
4,055

 
 
 
20,782

 
5,146

 
15,636

 
 
Other 5
75

 
217

 
(142
)
 
 
 
210

 
561

 
(351
)
 
 
Sold and held for sale properties 2 6
70

 
1,169

 
(1,099
)
 
 
 
1,959

 
5,801

 
(3,842
)
 
 
Total operating expenses 3
$
111,836

 
$
105,146

 
$
6,690

 
6.4
%
 
$
294,768

 
$
276,610

 
$
18,158

 
6.6
%
Owned properties net operating income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties 
$
91,200

 
$
90,862

 
$
338

 
0.4
%
 
$
317,764

 
$
308,085

 
$
9,679

 
3.1
%
New properties
8,913

 
4,506

 
4,407

 
 
 
28,334

 
4,448

 
23,886

 
 
Other 5
(75
)
 
(217
)
 
142

 
 
 
(210
)
 
(561
)
 
351

 
 
Sold and held for sale properties 2 6
(66
)
 
378

 
(444
)
 
 
 
256

 
5,973

 
(5,717
)
 
 
Total net operating income
$
99,972

 
$
95,529

 
$
4,443

 
4.7
%
 
$
346,144

 
$
317,945

 
$
28,199

 
8.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1.
The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2019 and 2018, which are not conducting or planning to conduct substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of September 30, 2019. Includes the full operating results of properties owned through joint ventures in which the company has a controlling financial interest and which are consolidated for financial reporting purposes.
2.
Includes properties sold in 2018 and 2019 and one property that was transferred to the lender in July 2019 in settlement of the property's $27.4 million mortgage loan.
3.
The company adopted new lease accounting guidance on January 1, 2019, which required the reclassification of the provision for uncollectible accounts from operating expenses to revenue starting in the first quarter 2019. To ensure comparability between periods when calculating same store and new property results of operations, the reclassification has also been made for the prior year. See table 2 for the total amounts reclassified from operating expenses to revenue for all properties for both periods presented.
4.
Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income.
5.
Includes transaction costs and recurring professional fees related to the formation and operation of the ACC / Allianz joint venture that are included in owned properties operating expenses in the consolidated statements of comprehensive income (refer to table 2).
6.
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
2019 Outlook1 
(dollars in thousands, except share and per share data)
 
 
Prior Guidance
 
Current Guidance
 
 
Low
 
High
 
Low
 
High
 
 
 
 
 
 
 
 
 
Net income 2
 
$
74,600

 
$
86,700

 
$
102,500

 
$
106,300

Noncontrolling interests' share of net income
 
5,800

 
3,900

 
1,600

 
1,600

Joint venture partners' share of funds from operations
 
(14,500
)
 
(11,600
)
 
(9,700
)
 
(9,700
)
Real estate related depreciation and amortization
 
273,100

 
273,100

 
272,400

 
272,400

Corporate depreciation
 
(5,300
)
 
(5,300
)
 
(4,800
)
 
(4,800
)
Funds from operations ("FFO")
 
$
333,700

 
$
346,800

 
$
362,000

 
$
365,800

 
 
 
 
 
 
 
 
 
Elimination of operations from on-campus participation properties ("OCPP")
 
(14,100
)
 
(13,700
)
 
(14,400
)
 
(14,000
)
Contribution from on-campus participation properties
 
5,500

 
6,100

 
4,800

 
5,400

Elimination of gain from early extinguishment of debt 2
 

 

 
(21,000
)
 
(21,000
)
Elimination of FFO from property in receivership 2
 

 

 
1,900

 
1,900

Transaction costs 3
 
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.
The company believes that the financial results for the fiscal year ending 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 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.
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.
3.
Represents transaction costs related to the closing of two presale development properties.





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


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Section 3: EX-99.2 (EXHIBIT 99.2)

ex992q32019supplementala
Q3 Supplemental Package October 21, 2019 Table of Contents Financial Highlights S-1 Consolidated Balance Sheets S-2 Consolidated Statements of Comprehensive Income S-3 Consolidated Statements of Funds from Operations S-5 Owned Properties Results of Operations S-6 Same Store Owned Properties Operating Expenses S-7 Seasonality of Operations S-8 Portfolio Overview S-9 Investment Update S-10 Owned Development Update S-11 Presale Development Update S-12 Third-Party Development Update S-13 Management Services Update S-14 Capital Structure S-15 Interest Coverage S-16 Capital Allocation – Long Term Funding Plan (2019-2023) S-17 2019 Outlook - Summary S-18 2019 Outlook - Changes from Previous Guidance S-19 Detail of Property Groupings S-20 Definitions S-21 Investor Information S-23


 
Financial Highlights ($ in thousands, except share and per share data) Operating Data Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 $ Change % Change 2019 2018 $ Change % Change Total revenues $ 227,705 $ 213,469 $ 14,236 6.7% $ 687,207 $ 634,937 $ 52,270 8.2% Operating income 27,307 21,501 5,806 27.0% 124,147 145,075 (20,928) (14.4%) Net income (loss) attributable to ACC 1 20,223 (2,345) 22,568 (962.4%) 60,249 69,591 (9,342) (13.4%) Net income (loss) per share - basic and diluted 0.14 (0.02) 0.43 0.50 Funds From Operations - ("FFO") 2 85,956 60,570 25,386 41.9% 260,513 216,116 44,397 20.5% FFO per share - diluted 2 0.62 0.44 0.18 40.9% 1.88 1.56 0.32 20.5% Funds From Operations - Modified ("FFOM") 2 64,072 60,600 3,472 5.7% 236,768 219,594 17,174 7.8% FFOM per share - diluted 2 0.46 0.44 0.02 4.5% 1.71 1.58 0.13 8.2% Market Capitalization and Unsecured Notes Covenants 3 September 30, 2019 December 31, 2018 Debt to total market capitalization 33.6% 34.6% Net debt to EBITDA 4 6.5x 6.3x Unencumbered asset value to total asset value 81.8% 81.2% Total debt to total asset value 39.1% 36.5% Secured debt to total asset value 9.5% 10.2% Unencumbered asset value to unsecured debt 276.4% 308.0% Interest coverage 4 3.8x 4.2x 1. Excluding provision for real estate impairment, loss from disposition of real estate, and gain on extinguishment of debt, net loss attributable to ACC for the for the three months ended September 30, 2019 would have been $0.8 million and net income attributable to ACC for the nine months ended September 30, 2019 would have been $42.7 million. Excluding gain from disposition of real estate and loss from extinguishment of debt, net income attributable to ACC for the nine months ended September 30, 2018 would have been $28.1 million. 2. Refer to page S-5 for a reconciliation to net income, the most directly comparable GAAP measure. 3. Refer to the definitions outlined on pages S-21 and S-22 for detailed definitions of terms appearing on this page. 4. Refer to calculations on page S-16, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures. S-1


 
Consolidated Balance Sheets ($ in thousands) September 30, 2019 December 31, 2018 (unaudited) Assets Investments in real estate: Owned properties, net $ 6,759,867 $ 6,583,397 On-campus participating properties, net 76,854 77,637 Investments in real estate, net 6,836,721 6,661,034 Cash and cash equivalents 56,218 71,238 Restricted cash 29,569 35,279 Student contracts receivable 27,360 8,565 Operating lease right of use assets 1 461,810 — Other assets 1 257,304 262,730 Total assets $ 7,668,982 $ 7,038,846 Liabilities and equity Liabilities: Secured mortgage, construction and bond debt, net $ 827,588 $ 853,084 Unsecured notes, net 1,984,748 1,588,446 Unsecured term loans, net 199,033 198,769 Unsecured revolving credit facility 352,100 387,300 Accounts payable and accrued expenses 86,295 88,767 Operating lease liabilities 2 469,479 — Other liabilities 2 211,612 191,233 Total liabilities 4,130,855 3,307,599 Redeemable noncontrolling interests 157,863 184,446 Equity: American Campus Communities, Inc. and Subsidiaries stockholders' equity: Common stock 1,373 1,370 Additional paid in capital 4,455,565 4,458,240 Common stock held in rabbi trust (3,486) (3,092) Accumulated earnings and dividends (1,104,448) (971,070) Accumulated other comprehensive loss (18,929) (4,397) Total American Campus Communities, Inc. and Subsidiaries stockholders' equity 3,330,075 3,481,051 Noncontrolling interests - partially owned properties 50,189 65,750 Total equity 3,380,264 3,546,801 Total liabilities and equity $ 7,668,982 $ 7,038,846 1. For purposes of calculating net asset value ("NAV") at September 30, 2019, the company excludes other assets of approximately $4.9 million related to net deferred financing costs on its revolving credit facility and the net value of in-place leases, as well as operating lease right of use assets disclosed above associated with new lease accounting guidance that was adopted by the company on January 1, 2019. 2. For purposes of calculating NAV at September 30, 2019, the company excludes other liabilities of approximately $77.6 million related to deferred revenue and fee income, as well as operating lease liabilities disclosed above associated with new lease accounting guidance that was adopted by the company on January 1, 2019. S-2


 
Consolidated Statements of Comprehensive Income (Unaudited, $ in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 $ Change 2019 2018 $ Change Revenues Owned properties 1 $ 211,082 $ 202,834 $ 8,248 $ 638,657 $ 597,854 $ 40,803 On-campus participating properties 1 6,944 6,980 (36) 24,788 23,605 1,183 Third-party development services 5,611 835 4,776 12,389 3,883 8,506 Third-party management services 3,342 2,128 1,214 9,118 7,311 1,807 Resident services 726 692 34 2,255 2,284 (29) Total revenues 227,705 213,469 14,236 687,207 634,937 52,270 Operating expenses Owned properties 1 111,836 107,997 3,839 294,768 282,193 12,575 On-campus participating properties 1 3,822 3,875 (53) 11,585 11,030 555 Third-party development and management services 5,430 3,831 1,599 14,129 11,573 2,556 General and administrative 2 7,165 7,183 (18) 22,595 27,055 (4,460) Depreciation and amortization 68,930 66,131 2,799 206,500 194,447 12,053 Ground/facility leases 3,215 2,951 264 10,000 8,526 1,474 Loss (gain) from disposition of real estate — — — 282 (42,314) 42,596 Provision for real estate impairment — — — 3,201 — 3,201 Other operating income — — — — (2,648) 2,648 Total operating expenses 200,398 191,968 8,430 563,060 489,862 73,198 Operating income 27,307 21,501 5,806 124,147 145,075 (20,928) Nonoperating income (expenses) Interest income 960 1,274 (314) 2,855 3,740 (885) Interest expense (28,303) (25,185) (3,118) (82,432) (72,207) (10,225) Amortization of deferred financing costs (1,315) (1,116) (199) (3,665) (4,744) 1,079 Gain (loss) from extinguishment of debt 3 20,992 — 20,992 20,992 (784) 21,776 Other nonoperating income — 570 (570) — 570 (570) Total nonoperating expenses (7,666) (24,457) 16,791 (62,250) (73,425) 11,175 Income (loss) before income taxes 19,641 (2,956) 22,597 61,897 71,650 (9,753) Income tax (provision) benefit 4 (305) 219 (524) (983) (2,147) 1,164 Net income (loss) 19,336 (2,737) 22,073 60,914 69,503 (8,589) Net loss (income) attributable to noncontrolling interests 887 392 495 (665) 88 (753) Net income (loss) attributable to ACC, Inc. and Subsidiaries common stockholders $ 20,223 $ (2,345) $ 22,568 $ 60,249 $ 69,591 $ (9,342) Other comprehensive (loss) income Change in fair value of interest rate swaps and other (145) 81 (226) (14,532) 726 (15,258) Comprehensive income (loss) $ 20,078 $ (2,264) $ 22,342 $ 45,717 $ 70,317 $ (24,600) Net income (loss) per share attributable to ACC, Inc. and Subsidiaries common stockholders Basic and diluted $ 0.14 $ (0.02) $ 0.43 $ 0.50 Weighted-average common shares outstanding Basic 137,403,842 137,022,012 137,259,130 136,742,094 Diluted 138,375,527 137,022,012 138,257,906 137,660,802 Refer to the next page for footnote explanations. S-3


 
Consolidated Statements of Comprehensive Income (Unaudited, $ in thousands, except share and per share data) 1. The company adopted new lease accounting guidance on January 1, 2019, which required the reclassification of the provision for uncollectible accounts from operating expenses to revenue. The reclassification is reflected starting in the first quarter 2019, but the prior year amounts have not been reclassified. The provision for uncollectible accounts for owned properties was $3.3 million and $2.9 million for the three months ended September 30, 2019 and 2018, respectively, and was $6.1 million and $5.6 million for the nine months ended September 30, 2019 and 2018, respectively. The provision for uncollectible accounts for on-campus participating properties for the three months ended September 30, 2019 was $0.1 million, nominal for the three months ended September 30, 2018, and a $0.6 million benefit and a $0.2 million expense for the nine months ended September 30, 2019 and 2018, respectively. 2. The nine months ended September 30, 2018 amount includes $5.8 million of transaction costs incurred in connection with the closing of the ACC / Allianz joint venture transaction in May 2018. 3. The three and nine months ended September 30, 2019 amounts represent the gain on the extinguishment of debt associated with a property that was transferred to the lender in settlement of the property's mortgage loan in July 2019. 4. Income tax provision / benefit for the three and nine months ended September 30, 2018 includes a $0.5 million benefit and a $1.3 million provision, respectively, related to an estimated taxable gain resulting from the ACC / Allianz joint venture transaction which closed in May 2018. S-4


 
Consolidated Statements of Funds from Operations ("FFO") (Unaudited, $ in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 $ Change 2019 2018 $ Change Net income (loss) attributable to ACC, Inc. and Subsidiaries common stockholders $ 20,223 $ (2,345) $ 22,568 $ 60,249 $ 69,591 $ (9,342) Noncontrolling interests' share of net (loss) income (887) (392) (495) 665 (88) 753 Joint venture partners' share of FFO (1,175) (1,563) 388 (6,856) (2,100) (4,756) Loss (gain) from disposition of real estate — — — 282 (42,314) 42,596 Elimination of provision for real estate impairment — — — 3,201 — 3,201 Total depreciation and amortization 68,930 66,131 2,799 206,500 194,447 12,053 Corporate depreciation 1 (1,135) (1,261) 126 (3,528) (3,420) (108) FFO attributable to common stockholders and OP unitholders 85,956 60,570 25,386 260,513 216,116 44,397 Elimination of operations of on-campus participating properties Net loss (income) from on-campus participating properties 424 436 (12) (2,138) (1,715) (423) Amortization of investment in on-campus participating properties (2,289) (1,962) (327) (6,334) (5,856) (478) 84,091 59,044 25,047 252,041 208,545 43,496 Modifications to reflect operational performance of on-campus participating properties Our share of net cashflow 2 353 644 (291) 2,063 2,232 (169) Management fees and other 369 302 67 1,597 1,058 539 Contribution from on-campus participating properties 722 946 (224) 3,660 3,290 370 Transaction costs 3 147 (232) 379 147 7,586 (7,439) Elimination of (gain) loss from extinguishment of debt 4 (20,992) — (20,992) (20,992) 784 (21,776) Elimination of gain from litigation settlement 5 — — — — (2,648) 2,648 Elimination of FFO from property in receivership 6 104 842 (738) 1,912 2,037 (125) Funds from operations-modified ("FFOM") attributable to common stockholders and OP unitholders $ 64,072 $ 60,600 $ 3,472 $ 236,768 $ 219,594 $ 17,174 FFO per share - diluted $ 0.62 $ 0.44 $ 1.88 $ 1.56 FFOM per share - diluted $ 0.46 $ 0.44 $ 1.71 $ 1.58 Weighted-average common shares outstanding - diluted 138,879,244 138,585,384 138,854,970 138,569,643 1. Represents depreciation on corporate assets not added back for purposes of calculating FFO. 2. 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). 3. The three months ended September 30, 2019 amount represents transaction costs incurred in connection with the closing of one presale transaction in August 2019. The three months ended September 30, 2018 amount represents transaction costs incurred in connection with the closing of a presale transaction in August 2018, net of an adjustment to estimated state income tax related to a tax gain resulting from the ACC / Allianz real estate joint venture transaction in May 2018. The nine months ended September 30, 2018 amount includes the costs discussed above in addition to transaction costs incurred in connection with the closing of the ACC / Allianz real estate joint venture transaction. 4. Represents gains and losses associated with the extinguishment of mortgage loans due to real estate disposition transactions, including the sale of partial ownership interests in properties and the transfer of an owned property to the lender in satisfaction of the property's mortgage loan. Such costs are excluded from gains from disposition of real estate reported in accordance with GAAP. 5. Represents a gain related to cash proceeds received from a litigation settlement. 6. Represents FFO for an owned property that was transferred to the lender in July 2019 in settlement of the property's mortgage loan. S-5


 
Owned Properties Results of Operations 1 ($ in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 $ Change % Change 2019 2018 $ Change % Change Owned properties revenues Same store properties $ 194,005 $ 189,791 $ 4,214 2.2% $ 589,581 $ 573,187 $ 16,394 2.9% New properties 17,799 9,337 8,462 49,116 9,594 39,522 Sold and held for sale properties 2 4 1,547 (1,543) 2,215 11,774 (9,559) Total revenues 3 4 $ 211,808 $ 200,675 $ 11,133 5.5% $ 640,912 $ 594,555 $ 46,357 7.8% Owned properties operating expenses Same store properties 5 $ 102,805 $ 98,929 $ 3,876 3.9% $ 271,817 $ 265,102 $ 6,715 2.5% New properties 8,886 4,831 4,055 20,782 5,146 15,636 Other 6 75 217 (142) 210 561 (351) Sold and held for sale properties 2 7 70 1,169 (1,099) 1,959 5,801 (3,842) Total operating expenses 3 $ 111,836 $ 105,146 $ 6,690 6.4% $ 294,768 $ 276,610 $ 18,158 6.6% Owned properties net operating income Same store properties $ 91,200 $ 90,862 $ 338 0.4% $ 317,764 $ 308,085 $ 9,679 3.1% New properties 8,913 4,506 4,407 28,334 4,448 23,886 Other 6 (75) (217) 142 (210) (561) 351 Sold and held for sale properties 2 7 (66) 378 (444) 256 5,973 (5,717) Total net operating income $ 99,972 $ 95,529 $ 4,443 4.7% $ 346,144 $ 317,945 $ 28,199 8.9% 1. Refer to page S-20 for detail of our store groupings. 2. Includes properties sold in 2018 and 2019 and one property that was transferred to the lender in July 2019 in settlement of the property's $27.4 million mortgage loan. 3. The company adopted new lease accounting guidance on January 1, 2019, which required the reclassification of the provision for uncollectible accounts from operating expenses to revenue starting in the first quarter 2019. To ensure comparability between periods when calculating same store and new property results of operations, the reclassification has also been made for the prior year. See page S-3 for the total amounts reclassified from operating expenses to revenue for all properties for both periods presented. 4. Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income. 5. Refer to page S-7 for detail of same store operating expenses. 6. Includes transaction costs and recurring professional fees related to the formation and operation of the ACC / Allianz joint venture that are included in owned properties operating expenses in the consolidated statements of comprehensive income (refer to page S-3). 7. Does not include the allocation of payroll and other administrative costs related to corporate management and oversight. S-6


 
Same Store Owned Properties Operating Expenses 1 2 ($ in thousands, except per bed amounts) Three Months Ended September 30, 2019 2018 % Change % of Total % of Total From Prior Operating Operating Total Per Bed Year Expenses Total Per Bed Expenses Property taxes $ 21,588 $ 250 4.9% 22% $ 20,590 $ 237 22% General & administrative and other 3 18,543 214 1.4% 18% 18,283 211 18% Payroll 20,636 238 6.3% 20% 19,423 224 20% Utilities 17,523 202 (4.0%) 17% 18,262 211 18% Repairs and maintenance 17,907 206 4.3% 17% 17,176 198 17% Marketing 4,532 52 39.3% 4% 3,253 38 3% Insurance 2,076 24 6.9% 2% 1,942 22 2% Total same store owned operating expenses 3 $ 102,805 $ 1,186 3.9 % 100% $ 98,929 $ 1,141 100% Same store owned beds 86,717 Nine Months Ended September 30, 2019 2018 % Change % of Total % of Total From Prior Operating Operating Total Per Bed Year Expenses Total Per Bed Expenses Property taxes $ 64,416 $ 744 3.9% 24% $ 61,973 $ 715 23% General & administrative and other 3 53,757 620 1.8% 20% 52,824 609 20% Payroll 52,991 611 3.8% 19% 51,063 589 19% Utilities 52,823 609 (3.7%) 19% 54,839 632 21% Repairs and maintenance 29,403 339 5.2% 11% 27,941 322 11% Marketing 12,331 142 16.6% 5% 10,574 122 4% Insurance 6,096 70 3.5% 2% 5,888 68 2% Total same store owned operating expenses 3 $ 271,817 $ 3,135 2.5 % 100% $ 265,102 $ 3,057 100% Same store owned beds 86,717 1. Refer to the definition of operating expenses on page S-22 for a detailed description of items included in the various expense categories. 2. Refer to page S-20 for detail of our same store groupings. 3. The company adopted new lease accounting guidance on January 1, 2019, which required the reclassification of the provision for uncollectible accounts from operating expenses to revenue starting in the first quarter 2019. To ensure comparability between periods when calculating same store operating expenses, the reclassification has also been made for the prior year. Refer to page S-6 for details. S-7


 
Seasonality of Operations 1 ($ in thousands, except per bed amounts) Three Months Ended Total/Weighted Average- September 30, 2018 December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 Last 12 Months 2019 Same Store Properties Average number of owned beds 86,717 86,717 86,717 86,717 86,717 86,717 Average physical occupancy for the quarter 89.9% 97.2% 96.9% 90.6% 90.9% 93.9% Rental revenue per occupied bed per month 2 $ 739 $ 768 $ 763 $ 747 $ 750 $ 757 Rental revenue $ 172,839 $ 194,292 $ 192,304 $ 175,956 $ 177,360 $ 739,912 Other income 3 4 16,952 12,820 13,065 14,251 16,645 56,781 Total revenue $ 189,791 $ 207,112 $ 205,369 $ 190,207 $ 194,005 $ 796,693 Property operating expenses 4 98,929 83,536 84,837 84,175 102,805 355,353 Net operating income $ 90,862 $ 123,576 $ 120,532 $ 106,032 $ 91,200 $ 441,340 Operating margin 47.9% 59.7% 58.7% 55.7% 47.0% 55.4% 2019 New Properties Average number of owned beds 3,493 6,985 6,985 6,985 8,417 7,343 Average physical occupancy for the quarter 96.9% 96.9% 97.6% 65.4% 70.5% 82.0% Rental revenue per occupied bed per month 2 $ 879 $ 889 $ 878 $ 862 $ 907 $ 885 Rental revenue $ 8,927 $ 18,056 $ 17,960 $ 11,808 $ 16,155 $ 63,979 Other income 3 410 710 598 951 1,644 3,903 Total revenue $ 9,337 $ 18,766 $ 18,558 $ 12,759 $ 17,799 $ 67,882 Property operating expenses 4,831 5,114 6,115 5,781 8,886 25,896 Net operating income $ 4,506 $ 13,652 $ 12,443 $ 6,978 $ 8,913 $ 41,986 Operating margin 48.3% 72.7% 67.0% 54.7% 50.1% 61.9% ALL PROPERTIES Average number of owned beds 90,210 93,702 93,702 93,702 95,134 94,060 Average physical occupancy for the quarter 90.2% 97.2% 96.9% 88.8% 89.1% 93.0% Rental revenue per occupied bed per month 2 $ 745 $ 777 $ 772 $ 752 $ 761 $ 766 Rental revenue $ 181,766 $ 212,348 $ 210,264 $ 187,764 $ 193,515 $ 803,891 Other income 3 17,362 13,530 13,663 15,202 18,289 60,684 Total revenue $ 199,128 $ 225,878 $ 223,927 $ 202,966 $ 211,804 $ 864,575 Property operating expenses 103,760 88,650 90,952 89,956 111,691 381,249 Net operating income $ 95,368 $ 137,228 $ 132,975 $ 113,010 $ 100,113 $ 483,326 Operating margin 47.9% 60.8% 59.4% 55.7% 47.3% 55.9% Sold, held for sale properties and other 5 Total revenue $ 1,547 $ 1,537 $ 1,274 $ 937 $ 4 $ 3,752 Property operating expenses 1,386 1,112 1,217 807 145 3,281 Net operating income (loss) $ 161 $ 425 $ 57 $ 130 $ (141) $ 471 1. Refer to page S-20 for detail of our store groupings. 2. Rental revenue per occupied bed per month is calculated based upon our net student rental revenue earned during the respective quarter divided by average monthly occupied beds over the periods presented. 3. 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, and the provision for uncollectible accounts reclassified from expenses to revenue as part of the adoption of the new lease accounting guidance on January 1, 2019. 4. The company adopted new lease accounting guidance on January 1, 2019, which required the reclassification of the provision for uncollectible accounts from operating expenses to revenue starting in the first quarter 2019. To ensure comparability between periods when calculating same store and new property results of operations, the reclassification has also been made for the prior year. See page S-3 for the total amounts reclassified from operating expenses to revenue for all properties for both periods presented. 5. Includes costs related to the formation and operation of the ACC / Allianz joint venture as noted on page S-6. S-8


 
Portfolio Overview 1 Owned properties - summary 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 Final Fall 2018 Occupancy of 98% or greater 57,933 98.8% 99.8% 3.2% 2.2% $ 830 $ 804 Final Fall 2018 Occupancy between 95% and 98% 16,867 96.3% 96.6% (0.3%) (1.3%) 747 749 Final Fall 2018 Occupancy less than 95% 18,902 94.1% 88.9% (3.0%) 2.5% 690 711 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 On Campus Participating Properties 5,230 98.2% 98.7% 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. S-9


 
Investment Update ($ in thousands) DISPOSITIONS Extinguished Project Location Primary University Served Beds Closing Date Sales Price Mortgage Debt College Club Townhomes Tallahassee, FL Florida A&M University 544 May 17, 2019 $ 9,450 $ — Blanton Common 1 Valdosta, GA Valdosta State University 860 July 2, 2019 27,400 27,400 1,404 $ 36,850 $ 27,400 1. In July 2019, Blanton Common was transferred to the lender in settlement of the property's mortgage loan. The sales price represents the principal amount of mortgage debt extinguished as a result of the transaction. S-10


 
Owned Development Update ($ in thousands) RECENTLY COMPLETED PROJECTS Project Total Project Opened for Project Location Primary University Served Type Beds Cost 1 Occupancy 191 College Auburn, AL Auburn University Off-campus 495 $ 61,900 August 2019 LightView Boston, MA Northeastern University ACE 825 150,700 August 2019 University of Arizona Honors College Tucson, AZ University of Arizona ACE 1,056 84,500 August 2019 2,376 $ 297,100 OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION 2 Project Estimated Total Costs Incurred as Scheduled Project Location Primary University / Market Served Type Beds Project Cost 1 of September 30, 2019 ³ Occupancy Disney College Program Phases I-II 4 5 Orlando, FL Walt Disney World® Resort ACE 1,627 $ 108,500 $ 67,713 May & Aug 2020 Currie Hall Phase II Los Angeles, CA Univ. of Southern California ACE 272 42,000 14,976 August 2020 Holloway Residences San Francisco, CA San Francisco State Univ. ACE 584 129,200 71,610 August 2020 SUBTOTAL - 2020 DELIVERIES 2,483 $ 279,700 $ 154,299 Disney College Program Phases III-V 4 6 Orlando, FL Walt Disney World® Resort ACE 3,369 $ 190,400 $ 75,892 Jan, May & Aug 2021 SUBTOTAL - 2021 DELIVERIES 3,369 $ 190,400 $ 75,892 Disney College Program Phases VI-VIII 4 7 Orlando, FL Walt Disney World® Resort ACE 3,235 $ 193,000 $ 21,316 Jan, May & Aug 2022 SUBTOTAL - 2022 DELIVERIES 3,235 $ 193,000 $ 21,316 Disney College Program Phases IX-X 4 8 Orlando, FL Walt Disney World® Resort ACE 2,209 $ 122,700 $ 12,281 Jan & May 2023 SUBTOTAL - 2023 DELIVERIES 2,209 $ 122,700 $ 12,281 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. Does not include land parcels in nine university markets totaling $55.9 million. 3. Includes $262.0 million in construction in progress "CIP" and excludes $10.4 million of CIP balances related to ongoing renovation projects at operating properties. Total consolidated CIP as of September 30, 2019 was $272.4 million. 4. The company executed two ground lease agreements with Walt Disney World® Resort to develop, own and manage housing for college students participating in the Disney student internship program (the “Disney College Program”). The development will be delivered in multiple phases from 2020-2023. 5. Phase I, with estimated project costs of $61.6 million and 778 beds, is scheduled for occupancy in May 2020. Phase II, with estimated project costs of $46.9 million and 849 beds, is scheduled for occupancy in August 2020. 6. Phase III, with estimated project costs of $54.4 million and 984 beds, is scheduled for occupancy in January 2021. Phase IV, with estimated project costs of $84.5 million and 1,521 beds, is scheduled for occupancy in May 2021. Phase V, with estimated project costs of $51.5 million and 864 beds, is scheduled for occupancy in August 2021. 7. Phase VI, with estimated project costs of $61.3 million and 867 beds, is scheduled for occupancy in January 2022. Phase VII, with estimated project costs of $90.3 million and 1,632 beds, is scheduled for occupancy in May 2022. Phase VIII, with estimated project costs of $41.4 million and 736 beds, is scheduled for occupancy in August 2022. 8. Phase IX, with estimated project costs of $81.5 million and 1,473 beds, is scheduled for occupancy in January 2023. Phase X , with estimated project costs of $41.2 million and 736 beds, is scheduled for occupancy in May 2023. S-11


 
Presale Development Update 1 ($ in thousands) RECENTLY COMPLETED PRESALE DEVELOPMENT PROJECTS Amount Funded Remaining Project Purchase as of Purchase Price Actual Project Location Primary University Served Type Beds Price 2 September 30, 2019 ³ to be Funded Occupancy The Flex at Stadium Centre Tallahassee, FL Florida State University Off-campus 340 $ 36,400 $ 36,400 $ — August 2019 959 Franklin 4 Eugene, OR University of Oregon Off-campus 443 72,400 23,700 48,700 September 2019 SUBTOTAL - 2019 DELIVERIES 783 $ 108,800 $ 60,100 $ 48,700 1. Under the terms of a presale transaction, the company is obligated to purchase the property from the third-party developer 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 executed the presale agreement with the developer in March 2018, at which time it provided $15.6 million of mezzanine financing to the project. The company expects to purchase the remaining ownership interest from the developer in Q4 2019. S-12


 
Third-Party Development Update ($ in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 $ Change 2019 2018 $ Change Development services revenue $ 5,611 $ 835 $ 4,776 $ 12,389 $ 3,883 $ 8,506 % of total revenue 2.5% 0.4% 1.8% 0.6% RECENTLY COMPLETED PROJECTS Project Location Primary University Served Beds Total Fees 1 Completed 2 University of Arizona Honors College 2 Tucson, AZ University of Arizona — $ 2,400 July 2019 The Academic & Residential Complex Chicago, IL University of Illinois, Chicago 548 5,100 July 2019 Plaza Verde Irvine, CA University of California, Irvine 1,441 5,900 August 2019 Tubman Laws Hall Dover, DE Delaware State University 620 2,500 August 2019 Calhoun Hall 3 Philadelphia, PA Drexel University 406 1,750 Sept 2019 & Apr 2020 3,015 $ 17,650 CONTRACTED PROJECTS IN PROGRESS Fees Earned Fees Remaining Fees as of Earned in as of Scheduled Project Location Primary University Served Beds Total Fees September 30, 2019 Current Year September 30, 2019 Completion Prairie View A&M University Phase IX Prairie View, TX Prairie View A&M University 540 $ 2,500 $ 1,624 $ 1,624 $ 876 August 2020 Dundee Residence Hall and Glasgow Riverside, CA University of California, Riverside 820 5,000 3,368 734 1,632 August 2020 Dining Hall University of California - Riverside North Riverside, CA University of California, Riverside 1,502 6,700 3,562 3,562 3,138 September 2021 District Phase I 2,862 $ 14,200 $ 8,554 $ 5,920 $ 5,646 ON-CAMPUS AWARD PIPELINE 4 Anticipated Anticipated Targeted Estimated Project Location Financing Structure Commencement Completion Fees Texas State University Master San Marcos, TX Third-party Q1 2020 Summer 2021 $1,950 Development - Phase I 5 Georgetown University - Capitol Campus Washington, D.C. Third-party Q3 2020 Summer 2022 $2,700 Housing Upper Hearst Development for the Berkeley, CA Third-party Q3 2020 Summer 2022 $3,000 Goldman School of Public Policy 6 University of California Irvine Phase V Irvine, CA Third-party Q3 2020 Summer 2022 $3,500 Concordia University Phase II Austin, TX Third-party Q1 2021 Summer 2022 TBD Northeastern University - Phase II Boston, MA ACE Q1 / Q2 2021 Fall 2023 N/A Princeton University Lake Campus Princeton, NJ TBD TBD TBD TBD Graduate Housing University of California Berkeley Master Berkeley, CA TBD TBD TBD TBD Development 5 University of California Riverside Master Riverside, CA Third-party TBD TBD TBD Development 5 1. Does not include anticipated construction savings which are recognized as development services revenue as a result of cost savings on these projects. 2. The University of Arizona Honors College project included the construction of a parking garage, academic center and a student recreation and wellness center as part of the overall development project. These components are owned, managed and funded by the University, and the company earned third-party development fees for its role in providing development services for those components of the project. 3. Includes the construction of a student residence hall and honors college. The residence hall was delivered in Fall 2019, and the honors college will be delivered in Spring 2020. As of September 30, 2019, the company recognized $1.7 million in development fees related to the project. 4. 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. 5. These projects include multiple phases to be completed over several years. The full scope, transaction structure, feasibility, fees, and timing will be negotiated. 6. Anticipated commencement and targeted completion dates may be affected by the outcome of a lawsuit filed by the city of Berkeley against the University. S-13


 
Management Services Update ($ in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 $ Change 2019 2018 $ Change Management services revenue $ 3,342 $ 2,128 $ 1,214 $ 9,118 $ 7,311 $ 1,807 % of total revenue 1.5% 1.0% 1.3% 1.2% NEW / PENDING MANAGEMENT CONTRACTS Actual or Approximate Stabilized Anticipated Project Location Primary University / Market Served Beds Annual Fees 1 Commencement The Rixey Arlington, VA Marymount University 551 $ 300 February 2019 Walt Disney World® College Program 2 Orlando, FL Walt Disney World® Resort 7,870 250 April 2019 The Academic & Residential Complex Chicago, IL University of Illinois, Chicago 548 240 August 2019 Tubman Laws Hall Dover, DE Delaware State University 620 220 August 2019 Campus1 - Montreal 3 Montreal, Quebec McGill University 886 250 September 2019 Plaza Verde Irvine, CA University of California, Irvine 1,441 630 September 2019 Nevada State College 4 Henderson, NV Nevada State College 342 100 August 2020 Prairie View A&M University Phase IX Prairie View, TX Prairie View A&M University 540 190 August 2020 Dundee Residence Hall and Glasgow Dining Hall Riverside, CA University of California, Riverside 820 440 September 2020 University of California, Riverside - North District Riverside, CA University of California, Riverside 1,502 540 September 2021 15,120 $ 3,160 DISCONTINUED MANAGEMENT CONTRACTS 2019 Fee Contribution Prior to Project Location Primary University / Market Served Beds Termination Discontinued As Of Collegeview Commons Ontario, Canada Durham College 974 $ 24 March 2019 MyRez at Lester Ontario, Canada University of Waterloo 455 37 April 2019 1,429 $ 61 1. Stabilized annual fees are dependent upon the achievement of anticipated occupancy levels. 2. As the project's facilities manager, the company is responsible for the operations and maintenance of the project. Because of the company’s role in funding payroll costs for on-site personnel at the properties, accounting guidance requires the management fee for this project to be recorded on a gross basis in the company’s consolidated financial statements. Accordingly, both management services revenue and third-party management services expenses in the accompanying consolidated statements of comprehensive income for 2019 will include approximately $3.2 million in reimbursed payroll costs. The stabilized annual fee noted above does not include such reimbursed costs and represents the net management fee anticipated to be earned by the company. 3. The stabilized annual fee amount does not include an initial operations fee of $105,000 earned from July 2018 through August 2019. 4. The stabilized annual fee amount does not include an initial operations fee of $140,000 earned from May 2019 through July 2020. S-14


 
Capital Structure as of September 30, 2019 ($ in millions, except per share data) Market Capitalization & Unsecured Notes Covenants Debt Maturity Schedule Total Debt ¹ $ 3,374 Total Equity Market Value ² 6,673 Total Market Capitalization 10,047 Debt to Total Market Capitalization 33.6% Net Debt to EBITDA ³ 6.5x Total Asset Value ⁴ $ 8,626 Unencumbered Asset Value 7,055 Unencumbered Asset Value to Total Asset Value 81.8% Requirement Current Ratio Total Debt to Total Asset Value ≤ 60% 39.1% Secured Debt to Total Asset Value ≤ 40% 9.5% Unencumbered Asset Value to Unsecured Debt > 150% 276.4% Interest Coverage ³ > 1.5x 3.8x Weighted Average Principal Average Term To Outstanding ¹ Interest Rate Maturity Mortgage Loans ⁵ $ 695 4.5% ⁶ 5.6 Yrs Construction Loan ⁷ 37 5.1% 0.0 Yrs Unsecured Revolving Credit Facility 352 3.2% 2.5 Yrs Unsecured Term Loan 200 3.1% 2.7 Yrs Unsecured Notes 2,000 3.7% 4.8 Yrs On-Campus Participating Properties 90 5.2% 13.5 Yrs Total/Weighted Average $ 3,374 3.9% 4.8 Yrs Variable Rate Debt as % of Total Debt 8 14.6% Weighted Average Interest Rate Of Debt Maturing Each Year Fixed Rate Debt N/A 3.5% 5.4% 4.0% 3.8% 4.2% N/A 3.7% 3.6% 4.1% Total Debt 5.1% 3.5% 5.2% 3.2% 3.9% 4.2% 7.6% 3.7% 3.6% 4.1% Note – refer to the definitions outlined on pages S-21 and S-22 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 $7.6 million, unamortized original issue discount on unsecured notes of $2.4 million, and unamortized deferred financing costs of $15.6 million. 2. Based on share price of $48.08 and fully diluted share count of 138,799,520 as of September 30, 2019. Assumes conversion of 503,717 common and preferred Operating Partnership units and 968,979 unvested restricted stock awards. 3. Refer to calculations on page S-16, including a reconciliation to net income and interest expense, the most directly comparable GAAP measures. 4. Excludes accumulated depreciation of $1.5 billion, receivables and intangible assets, net of accumulated amortization, of $80.2 million, and lease-related right of use assets of $461.8 million associated with the adoption of new lease accounting guidance on January 1, 2019. 5. Includes $330.0 million of mortgage debt related to the ACC / Allianz joint venture of which the company has a 55% interest. 6. 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%. 7. The construction loan is associated with a presale development and is an obligation of the third-party developer. In accordance with accounting guidance, the company is including the presale development property 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 property. 8. The company's variable rate debt consists of the unsecured revolving credit facility, $100.0 million of the unsecured term loan, a $3.3 million mortgage loan at one of our on-campus participating properties, and the $37.0 million construction loan. Remaining variable rate debt has been swapped to a fixed interest rate. S-15


 
Interest Coverage ($ in thousands) Three Months Ended December 31, March 31, June 30, September 30, Last Twelve 2018 2019 2019 2019 Months Net income attributable to ACC, Inc. and Subsidiaries common stockholders $ 47,504 $ 29,640 $ 10,386 $ 20,223 $ 107,753 Net (loss) income attributable to noncontrolling interests 2,117 1,728 (176) (887) 2,782 Interest expense 27,021 27,061 27,068 28,303 109,453 Income tax provision 282 364 314 305 1,265 Depreciation and amortization 68,756 68,755 68,815 68,930 275,256 Amortization of deferred financing costs 1,072 1,132 1,218 1,315 4,737 Share-based compensation 2,254 3,765 3,745 3,104 12,868 Provision for real estate impairment — 3,201 — — 3,201 Gain on extinguishment of debt, net (8,651) — — (20,992) (29,643) Loss from disposition of real estate — — 282 — 282 Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") $ 140,355 $ 135,646 $ 111,652 $ 100,301 $ 487,954 Pro-forma adjustments to EBITDA 1 22,624 Adjusted EBITDA $ 510,578 Interest Expense from consolidated statement of comprehensive income $ 27,021 $ 27,061 $ 27,068 $ 28,303 $ 109,453 Amortization of mortgage debt premiums/discounts 1,234 1,246 1,246 1,212 4,938 Capitalized interest 2,067 2,739 3,623 3,072 11,501 Change in accrued interest payable 4,709 (7,300) 5,060 (2,013) 456 Cash Interest Expense $ 35,031 $ 23,746 $ 36,997 $ 30,574 $ 126,348 Pro-forma adjustments to Cash Interest Expense 1 7,833 Adjusted Interest Expense $ 134,181 Interest Coverage 3.8x Note: refer to the definitions outlined on pages S-21 and S-22 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. S-16


 
Capital Allocation – Long Term Funding Plan (2019-2023) ($ in millions) Sources and Uses for Development - As of September 30, 2019 Estimated Project Total Costs Remaining Estimated Capital Uses: Cost Incurred Capital Needs Development and Presale Development Pipeline 1 2019 Presale Development $ 73 $ 24 $ 49 2020 Developments Underway or Expected to Start in Current Year 171 87 84 Disney Internships & College Program Housing Phases I-II (2020 deliveries) 109 68 41 Phases III-V (2021 deliveries) 190 76 114 Phases VI-VIII (2022 deliveries) 193 21 172 Phases IX-X (2023 deliveries) 123 12 111 Core Spaces / DRW Portfolio Transaction Presale Developments Funding 2 119 — 119 Total $ 978 $ 288 $ 690 Estimated Sources through 2023: Capital Sources Cash and Cash Equivalents as of September 30, 2019 $ 56 Estimated Cash Flow Available for Investment - through 2023 3 273 Anticipated Debt (Repayment) / Funding - through 2023 4 (264) to (64) Anticipated Capital Recycling and/or Equity Funding - through 2023 4 625 to 425 Total $ 690 Selected Credit Metrics 5 Credit Metric: September 30, 2019 Pro Forma 6 Total Debt to Total Asset Value 39.1% 34.0% - 38.0% Net Debt to EBITDA 7 6.5x 5.5x - 6.1x Note: This analysis demonstrates anticipated funding for the developments currently committed, 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-11 and S-12. 2. Reflects the exercise of the option to purchase the remaining interest in the joint ventures with Core Spaces / DRW Real Estate Investments. 3. Available cash flow is derived from disclosures in our 2018 Form 10-K and is calculated as net cash provided by operating activities of $376.6 million, excluding changes in working capital of $29.8 million, less dividend payments of $250.5 million, less principal payments on debt of $11.7 million, less recurring capital expenditures of $20.3 million. Calculation results in available cash flow for investment in 2018 of $64.3 million, which is then annualized over the remaining 17 quarters through the end of 2023. 4. Reflects the company's current anticipated capital sources to fund committed developments through 2023. The actual mix of capital sources may vary based on prevailing capital market conditions and the company's balance sheet management strategy. 5. Refer to definitions outlined on pages S-21 and S-22 for detailed definitions of terms appearing on this page. 6. Ratios represent the pro forma impact of development deliveries and funding alternatives assumed in the Sources and Uses table. The lower end of the pro forma leverage ranges assumes remaining capital needs in excess of debt are funded with equity, while the higher end assumes remaining needs in excess of debt are funded with dispositions. 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. 7. Refer to page S-16 for a reconciliation of EBITDA to net income, the most directly comparable GAAP measure. S-17


 
2019 Outlook - Summary 1 ($ 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' share of net income 5,800 3,900 1,600 1,600 Joint venture partners' share of funds from operations (14,500) (11,600) (9,700) (9,700) Real estate related depreciation and amortization 273,100 273,100 272,400 272,400 Corporate depreciation (5,300) (5,300) (4,800) (4,800) Funds from operations ("FFO") $ 333,700 $ 346,800 $ 362,000 $ 365,800 Elimination of operations from on-campus participation properties ("OCPP") (14,100) (13,700) (14,400) (14,000) Contribution from on-campus participation properties 5,500 6,100 4,800 5,400 Elimination of gain from early 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. The company believes that the financial results for the fiscal year ending 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 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. Refer to page S-19 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 as disclosed on page S-12. S-18


 
2019 Outlook - Changes from Previous Guidance ($ in thousands, except share and per share data) FFO Guidance As Reported Prior Guidance Current Guidance Significant Changes from Previous Guidance and Assumptions Nine Months Ended Year Ended Year Ended September 30, 2019 December 31, 2019 December 31, 2019 Low High Low High Owned properties 1 2019 same store properties Same store revenue $ 589,581 $ 797,700 $ 802,700 $ 798,200 $ 800,700 Owned property guidance revised to reflect final leasing results for the 2019/2020 academic year and anticipated property operating performance for % growth 2.9 % 2.2 % 2.9 % 2.3 % 2.6 % the remainder of the year. Same store operating expenses $ (271,817) (359,500) (356,500) (359,100) (357,600) % growth 2.5 % 3.1 % 2.2 % 3.0 % 2.6 % Same store net operating income ("NOI") $ 317,764 $ 438,200 $ 446,200 $ 439,100 $ 443,100 % growth 3.1 % 1.5 % 3.4 % 1.7 % 2.7 % 2019 new properties NOI $ 28,334 $ 44,700 $ 45,900 $ 46,900 $ 47,500 NOI impact from dispositions revised to reflect the disposition of properties not 2 3 anticipated in prior guidance (refer to revised capital recycling assumptions 2019 NOI contribution from dispositions and other 46 (100) (100) (1,400) (1,400) detailed in footnote 3 below). Also includes NOI contributed from previously Total owned properties NOI $ 346,144 $ 482,800 $ 492,000 $ 484,600 $ 489,200 disclosed dispositions and recurring professional fees related to the operation of the ACC/Allianz joint venture. Third-party development services revenue $ 12,389 $ 13,400 $ 16,400 $ 14,200 $ 14,200 Third-party development services revenue revised to eliminate fee income from two projects now anticipated to commence construction in 2020. Third-party management services revenue $ 9,118 $ 12,800 $ 13,600 $ 12,400 $ 13,200 Third-party development and mgmt. services expenses $ (14,129) $ (20,100) $ (20,500) $ (19,700) $ (20,100) General and administrative expenses $ (22,595) $ (29,800) $ (30,500) $ (29,700) $ (30,400) Ground/facility leases expense $ (10,000) $ (14,100) $ (14,500) $ (13,300) $ (13,800) Less: OCPP ground/facility leases expense $ 2,063 $ 3,300 $ 3,700 $ 2,700 $ 3,100 Interest income 4 $ 2,685 $ 3,600 $ 3,600 $ 3,600 $ 3,600 Interest expense 2 $ (82,432) $ (110,000) $ (111,200) $ (111,300) $ (111,300) Interest expense revised to reflect the June 2019 issuance of $400 million senior unsecured notes with a 3.3% coupon and a lower interest rate Less: OCPP interest expense $ 3,895 $ 4,900 $ 4,900 $ 5,100 $ 5,100 environment for the year than anticipated in prior guidance. Interest expense is Amortization of deferred financing costs 4 $ (3,585) $ (4,700) $ (4,800) $ (4,900) $ (4,900) net of $11.9 million of capitalized interest. Corporate depreciation 5 $ (3,528) $ (5,300) $ (5,300) $ (4,800) $ (4,800) OCPP overhead $ (1,137) $ (1,600) $ (1,600) $ (1,500) $ (1,500) Income tax provision $ (983) $ (1,100) $ (1,100) $ (1,100) $ (1,100) Joint Ventures ("JV") Existing JV partners' share of FFO 6 $ (6,856) $ (11,200) $ (11,200) $ (9,700) $ (9,700) Existing JV partners’ share of FFO revised to reflect final 2019/2020 academic year leasing results for the ACC/Allianz JV portfolio and the portfolio’s Speculative JV partner's share of FFO $ — $ (3,300) $ (400) $ — $ — anticipated operating performance for the remainder of the year Contribution from OCPP 7 $ 3,660 $ 5,500 $ 6,100 $ 4,800 $ 5,400 Elimination of property in receivership 2 $ 1,912 $ — $ — $ 1,900 $ 1,900 Transaction costs 8 $ 147 $ 800 $ 800 $ 600 $ 600 FFOM per share - diluted $ 1.71 $ 2.35 $ 2.45 $ 2.40 $ 2.44 1. Refer to page S-20 for detail of the 2019 same store and new property groupings. 2. Current guidance figures and actual results for the nine months ended September 30, 2019 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. 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. 4. Excluding on-campus participating properties ("OCCPs"). 5. Represents depreciation expense not added back in the calculation of FFO as per the NAREIT definition of FFO. 6. Current guidance for the year ended December 31, 2019 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. 7. Includes the company's 50% share of OCPP net cash flow and management and development fees received, as per the definition of FFOM on page S-21. 8. Represents transaction costs related to the closing of two presale development properties as disclosed on page S-12. S-19


 
Detail of Property Groupings As of September 30, 2019 2019 Grouping 2020 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, 2018 144 86,717 144 86,717 2018 Development Deliveries 10 6,985 10 6,985 2019 Development Deliveries 5 3,159 5 3,159 2020 Development Deliveries 3 2,483 3 2,483 2021 Development Deliveries ¹ — 3,369 — 3,369 2022 Development Deliveries ¹ — 3,235 — 3,235 2023 Development Deliveries ¹ — 2,209 — 2,209 Total Owned Properties 144 86,717 18 21,440 154 93,702 8 14,455 Grand Total # of Owned Properties (All Groupings) 162 Grand Total Owned Design Beds (All Groupings) 108,157 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. 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. 2020: The 2020 same store grouping represents properties owned and operating for both of the entire calendar years ended December 31, 2020 and 2019. This same store grouping will be used for purposes of presenting our 2020 same store operating results. 1. The Disney College Program project will be delivered in multiple phases over several years with initial deliveries expected to occur in 2020 and full development completion in 2023. All phases are counted as one property in the table above. S-20


 
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 Determined based on the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (”FFO”) (“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 FFO modified to reflect certain adjustments related to the economic performance of our on-campus participating properties, the (”FFOM”) elimination of real estate transaction costs, and other items, as we determine in good faith, that do not reflect our core operations on a comparative basis. 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. 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 Property revenues less direct property operating expenses, excluding depreciation, but including an allocation of costs related to “NOI” corporate management and oversight. * These definitions are provided for purposes of calculating the company’s unsecured notes covenants and other key ratios. S-21


 
Definitions On-campus Participating A transaction structure whereby the company enters into long-term ground/facility lease agreements with Universities to develop, Properties 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. Operating Expenses General & administrative and other expenses include 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, food service, and other miscellaneous expenses. Utilities expense represents gross expenses prior to any recoveries from tenants, which are reflected in owned properties revenues. Payroll expense includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff. Repairs and maintenance expense includes general maintenance costs such as interior painting, routine landscaping, pest control, fire protection, snow removal, elevator maintenance, roof and parking lot repairs, and other miscellaneous building repair costs. Also includes costs related to the annual turn process. Marketing expense includes costs related to property marketing campaigns associated with our ongoing leasing efforts. 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 Properties owned and operating for both of the entire annual periods presented, which are not conducting or planning to conduct substantial development, redevelopment, or repositioning activities, and are not classified as held for sale as of the current period-end. Includes the full operating results of properties owned through joint ventures in which the company has a controlling financial interest and which are consolidated for financial reporting purposes. 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, intangibles, and right of use assets, of our consolidated subsidiaries, all determined in accordance with GAAP. Total Debt* Total consolidated debt calculated in accordance with GAAP, including finance 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-22


 
Investor Information 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 Jacob Kilstein Argus Research Company (646) 747-5447 [email protected] Jeffery Spector / Shirley Wu Bank of America / Merrill Lynch (646) 855-1363 / (646) 855-3081 [email protected] / [email protected] Neil Malkin Capital One (571) 633-8191 [email protected] Michael Bilerman / Nick Joseph Citigroup Equity Research (212) 816-1383 / (212) 816-1909 [email protected] / [email protected] Derek Johnston / Tom Hennessy Deutsche Bank Securities, Inc. (212) 250-5683 / (212) 250-4063 [email protected] / [email protected] Steve Sakwa / Samir Khanal Evercore ISI (212) 446-9462 / (212) 888-3796 [email protected] / [email protected] John Pawlowski / Alan Peterson Green Street Advisors (949) 640-8780 / (949) 640-8780 [email protected] / [email protected] Aaron Hecht JMP Securities (415) 835-3963 [email protected] Anthony Paolone / Nikita Bely J.P. Morgan Securities (212) 622-6682 / (212) 622-0695 [email protected] / [email protected] Jordan Sadler / Austin Wurschmidt KeyBanc Capital Markets (917) 368-2280 / (917) 368-2311 [email protected] / [email protected] Drew Babin / Alex Kubicek Robert W. Baird & Co. (610) 238-6634 / (414) 765-7311 [email protected] / [email protected] Alexander Goldfarb / Daniel Santos Sandler O'Neill + Partners, L.P. (212) 466-7937 / (212) 466-7927 [email protected] / [email protected] 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. 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 [email protected] Austin, Texas 78738 www.americancampus.com S-23


 
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, 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. 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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