FINANCIAL HIGHLIGHTS |
(Amounts in thousands, except per share data, unaudited) | ||||||||||||||||||||||||||||||
OPERATING DATA: | ||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||
2017 | 2016 | $ Chg | % Chg | 2017 | 2016 | $ Chg | % Chg | |||||||||||||||||||||||
Same-community revenue | $ | 53,245 | $ | 51,911 | $ | 1,334 | 2.6 | % | $ | 172,311 | $ | 168,993 | $ | 3,318 | 2.0 | % | ||||||||||||||
Total community revenue | 71,085 | 61,877 | 9,208 | 14.9 | % | 221,941 | 193,750 | 28,191 | 14.6 | % | ||||||||||||||||||||
Total revenue | 75,360 | 66,225 | 9,135 | 13.8 | % | 235,200 | 204,744 | 30,456 | 14.9 | % | ||||||||||||||||||||
Same-community net operating income | 25,852 | 25,349 | 503 | 2.0 | % | 100,162 | 99,719 | 443 | 0.4 | % | ||||||||||||||||||||
Total community net operating income | 34,009 | 29,365 | 4,644 | 15.8 | % | 125,650 | 110,183 | 15,467 | 14.0 | % | ||||||||||||||||||||
Total operating income | 3,869 | 1,231 | 2,638 | 214.3 | % | 30,935 | 30,933 | 2 | — | % | ||||||||||||||||||||
Net (loss) income attributable to EdR | (155 | ) | (3,533 | ) | 3,378 | (95.6 | )% | 22,062 | 30,791 | (8,729 | ) | (28.3 | )% | |||||||||||||||||
Per share - basic and diluted | $ | (0.01 | ) | $ | (0.05 | ) | $ | 0.04 | (80.0 | )% | $ | 0.27 | $ | 0.45 | $ | (0.18 | ) | (40.0 | )% | |||||||||||
Funds from operations (FFO) | 22,192 | 18,664 | 3,528 | 18.9 | % | 94,354 | 66,281 | 28,073 | 42.4 | % | ||||||||||||||||||||
Per weighted average share/unit (1) | $ | 0.30 | $ | 0.25 | $ | 0.05 | 20.0 | % | $ | 1.28 | $ | 0.97 | $ | 0.31 | 32.0 | % | ||||||||||||||
Core funds from operations (Core FFO) | 21,665 | 19,396 | 2,269 | 11.7 | % | 96,725 | 79,761 | 16,964 | 21.3 | % | ||||||||||||||||||||
Per weighted average share/unit (1) | $ | 0.29 | $ | 0.26 | $ | 0.03 | 11.5 | % | $ | 1.31 | $ | 1.17 | $ | 0.14 | 12.0 | % | ||||||||||||||
FINANCIAL RATIOS: | ||||||||||||||||||||||||||||||
9/30/2017 | 12/31/2016 | |||||||||||||||||||||||||||||
Debt to gross assets | 24.7% | 18.4% | ||||||||||||||||||||||||||||
Net debt to gross assets | 23.6% | 17.4% | ||||||||||||||||||||||||||||
Net debt to enterprise value | 21.9% | 13.5% | ||||||||||||||||||||||||||||
Interest coverage ratio (TTM) | 11.2x | 9.0x | ||||||||||||||||||||||||||||
Net debt to EBITDA - Adjusted (TTM) | 3.0x | 1.7x | ||||||||||||||||||||||||||||
(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, unaudited) | ||||||||||
September 30, 2017 | December 31, 2016 | |||||||||
Assets | ||||||||||
Collegiate housing properties, net (1) | $ | 2,453,702 | $ | 2,108,706 | ||||||
Assets under development | 348,653 | 289,942 | ||||||||
Cash and cash equivalents | 47,462 | 34,475 | ||||||||
Restricted cash | 6,020 | 7,838 | ||||||||
Other assets | 70,242 | 65,224 | ||||||||
Total assets | $ | 2,926,079 | $ | 2,506,185 | ||||||
Liabilities and equity | ||||||||||
Liabilities: | ||||||||||
Unsecured debt, net of unamortized deferred financing costs | $ | 778,309 | $ | 454,676 | ||||||
Mortgage and construction loans, net of unamortized deferred financing costs | 29,772 | 62,520 | ||||||||
Accounts payable and accrued expenses | 181,676 | 127,872 | ||||||||
Deferred revenue | 32,479 | 20,727 | ||||||||
Total liabilities | 1,022,236 | 665,795 | ||||||||
Commitments and contingencies | — | — | ||||||||
Redeemable noncontrolling interests | 55,171 | 38,949 | ||||||||
Equity: | ||||||||||
EdR stockholders' equity: | ||||||||||
Common stock, $0.01 par value per share, 200,000,000 shares authorized, 75,751,216 and 73,075,455 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 757 | 731 | ||||||||
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, no shares issued and outstanding | — | — | ||||||||
Additional paid-in capital | 1,849,112 | 1,802,852 | ||||||||
Retained earnings | — | — | ||||||||
Accumulated other comprehensive loss | (2,484 | ) | (3,564 | ) | ||||||
Total EdR stockholders' equity | 1,847,385 | 1,800,019 | ||||||||
Noncontrolling interest | 1,287 | 1,422 | ||||||||
Total equity | 1,848,672 | 1,801,441 | ||||||||
Total liabilities and equity | $ | 2,926,079 | $ | 2,506,185 |
THIRD QUARTER | 2 |
OPERATING RESULTS |
(Amounts in thousands, except per share data, unaudited) | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2017 | 2016 | $ Change | 2017 | 2016 | $ Change | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Collegiate housing leasing revenue | $ | 71,085 | $ | 61,877 | $ | 9,208 | $ | 221,941 | $ | 193,750 | $ | 28,191 | |||||||||||
Third-party development consulting services | 1,222 | 778 | 444 | 4,193 | 1,728 | 2,465 | |||||||||||||||||
Third-party management services | 858 | 965 | (107 | ) | 2,634 | 2,556 | 78 | ||||||||||||||||
Operating expense reimbursements | 2,195 | 2,605 | (410 | ) | 6,432 | 6,710 | (278 | ) | |||||||||||||||
Total revenues | 75,360 | 66,225 | 9,135 | 235,200 | 204,744 | 30,456 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Collegiate housing leasing operations | 37,076 | 32,512 | 4,564 | 96,291 | 83,567 | 12,724 | |||||||||||||||||
Development and management services | 5,218 | 2,716 | 2,502 | 10,894 | 7,965 | 2,929 | |||||||||||||||||
General and administrative | 2,582 | 2,489 | 93 | 8,724 | 7,991 | 733 | |||||||||||||||||
Development pursuit, acquisition costs and severance | 238 | 212 | 26 | 861 | 898 | (37 | ) | ||||||||||||||||
Depreciation and amortization | 22,449 | 22,336 | 113 | 72,808 | 58,951 | 13,857 | |||||||||||||||||
Ground lease expense | 3,437 | 3,224 | 213 | 9,459 | 8,829 | 630 | |||||||||||||||||
Other operating income (1) | (1,704 | ) | (1,100 | ) | (604 | ) | (1,204 | ) | (1,100 | ) | (104 | ) | |||||||||||
Reimbursable operating expenses | 2,195 | 2,605 | (410 | ) | 6,432 | 6,710 | (278 | ) | |||||||||||||||
Total operating expenses | 71,491 | 64,994 | 6,497 | 204,265 | 173,811 | 30,454 | |||||||||||||||||
Operating income | 3,869 | 1,231 | 2,638 | 30,935 | 30,933 | 2 | |||||||||||||||||
Nonoperating (income) expenses: | |||||||||||||||||||||||
Interest expense, net of capitalized interest | 4,284 | 3,811 | 473 | 10,374 | 12,109 | (1,735 | ) | ||||||||||||||||
Amortization of deferred financing costs | 406 | 443 | (37 | ) | 1,185 | 1,380 | (195 | ) | |||||||||||||||
Interest income | (17 | ) | (155 | ) | 138 | (66 | ) | (429 | ) | 363 | |||||||||||||
Loss on extinguishment of debt | — | 475 | (475 | ) | 22 | 10,611 | (10,589 | ) | |||||||||||||||
Total nonoperating expenses | 4,673 | 4,574 | 99 | 11,515 | 23,671 | (12,156 | ) | ||||||||||||||||
(Loss) income before equity in (losses) earnings of unconsolidated entities, income taxes and gain on sale of collegiate housing properties | (804 | ) | (3,343 | ) | 2,539 | 19,420 | 7,262 | 12,158 | |||||||||||||||
Equity in (losses) earnings of unconsolidated entities | (243 | ) | (480 | ) | 237 | 141 | (617 | ) | 758 | ||||||||||||||
(Loss) income before income taxes and gain on sale of collegiate housing properties | (1,047 | ) | (3,823 | ) | 2,776 | 19,561 | 6,645 | 12,916 | |||||||||||||||
Income tax (benefit) expense | (416 | ) | 84 | (500 | ) | (948 | ) | 224 | (1,172 | ) | |||||||||||||
(Loss) income before gain on sale of collegiate housing properties | (631 | ) | (3,907 | ) | 3,276 | 20,509 | 6,421 | 14,088 | |||||||||||||||
Gain on sale of collegiate housing properties | — | — | — | 691 | 23,956 | (23,265 | ) | ||||||||||||||||
Net (loss) income | (631 | ) | (3,907 | ) | 3,276 | 21,200 | 30,377 | (9,177 | ) | ||||||||||||||
Less: Net loss attributable to the noncontrolling interests | (476 | ) | (374 | ) | (102 | ) | (862 | ) | (414 | ) | (448 | ) | |||||||||||
Net (loss) income attributable to Education Realty Trust, Inc. | $ | (155 | ) | $ | (3,533 | ) | $ | 3,378 | $ | 22,062 | $ | 30,791 | $ | (8,729 | ) |
THIRD QUARTER | 3 |
OPERATING RESULTS |
(Amounts in thousands, except per share data, unaudited) | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2017 | 2016 | $ Change | 2017 | 2016 | $ Change | ||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Gain (loss) on cash flow hedging derivatives | 367 | 1,651 | (1,284 | ) | 1,080 | (2,837 | ) | 3,917 | |||||||||||||||
Comprehensive income (loss) attributable to Education Realty Trust, Inc. | $ | 212 | $ | (1,882 | ) | $ | 2,094 | $ | 23,142 | $ | 27,954 | $ | (4,812 | ) | |||||||||
Earnings per share information: | |||||||||||||||||||||||
Net (loss) income attributable to Education Realty Trust, Inc. common stockholders per share – basic and diluted (2) | $ | (0.01 | ) | $ | (0.05 | ) | $ | 0.04 | $ | 0.27 | $ | 0.45 | $ | (0.18 | ) | ||||||||
Weighted average shares of common stock outstanding – basic | 73,687 | 73,205 | 482 | 73,606 | 67,979 | 5,627 | |||||||||||||||||
Weighted average shares of common stock outstanding – diluted | 73,687 | 73,205 | 482 | 73,820 | (3) | 68,281 | (3) | 5,539 | |||||||||||||||
(1) Represents the change in fair value of contingent consideration liabilities associated with our 2016 acquisitions of Hub at Madison and Urbane. | |||||||||||||||||||||||
(2) The numerator for earnings per share - diluted also includes $0.7 million and $1.9 million of accretion of redeemable noncontrolling interests for the three and nine months ended September 30, 2017, respectively. | |||||||||||||||||||||||
(3) 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, | ||||||||||||||||||||||
2017 | 2016 | $ Change | 2017 | 2016 | $ Change | |||||||||||||||||||
Net (loss) income attributable to EdR | $ | (155 | ) | $ | (3,533 | ) | $ | 3,378 | $ | 22,062 | $ | 30,791 | $ | (8,729 | ) | |||||||||
Gain on sale of collegiate housing assets | — | — | — | (691 | ) | (23,956 | ) | 23,265 | ||||||||||||||||
Real estate related depreciation and amortization | 21,911 | 21,616 | 295 | 71,316 | 57,424 | 13,892 | ||||||||||||||||||
Equity portion of real estate depreciation and amortization on equity investees | 663 | 700 | (37 | ) | 2,010 | 2,023 | (13 | ) | ||||||||||||||||
Noncontrolling interests | (227 | ) | (119 | ) | (108 | ) | (343 | ) | (1 | ) | (342 | ) | ||||||||||||
Funds from operations ("FFO") available to stockholders and unitholders | 22,192 | 18,664 | 3,528 | 94,354 | 66,281 | 28,073 | ||||||||||||||||||
percent change | 18.9 | % | 42.4 | % | ||||||||||||||||||||
FFO adjustments: | ||||||||||||||||||||||||
Loss on extinguishment of debt | — | 475 | (475 | ) | 22 | 10,611 | (10,589 | ) | ||||||||||||||||
Acquisition costs | — | 175 | (175 | ) | 27 | 413 | (386 | ) | ||||||||||||||||
Change in fair value of contingent consideration liability (1) | (1,704 | ) | (1,100 | ) | (604 | ) | (1,204 | ) | (1,100 | ) | (104 | ) | ||||||||||||
Straight-line adjustment for ground leases (2) | 1,177 | 1,182 | (5 | ) | 3,526 | 3,556 | (30 | ) | ||||||||||||||||
FFO adjustments | (527 | ) | 732 | (1,259 | ) | 2,371 | 13,480 | (11,109 | ) | |||||||||||||||
Core funds from operations ("Core FFO") available to stockholders and unitholders | $ | 21,665 | $ | 19,396 | $ | 2,269 | $ | 96,725 | $ | 79,761 | $ | 16,964 | ||||||||||||
percent change | 11.7 | % | 21.3 | % | ||||||||||||||||||||
Earnings per share - diluted (3) | $ | (0.01 | ) | $ | (0.05 | ) | $ | 0.04 | $ | 0.27 | $ | 0.45 | $ | (0.18 | ) | |||||||||
percent change | (80.00 | )% | (40.0 | )% | ||||||||||||||||||||
FFO per weighted average share/unit (4) | $ | 0.30 | $ | 0.25 | $ | 0.05 | $ | 1.28 | $ | 0.97 | $ | 0.31 | ||||||||||||
percent change | 20.0 | % | 32.0 | % | ||||||||||||||||||||
Core FFO per weighted average share/unit (4) | $ | 0.29 | $ | 0.26 | $ | 0.03 | $ | 1.31 | $ | 1.17 | $ | 0.14 | ||||||||||||
percent change | 11.5 | % | 12.0 | % | ||||||||||||||||||||
Weighted average shares/units (4) | 73,894 | 73,468 | 426 | 73,820 | 68,281 | 5,539 | ||||||||||||||||||
percent change | 0.6 | % | 8.1 | % | ||||||||||||||||||||
(1) Represents the change in fair value of contingent consideration liabilities associated with our 2016 acquisitions of Hub at Madison and Urbane. | ||||||||||||||||||||||||
(2) 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. | ||||||||||||||||||||||||
(3) The numerator for earnings per share - diluted also includes $0.7 million and $1.9 million of accretion of redeemable noncontrolling interests for the three and nine months ended September 30, 2017, respectively. | ||||||||||||||||||||||||
(4) 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, and the dilutive impact of the ATM Forward. |
THIRD QUARTER | 5 |
COMMUNITY OPERATING RESULTS |
(Amounts in thousands, unaudited) | ||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||
2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | |||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Same-communities(1) | $ | 53,245 | $ | 51,911 | $ | 1,334 | 2.6 | % | $ | 172,311 | $ | 168,993 | $ | 3,318 | 2.0 | % | ||||||||||||||
New-communities(2) | 16,092 | 7,154 | 8,938 | NM | 42,265 | 11,219 | 31,046 | NM | ||||||||||||||||||||||
Other-communities(3) | 1,748 | 2,221 | (473 | ) | NM | 6,431 | 7,371 | (940 | ) | NM | ||||||||||||||||||||
Sold-communities(4) | — | 591 | (591 | ) | NM | 934 | 6,167 | (5,233 | ) | NM | ||||||||||||||||||||
Total revenues | 71,085 | 61,877 | 9,208 | 14.9 | % | 221,941 | 193,750 | 28,191 | 14.6 | % | ||||||||||||||||||||
Operating expenses (5) | ||||||||||||||||||||||||||||||
Same-communities(1) | 27,393 | 26,562 | 831 | 3.1 | % | 72,149 | 69,274 | 2,875 | 4.2 | % | ||||||||||||||||||||
New-communities(2) | 8,317 | 3,751 | 4,566 | NM | 19,134 | 6,079 | 13,055 | NM | ||||||||||||||||||||||
Other-communities(3) | 1,366 | 1,615 | (249 | ) | NM | 4,177 | 4,523 | (346 | ) | NM | ||||||||||||||||||||
Sold-communities(4) | — | 584 | (584 | ) | NM | 831 | 3,691 | (2,860 | ) | NM | ||||||||||||||||||||
Total operating expenses | 37,076 | 32,512 | 4,564 | 14.0 | % | 96,291 | 83,567 | 12,724 | 15.2 | % | ||||||||||||||||||||
Net operating income | ||||||||||||||||||||||||||||||
Same-communities(1) | 25,852 | 25,349 | 503 | 2.0 | % | 100,162 | 99,719 | 443 | 0.4 | % | ||||||||||||||||||||
New-communities (2) | 7,775 | 3,403 | 4,372 | NM | 23,131 | 5,140 | 17,991 | NM | ||||||||||||||||||||||
Other-communities(3) | 382 | 606 | (224 | ) | NM | 2,254 | 2,848 | (594 | ) | NM | ||||||||||||||||||||
Sold-communities(4) | — | 7 | (7 | ) | NM | 103 | 2,476 | (2,373 | ) | NM | ||||||||||||||||||||
Total net operating income | $ | 34,009 | $ | 29,365 | $ | 4,644 | 15.8 | % | $ | 125,650 | $ | 110,183 | $ | 15,467 | 14.0 | % | ||||||||||||||
(1) Same-communities are defined as those communities that have been open and operating for the whole time in the current and prior periods and are not conducting substantial development or redevelopment activities or have other significant changes in design beds. See page 32 of this supplement for a listing of same-communities. | ||||||||||||||||||||||||||||||
(2) See page 33 of this supplement for a listing of which communities are categorized as new-communities. | ||||||||||||||||||||||||||||||
(3) Effective January 1, 2017, the following communities moved from same-community to other-community: 1) Players Club serving Florida State University due to the demolition and redevelopment of the property and 2) University Towers, serving North Carolina State University. As a result of the university implementing a new freshman live-on requirement this fall, we anticipate changing the way the community will be leased and operated in 2017 making year over year results incomparable. | ||||||||||||||||||||||||||||||
(4) Represents operating results from communities sold in 2016 and 2017. | ||||||||||||||||||||||||||||||
(5) 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, 2017 | Three months ended September 30, 2016 | |||||||||||||||||||||||||||
Amount | Per Bed | % of Total Operating Expenses | Amount | Per Bed | % of Total Operating Expenses | $ Change | % Change | |||||||||||||||||||||
Utilities(1) | $ | 6,987 | $ | 267 | 26 | % | $ | 6,815 | $ | 260 | 26 | % | $ | 172 | 2.5 | % | ||||||||||||
On-Site Payroll | 4,197 | 160 | 15 | % | 4,379 | 167 | 16 | % | (182 | ) | (4.2 | )% | ||||||||||||||||
General & Administrative(2) | 3,401 | 130 | 12 | % | 3,204 | 122 | 12 | % | 197 | 6.1 | % | |||||||||||||||||
Maintenance & Repairs(3) | 5,577 | 213 | 20 | % | 5,623 | 215 | 21 | % | (46 | ) | (0.8 | )% | ||||||||||||||||
Marketing | 1,134 | 43 | 4 | % | 1,011 | 39 | 4 | % | 123 | 12.2 | % | |||||||||||||||||
Total Direct Operating Expenses | $ | 21,296 | $ | 813 | 77 | % | $ | 21,032 | $ | 803 | 79 | % | $ | 264 | 1.3 | % | ||||||||||||
Real Estate Taxes | 5,585 | 213 | 21 | % | 4,962 | 190 | 19 | % | 623 | 12.6 | % | |||||||||||||||||
Insurance | 512 | 20 | 2 | % | 568 | 22 | 2 | % | (56 | ) | (9.9 | )% | ||||||||||||||||
Total Fixed Operating Expenses | $ | 6,097 | $ | 233 | 23 | % | $ | 5,530 | $ | 212 | 21 | % | $ | 567 | 10.3 | % | ||||||||||||
Total Property Operating Expenses | $ | 27,393 | $ | 1,046 | 100 | % | $ | 26,562 | $ | 1,015 | 100 | % | $ | 831 | 3.1 | % | ||||||||||||
Nine months ended September 30, 2017 | Nine months ended September 30, 2016 | |||||||||||||||||||||||||||
Amount | Per Bed | % of Total Operating Expenses | Amount | Per Bed | % of Total Operating Expenses | $ Change | % Change | |||||||||||||||||||||
Utilities(1) | $ | 19,890 | $ | 760 | 28 | % | $ | 19,525 | $ | 746 | 28 | % | $ | 365 | 1.9 | % | ||||||||||||
On-Site Payroll | 12,114 | 463 | 17 | % | 12,340 | 472 | 18 | % | (226 | ) | (1.8 | )% | ||||||||||||||||
General & Administrative(2) | 9,620 | 368 | 13 | % | 9,439 | 361 | 14 | % | 181 | 1.9 | % | |||||||||||||||||
Maintenance & Repairs(3) | 9,434 | 361 | 13 | % | 9,049 | 346 | 13 | % | 385 | 4.3 | % | |||||||||||||||||
Marketing | 2,771 | 106 | 4 | % | 2,753 | 105 | 4 | % | 18 | 0.7 | % | |||||||||||||||||
Total Direct Operating Expenses | $ | 53,829 | $ | 2,058 | 75 | % | $ | 53,106 | $ | 2,030 | 77 | % | $ | 723 | 1.4 | % | ||||||||||||
Real Estate Taxes | 16,787 | 642 | 23 | % | 14,467 | 553 | 21 | % | 2,320 | 16.0 | % | |||||||||||||||||
Insurance | 1,533 | 59 | 2 | % | 1,701 | 65 | 2 | % | (168 | ) | (9.9 | )% | ||||||||||||||||
Total Fixed Operating Expenses | $ | 18,320 | $ | 701 | 25 | % | $ | 16,168 | $ | 618 | 23 | % | $ | 2,152 | 13.3 | % | ||||||||||||
Total Property Operating Expenses | $ | 72,149 | $ | 2,759 | 100 | % | $ | 69,274 | $ | 2,648 | 100 | % | $ | 2,875 | 4.2 | % | ||||||||||||
Same-community beds | 26,167 | |||||||||||||||||||||||||||
(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, 2016 | December 31, 2016 | March 31, 2017 | June 30, 2017 | September 30, 2017 | |||||||||||||||||||||
2017 Same Communities | |||||||||||||||||||||||||
Revenue | $ | 51,911 | $ | 64,900 | $ | 63,492 | $ | 55,574 | $ | 53,245 | $ | 237,211 | |||||||||||||
Operating Expenses | 26,562 | 22,181 | 21,871 | 22,886 | 27,393 | 94,331 | |||||||||||||||||||
Net Operating Income | $ | 25,349 | $ | 42,719 | $ | 41,621 | $ | 32,688 | $ | 25,852 | $ | 142,880 | |||||||||||||
Margin | 49 | % | 66 | % | 66 | % | 59 | % | 49 | % | 60 | % | |||||||||||||
Beds | 78,501 | 78,501 | 78,501 | 78,501 | 78,501 | 314,004 | |||||||||||||||||||
Occupancy(1) | 88.7 | % | 96.8 | % | 95.3 | % | 82.3 | % | 87.8 | % | 90.6 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 671 | $ | 810 | $ | 800 | $ | 799 | $ | 695 | $ | 777 | |||||||||||||
Other Income per Occupied Bed | 75 | 44 | 48 | 61 | 78 | 57 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 746 | $ | 854 | $ | 848 | $ | 860 | $ | 773 | $ | 834 | |||||||||||||
Operating Expense per Available Bed | $ | 338 | $ | 283 | $ | 279 | $ | 292 | $ | 349 | $ | 300 | |||||||||||||
2017 New Communities | |||||||||||||||||||||||||
Revenue | $ | 7,154 | $ | 11,795 | $ | 13,647 | $ | 12,526 | $ | 16,092 | $ | 54,060 | |||||||||||||
Operating Expenses | 3,751 | 3,673 | 5,076 | 5,741 | 8,317 | 22,807 | |||||||||||||||||||
Net Operating Income | $ | 3,403 | $ | 8,122 | $ | 8,571 | $ | 6,785 | $ | 7,775 | $ | 31,253 | |||||||||||||
Margin | 48 | % | 69 | % | 63 | % | 54 | % | 48 | % | 58 | % | |||||||||||||
Beds | 11,039 | 14,175 | 17,833 | 18,138 | 24,144 | 74,290 | |||||||||||||||||||
Occupancy(1) | 86.9 | % | 89.6 | % | 89.2 | % | 77.5 | % | 83.3 | % | 84.5 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 663 | $ | 871 | $ | 803 | $ | 820 | $ | 721 | $ | 794 | |||||||||||||
Other Income per Occupied Bed | 83 | 58 | 55 | 71 | 79 | 67 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 746 | $ | 929 | $ | 858 | $ | 891 | $ | 800 | $ | 861 | |||||||||||||
Operating Expense per Available Bed | $ | 340 | $ | 259 | $ | 285 | $ | 317 | $ | 344 | $ | 307 | |||||||||||||
2017 Other Communities(2) | |||||||||||||||||||||||||
Revenue | $ | 2,221 | $ | 3,090 | $ | 3,021 | $ | 1,662 | $ | 1,748 | $ | 9,521 | |||||||||||||
Operating Expenses | 1,615 | 1,508 | 1,475 | 1,336 | 1,366 | 5,685 | |||||||||||||||||||
Net Operating Income | $ | 606 | $ | 1,582 | $ | 1,546 | $ | 326 | $ | 382 | $ | 3,836 | |||||||||||||
Margin | 27 | % | 51 | % | 51 | % | 20 | % | 22 | % | 40 | % | |||||||||||||
Beds | 3,675 | 3,675 | 3,675 | 3,339 | 2,667 | 13,356 | |||||||||||||||||||
Occupancy(1) | 69.1 | % | 87.8 | % | 87.2 | % | 42.3 | % | 66.6 | % | 72.1 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 692 | $ | 903 | $ | 883 | $ | 899 | $ | 765 | $ | 870 | |||||||||||||
Other Income per Occupied Bed | 182 | 54 | 59 | 278 | 219 | 119 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 874 | $ | 957 | $ | 942 | $ | 1,177 | $ | 984 | $ | 989 | |||||||||||||
Operating Expense per Available Bed | $ | 439 | $ | 410 | $ | 401 | $ | 400 | $ | 512 | $ | 426 | |||||||||||||
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, 2016 | December 31, 2016 | March 31, 2017 | June 30, 2017 | September 30, 2017 | |||||||||||||||||||||
2017 Sold Communities | |||||||||||||||||||||||||
Revenue | $ | 591 | $ | 652 | $ | 625 | $ | 309 | $ | — | $ | 1,586 | |||||||||||||
Operating Expenses | 584 | 449 | 455 | 375 | — | 1,279 | |||||||||||||||||||
Net Operating Income (Loss) | $ | 7 | $ | 203 | $ | 170 | $ | (66 | ) | $ | — | $ | 307 | ||||||||||||
Margin | 1 | % | 31 | % | 27 | % | (21 | )% | — | % | 19 | % | |||||||||||||
Beds | 1,836 | 1,836 | 1,836 | 1,224 | — | 4,896 | |||||||||||||||||||
Occupancy(1) | 61.4 | % | 61.4 | % | 61.4 | % | 63.1 | % | — | % | 61.8 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 472 | $ | 563 | $ | 530 | $ | 372 | $ | — | $ | 502 | |||||||||||||
Other Income per Occupied Bed | 53 | 15 | 24 | 27 | — | 21 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 525 | $ | 578 | $ | 554 | $ | 399 | $ | — | $ | 523 | |||||||||||||
Operating Expense per Available Bed | $ | 318 | $ | 244 | $ | 248 | $ | 307 | $ | — | $ | 261 | |||||||||||||
2017 Total Communities | |||||||||||||||||||||||||
Revenue | $ | 61,877 | $ | 80,437 | $ | 80,785 | $ | 70,071 | $ | 71,085 | $ | 302,378 | |||||||||||||
Operating Expenses | 32,512 | 27,811 | 28,877 | 30,338 | 37,076 | 124,102 | |||||||||||||||||||
Net Operating Income | $ | 29,365 | $ | 52,626 | $ | 51,908 | $ | 39,733 | $ | 34,009 | $ | 178,276 | |||||||||||||
Margin | 47 | % | 65 | % | 64 | % | 57 | % | 48 | % | 59 | % | |||||||||||||
Beds | 95,051 | 98,187 | 101,845 | 101,202 | 105,312 | 406,546 | |||||||||||||||||||
Occupancy(1) | 87.2 | % | 94.8 | % | 93.3 | % | 79.9 | % | 86.2 | % | 88.5 | % | |||||||||||||
Net Apartment Rent per Occupied Bed | $ | 668 | $ | 819 | $ | 800 | $ | 800 | $ | 702 | $ | 780 | |||||||||||||
Other Income per Occupied Bed | 79 | 46 | 50 | 66 | 81 | 60 | |||||||||||||||||||
Total Revenue per Occupied Bed | $ | 747 | $ | 865 | $ | 850 | $ | 866 | $ | 783 | $ | 840 | |||||||||||||
Operating Expense per Available Bed | $ | 342 | $ | 283 | $ | 284 | $ | 300 | $ | 352 | $ | 305 | |||||||||||||
(1) Represents the weighted average physical occupancy for the period presented. | |||||||||||||||||||||||||
(2) Effective January 1, 2017, the following communities moved from same-community to other-community: 1) Players Club serving Florida State University due to the demolition and redevelopment of the property and 2) University Towers, serving North Carolina State University, as we previously anticipated changing the way the community will be leased and operated in 2017. |
THIRD QUARTER | 9 |
LEASING RESULTS SUMMARY |
Opening Occupancy | |||||||||||||||||||
Design Beds | % of NOI | 2017 | 2016 | Ahead/(Behind) | Opening Rate Growth | ||||||||||||||
Same-Communities - by Tier | |||||||||||||||||||
Prior Year Occupancy Below 90% (Tier 1) | 4,046 | 9.3 | % | 83.4 | % | 81.2 | % | 2.2 | % | (2.6 | )% | ||||||||
Prior Year Occupancy 90% to 96.9% (Tier 2) | 3,697 | 11.0 | % | 92.8 | % | 94.0 | % | (1.2 | )% | 1.2 | % | ||||||||
Prior Year Occupancy 97% and Above (Tier 3) | 22,644 | 79.7 | % | 97.7 | % | 99.5 | % | (1.8 | )% | 3.9 | % | ||||||||
Total Same-Communities (1) | 30,387 | 100.0 | % | 95.2 | % | 96.4 | % | (1.2 | )% | 3.0 | % | ||||||||
Total Other-Communities (2) | 889 | 99.4 | % | ||||||||||||||||
Total New-Communities (3) | 5,144 | 89.2 | % | ||||||||||||||||
Total Communities | 36,420 | 94.4 | % | ||||||||||||||||
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 2017/2018 leasing cycle. | |||||||||||||||||||
(1) The same-community designation for leasing purposes is different than for financial reporting 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 2017/2018 leasing cycle. Design beds for Same-Communities included in the 2017 Preleasing Summary above include the following design beds: (1) total same-community design beds on page 32 of 26,167 plus (2) 4,220 design beds on communities that are considered same for leasing purposes (see note 1 on page 33). | |||||||||||||||||||
(2) Other-communities includes University Towers, serving North Carolina State University. | |||||||||||||||||||
(3) The new-community designation for leasing purposes is different than for financial statement purposes. A community is considered new-community for leasing when the Company has not previously managed the leasing process. Design beds for Total New-Communities include the following: (1) our 2016 acquisitions of Pura Vida Place (100 beds), Carriage House (94 beds) and Urbane (311 beds), plus (2) beds at our 2017 development deliveries including The Local: Downtown (304 beds), SkyVue (824 beds) Sawtooth Hall (656), University Flats (771), Lewis Hall (346) and The Woods (417), plus (3) our 2017 acquisitions of Retreat at Corvallis (1,016 beds) and 319 Bragg (305 beds). |
THIRD QUARTER | 10 |
SAME-COMMUNITY LEASING RESULTS BY REGION AND DISTANCE |
Opening Occupancy | |||||||||||||||||
Design Beds | % of NOI | 2017 | 2016 | Ahead/(Behind) | Opening Rate Growth | ||||||||||||
Same-Communities - by Region (1) | |||||||||||||||||
Mid-Atlantic | 5,758 | 22.6 | % | 96.2 | % | 98.1 | % | (1.9 | )% | 4.9 | % | ||||||
Midwest | 1,664 | 2.9 | % | 86.4 | % | 82.7 | % | 3.7 | % | (1.6 | )% | ||||||
North | 4,243 | 12.6 | % | 95.1 | % | 95.3 | % | (0.2 | )% | 0.1 | % | ||||||
South Central | 10,983 | 36.4 | % | 93.2 | % | 96.1 | % | (2.9 | )% | 3.1 | % | ||||||
Southeast | 4,001 | 10.6 | % | 99.5 | % | 99.9 | % | (0.4 | )% | 2.9 | % | ||||||
West | 3,738 | 14.9 | % | 98.5 | % | 98.4 | % | 0.1 | % | 3.9 | % | ||||||
Total Same-Communities | 30,387 | 100.0 | % | 95.2 | % | 96.4 | % | (1.2 | )% | 3.0 | % | ||||||
Same-Communities - by Distance from Campus | |||||||||||||||||
0-0.2 miles | 20,057 | 73.4 | % | 95.8 | % | 98.6 | % | (2.8 | )% | 3.7 | % | ||||||
0.21-0.49 miles | 2,720 | 8.0 | % | 91.6 | % | 90.8 | % | 0.8 | % | (2.1 | )% | ||||||
0.5-0.99 miles | 2,041 | 5.9 | % | 91.6 | % | 87.2 | % | 4.4 | % | 2.3 | % | ||||||
1.0-1.99 miles | 3,709 | 9.0 | % | 94.4 | % | 92.5 | % | 1.9 | % | 2.5 | % | ||||||
2.0 & > miles | 1,860 | 3.7 | % | 99.3 | % | 99.6 | % | (0.3 | )% | 2.1 | % | ||||||
Total Same-Communities | 30,387 | 100.0 | % | 95.2 | % | 96.4 | % | (1.2 | )% | 3.0 | % | ||||||
(1) See definition of regions on page 36. |
THIRD QUARTER | 11 |
TOP EdR MARKETS AND STATES BY REVENUE |
*The data above is based on revenue for the twelve months ended September 30, 2017 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, 2017 and excludes properties that were sold during the period. |
THIRD QUARTER | 13 |
NEW SUPPLY AND ENROLLMENT - EdR MARKETS |
EdR Markets: | 2013 | 2014 | 2015 | 2016 | 2017 (1) | 2018 Est (2) | ||||||||||||
New supply as % of enrollment | 2.2 | % | 2.2 | % | 2.0 | % | 1.8 | % | 2.1 | % | 1.8 | % | ||||||
Enrollment growth | 1.3 | % | 1.4 | % | 1.5 | % | 1.5 | % | 1.4 | % | 1.4 | % | ||||||
0.9 | % | 0.8 | % | 0.5 | % | 0.3 | % | 0.7 | % | 0.4 | % | |||||||
Same-community: | ||||||||||||||||||
Occupancy increase (decrease) | 3.0 | % | 2.0 | % | 0.4 | % | (1.1 | )% | (1.2 | )% | ||||||||
Rate increase | 2.0 | % | 2.0 | % | 3.4 | % | 3.4 | % | 3.0 | % | ||||||||
Total leasing revenue growth | 5.0 | % | 4.0 | % | 3.8 | % | 2.3 | % | 1.8 | % | ||||||||
(1) Data includes the existing portfolio plus 2017 developments. The estimated enrollment growth is based on the 3-year enrollment CAGR through 2016 for the included communities. | ||||||||||||||||||
(2) Data includes the existing portfolio plus 2018 developments. The estimated enrollment growth is based on the 3-year enrollment CAGR through 2016 for the included communities. |
THIRD QUARTER | 14 |
OWNED COMMUNITY PROJECTED 2018 NEW SUPPLY AND DEMAND INFORMATION |
Owned Community Projected 2018 New Supply and Demand Information by Region | |||||
Region (2) | % of Owned Beds | Pro Forma EdR NOI% (1) | Enrollment Growth 3 Year CAGR - Universities Served | 2018 New Supply as a % of Enrollment | Variance |
West | 15% | 19% | 1.8% | 2.8% | (1.0)% |
Mid Atlantic | 20% | 22% | 1.5% | 2.2% | (0.7)% |
North | 17% | 15% | 0.2% | 1.2% | (1.0)% |
South Central | 29% | 29% | 1.7% | 1.0% | 0.7% |
Southeast | 12% | 9% | 1.1% | 2.5% | (1.4)% |
Midwest | 7% | 6% | 2.0% | 1.9% | 0.1% |
Total | 100% | 100% | 1.4% | 1.8% | (0.4)% |
Projected 2018 New Supply Sorted by Percentage Increase | University Markets with >5% Increase in 2018 Supply as a % of Enrollment | ||||||
New Supply Growth | University Markets | EdR Beds | Pro Forma EdR NOI %(1) | University | New Supply Increase | Pro Forma EdR NOI %(1) | |
0% | 42% | 47% | 48% | Arizona State University - Phoenix | 5.2% | 9% | |
0.1% to 1.0% | 3% | 1% | 1% | Florida State University/Florida A&M | 7.2% | 2% | |
1.0% - 3.0% | 33% | 26% | 25% | Syracuse University | 6.3% | 2% | |
3.0% - 5.0% | 11% | 10% | 10% | University of Mississippi | 6.3% | 2% | |
> 5.0% | 11% | 16% | 16% | Northern Michigan University | 6.0% | 1% | |
Total | 100% | 100% | 100% | 16% | |||
NOTE: Schedule represents all markets served by EdR communities and includes the 2017 acquisitions and developments and all announced 2018 developments. Data was obtained from the National Center for Education Statistics, AXIOMetrics and local market data. | |||||||
(1) NOI is based on 2017 forecast net operating income with proforma adjustments for 2017 acquisitions and developments that have been operating for less than 12 months. | |||||||
(2) See definition of regions on page 36. |
THIRD QUARTER | 15 |
COMPLETED 2017 DELIVERIES |
(Amounts in thousands, except bed counts) | ||||||||
August 2017 Delivered Communities | ||||||||
Project | Project Type | Bed Count | Budgeted Total Project Development Cost | EdR's Ownership Percentage | ||||
University of Kentucky - University Flats | ONE Plan (1) | 771 | $ | 74,000 | 100% | |||
Boise State University - Sawtooth Hall | ONE Plan (1) | 656 | 39,800 | 100% | ||||
University of Kentucky - Lewis Hall | ONE Plan (1) | 346 | 26,900 | 100% | ||||
Michigan State University - SkyVue | Joint Venture | 824 | 89,900 | 90% | ||||
Texas State University - The Local: Downtown | Joint Venture | 304 | 29,600 | 80% | ||||
Northern Michigan University - The Woods | ONE Plan (1) | 417 | 25,700 | 100% | ||||
Total - August 2017 Delivered Communities | 3,318 | $ | 285,900 | |||||
(1) 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. | ||||||||
NOTE: We estimate that 2017 delivered developments will be completed approximately $4 million under budget. |
THIRD QUARTER | 16 |
OWNED DEVELOPMENT SUMMARY |
(Amounts in thousands, except bed counts) | ||||||||||||||||||||||
Development Cost Funded by EdR's Balance Sheet (Excludes Partner Contribution)(2) | ||||||||||||||||||||||
Active Projects | Project Type | EdR's Ownership Percentage | Bed Count | Estimated Start Date | Anticipated Completion Date | Budgeted Total Project Development Cost | EdR's Economic Ownership Cost(1) | EdR's Remaining Cost to be Funded | ||||||||||||||
Northern Michigan University - The Woods | ONE Plan (3) | 100% | 433 | In progress | January 2018 | $ | 24,600 | $ | 24,600 | $ | 24,600 | $ | 5,400 | |||||||||
University of Pittsburgh | Joint Venture | 80% | 723 | In progress | Summer 2018 | 106,100 | 84,900 | 100,300 | 63,300 | |||||||||||||
Florida State University - Players Club redevelopment | Wholly Owned | 100% | 592 | In progress | Summer 2018 | 38,000 | 38,000 | 38,000 | 34,500 | |||||||||||||
Northern Michigan University - The Woods | ONE Plan (3) | 100% | 379 | In progress | Summer 2018 | 29,000 | 29,000 | 29,000 | 29,000 | |||||||||||||
University of Minnesota - Hub at Minneapolis | Joint Venture | 51% | 707 | In progress | Summer 2018 | 97,900 | 49,900 | 83,500 | 64,300 | |||||||||||||
Arizona State University - Union at Tempe | Joint Venture | 90% | 839 | In progress | Summer 2018 | 164,900 | 148,400 | 159,100 | 91,500 | |||||||||||||
Cornell University - Maplewood | ONE Plan (3) | 100% | 872 | In progress | Summer 2018 | 86,000 | 86,000 | 86,000 | 72,200 | |||||||||||||
Colorado State University - Union on Plum | Joint Venture | 70% | 229 | In progress | Summer 2018 | 28,200 | 19,700 | 25,700 | 18,300 | |||||||||||||
Iowa State University - Union on Lincoln Way | Joint Venture | 70% | 542 | In progress | Summer 2018 | 51,900 | 36,300 | 47,300 | 34,900 | |||||||||||||
Total - 2018 Deliveries | 5,316 | $ | 626,600 | $ | 516,800 | $ | 593,500 | $ | 413,400 | |||||||||||||
University of Hawai'i - Hale Mahana | Joint Venture | 90% | 589 | In progress | Fall 2018 or 2019 | $ | 109,600 | $ | 98,600 | $ | 106,300 | $ | 68,800 | |||||||||
Total - 2019 Deliveries | 589 | $ | 109,600 | $ | 98,600 | $ | 106,300 | $ | 68,800 | |||||||||||||
Oklahoma State University - One on 4th | Joint Venture | 70% | 475 | In progress | TBD | $ | 47,200 | $ | 33,000 | $ | 43,700 | $ | 12,500 | |||||||||
Total Active Projects | 6,380 | $ | 783,400 | $ | 648,400 | $ | 743,500 | $ | 494,700 | |||||||||||||
Recently Awarded | Project Type | Anticipated Completion Date | ||||||||||||||||||||
Lehigh University | ONE Plan (3) | Fall 2019 | ||||||||||||||||||||
Mississippi State University | Possible ONE Plan | Fall 2019 | ||||||||||||||||||||
Cornell University - East Hill Village | ONE Plan (3) | Fall 2020 | ||||||||||||||||||||
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) Represents total project cost multiplied by EdR's ownership percentage, which is reflective of EdR's economic interest in operating results. | ||||||||||||||||||||||
(2) For developments that are consolidated in EdR's financials but less than 100% owned, 100% of the developments costs and debt related to the development is included in EdR's balance sheet. As such, EdR's funding requirement and impact on leverage is equal to total project cost less equity contributed by our joint venture partner. | ||||||||||||||||||||||
(3) 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: | |||||||||||||||||
Total Project Development Cost(2) | Acquisition or Development Costs funded by EdR Balance Sheet (Excludes Partner Contribution)(2) | Less: Costs Incurred to Date(2) | Remaining Capital Needs(2) | ||||||||||||||
2017 Announced Acquisitions(1) | $ | 16 | $ | 16 | $ | — | $ | 16 | |||||||||
2018 Development Deliveries | 627 | 594 | 181 | 413 | |||||||||||||
2019 Development Deliveries | 110 | 106 | 37 | 69 | |||||||||||||
TBD Deliveries | 47 | 44 | 31 | 13 | |||||||||||||
$ | 800 | $ | 760 | $ | 249 | $ | 511 | ||||||||||
Estimated Capital Sources: | |||||||||||||||||
2017 | Thereafter | Capital Sources | |||||||||||||||
Equity Proceeds Available from ATM Forward Sales(3) | $ | 93 | $ | 99 | $ | 192 | |||||||||||
Additional Debt, Including Draws on Revolving Credit Facility(4) | 56 | 263 | 319 | ||||||||||||||
$ | 149 | $ | 362 | $ | 511 | ||||||||||||
Debt to Gross Assets | |||||||||||||||||
September 30, 2017 | Pro Forma for Funding Needs Through December 31, 2017(5) | Pro Forma Assuming All Funding Completed(6) | |||||||||||||||
Debt to gross assets | 25% | 25% | 29% | ||||||||||||||
THIRD QUARTER | 18 |
THIRD-PARTY DEVELOPMENT SUMMARY |
(Amounts in thousands, except bed counts) | |||||||||||||||
THIRD-PARTY PROJECTS | |||||||||||||||
Delivered Project | Bed Count | Project Development Cost | Total Project Fees | Fees Earned Prior Year (1) | Fees Earned Nine Months Ended September 30, 2017 (1) | ||||||||||
East Stroudsburg University - Pennsylvania Ph II | 488 | $ | 45,349 | $ | 1,374 | $ | 338 | $ | 1,036 | ||||||
Texas A&M - Commerce | 490 | 29,925 | 1,260 | 210 | 1,050 | ||||||||||
Shepherd University | 298 | 22,385 | 1,025 | 395 | 630 | ||||||||||
Total | 1,276 | $ | 97,659 | $ | 3,659 | $ | 943 | $ | 2,716 | ||||||
Recently Awarded | Anticipated Completion Date | ||||||||||||||
University of South Florida - St. Petersburg | Fall 2019 or 2020 | ||||||||||||||
University of South Carolina | Fall 2020 - 2024 | ||||||||||||||
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 and ground leases, and obtaining financing. A previously announced third-party development at Thomas More College has been removed from the schedule above, as the Board of Trustees of Thomas More College did not approve the transaction. | |||||||||||||||
(1) Amount may not tie to third-party development services revenue on the statement of operations as this schedule only includes development and construction oversight fees earned on projects during the period. The fees earned above do not include $1.4 million of our portion of cost savings recognized as additional development fees during the nine months ended September 30, 2017. In addition, the schedule above does not reflect $2.5 million of cost overruns recognized in development and management services expenses related to unforeseen circumstances on one of the third-party developments. | |||||||||||||||
THIRD QUARTER | 19 |
CAPITAL STRUCTURE |
as of September 30, 2017 | Principal Outstanding | Weighted Average Interest Rate | Average Term to Maturity (in years) | ||||||||||||
(Amounts in thousands) | |||||||||||||||
Total Debt to Gross Assets | |||||||||||||||
Debt(1) | $ | 811,272 | Variable Rate - Construction Debt | $ | 29,772 | 3.0 | % | 0.1 | |||||||
Gross Assets(2) | 3,289,491 | Fixed Rate - 5 Yr. Unsecured Term Loan(5) | 65,000 | 2.9 | % | 4.3 | |||||||||
Debt to Gross Assets | 24.7 | % | Fixed Rate - 7 Yr. Unsecured Term Loan(5) | 122,500 | 3.5 | % | 3.3 | ||||||||
Fixed Rate - 12 Yr. Unsecured Senior Notes | 75,000 | 4.2 | % | 11.9 | |||||||||||
Net Debt to Gross Assets | Fixed Rate - 15 Yr. Unsecured Senior Notes | 75,000 | 4.3 | % | 14.9 | ||||||||||
Net Debt | $ | 763,810 | Fixed Rate - Unsecured Senior Notes | 250,000 | 4.6 | % | 7.2 | ||||||||
Gross Assets(3) | 3,242,029 | Variable Rate - Unsecured Revolving Credit Facility | 194,000 | 2.5 | % | 1.1 | |||||||||
Net Debt to Gross Assets | 23.6 | % | Debt(1) / Weighted Average | $ | 811,272 | 3.7 | % | 5.8 | |||||||
Less: Cash | 47,462 | ||||||||||||||
Net Debt to Enterprise Value | Net Debt | $ | 763,810 | ||||||||||||
Net Debt | $ | 763,810 | |||||||||||||
Market Equity (4) | 2,729,744 | Interest Coverage (TTM)(6) | 11.2x | ||||||||||||
Enterprise Value | $ | 3,493,554 | Net Debt to EBITDA - Adjusted (TTM)(7) | 3.0x | |||||||||||
Variable Rate Debt to Total Debt | 27.6% | ||||||||||||||
Net Debt to Enterprise Value | 21.9 | % | Undrawn Forward Equity Proceeds(8) | $ | 192,071 | ||||||||||
(1) Excludes unamortized deferred financing costs of $3.2 million. | |||||||||||||||
(2) Excludes accumulated depreciation of $363.4 million. | |||||||||||||||
(3) Excludes accumulated depreciation of $363.4 million and cash of $47.5 million. | |||||||||||||||
(4) Market equity includes 75,751,216 shares of the Company's common stock and 222,737 units outstanding, which are convertible into common shares, and is calculated using $35.93 per share, the closing price of the Company's common stock on September 30, 2017. | |||||||||||||||
(5) 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. In January 2017, the Trust amended the term loans to extend the maturity of the five year tranche by three years to 2022 and reduce the interest rate margin of the seven year tranche by 35 bps. | |||||||||||||||
(6) Equals Adjusted EBITDA of $153.1 million divided by interest expense, net of capitalized interest of $13.7 million. See page 23 for reconciliation to Adjusted EBITDA. | |||||||||||||||
(7) 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. | |||||||||||||||
(8) Represents available proceeds from sales of common stock sold under ATM forward agreements through September 30, 2017. The forward transactions can be settled, shares issued and proceeds received at any time at the Company's option through December 31, 2018. Undrawn proceeds from the completed ATM forward sales are not factored into the metrics above. |
THIRD QUARTER | 20 |
CAPITAL STRUCTURE |
NOTE: At September 30, 2017, the Trust had $192.1 million of undrawn proceeds from shares sold under ATM forward agreements. | ||||||||||||||||||||||||||||||||
Weighted Average Interest Rate of Debt Maturing Each Year (3) | ||||||||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | |||||||||||||||||
Fixed Rate Debt | —% | —% | —% | —% | 3.5% | 2.9% | —% | 4.6% | —% | —% | —% | —% | 4.2% | —% | —% | 4.3% | ||||||||||||||||
Variable Rate Debt | 3.0% | 2.5% | —% | —% | —% | —% | —% | —% | —% | —% | —% | —% | —% | —% | —% | —% | ||||||||||||||||
Total Debt | 3.0% | 2.5% | —% | —% | 3.5% | 2.9% | —% | 4.6% | —% | —% | —% | —% | 4.2% | —% | —% | 4.3% | ||||||||||||||||
(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. | ||||||||||||||||||||||||||||||||
(2) The Company has $150 million of unsecured private placement notes outstanding with an average interest rate of 4.26%. The notes are evenly split between a 12-year and a 15-year maturity. | ||||||||||||||||||||||||||||||||
(3) 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, 2017 | ||||||
(Amounts in thousands) | ||||||
Unsecured Senior Note Covenants(1) | Requirement | Current Ratio | ||||
Total Debt to Total Asset Value | ≤ 60% | 24.7% | ||||
Secured Debt to Total Asset Value | ≤ 40% | 0.9% | ||||
Unencumbered Asset Value to Unsecured Debt | > 150% | 411.3% | ||||
Interest Coverage | > 1.5x | 5.4x | ||||
Calculation of Interest Coverage Ratio: | ||||||
Adjusted Pro Forma EBITDA - TTM: | ||||||
EdR Adjusted EBITDA(2) | $ | 153,144 | ||||
Pro forma Adjustments - acquisitions & dispositions (1) | 1,634 | |||||
Total Adjusted Pro Forma EBITDA - TTM | $ | 154,778 | ||||
Pro Forma Interest Expense - TTM: | ||||||
Interest expense, net of capitalized interest | $ | 13,719 | ||||
Add back: Capitalized interest | 11,475 | |||||
Pro forma adjustments(1) | 3,420 | |||||
Pro forma interest expense - TTM | $ | 28,614 | ||||
Interest Coverage | 5.4x | |||||
(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, 2017 | December 31, 2016 | September 30, 2016 | September 30, 2017 | ||||||||||||||
Net income attributable to common shareholders | $ | 22,062 | $ | 44,924 | $ | 30,791 | $ | 36,195 | |||||||||
Straight line adjustment for ground leases | 3,526 | 4,731 | 3,556 | 4,701 | |||||||||||||
Acquisition costs | 27 | 619 | 413 | 233 | |||||||||||||
Depreciation and amortization | 72,808 | 81,413 | 58,951 | 95,270 | |||||||||||||
Loss on impairment of collegiate housing assets | — | 2,500 | — | 2,500 | |||||||||||||
Gain on sale of collegiate housing assets | (691 | ) | (23,956 | ) | (23,956 | ) | (691 | ) | |||||||||
Interest expense, net of capitalized interest | 10,374 | 15,454 | 12,109 | 13,719 | |||||||||||||
Amortization of deferred financing costs | 1,185 | 1,731 | 1,380 | 1,536 | |||||||||||||
Interest income | (66 | ) | (490 | ) | (429 | ) | (127 | ) | |||||||||
Loss on extinguishment of debt | 22 | 10,611 | 10,611 | 22 | |||||||||||||
Income tax (benefit) expense | (948 | ) | 684 | 224 | (488 | ) | |||||||||||
Other operating (income) expense - change in fair value of contingent consideration liability | (1,204 | ) | 1,046 | (1,100 | ) | 942 | |||||||||||
Noncontrolling interests | (862 | ) | (220 | ) | (414 | ) | (668 | ) | |||||||||
Adjusted EBITDA | $ | 106,233 | $ | 139,047 | $ | 92,136 | $ | 153,144 | |||||||||
Annualize acquisitions, developments and dispositions(1) | — | — | — | 16,185 | |||||||||||||
Pro Forma Adjusted EBITDA | $ | 106,233 | $ | 139,047 | $ | 92,136 | $ | 169,329 | |||||||||
(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, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating income | $ | 3,869 | $ | 1,231 | $ | 30,935 | $ | 30,933 | |||||||
Less: Third-party development services revenue | 1,222 | 778 | 4,193 | 1,728 | |||||||||||
Less: Third-party management services revenue | 858 | 965 | 2,634 | 2,556 | |||||||||||
Less: Other operating income | 1,704 | 1,100 | 1,204 | 1,100 | |||||||||||
Plus: Development and management services expenses | 5,218 | 2,716 | 10,894 | 7,965 | |||||||||||
Plus: General and administrative expenses, development pursuit, acquisition costs and severance | 2,820 | 2,701 | 9,585 | 8,889 | |||||||||||
Plus: Ground leases | 3,437 | 3,224 | 9,459 | 8,829 | |||||||||||
Plus: Depreciation and amortization | 22,449 | 22,336 | 72,808 | 58,951 | |||||||||||
NOI | $ | 34,009 | $ | 29,365 | $ | 125,650 | $ | 110,183 |
(Amounts in thousands) | September 30, 2017 | December 31, 2016 | ||||||
Unsecured debt, excluding unamortized deferred financing costs of $3,191 and $2,824 as of September 30, 2017 and December 31, 2016, respectively | $ | 781,500 | $ | 457,500 | ||||
Mortgage and construction loans, excluding unamortized deferred financing costs of $56 as of December 31, 2016 | 29,772 | 62,576 | ||||||
Total debt, excluding unamortized deferred financing costs | $ | 811,272 | $ | 520,076 | ||||
Total assets | $ | 2,926,079 | $ | 2,506,185 | ||||
Accumulated depreciation(1) | 363,412 | 315,634 | ||||||
Gross assets | $ | 3,289,491 | $ | 2,821,819 | ||||
Debt to gross assets | 24.7 | % | 18.4 | % | ||||
(1) Represents accumulated depreciation on real estate assets. |
THIRD QUARTER | 24 |
UPDATED 2017 GUIDANCE |
(Amounts in thousands, except per share/unit data) | Year ending December 31, 2017 | ||||||
Low End | High End | ||||||
Net income attributable to EdR | $ | 40,550 | $ | 43,550 | |||
Real estate related depreciation and amortization | 94,000 | 94,000 | |||||
Equity portion of real estate depreciation and amortization on equity investees | 2,700 | 2,700 | |||||
Gain on sale of collegiate housing assets | (691 | ) | (691 | ) | |||
Noncontrolling interests | (330 | ) | (330 | ) | |||
Funds from operations ("FFO") available to stockholders and unitholders | $ | 136,229 | $ | 139,229 | |||
FFO adjustments: | |||||||
Loss on extinguishment of debt | 22 | 22 | |||||
Acquisition costs | 27 | 27 | |||||
Change in fair value of contingent consideration liability (1) | (1,204 | ) | (1,204 | ) | |||
Straight-line adjustment for ground leases (2) | 4,700 | 4,700 | |||||
FFO adjustments | 3,545 | 3,545 | |||||
Core funds from operations ("Core FFO") available to stockholders and unitholders | $ | 139,774 | $ | 142,774 | |||
Earnings per share – diluted (3) | $ | 0.51 | $ | 0.55 | |||
FFO per weighted average share/unit (4) | $ | 1.83 | $ | 1.87 | |||
Core FFO per weighted average share/unit (4) | $ | 1.88 | $ | 1.92 | |||
Weighted average shares/units (4) | 74,500 | 74,500 | |||||
(1) This represents the fair value adjustment for The Hub at Madison and Urbane's contingent consideration. | |||||||
(2) 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. | |||||||
(3) The numerator for earnings per share - diluted also includes $2.6 million of accretion of redeemable noncontrolling interests for the year ended December 31, 2017. | |||||||
(4) FFO and Core FFO per weighted average share/unit were computed using the weighted average of all shares and operating partnership units outstanding, regardless of their dilutive impact. |
THIRD QUARTER | 25 |
UPDATED 2017 GUIDANCE |
(Amounts in millions, except per share data) | ||||||||||||||||
2017 Revised Guidance Assumptions | ||||||||||||||||
$ | Shares | Per Share | Notes | |||||||||||||
Midpoint of Core FFO per Original Guidance | $ | 149.8 | 76.8 | $ | 1.95 | |||||||||||
Same-community NOI items: | ||||||||||||||||
January to July | $ | (0.3 | ) | |||||||||||||
August to December | (3.2 | ) | ||||||||||||||
Sale of Oklahoma community | (0.6 | ) | ||||||||||||||
(4.1 | ) | The 2.8% reduction in same-community NOI is primarily due to the previously disclosed reduction in 2017/2018 lease term revenue growth from 4% (midpoint of original guidance) to 1.8% (midpoint of updated guidance) as a result of lower than expected opening occupancies for the communities at Texas Tech University, Syracuse University, the University of Mississippi and the University of Kentucky, and the sale of our University of Oklahoma community that was not in original guidance. | ||||||||||||||
New-community NOI items: | ||||||||||||||||
2016 Acquisitions / Developments | $ | (2.7 | ) | The reduction in guidance for new community NOI from 2016 Acquisitions/Developments is primarily attributed to our University of Wisconsin community, including a $0.6 million (5%) shortfall in 2017/2018 lease term revenue and $1.9 million increase in expenses, primarily real estate taxes. Real estate tax expense has been recorded at the assessed amount, but the assessment is being appealed. | ||||||||||||
Removal of 2017 TBD Acquisitions | (1.0 | ) | Reduction in new community NOI from 2017 Acquisitions is the result of the reduction in 2017 acquisitions from $100 million at midpoint, to $28 million actual. | |||||||||||||
2017 Developments - Oklahoma State University | (1.4 | ) | Postponement of the delivery of the off-campus development at Oklahoma State University. | |||||||||||||
2017 Developments | (1.2 | ) | The reduction in guidance for new community NOI from 2017 Developments other than Oklahoma State University is primarily due to the new delivery at Michigan State University, which opened the 2017/2018 lease term 64% occupied. | |||||||||||||
(6.3 | ) | |||||||||||||||
Other-community NOI | 1.3 | Increase in other community NOI at University Towers, the off-campus freshman style dorm serving North Carolina State University, as a result of achieving 2017/2018 opening occupancy of almost 100% compared to original guidance of 50%. | ||||||||||||||
Third-party development fees | 1.1 | Third-party development fees in excess of guidance, primarily related to incentive development fees earned from completing two third-party developments under budget. | ||||||||||||||
General and administrative expense | (1.8 | ) | Primarily the $2.5 million accrual of expenses related to third-party development construction cost overruns. Any future recoveries will be recognized when realized. | |||||||||||||
All other, net | 1.3 | The net impact of all other non-community related items; primarily non-controlling interests and income taxes. | ||||||||||||||
Lower Share Count Guidance | (2.3 | ) | The estimated weighted average shares outstanding during 2017 has been revised downward by 2.3 million shares to 74.5 million, and the estimated total shares outstanding at December 31, 2017 has been revised downward by 6 million shares to 78.8 million. The reduction in weighted average shares outstanding and total shares outstanding is directly attributable to changes in the total amount of capital required in 2017 to maintain our goal of debt to gross assets of 25% at the end of each quarter. This reduction is primarily as a result of the $72 million reduction in estimated 2017 acquisitions, the unbudgeted sale of our University of Oklahoma community which generated $18 million in proceeds and the timing of development spending. | |||||||||||||
Midpoint of Core FFO Revised Guidance | $ | 141.3 | 74.5 | $ | 1.90 |
THIRD QUARTER | 26 |
UPDATED 2017 GUIDANCE |
(Amounts in millions, except per share data) | ||||||||||||||||||||||||||||
Core FFO | ||||||||||||||||||||||||||||
Original Guidance | Updated Guidance | Difference | ||||||||||||||||||||||||||
Low | High | Low | High | Low | High | % Change | ||||||||||||||||||||||
Core FFO | $ | 146.0 | $ | 153.5 | $ | 139.8 | $ | 142.8 | $ | (6.2 | ) | $ | (10.7 | ) | ||||||||||||||
Midpoint | $149.8 | $141.3 | $(8.5) | (5.7 | )% | |||||||||||||||||||||||
Core FFO per share/unit | $ | 1.90 | $ | 2.00 | $ | 1.88 | $ | 1.92 | $ | (0.02 | ) | $ | (0.08 | ) | ||||||||||||||
Midpoint | $1.95 | $1.90 | $(0.05) | (2.6 | )% | |||||||||||||||||||||||
Core FFO Growth - Midpoint | 21.8% | 14.9% | ||||||||||||||||||||||||||
Core FFO per Share/Unit Growth - Midpoint | 10.4% | 7.3% | ||||||||||||||||||||||||||
Full year weighted average shares | 76.8 | 74.5 | (2.3) | (3.0 | )% | |||||||||||||||||||||||
Total shares outstanding at January 1, 2016 | 73.6 | 73.6 | — | |||||||||||||||||||||||||
Total shares outstanding at December 31, 2016 | 84.8 | 78.8 | (6.0) | (7.1 | )% | |||||||||||||||||||||||
Community Net Operating Income Guidance Assumptions | ||||||||||||||||||||||||||||
Original Guidance | Updated Guidance | Difference | ||||||||||||||||||||||||||
Low | High | Low | High | Low | High | % Change | ||||||||||||||||||||||
Same Communities: | ||||||||||||||||||||||||||||
Revenue - full year | $ | 242.8 | $ | 245.0 | $ | 237.7 | $ | 238.3 | $ | (5.1 | ) | $ | (6.7 | ) | ||||||||||||||
Midpoint | $243.9 | $238.0 | $(5.9) | (1) | (2.4 | )% | ||||||||||||||||||||||
Revenue growth - full year | 2.5 | % | 3.5 | % | 1.6 | % | 1.9 | % | (0.9 | )% | (1.6 | )% | ||||||||||||||||
Midpoint | 3.0% | 1.8% | (1.2)% | |||||||||||||||||||||||||
SS revenue growth pacing: | ||||||||||||||||||||||||||||
First Quarter | 1.0% | 1.4% | 0.4% | |||||||||||||||||||||||||
Second Quarter | 2.5% | 2.1% | (0.4)% | |||||||||||||||||||||||||
Third Quarter | 4.5% | 2.6% | (1.9)% | |||||||||||||||||||||||||
Fourth Quarter | 4.0% | 1.4% | (2.6)% |
THIRD QUARTER | 27 |
UPDATED 2017 GUIDANCE |
Original Guidance | Updated Guidance | Difference | ||||||||||||||||||||||||||
Low | High | Low | High | Low | High | % Change | ||||||||||||||||||||||
Operating expense - full year | $ | 96.2 | $ | 97.2 | $ | 94.6 | $ | 95.2 | $ | (1.6 | ) | $ | (2.0 | ) | ||||||||||||||
Midpoint | $96.7 | $94.9 | $(1.8) | (1) | (1.9 | )% | ||||||||||||||||||||||
Operating expense growth - full year | 3.0 | % | 4.0 | % | 3.5 | % | 4.1 | % | 0.5 | % | 0.1 | % | ||||||||||||||||
Midpoint | 3.5% | 3.8% | 0.3% | |||||||||||||||||||||||||
SS operating expense growth pacing: | ||||||||||||||||||||||||||||
First Quarter | 6.0% | 5.1% | (0.9)% | |||||||||||||||||||||||||
Second Quarter | 3.0% | 4.5% | 1.5% | |||||||||||||||||||||||||
Third Quarter | 3.0% | 3.1% | 0.1% | |||||||||||||||||||||||||
Fourth Quarter | 2.0% | 3.8% | 1.8% | |||||||||||||||||||||||||
Direct operating expenses | 1.0 | % | 2.0 | % | 1.0 | % | 1.5 | % | — | % | (0.5 | )% | ||||||||||||||||
Fixed operating expenses | 9.0 | % | 11.0 | % | 12.0 | % | 13.4 | % | 3.0 | % | 2.4 | % | ||||||||||||||||
Real estate taxes within fixed operating expenses | 13.0 | % | 15.0 | % | 14.5 | % | 15.0 | % | 1.5 | % | — | % | ||||||||||||||||
NOI - full year | $ | 146.6 | $ | 147.8 | $ | 142.8 | $ | 143.4 | $ | (3.8 | ) | $ | (4.4 | ) | ||||||||||||||
Midpoint | $147.2 | $143.1 | $(4.1) | (1) | (2.8 | )% | ||||||||||||||||||||||
NOI growth - full year | 2.0 | % | 3.0 | % | 0.2 | % | 0.7 | % | (1.8 | )% | (2.3 | )% | ||||||||||||||||
Midpoint | 2.5% | 0.5% | (2.0)% | |||||||||||||||||||||||||
SS NOI growth pacing: | ||||||||||||||||||||||||||||
First Quarter | (2.0)% | (0.5)% | 1.5% | |||||||||||||||||||||||||
Second Quarter | 2.0% | 0.4% | (1.6)% | |||||||||||||||||||||||||
Third Quarter | 6.0% | 2.0% | (4.0)% | |||||||||||||||||||||||||
Fourth Quarter | 5.0% | 0.1% | (4.9)% | |||||||||||||||||||||||||
Same Community growth - rest of year: | ||||||||||||||||||||||||||||
Revenue - last 5 months | 3.5 | % | 4.5 | % | 1.3 | % | 2.3 | % | (2.2 | )% | (2.2 | )% | ||||||||||||||||
Midpoint | 4.0% | 1.8% | (2.2)% |
THIRD QUARTER | 28 |
UPDATED 2017 GUIDANCE |
Original Guidance | Updated Guidance | Difference | ||||||||||||||||||||||||||
Low | High | Low | High | Low | High | % Change | ||||||||||||||||||||||
Fourth Quarter: | ||||||||||||||||||||||||||||
Revenue | 4.0% | 1.4% | (2.6)% | |||||||||||||||||||||||||
Operating Expense | 2.0% | 3.8% | 1.8% | |||||||||||||||||||||||||
NOI | 5.0% | 0.1% | (4.9)% | |||||||||||||||||||||||||
(1) The reduction from original same-community revenue, operating expense and NOI guidance includes, $2.6 million, $2.0 million and $0.6 million respectively for the removal of The Reserve on Stinson, which was sold in June of 2017. | ||||||||||||||||||||||||||||
New Communities: | ||||||||||||||||||||||||||||
New Community NOI | $ | 42.8 | $ | 44.6 | $ | 37.2 | $ | 37.6 | $ | (5.6 | ) | $ | (7.0 | ) | ||||||||||||||
Midpoint | $43.7 | $37.4 | $(6.3) | (14.4 | )% | (2) | ||||||||||||||||||||||
Comprised of: | ||||||||||||||||||||||||||||
NOI on 2017 developments and acquisitions | $ | 17.4 | $ | 18.7 | $ | 14.8 | $ | 15.0 | $ | (2.6 | ) | $ | (3.7 | ) | ||||||||||||||
NOI on 2016 developments and acquisitions | $ | 29.5 | $ | 30.0 | $ | 26.5 | $ | 26.7 | $ | (3.0 | ) | $ | (3.3 | ) | ||||||||||||||
Preopening expenses | $4.1 | $4.1 | $— | |||||||||||||||||||||||||
(2) $2.7 million relates to reduced acquisition guidance and delay of Oklahoma State University | ||||||||||||||||||||||||||||
Other Communities: | ||||||||||||||||||||||||||||
Other Community NOI | $2.0 | $3.3 | $1.3 | 65.0 | % | |||||||||||||||||||||||
Preopening expenses related to redevelopment of Players Club, included in above | $0.4 | $0.4 | $— | |||||||||||||||||||||||||
Third Party Development and Management Fees | ||||||||||||||||||||||||||||
Original Guidance | Updated Guidance | Difference | ||||||||||||||||||||||||||
Low | High | Low | High | Low | High | % Change | ||||||||||||||||||||||
Third party development fees | $3.4 | $ | 4.4 | $ | 4.7 | $1.0 | $ | 1.3 | 33.3 | % | ||||||||||||||||||
Third party management fees | $3.2 | $3.5 | $0.3 | 9.4 | % | |||||||||||||||||||||||
THIRD QUARTER | 29 |
UPDATED 2017 GUIDANCE |
G&A and Nonoperating Expenses | ||||||||||||||||||||||||||||
Original Guidance | Updated Guidance | Difference | ||||||||||||||||||||||||||
Low | High | Low | High | Low | High | % Change | ||||||||||||||||||||||
Interest expense before capitalized interest and including amortization of deferred financing costs | $ | 32.0 | $ | 33.0 | $ | 29.3 | $ | 29.7 | $ | (2.7 | ) | $ | (3.3 | ) | ||||||||||||||
Midpoint | $32.5 | $29.5 | $(3.0) | (9.2 | )% | |||||||||||||||||||||||
Capitalized interest | $ | 14.4 | $ | 16.2 | $ | 12.2 | $ | 12.6 | $ | (2.2 | ) | $ | (3.6 | ) | ||||||||||||||
Midpoint | $15.3 | $12.4 | $(2.9) | (19.0 | )% | |||||||||||||||||||||||
General and administrative expenses (including management and development services) | $ | 24.0 | $ | 25.5 | $ | 26.2 | $ | 27.0 | $ | 2.2 | $ | 1.5 | ||||||||||||||||
Midpoint | $24.8 | $26.6 | $1.8 | 7.3 | % | |||||||||||||||||||||||
Ground lease expense | $13.5 | $13.4 | $(0.1) | |||||||||||||||||||||||||
Straight line ground rent add back to Core FFO | $4.7 | $4.7 | $— | |||||||||||||||||||||||||
Depreciation and amortization | $90.6 | $95.3 | $4.7 | |||||||||||||||||||||||||
Depreciation and amortization add back to Core FFO | $88.2 | $93.2 | $5.0 | |||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Original Guidance | Updated Guidance | Difference | ||||||||||||||||||||||||||
Low | High | Low | High | Low | High | |||||||||||||||||||||||
Income tax expense | $0.4 | $(0.7) | $(1.1) | |||||||||||||||||||||||||
Equity in earnings of unconsolidated entities | $0.7 | $0.5 | $(0.2) | |||||||||||||||||||||||||
Core FFO depreciation add back related to unconsolidated entities above | $2.5 | $2.7 | $0.2 | |||||||||||||||||||||||||
Net loss attributable to noncontrolling interests | $0.8 | $1.2 | $0.4 | |||||||||||||||||||||||||
Noncontrolling interest reduction adjustment to FFO | $0.3 | $0.3 | $— | |||||||||||||||||||||||||
THIRD QUARTER | 30 |
UPDATED 2017 GUIDANCE |
Potential Capital Transactions | ||||||||||||||||||||||||||||
Original Guidance | Updated Guidance | |||||||||||||||||||||||||||
Low | High | Low | High | |||||||||||||||||||||||||
Acquisitions | $ | 75.0 | $ | 125.0 | $28.7 | |||||||||||||||||||||||
Dispositions | $— | $17.7 | ||||||||||||||||||||||||||
Equity issuances, including settling ATM forward | $400 | $190 | ||||||||||||||||||||||||||
11.2 million shares | 5.0 million shares | |||||||||||||||||||||||||||
First Quarter | $— | $— | ||||||||||||||||||||||||||
Second Quarter | $110 | $— | ||||||||||||||||||||||||||
Third Quarter | $205 | $110 | ||||||||||||||||||||||||||
Fourth Quarter | $85 | $93 | ||||||||||||||||||||||||||
Private placement notes offering | $150 on 7/1/17 at 4.5% | $150 on 9/1/17 at 4.3% |
THIRD QUARTER | 31 |
COMMUNITY LISTING - OWNED |
Name | Primary University Served | Acquisition/Development Date | # of Beds | Name | Primary University Served | Acquisition/Development Date | # of Beds | |||||||||
Same-Communities | ||||||||||||||||
The Reserve on Perkins | Oklahoma State University | Jan '05 | 732 | The Centre at Overton Park | Texas Tech University | Dec '12 | 400 | |||||||||
The Pointe | Pennsylvania State University | Jan '05 | 984 | The Oaks on the Square | University of Connecticut | Aug '12, Aug '13 | 503 | |||||||||
The Lofts | University of Central Florida | Jan '05 | 730 | 3949 | Saint Louis University | Aug '13 | 256 | |||||||||
The Reserve at Columbia | University of Missouri | Jan '05 | 676 | Lymon T. Johnson Hall (ONE Plan) | University of Kentucky | Aug '13 | 301 | |||||||||
Commons at Knoxville | University of Tennessee | Jan '05 | 708 | Herman Lee Donovan Hall (ONE Plan) | University of Kentucky | Aug '13 | 300 | |||||||||
Campus Creek | University of Mississippi | Feb '05 | 636 | 2400 Nueces (ONE Plan) | University of Texas at Austin | Aug '13 | 655 | |||||||||
Campus Lodge | University of Florida | Jun '05 | 1,115 | Roosevelt Point | Arizona State University - Downtown Phoenix | Aug '13 | 609 | |||||||||
Carrollton Crossing | University of West Georgia | Jan '06 | 336 | The Retreat at State College | Pennsylvania State University | Sept '13 | 587 | |||||||||
River Pointe | University of West Georgia | Jan '06 | 504 | The Cottages on Lindberg | Purdue University | Sept '13 | 745 | |||||||||
The Reserve at Saluki Pointe | Southern Illinois University | Aug '08, Aug '09 | 768 | The Varsity | University of Michigan | Dec '13 | 415 | |||||||||
University Village on Colvin (ONE Plan) | Syracuse University | Aug '09 | 432 | The Lotus | University of Colorado - Boulder | Nov '11, Aug '14 | 235 | |||||||||
GrandMarc at The Corner | University of Virginia | Oct '10 | 641 | 109 Tower | Florida International University | Aug '14 | 542 | |||||||||
Wertland Square | University of Virginia | Mar '11 | 152 | The Oaks on the Square- Ph III | University of Connecticut | Aug '14 | 116 | |||||||||
Jefferson Commons | University of Virginia | Mar '11 | 82 | Frances Jewell Hall (ONE Plan) | University of Kentucky | Aug '14 | 740 | |||||||||
The Berk on College | University of California, Berkeley | May '11 | 122 | Georgia M. Blazer Hall (ONE Plan) | University of Kentucky | Aug '14 | 427 | |||||||||
The Berk on Arch | University of California, Berkeley | May '11 | 43 | Haggin Hall (ONE Plan) | University of Kentucky | Aug '14 | 396 | |||||||||
University Village Towers | University of California, Riverside | Sept '11 | 554 | Chellgren Hall (ONE Plan) | University of Kentucky | Aug '14 | 409 | |||||||||
Irish Row | University of Notre Dame | Nov '11 | 326 | Woodland Glen II (ONE Plan) | University of Kentucky | Aug '14 | 409 | |||||||||
GrandMarc at Westberry Place (ONE Plan) | Texas Christian University | Dec '11 | 562 | The District on Apache | Arizona State University - Tempe | Sept '14 | 900 | |||||||||
Campus West (ONE Plan) | Syracuse University | Aug '12 | 313 | Commons on Bridge | University of Tennessee | June '15 | 150 | |||||||||
East Edge | University of Alabama | Aug '12 | 774 | Oaks on the Square- Ph IV | University of Connecticut | Aug '15 | 391 | |||||||||
The Province | East Carolina University | Sept '12 | 728 | The Retreat at Louisville | University of Louisville | Aug '15 | 656 | |||||||||
The District on 5th | University of Arizona | Oct '12 | 764 | Woodland Glen III (ONE Plan) | University of Kentucky | Aug '15 | 782 | |||||||||
Campus Village | Michigan State University | Oct '12 | 355 | Woodland Glen IV (ONE Plan) | University of Kentucky | Aug '15 | 578 | |||||||||
The Province | Kent State University | Nov '12 | 596 | Woodland Glen V (ONE Plan) | University of Kentucky | Aug '15 | 250 | |||||||||
The Suites at Overton Park | Texas Tech University | Dec '12 | 465 | The Province Boulder | University of Colorado - Boulder | Sept '15 | 317 | |||||||||
Total Same-Communities | 26,167 |
THIRD QUARTER | 32 |
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(1) | University of Mississippi | Aug '13, Aug '16 | 1,018 | Sawtooth Hall (ONE Plan) | Boise State University | Aug '17 | 656 | |||||||||
Lokal(1) | Colorado State University | March '16 | 194 | Lewis Hall (ONE Plan) | University of Kentucky | Aug '17 | 346 | |||||||||
The Hub at Madison(1) | University of Wisconsin | May '16 | 1,038 | SkyVue | Michigan State University | Aug '17 | 824 | |||||||||
Holmes Hall (ONE Plan)(1) | University of Kentucky | Aug '16 | 645 | The Local: Downtown | Texas State University | Aug '17 | 304 | |||||||||
Boyd Hall (ONE Plan)(1) | University of Kentucky | Aug '16 | 496 | The Woods (ONE Plan) | Northern Michigan University | Aug '17 | 417 | |||||||||
The Retreat at Blacksburg(1) | Virginia Tech | Aug '16 | 829 | Total New-Communities | 9,364 | |||||||||||
Pura Vida Place(2) | Colorado State University | Aug '16 | 100 | |||||||||||||
Carriage House(2) | Colorado State University | Aug '16 | 94 | Other-Communities | ||||||||||||
Urbane(2) | University of Arizona | Sept '16 | 311 | University Towers(3) | North Carolina State University | Jan '05 | 889 | |||||||||
Retreat at Corvallis(2) | Oregon State University | Jan '17 | 1,016 | Total Other-Communities | 889 | |||||||||||
319 Bragg(2) | Auburn University | Feb '17 | 305 | |||||||||||||
University Flats (ONE Plan) | University of Kentucky | Aug '17 | 771 | Total Owned-Communities | 36,420 | |||||||||||
(1) The same-community designation for leasing purposes is different than for financial reporting purposes. These communities are considered same-community for 2017/2018 leasing purposes, as the Company managed the leasing process for both the 2016/2017 and 2017/2018 lease cycles. Total same-community beds for leasing purposes is 30,387. | ||||||||||||||||
(2) These properties are considered new for purposes of leasing, as we did not manage the leasing process for the 2016/2017 lease year. | ||||||||||||||||
(3) University Towers moved into other-communities on January 1, 2017 due to an anticipated change in the operations of the property related to the University's new live-on requirement, and is reflected as an other-community in the final leasing results. |
THIRD QUARTER | 33 |
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 | |
Citi | 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 | Ryan Burke | (949) 640-8780 | rburke@greenstreetadvisors.com | |
Goldman Sachs | Andrew Rosivach | (212) 902-2796 | andrew.rosivach@gs.com | |
Hilliard Lyons | Carol Kemple | (502) 588-1839 | ckemple@hilliard.com | |
JMP Securities | Aaron Hecht | (415) 835-3963 | ahecht@jmpsecurities.com | |
J.P. Morgan Securities Inc. | Anthony Paolone | (212) 622-6682 | anthony.paolone@jpmorgan.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 | 34 |
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 (excluding unamortized deferred financing costs) less cash and excludes non income-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: Idaho, Iowa, Oklahoma, Missouri; North: Michigan, Minnesota, Ohio, Indiana, Illinois, Wisconsin; South Central: Texas, Tennessee, Mississippi, Kentucky; Southeast: Florida, Alabama, Georgia; West: Arizona, California, Colorado, Oregon. |
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. |
EdR's Economic Ownership of Developments | Represents total project cost multiplied by EdR's ownership percentage, which is reflective of EdR's economic interest in operating results. |
Development Cost Funded by EdR's Balance Sheet | For developments that are consolidated in EdR's financials but less than 100% owned, 100% of the development costs and debt related to the development is included in EdR's balance sheet. As such, EdR's funding requirement and impact on leverage is equal to total project cost less equity contributed by our joint venture partner. |
THIRD QUARTER | 35 |
SAFE HARBOR STATEMENT |
THIRD QUARTER | 36 |