EdR Announces Third Quarter 2012 Results

  EdR Announces Third Quarter 2012 Results

             - Same-Community Net Operating Income Up Nearly 9% -

                  - Year To Date Core FFO per Share Up 15% -

Business Wire

MEMPHIS, Tenn. -- October 25, 2012

EdR (NYSE:EDR), one of the nation’s largest developers, owners and managers of
collegiate housing, today announced results for the quarter ended
September30, 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 September30, 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 (NYSE: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,      $     797,427            $   803,519
net
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           $     322,549            $   358,504
premium/discount
Unsecured revolving credit          —                        —
facility
Accounts payable and accrued        49,818                   31,766
expenses
Deferred revenue                    18,980                  14,409        
Total liabilities                   391,347                 404,679       
                                                                           
Commitments and contingencies       —                        —
                                                                           
Redeemable noncontrolling           9,066                    9,776
interests
                                                                           
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,         1,129                    918
respectively
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, income taxes      (5,704     )        (5,909     )
and discontinued operations
                                                                  
Equity in earnings (losses) of                (39        )        (390       )
unconsolidated entities
Loss before income taxes and discontinued     (5,743     )        (6,299     )
operations
Less: Income tax benefit                      (638       )        (60        )
Loss from continuing operations               (5,105     )        (6,239     )
Income (loss) from discontinued               5,474              (318       )
operations
Net income (loss)                             369                 (6,557     )
                                                                  
Less: Net loss attributable to the            (120       )        (91        )
noncontrolling interests
Net income (loss) attributable to EdR         $  489             $  (6,466  )
common shareholders
                                                                  
Earnings per share information:
Net income (loss) attributable to EdR
common stockholders per share – basic &       $  —               $  (0.09   )
diluted:
                                                                  
Weighted-average share of common stock        103,929            73,061     
outstanding – basic & diluted
                                                                             

                                            
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, income taxes and      (3,885     )        (6,717    )
discontinued operations
                                                                   
Equity in earnings (losses) of                 (340       )        (408      )
unconsolidated entities
Loss before income taxes and discontinued      (4,225     )        (7,125    )
operations
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           26                 60        
noncontrolling interests
Net income (loss) attributable to EdR          $  3,633           $  (5,235 )
                                                                   
Earnings per share information:
Net income (loss) attributable to EdR
common stockholders per share – basic &        $  0.04            $  (0.07  )
diluted:
                                                                   
Weighted-average share of common stock         97,259             72,040    
outstanding – basic & diluted
                                                                             

                                                
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       $ 489           $ (6,466 )     $ 3,633        $ (5,235 )
EdR
                                                                    
Gain on sale of
collegiate            (5,255    )     —              (5,427   )     (2,388   )
housing assets
(1)
Real estate
related               8,920           6,693          26,199         20,797
depreciation and
amortization
Equity portion of
real estate
depreciation and      53              107            178            329
amortization on
equity investees
Equity portion of
loss on sale of
student housing       —               256            88             256
property on
equity investees
Noncontrolling        (48     )      (91      )   137           60       
interests
FFO                   $ 4,159         $ 499          $ 24,808       $ 13,819
FFO adjustments:
Loss on
extinguishment of     —               —              —              757
debt (1)
Acquisition costs     155             108            609            480
Straight-line
adjustment for        1,062          1,051       3,208         3,157    
ground leases (2)
FFO adjustments       1,217           1,159          3,817          4,394
                                                                    
FFO on
Participating
Developments: (3)
Interest on loan
to Participating      460             460            1,370          1,138
Development
Development fees
on Participating      20             244         91            763      
Development, net
of costs and tax
FFO on
Participating         480             704            1,461          1,901
Developments
                                                                    
Core FFO              $ 5,856        $ 2,362     $ 30,086      $ 20,114 
                                                                    
FFO per weighted
average               $ 0.04         $ 0.01      $ 0.25        $ 0.19   
share/unit (4)
                                                                    
Core FFO per
weighted average      $ 0.06         $ 0.03      $ 0.31        $ 0.27   
share/unit (4)
                                                                    
Weighted average      104,996        74,172      98,336        73,151   
shares/units (4)
                                                                             

     
Notes:
      
      All or a portion of these amounts are included in discontinued
(1)   operations and are not visible on the face of our statement of
      operations.
      
      This represents the straight-line rent expense adjustment required by
      GAAP related to ground leases at three communities. As the ground lease
(2)   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.
      
      FFO on participating developments represents the economic impact of
      interest and fees not recognized in net income due to the Company having
(3)   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.
      
      FFO and Core FFO per weighted average share/unit were computed using the
(4)   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             38,051             38,051
amortization
Equity portion of real estate depreciation       221                221
and amortization on equity investees
Equity portion of loss on sale of student        88                 88
housing property on equity investees
Noncontrolling interests                         215              370      
FFO                                              $  40,338          $ 41,885
FFO adjustments:
Acquisition costs                                508                508
Straight-line adjustment for ground leases       4,200            4,200    
(1)
FFO adjustments                                  4,708              4,708
                                                                    
FFO on Participating Developments: (2)
Interest on loan to Participating                1,820              1,820
Development
Development fees on Participating                200              700      
Development, net of costs and tax
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:
    
      This represents the straight-line rent expense adjustment required by
      GAAP related to ground leases at three communities. As the ground lease
(1)   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.
      
      FFO on participating developments represents the economic impact of
      interest and fees not recognized in net income due to the Company having
(2)   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.
      
      FFO and Core FFO per weighted average share/unit were computed using the
(3)   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            $ (2,170 )    $ (1,418 )        $ 7,815       $ 7,441
income
Less:
Third-party
development          145              1,132              490              3,481
services
revenue
Less:
Third-party
management           879              846                2,451            2,425
services
revenue
Plus: General
and                  3,344            3,166              10,657           8,791
administrative
expenses
Plus: Ground         1,696            1,365              4,716            4,097
leases
Plus:
Depreciation      8,757        6,376         25,268       19,220
and
amortization
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           Plus:               Nine months        Twelve
                      months
                      ended          Year ended          ended              Months
                                                                            ended
                      September      December 31,        September          September
                      30,                                30,                30,
                  2012         2011             2011            2012
Net income
(loss)
attributable to       $ 3,633         $ (11,014 )        $ (5,235 )       $ (2,146 )
common
shareholders
Straight line
adjustment for        3,208            4,208               3,157            4,259
ground leases
Acquisition           609              741                 480              870
costs
Depreciation
and                   25,268           27,109              19,220           33,157
amortization
Depreciation
and
amortization-         1,339            2,446               1,934            1,851
discontinued
operations
Loss on
impairment of         88               7,859               —                7,947
collegiate
housing assets
Gain on sale of
collegiate
housing assets-       (5,427   )       (2,388    )         (2,388   )       (5,427   )
discontinued
operations
Interest              10,941           16,887              13,036           14,792
expense, net
Interest
expense, net-         —                1,431               867              564
discontinued
operations
Other
nonoperating          759              1,348               1,122            985
expense
Income tax            (1,117   )       (95       )         (278     )       (934     )
benefit
Non-controlling       (25      )       316                 29               262
interests
Applicable
expenses
(income)           51           420            486          (15      )
related to
discontinued
operations
Adjusted EBITDA    $ 39,327     $ 49,268        $ 32,430     $ 56,165 

Contact:

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
 
Press spacebar to pause and continue. Press esc to stop.