FINANCIAL HIGHLIGHTS |
FINANCIAL HIGHLIGHTS |
FINANCIAL HIGHLIGHTS |
(Amounts in thousands, except per share data, unaudited) | ||||||||||||||||||||||||||||||
OPERATING DATA: | ||||||||||||||||||||||||||||||
Three months ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2016 | 2015 | $ Chg | % Chg | 2016 | 2015 | $ Chg | % Chg | |||||||||||||||||||||||
Same-community revenue | $ | 48,599 | $ | 47,304 | $ | 1,295 | 2.7 | % | $ | 158,673 | $ | 153,047 | $ | 5,626 | 3.7 | % | ||||||||||||||
Total community revenue | 61,877 | 54,725 | 7,152 | 13.1 | % | 193,750 | 168,842 | 24,908 | 14.8 | % | ||||||||||||||||||||
Total revenue | 66,225 | 58,189 | 8,036 | 13.8 | % | 204,744 | 179,642 | 25,102 | 14.0 | % | ||||||||||||||||||||
Same-community net operating income | 22,485 | 22,673 | (188 | ) | (0.8 | )% | 89,748 | 86,219 | 3,529 | 4.1 | % | |||||||||||||||||||
Total community net operating income | 29,365 | 26,281 | 3,084 | 11.7 | % | 110,183 | 93,390 | 16,793 | 18.0 | % | ||||||||||||||||||||
Total operating income | 1,231 | 2,417 | (1,186 | ) | (49.1 | )% | 30,933 | 25,198 | 5,735 | 22.8 | % | |||||||||||||||||||
Net income (loss) attributable to EdR | (3,533 | ) | (4,720 | ) | 1,187 | (25.1 | )% | 30,791 | 5,138 | 25,653 | 499.3 | % | ||||||||||||||||||
Per share - basic | $ | (0.05 | ) | $ | (0.10 | ) | $ | 0.05 | (50.0 | )% | $ | 0.45 | $ | 0.11 | $ | 0.34 | 309.1 | % | ||||||||||||
Per share - diluted | $ | (0.05 | ) | $ | (0.10 | ) | $ | 0.05 | (50.0 | )% | $ | 0.45 | $ | 0.11 | $ | 0.34 | 309.1 | % | ||||||||||||
Funds from operations (FFO) | 18,664 | 13,142 | 5,522 | 42.0 | % | 66,281 | 55,005 | 11,276 | 20.5 | % | ||||||||||||||||||||
Per weighted average share/unit (1) | $ | 0.25 | $ | 0.27 | $ | (0.02 | ) | (7.4 | )% | $ | 0.97 | $ | 1.13 | $ | (0.16 | ) | (14.2 | )% | ||||||||||||
Core funds from operations (Core FFO) | 19,396 | 14,540 | 4,856 | 33.4 | % | 79,761 | 58,894 | 20,867 | 35.4 | % | ||||||||||||||||||||
Per weighted average share/unit (1) | $ | 0.26 | $ | 0.30 | $ | (0.04 | ) | (13.3 | )% | $ | 1.17 | $ | 1.21 | $ | (0.04 | ) | (3.3 | )% | ||||||||||||
FINANCIAL RATIOS: | ||||||||||||||||||||||||||||||
9/30/2016 | 12/31/2015 | |||||||||||||||||||||||||||||
Net debt to gross assets | 14.4% | 27.2% | ||||||||||||||||||||||||||||
Debt to gross assets | 18.0% | 28.3% | ||||||||||||||||||||||||||||
Net debt to enterprise value | 10.8% | 22.0% | ||||||||||||||||||||||||||||
Interest coverage ratio (TTM) | 7.0x | 4.8x | ||||||||||||||||||||||||||||
Net debt to EBITDA - Adjusted (TTM) | 1.7x | 4.0x | ||||||||||||||||||||||||||||
(1) FFO and Core FFO per share/unit were computed using weighted average shares and units outstanding, regardless of their dilutive impact. See page 5 for a detailed calculation. |
THIRD QUARTER | 1 |
BALANCE SHEET |
(Amount in thousands, except share and per share data) | September 30, 2016 | December 31, 2015 | ||||||||
Assets | (unaudited) | |||||||||
Collegiate housing properties, net (1) | $ | 2,125,140 | $ | 1,774,796 | ||||||
Assets under development | 162,336 | 117,384 | ||||||||
Cash and cash equivalents | 115,486 | 33,742 | ||||||||
Restricted cash | 7,492 | 9,784 | ||||||||
Other assets | 72,870 | 66,125 | ||||||||
Total assets | $ | 2,483,324 | $ | 2,001,831 | ||||||
Liabilities and equity | ||||||||||
Liabilities: | ||||||||||
Mortgage and construction loans, net of unamortized premium and deferred financing costs | $ | 61,847 | $ | 204,511 | ||||||
Unsecured revolving credit facility | — | — | ||||||||
Unsecured term loans, net of unamortized deferred financing costs | 186,706 | 186,518 | ||||||||
Unsecured senior notes, net of unamortized deferred financing costs | 247,873 | 247,678 | ||||||||
Accounts payable and accrued expenses | 125,421 | 85,670 | ||||||||
Deferred revenue | 30,981 | 19,024 | ||||||||
Total liabilities | 652,828 | 743,401 | ||||||||
Commitments and contingencies | — | — | ||||||||
Redeemable noncontrolling interests | 11,033 | 13,560 | ||||||||
Equity: | ||||||||||
EdR stockholders' equity: | ||||||||||
Common stock, $0.01 par value per share, 200,000,000 shares authorized, 73,047,395 and 56,879,003 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 730 | 569 | ||||||||
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, no shares issued and outstanding | — | — | ||||||||
Additional paid-in capital | 1,813,980 | 1,263,603 | ||||||||
Retained earnings (accumulated deficit) | — | (21,998 | ) | |||||||
Accumulated other comprehensive loss | (8,312 | ) | (5,475 | ) | ||||||
Total EdR stockholders' equity | 1,806,398 | 1,236,699 | ||||||||
Noncontrolling interest | 13,065 | 8,171 | ||||||||
Total equity | 1,819,463 | 1,244,870 | ||||||||
Total liabilities and equity | $ | 2,483,324 | $ | 2,001,831 |
THIRD QUARTER | 2 |
OPERATING RESULTS |
(Amounts in thousands, except per share data, unaudited) | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2015 | $ Change | 2016 | 2015 | $ Change | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Collegiate housing leasing revenue | $ | 61,877 | $ | 54,725 | $ | 7,152 | $ | 193,750 | $ | 168,842 | $ | 24,908 | |||||||||||
Third-party development consulting services | 778 | 490 | 288 | 1,728 | 1,531 | 197 | |||||||||||||||||
Third-party management services | 965 | 865 | 100 | 2,556 | 2,698 | (142 | ) | ||||||||||||||||
Operating expense reimbursements | 2,605 | 2,109 | 496 | 6,710 | 6,571 | 139 | |||||||||||||||||
Total revenues | 66,225 | 58,189 | 8,036 | 204,744 | 179,642 | 25,102 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Collegiate housing leasing operations | 32,512 | 28,444 | 4,068 | 83,567 | 75,452 | 8,115 | |||||||||||||||||
Development and management services | 2,716 | 3,019 | (303 | ) | 7,965 | 8,228 | (263 | ) | |||||||||||||||
General and administrative | 2,489 | 1,988 | 501 | 7,991 | 6,227 | 1,764 | |||||||||||||||||
Development pursuit, acquisition costs and severance | 212 | (554 | ) | 766 | 898 | 405 | 493 | ||||||||||||||||
Depreciation and amortization | 22,336 | 17,828 | 4,508 | 58,951 | 49,605 | 9,346 | |||||||||||||||||
Ground lease expense | 3,224 | 2,938 | 286 | 8,829 | 7,956 | 873 | |||||||||||||||||
Other operating income | (1,100 | ) | — | (1,100 | ) | (1,100 | ) | — | (1,100 | ) | |||||||||||||
Reimbursable operating expenses | 2,605 | 2,109 | 496 | 6,710 | 6,571 | 139 | |||||||||||||||||
Total operating expenses | 64,994 | 55,772 | 9,222 | 173,811 | 154,444 | 19,367 | |||||||||||||||||
Operating income | 1,231 | 2,417 | (1,186 | ) | 30,933 | 25,198 | 5,735 | ||||||||||||||||
Nonoperating (income) expenses: | |||||||||||||||||||||||
Interest expense | 3,811 | 6,223 | (2,412 | ) | 12,109 | 17,615 | (5,506 | ) | |||||||||||||||
Amortization of deferred financing costs | 443 | 520 | (77 | ) | 1,380 | 1,527 | (147 | ) | |||||||||||||||
Interest income | (155 | ) | (39 | ) | (116 | ) | (429 | ) | (144 | ) | (285 | ) | |||||||||||
Loss on extinguishment of debt | 475 | — | 475 | 10,611 | — | 10,611 | |||||||||||||||||
Total nonoperating expenses | 4,574 | 6,704 | (2,130 | ) | 23,671 | 18,998 | 4,673 | ||||||||||||||||
Income (loss) before equity in losses of unconsolidated entities, income taxes and gain on sale of collegiate housing properties | (3,343 | ) | (4,287 | ) | 944 | 7,262 | 6,200 | 1,062 | |||||||||||||||
Equity in losses of unconsolidated entities | (480 | ) | (427 | ) | (53 | ) | (617 | ) | (823 | ) | 206 | ||||||||||||
Income (loss) before income taxes and gain on sale of collegiate housing properties | (3,823 | ) | (4,714 | ) | 891 | 6,645 | 5,377 | 1,268 | |||||||||||||||
Income tax expense | 84 | 157 | (73 | ) | 224 | 325 | (101 | ) |
THIRD QUARTER | 3 |
OPERATING RESULTS |
(Amounts in thousands, except per share data, unaudited) | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2015 | $ Change | 2016 | 2015 | $ Change | ||||||||||||||||||
Income (loss) before gain on sale of collegiate housing properties | (3,907 | ) | (4,871 | ) | 964 | 6,421 | 5,052 | 1,369 | |||||||||||||||
Gain on sale of collegiate housing properties | — | — | — | 23,956 | — | 23,956 | |||||||||||||||||
Net income (loss) | (3,907 | ) | (4,871 | ) | 964 | 30,377 | 5,052 | 25,325 | |||||||||||||||
Less: Net loss attributable to the noncontrolling interests | (374 | ) | (151 | ) | (223 | ) | (414 | ) | (86 | ) | (328 | ) | |||||||||||
Net income (loss) attributable to Education Realty Trust, Inc. | $ | (3,533 | ) | $ | (4,720 | ) | $ | 1,187 | $ | 30,791 | $ | 5,138 | $ | 25,653 | |||||||||
Other comprehensive income: | |||||||||||||||||||||||
Gain (loss) on cash flow hedging derivatives | 1,651 | (3,081 | ) | 4,732 | (2,837 | ) | (3,429 | ) | 592 | ||||||||||||||
Comprehensive income (loss) | $ | (1,882 | ) | $ | (7,801 | ) | $ | 5,919 | $ | 27,954 | $ | 1,709 | $ | 26,245 | |||||||||
Earnings per share information: | |||||||||||||||||||||||
Net income (loss) attributable to Education Realty Trust, Inc. common stockholders per share – basic and diluted | $ | (0.05 | ) | $ | (0.10 | ) | $ | 0.05 | $ | 0.45 | $ | 0.11 | $ | 0.34 | |||||||||
Weighted average shares of common stock outstanding – basic | 73,205 | 48,526 | 24,679 | 67,979 | 48,406 | 19,573 | |||||||||||||||||
Weighted average shares of common stock outstanding – diluted (1) | 73,205 | 48,526 | 24,679 | 68,281 | 48,726 | 19,555 | |||||||||||||||||
(1) Weighted average shares of common stock outstanding - diluted assumes the conversion of outstanding redeemable Operating Partnership Units and University Towers Operating Partnership Units and shares issuable upon settlement of the forward equity agreements. |
THIRD QUARTER | 4 |
FUNDS FROM OPERATIONS |
(Amounts in thousands, except per share data, unaudited) | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2016 | 2015 | $ Change | 2016 | 2015 | $ Change | |||||||||||||||||||
Net income (loss) attributable to EdR | $ | (3,533 | ) | $ | (4,720 | ) | $ | 1,187 | $ | 30,791 | $ | 5,138 | $ | 25,653 | ||||||||||
Gain on sale of collegiate housing assets | — | — | — | (23,956 | ) | — | (23,956 | ) | ||||||||||||||||
Real estate related depreciation and amortization | 21,616 | 17,433 | 4,183 | 57,424 | 48,473 | 8,951 | ||||||||||||||||||
Equity portion of real estate depreciation and amortization on equity investees | 700 | 514 | 186 | 2,023 | 1,357 | 666 | ||||||||||||||||||
Noncontrolling interests | (119 | ) | (85 | ) | (34 | ) | (1 | ) | 37 | (38 | ) | |||||||||||||
Funds from operations ("FFO") available to stockholders and unitholders | 18,664 | 13,142 | 5,522 | 66,281 | 55,005 | 11,276 | ||||||||||||||||||
percent change | 42.0 | % | 20.5 | % | ||||||||||||||||||||
FFO adjustments: | ||||||||||||||||||||||||
Loss on extinguishment of debt | 475 | — | 475 | 10,611 | — | 10,611 | ||||||||||||||||||
Acquisition costs | 175 | 203 | (28 | ) | 413 | 293 | 120 | |||||||||||||||||
Change in fair value of contingent consideration liability (3) | (1,100 | ) | — | (1,100 | ) | (1,100 | ) | — | (1,100 | ) | ||||||||||||||
Straight-line adjustment for ground leases (1) | 1,182 | 1,195 | (13 | ) | 3,556 | 3,596 | (40 | ) | ||||||||||||||||
FFO adjustments | 732 | 1,398 | (666 | ) | 13,480 | 3,889 | 9,591 | |||||||||||||||||
Core funds from operations ("Core FFO") available to stockholders and unitholders | $ | 19,396 | $ | 14,540 | $ | 4,856 | $ | 79,761 | $ | 58,894 | $ | 20,867 | ||||||||||||
percent change | 33.4 | % | 35.4 | % | ||||||||||||||||||||
FFO per weighted average share/unit (2) | $ | 0.25 | $ | 0.27 | $ | (0.02 | ) | $ | 0.97 | $ | 1.13 | $ | (0.16 | ) | ||||||||||
percent change | (7.4 | )% | (14.2 | )% | ||||||||||||||||||||
Core FFO per weighted average share/unit (2) | $ | 0.26 | $ | 0.30 | $ | (0.04 | ) | $ | 1.17 | $ | 1.21 | $ | (0.04 | ) | ||||||||||
percent change | (13.3 | )% | (3.3 | )% | ||||||||||||||||||||
Weighted average shares/units (2) | 73,468 | 48,844 | 24,624 | 68,281 | 48,726 | 19,555 | ||||||||||||||||||
percent change | 50.4 | % | 40.1 | % | ||||||||||||||||||||
(1) This represents the straight-line rent expense adjustment required by GAAP related to ground leases. 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 and Core FFO per weighted average share/unit were computed using the weighted average of all shares and partnership units outstanding, regardless of their dilutive impact. | ||||||||||||||||||||||||
(3) This represents the fair value adjustment for The Hub at Madison's contingent consideration. |
THIRD QUARTER | 5 |
COMMUNITY OPERATING RESULTS |
(Amounts in thousands, unaudited) | ||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||
2016 | 2015 | $ Change | % Change | 2016 | 2015 | $ Change | % Change | |||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Same-communities(1) | $ | 48,599 | $ | 47,304 | $ | 1,295 | 2.7 | % | $ | 158,673 | $ | 153,047 | $ | 5,626 | 3.7 | % | ||||||||||||||
New-communities (2) | 13,278 | 4,822 | 8,456 | NM | 31,274 | 7,494 | 23,780 | NM | ||||||||||||||||||||||
Sold-communities(3) | — | 2,599 | (2,599 | ) | NM | 3,803 | 8,301 | (4,498 | ) | NM | ||||||||||||||||||||
Total revenues | 61,877 | 54,725 | 7,152 | 13.1 | % | 193,750 | 168,842 | 24,908 | 14.8 | % | ||||||||||||||||||||
Operating expenses (4) | ||||||||||||||||||||||||||||||
Same-communities(1) | 26,114 | 24,631 | 1,483 | 6.0 | % | 68,925 | 66,828 | 2,097 | 3.1 | % | ||||||||||||||||||||
New-communities (2) | 6,398 | 1,860 | 4,538 | NM | 12,468 | 3,485 | 8,983 | NM | ||||||||||||||||||||||
Sold-communities(3) | — | 1,953 | (1,953 | ) | NM | 2,174 | 5,139 | (2,965 | ) | NM | ||||||||||||||||||||
Total operating expenses | 32,512 | 28,444 | 4,068 | 14.3 | % | 83,567 | 75,452 | 8,115 | 10.8 | % | ||||||||||||||||||||
Net operating income | ||||||||||||||||||||||||||||||
Same-communities(1) | 22,485 | 22,673 | (188 | ) | (0.8 | )% | 89,748 | 86,219 | 3,529 | 4.1 | % | |||||||||||||||||||
New-communities (2) | 6,880 | 2,962 | 3,918 | NM | 18,806 | 4,009 | 14,797 | NM | ||||||||||||||||||||||
Sold-communities(3) | — | 646 | (646 | ) | NM | 1,629 | 3,162 | (1,533 | ) | NM | ||||||||||||||||||||
Total net operating income | $ | 29,365 | $ | 26,281 | $ | 3,084 | 11.7 | % | $ | 110,183 | $ | 93,390 | $ | 16,793 | 18.0 | % | ||||||||||||||
(1) Same-communities are defined as those communities that have been open and operating for the whole time in the current and prior periods. See page 26 of this supplement for a listing of same-communities. | ||||||||||||||||||||||||||||||
(2) See page 27 of this supplement for a listing of which communities are categorized as new-communities. | ||||||||||||||||||||||||||||||
(3) Represents operating results from communities sold in 2015 and 2016. | ||||||||||||||||||||||||||||||
(4) Represents community level operating expenses, excluding management fees, depreciation, amortization, ground lease expense and impairment charges, plus regional and other corporate costs of supporting the communities. |
THIRD QUARTER | 6 |
SAME-COMMUNITY EXPENSES BY CATEGORY |
(Amounts in thousands, except bed and per-bed data, unaudited) | ||||||||||||||||||||||||||||
Three months ended September 30, 2016 | Three months ended September 30, 2015 | |||||||||||||||||||||||||||
Amount | Per Bed | % of Total Operating Expenses | Amount | Per Bed | % of Total Operating Expenses | $ Change | % Change | |||||||||||||||||||||
Utilities(1) | $ | 6,541 | $ | 263 | 25 | % | $ | 6,333 | $ | 255 | 26 | % | $ | 208 | 3.3 | % | ||||||||||||
On-Site Payroll | 4,487 | 180 | 17 | % | 4,275 | 172 | 17 | % | 212 | 5.0 | % | |||||||||||||||||
General & Administrative(2) | 3,487 | 140 | 13 | % | 3,191 | 128 | 13 | % | 296 | 9.3 | % | |||||||||||||||||
Maintenance & Repairs(3) | 5,181 | 208 | 20 | % | 4,942 | 199 | 20 | % | 239 | 4.8 | % | |||||||||||||||||
Marketing | 1,053 | 42 | 4 | % | 903 | 36 | 4 | % | 150 | 16.6 | % | |||||||||||||||||
Total Direct Operating Expenses | $ | 20,749 | $ | 833 | 79 | % | $ | 19,644 | $ | 790 | 80 | % | $ | 1,105 | 5.6 | % | ||||||||||||
Real Estate Taxes | 4,811 | 193 | 19 | % | 4,368 | 176 | 18 | % | 443 | 10.1 | % | |||||||||||||||||
Insurance | 554 | 22 | 2 | % | 619 | 25 | 2 | % | (65 | ) | (10.5 | )% | ||||||||||||||||
Total Fixed Operating Expenses | $ | 5,365 | $ | 215 | 21 | % | $ | 4,987 | $ | 201 | 20 | % | $ | 378 | 7.6 | % | ||||||||||||
Total Property Operating Expenses | $ | 26,114 | $ | 1,048 | 100 | % | $ | 24,631 | $ | 991 | 100 | % | $ | 1,483 | 6.0 | % | ||||||||||||
Nine months ended September 30, 2016 | Nine months ended September 30, 2015 | |||||||||||||||||||||||||||
Amount | Per Bed | % of Total Operating Expenses | Amount | Per Bed | % of Total Operating Expenses | $ Change | % Change | |||||||||||||||||||||
Utilities(1) | $ | 18,745 | $ | 753 | 27 | % | $ | 18,406 | $ | 740 | 28 | % | $ | 339 | 1.8 | % | ||||||||||||
On-Site Payroll | 12,672 | 509 | 18 | % | 12,396 | 498 | 19 | % | 276 | 2.2 | % | |||||||||||||||||
General & Administrative(2) | 10,383 | 417 | 15 | % | 10,050 | 404 | 15 | % | 333 | 3.3 | % | |||||||||||||||||
Maintenance & Repairs(3) | 8,292 | 333 | 12 | % | 7,817 | 314 | 12 | % | 475 | 6.1 | % | |||||||||||||||||
Marketing | 2,815 | 113 | 4 | % | 2,702 | 109 | 4 | % | 113 | 4.2 | % | |||||||||||||||||
Total Direct Operating Expenses | $ | 52,907 | $ | 2,125 | 77 | % | $ | 51,371 | $ | 2,065 | 77 | % | $ | 1,536 | 3.0 | % | ||||||||||||
Real Estate Taxes | 14,358 | 577 | 21 | % | 13,600 | $ | 547 | 20 | % | $ | 758 | 5.6 | % | |||||||||||||||
Insurance | 1,660 | 67 | 2 | % | 1,857 | 75 | 3 | % | (197 | ) | (10.6 | )% | ||||||||||||||||
Total Fixed Operating Expenses | $ | 16,018 | $ | 644 | 23 | % | $ | 15,457 | $ | 622 | 23 | % | $ | 561 | 3.6 | % | ||||||||||||
Total Property Operating Expenses | $ | 68,925 | $ | 2,769 | 100 | % | $ | 66,828 | $ | 2,687 | 100 | % | $ | 2,097 | 3.1 | % | ||||||||||||
Same-community beds | 24,880 | |||||||||||||||||||||||||||
(1) Represents gross costs before recoveries from tenants and includes student amenities such as internet. | ||||||||||||||||||||||||||||
(2) Includes property-level general and administrative cost and dining costs as well as regional and other corporate costs of supporting the communities. | ||||||||||||||||||||||||||||
(3) Includes general maintenance costs, grounds and landscaping, turn costs and life safety costs. |
THIRD QUARTER | 7 |
COMMUNITY OPERATIONS - TRAILING FIVE QUARTERS |
(Amounts in thousands, except beds and per bed amounts) | Three Months Ended | Total / Weighted Average - Trailing Twelve Months | |||||||||||||||||||||||
September 30, 2015 | December 31, 2015 | March 31, 2016 | June 30, 2016 | September 30, 2016 | |||||||||||||||||||||
2016 Same Communities | |||||||||||||||||||||||||
Revenue | $ | 47,304 | $ | 59,270 | $ | 58,490 | $ | 51,584 | $ | 48,599 | $ | 217,943 | |||||||||||||
Operating Expenses | 24,631 | 21,500 | 21,060 | 21,750 | 26,114 | 90,424 | |||||||||||||||||||
Net Operating Income | $ | 22,673 | $ | 37,770 | $ | 37,430 | $ | 29,834 | $ | 22,485 | $ | 127,519 | |||||||||||||
Margin | 48 | % | 64 | % | 64 | % | 58 | % | 46 | % | 59 | % | |||||||||||||
Beds | 74,640 | 74,640 | 74,640 | 74,640 | 74,640 | 298,560 | |||||||||||||||||||
Occupancy(1) | 89.1 | % | 97.6 | % | 96.7 | % | 84.4 | % | 88.3 | % | 91.7 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 639 | $ | 769 | $ | 761 | $ | 754 | $ | 662 | $ | 738 | |||||||||||||
Other Income per Occupied Bed | 72 | 45 | 49 | 65 | 76 | 58 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 711 | $ | 814 | $ | 810 | $ | 819 | $ | 738 | $ | 796 | |||||||||||||
Operating Expense per Available Bed | $ | 330 | $ | 288 | $ | 282 | $ | 291 | $ | 350 | $ | 303 | |||||||||||||
2016 New Communities | |||||||||||||||||||||||||
Revenue | $ | 4,822 | $ | 9,646 | $ | 9,469 | $ | 8,527 | $ | 13,278 | $ | 40,920 | |||||||||||||
Operating Expenses | 1,860 | 2,720 | 2,529 | 3,542 | 6,398 | 15,189 | |||||||||||||||||||
Net Operating Income | $ | 2,962 | $ | 6,926 | $ | 6,940 | $ | 4,985 | $ | 6,880 | $ | 25,731 | |||||||||||||
Margin | 61 | % | 72 | % | 73 | % | 58 | % | 52 | % | 63 | % | |||||||||||||
Beds | 8,085 | 11,376 | 11,570 | 14,030 | 20,411 | 57,387 | |||||||||||||||||||
Occupancy(1) | 89.2 | % | 92.9 | % | 92.6 | % | 65.9 | % | 83.2 | % | 82.8 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 615 | $ | 885 | $ | 849 | $ | 863 | $ | 690 | $ | 803 | |||||||||||||
Other Income per Occupied Bed | 53 | 28 | 34 | 59 | 92 | 58 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 668 | $ | 913 | $ | 883 | $ | 922 | $ | 782 | $ | 861 | |||||||||||||
Operating Expense per Available Bed | $ | 230 | $ | 239 | $ | 219 | $ | 252 | $ | 313 | $ | 265 | |||||||||||||
2016 Sold Communities | |||||||||||||||||||||||||
Revenue | $ | 2,599 | $ | 2,864 | $ | 2,224 | $ | 1,579 | $ | — | $ | 6,667 | |||||||||||||
Operating Expenses | 1,953 | 1,611 | 1,300 | 874 | — | 3,785 | |||||||||||||||||||
Net Operating Income | $ | 646 | $ | 1,253 | $ | 924 | $ | 705 | $ | — | $ | 2,882 | |||||||||||||
Margin | 25 | % | 44 | % | 42 | % | 45 | % | — | % | 43 | % | |||||||||||||
Beds | 6,264 | 6,264 | 5,184 | 4,032 | — | 15,480 | |||||||||||||||||||
Occupancy(1) | 87.6 | % | 86.6 | % | 85.9 | % | 93.3 | % | — | % | 88.1 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 447 | $ | 510 | $ | 472 | $ | 388 | $ | — | $ | 464 | |||||||||||||
Other Income per Occupied Bed | 27 | 19 | 27 | 31 | — | 25 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 474 | $ | 529 | $ | 499 | $ | 419 | $ | — | $ | 489 | |||||||||||||
Operating Expense per Available Bed | $ | 312 | $ | 257 | $ | 251 | $ | 217 | $ | — | $ | 245 | |||||||||||||
THIRD QUARTER | 8 |
COMMUNITY OPERATIONS - TRAILING FIVE QUARTERS |
(Amounts in thousands, except beds and per bed amounts) | Three Months Ended | Total / Weighted Average - Trailing Twelve Months | |||||||||||||||||||||||
September 30, 2015 | December 31, 2015 | March 31, 2016 | June 30, 2016 | September 30, 2016 | |||||||||||||||||||||
2016 Total Communities | |||||||||||||||||||||||||
Revenue | $ | 54,725 | $ | 71,780 | $ | 70,183 | $ | 61,690 | $ | 61,877 | $ | 265,530 | |||||||||||||
Operating Expenses | 28,444 | 25,831 | 24,889 | 26,166 | 32,512 | 109,398 | |||||||||||||||||||
Net Operating Income | $ | 26,281 | $ | 45,949 | $ | 45,294 | $ | 35,524 | $ | 29,365 | $ | 156,132 | |||||||||||||
Margin | 48 | % | 64 | % | 65 | % | 58 | % | 47 | % | 59 | % | |||||||||||||
Beds | 88,989 | 92,280 | 91,394 | 92,702 | 95,051 | 371,427 | |||||||||||||||||||
Occupancy(1) | 89.0 | % | 96.3 | % | 95.5 | % | 82.0 | % | 87.2 | % | 90.2 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 624 | $ | 767 | $ | 757 | $ | 749 | $ | 668 | $ | 736 | |||||||||||||
Other Income per Occupied Bed | 67 | 41 | 46 | 63 | 79 | 57 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 691 | $ | 808 | $ | 803 | $ | 812 | $ | 747 | $ | 793 | |||||||||||||
Operating Expense per Available Bed | $ | 320 | $ | 280 | $ | 272 | $ | 282 | $ | 342 | $ | 295 | |||||||||||||
(1) Represents the weighted average physical occupancy for the period presented. |
THIRD QUARTER | 9 |
LEASING RESULTS SUMMARY |
Opening Occupancy | ||||||||||||||||||
Design Beds | % of NOI | 2016 | 2015 | Ahead/(Behind) | Opening Rate Growth | |||||||||||||
Same-Communities - by Tier | ||||||||||||||||||
Prior Year Occupancy Below 90% (Tier 1) | 2,000 | 3.5 | % | 79.9 | % | 82.5 | % | (2.6 | )% | 0.3 | % | |||||||
Prior Year Occupancy 90% to 96.9% (Tier 2) | 4,558 | 11.2 | % | 96.9 | % | 95.2 | % | 1.7 | % | 2.1 | % | |||||||
Prior Year Occupancy 97% and Above (Tier 3) | 20,979 | 85.3 | % | 98.2 | % | 99.8 | % | (1.6 | )% | 3.8 | % | |||||||
Total Same-Communities (1) | 27,537 | 100.0 | % | 96.7 | % | 97.8 | % | (1.1 | )% | 3.4 | % | |||||||
Total New-Communities (2) | 4,685 | 88.8 | % | |||||||||||||||
Total Communities | 32,222 | 95.6 | % | |||||||||||||||
NOTE: The same-community designation for leasing purposes is different than for financial statement purposes. A community is considered same-community for leasing when the Company has managed the leasing process for at least two leasing cycles, including the 2016/2017 leasing cycle. |
THIRD QUARTER | 10 |
SAME-COMMUNITY LEASING BY REGION AND DISTANCE |
Opening Occupancy | ||||||||||||||||||
Design Beds | % of NOI | 2016 | 2015 | Ahead/(Behind) | Opening Rate Growth | |||||||||||||
Same-Communities - by Region (1) | ||||||||||||||||||
Mid-Atlantic | 5,818 | 24.7 | % | 97.5 | % | 99.0 | % | (1.5 | )% | 3.1 | % | |||||||
Midwest | 2,276 | 4.3 | % | 76.9 | % | 91.3 | % | (14.4 | )% | 0.7 | % | |||||||
North | 3,205 | 10.1 | % | 99.6 | % | 98.1 | % | 1.5 | % | 2.4 | % | |||||||
South Central | 8,674 | 35.2 | % | 98.2 | % | 98.1 | % | 0.1 | % | 3.4 | % | |||||||
Southeast | 4,337 | 12.4 | % | 99.2 | % | 98.0 | % | 1.2 | % | 3.7 | % | |||||||
West | 3,227 | 13.3 | % | 98.6 | % | 98.8 | % | (0.2 | )% | 6.0 | % | |||||||
Total Same-Communities | 27,537 | 100.0 | % | 96.7 | % | 97.8 | % | (1.1 | )% | 3.4 | % | |||||||
Same-Communities - by Distance from Campus | ||||||||||||||||||
0-0.2 miles | 19,488 | 79.9 | % | 98.1 | % | 98.4 | % | (0.3 | )% | 3.6 | % | |||||||
0.21-0.49 miles | 2,144 | 5.4 | % | 88.9 | % | 96.4 | % | (7.5 | )% | 2.5 | % | |||||||
0.5-0.99 miles | 336 | 0.7 | % | 91.4 | % | 95.5 | % | (4.1 | )% | 9.5 | % | |||||||
1.0-1.99 miles | 3,709 | 10.2 | % | 92.5 | % | 96.8 | % | (4.3 | )% | 2.7 | % | |||||||
2.0 & > miles | 1,860 | 3.8 | % | 99.6 | % | 94.8 | % | 4.8 | % | 1.1 | % | |||||||
Total Same-Communities | 27,537 | 100.0 | % | 96.7 | % | 97.8 | % | (1.1 | )% | 3.4 | % | |||||||
(1) See definition of regions on page 29. |
THIRD QUARTER | 11 |
TOP EdR MARKETS AND STATES BY REVENUE |
*The data above is based on revenue for the twelve months ended September 30, 2016 and excludes properties that were sold during the period. |
(1) All revenue at the University of Kentucky is from ONE PlanSM on-campus collegiate housing communities. |
THIRD QUARTER | 12 |
TOP EdR MARKETS AND STATES BY REVENUE |
*The data above is based on revenue for the twelve months ended September 30, 2016 and excludes properties that were sold during the period. |
THIRD QUARTER | 13 |
NEW SUPPLY AND ENROLLMENT - EdR MARKETS |
EdR Markets (% of enrollment): | 2013 | 2014 | 2015 | 2016* | 2017* | ||||||||||
Projected new supply | 2.2 | % | 2.2 | % | 2.0 | % | 1.8 | % | 2.2 | % | |||||
Projected enrollment growth | 1.3 | % | 1.4 | % | 1.5 | % | 1.5 | % | 1.8 | % | |||||
0.9 | % | 0.8 | % | 0.5 | % | 0.3 | % | 0.4 | % | ||||||
Same-community: | |||||||||||||||
Occupancy increase | 3.0 | % | 2.0 | % | 0.4 | % | (1.1 | )% | |||||||
Rate increase | 2.0 | % | 2.0 | % | 3.4 | % | 3.4 | % | |||||||
Total leasing revenue growth | 5.0 | % | 4.0 | % | 3.8 | % | 2.3 | % | |||||||
*Enrollment projections for 2016 and 2017 represent the 3-year enrollment CAGR through 2015 for our current portfolio and our portfolio with 2017 deliveries, respectively. |
THIRD QUARTER | 14 |
OWNED COMMUNITY PROJECTED 2017 NEW SUPPLY AND DEMAND INFORMATION |
By Region | |||||
Region (2) | % of Owned Beds | EdR NOI % (1) | Enrollment Growth 3 Year CAGR - Universities Served | 2017 New Supply % | Variance |
West | 11% | 14% | 2.0% | 1.9% | 0.1% |
Mid Atlantic | 18% | 20% | 1.8% | 1.4% | 0.4% |
North | 18% | 17% | (0.1)% | 1.8% | (1.9)% |
South Central | 34% | 35% | 2.4% | 2.9% | (0.5)% |
Southeast | 12% | 9% | 3.0% | 1.2% | 1.8% |
Midwest | 7% | 5% | 1.2% | 3.9% | (2.7)% |
Total | 100% | 100% | 1.8% | 2.2% | (0.4)% |
Projected 2017 New Supply Sorted by Percentage Increase | University Markets with >5% Increase in 2017 Supply | ||||||
New Supply Growth | University Markets | EdR Beds | Pro Forma EdR NOI %(1) | University | New Supply Increase | Pro Forma EdR NOI %(1) | |
0% | 40% | 32% | 32% | Boise State University | 5.2% | 1% | |
0.1% to 1.0% | 10% | 5% | 6% | University of Oklahoma | 7.2% | 1% | |
1.0% - 3.0% | 25% | 25% | 24% | Texas Tech University | 6.3% | 2% | |
3.0% - 5.0% | 15% | 30% | 33% | University of Missouri | 5.3% | 1% | |
> 5.0% | 10% | 8% | 5% | 5% | |||
Total | 100% | 100% | 100% | ||||
NOTE: Schedule represents all markets served by EdR communities and includes the 2016 acquisitions and developments and all announced 2017 developments and acquisitions. Data was obtained from the National Center for Education Statistics, AXIOMetrics and local market data. | |||||||
(1) NOI is based on 2016 forecast net operating income with proforma adjustments for 2016 developments and completed or pending acquisitions. | |||||||
(2) See definition of regions on page 29. | |||||||
THIRD QUARTER | 15 |
COMPLETED 2016 DELIVERIES |
(Amounts in thousands, except bed counts) | |||||||||||
August 2016 Delivered Communities | |||||||||||
Project | Project Type | Bed Count | Total Project Development Cost | EdR's Ownership Percentage | EdR's Share of Development Cost | ||||||
University of Kentucky - Holmes Hall and Boyd Hall (1) | ONE Plan (2) | 1,141 | $ | 83,911 | 100% | $ | 83,911 | ||||
University of Mississippi - The Retreat - Phase II | Wholly Owned | 350 | 26,161 | 100% | 26,161 | ||||||
Virginia Tech - Retreat at Blacksburg - Ph I & II | Joint Venture (3) | 829 | 64,433 | 75% | 48,325 | ||||||
Total - August 2016 Delivered Communities | 2,320 | $ | 174,505 | $ | 158,397 | ||||||
(1) This project consists of multiple communities. | |||||||||||
(2) The On-Campus Equity Plan, or The ONE Plan SM, is our equity program for universities, which allows universities to use EdR's equity and financial stability to develop and revitalize campus housing while preserving their credit capacity for other campus projects. The ONE Plan SM offers one service provider and one equity source to universities seeking to modernize on-campus housing to meet the needs of today's students. | |||||||||||
(3) The Retreat at Blacksburg was initially a joint venture. During September 2016, we purchased our partner's 25% ownership interest in the property. |
THIRD QUARTER | 16 |
OWNED DEVELOPMENT SUMMARY |
(Amounts in thousands, except bed counts) | ||||||||||||||||||||||||
Active Projects | Project Type | Bed Count | Estimated Start Date | Anticipated Completion Date | Total Project Development Cost | EdR's Ownership Percentage | EdR's Share of Development Cost | EdR's Share of Development Cost to be Funded | ||||||||||||||||
University of Kentucky - University Flats | ONE Plan (1) | 771 | In progress | Summer 2017 | $ | 74,038 | 100 | % | $ | 74,038 | $ | 38,062 | ||||||||||||
Boise State University | ONE Plan (1) | 656 | In progress | Summer 2017 | 39,763 | 100 | % | 39,763 | 29,759 | |||||||||||||||
University of Kentucky - Lewis Hall | ONE Plan (1) | 346 | In progress | Summer 2017 | 26,935 | 100 | % | 26,935 | 20,019 | |||||||||||||||
Michigan State University - SkyVue | Joint Venture | 824 | In progress | Summer 2017 | 89,906 | 90 | % | 80,915 | 39,795 | |||||||||||||||
Texas State University - The Local: Downtown | Joint Venture | 304 | In progress | Summer 2017 | 29,631 | 80 | % | 23,705 | 14,306 | |||||||||||||||
Oklahoma State University - Avid Square | Joint Venture | 475 | In progress | Summer 2017 | 47,227 | 70 | % | 33,059 | 24,432 | |||||||||||||||
Northern Michigan University | ONE Plan (1) | 800 | In progress | Summer / Dec 2017 | 50,267 | 100 | % | 50,267 | 47,813 | |||||||||||||||
Total - 2017 Deliveries | 4,176 | $ | 357,767 | $ | 328,682 | $ | 214,186 | |||||||||||||||||
University of Pittsburgh | Joint Venture | 723 | In progress | Summer 2018 | $ | 106,098 | 80 | % | $ | 84,878 | $ | 72,932 | ||||||||||||
Florida State University - Players Club redevelopment | Wholly Owned | 592 | Summer 2017 | Summer 2018 | 38,043 | 100 | % | 38,043 | 37,228 | |||||||||||||||
Northern Michigan University | ONE Plan (1) | 400 | In progress | Summer 2018 | 25,133 | 100 | % | 25,133 | 25,133 | |||||||||||||||
Total - 2018 Deliveries | 1,715 | $ | 169,274 | $ | 148,054 | $ | 135,293 | |||||||||||||||||
Total Active Projects | 5,891 | $ | 527,041 | $ | 476,736 | $ | 349,479 | |||||||||||||||||
Recently Awarded | Project Type | Bed Count | Estimated Start Date | Anticipated Completion Date | Total Project Development Cost | |||||||||||||||||||
Cornell University - Maplewood | ONE Plan (1) | 850 | Winter 2016 | Summer 2018 | $ | 80,000 | ||||||||||||||||||
NOTE: The initiation and completion of an awarded project that has not begun construction is contingent upon execution of transactional documents, including such items as development agreements, construction agreements and ground leases. | ||||||||||||||||||||||||
(1) The On-Campus Equity Plan, or The ONE PlanSM, is our equity program for universities, which allows universities to use EdR's equity and financial stability to develop and revitalize campus housing while preserving their credit capacity for other campus projects. The ONE PlanSM offers one service provider and one equity source to universities seeking to modernize on-campus housing to meet the needs of today's students. |
THIRD QUARTER | 17 |
CAPITAL ALLOCATION - LONG TERM FUNDING PLAN |
(Amounts in millions) | |||||||||||||
Sources and Uses of Capital for All Announced Transactions | |||||||||||||
Estimated Capital Uses: | |||||||||||||
Acquisition or Development Costs | Less: Costs Incurred to Date | Remaining Capital Needs | |||||||||||
2016 Announced Acquisitions(1) | $ | 130.0 | $ | 34.0 | $ | 96.0 | |||||||
2017 Development Deliveries(2) | 328.7 | 114.5 | 214.2 | ||||||||||
2018 Development Deliveries(2) | 148.1 | 12.8 | 135.3 | ||||||||||
Recently Awarded Development | 80.0 | — | 80.0 | ||||||||||
$ | 686.8 | $ | 161.3 | $ | 525.5 | ||||||||
Estimated Capital Sources: | |||||||||||||
Capital Sources | |||||||||||||
Cash on Hand(3) | $ | 115.5 | |||||||||||
Equity Proceeds Available from ATM Forward Sales(4) | 199.6 | ||||||||||||
Draws on Revolving Credit Facility(5) | 210.4 | ||||||||||||
$ | 525.5 | ||||||||||||
Debt to Gross Assets | |||||||||||||
September 30, 2016 | September 30, 2016 Pro Forma(6) | ||||||||||||
Debt to gross assets | 18.0 | % | 22.3 | % | |||||||||
THIRD QUARTER | 18 |
THIRD-PARTY DEVELOPMENT SUMMARY |
(Amounts in thousands, except bed counts) | |||||||||||||||||||||||
THIRD-PARTY PROJECTS | |||||||||||||||||||||||
Completed and Delivered Project | Bed Count | Project Development Cost | Total Project Fees | Fees Earned Prior Year (1) | Fees Earned Nine Months Ended September 30, 2016 (1) | ||||||||||||||||||
University of Cal. Berkeley - Bowles Hall | 186 | $ | 35,947 | $ | 1,768 | $ | 826 | $ | 942 | ||||||||||||||
Clarion University of Pennsylvania | 728 | 55,104 | 2,092 | 2,046 | 46 | ||||||||||||||||||
914 | $ | 91,051 | $ | 3,860 | $ | 2,872 | $ | 988 | |||||||||||||||
Active Projects | Bed Count | Estimated Start Date | Anticipated Completion Date | Project Development Cost | Total Project Fees | Fees Earned Prior Year (1) | Fees Earned Nine Months Ended September 30, 2016 (1) | Remaining Fees to Earn | |||||||||||||||
East Stroudsburg University - Pennsylvania Ph II | 488 | In progress | Summer 2017 | $ | 45,349 | $ | 1,374 | $ | — | $ | 104 | $ | 1,270 | ||||||||||
Texas A&M - Commerce | 490 | In progress | Summer 2017 | 29,925 | 1,260 | — | 57 | 1,203 | |||||||||||||||
Shepherd University | 298 | In progress | Summer 2017 | 22,385 | 1,025 | — | 145 | 880 | |||||||||||||||
Total | 1,276 | $ | 97,659 | $ | 3,659 | $ | — | $ | 306 | $ | 3,353 | ||||||||||||
Recently Awarded | Bed Count | Estimated Start Date | Anticipated Completion Date | Project Development Cost | Total Project Fees | ||||||||||||||||||
New Mexico State | > 2,000 | TBD | TBD | TBD | TBD | ||||||||||||||||||
(1) Amount may not tie to third-party development services revenue on the statement of operations as this schedule only includes fees earned on projects that are in progress or recently completed. During the nine months ended September 30, 2016, we also earned a fee of $314 thousand related to the terminated third-party development agreement at Southeastern Louisiana University which is not included in the schedule above. | |||||||||||||||||||||||
THIRD QUARTER | 19 |
CAPITAL STRUCTURE |
as of September 30, 2016 | Principal Outstanding | Weighted Average Interest Rate | Average Term to Maturity (in years) | ||||||||||||
(Amounts in thousands) | |||||||||||||||
Total Debt to Gross Assets | |||||||||||||||
Debt(1) | $ | 500,240 | Variable Rate - Mortgage Debt | 33,125 | 2.7 | % | 0.8 | ||||||||
Gross Assets(2) | 2,778,272 | Variable Rate - Construction Debt | 29,615 | 2.5 | % | 1.1 | |||||||||
Debt to Gross Assets | 18.0 | % | Fixed Rate - 5 Yr. Unsecured Term Loan (6) | 65,000 | 2.9 | % | 2.3 | ||||||||
Fixed Rate - 7 Yr. Unsecured Term Loan (6) | 122,500 | 3.9 | % | 4.3 | |||||||||||
Net Debt to Gross Assets | Fixed Rate - Unsecured Senior Notes | 250,000 | 4.6 | % | 8.2 | ||||||||||
Net Debt | $ | 384,754 | Variable Rate - Unsecured Revolving Credit Facility | — | 1.8 | % | 2.1 | ||||||||
Gross Assets(7) | 2,662,786 | Debt(1) / Weighted Average | $ | 500,240 | 3.9 | % | 5.5 | ||||||||
Net Debt to Gross Assets | 14.4 | % | Less: Cash | 115,486 | |||||||||||
Net Debt | $ | 384,754 | |||||||||||||
Net Debt to Enterprise Value | |||||||||||||||
Net Debt | $ | 384,754 | |||||||||||||
Market Equity (3) | 3,162,518 | Interest Coverage (TTM)(4) | 7.0x | ||||||||||||
Enterprise Value | $ | 3,547,272 | Net Debt to EBITDA - Adjusted (TTM)(5) | 1.7x | |||||||||||
Variable Rate Debt to Total Debt | 12.5% | ||||||||||||||
Net Debt to Enterprise Value | 10.8 | % | |||||||||||||
Undrawn Forward Equity Proceeds(8) | $ | 199,656 | |||||||||||||
(1) Excludes unamortized deferred financing costs of $3.8 million. | |||||||||||||||
(2) Excludes accumulated depreciation of $294.9 million. | |||||||||||||||
(3) Market equity includes 73,047,395 shares of the Company's common stock and 260,851 units outstanding, which are convertible into common shares, and is calculated using $43.14 per share, the closing price of the Company's common stock on September 30, 2016. | |||||||||||||||
(4) Equals Adjusted EBITDA of $131.8 million divided by interest expense of $18.9 million. See page 23 for reconciliation to Adjusted EBITDA. | |||||||||||||||
(5) Net Debt to EBITDA - Adjusted is calculated to normalize the impact of non-income producing construction debt. In the calculation, Net Debt is total debt (excluding the unamortized deferred financing costs) less cash and excludes non income-producing debt related to assets under development at time of calculation. EBITDA is Proforma Adjusted EBITDA, which includes proforma adjustments to reflect all acquisitions, development deliveries and dispositions as if such had occurred at the beginning of the 12 month period being presented. | |||||||||||||||
(6) The Trust entered into interest rate swaps to effectively fix the interest rate on the term loans. The weighted average interest rates reflect the swapped (fixed) rate plus the current margin. | |||||||||||||||
(7) Excludes accumulated depreciation of $294.9 million and cash of $115.5 million. | |||||||||||||||
(8) Represents available proceeds from sales of common stock sold under ATM forward agreements. The forward transactions can be settled, shares issued and proceeds received at any time at the Company's option through the end of 2017. Undrawn proceeds from the completed ATM forward sales are not factored into the metrics above. |
THIRD QUARTER | 20 |
CAPITAL STRUCTURE |
NOTE: At September 30, 2016, the Trust had $115.5 million of cash on hand and $200 million of undrawn proceeds from shares sold under ATM forward agreements during the third quarter of 2016. | ||||||||||||||||||
Weighted Average Interest Rate of Debt Maturing Each Year (2) | ||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||
Fixed Rate Debt | —% | —% | —% | 2.9% | —% | 3.9% | —% | —% | 4.6% | |||||||||
Variable Rate Debt | —% | 2.6% | —% | —% | —% | —% | —% | —% | —% | |||||||||
Total Debt | —% | 2.6% | —% | 2.9% | —% | 3.9% | —% | —% | 4.6% | |||||||||
(1) The unsecured revolving credit facility has an initial maturity of November 19, 2018 and has a one-year extension option that may be exercised if certain conditions are met. The revolver has a current balance of $0. | ||||||||||||||||||
(2) The Trust entered into interest rate swaps to effectively fix the interest rate on the term loans. The weighted average interest rates reflect the swapped (fixed) rate plus the current margin. |
THIRD QUARTER | 21 |
UNSECURED SENIOR NOTE COVENANTS |
as of September 30, 2016 | ||||||
(Amounts in thousands) | ||||||
Unsecured Senior Note Covenants(1) | Requirement | Current Ratio | ||||
Total Debt to Total Asset Value | ≤ 60% | 18.1% | ||||
Secured Debt to Total Asset Value | ≤ 40% | 2.3% | ||||
Unencumbered Asset Value to Unsecured Debt | > 150% | 573.5% | ||||
Interest Coverage | > 1.5x | 5.82x | ||||
Calculation of Interest Coverage Ratio: | ||||||
Adjusted Pro Forma EBITDA - TTM: | ||||||
EdR Adjusted EBITDA(2) | $ | 131,751 | ||||
Pro forma Adjustments - acquisitions & dispositions (1) | 6,723 | |||||
Total Adjusted Pro Forma EBITDA - TTM | $ | 138,474 | ||||
Pro Forma Interest Expense - TTM: | ||||||
Interest expense | $ | 18,943 | ||||
Add back: Capitalized interest | 5,925 | |||||
Pro forma adjustments(1) | (1,059 | ) | ||||
Pro forma interest expense - TTM | $ | 23,809 | ||||
Interest Coverage | 5.82x | |||||
(1) Computed in accordance with the First Supplemental Indenture filed November 24, 2014 with the SEC. | ||||||
(2) See page 23 for a reconciliation to EdR Adjusted EBITDA. |
THIRD QUARTER | 22 |
RECONCILIATION OF NON-GAAP MEASURES |
(Amounts in thousands) | Nine Months | Plus: Year | Less: Nine | Trailing Twelve | |||||||||||||
Ended | Ended | Months Ended | Months Ended | ||||||||||||||
September 30, 2016 | December 31, 2015 | September 30, 2015 | September 30, 2016 | ||||||||||||||
Net income attributable to common shareholders | $ | 30,791 | $ | 19,911 | $ | 5,138 | $ | 45,564 | |||||||||
Straight line adjustment for ground leases | 3,556 | 4,782 | 3,596 | 4,742 | |||||||||||||
Acquisition costs | 413 | 293 | 293 | 413 | |||||||||||||
Depreciation and amortization | 58,951 | 68,022 | 49,605 | 77,368 | |||||||||||||
Gain on sale of collegiate housing assets | (23,956 | ) | (2,770 | ) | — | (26,726 | ) | ||||||||||
Interest expense | 12,109 | 24,449 | 17,615 | 18,943 | |||||||||||||
Amortization of deferred financing costs | 1,380 | 2,089 | 1,527 | 1,942 | |||||||||||||
Interest income | (429 | ) | (213 | ) | (144 | ) | (498 | ) | |||||||||
Loss on extinguishment of debt | 10,611 | 403 | — | 11,014 | |||||||||||||
Income tax expense (benefit) | 224 | 347 | 325 | 246 | |||||||||||||
Other operating income - change in fair value of contingent consideration liability | (1,100 | ) | — | — | (1,100 | ) | |||||||||||
Noncontrolling interests | (414 | ) | 171 | (86 | ) | (157 | ) | ||||||||||
Adjusted EBITDA | $ | 92,136 | $ | 117,484 | $ | 77,869 | $ | 131,751 | |||||||||
Annualize acquisitions, developments and dispositions(1) | — | — | — | 17,110 | |||||||||||||
Pro Forma Adjusted EBITDA | $ | 92,136 | $ | 117,484 | $ | 77,869 | $ | 148,861 | |||||||||
(1) Pro forma adjustment to reflect all acquisitions, development deliveries and dispositions as if such transactions had occurred on the first day of the period presented. |
THIRD QUARTER | 23 |
RECONCILIATION OF NON-GAAP MEASURES |
(Amounts in thousands) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating income | $ | 1,231 | $ | 2,417 | $ | 30,933 | $ | 25,198 | |||||||
Less: Third-party development services revenue | 778 | 490 | 1,728 | 1,531 | |||||||||||
Less: Third-party management services revenue | 965 | 865 | 2,556 | 2,698 | |||||||||||
Less: Other operating income | 1,100 | — | 1,100 | — | |||||||||||
Plus: Development and management services expenses | 2,716 | 3,019 | 7,965 | 8,228 | |||||||||||
Plus: General and administrative expenses, development pursuit, acquisition costs and severance | 2,701 | 1,434 | 8,889 | 6,632 | |||||||||||
Plus: Ground leases | 3,224 | 2,938 | 8,829 | 7,956 | |||||||||||
Plus: Impairment loss on collegiate housing properties | — | — | — | — | |||||||||||
Plus: Depreciation and amortization | 22,336 | 17,828 | 58,951 | 49,605 | |||||||||||
NOI | $ | 29,365 | $ | 26,281 | $ | 110,183 | $ | 93,390 |
(Amounts in thousands) | September 30, 2016 | December 31, 2015 | ||||||
Mortgage and construction loans, excluding unamortized premium and deferred financing costs of $893 and $953 as of September 30, 2016 and December 31, 2015, respectively | $ | 62,740 | $ | 205,464 | ||||
Unsecured term loan, excluding unamortized deferred financing costs of $794 and $982 as of September 30, 2016 and December 31, 2015, respectively | 187,500 | 187,500 | ||||||
Unsecured Senior Notes, excluding unamortized deferred financing costs of $2,127 and $2,322 as of September 30, 2016 and December 31, 2015, respectively | 250,000 | 250,000 | ||||||
Total debt, excluding unamortized premium and deferred financing costs | $ | 500,240 | $ | 642,964 | ||||
Total assets | $ | 2,483,324 | $ | 2,001,831 | ||||
Accumulated depreciation(1) | 294,948 | 270,993 | ||||||
Gross assets | $ | 2,778,272 | $ | 2,272,824 | ||||
Debt to gross assets | 18.0 | % | 28.3 | % | ||||
(1) Represents accumulated depreciation on real estate assets. |
THIRD QUARTER | 24 |
UPDATED 2016 GUIDANCE |
(Amounts in thousands, except share and per share data) | Year ending December 31, 2016 | |||||||
Low End | High End | |||||||
Net income attributable to EdR | $ | 53,500 | $ | 56,000 | ||||
Gain on sale of collegiate housing assets | (23,956 | ) | (23,956 | ) | ||||
Real estate related depreciation and amortization | 73,500 | 74,500 | ||||||
Equity portion of real estate depreciation and amortization on equity investees | 2,600 | 2,800 | ||||||
Noncontrolling interests | 150 | 300 | ||||||
Funds from operations ("FFO") available to stockholders and unitholders | $ | 105,794 | $ | 109,644 | ||||
FFO adjustments: | ||||||||
Loss on extinguishment of debt | 10,611 | 10,611 | ||||||
Acquisition costs | 450 | 450 | ||||||
Change in fair value of contingent consideration liability | (1,100 | ) | (1,100 | ) | ||||
Straight-line adjustment for ground leases (1) | 4,800 | 4,800 | ||||||
FFO adjustments | 14,761 | 14,761 | ||||||
Core funds from operations ("Core FFO") available to stockholders and unitholders | $ | 120,555 | $ | 124,405 | ||||
Net income attributable to EdR common stockholders per share – diluted | $ | 0.77 | $ | 0.80 | ||||
FFO per weighted average share/unit (2) | $ | 1.52 | $ | 1.58 | ||||
Core FFO per weighted average share/unit (2) | $ | 1.73 | $ | 1.79 | ||||
Weighted average shares/units (2) | 69,600 | 69,600 | ||||||
(1) Represents the straight-line rent expense adjustment required by GAAP related to ground leases. As 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 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. |
THIRD QUARTER | 25 |
COMMUNITY LISTING - OWNED |
Name | Primary University Served | Acquisition/Development Date | # of Beds | Name | Primary University Served | Acquisition/Development Date | # of Beds | |||||||||
Same-Communities | ||||||||||||||||
Players Club | Florida State University | Jan '05 | 336 | The District on 5th | University of Arizona | Oct '12 | 764 | |||||||||
University Towers | North Carolina State University | Jan '05 | 889 | Campus Village | Michigan State University | Oct '12 | 355 | |||||||||
The Reserve on Perkins | Oklahoma State University | Jan '05 | 732 | The Province | Kent State University | Nov '12 | 596 | |||||||||
The Pointe | Pennsylvania State University | Jan '05 | 984 | The Suites at Overton Park | Texas Tech University | Dec '12 | 465 | |||||||||
The Lofts | University of Central Florida | Jan '05 | 730 | The Centre at Overton Park | Texas Tech University | Dec '12 | 400 | |||||||||
The Reserve at Columbia | University of Missouri | Jan '05 | 676 | The Oaks on the Square | University of Connecticut | Aug '12, Aug '13 | 503 | |||||||||
Commons at Knoxville | University of Tennessee | Jan '05 | 708 | 3949 | Saint Louis University | Aug '13 | 256 | |||||||||
Campus Creek | University of Mississippi | Feb '05 | 636 | Lymon T. Johnson Hall (ONE Plan) | University of Kentucky | Aug '13 | 301 | |||||||||
Campus Lodge | University of Florida | Jun '05 | 1,115 | Herman Lee Donovan Hall (formerly Central Hall II) (ONE Plan) | University of Kentucky | Aug '13 | 300 | |||||||||
Carrollton Crossing | University of West Georgia | Jan '06 | 336 | 2400 Nueces (ONE Plan) | University of Texas at Austin | Aug '13 | 655 | |||||||||
River Pointe | University of West Georgia | Jan '06 | 504 | Roosevelt Point | Arizona State University - Downtown Phoenix | Aug '13 | 609 | |||||||||
The Reserve at Saluki Pointe | Southern Illinois University | Aug '08, Aug '09 | 768 | The Retreat at State College | Pennsylvania State University | Sept '13 | 587 | |||||||||
University Village on Colvin (ONE Plan) | Syracuse University | Aug '09 | 432 | The Cottages on Lindberg | Purdue University | Sept '13 | 745 | |||||||||
GrandMarc at The Corner | University of Virginia | Oct '10 | 641 | The Varsity | University of Michigan | Dec '13 | 415 | |||||||||
Wertland Square | University of Virginia | Mar '11 | 152 | The Lotus | University of Colorado - Boulder | Nov '11, Aug '14 | 235 | |||||||||
Jefferson Commons | University of Virginia | Mar '11 | 82 | 109 Tower | Florida International University | Aug '14 | 542 | |||||||||
The Berk on College | University of California, Berkeley | May '11 | 122 | The Oaks on the Square- Ph III | University of Connecticut | Aug '14 | 116 | |||||||||
The Berk on Arch | University of California, Berkeley | May '11 | 43 | Frances Jewell Hall (formerly Champions Court I) (ONE Plan) | University of Kentucky | Aug '14 | 740 | |||||||||
University Village Towers | University of California, Riverside | Sept '11 | 554 | Georgia M. Blazer Hall (formerly Champions Court II) (ONE Plan) | University of Kentucky | Aug '14 | 427 | |||||||||
Irish Row | University of Notre Dame | Nov '11 | 326 | Haggin Hall (ONE Plan) | University of Kentucky | Aug '14 | 396 | |||||||||
GrandMarc at Westberry Place (ONE Plan) | Texas Christian University | Dec '11 | 562 | Woodland Glen I (ONE Plan) | University of Kentucky | Aug '14 | 409 | |||||||||
The Reserve on Stinson | University of Oklahoma | Jan '12 | 612 | Woodland Glen II (ONE Plan) | University of Kentucky | Aug '14 | 409 | |||||||||
Campus West (ONE Plan) | Syracuse University | Aug '12 | 313 | The District on Apache | Arizona State University - Tempe | Sept '14 | 900 | |||||||||
East Edge | University of Alabama | Aug '12 | 774 | Total Same-Communities | 24,880 | |||||||||||
The Province | East Carolina University | Sept '12 | 728 |
THIRD QUARTER | 26 |
COMMUNITY LISTING - OWNED |
Name | Primary University Served | Acquisition/Development Date | # of Beds | Name | Primary University Served | Acquisition/Development Date | # of Beds | |||||||||
New-Communities | ||||||||||||||||
The Retreat at Oxford(3) | University of Mississippi | Aug '13, Aug '16 | 1,018 | The Hub at Madison(2) | University of Wisconsin | May '16 | 1,038 | |||||||||
Commons on Bridge(2) | University of Tennessee | June '15 | 150 | Holmes Hall (formerly Limestone Park I) (ONE Plan) | University of Kentucky | Aug '16 | 645 | |||||||||
Oaks on the Square- Ph IV(1) | University of Connecticut | Aug '15 | 391 | Boyd Hall (formerly Limestone Park II) (ONE Plan) | University of Kentucky | Aug '16 | 496 | |||||||||
The Retreat at Louisville(1) | University of Louisville | Aug '15 | 656 | The Retreat at Blacksburg | Virginia Tech | Aug '16 | 829 | |||||||||
Woodland Glen III (ONE Plan)(1) | University of Kentucky | Aug '15 | 782 | Pura Vida Place(2) | Colorado State University | Aug '16 | 100 | |||||||||
Woodland Glen IV (ONE Plan)(1) | University of Kentucky | Aug '15 | 578 | Carriage House(2) | Colorado State University | Aug '16 | 94 | |||||||||
Woodland Glen V (ONE Plan)(1) | University of Kentucky | Aug '15 | 250 | Urbane(2) | University of Arizona | Sept '16 | 311 | |||||||||
The Province Boulder(2) | University of Colorado - Boulder | Sept '15 | 317 | Total New-Communities | 7,849 | |||||||||||
Lokal(2) | Colorado State University | March '16 | 194 | Total Owned-Communities | 32,729 | |||||||||||
(1) The same-community designation for leasing purposes is different than for financial reporting purposes. These communities are considered same-community for 2016/2017 leasing purposes, as the Company managed the leasing process for both the 2015/2016 and 2016/2017 lease cycles. Total same-community beds for leasing purposes is 27,537. | ||||||||||||||||
(2) These properties are considered new for purposes of leasing, as we did not manage the leasing process for the 2015/2016 lease year. | ||||||||||||||||
(3) The Retreat at Oxford is considered new for purposes of leasing due to the development of the second phase of the property. |
THIRD QUARTER | 27 |
INVESTOR RELATIONS |
Executive Management | ||||
Randy Churchey | Chief Executive Officer | |||
Tom Trubiana | President | |||
Bill Brewer | Chief Financial Officer | |||
Christine Richards | Chief Operating Officer | |||
Lindsey Mackie | Chief Accounting Officer | |||
J. Drew Koester | Senior Vice President - Capital Markets and Investor Relations | |||
Corporate Headquarters | ||||
EdR | ||||
999 South Shady Grove Road, Suite 600 | ||||
Memphis, TN 38120 | ||||
(901) 259-2500 | ||||
Covering Analysts | ||||
Firm | Analyst | Contact # | Email | |
Bank of America - Merrill | Jeffrey Spector | (646) 855-1363 | jeff.spector@baml.com | |
CANACCORD|Genuity | Ryan Meliker | (212) 389-8094 | rmeliker@canaccordgenuity.com | |
Capital One | Tom Lesnick | (571) 633-8191 | thomas.lesnick@capitalone.com | |
Citi | Michael Bilerman | (212) 816-1383 | michael.bilerman@citi.com | |
Nicholas Joseph | (212) 816-1909 | nicholas.joseph@citi.com | ||
Evercore ISI | Gwen Clark | (212) 446-5611 | gwen.clark@evercoreisi.com | |
FBR Capital Markets & Co. | David Corak | (703) 312-1610 | dcorak@fbr.com | |
Green Street Advisors | Dave Bragg | (949) 706-8142 | dbragg@greenstreetadvisors.com | |
Goldman Sachs | Andrew Rosivach | (212) 902-2796 | andrew.rosivach@gs.com | |
Hilliard Lyons | Carol Kemple | (502) 588-1839 | ckemple@hilliard.com | |
J.P. Morgan Securities Inc. | Anthony Paolone | (212) 622-6682 | anthony.paolone@jpmorgan.com | |
JMP Securities | Aaron Hecht | (415) 835-3963 | ahecht@jmpsecurities.com | |
KeyBanc Capital Markets | Jordan Sadler | (917) 368-2280 | jsadler@keybanccm.com | |
RBC Capital Market | Wes Golladay | (440) 715-2650 | wes.golladay@rbccm.com | |
Robert W Baird & Co. | Drew Babin | (215) 553-7816 | dbabin@rwbaird.com | |
Sandler O'Neill + Partners, L.P. | Alex Goldfarb | (212) 466-7937 | agoldfarb@sandleroneill.com |
THIRD QUARTER | 28 |
DEFINITIONS |
Design beds | Represents the sum of the monthly design beds in the portfolio during the period. |
FFO | Funds from operations as defined by the National Association of Real Estate Investment Trusts. |
GAAP | U.S. generally accepted accounting principles. |
Net apartment rent per occupied bed (NarPOB) | Represents GAAP net apartment rent for the respective period divided by the sum of occupied beds in the portfolio for each month included in the period reported. |
Net debt to EBITDA - adjusted | Net debt to EBITDA - adjusted is calculated to normalize the impact of non-producing construction debt. In the calculation, net debt is total debt less cash and excludes non-producing debt related to assets under development at time of calculation. EBITDA is Pro Forma Adjusted EBITDA, which includes proforma adjustments to reflect all acquisitions, dispositions and development assets that are open as if such had occurred at the beginning of the 12 month period being presented. |
Operating expense per bed | Represents community-level operating expenses excluding management fees, depreciation and amortization. |
Other income per available bed | Represents other GAAP-based income for the respective period divided by the sum of the design beds in the portfolio for each of the included months. Other income includes service/application fees, late fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery, and other misc. |
Physical occupancy | Represents a weighted average of the month end occupancies for each month included in the period reported. |
Regional Definitions | Regions are defined as follows: Mid-Atlantic: North Carolina, Pennsylvania, Connecticut, New York, Virginia; Midwest: Oklahoma, Missouri; North: Michigan, Ohio, Indiana, Illinois; South Central: Texas, Tennessee, Mississippi, Kentucky; Southeast: Florida, Alabama, Georgia; West: Arizona, California, Colorado. |
Revenue per occupied bed (RevPOB) | Represents total revenue (net apartment rent plus other income) for the respective period divided by the sum of occupied beds in the portfolio for each month included in the period reported. |
Same community | Includes communities that have been owned for more than a year as of the beginning of the current fiscal year. |
THIRD QUARTER | 29 |
SAFE HARBOR STATEMENT |
THIRD QUARTER | 30 |