American Campus Communities, Inc. Reports First Quarter 2013 Financial Results

  American Campus Communities, Inc. Reports First Quarter 2013 Financial
  Results

Business Wire

AUSTIN, Texas -- April 23, 2013

American Campus Communities, Inc. (NYSE:ACC) today announced the following
financial results for the quarter ended March 31, 2013.

Highlights

  *Increased quarterly FFOM by 65.4 percent to $68.4 million or $0.64 per
    fully diluted share compared to $41.4 million or $0.55 per fully diluted
    share in the first quarter prior year.
  *Increased same store wholly-owned net operating income ("NOI") by 3.2
    percent over the first quarter 2012.
  *Achieved same store wholly-owned occupancy of 97.6 percent as of March 31,
    2013.
  *Leased total wholly-owned portfolio for the upcoming academic year to 75.1
    percent applied for and 68.7 percent leased as of April 19, 2013.
  *Completed inaugural bond offering, issuing $400 million 10-year senior
    unsecured notes with a 3.791 percent yield and 3.750 percent coupon.
  *Continued portfolio integration of $2.2 billion in assets acquired or
    developed during 2012.
  *Named one of America’s Top 100 Most Trustworthy Companies by Forbes based
    on results from their annual survey.

“With the completion of our debut bond offering as the industry's only
investment grade rated company and being named one of America’s Top 100 Most
Trustworthy Companies by Forbes,we continue to establish American Campus as
the best-in-class company in our sector,” said Bill Bayless, American Campus
CEO. “Furthermore, our FFOM per share growth of 16.4 percent this quarter over
last year on the heels of integrating $2.2 billion in growth assets sets the
stage for continued value creation for our shareholders while
deliveringexceptional service to our students, parents, and university
customers.”

First Quarter Operating Results

Revenue for the 2013 first quarter totaled $165.6 million, up 54.8 percent
from $107.0 million in the first quarter 2012 and operating income for the
quarter increased $10.8 million or 34.0 percent over the prior year first
quarter.The increase in revenues and operating income was primarily due to
growth resulting from property acquisitions, recently completed development
properties, and increased rental rates for the 2012-2013 academic year. Net
income for the 2013 first quarter totaled $21.6 million, or $0.20 per fully
diluted share, compared with net income of $20.0 million, or $0.26 per fully
diluted share, for the same quarter in 2012. The decrease in net income per
fully diluted share as compared to the prior year quarter is primarily due to
an increase in depreciation and amortization expense recorded in connection
with property acquisitions and recently completed development properties and a
$2.8 million noncash litigation settlement expense.FFO for the 2013 first
quarter totaled $68.5 million, or $0.64 per fully diluted share, as compared
to $44.4 million, or $0.59 per fully diluted share for the same quarter in
2012. FFOM for the 2013 first quarter was $68.4 million, or $0.64 per fully
diluted share as compared to $41.4 million, or $0.55 per fully diluted share
for the same quarter in 2012. A reconciliation of FFO and FFOM to net income
is shown in Table 3.

NOI for same store wholly-owned properties was $57.1 million in the quarter,
up 3.2 percent from $55.4 million in the 2012 first quarter. Same store
wholly-owned property revenues increased by 2.2 percent over the 2012 first
quarter due to an increase in average rental rates for the 2012-2013 academic
year.Same store wholly-owned property operating expenses increased by 0.9
percent over the prior year quarter.NOI for the total wholly-owned portfolio
increased 63.0 percent to $90.8 million for the quarter from $55.7 million in
the comparable period of 2012.

Portfolio Update

As of April 19, 2013 the company’s same store wholly-owned portfolio was 74.1
percent applied for and 67.9 percent leased for the upcoming academic year
compared to 79.1 percent applied for and 72.6 percent leased for the same date
prior year, with a 1.7 percent current rental rate increase projected over the
in-place rent.

Developments

Owned

The company is progressing on the construction of its $416.8 million owned
development pipeline with expected delivery in Fall 2013 and 2014. The
developments are all core Class A assets pedestrian to campus in their
respective markets and on track to meet their previously announced stabilized
development yields in the range of 7.0 - 7.25 percent. The seven new owned
development projects scheduled to open Fall 2013 totaling $304.5 million are
preleased to an average of 86.1 percent for the upcoming academic year as of
April 19, 2013 with four assets preleased to 97 percent and above.

Third-Party Services

During the quarter, the company generated five new management contracts to
commence between February – September 2013 with stabilized annual fees of $420
thousand.

On April 22, 2013, the company acquired a note and subrogation rights from
National Public Finance Guarantee Corporation (formerly known as MBIA
Insurance Corp. of Illinois) for an aggregate of $52.8 million, which are
secured by a lien on, and the cash flows from, two student housing properties
in close proximity to the University of Central Florida and currently under a
ground lease with the UCF Foundation. The instruments carry an interest rate
of 5.123 percent. This transaction should provide an opportunity for the
company to discuss the acquisition of the two communities with the University
and the UCF Foundation under the company’s ACE program, and to potentially
convert its off-campus development The Plaza on University into an ACE
investment. Additionally, the acquisition facilitated the settlement of
litigation related to a third-party management agreement for the properties
with a GMH entity that was acquired by the company’s 2008 merger with GMH. The
acquisition resulted in a non-cash settlement charge of $2.8 million to
reflect the fair market valuation of the instruments. If the company is
successful in the structuring of an ACE acquisition or refinancing of the
properties, the instruments will be extinguished.

Capital Markets

On March 25, 2013, the company priced a $400 million offering of senior
unsecured notes under its existing shelf registration. These 10-year notes
were issued at 99.659 percent of par value with a coupon of 3.750 percent and
a yield of 3.791 percent, and are fully and unconditionally guaranteed by the
company. Interest on the notes is payable semi-annually on April 15 and
October 15, with the first payment beginning on October 15, 2013. The notes
will mature on April 15, 2023. Moody’s and S&P rated the notes Baa3 and BBB-,
respectively, and Moody’s revised the company’s rating outlook to positive
from stable. Net proceeds from the transaction totaled $394.9 million with a
portion used to repay the outstanding balance of the company’s revolving
credit facility and the remainder expected to fund the current development
pipeline, potential acquisitions of student housing properties, and for
general business purposes. The transaction settled on April 2, 2013.

At-The-Market (ATM) Share Offering Program

During the quarter, the company established a new at-the-market equity program
under which it may sell common stock with an aggregate offering price of up to
$500 million. The company did not sell any shares under the ATM during the
quarter.

2013 Outlook

The company is maintaining its previously stated guidance range for the fiscal
year 2013 FFO of $2.37 to $2.46 per fully diluted share and FFOM of $2.32 to
$2.42 per fully diluted share. All guidance is based on the current
expectations and judgment of the company’s management team.

Supplemental Information and Earnings Conference Call

Supplemental financial and operating information, as well as this release, are
available in the investor relations section of the American Campus Communities
website, www.americancampus.com. In addition, the company will host a
conference call to discuss first quarter results and the 2013 outlook on
Wednesday, April 24, 2013 at 11 a.m. EDT (10:00 a.m. CDT). Participants from
within the U.S. may dial 888-317-6003 passcode 7250005, and participants
outside the U.S. may dial 412-317-6061 passcode 7250005 at least five minutes
prior to the call.

To listen to the live broadcast, go to www.americancampus.com at least 15
minutes prior to the call so that required audio software can be downloaded.
Informational slides in the form of the supplemental analyst package can be
accessed via the website. A replay of the conference call will be available
beginning one hour after the end of the call until May 2, 2013 by dialing
877-344-7529 or 412-317-0088 conference number 10026747. The replay also will
be available for one year at www.americancampus.com. The call will also be
available as a podcast on www.REITcafe.com and on the company’s website
shortly after the call.

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, plus real estate depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. This also
excludes non-cash impairment charges. 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, many of which present FFO when reporting their
results. 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 other
non-cash items as we determine in good faith. The company believes it is
meaningful to eliminate the FFO generated from the on-campus participating
properties and instead to reflect the company’s 50 percent share of the
properties’ net cash flow and management fees received, as this measure better
reflects the economic benefit derived from the company’s involvement in the
operation of these properties. 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 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 and manager 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. American Campus Communities owns 160 student housing properties
containing approximately 98,800 beds. Including its owned and third-party
managed properties, ACC’s total managed portfolio consists of 191 properties
with approximately 122,800 beds. Visit www.americancampus.com or
www.studenthousing.com

Forward-Looking Statements

In addition to historical information, this press release contains
forward-looking statements under the federal securities law. These statements
are based on current expectations, estimates and projections about the
industry and markets in which American Campus operates management's beliefs,
and assumptions made by management. Forward-looking statements are not
guarantees of future performance and involve certain risks and uncertainties,
which are difficult to predict.

                                                         
                                                             
Table 1
American Campus Communities, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
                                                             
                                            March 31, 2013   December 31, 2012
Assets                                      (unaudited)
                                                             
Investments in real estate:
Wholly-owned properties, net                $  4,840,091     $   4,871,376
Wholly-owned properties held for sale          87,304            -
On-campus participating properties, net       56,508          57,346     
Investments in real estate, net                4,983,903         4,928,722
                                                             
Cash and cash equivalents                      15,033            21,454
Restricted cash                                38,817            36,790
Student contracts receivable, net              6,475             14,122
Other assets                                  115,110         117,874    
                                                             
Total assets                                $  5,159,338    $   5,118,962  
                                                             
Liabilities and equity
                                                             
Liabilities:
Secured mortgage, construction and bond     $  1,516,407     $   1,509,105
debt
Unsecured term loan                            350,000           350,000
Unsecured revolving credit facility            321,000           258,000
Secured agency facility                        104,000           104,000
Accounts payable and accrued expenses          44,690            56,046
Other liabilities                             104,294         107,223    
Total liabilities                              2,440,391         2,384,374
                                                             
Redeemable noncontrolling interests            56,736            57,534
                                                             
Equity:
American Campus Communities, Inc. and
Subsidiaries

stockholders’ equity:
Common stock                                   1,043             1,043
Additional paid in capital                     2,999,766         3,001,520
Accumulated earnings and dividends             (361,527  )       (347,521   )
Accumulated other comprehensive loss          (5,848    )      (6,661     )
Total American Campus Communities, Inc.
and Subsidiaries                               2,633,434         2,648,381

stockholders’ equity
Noncontrolling interests – partially          28,777          28,673     
owned properties
Total equity                                  2,662,211       2,677,054  
                                                             
Total liabilities and equity                $  5,159,338    $   5,118,962  

                                           
                                              
Table 2
American Campus Communities, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(unaudited, dollars in thousands, except share and per share data)
                                              
                                              Three Months Ended March 31,
                                              2013             2012
Revenues
Wholly-owned properties                       $ 154,756         $ 94,819
On-campus participating properties              8,102             7,967
Third-party development services                479               2,094
Third-party management services                 1,709             1,758
Resident services                              597             343        
Total revenues                                  165,643           106,981
Operating expenses
Wholly-owned properties                         67,143            42,058
On-campus participating properties              2,504             2,495
Third-party development and management          2,306             2,785
services
General and administrative                      3,806             3,540
Depreciation and amortization                   46,143            23,399
Ground/facility leases                         1,203           964        
Total operating expenses                       123,105         75,241     
                                                                
Operating income                                42,538            31,740
                                                                
Nonoperating income and (expenses)
Interest income                                 427               516
Interest expense                                (17,641     )     (12,845    )
Amortization of deferred financing costs        (1,314      )     (986       )
Income from unconsolidated joint ventures       -                 444
Other nonoperating expense                     (2,800      )    (122       )
Total nonoperating expenses                    (21,328     )    (12,993    )
                                                                
Income before income taxes and                  21,210            18,747
discontinued operations
Income tax provision                           (255        )    (156       )
Income from continuing operations               20,955            18,591
                                                                
Discontinued operations
Income attributable to discontinued            1,426           2,214      
operations
Total discontinued operations                  1,426           2,214      
                                                                
Net income                                      22,381            20,805
Net income attributable to noncontrolling      (791        )    (779       )
interests
Net income attributable to American
Campus                                        $ 21,590         $ 20,026     

Communities, Inc. and Subsidiaries
                                                                
Other comprehensive income
Change in fair value of interest rate          813             3,404      
swaps
Comprehensive income                          $ 22,403         $ 23,430     
                                                                
Net income per share attributable to
American
Campus Communities, Inc. and Subsidiaries
common stockholders
Basic                                         $ 0.20           $ 0.27       
Diluted                                       $ 0.20           $ 0.26       
                                                                
Weighted-average common shares
outstanding
Basic                                          104,697,433     74,216,854 
Diluted                                        105,364,769     74,864,447 

                                           
                                              
Table 3
American Campus Communities, Inc. and Subsidiaries
Calculation of FFO and FFOM
(unaudited, dollars in thousands, except share and per share data)
                                              
                                              Three Months Ended March 31,
                                              2013             2012
Net income attributable to American           $ 21,590          $ 20,026
Campus Communities, Inc. and Subsidiaries
Noncontrolling interests^1                      382               381
Income from unconsolidated joint ventures       -                 (444       )
FFO from unconsolidated joint ventures^2        -                 429
Real estate related depreciation and           46,530          24,005     
amortization
Funds from operations (“FFO”)                   68,502            44,397
                                                                
Elimination of operations of on-campus
participating properties
Net income from on-campus participating         (2,654      )     (2,498     )
properties
Amortization of investment in on-campus        (1,174      )    (1,155     )
participating properties
                                                64,674            40,744
                                                                
Modifications to reflect operational
performance of
on-campus participating properties
Our share of net cash flow^3                    539               550
Management fees                                376             362        
Impact of on-campus participating               915               912
properties
Non-cash litigation settlement expense^4        2,800             -
Elimination of gain on debt restructuring
-
unconsolidated joint venture^5                  -                 (424       )
Loss on remeasurement of equity method         -               122        
investment^6
Funds from operations-modified ("FFOM”)       $ 68,389         $ 41,354     
                                                                
FFO per share – diluted                       $ 0.64           $ 0.59       
                                                                
FFOM per share – diluted                      $ 0.64           $ 0.55       
                                                                
Weighted average common shares                 106,611,973     75,878,010 
outstanding - diluted
                                                                             

     Excludes $0.4 million for the three months ended March 31, 2013 and 2012
1.  of income attributable to the noncontrolling partner in The Varsity, a
     property purchased in December 2011 from a seller that retained a 20.5%
     noncontrolling interest in the property.
     Represents our 10% share of FFO from a joint venture with Fidelity (“Fund
     II”) in which we were a noncontrolling partner. In January 2012, we
2.   purchased the full ownership interest in the one remaining property owned
     by Fund II (University Heights). Subsequent to the acquisition, the
     property is now wholly-owned and is consolidated by the company.
     50% of the properties’ net cash available for distribution after payment
3.   of operating expenses, debt service (including repayment of principal)
     and capital expenditures. Represents amounts accrued for the interim
     periods.
     On April 22, 2013, the company acquired a note and subrogation rights
     from National Public Finance Guarantee Corporation (formerly known as
     MBIA Insurance Corp. of Illinois) for an aggregate of $52.8 million,
     which are secured by a lien on, and the cash flows from, two student
     housing properties in close proximity to the University of Central
4.   Florida and currently under a ground lease with the UCF Foundation. The
     instruments carry an interest rate of 5.123 percent. The acquisition
     facilitated the settlement of litigation related to a third-party
     management agreement for the properties with a GMH entity that was
     acquired by the company’s 2008 merger with GMH. The acquisition resulted
     in a non-cash settlement charge of $2.8 million to reflect the fair
     market valuation of the instruments.
     Immediately prior to our purchase of University Heights from Fund II (see
     Note 2), Fund II negotiated a Settlement Agreement with the lender of the
     property’s mortgage loan whereby the lender agreed to accept a discounted
5.   amount that was less than the original principal amount of the loan as
     payment in full. Accordingly, Fund II recorded a gain on debt
     restructuring to reflect the discounted payoff. Our 10% share of such
     gain is reflected above as an adjustment to FFOM.
     Represents a non-cash loss recorded to remeasure our equity method
6.   investment in Fund II to fair value as a result of our purchase of the
     full ownership interest in University Heights from Fund II in January
     2012.

Contact:

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