EX-99.1 2 a4834873ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 (ACC) American Campus Communities, Inc. Reports 2004 Fourth-Quarter and Full-Year Financial Results AUSTIN, Texas--(BUSINESS WIRE)--March 1, 2005--American Campus Communities, Inc. (NYSE:ACC), today announced the following financial results for the quarter and year ending December 31, 2004. Highlights -- Fourth Quarter 2004 Net Income of $3.3 million and FFO of $0.48 per fully diluted share exceeds previous guidance. -- Fourth Quarter 2004 FFOM per fully diluted share of $0.36 in line with previous guidance. -- Fourth Quarter 2004 Net Operating Income ("NOI") for same-store owned off-campus properties increased 15 percent over fourth quarter 2003. -- Third party management services revenues in fourth quarter 2004 increased 115 percent over prior year quarter. -- Closed and commenced construction on Cullen Oaks, a $17.0 million on-campus participating property at the University of Houston, scheduled to open in Fall 2005. -- Assumed third-party management responsibilities of two properties serving students attending Florida State University and Central Michigan University. Fourth-Quarter 2004 Operating Results Revenue for the 2004 fourth quarter totaled $18.2 million, up 19 percent from $15.2 million in the 2003 fourth quarter. Net income for 2004 fourth quarter, totaled $3.3 million, or $0.26 per fully diluted share, compared with a net loss of $0.4 million in the 2003 fourth quarter. The increase in net income was primarily due to the opening of new, owned properties at Temple University, California State University at Fresno and California State University at San Bernardino in August 2004. FFO for the quarter totaled $6.2 million, or $0.48 per fully diluted share. FFOM totaled $4.5 million, or $0.36 per fully diluted share. A reconciliation of FFO and FFOM to net income is shown on Table 4. NOI for same-store owned off-campus properties was $4.6 million in the 2004 fourth quarter, up $0.6 million from the 2003 fourth quarter. "Our strong fourth-quarter performance benefited from the opening of three new developments, a 15 percent increase in same-store NOI on our owned off-campus properties, and occupancy rates exceeding 97 percent for our owned properties," said Bill Bayless, ACC President and Chief Executive Officer. "We're also continuing to see numerous development and acquisition opportunities that complement our growth strategy of owning high-quality properties in close proximity to college and university campuses." Full-Year 2004 Operating Results For the year ended December 31, 2004, the company's revenue totaled $60.8 million, an increase of 6 percent over revenue of $57.1 million in 2003. A net loss of $1.3 million was reported for the 2004 full year, compared with a net loss of $0.9 million a year-earlier. FFO and FFOM for the 2004 full year totaled $8.6 million and $6.5 million, respectively. A reconciliation of FFO and FFOM to net income is shown in Table 4. NOI for same-store owned off-campus properties in 2004 totaled $16.4 million, compared to $16.2 million in 2003. Full-year 2004 results reflect expenses totaling approximately $2.6 million related to certain transactions occurring in conjunction with the company's IPO and related formation transactions. Excluding the charges related to the IPO and formation transactions, net income, FFO and FFOM for the year ended December 31, 2004 would have been $1.3 million, $11.2 million and $9.1 million, respectively. Recent Activities Since the end of the 2004 fourth quarter, the company: -- Completed the disposition of its University Village property to California State University, San Bernardino for an option price of $28.3 million. -- Closed the acquisition of five student housing properties in Florida containing a total of 1,656 beds for an aggregate purchase price of approximately $53.5 million, including the assumption of approximately $35.4 million in fixed-rate mortgage debt. -- Signed an agreement to purchase Cityparc at Fry Street, a 418-bed student housing community located in close proximity to the University of North Texas, to be acquired for a purchase price of approximately $19.2 million, including approximately $11.8 million of existing fixed-rate mortgage debt. -- Signed an agreement to purchase the Exchange at Gainesville, a 1,044-bed student housing community located in close proximity to the University of Florida, for a total purchase price of approximately $47.5 million. The property is unencumbered by debt. 2005 Outlook Based on the judgment and current expectations of the management team, the company is narrowing the range of its previous 2005 FFOM guidance and is lowering its previous 2005 FFO guidance. This is due to several factors, including : -- A delay in closing the acquisition of the five-property portfolio in Florida, which we had anticipated closing in mid-December 2004 and was closed in February 2005, this impacted 2005 FFO and FFOM by approximately 3 cents per share. -- The exercise of the option by California State University - San Bernardino to purchase our University Village property, which closed on January 5, 2005. This resulted in capital being inactive pending redeployment which lowered FFO and FFOM by approximately 3 to 7 cents per share. -- Our previous guidance had treated the development fee revenue from the Cullen Oaks Phase II project as third party service revenue as at that time we were pursuing this project in that structure. Our current guidance reflects this as an on-campus participating property structure and accordingly this development fee revenue is substantially eliminated in consolidation - this resulted in lowering of FFO by approximately 4 to 5 cents per share. The company now expects that full-year 2005 net income will range from $0.72 to $0.78 per fully diluted share, FFO will range from $1.42 to $1.50 per fully diluted share, and FFOM will range from $1.32 to $1.42 per fully diluted share. A reconciliation of the range provided for projected net income to projected FFO and FFOM for the year ending December 31, 2005 is shown in Table 5. We expect that the company's financial results for the year ended December 31, 2005 will be affected by national and regional economic trends and events, the acquisition of properties, the ability of the company to be awarded development projects and the timing of such awards, the amount of income recognized by the taxable REIT subsidiary and any corresponding income tax expense, and other factors. Supplemental Information and Earnings Conference Call Supplemental financial and operating information, as well as this earnings news release, is available at the investor relations section of American Campus Communities' website, www.americancampuscommunities.com. In addition, the company will host a conference call to discuss fourth quarter results and the 2005 outlook on Wednesday, March 2, 2005 at 11:00 a.m. EST (10 a.m. CST). To participate by telephone, call 800-810-0924 or 913-981-4900 at least five minutes prior to the call. To listen to the live broadcast, go to www.americancampuscommunities.com or www.fulldisclosure.com at least 15 minutes prior to the call so that required audio software can be downloaded. Informational slides to accompany prepared remarks during the conference call as well as a supplemental analyst package can be accessed at the websites. A replay of the conference call will be available beginning two hours after the end of the call until March 9, 2005 by dialing 888-203-1112 or 719-457-0820, pass code 9400162. The replay also will be available for 30 days at www.americancampuscommunities.com and at www.fulldisclosure.com. About American Campus Communities American Campus Communities, Inc. is one of the largest developers, owners and managers 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, leasing and management of student housing properties. American Campus Communities owns and manages a portfolio of 22 student housing communities containing approximately 14,100 beds. Including its owned properties, the company provides management and leasing services at a total of 41 properties with more than 25,400 beds located on or near college and university campuses. Additional information is available at www.americancampuscommunities.com. Forward-Looking Statements This news release contains forward-looking statements, which express the current beliefs and expectations of management. Except for historical information, the matters discussed in this news release are forward-looking statements and can be identified by the use of the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "result" and similar expressions. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including risks and uncertainties inherent in the national economy, the real estate industry in general, and in our specific markets; the effect of terrorism or the threat of terrorism; legislative or regulatory changes including changes to laws governing REITS; our dependence on key personnel whose continued service is not guaranteed; availability of qualified acquisition and development targets; availability of capital and financing; rising interest rates; rising insurance rates; impact of ad valorem and income taxation; changes in generally accepted accounting principals; and our continued ability to successfully lease and operate our properties. While we believe these forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. These forward-looking statements are made as of the date of this news release, and we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Table 1 American Campus Communities, Inc. and Subsidiaries Consolidated & Combined Balance Sheets (unaudited, dollars in thousands, except share and per share data) December 31, ----------------------------- 2004 2003 -------------- -------------- Assets Investments in real estate: Owned off-campus properties, net $272,450 $222,907 On-campus participating properties, net 68,064 77,689 -------------- -------------- Investments in real estate, net 340,514 300,596 Cash and cash equivalents 4,050 5,227 Restricted cash and short-term investments 9,816 9,503 Student contracts receivable, net 2,164 2,355 Other assets 11,084 12,885 -------------- -------------- Total assets $367,628 $330,566 ============== ============== Liabilities and stockholders' and Predecessor owners' equity Liabilities: Mortgage loans, bonds payable and lines of credit $201,014 $275,598 Accounts payable and accrued expenses 5,443 3,966 Other liabilities 20,294 23,092 -------------- -------------- Total liabilities 226,751 302,656 Minority interests 2,648 252 Stockholders' and Predecessor owners' equity: Common stock, $0.01 par value, 800,000,000 shares authorized, 12,615,000 shares issued and outstanding 126 -- Additional paid in capital 136,259 -- Accumulated earnings and dividends 1,802 -- Accumulated other comprehensive income (loss) 42 (197) Predecessor owners' equity -- 27,855 -------------- -------------- Total stockholders' and Predecessor owners' equity 138,229 27,658 -------------- -------------- Total liabilities and stockholders' and Predecessor owners' equity $367,628 $330,566 ============== ============== Table 2 American Campus Communities, Inc. and Subsidiaries Consolidated & Combined Statements of Operations (unaudited, dollars in thousands, except share and per share data) Quarter Ended December 31, ------------------------------ 2004 2003 --------------- -------------- Revenues: Owned off-campus properties $10,455 $7,699 On-campus participating properties 5,595 5,578 Third-party development services 1,065 1,600 Third-party management services 798 371 Resident services 268 -- --------------- -------------- Total revenues 18,181 15,248 Operating expenses: Owned off-campus properties 4,446 3,728 On-campus participating properties 2,082 2,099 Third-party development and management services 1,422 1,448 General and administrative 1,314 1,561 Depreciation and amortization 2,823 2,237 Ground lease 148 187 --------------- -------------- Total operating expenses 12,235 11,260 --------------- -------------- Operating income 5,946 3,988 Non-operating income and (expenses): Interest income 25 15 Interest expense (3,550) (4,299) Amortization of deferred financing costs (232) (140) Other non-operating income 653 -- --------------- -------------- Total non-operating expenses (3,104) (4,424) --------------- -------------- Income (loss) before taxes, minority interests and discontinued operations 2,842 (436) Income tax provision (29) -- Minority interests (30) 41 --------------- -------------- Income (loss) from continuing operations 2,783 (395) Discontinued operations: Income attributable to discontinued operations 557 2 Gain from disposition of real estate -- 16 --------------- -------------- Total discontinued operations 557 18 --------------- -------------- Net income (loss) $3,340 $(377) =============== ============== Earnings per share, basic and fully diluted: Net income per share $0.26 =============== Weighted average common shares outstanding: Basic 12,622,145 =============== Diluted 12,743,145 =============== Table 3 American Campus Communities, Inc. and Subsidiaries Consolidated & Combined Statements of Operations (unaudited, dollars in thousands) Year Ended December 31, ----------------------------- 2004 2003 -------------- -------------- Revenues: Owned off-campus properties $35,115 $31,514 On-campus participating properties 17,418 16,482 Third-party development services 5,803 7,939 Third-party management services 2,105 1,189 Resident services and other 382 12 -------------- -------------- Total revenues 60,823 57,136 Operating expenses: Owned off-campus properties 16,861 15,272 On-campus participating properties 7,900 7,925 Third-party development and management services 5,543 5,389 General and administrative 5,234 2,749 Depreciation 9,973 8,868 Ground lease 812 489 -------------- -------------- Total operating expenses 46,323 40,692 -------------- -------------- Operating income 14,500 16,444 Non-operating income and (expenses): Interest income 82 71 Interest expense (16,698) (16,940) Amortization of deferred financing costs (1,211) (558) Other non-operating income 927 -- -------------- -------------- Total non-operating expenses (16,900) (17,427) -------------- -------------- Loss before taxes, minority interests and discontinued operations (2,400) (983) Income tax benefit 728 -- Minority interests 100 16 -------------- -------------- Loss from continuing operations (1,572) (967) Discontinued operations: Income attributable to discontinued operations 272 7 (Loss) gain from disposition of real estate (39) 16 -------------- -------------- Total discontinued operations 233 23 -------------- -------------- Net loss $(1,339) $(944) ============== ============== Table 4 American Campus Communities, Inc. and Subsidiaries Calculation of FFO and FFOM (unaudited, dollars in thousands, except share and per share data) Quarter Ended Year Ended -------------- -------------- 12/31/04 12/31/04 -------------- -------------- Net income (loss) $3,340 $(1,339) Minority interests 30 (100) Loss from disposition of real estate -- 39 Real estate-related depreciation and amortization 2,791 10,009 -------------- -------------- Funds from Operations ("FFO") 6,161 8,609 Elimination of operations from on-campus participating properties: Net income from on-campus participating properties (1,179) (270) Amortization of investment in on-campus participating properties (871) (3,531) -------------- -------------- (2,050) (3,801) Modifications to reflect operational performance of on-campus participating properties: Our share of net cash flow (a) 148 772 Management fees 274 860 On-campus participating properties development fees (b) 15 15 -------------- -------------- Impact of on-campus participating properties 437 1,647 -------------- -------------- Funds from Operations--Modified for operational performance of on-campus participating properties ("FFOM") $4,548 $6,455 ============== ============== FFO per share--basic $0.49 ============== FFO per share--diluted $0.48 ============== FFOM per share--basic and diluted $0.36 ============== Weighted average common shares outstanding: Basic 12,622,145 ============== Diluted 12,743,145 ============== (a) 50 percent of the properties' net cash available for distribution after payment of operating expenses, debt service (including repayment of principal) and capital expenditures. Amounts indicate actual cash received for the year-to-date periods and amounts accrued for the interim periods. (b) Development and construction management fees related to the Cullen Oaks Phase II on-campus participating property. Table 5 American Campus Communities, Inc. and Subsidiaries 2005 Outlook(a) (unaudited, dollars in thousands, except per share data) Low High -------------- ------------- Net income $9,200 $9,900 Gain on disposition of property (5,400) (5,600) Minority interests 50 150 Depreciation and amortization 13,900 14,100 Amortization of intangible acquired assets 400 600 -------------- ------------- Funds from Operations ("FFO") 18,150 19,150 Elimination of operations of on-campus participating properties: Net income from on-campus participating properties (500) (400) Amortization of investment in on-campus participating properties (3,500) (3,500) -------------- ------------- (4,000) (3,900) Modifications to reflect operational performance of on-campus participating properties: Our share of net cash flow 800 900 Development fees earned on Cullen Oaks 1,050 1,100 Management fees 800 900 -------------- ------------- Impact of on-campus participating properties 2,650 2,900 -------------- ------------- Funds from operations--Modified for operational performance of on-campus participating properties ("FFOM") $16,800 $18,150 ============== ============= Weighted average common shares outstanding--diluted 12,744 12,744 ============== ============= Net income per share--diluted $0.72 $0.78 ============== ============= FFO per share--diluted $1.42 $1.50 ============== ============= FFOM per share--diluted $1.32 $1.42 ============== ============= (a) Assumes that (1) the company will complete current contracted acquisitions by mid-year at current contract terms without effect of fair value adjustments that may be necessary, (2) University Village at Sweet Home will open on-time and on-budget, and that 50 percent of the project costs will be permanently financed upon completion, (3) the on-campus participating construction property Cullen Oaks Phase II will open on-time and on-budget, (4) the company will enter into contracts for third-party development and construction projects that generate revenues consistent with 2004 levels, (5) the 2005-2006 academic year lease-up will be at similar rates and occupancy levels as experienced in the current academic year, (6) the cost of Sarbanes-Oxley compliance at 2005 year-end will be approximately $0.5 million, and (7) the interest rate on our floating rate debt will not increase more than 75 basis points in 2005. CONTACT: American Campus Communities, Inc., Austin Mark J. Hager, 512-732-1000