Campus Crest Communities, Inc. (NYSE: CCG) (the “Company”), a
leading developer, builder, owner and manager of high-quality
student housing properties, today announced results for the three
and twelve months ended December 31, 2013.
Highlights
Fourth Quarter 2013
- Increased Funds From Operations
Adjusted (“FFOA”) per diluted share 5.0%, from $0.20 in the fourth
quarter of 2012 to $0.21
- Delivered same store net operating
income (“NOI”) of $11.2 million at a 92.4% occupancy and 52.1%
margin
- Achieved 46.6% leasing for the
2014/2015 academic year as of February 23, 2014 at all 41 Grove
operating properties compared to 42.7% the prior year, and 60.5% at
the 28 operating Copper Beech properties compared to 67.8% the
prior year
- Commenced construction of The Grove at
Gainesville, a wholly-owned 676-bed, $41.4 million development 0.3
miles from the University of Florida scheduled to be delivered for
the 2014/2015 academic year
- Completed the disposition of four
non-core, wholly-owned student housing properties generating net
proceeds of approximately $50.0 million
- Issued approximately $95.2 million of
its 8.0% Series A cumulative redeemable preferred stock and $100.0
million of the 4.75% senior exchangeable notes due 2018
Full Year 2013
- Increased FFOA per diluted share 6.7%,
from $0.75 for the year ended December, 31 2012 to $0.80
- Achieved same store NOI of $35.0
million at a 91.8% occupancy and 52.8% margin
- Delivered six new Grove properties and
an expansion of an existing Grove property, with a total of 3,756
beds, for the 2013/2014 academic year
- Based on in-place rate and occupancy,
this group of developments is expected to achieve between a 7.5%
and 8.0% weighted average yield
- Commenced or continued progress on
eight new development and two redevelopment projects expected to be
delivered for the 2014/2015 academic year, containing 7,455 beds
with median distance to campus of 0.3 miles
- Increased the quarterly common dividend
to $0.165 per share, an increase of 3.1% on an annualized basis, in
January 2013
- Completed a $312.7 million common stock
offering to fund the staged acquisition of Copper Beech in February
2013
Financial Results for the Three and Twelve Months Ended
December 31, 2013
For the three and twelve months ended December 31, 2013, Funds
From Operations (“FFO”) and FFOA are shown in the table below.
FFO/FFOA
Three Months Ended December 31,
Per share -
diluted
Per share
- diluted
($mm, except per share)
2013
2012 FFO $ 14.2 $ 0.22 $ 7.7 $ 0.20 FFOA1 $ 13.5 $
0.21 $ 7.7 $ 0.20
Twelve Months Ended December 31,
Per share -
diluted
Per share
- diluted
($mm, except per share)
2013
2012 FFO $ 49.3 $ 0.82 $ 25.4 $ 0.72 FFOA1 $ 48.1 $
0.80 $ 26.3 $ 0.75
1 Includes eliminations for the write-off of transaction
costs, development costs, unamortized deferred financing fees and
the fair value adjustments of Copper Beech debt as reflected in the
Q4 2013 Supplemental Analyst Package.
A reconciliation of net income attributable to common
stockholders to FFO and to FFOA can be found at the end of this
release.
For the three months ended December 31, 2013, the Company
reported total revenues of $35.0 million and net income (loss)
attributable to common stockholders of ($12.0) million, compared to
$32.3 million and $1.1 million, respectively, in the same period in
2012. For the twelve months ended December 31, 2013, the Company
reported total revenues of $142.3 million and net income (loss)
attributable to common stockholders of ($4.5) million, compared to
$128.4 million and $6.6 million, respectively, in the same period
in 2012.
Operating Results
For the three and twelve months ended December 31, 2013, results
for wholly-owned same store properties were as follows:
Same Store Results
Three Months Ended
December 31, Twelve Months Ended December 31, ($mm )
2013 2012
Change 2013 2012
Change Number of Assets 28 28 23 23 Number of
Beds 14,920 14,920 11,868 11,868 Occupancy 92.4 % 93.7 % (130) bps
91.8 % 92.4 % (60) bps Total Revenues $ 21.6 $ 21.2 1.6 % $ 66.4 $
65.9 0.8 % NOI $ 11.2 $ 12.3 (8.4 %) $ 35.0 $ 35.9 (2.3 %) NOI
Margin 52.1 % 57.8 % (570) bps 52.8 % 54.4 % (160) bps
Note: Excludes 4 properties sold in December 2013.
The decrease in same-store NOI for the three and twelve months
ended December 31, 2013 was primarily a result of an increase in
bad debt expense of $1.2 million for both the quarter and the
year.
NOI margin is calculated by dividing NOI for the period by total
student housing rental and services revenues for the period. A
reconciliation of net income attributable to common stockholders to
NOI can be found at the end of this release. In addition, details
regarding same store NOI and calculations thereof may be found in
the Supplemental Analyst Package located at
http://investors.campuscrest.com/.
Portfolio Information
As of December 31, 2013, the Company owned interests in 79
properties totaling approximately 43,256 beds across North America.
A summary of the leasing for the 2014 – 2015 academic year
follows:
2014/2015 Academic Year Leasing
Summary
2014-2015 2013-2014 Property
Properties Unit Beds
Signed(1)
% Signed(1) %
Change Operating Wholly-Owned 31 6,184
16,892 8,350 49.4 % 7,859 46.5 % 2.9 % HSRE Joint venture 10 2,086
5,732 2,187 38.2 % 1,797 31.4 % 6.8 %
Total Operating 41 8,270 22,624
10,537 46.6 % 9,656 42.7
% 3.9 % Copper Beech Portfolio
28 5,047 13,177 7,974 60.5
% 8,939 67.8 % (7.3 %)
Total Operating Portfolio
69 13,317 35,801 18,511
51.7 % 18,595 51.9 %
(0.2 %)
Total
2014 Deliveries 10 3,128 7,455
1,303 17.5 % n/a
n/a n/a Note: Excludes
the Toledo, OH redevelopment. 1 As of February 23, 2014 and
February 23, 2013, respectively.
Investment Activity
Development
The Company expects to deliver eight new development projects,
totaling 5,213 beds, for the 2014/2015 academic year, at a total
cost of approximately $384.9 million, of which $214.5 million is
the Company’s share. The assets are located a median of 0.3 miles
to campuses of primary non-flagship and flagship universities.
Redevelopment
The Company expects to deliver two redevelopment projects,
totaling 2,242 beds, for the 2014/2015 academic year, at a total
cost of approximately $166.4 million, of which $58.2 million is the
Company’s share. The two assets are located in downtown Montréal,
Québec.
Acquisitions
On September 30, 2013, the Company entered into an amendment to
the purchase and sale agreement for the Copper Beech portfolio
that, subject to receipt of required third-party lender consents,
enabled the Company to acquire a 67% ownership interest in 30
properties, while deferring ownership in 7 properties until the
Company exercises future purchase options. As of December 31, 2013,
the Company held a 67% effective interest in 28 operating and 2
non-operating properties.
In January 2014, the Company acquired from Harrison Street Real
Estate Capital the remaining 80% interest in The Grove at Denton,
Texas, for approximately $7.7 million.
Dispositions
On December 27, 2013, the Company completed the sale of four
wholly-owned Grove-branded student housing properties. The four
properties were unencumbered and generated net sales proceeds to
the Company of approximately $50.0 million.
Balance Sheet and Capital Markets
On October 9, 2013, the Company closed on two capital markets
offerings:
- $100.0 million through an issuance by
its operating partnership of 4.75% exchangeable senior notes due
2018
- $95.2 million through the re-opening of
the Company's 8.0% Series A cumulative redeemable preferred
stock.
As of December 31, 2013, the Company had $26.7 million of
restricted cash from the asset sales mentioned above that were
structured as a 1031 exchange. Additionally, as of December 31,
2013, the Company had not sold any shares under its $100.0 million
At-the-Market common equity offering program.
Dividends
On January 28, 2014, the Company announced that its Board of
Directors declared its first quarter 2014 common stock dividend of
$0.165 per share. The dividend is payable on April 9, 2014 to
stockholders of record as of March 26, 2014.
The Board of Directors also declared a cash dividend of $0.50
per Series A Cumulative Redeemable Preferred Share for the first
quarter of 2014. The preferred share dividend is payable on April
15, 2014 to stockholders of record as of March 26, 2014.
2014 Earnings Guidance and Outlook
Based on the current expectations and judgment of the Company's
management team, the Company anticipates that fiscal year 2014 FFOA
will be in the range of $0.72 to $0.74 per fully diluted share.
This reflects a blend of 2013/2014 and 2014/2015 academic years as
well as the base case for Copper Beech in the event the Company
does not elect to exercise purchase option one. The following table
provides details of our 2014 guidance:
2014 FFOA Guidance ($mm)
Range Wholly-owned NOI for operating properties1
$57.0 to $59.0 Occupancy 91.0% to 93.0% Total RevPOB $530 to $536
Expected weighted average development yields on 2014/2015 AY
7.5% to 8.0% deliveries (wholly-owned and JVs) FFOA
contribution from JV properties (including 2014 deliveries) $7.3 to
$7.5 FFOA contribution from investment in Copper Beech2
$15.5 to $16.0 Net development, construction and management
services fees3
$4.9
to
$5.1
General and administrative expense $11.9 to $12.3
Overhead D&A
$0.9
Ground lease
$0.6
Interest expense $17.1 to $18.1 Preferred dividends
$12.2
Weighted average fully diluted shares/units outstanding
65.2
1 Includes 32
wholly-owned Grove properties (31 outlined on pg. 19 of the
Supplemental Analyst Package plus The Grove at Denton). 2 Ownership
and cash flow splits as outlined in the amendment to the PSA dated
September 30, 2013. 3 Shown net of taxes.
As a result of certain transactions at the end of 2013 and
assumptions for 2014, the Company expects to have short term
dilution of approximately $0.16 to $0.18 per fully diluted share
that is embedded in the above guidance. This dilution is partially
offset in 2014 by the impact of other items, such as the delivery
of new properties in the third quarter 2014 that were funded by the
2013 transactions. These transactions and assumptions include:
- The impact of the preferred and
exchangeable notes capital raises executed in the fourth quarter
2013, which the Company believes represents a very effective manner
to create liquidity at an attractive blended cost relative to a
common equity issuance;
- The loss of FFO contribution from
recycling capital via the four wholly-owned dispositions in the
fourth quarter 2013; and
- A base case Copper Beech structure in
2014, in the event the Company does not elect to exercise purchase
option one. This would result in the preferred payment expiring on
March 18th, ownership remaining at 67% in the 30 properties until
August 18th, and reverting to a 48% ownership across all 37
properties with no promoted cash flows thereafter. The Company
thinks this is an appropriate and conservative way to guide, and
will update if and when an agreement is reached.
Our FFOA guidance excludes non-recurring and non-cash items,
such as the write-off of deferred financing costs as a result of
early payoff of financings, potential impairments, transaction
costs associated with the Copper Beech investment and other
acquisitions and the mark-to-market adjustment of the Copper Beech
debt. Additionally, it excludes the potential impact of any asset
dispositions or capital raises.
Conference Call Details
The Company will host a conference call on Thursday, February
27, 2014, at 9:00 a.m. (EST) to discuss the financial results, as
well as the Company's outlook for 2014.
The call can be accessed live over the phone by dialing
877-407-0789, or for international callers, 201-689-8562. A replay
will be available shortly after the call and can be accessed by
dialing 877-870-5176, or for international callers, 858-384-5517.
The pin number for the replay is 13574886. The replay will be
available until March 6, 2014.
Interested parties may also listen to a simultaneous webcast of
the conference call by logging onto the Company's website at
http://investors.campuscrest.com/. A recording of the call will
also be available on the Company's website following the call.
Supplemental Schedules
The Company has published a Supplemental Analyst Package in
order to provide additional disclosure and financial information
for the benefit of the Company’s stakeholders. These can be found
under the “Earnings Center” tab in the Investors section of the
Company’s web site at http://www.campuscrest.com/.
About Campus Crest Communities, Inc.
Campus Crest Communities, Inc. is a leading developer, builder,
owner and manager of high-quality student housing properties
located close to college campuses in targeted markets. Pro forma
for the Copper Beech restructure, the Company has ownership
interests in 80 student housing properties and over 43,000 beds
across North America, of which 70 are operating and 10 are
development or redevelopment properties. The Company is an equity
REIT that differentiates itself through its vertical integration
and consistent branding across the portfolio through three unique
brands targeting different segments of the college student
population. The Grove® brand offers more traditional apartment
floor plans and focuses on customer service, privacy, on-site
amenities and a proprietary residence life program. The Copper
Beech brand and townhome product offers more residential-type
living to students looking for a larger floor plan with a front
door and back porch. The evo brand provides urban students with a
luxury student housing option with all the conveniences of city
living. Additional information can be found on the Company's
website at http://www.campuscrest.com/.
Forward-Looking Statements
This press release, together with other statements and
information publicly disseminated by the Company, contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends
such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with these safe harbor
provisions. Forward-looking statements relate to expectations,
beliefs, projections, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that
are not historical facts. In some cases, you can identify
forward-looking statements by the use of forward-looking
terminology such as “may,” “will,” “should,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts” or
“potential” or the negative of these words and phrases or similar
words or phrases which are predictions of or indicate future events
or trends and which do not relate solely to historical matters.
Forward-looking statements in this press release include, among
others, the performance of properties in occupancy and yield
targets, outlook and guidance for full year 2014 FFOA and the
related underlying assumptions, growth and development
opportunities, leasing activities, financing strategies, and
development and construction projects. You should not rely on
forward-looking statements since they involve known and unknown
risks, uncertainties, assumptions and contingencies, many of which
are beyond the Company’s control that may cause actual results to
differ significantly from those expressed in any forward-looking
statement. All forward-looking statements reflect the Company’s
good faith beliefs, assumptions and expectations, but they are not
guarantees of future performance. Furthermore, except as otherwise
required by federal securities laws, the Company disclaims any
obligation to publicly update or revise any forward-looking
statement to reflect changes in underlying assumptions or factors,
new information, data or methods, future events or other changes.
For a further discussion of these and other factors that could
cause the Company’s future results to differ materially from any
forward-looking statements, see the risk factors discussed in the
Company’s most recent Annual Report on Form 10-K, as updated in the
Company’s Quarterly Reports on Form 10-Q.
CAMPUS CREST COMMUNITIES CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) (in $000s)
December 31, December 31,
2013
2012 Assets Investment in real estate, net:
Student housing properties $ 716,285 $ 669,387 Accumulated
depreciation (102,356 ) (97,820 ) Development in process
91,184 50,781 Investment in real estate, net
705,113 622,348 Investment in unconsolidated entities1 324,838
22,555 Cash and cash equivalents 32,054 5,970 Restricted cash 2
32,636 3,902 Student receivables, net 2,825 2,193 Cost and earnings
in excess of construction billings 42,803 23,077 Other assets, net
42,410 16,275
Total assets $
1,182,679 $ 696,320
Liabilities and equity
Liabilities: Mortgage and construction loans $ 205,531 $ 218,337
Line of credit and other debt 207,952 75,375 Accounts payable and
accrued expenses 62,448 45,634 Construction billings in excess of
cost and earnings 600 49 Other liabilities 11,166
12,023 Total liabilities 487,697
351,418 Equity: Preferred stock $ 61 $ 23 Common stock 645
386 Additional common and preferred paid-in capital 773,896 377,180
Accumulated deficit and distributions (84,142 ) (37,047 )
Accumulated other comprehensive loss (71 ) (58 )
Total stockholders' equity 690,389 340,484 Noncontrolling interests
4,593 4,418 Total equity 694,982
344,902
Total liabilities and equity $
1,182,679 $ 696,320 1 As of December 31, 2013,
includes the Company’s investment in Copper Beech equating to a
67.0% effective ownership interest in 30 properties. 2 As of
December 31, 2013, includes approximately $26,700 of cash held in
escrow from the sale of the four properties on December 27, 2013.
CAMPUS CREST COMMUNITIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (in $000s, except per share data)
Three Months Ended December 31, Twelve Months Ended
December 31, 2013
2012 $ Change
2013 2012
$ Change Revenues: Student housing
rental $ 23,518 $ 20,502 $ 3,016 $ 87,635 $ 71,211 $ 16,424 Student
housing services 972 703 269 3,615 2,880 735 Development,
construction and management services 10,494
11,133 (639 ) 51,069 54,295
(3,226 )
Total revenues 34,984 32,338 2,646
142,319 128,386 13,933
Operating expenses: Student housing
operations 10,974 8,950 2,024 40,346 32,633 7,713 Development,
construction and management services 8,360 10,234 (1,874 ) 46,759
50,493 (3,734 ) General and administrative 2,667 2,320 347 10,658
8,821 1,837 Transaction costs1 286 - 286 1,121 - 1,121 Ground
leases 88 54 34 249 217 32 Inpairment of unconsolidated joint
venture2 312 - 312 312 - 312 Depreciation and amortization
6,547 5,551 996 23,700
20,693 3,007
Total operating
expenses 29,234 27,109 2,125 123,145 112,857 10,288 Equity in
earnings (loss) of unconsolidated entities3, 4 (7,335 )
78 (7,413 ) (3,727 ) 361
(4,088 )
Operating income (1,585 )
5,307 (6,892 ) 15,447 15,890
(443 )
Nonoperating income (expense): Interest
expense, net5 (4,204 ) (3,150 ) (1,054 ) (12,969 ) (11,545 ) (1,424
) Other income6 (5 ) (175 ) 170
1,414 6,144 (4,730 )
Total
nonoperating expense, net (4,209 ) (3,325 )
(884 ) (11,555 ) (5,401 ) (6,154 )
Net income before income tax benefit (expense) (5,794 )
1,982 (7,776 ) 3,892 10,489 (6,597 ) Income tax benefit (expense)
420 (26 ) 446 727
(356 ) 1,083
Income from continuing
operations (5,374 ) 1,956 (7,330 ) 4,619 10,133 (5,514 ) Income
(loss) from discontinued operations7 (3,966 ) 312
(4,278 ) (3,001 ) 665
(3,666 )
Net income (9,340 ) 2,268 (11,608 ) 1,618 10,798
(9,180 ) Net income (loss) attributable to noncontrolling interests
(88 ) 8 (96 ) (34 ) 46 (80 ) Dividends on preferred stock
2,733 1,150 1,583 6,183
4,114 2,069
Net income (loss)
attributable to common stockholders ($11,985 ) $ 1,110
($13,095 ) ($4,531 ) $ 6,638
($11,169 )
Net income (loss) per share attributable to
common stockholders - Basic and Diluted: ($0.19 ) $ 0.03 ($0.08
) $ 0.19
Weighted average common shares outstanding:
Basic 64,503 38,479 59,984 34,781
Diluted 64,937
38,994 60,418 35,217
1 For the three months ended December 31,
2013, includes $286 of Copper Beech-related transaction costs. For
twelve months ended December 31, 2013, includes $1,070 of Copper
Beech-related transaction costs and $51 of Toledo, OH-related
transaction costs.
2 For the three and twelve months ended December 31, 2013,
represents a $312 impairment at The Grove at Denton for which the
Company acquired its joint venture partner's interest in January
2014. 3 For the three and twelve months ended December 31, 2013,
includes results from the Company’s investment in Copper Beech. The
Company made its initial investment on March 18, 2013 and
subsequently made additional investments. On September 30, 2013,
the Company entered into an amendment to the purchase and sale
agreement that, subject to receipt of required third-party lender
consents, enabled the Company to acquire a 67% ownership interest
in 30 properties, while deferring ownership in 7 properties until
the Company exercises future purchase options. As of December 31,
2013, the Company held a 67% effective interest in 28 operating and
2 non-operating properties. 4 For the three months and twelve
months ended December 31, 2013, includes $906 in transaction costs
related to evo à Square Victoria. 5 For the three and twelve months
ended December 31, 2013, includes an approximate $236 non-cash
charge related to the write-off of unamortized deferred financing
fees. For the three and twelve months ended December 31, 2012,
includes an approximate $6 and $966, respectively, non-cash charge
related to the write-off of unamortized deferred financing fees. 6
For the twelve months ended December 31, 2013, includes interest
income from the 8.5%, $31,700 loan made to existing investors in
Copper Beech on March 18, 2013. In conjunction with the September
30, 2013 amendment to the purchase and sale agreement, the $31,700
loan was repaid by Copper Beech.
7 For the three and twelve months ended
December 31, 2013, includes a $4,729 impairment from the
disposition of The Grove at Jacksonville, The Grove at Jonesboro,
The Grove at Wichita, and The Grove at Wichita Falls on December
27, 2013.
CAMPUS CREST COMMUNITIES
RECONCILIATION OF NET
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS TO FUNDS FROM
OPERATIONS ("FFO") & NET OPERATING INCOME ("NOI")
(unaudited) (in $000s, except per share data) Three
Months Ended December 31, Twelve Months Ended December
31, 2013
2012 $ Change 2013
2012 $ Change Net income
(loss) attributable to common stockholders ($11,985 ) $ 1,110
($13,095 ) ($4,531 ) $ 6,638 ($11,169 ) Net income (loss)
attributable to noncontrolling interests (88 ) 8 (96 ) (34 ) 46 (80
) Impairment of disposed assets1 4,729 - 4,729 4,729 - 4,729
Impairment of investment in unconsolidated joint venture2 312 - 312
312 - 312 Gain on purchase of joint venture properties3 - - - -
(6,554 ) 6,554 Real estate related depreciation and amortization
6,910 6,202 708 25,503 23,521 1,982 Real estate related
depreciation and amortization - unconsolidated entities
14,354 378 13,976 23,271
1,731 21,540
FFO available to
common shares and OP units4, 5, 6
14,232 7,698
6,534 49,250 25,382 23,868 Elimination
of transactions costs 286 - 286 1,121 - 1,121 Elimination of
transactions costs included in equity in earnings - - - 906 - 906
Elimination of write-off of development costs 175 - 175 175 - 175
Elimination of FV adjustment of CB debt (1,411 ) - (1,411 ) (3,576
) - (3,576 ) Elimination of non-cash charge from the write-off of
unamortized deferred financing fees 236 6
230 236 966
(730 )
Funds from operations adjusted (FFOA)
available to commonshares and OP units
$ 13,518 $ 7,704 $
5,814 $ 48,112 $
26,348 $ 21,764 FFO per share -
diluted4, 5, 6 $ 0.22 $ 0.20 $ 0.02 $ 0.82 $ 0.72 $ 0.10 FFOA per
share - diluted $ 0.21 $ 0.20 $ 0.01 $ 0.80 $ 0.75 $ 0.05 Weighted
average common shares and OP units outstanding - diluted 64,937
38,994 60,418 35,217
Three Months Ended December 31,
Twelve Months Ended December 31, 2013(1
)
2012(1 ) 2013(1 ) 2012(1 ) Net income (Loss)
attributable to common stockholders ($11,985 ) $ 1,110 ($4,531 ) $
6,638 Net income (Loss) attributable to noncontrolling interests
(88 ) 8 (34 ) 46 Preferred stock dividends 2,733 1,150 6,183 4,114
Income tax benefit (expense) (420 ) 26 (727 ) 356 Other income
(expense)2 5 175 (1,414 ) (6,144 ) (Income) loss on discontinued
operations 3,966 (312 ) 3,001 (665 ) Interest expense 4,204 3,150
12,969 11,545 Equity in earnings of unconsolidated entities 7,335
(78 ) 3,727 (361 ) Depreciation and amortization 6,547 5,551 23,700
20,693 Impairment of investment in unconsolidated joint venture 312
- 312 - Ground lease expense 88 54 249 217 General and
administrative expense 2,667 2,320 10,658 8,821 Transaction costs
286 0 1,121 - Development, construction and management services
expenses 8,360 10,234 46,759 50,493 Development, construction and
management services revenues (10,494 ) (11,133 )
(51,069 ) (54,295 )
Total NOI $
13,516 $ 12,255 $
50,904 $ 41,458 Same store
properties NOI7 $ 11,221 $ 12,255 $ 35,046 $ 35,875 New properties
NOI7 $ 1,531 $ 0 $ 14,293 $ 5,583 The Grove at Pullman & Toledo
NOI8 $ 764 $ 0 $ 1,565 $ 0 1 For the three and twelve months ended
December 31, 2013, represents a $4,724 impairment from the
dispostion of The Grove at Jacksonville, The Grove at Jonesboro,
The Grove at Wichita, and The Grove at Wichita Falls on December
27, 2013. 2 For the three and twelve months ended December 31,
2013, represents a $312 impairment at The Grove at Denton for which
the Company acquired its joint venture partner's interest in
January 2014. 3 For the three and nine months ended December 31,
2012, represents a $6,554 gain from the purchase of our joint
venture partner's interest in The Grove at Valdosta and The Grove
at Moscow. 4 For the three and twelve months ended December 31,
2013, includes results from the Company’s investment in Copper
Beech. The Company made its initial investment on March 18, 2013
and subsequently made additional investments. On September 30,
2013, the Company entered into an amendment to the purchase and
sale agreement that, subject to receipt of required third-party
lender consents, enabled the Company to acquire a 67% ownership
interest in 30 properties, while deferring ownership in 7
properties until the Company exercises future purchase options. As
of December 31, 2013, the Company held a 67% effective interest in
28 operating and 2 non-operating properties. 5 For the three months
ended December 31, 2013, includes $286 of transaction costs, the
write-off of $175 of development costs and a $1,187 fair value
adjustment of Copper Beech’s debt. For twelve months ended December
31, 2013, includes $2,027 of transaction costs, the write-off of
$175 of development costs and a $3,352 fair value adjustment of
Copper Beech’s debt. 6 For the three and twelve months ended
December 31, 2013 and 2012, includes non-cash charges related to
the write-off of unamortized deferred financing fees associated
with construction debt paid-off prior maturity. 7 "Same store"
properties are our wholly-owned operating properties acquired or
placed in-service prior to the beginning of the earliest period
presented and owned by us and remaining in service through the end
of the latest period presented or period being analyzed. "New
properties" are our wholly-owned operating properties that we
acquired or placed in service after the beginning of the earliest
period presented or period being analyzed. 8 For the three and
twelve months ended December 31, 2013, includes NOI contribution
from the operations of The Grove at Pullman and the Toledo,
OH-redevelopment, as well as business interruption insurance
proceeds from The Grove at Pullman.
Non-GAAP Financial Measures
FFO and FFOA
FFO is a non-GAAP financial measure. We calculate FFO in
accordance with the definition that was adopted by the Board of
Governors of NAREIT. FFO, as defined by NAREIT, represents net
income (loss) determined in accordance with U.S. GAAP, excluding
extraordinary items as defined under GAAP and gains or losses from
sales of previously depreciated operating real estate assets, plus
specified non-cash items, such as real estate asset depreciation
and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. In addition, in October 2011,
NAREIT communicated to its members that the exclusion of impairment
write-downs of depreciable real estate is consistent with the
definition of FFO.
We use FFO as a supplemental performance measure because, in
excluding real estate-related depreciation and amortization and
gains and losses from property dispositions, it provides a
performance measure that, when compared year over year, captures
trends in occupancy rates, rental rates and operating expenses. We
also believe that, as a widely recognized measure of the
performance of equity REITs, FFO will be used by investors as a
basis to compare our operating performance with that of other
REITs. However, because FFO excludes depreciation and amortization
and captures neither the changes in the value of our properties
that result from use or market conditions nor the level of capital
expenditures necessary to maintain the operating performance of our
properties, all of which have real economic effects and could
materially and adversely impact our results of operations, the
utility of FFO as a measure of our performance is limited.
While FFO is a relevant and widely used measure of operating
performance of equity REITs, other equity REITs may use different
methodologies for calculating FFO and, accordingly, FFO as
disclosed by such other REITs may not be comparable to FFO
published herein. Therefore, we believe that in order to facilitate
a clear understanding of our historical operating results, FFO
should be examined in conjunction with net income (loss) (computed
in accordance with U.S. GAAP) as presented in the consolidated
financial statements included elsewhere in this document. FFO
should not be considered as an alternative to net income (loss)
(computed in accordance with U.S. GAAP) as an indicator of our
properties’ financial performance or to cash flow from operating
activities (computed in accordance with U.S. GAAP) as an indicator
of our liquidity, nor is it indicative of funds available to fund
our cash needs, including our ability to pay dividends or make
distributions.
FFOA is a non-GAAP financial measure. In addition to FFO, we
believe it is also a meaningful measure of our performance to
adjust FFO to exclude the write-off of unamortized deferred
financing fees, transaction costs, the write-off of development
cost and fair value debt adjustments on equity method investments.
Excluding the write-off of unamortized deferred financing fees,
transaction costs and fair value debt adjustments on equity method
investments adjusts FFO to be more reflective of operating results
prior to capital replacement or expansion, debt service obligations
or other commitments and contingencies.
NOI
NOI is a non-GAAP financial measure. We calculate NOI by adding
back (or subtracting from) to net income (loss) attributable to
common stockholders the following expenses or charges: income tax
expense, interest expense, equity in loss of unconsolidated
entities, preferred stock dividends, depreciation and amortization,
transaction costs, ground lease expense, general and administrative
expense and development, construction and management services
expense. The following income or gains are then deducted from net
income (loss) attributable to common stockholders, adjusted for add
backs of expenses or charges: equity in earnings of unconsolidated
entities, income tax benefit, other income, and development,
construction and management services revenue. We believe these
adjustments help provide a performance measure, when compared year
over year, that illustrates the operating results of our
wholly-owned properties and captures trends in student housing
rental and services income and student housing operating
expenses.
NOI excludes multiple components of net income (loss) (computed
in accordance with U.S. GAAP) and captures neither the changes in
the value of our properties that result from use or market
conditions nor the level of capital expenditures necessary to
maintain the operating performance of our properties, all of which
have real economic effects and could materially and adversely
impact our results of operations. Therefore, the utility of NOI as
a measure of our performance is limited. Additionally, other
companies, including other equity REITs, may use different
methodologies for calculating NOI and, accordingly, NOI as
disclosed by such other companies may not be comparable to NOI
published herein. Therefore, we believe that in order to facilitate
a clear understanding of our historical operating results, NOI
should be examined in conjunction with net income (loss) (computed
in accordance with U.S. GAAP) as presented in the consolidated
financial statements included elsewhere in this document. NOI
should not be considered as an alternative to net income (loss)
(computed in accordance with U.S. GAAP) as an indicator of our
properties’ financial performance or to cash flow from operating
activities (computed in accordance with U.S. GAAP) as an indicator
of our liquidity, nor is it indicative of funds available to fund
our cash needs, including our ability to pay dividends or make
distributions.
Campus Crest Communities, Inc.Thomas Nielsen, Investor
Relations704-496-2571, Investor.Relations@CampusCrest.com
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