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--- Year To Date Core FFO per Share Up 15% -
EdR (EDR), one of the nation’s largest developers, owners and
managers of collegiate housing, today announced results for the quarter
ended September 30, 2012.
Company Highlights
--
Core funds from operations ("Core FFO") was $5.9 million or $0.06 per
share/unit for the third quarter, compared to $2.4 million or $0.03
per share/unit in the prior year;
--
Same-community net operating income ("NOI") for the quarter increased
8.8% on a 2.3% increase in revenues and a 0.6% reduction in operating
expenses;
--
Same-community net rental rates increased 5.1% for the 2012-2013 lease
term;
--
Same-community portfolio opened the 2012-2013 lease term 90.5%
occupied, compared to opening 94.7% occupied the prior lease term;
--
Signed agreements with the University of Kentucky for Phase II of the
multi-year, 9,000-bed, campus-housing revitalization project. Phase II
includes four communities with 2,317 beds and total estimated project
costs of $133.7 million. These communities are scheduled to open
summer of 2014;
--
Acquired three communities with a total of 1,847 beds and an aggregate
purchase price of $137.3 million;
--
Closed on the sale of two communities, NorthPointe serving University
of Arizona and The Reserve on Frankford serving Texas Tech University,
for a gross sales price and net cash proceeds of approximately $42.3
million;
--
The previously announced $74.8 million acquisition of two communities
at Texas Tech University with a total of 866 beds is scheduled to
close in the fourth quarter of 2012; and
--
Raised $180.9 million in net proceeds from a follow-on equity offering
in August 2012, selling 17.3 million shares, including the exercise of
the underwriters’ option to purchase additional shares.
"The transformation of our portfolio of communities continues to evolve
as we further work to position EdR to outperform in this growing
industry," commented Randy Churchey, EdR’s president and chief executive
officer. "We have sold 35% of the communities that were in our portfolio
at the beginning of 2010 and since that time we have also added $468
million of acquisitions and $91 million of developments to our
portfolio. In addition we announced $343 million of developments
delivering in 2013 and 2014. The culmination of these transactions has
reduced our median distance from campus to 0.2 miles from 1.3 miles,
increased our average rental rate by 20% to $562 per bed and continues
us along the path of adding well-located quality assets to our
portfolio."
Net Income Attributable to Common Stockholders
Net income attributable to common stockholders for the quarter was $0.5
million, or $0.00 per diluted share, compared to a loss of $6.5 million,
or $0.09 per diluted share, for the prior year. Improvements in
same-community NOI, operating profits of new communities, lower interest
expense and a $5.2 million gain on sale of assets in 2012 were the main
drivers of the improvement in net income.
Core Funds From Operations
Core FFO for the quarter was $5.9 million, more than double the $2.4
million in the prior year. The improvement in Core FFO reflects improved
operating results from our same-community portfolio, operating profits
from new communities and lower interest expense. Core FFO per share/unit
for the quarter was $0.06 compared to $0.03 in the prior year.
A reconciliation of funds from operations ("FFO") and Core FFO to net
income is included with the financial tables accompanying this release.
Same-Community Results
Net operating income was $7.8 million for the quarter, an increase of
8.8%, or $0.6 million, from the prior year. This growth in operating
income was the result of a 1.8%, or $0.4 million, increase in net
apartment rent, a 6.7%, or $0.1 million, increase in other revenue and a
0.6%, or $0.1 million, reduction in operating expenses.
The growth in net apartment rent for the quarter was driven by a 5.4%
increase in net rental rates, offset by a 3.6% decline in occupancies.
The 0.6% reduction in operating expenses for the quarter is the result
of direct expenses being relatively flat while real estate taxes were
down slightly from the prior year.
Opening Occupancy - Fall 2012
Same-community opening occupancy for the 2012-2013 lease term was 90.5%
compared to 94.7% for the 2011-2012 lease term. Net rental rates for the
2012-2013 lease term increased approximately 5.1% over the prior lease
term.
The Company provides a property-by-property leasing schedule in its
quarterly earnings supplement located at http://www.snl.com/irweblinkx/yearlypresentations.aspx?iid=4095382.
University of Kentucky
In December 2011, the Company was selected by the University of Kentucky
("UK") to negotiate the potential revitalization of UK’s entire campus
housing portfolio and expansion of such to more than 9,000 beds within
five to seven years (the "UK Campus Housing Revitalization Plan"). The
UK Campus Housing Revitalization Plan is being financed through EdR’s
On-Campus Equity Plan - The ONE Plan(SM) with EdR leasing,
managing and operating the communities. Construction of Phase I of the
plan, a 601-bed community called New Central Residence Hall, began in
the spring of 2012 and is expected to open in summer of 2013.
On October 18, 2012, the Company and UK signed documents for the second
phase of the UK Campus Housing Revitalization Plan. The signings clear
the way for Phase II of the project that will include four communities
with 2,317 beds and a total project cost of approximately $133.7
million. Site work is scheduled to begin this fall with all four
communities opening in the summer of 2014.
Investment Activity - Developments
All three company-owned 2012 development deliveries, aggregating a total
investment of approximately $91.2 million, opened in August 2012. On
average the new communities opened the 2012-2013 lease term 96.7% leased
with average monthly rental rates of $839 per bed. Furthermore, the
Johns Hopkins participating development, with a total project cost of
$60.7 million, opened in August of 2012.
All five of the announced company-owned 2013 developments, aggregating a
total investment of approximately $190 million are proceeding as
expected.
"We are pleased with the progress of our development projects," stated
Tom Trubiana, EdR’s executive vice president and chief investment
officer. "We opened four owned and participating development communities
a couple of months ago, are on pace to successfully deliver five
developments in 2013 and have announced over $153.5 million of
anticipated development deliveries for 2014. In addition, the volume of
new opportunities that are in our pipeline should allow us to maintain
our pace of activity for the foreseeable future."
Investment Activity - Acquisitions
In September 2012, the Company acquired The Province, a 728-bed
community adjacent to East Carolina University in Greenville, SC. The
community, which opened in 2011, is 96.2% leased for the 2012-2013 lease
term with average monthly rental rates of $592 per bed. The community
was purchased for approximately $50.0 million in cash.
On October 4, 2012, the Company acquired The District on 5th, a 764-bed
community located within walking distance of the University of Arizona
for approximately $66.4 million in cash. The community, which opened
last month, is 99.8% leased for the 2012-2013 lease term with average
monthly rental rates of $633 per bed.
On October 18, 2012 the Company purchased Campus Village, a 355-bed
community adjacent to Michigan State University in East Lansing, MI. The
community is 97.7% leased for the 2012-2013 lease term with average
monthly rental rates of $639 per bed. The community was purchased for
approximately $20.9 million in cash.
The Company is in the process of assuming $49.5 million of debt related
to the previously announced $74.8 million acquisition of two
communities, with a total of 866 beds, adjacent to Texas Tech
University. The assumption process and closing of the acquisition is
expected to be completed in the fourth quarter of 2012. The communities
are 97.8% leased for the 2012-2013 lease term with average monthly
rental rates of $738 per bed.
Capital Structure
The Company completed a follow-on equity offering in August 2012 selling
17.3 million shares, including the exercise of the underwriters’ option
to purchase additional shares. A portion of the approximate $180.9
million in net proceeds was used to payoff the outstanding balance on
the revolving credit facility and fund recent acquisitions. The
remaining proceeds are expected to be used to fund the Company’s current
developments, fund future acquisitions and developments and for general
corporate purposes.
During the third quarter of 2012, the Company sold approximately 0.3
million shares of common stock under its ATM program. The shares were
sold at a weighted average share price of $11.43, raising net proceeds
of $3.2 million that were mainly used to fund current projects and
reduce debt.
At September 30, 2012 the Company had cash and cash equivalents totaling
$127.6 million and availability on its unsecured revolving credit
facility of $175.0 million. The Company’s debt to gross assets was
24.0%, its net debt to Adjusted EBITDA was 3.5x and its interest
coverage ratio was 3.7x. The Company’s cash balance after taking into
account the acquisitions of the District on 5th and Campus Village,
which occurred after September 30th, was reduced to approximately $40.0
million. Based on current cash balances and the ability to expand its
currently unused revolving credit facility, the Company has additional
acquisition/development capacity of over $400.0 million.
Earnings Guidance and Outlook
Based on management’s current estimates of market conditions and future
operating results, the Company reaffirms its previous guidance for full
year 2012 Core FFO per share/unit of $0.46 to $0.48. Consistent with
prior guidance, this outlook does not include the impact of any
unannounced dispositions, acquisitions, new third-party development or
management contracts, additional ONE Plan sm developments and
capital transactions.
Webcast and Conference Call
EdR will host a conference call for investors and other interested
parties beginning at 5:00 p.m. Eastern Time on Thursday, October 25,
2012. The call will be hosted by Randy Churchey, president and chief
executive officer, and Randy Brown, executive vice president and chief
financial officer.
The conference call will be accessible by telephone and the Internet. To
access the call, participants in the U.S. may dial (877) 705-6003, and
participants outside the U.S. may dial (201) 493-6725. Participants may
also access the call via live webcast by visiting the company’s investor
relations Web site at www.EdRTrust.com.
The replay of the call will be available at approximately 8:00 p.m.
Eastern Time on October 25, 2012 through midnight Eastern Time on
November 1, 2012. To access the replay, the domestic dial-in number is
(877) 870-5176, the international dial-in number is (858) 384-5517, and
the passcode is 401013. The archive of the webcast will be available on
the company’s website for a limited time.
About EdR
EdR (EDR) is one of America’s largest owners, developers and
managers of collegiate housing. EdR is a self-administered and
self-managed real estate investment trust that owns or manages 65
communities in 24 states with over 36,600 beds within more than 12,000
units. For more information please visit the company’s website at www.EdRTrust.com.
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995
Statements about the Company’s business that are not historical facts
are "forward-looking statements," which relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or trends
and similar expressions. In some cases, you can identify forward-looking
statements by the use of forward-looking terminology such as "may,"
"will," "should," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts" or "potential" or the negative of
these words and phrases or similar words or phrases which are
predictions of or indicate future events or trends and which do not
relate solely to historical matters. Forward-looking statements are
based on current expectations. You should not rely on forward-looking
statements because the matters that they describe are subject to known
and unknown risks and uncertainties that could cause the Company’s
business, financial condition, liquidity, results of operations, Core
FFO, FFO and prospects to differ materially from those expressed or
implied by such statements. Such risks are set forth under the captions
"Risk Factors," "Forward-Looking Statements" and "Management’s
Discussion and Analysis of Financial Condition and Results of
Operations" (or similar captions) in EdR’s most recent annual report on
Form 10-K and quarterly reports on Form 10-Q, and as described in EdR’s
other filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date on which they are
made, and, except as otherwise may be required by law, the Company
undertakes no obligation to update publicly or revise any guidance or
other forward-looking statement, whether as a result of new information,
future developments, or otherwise.
Non-GAAP Financial Measures
Funds from Operations (FFO)
As defined by the National Association of Real Estate Investment Trusts,
FFO represents net income (loss) (computed in accordance with U.S.
generally accepted accounting principles ("GAAP")), excluding gains (or
losses) from sales of property, plus real estate-related depreciation
and amortization and after adjustments for unconsolidated partnerships
and joint ventures. Adjustments for unconsolidated partnerships and
joint ventures will be calculated to reflect FFO on the same basis. The
Company presents FFO available to all stockholders and unitholders
because management considers it to be an important supplemental measure
of the Company’s operating performance, believes it assists in the
comparison of the Company’s operating performance between periods to
that of different REITs and believes it is frequently used by securities
analysts, investors and other interested parties in the evaluation of
REITs, many of which present FFO when reporting their operating results.
As such, the Company also excludes the impact of noncontrolling
interests, only as they relate to operating partnership units, in the
calculation. FFO is intended to exclude GAAP historical cost
depreciation and amortization of real estate and related assets, which
assumes that the value of real estate diminishes ratably over time.
Historically, however, real estate values have risen or fallen with
market conditions. Because FFO excludes depreciation and amortization
unique to real estate, gains and losses from property dispositions and
extraordinary items, it provides a performance measure that, when
compared year over year, reflects the impact to operations from trends
in occupancy rates, rental rates, operating costs, development
activities and interest costs, providing perspective not immediately
apparent from net income. In October 2011, NAREIT communicated to its
members that the exclusion of impairment write-downs of depreciable real
estate is consistent with the definition of FFO and prior periods should
be restated to be consistent with this guidance. Accordingly, we have
restated all periods presented to reflect the current guidance.
The Company also uses core funds from operations, or Core FFO, as an
operating measure. Core FFO is defined as FFO adjusted to include the
economic impact of revenue on participating projects for which
recognition is deferred for GAAP purposes. The adjustment for this
revenue is calculated on the same percentage of completion method used
to recognize revenue on third-party development projects. Core FFO also
includes adjustments to exclude the impact of straight-line adjustment
for ground leases, gains/losses on extinguishment of debt, transaction
costs related to acquisitions and reorganization or severance costs. The
Company believes that these adjustments are appropriate in determining
Core FFO as they are not indicative of the operating performance of the
Company’s assets. In addition the Company believes that Core FFO is a
useful supplemental measure for the investing community to use in
comparing the Company to other REITs as most REITs provide some form of
adjusted or modified FFO.
Net Operating Income (NOI)
The Company considers NOI to be a useful measure of its collegiate
housing operating performance. The Company defines NOI as rental and
other community-level revenues earned from our collegiate housing
communities less community-level operating expenses, excluding
management fees, depreciation, amortization, ground lease expense and
impairment charges and including regional and other corporate costs of
supporting the communities. Other REITs may use different methodologies
for calculating NOI, and accordingly, the Company’s NOI may not be
comparable to other REITs. The Company believes that this measure
provides an operating perspective not immediately apparent from GAAP
operating income or net income. The Company uses NOI to evaluate
performance on a community-by-community basis because it allows
management to evaluate the impact that factors such as lease structure,
lease rates and tenant base, which vary by property, have on the
Company’s operating results. However, NOI should only be used as an
alternative measure of the Company’s financial performance.
Adjusted Earnings before Interest, Taxes, Depreciation and
Amortization (Adjusted EBITDA)
Adjusted EBITDA is defined as net income or loss excluding: (1) straight
line adjustment for ground leases; (2) acquisition costs; (3)
depreciation and amortization; (4) loss on impairment of collegiate
housing assets; (5) gain on sale of collegiate housing assets; (6)
interest expense; (7) other non-operating expense (income); (8) income
tax expense (benefit); (9) non-controlling interest; and (10) applicable
expenses related to discontinued operations. Management considers
Adjusted EBITDA useful to an investor in evaluating and facilitating
comparisons of the Company’s operating performance between periods and
between REITs by removing the impact of the Company’s capital structure
(primarily interest expense) and asset base (primarily depreciation and
amortization) from our operating results.
EdR AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
September 30, 2012 December 31, 2011
-------------------- ------------------
(unaudited)
Assets
Collegiate housing properties, net $ 797,427 $ 803,519
Assets under development 181,391 56,648
Cash and cash equivalents 127,623 75,813
Restricted cash 5,995 4,826
Other assets 57,515 37,003
-------------------- ----------------
Total assets $ 1,169,951 $ 977,809
========= ========= ======= =======
Liabilities and equity
Liabilities:
Mortgage and construction loans, net of unamortized premium/discount $ 322,549 $ 358,504
Unsecured revolving credit facility -- --
Accounts payable and accrued expenses 49,818 31,766
Deferred revenue 18,980 14,409
-------------------- ----------------
Total liabilities 391,347 404,679
-------------------- ----------------
Commitments and contingencies -- --
Redeemable noncontrolling interests 9,066 9,776
Equity:
EdR stockholders’ equity:
Common stock, $0.01 par value per share, 200,000,000 shares
authorized, 112,863,970 and 91,800,688 shares issued and
outstanding as of September 30, 2012 and December 31, 2011,
respectively
1,129 918
-- --
Preferred shares, $0.01 par value, 50,000,000 shares authorized,
no shares issued and outstanding
Additional paid-in capital 861,389 662,657
Accumulated deficit (98,075 ) (101,708 )
--------------------- -----------------
Total EdR stockholders’ equity 764,443 561,867
-------------------- ----------------
Noncontrolling interests 5,095 1,487
-------------------- ----------------
Total equity 769,538 563,354
-------------------- ----------------
Total liabilities and equity $ 1,169,951 $ 977,809
========= ========= ======= =======
EdR AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three months ended September 30,
2012 2011
------------------------- -----------------
Revenues:
Collegiate housing leasing revenue $ 30,464 $ 23,431
Third-party development services 145 1,132
Third-party management services 879 846
Operating expense reimbursements 3,015 2,503
-------------------- ------------
Total revenues 34,503 27,912
-------------------- ------------
Operating expenses:
Collegiate housing leasing operations 19,861 15,920
Development and management services 1,493 1,466
General and administrative 1,635 1,592
Development pursuit and acquisition costs 216 108
Ground leases 1,696 1,365
Depreciation and amortization 8,757 6,376
Reimbursable operating expenses 3,015 2,503
-------------------- ------------
Total operating expenses 36,673 29,330
-------------------- ------------
Operating income (loss) (2,170 ) (1,418 )
------------------------ ----------------
Nonoperating expenses:
Interest expense 3,354 4,176
Amortization of deferred financing costs 288 352
Interest income (108 ) (37 )
------------------------ ----------------
Total nonoperating expenses 3,534 4,491
-------------------- ------------
Loss before equity in earnings (losses) of unconsolidated entities, (5,704 ) (5,909 )
income taxes and discontinued operations
Equity in earnings (losses) of unconsolidated entities (39 ) (390 )
------------------------ ----------------
Loss before income taxes and discontinued operations (5,743 ) (6,299 )
Less: Income tax benefit (638 ) (60 )
------------------------ ----------------
Loss from continuing operations (5,105 ) (6,239 )
Income (loss) from discontinued operations 5,474 (318 )
-------------------- ----------------
Net income (loss) 369 (6,557 )
Less: Net loss attributable to the noncontrolling interests (120 ) (91 )
------------------------ ----------------
Net income (loss) attributable to EdR common shareholders $ 489 $ (6,466 )
==== ============== ==== ====== ====
Earnings per share information:
Net income (loss) attributable to EdR common stockholders per share $ -- $ (0.09 )
- basic & diluted:
==== ============== ==== ==== ====== ====
Weighted-average share of common stock outstanding - basic & diluted 103,929 73,061
==================== ============
EdR AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)
(Unaudited)
Nine months ended September 30,
2012 2011
--------------------- -----------------
Revenues:
Collegiate housing leasing revenue $ 94,285 $ 72,363
Third-party development services 490 3,481
Third-party management services 2,451 2,425
Operating expense reimbursements 7,414 6,376
---------------- ------------
Total revenues 104,640 84,645
---------------- ------------
Operating expenses:
Collegiate housing leasing operations 48,770 38,720
Development and management services 4,756 4,132
General and administrative 5,292 4,400
Development pursuit and acquisition costs 609 259
Ground leases 4,716 4,097
Depreciation and amortization 25,268 19,220
Reimbursable operating expenses 7,414 6,376
---------------- ------------
Total operating expenses 96,825 77,204
---------------- ------------
Operating income 7,815 7,441
---------------- ------------
Nonoperating expenses:
Interest expense 10,941 13,036
Amortization of deferred financing costs 911 900
Interest income (152 ) (129 )
Loss on extinguishment of debt -- 351
---------------- ------------
Total nonoperating expenses 11,700 14,158
---------------- ------------
Loss before equity in earnings (losses) of unconsolidated entities, (3,885 ) (6,717 )
income taxes and discontinued operations
Equity in earnings (losses) of unconsolidated entities (340 ) (408 )
-------------------- ----------------
Loss before income taxes and discontinued operations (4,225 ) (7,125 )
Less: Income tax benefit (1,117 ) (278 )
-------------------- ----------------
Loss from continuing operations (3,108 ) (6,847 )
Income from discontinued operations 6,767 1,672
---------------- ------------
Net income (loss) 3,659 (5,175 )
Less: Net income attributable to the noncontrolling interests 26 60
---------------- ------------
Net income (loss) attributable to EdR $ 3,633 $ (5,235 )
======= ======= ==== ====== ====
Earnings per share information:
Net income (loss) attributable to EdR common stockholders per share $ 0.04 $ (0.07 )
- basic & diluted:
======= ======= ==== ==== ====== ====
Weighted-average share of common stock outstanding - basic & diluted 97,259 72,040
================ ============
EdR AND SUBSIDIARIES
CALCULATION OF FFO AND CORE FFO
(Amounts in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
------------------------ ------------------- ------------------- --------------
Net income (loss) attributable to EdR $ 489 $ (6,466 ) $ 3,633 $ (5,235 )
Gain on sale of collegiate housing assets (1) (5,255 ) -- (5,427 ) (2,388 )
Real estate related depreciation and amortization 8,920 6,693 26,199 20,797
Equity portion of real estate depreciation and amortization on 53 107 178 329
equity investees
Equity portion of loss on sale of student housing property on equity -- 256 88 256
investees
Noncontrolling interests (48 ) (91 ) 137 60
-------------------- ------------------ ---------------- -----------
FFO $ 4,159 $ 499 $ 24,808 $ 13,819
FFO adjustments:
Loss on extinguishment of debt (1) -- -- -- 757
Acquisition costs 155 108 609 480
Straight-line adjustment for ground leases (2) 1,062 1,051 3,208 3,157
---------------- ---------------- ---------------- -----------
FFO adjustments 1,217 1,159 3,817 4,394
FFO on Participating Developments: (3)
Interest on loan to Participating Development 460 460 1,370 1,138
Development fees on Participating Development, net of costs and tax 20 244 91 763
---------------- ---------------- ---------------- -----------
FFO on Participating Developments 480 704 1,461 1,901
Core FFO $ 5,856 $ 2,362 $ 30,086 $ 20,114
======= ======= ======= ======= ======= ======= === ======
FFO per weighted average share/unit (4) $ 0.04 $ 0.01 $ 0.25 $ 0.19
======= ======= ======= ======= ======= ======= === ======
Core FFO per weighted average share/unit (4) $ 0.06 $ 0.03 $ 0.31 $ 0.27
======= ======= ======= ======= ======= ======= === ======
Weighted average shares/units (4) 104,996 74,172 98,336 73,151
================ ================ ================ ===========
Notes:
(1) All or a portion of these amounts are included in discontinued
operations and are not visible on the face of our statement of
operations.
(2)
This represents the straight-line rent expense adjustment required
by GAAP related to ground leases at three communities. As the
ground lease terms range from 40 to 99 years, the adjustment to
straight-line these agreements becomes material to our operating
results, distorting the economic results of the communities.
(3) FFO on participating developments represents the economic impact
of interest and fees not recognized in net income due to the
Company having a participating investment in the third-party
development. The adjustment for development fees is recognized
under the same percentage of completion method of accounting used
for third-party development fees. The adjustment for interest
income is based on terms of the loan.
(4)
FFO and Core FFO per weighted average share/unit were computed
using the weighted average of all shares and operating partnership
units outstanding, regardless of their dilutive impact.
EdR AND SUBSIDIARIES
2012 GUIDANCE - RECONCILIATION OF FFO and CORE FFO
(Amounts in thousands, except per share data)
(Unaudited)
Year ending December 31, 2012
---------------------------------
Low End High End
---------------- ---------------
Net income attributable to EdR $ 1,935 $ 3,327
Gain on sale of collegiate housing assets (172 ) (172 )
Real estate related depreciation and amortization 38,051 38,051
Equity portion of real estate depreciation and amortization on 221 221
equity investees
Equity portion of loss on sale of student housing property on equity 88 88
investees
Noncontrolling interests 215 370
------------- -------------
FFO $ 40,338 $ 41,885
FFO adjustments:
Acquisition costs 508 508
Straight-line adjustment for ground leases (1) 4,200 4,200
------------- -------------
FFO adjustments 4,708 4,708
FFO on Participating Developments: (2)
Interest on loan to Participating Development 1,820 1,820
Development fees on Participating Development, net of costs and tax 200 700
------------- -------------
FFO on Participating Developments 2,020 2,520
Core FFO $ 47,066 $ 49,113
===== ====== ===== ======
FFO per weighted average share/unit (3) $ 0.39 $ 0.41
===== ====== ===== ======
Core FFO per weighted average share/unit (3) $ 0.46 $ 0.48
===== ====== ===== ======
Weighted average shares/units (3) 102,318 102,318
============= =============
Notes:
---------------------------------------------------------------------
(1) This represents the straight-line rent expense adjustment required
by GAAP related to ground leases at three communities. As the
ground lease terms range from 40 to 99 years, the adjustment to
straight-line these agreements becomes material to our operating
results, distorting the economic results of the communities.
(2) FFO on participating developments represents the economic impact
of interest and fees not recognized in net income due to the
Company having a participating investment in the third-party
development. The adjustment for development fees is recognized
under the same percentage of completion method of accounting used
for third-party development fees. The adjustment for interest
income is based on terms of the loan.
(3) FFO and Core FFO per weighted average share/unit were computed
using the weighted average of all shares and operating partnership
units outstanding, regardless of their dilutive impact.
EdR AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (Unaudited)
The following is a reconciliation of the Company’s GAAP operating income
(loss) to NOI for three and nine months ended September 30, 2012 and
2011 (in thousands):
For the three months For the nine months
ended September 30, ended September 30,
2012 2011 2012 2011
------------ -------------- ------------ -----------
Operating income $ (2,170 ) $ (1,418 ) $ 7,815 $ 7,441
Less: Third-party development services revenue 145 1,132 490 3,481
Less: Third-party management services revenue 879 846 2,451 2,425
Plus: General and administrative expenses 3,344 3,166 10,657 8,791
Plus: Ground leases 1,696 1,365 4,716 4,097
Plus: Depreciation and amortization 8,757 6,376 25,268 19,220
---------------------------------------------- ---------- ---------- ----------- -----------
NOI $ 10,603 $ 7,511 $ 45,515 $ 33,643
============================================== == ====== == ====== === ====== === ======
The following is a reconciliation of the Company’s GAAP net income
(loss) to Adjusted EBITDA for the trailing twelve months ended September
30, 2012 (in thousands):
Less: Trailing
Nine months Plus: Nine months Twelve
ended Year ended ended Months ended
September 30, December 31, September 30, September 30,
2012 2011 2011 2012
------------------ ---------------- -------------------- --------------
Net income (loss) attributable to common shareholders $ 3,633 $ (11,014 ) $ (5,235 ) $ (2,146 )
Straight line adjustment for ground leases 3,208 4,208 3,157 4,259
Acquisition costs 609 741 480 870
Depreciation and amortization 25,268 27,109 19,220 33,157
Depreciation and amortization- discontinued operations 1,339 2,446 1,934 1,851
Loss on impairment of collegiate housing assets 88 7,859 -- 7,947
Gain on sale of collegiate housing assets- discontinued operations (5,427 ) (2,388 ) (2,388 ) (5,427 )
Interest expense, net 10,941 16,887 13,036 14,792
Interest expense, net- discontinued operations -- 1,431 867 564
Other nonoperating expense 759 1,348 1,122 985
Income tax benefit (1,117 ) (95 ) (278 ) (934 )
Non-controlling interests (25 ) 316 29 262
Applicable expenses (income) related to discontinued operations 51 420 486 (15 )
------------------------------------------------------------------ ---------------- ------------ ---------------- ----------------
Adjusted EBITDA $ 39,327 $ 49,268 $ 32,430 $ 56,165
================================================================== ======= ======= === ======= ======= ======= ==== ======
SOURCE: EdR
ICR, LLC
Brad Cohen, 203-682-8211
bcohen@icrinc.com
or
EdR
Randy Brown, 901-259-2500
Executive Vice President and
Chief Financial Officer
or
J. Drew Koester, 901-259-2500
Senior Vice President and
Chief Accounting Officer
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