United
States
Securities And Exchange Commission
Washington, D.C. 20549
______________
FORM 8-K
______________
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of Report (Date of earliest event
reported): February 15, 2015
CAMPUS
CREST COMMUNITIES, INC.
(Exact Name of Registrant as Specified
in Its Charter)
Maryland |
001-34872 |
27-2481988 |
(State or other jurisdiction
of incorporation or organization) |
(Commission File Number) |
(IRS Employer
Identification No.) |
2100 Rexford Road, Suite 414 |
|
Charlotte, North Carolina |
28211 |
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s telephone number,
including area code: (704) 496-2500
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations
and Financial Condition.
On February 26, 2015, Campus Crest Communities,
Inc. (the “Company”) issued a press release announcing its results of operations for the three months and year ended
December 31, 2014. A copy of such press release is furnished as Exhibit 99.1 to this current report. A copy of the Company’s
Fourth Quarter 2014 Supplemental Analyst Package referenced in such press release is furnished as Exhibit 99.2 to this current
report.
The information contained in Item 2.02
of this current report on Form 8-K, including Exhibits 99.1 and 99.2, is furnished pursuant to Item 2.02 of Form 8-K and shall
not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to
the liabilities of that section. Furthermore, the information in Item 2.02 of this current report on Form 8-K, including Exhibits
99.1 and 99.2, shall not be deemed to be incorporated by reference in the filings of the registrant under the Securities Act of
1933.
Item 5.02 Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Mr. Angel Herrera as
Chief Operating Officer
On February 20, 2015, Angel Herrera tendered
his resignation as Chief Operating Officer of the Company, effective on February 28, 2015. Mr. Herrera’s resignation was
not the result of any dispute or disagreement with the Company regarding the Company’s operations, policies or practices,
but rather was a result of Mr. Herrera’s desire to pursue other opportunities closer to his family’s home in the southwest.
In connection with Mr. Herrera’s
resignation, the Company and Mr. Herrera entered into a Separation Agreement, effective as of February 28, 2015 (the
“Separation Agreement”). In addition to providing for the termination of Mr. Herrera’s employment as Chief
Operating Officer, the Separation Agreement provides that Mr. Herrera will receive the following compensation and
benefits:
| · | a cash payment of $122,566.12, less payroll deductions, to be paid by March 10, 2015; and |
| · | vesting of 41,137 shares of unvested restricted stock awards held by Mr. Herrera that were granted
to him during 2014. |
Under the Separation Agreement, Mr. Herrera
released and discharged, and covenanted not to sue, the Company or any of its affiliates, subsidiaries, parent companies, predecessors,
successors and assigns or any of their respective officers, directors, employees, shareholders and other agents and related parties
from any and all claims of any nature which Mr. Herrera now has or may later claim to have against the foregoing parties, whether
known or unknown to him, resulting from anything that occurred prior to the date of the Separation Agreement. Mr. Herrera continues
to be bound by the obligations, including post-termination obligations, under the Confidentiality and Noncompetition Agreement
made and entered into as of October 27, 2014, which agreement has been filed previously as Exhibit 10.2 to the Company’s
Current Report on Form 8-K filed on October 31, 2014.
Appointment of Mr. Aaron S. Halfacre as
President
As previously announced, the Board of Directors
of the Company appointed Aaron S. Halfacre, the Company’s Executive Vice President and Chief Investment Officer, to the additional
role of President of the Company effective February 15, 2015. Mr. Halfacre has over 16 years of real estate and investment management
experience and was most recently with Cole Real Estate Investments, a publicly traded net lease REIT that subsequently merged into
American Realty Capital Properties, where he was Head of Strategic Relations overseeing both corporate strategy and capital market
relationships. Prior to Cole, he held senior leadership roles at BlackRock, the world's largest investment manager, to include
COO within their global opportunity equities team and the dual roles of Chief of Staff and Head of Product Development in their
institutional real estate group. Earlier, he worked at Green Street Advisors, the leading independent REIT research firm, where
he first established his long-standing relationships with the REIT investment community. Mr. Halfacre is a CFA® charterholder,
has an MBA in finance from Rice University and holds an undergraduate degree in accounting from College of Santa Fe. Mr. Halfacre
is 42 years old.
Item 9.01 Financial Statements and
Exhibits.
Exhibit
No. |
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Exhibit
Description |
99.1 |
|
Press release, dated February 26, 2015, issued by Campus Crest Communities, Inc., providing the results of operations for the three months and year ended December 31, 2014 |
99.2 |
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Campus Crest Communities, Inc. Fourth Quarter 2014 Supplemental Analyst Package |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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CAMPUS CREST COMMUNITIES, INC. |
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By: |
/s/ Scott R. Rochon |
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Scott R. Rochon |
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Acting Chief Financial Officer |
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and Chief Accounting Officer |
Dated: February 26, 2015
Exhibit Index
Exhibit
Number |
Description |
99.1 |
Press release, dated February 26, 2015, issued by Campus Crest Communities, Inc., providing the results of operations for the three months and year ended December 31, 2014 |
99.2 |
Campus Crest Communities, Inc. Fourth Quarter 2014 Supplemental Analyst Package |
Exhibit
99.1
CCG Announces Fourth Quarter 2014 Results
- Revenues Increased 16.0% and NOI Improved 13.4% in Fourth Quarter -
- Revenue Grew 15.9% and NOI Increased 15.3% for Full Year 2014 -
- Company Advances its Repositioning and Initiates Strategic Review -
CHARLOTTE, N.C., Feb. 26, 2015 /PRNewswire/ -- Campus Crest Communities, Inc. (NYSE: CCG) (the "Company" or "Campus Crest"), an owner and manager of high-quality student housing properties, today announced results for the three and twelve months ended December 31, 2014.
On November 4, 2014, the Company announced a strategic repositioning expressly focused on improving shareholder value. The Company declared its intent to discontinue all internal construction and development to
focus on property operations, entered into a definitive agreement to conclude the Copper Beech transaction, initiated a process to identify cost savings, and acted upon a commitment to improve balance sheet strength and clarity.
In less than 100 business days, the Company has advanced its strategic repositioning by taking multiple actions, to include:
- Acquired the remaining interest in 32 properties in the Copper Beech portfolio, which is expected to generate approximately $20 million of incremental net operating income.
- Executed a highly competitive undeveloped land parcel sales process garnering over 30 qualified offers and resulting in net sale proceeds of $28.4 million, on which it expects to recognize a gain of over $4 million when reported in 1Q2015.
- Identified approximately $14 million of near-term savings in corporate cash G&A and overhead burden through the elimination of staff positions, numerous cost reductions, and enhanced expense policies.
- Discontinued the internal construction and development business, thereby materially improving the Company's risk profile, eliminating future development capital needs and increasing focus on ongoing property operations.
- Declared a 45% reduction in the annual dividend rate producing nearly $5 million of immediate cash savings for the 4Q14 dividend payment and meaningful cash savings going forward.
- Established a broad review of multiple strategic alternatives, which could include such potential outcomes as a key investment in, or the acquisition of, the Company.
The fourth quarter 2014 results presented in the accompanying Supplemental Analyst Package reflect changes designed to clarify the financial transition associated with the Company's strategic repositioning. Additionally, the Company has, in an effort to assist investor evaluation, prepared a 2015 outlook.
Financial Highlights for the Three and Twelve Months Ended December 31, 2014
For the three and twelve months ended December 31, 2014, revenue, revenue per occupied bed, net operating income ("NOI") and Funds From Operations Adjusted ("FFOA") are shown in the table below.
Financial Highlights |
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| Three Months Ended December 31, |
| Twelve Months Ended December 31, |
($'000, except per share/bed data) |
| 2014 | 2013 | Change |
| 2014 | 2013 | Change |
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Total Revenues |
| $28,731 | $24,768 | 16.0% |
| $106,741 | $92,070 | 15.9% |
Total RevPoB (wholly owned) |
| 531 | 527 | 0.7% |
| 528 | 520 | 1.6% |
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NOI |
| 15,290 | 13,482 | 13.4% |
| 58,715 | 50,904 | 15.3% |
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FFOA |
| 3,064 | 13,515 | (77.3%) |
| 31,292 | 48,112 | (35.0%) |
FFOA per Share |
| $0.05 | $0.21 | (76.2%) |
| $0.48 | $0.80 | (40.0%) |
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A reconciliation of the net income attributable to common stockholders to FFOA can be found at the end of this release.
The discontinued operations associated with the unwinding of the Company's construction and development business, along with select activities of the strategic repositioning, produced results for the three months ended December 31, 2014, that do not allow for normal, run-rate characterization.
Property Leasing Results for Academic Year 2015/2016
The following tables highlight the leasing activity for the 2015/2016 academic year as of February, 20, 2015:
Preleasing Update |
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| Preleasing as of Feb. 20, |
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| Properties |
| Beds |
| AY '14/'15 |
| AY '15/'16 |
| Change |
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Same Store Properties by Occupancy |
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Tier 1 (98%+) |
| 29 |
| 14,828 |
| 59.4% |
| 58.7% |
| (0.7%) |
Tier 2 (95% to 97.9%) |
| 5 |
| 2,818 |
| 37.7% |
| 42.8% |
| 5.1% |
Tier 3 (90% to 94.9%) |
| 13 |
| 6,108 |
| 38.5% |
| 39.9% |
| 1.4% |
Tier 4 (Below 90%) |
| 26 |
| 13,780 |
| 38.8% |
| 40.0% |
| 1.2% |
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Total Same Store Properties |
| 73 |
| 37,534 |
| 46.8% |
| 47.6% |
| 0.8% |
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Same Store Properties By Ownership |
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Wholly Owned |
| 32 |
| 17,476 |
| 46.1% |
| 46.9% |
| 0.8% |
Joint Venture |
| 8 |
| 4,536 |
| 35.9% |
| 35.3% |
| (0.6%) |
Copper Beech |
| 33 |
| 15,522 |
| 50.8% |
| 51.9% |
| 1.1% |
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Total Same Store Properties |
| 73 |
| 37,534 |
| 46.8% |
| 47.6% |
| 0.8% |
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2014 Deliveries By Type |
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Grove & Copper Beech |
| 7 |
| 4,339 |
| 26.3% |
| 50.3% |
| 24.0% |
evo Philadelphia |
| 1 |
| 850 |
| 3.6% |
| 71.2% |
| 67.6% |
evo Montreal |
| 2 |
| 2,223 |
| 0.0% |
| 3.6% |
| 3.6% |
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Total 2014 Deliveries |
| 10 |
| 7,412 |
| 15.8% |
| 38.7% |
| 22.9% |
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2014 Deliveries By Ownership |
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Wholly Owned |
| 5 |
| 3,099 |
| 28.5% |
| 55.9% |
| 27.4% |
Joint Venture |
| 5 |
| 4,313 |
| 6.7% |
| 26.4% |
| 19.7% |
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Total 2014 Deliveries |
| 10 |
| 7,412 |
| 15.8% |
| 38.7% |
| 22.9% |
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Total Portfolio By Ownership |
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Wholly Owned |
| 37 |
| 20,575 |
| 43.4% |
| 48.3% |
| 4.9% |
Copper Beech |
| 33 |
| 15,522 |
| 50.8% |
| 51.9% |
| 1.1% |
Joint Venture |
| 13 |
| 8,849 |
| 21.7% |
| 30.9% |
| 9.2% |
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Total Portfolio |
| 83 |
| 44,946 |
| 41.7% |
| 46.1% |
| 4.4% |
Balance Sheet
As of December 31, 2014, the Company held cash and cash equivalents totaling $15.2 million and $5.4 million of restricted cash. Net availability under the Company's credit facility was $50.0 million.
On February 25, 2015, the Company received a unanimously approved waiver under its amended credit facility that provides relief from certain financial covenants during a relief period that runs from December 31, 2014 until and including September 30, 2015. During
the relief period the following new measurements will apply to covenant tests: Maximum Leverage Ratio of not greater than 0.65:1.00; Maximum Secured Debt Ratio of not greater than 47.5%; Minimum Fixed Charge Ratio of not less than 1.30:1.00; and a Dividend Payout Ratio of not more than 105.0% calculated on a pro forma basis that applies the current quarterly dividend of $0.090 on a trailing twelve month basis.
Dividends
On December 19, 2014, the Company announced that its Board of Directors declared a cash dividend of $0.090 per share of common stock for the fourth quarter of 2014. The common stock dividend was paid on January 29, 2015 to stockholders of record as of December 31, 2014.
The Board of Directors also declared a cash dividend of $0.50 per Series A Cumulative Redeemable Preferred Share for the third quarter of 2014. The preferred share dividend was
paid on January 15, 2015 to stockholders of record as of December 31, 2014.
2015 Financial Outlook
Based on management's estimate of the Company's current financial condition and future operating results, the Company is providing projections for several key elements of potential profitability.
2015 Outlook |
($mm) |
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| Range |
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Total Pro Rata NOI (excluding Montreal)1,4 |
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| $117.0 | to | $122.0 |
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Pro Rata Montreal NOI2 |
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| ($3.5) | to | ($0.7) |
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General and Administrative Expense3 |
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| $20.0 | to | $23.0 |
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Total Pro Rata Interest Expense4 |
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| $49.0 | to | $50.0 |
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Preferred Dividends |
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| $12.2 |
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Footnote: |
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1) Pro rata NOI for entire portfolio; reflects current preleasing velocity and outlook. |
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2) Range assumes no occupancy improvement on low end; 85% '15/'16 occupancy on high end. |
3) See page 20 of the Supplemental Analyst Package for additional detail on 2015 G&A. |
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4) Includes pro rata joint venture impact to FFOA that is reflected in "equity in earnings of unconsolidated |
entities" in the Company's financial statements. |
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An illustrative bridge of key elements can be found on page 20 of the Supplemental Analyst Package.
Additional Matters
The Company, through its engagement with Korn Ferry and FPL Associates, continues to make positive strides in the identification and recruitment of highly qualified additions both to our Board of Directors and the Campus Crest executive management team. The Company will announce further progress on these important additions at the appropriate time.
Campus Crest is in the process of conducting a comprehensive and thorough analysis of all potential financial and strategic alternatives. The Company is committed to maximizing shareholder value and will continue to work closely with its outside financial and legal advisors to ensure a thorough and robust process. There can be no assurance that the exploration
process will result in the Company pursuing a particular transaction or completing any such transaction. The Company has not set a definitive timetable for completion of the process and does not intend to disclose further developments until its Board of Directors approves a specific action or otherwise concludes the review of the strategic alternatives. The Company welcomes all interested parties into this ongoing process.
The Company plans to file a Form 12b-25 Notification of Late Filing with the U.S. Securities and Exchange Commission (SEC) with regard to its Annual Report on Form 10-K for the year ended December 31, 2014. The Company and certain of its affiliates recently completed certain acquisitions pursuant to the Company's purchase and sale agreement, as amended, with the former members of Copper Beech Townhome Communities, LLC and Copper Beech Townhome Communities
(PA), LLC. Due to the significant nature of this transaction, the Company needs additional time to complete the documentation and corresponding disclosure contained in its annual report. The Company expects to complete the work necessary for it to file its Form 10-K for the fiscal year ended December 31, 2014 by March 17, 2015, which will be the end of the fifteen-day extension period provided by Rule 12b-25.
Conference Call Details
The Company will host a conference call on Thursday, February 26, 2015, at 9:00 a.m. (EST) to discuss the financial results from the quarter.
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
13600472. The replay will be available until March 5, 2015.
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.
About Campus Crest Communities, Inc.
Campus Crest Communities, Inc. is a leading owner and manager of high-quality student housing properties located close to college campuses in targeted markets. It has ownership interests in 84 student housing properties with over 46,000 beds across North America. 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. 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 |
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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
(in $000s) |
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| December 31, |
| December 31, |
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| 2014 |
| 2013 |
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Assets |
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Investment in real estate, net: |
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| Student housing properties |
| $934,471 |
| $716,285 |
| Accumulated depreciation |
| (128,121) |
| (102,356) |
| Development in process |
| - |
| 91,184 |
| Land held for sale1 |
| 38,104 |
| - |
| Land held for investment2 |
| 7,534 |
| - |
Investment in real estate, net |
| 851,988 |
| 705,113 |
Investment in unconsolidated entities3 |
| 256,653 |
| 324,838 |
Cash and cash equivalents |
| 15,240 |
| 32,054 |
Restricted cash 4 |
| 5,429 |
| 32,636 |
Student receivables, net |
| 1,587 |
| 2,825 |
Cost and earnings in excess of construction billings |
| 7,516 |
| 42,803 |
Other assets, net5 |
| 42,447 |
| 42,410 |
Total assets |
| $1,180,860 |
| $1,182,679 |
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Liabilities and equity |
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Liabilities: |
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| Mortgage and construction loans |
| $300,673 |
| $205,531 |
| Line of credit and other debt |
| 317,746 |
| 207,952 |
| Accounts payable and accrued expenses |
| 53,968 |
| 62,448 |
| Construction billings in excess of cost and earnings |
| 481 |
| 600 |
| Other liabilities |
| 22,092 |
| 11,167 |
Total liabilities |
| 694,960 |
| 487,698 |
Equity: |
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| Preferred stock |
| $61 |
| $61 |
| Common stock |
| 648 |
| 645 |
| Additional common and preferred paid-in capital |
| 770,949 |
| 773,896 |
| Accumulated deficit and distributions6 |
| (292,210) |
| (84,143) |
| Accumulated other comprehensive loss |
| (2,616) |
| (71) |
Total stockholders' equity |
| 476,832 |
| 690,388 |
Noncontrolling interests |
| 9,069 |
| 4,593 |
Total equity |
| 485,901 |
| 694,981 |
Total liabilities and equity |
| $1,180,860 |
| $1,182,679 |
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1Land held for sale includes properties located in the following locations: Allendale, MI; Bellingham, WA; Boca Raton, FL; Corvallis, OR; Grand Forks, ND; Sacramento, CA; San Angelo, TX; Tempe, AZ; Tuscaloosa, AL; and Toledo, OH. The Toledo, OH property includes the redevelopment property, which is currently in operation, as well as an undeveloped land parcel.
2Land held for investment includes potential Phase II sites at the following locations: Auburn, AL; Huntsville, TX; Pullman, WA; State College, PA; and Statesboro, GA.
3As of December 31, 2013, includes the Company's investment in Copper Beech equating to a 67% effective ownership interest in 30 properties, of which 28 are operating and two are non-operating properties. On August 18, 2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated and a 48% interest in one consolidated operating property. 4As of December 31, 2014 and December 31, 2013, includes approximately $0 and $28,200, respectively, of cash held in escrow from the sale of four
wholly-owned Grove-branded student housing properties on December 27, 2013. 5Primarily includes other receivables of $21,487 including insurance proceeds and amounts due from joint ventures, deferred financing costs of $6,910, corporate fixed assets of $6,356, Company owned corporate aircraft of $3,900 and prepaid and other assets of $3,794. 6Includes 2014 net loss of $158,004 plus dividends of $50,063. |
CAMPUS CREST COMMUNITIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
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(in $000s, except per share data) |
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| Three Months Ended December 31, |
| Twelve Months Ended December 31, |
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|
| 2014 |
| 2013 |
| $ Change |
| 2014 |
| 2013 |
| $ Change |
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Revenues: |
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|
Student housing rental |
| $27,467 |
| 23,517 |
| $3,950 |
| $101,724 |
| $87,635 |
| $14,089 |
Student housing services |
| 725 |
| 970 |
| (245) |
| 3,768 |
| 3,615 |
| 153 |
Property management services |
| 538 |
| 281 |
| 257 |
| 1,249 |
| 820 |
| 429 |
Total revenues |
|
| 28,731 |
| 24,768 |
| 3,963 |
| 106,741 |
| 92,070 |
| 14,671 |
Operating expenses: |
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Student housing operations |
| 12,903 |
| 11,005 |
| 1,898 |
| 46,777 |
| 40,346 |
| 6,431 |
General and administrative |
| 3,250 |
| 2,582 |
| 668 |
| 14,303 |
| 10,658 |
| 3,645 |
Severance1 |
| 6,159 |
| - |
| 6,159 |
| 6,159 |
| - |
| 6,159 |
Impairment of land, predevelopment costs and assets held for sale2 |
| 2,137 |
| - |
| 2,137 |
| 31,927 |
| - |
| 31,927 |
Write-off of corporate other assets3 |
| 7,345 |
| - |
| 7,345 |
| 15,110 |
| - |
| 15,110 |
Transaction costs4 |
| 339 |
| 286 |
| 53 |
| 2,671 |
| 1,121 |
| 1,550 |
Ground leases |
| 120 |
| 87 |
| 33 |
| 477 |
| 249 |
| 228 |
Depreciation and amortization |
| 8,822 |
| 6,546 |
| 2,276 |
| 31,696 |
| 23,700 |
| 7,996 |
Total operating expenses |
| 41,076 |
| 20,506 |
| 20,570 |
| 149,120 |
| 76,074 |
| 73,046 |
Equity in earnings (loss) of unconsolidated entities5, 6 |
| (5,572) |
| (7,335) |
| 1,763 |
| (5,510) |
| (3,727) |
| (1,783) |
Impairment of unconsolidated entities7 |
| (3,702) |
| (312) |
| (3,390) |
| (54,568) |
| (312) |
| (54,256) |
Effect of not exercising Copper Beech purchase option |
| - |
| - |
| - |
| (34,048) |
| - |
| (34,048) |
Operating income (loss) |
| (21,619) |
| (3,385) |
| (18,234) |
| (136,505) |
| 11,957 |
| (148,462) |
Nonoperating income (expense): |
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|
|
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|
|
Interest expense, net |
| (5,526) |
| (4,205) |
| (1,321) |
| (13,886) |
| (12,969) |
| (917) |
Other income (expense)8 |
| (88) |
| (7) |
| (81) |
| 42 |
| 1,414 |
| (1,372) |
Total nonoperating expense, net |
|
| (5,613) |
| (4,212) |
| (1,401) |
| (13,844) |
| (11,555) |
| (2,289) |
Net income (loss) before income tax benefit (expense) |
|
| (27,233) |
| (7,597) |
| (19,636) |
| (150,349) |
| 402 |
| (150,751) |
Income tax benefit (expense) |
|
| 0 |
| 421 |
| (421) |
| (731) |
| 727 |
| (1,458) |
Income (loss) from continuing operations |
|
| (27,232) |
| (7,176) |
| (20,056) |
| (151,079) |
| 1,129 |
| (152,208) |
Income (loss) from discontinued operations |
|
| (4,933) |
| (2,166) |
| (2,767) |
| (8,125) |
| 489 |
| (8,614) |
Net income (loss) |
|
| (32,166) |
| (9,342) |
| (22,824) |
| (159,204) |
| 1,618 |
| (160,822) |
Dividends on preferred stock |
|
| 3,050 |
| 2,733 |
| 317 |
| 12,200 |
| 6,183 |
| 6,017 |
Net loss attributable to noncontrolling interests |
|
| (426) |
| (85) |
| (341) |
| (1,200) |
| (34) |
| (1,166) |
Net loss attributable to common stockholders |
|
| ($34,790) |
| ($11,990) |
| ($22,800) |
| ($170,204) |
| ($4,531) |
| ($165,673) |
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Per share data - basic and diluted: |
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Income (loss) from continuing operations attributable to common stockholders |
| ($0.45) |
| ($0.15) |
|
|
| ($2.49) |
| ($0.08) |
|
|
Income (loss) from discontinued operations attributable to common stockholders |
| ($0.08) |
| ($0.03) |
|
|
| ($0.12) |
| $0.01 |
|
|
Net income (loss) per share attributable to common stockholders |
|
| ($0.53) |
| ($0.18) |
|
|
| ($2.61) |
| ($0.07) |
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Weighted average common shares outstanding, diluted: |
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Diluted |
|
| 65,154 |
| 64,937 |
|
|
| 65,102 |
| 60,418 |
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1For the three months ended December 31, 2014, severance includes termination benefits for former executives in connection with our strategic repositioning.
2For the three months ended December 31, 2014, amounts include impairment of our property in Toledo, OH.
3For the three months ended December 31, 2014, amount primarily includes $5,499 of Enterprise Resource Planning system impairment and $1,470 of corporate aircraft impairment
4For the three and twelve months ended December 31, 2014, includes $339 and $2,671, respectively, of transaction costs related to Copper Beech. Additionally, for the three and twelve months ended December 31, 2013, includes $286 and $1,121, respectively, of transaction costs related to Copper Beech.
5For the three and twelve months ended December 31, 2014 and the period from March 18, 2013 to 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 enabled the Company to acquire a 67% ownership interest in 28 operating properties, while deferring ownership in seven properties until the Company exercises future purchase options. On August 18, 2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated
and a 48% interest in one consolidated operating property.
6For the three and twelve months ended December 31, 2014, includes $1,431 and $6,491, respectively, of fair value adjustment related to Copper Beech's debt. For the three and twelve months ended December 31, 2013, includes $1,411 and $3,576, respectively, of fair value adjustment related to Copper Beech's debt.
7For the three months ended December 31, 2014, relates to an impairment of our investments in Montreal.
8For 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. |
CAMPUS CREST COMMUNITIES |
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RECONCILIATION OF NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS TO FUNDS FROM OPERATIONS
("FFO")& FUNDS FROM OPERATIONS ADJUSTED ("FFOA") (unaudited) |
(in $000s, except per share data) |
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| Three Months Ended December 31, |
| Twelve Months Ended December 31, |
|
| 2014 |
| 2013 |
| $ Change |
| 2014 |
| 2013 |
| $ Change |
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|
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Net loss attributable to common stockholders |
| ($34,790) |
| ($11,990) |
| ($22,800) |
| ($170,204) |
| ($4,531) |
| ($165,673) |
Net loss attributable to noncontrolling interests |
| (426) |
| (85) |
| (341) |
| (1,200) |
| (34) |
| (1,166) |
Real estate related depreciation and amortization |
| 7,683 |
| 6,910 |
| 773 |
| 27,858 |
| 25,503 |
| 2,356 |
Real estate related depreciation and amortization - unconsolidated entities |
| 5,178 |
| 14,354 |
| (9,176) |
| 25,034 |
| 23,272 |
| 1,763 |
FFO available to common shares and OP units1, 2 |
| (22,356) |
| 9,189 |
| (31,545) |
| (118,511) |
| 44,209 |
| (162,721) |
Elimination of the following: |
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|
|
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|
|
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|
|
Transaction costs3 | 2,095 |
| 286 |
| 1,809 |
| 4,426 |
| 2,027 |
| 2,399 |
Elimination of transactions costs included in equity in earnings |
| - |
| - |
| - |
| - |
| - |
| - |
Impairment of land, predevelopment costs and asset held for sale | 2,137 |
| 175 |
| 1,962 |
| 31,927 |
| 175 |
| 31,752 |
Impairment of disposed assets | - |
| 4,729 |
| (4,729) |
| - |
| 4,729 |
| (4,729) |
Copper Beech dividend equivalency4 | 1,200 |
| - |
| 1,200 |
| 1,200 |
| - |
| 1,200 |
Write off of corporate other assets | 7,345 |
| - |
| 7,345 |
| 15,110 |
| - |
| 15,110 |
Write off of deferred financing costs | - |
| 236 |
| (236) |
| - |
| 236 |
| (236) |
Severance5 | 5,439 |
| - |
| 5,439 |
| 6,159 |
| - |
| 6,159 |
Change in valuation allowance for deferred tax asset | (0) |
| - |
| (0) |
| 731 |
| - |
| 731 |
Discontinued operations6 | 4,933 |
| 312 |
| 4,621 |
| 8,125 |
| 312 |
| 7,812 |
Impairment of unconsolidated entities | 3,702 |
| - |
| 3,702 |
| 54,568 |
| - |
| 54,568 |
Effect of not exercising Copper Beech purchase option | - |
| - |
| - |
| 34,048 |
| - |
| 34,048 |
FV adjustment of CB debt | (1,432) |
| (1,411) |
| (21) |
| (6,491) |
| (3,576) |
| (2,914) |
Funds from operations adjusted (FFOA) available to common |
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shares and OP units | $3,063 |
| $13,515 |
| ($10,452) |
| $31,292 |
| $48,112 |
| ($16,820) |
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|
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FFO per share - diluted1, 2 |
| ($0.34) |
| $0.14 |
| ($0.48) |
| ($1.82) |
| $0.73 |
| ($2.55) |
FFOA per share - diluted |
| $0.05 |
| $0.21 |
| ($0.16) |
| $0.48 |
| $0.80 |
| ($0.32) |
Weighted average common shares and OP units outstanding - diluted7 |
| 65,154 |
| 64,937 |
|
|
| 65,102 |
| 60,418 |
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1 For the three and twelve months ended December 31, 2014 and the period March 18, 2013 to 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 December 31, 2013, the Company entered into an amendment to the purchase and sale agreement that enabled the Company to acquire a 67% ownership interest in 28 operating properties, while deferring ownership in seven properties until the Company exercises future
purchase options. On August 18, 2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated and a 48% interest in one consolidated operating property.
2 For the three and twelve months ended December 31, 2014, includes $1,431 and $6,491, respectively, of fair value adjustment related to Copper Beech's debt. For the three and twelve months ended December 31, 2013, includes $1,411 and $3,576, respectively, of fair value adjustment related to Copper Beech's debt.
3 Includes costs incurred in connection with Copper Beech and Montreal.
4 Amount represents a one time cash dividend equivalency payment made during the three months ended December 31, 2014 to the CB Investors as stipulated in the second amendment to the purchase and sell agreement of Copper Beech.
5 For the three months ended September 30, 2014, $720 of severance was included in general and administrative expense, and was reclassified to the Severance line in the three months ended December 31, 2014.
6 For the three months ended December, 31, 2014, includes expenses related to discontinued construction and development operations of $3,068. See table on page 20 for additional detail on general and administrative expense.
7 For the three and twelve months ended December 31, 2014 and 2013, the diluted shares were used to calculate FFO and FFOA. |
CAMPUS CREST COMMUNITIES |
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RECONCILIATION OF NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS TO NET OPERATING INCOME ("NOI") (unaudited) |
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(in $000s, except per share data) |
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| Three Months Ended December 31, |
|
|
| Twelve Months Ended December 31, |
|
|
| 20141 |
| 20131 |
|
|
| 20141 |
| 20131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders |
| ($34,790) |
| ($11,990) |
|
|
| ($170,204) |
| ($4,531) |
|
Net loss attributable to noncontrolling interests |
| (426) |
| (85) |
|
|
| (1,200) |
| (34) |
|
Preferred stock dividends |
| 3,050 |
| 2,733 |
|
|
| 12,200 |
| 6,183 |
|
Income tax (benefit) expense | (0) |
| (421) |
|
|
| 731 |
| (727) |
|
Other (income) expense | 88 |
| 7 |
|
|
| (42) |
| (1,414) |
|
Severance | 6,159 |
| - |
|
|
| 6,159 |
| - |
|
(Income) loss on discontinued operations | 4,933 |
| 2,166 |
|
|
| 8,125 |
| (489) |
|
Interest expense | 5,526 |
| 4,205 |
|
|
| 13,886 |
| 12,969 |
|
Equity in losses of unconsolidated entities | 5,572 |
| 7,335 |
|
|
| 5,510 |
| 3,727 |
|
Depreciation and amortization | 8,822 |
| 6,546 |
|
|
| 31,696 |
| 23,700 |
|
Ground lease expense | 120 |
| 87 |
|
|
| 477 |
| 249 |
|
General and administrative expense | 3,250 |
| 2,582 |
|
|
| 14,303 |
| 10,658 |
|
Impairment of unconsolidated entities | 3,702 |
| 312 |
|
|
| 54,568 |
| 312 |
|
Effect of not exercising Copper Beech purchase option | - |
| - |
|
|
| 34,048 |
| - |
|
Impairment of land, predevelopment costs and asset held for sale | 2,137 |
| - |
|
|
| 31,927 |
| - |
|
Write-off of corporate other assets | 7,345 |
| - |
|
|
| 15,110 |
| - |
|
Transaction costs | 339 |
| 286 |
|
|
| 2,671 |
| 1,121 |
|
Property management services | (538) |
| (281) |
|
|
| (1,249) |
| (820) |
|
Total NOI | $15,289 |
| $13,482 |
|
|
| $58,715 |
| $50,904 |
|
Same store properties NOI1 | $12,350 |
| $12,718 |
|
|
| $42,929 |
| $46,612 |
|
New properties NOI1, 2 | $2,118 |
| $0 |
|
|
| $11,408 |
| $2,742 |
|
The Grove at Pullman & Toledo NOI3 |
| $822 |
| $764 |
|
|
| $4,378 |
| $1,550 |
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1"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.
2Includes NOI contribution from Copper Beech at Ames. This is a consolidated joint venture property.
3Includes 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, impairments, severance, discontinued operations, the effect of not exercising the Copper Beech purchase option, 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, impairments, severance, discontinued operations, the effect of not exercising the
Copper Beech purchase option, the write-off of development cost, 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.
Logo - http://photos.prnewswire.com/prnh/20141205/162610LOGO
CONTACT: Investor Relations, (704) 496-2571, Investor.Relations@CampusCrest.com
Exhibit 99.2
Fourth
Quarter 2014
Supplemental
Analyst Package
|
Contact: |
|
Investor Relations |
|
704-496-2571 |
|
Investor.Relations@CampusCrest.com |
FOURTH QUARTER 2014
SUPPLEMENTAL ANALYST PACKAGE
TABLE OF CONTENTS
Financial Highlights |
3 |
|
|
Condensed Consolidated Balance Sheets |
4 |
|
|
Condensed Consolidated Statements of Operations |
5 |
|
|
Reconciliation of Net Loss Attributable to Common Stockholders to FFO, FFOA and Net Operating Income |
6 - 7 |
|
|
Wholly Owned Property Results of Operations |
8 |
|
|
Quarterly Wholly Owned Property Results of Operations |
9 |
|
|
Same Store Wholly Owned Property Operating Expenses |
10 |
|
|
HSRE, Beaumont and Copper Beech Joint Venture Property Results of Operations |
11 |
|
|
Capital Structure as of December 31, 2014 |
12 |
|
|
Outstanding Debt and Maturity Schedule |
13 |
|
|
HSRE & Beaumont Joint Venture Debt Summary |
14 |
|
|
Copper Beech Joint Venture Debt Summary |
15 |
|
|
Illustrative Pro Rata Debt Schedule |
16 |
|
|
Portfolio Overview and Occupancy |
17 - 18 |
|
|
Copper Beech Portfolio Overview and Occupancy |
19 |
|
|
Illustrative Bridges to Key Metrics |
20 |
|
|
Investor Information |
21 |
|
|
Forward-Looking Statements |
22 |
CAMPUS
CREST COMMUNITIES |
|
FINANCIAL HIGHLIGHTS (unaudited) |
(in $000s, except per share and per bed data) |
|
|
|
Three
Months Ended December 31, |
|
Twelve
Months Ended December 31, |
|
2014 |
|
2013 |
|
$
Change |
|
%
Change |
|
2014 |
|
2013 |
|
$
Change |
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
$28,731 |
|
$24,768 |
|
$3,963 |
|
16.0% |
|
$106,741 |
|
$92,070 |
|
$14,671 |
|
15.9% |
NOI |
15,290 |
|
13,482 |
|
1,808 |
|
13.4% |
|
58,715 |
|
50,904 |
|
7,811 |
|
15.3% |
Net loss attributable to common stockholders 1 |
(34,790) |
|
(11,990) |
|
(22,800) |
|
NM |
|
(170,204) |
|
(4,531) |
|
(165,673) |
|
NM |
Net loss per share
- basic and diluted |
($0.53) |
|
($0.18) |
|
($0.35) |
|
NM |
|
($2.61) |
|
($0.07) |
|
($2.54) |
|
NM |
FFO 2 |
(22,356) |
|
9,189 |
|
(31,545) |
|
NM |
|
(118,511) |
|
44,209 |
|
(162,721) |
|
NM |
FFO per share - diluted 2,
3 |
($0.34) |
|
$0.14 |
|
($0.48) |
|
NM |
|
($1.82) |
|
$0.73 |
|
($2.55) |
|
NM |
FFOA 2 |
3,063 |
|
13,515 |
|
(10,452) |
|
(77.3%) |
|
31,292 |
|
48,112 |
|
(16,820) |
|
(35.0%) |
FFOA per share - diluted 2,
3 |
$0.05 |
|
$0.21 |
|
($0.16) |
|
(76.2%) |
|
$0.48 |
|
$0.80 |
|
($0.32) |
|
(40.0%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt to total market capitalization |
49.6% |
|
35.1% |
|
n/a |
|
14.5% |
|
49.6% |
|
35.1% |
|
n/a |
|
14.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Statistics (wholly-owned) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total RevPOB 4 |
$531 |
|
$527 |
|
$4 |
|
0.7% |
|
$528 |
|
$520 |
|
$8 |
|
1.6% |
Average Physical Occupancy 5 |
89.9% |
|
92.0% |
|
n/a |
|
(2.1%) |
|
89.7% |
|
92.2% |
|
n/a |
|
(2.5%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 For the three and twelve months ended December 31, 2014 and 2013, results include certain write-downs and impairments, primarily related to impairment of unconsolidated entities, impairments of land and predevelopment costs, effect of not exercising Copper Beech purchase option and write off of other corporate assets.
2
For the three and twelve months ended December 31, 2014 and the period March 18, 2013 to December 31, 2013, includes results
from the Company’s investment in Copper Beech. The Company made its initial investment in Copper Beech 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 enabled the Company to acquire a 67% ownership interest in 28 operating
properties, while deferring ownership in seven properties until the Company exercises future purchase options. On August 18,
2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35
operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two
non-operating properties which are unc onsolidated and a 48% interest in one consolidated operating property.
3
Refer to page 6 for a reconciliation of FFO per share to FFOA per share.
4
Total revenue per occupied bed includes rental and service revenues.
5
Average monthly occupancy.
CAMPUS
CREST COMMUNITIES |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
(in $000s) |
|
|
|
|
December 31, |
|
December 31, |
|
|
2014 |
|
2013 |
|
|
|
|
|
Assets |
|
|
|
|
Investment in real estate, net: |
|
|
|
|
Student housing properties |
|
$934,471 |
|
$716,285 |
Accumulated depreciation |
|
(128,121) |
|
(102,356) |
Development in process |
|
- |
|
91,184 |
Land held for sale1 |
|
38,104 |
|
- |
Land held for investment2 |
|
7,534 |
|
- |
Investment in real estate, net |
|
851,988 |
|
705,113 |
Investment in unconsolidated entities3 |
|
256,653 |
|
324,838 |
Cash and cash equivalents |
|
15,240 |
|
32,054 |
Restricted cash 4 |
|
5,429 |
|
32,636 |
Student receivables, net |
|
1,587 |
|
2,825 |
Cost and earnings in excess of construction billings |
|
7,516 |
|
42,803 |
Other assets, net5 |
|
42,447 |
|
42,410 |
Total assets |
|
$1,180,860 |
|
$1,182,679 |
|
|
|
|
|
Liabilities and equity |
|
|
|
|
Liabilities: |
|
|
|
|
Mortgage and construction loans |
|
$300,673 |
|
$205,531 |
Line of credit and other debt |
|
317,746 |
|
207,952 |
Accounts payable and accrued expenses |
|
53,968 |
|
62,448 |
Construction billings in excess of cost and earnings |
|
481 |
|
600 |
Other liabilities |
|
22,092 |
|
11,167 |
Total liabilities |
|
694,960 |
|
487,698 |
Equity: |
|
|
|
|
Preferred stock |
|
$61 |
|
$61 |
Common stock |
|
648 |
|
645 |
Additional common and preferred paid-in capital |
|
770,949 |
|
773,896 |
Accumulated deficit and distributions6 |
|
(292,210) |
|
(84,143) |
Accumulated other comprehensive loss |
|
(2,616) |
|
(71) |
Total stockholders' equity |
|
476,832 |
|
690,388 |
Noncontrolling interests |
|
9,069 |
|
4,593 |
Total equity |
|
485,901 |
|
694,981 |
Total liabilities and equity |
|
$1,180,860 |
|
$1,182,679 |
|
|
|
|
|
|
1
Land held for sale includes properties located in the following locations: Allendale, MI; Bellingham, WA; Boca Raton, FL;
Corvallis, OR; Grand Forks, ND; Sacramento, CA; San Angelo, TX; Tempe, AZ; Tuscaloosa, AL; and Toledo, OH. The
Toledo, OH property includes the redevelopment property, which is currently in operation, as well as an undeveloped land
parcel.
2
Land held for investment includes potential Phase II sites at the following locations: Auburn, AL; Huntsville, TX; Pullman,
WA; State College, PA; and Statesboro, GA.
3 As of December 31, 2013, includes the Company’s investment in Copper Beech equating to a 67% effective ownership interest in 30 properties, of which 28 are operating and two are non-operating properties. On August 18, 2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated and a 48% interest in one consolidated operating property.
4 As of December 31, 2014 and December 31, 2013, includes approximately $0 and $28,200, respectively, of cash held in escrow from the sale of four wholly-owned Grove-branded student housing properties on December 27, 2013.
5 Primarily includes other receivables of $21,487 including insurance proceeds and amounts due from joint ventures, deferred financing costs of $6,910, corporate fixed assets of $6,356, Company owned corporate aircraft of $3,900 and prepaid and other assets of $3,794.
6 Includes
2014 net loss of $158,004 plus dividends of $50,063.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in $000s, except per share data)
|
|
Three
Months Ended December 31, |
|
Twelve
Months Ended December 31, |
|
|
2014 |
|
2013 |
|
$ Change |
|
2014 |
|
2013 |
|
$ Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Student housing rental |
|
$27,467 |
|
23,517 |
|
$3,950 |
|
$101,724 |
|
$87,635 |
|
$14,089 |
Student housing services |
|
725 |
|
970 |
|
(245) |
|
3,768 |
|
3,615 |
|
153 |
Property management
services |
|
538 |
|
281 |
|
257 |
|
1,249 |
|
820 |
|
429 |
Total revenues |
|
28,731 |
|
24,768 |
|
3,963 |
|
106,741 |
|
92,070 |
|
14,671 |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Student housing operations |
|
12,903 |
|
11,005 |
|
1,898 |
|
46,777 |
|
40,346 |
|
6,431 |
General and administrative |
|
3,250 |
|
2,582 |
|
668 |
|
14,303 |
|
10,658 |
|
3,645 |
Severance1 |
|
6,159 |
|
- |
|
6,159 |
|
6,159 |
|
- |
|
6,159 |
Impairment of land,
predevelopment costs and assets held for sale2 |
|
2,137 |
|
- |
|
2,137 |
|
31,927 |
|
- |
|
31,927 |
Write-off of corporate
other assets3 |
|
7,345 |
|
- |
|
7,345 |
|
15,110 |
|
- |
|
15,110 |
Transaction costs4 |
|
339 |
|
286 |
|
53 |
|
2,671 |
|
1,121 |
|
1,550 |
Ground leases |
|
120 |
|
87 |
|
33 |
|
477 |
|
249 |
|
228 |
Depreciation and amortization |
|
8,822 |
|
6,546 |
|
2,276 |
|
31,696 |
|
23,700 |
|
7,996 |
Total operating expenses |
|
41,076 |
|
20,506 |
|
20,570 |
|
149,120 |
|
76,074 |
|
73,046 |
Equity in earnings (loss)
of unconsolidated entities5, 6 |
|
(5,572) |
|
(7,335) |
|
1,763 |
|
(5,510) |
|
(3,727) |
|
(1,783) |
Impairment of unconsolidated
entities7 |
|
(3,702) |
|
(312) |
|
(3,390) |
|
(54,568) |
|
(312) |
|
(54,256) |
Effect of not exercising
Copper Beech purchase option |
|
- |
|
- |
|
- |
|
(34,048) |
|
- |
|
(34,048) |
Operating income
(loss) |
|
(21,619) |
|
(3,385) |
|
(18,234) |
|
(136,505) |
|
11,957 |
|
(148,462) |
Nonoperating income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(5,526) |
|
(4,205) |
|
(1,321) |
|
(13,886) |
|
(12,969) |
|
(917) |
Other income (expense)8 |
|
(88) |
|
(7) |
|
(81) |
|
42 |
|
1,414 |
|
(1,372) |
Total nonoperating
expense, net |
|
(5,613) |
|
(4,212) |
|
(1,401) |
|
(13,844) |
|
(11,555) |
|
(2,289) |
Net income (loss)
before income tax benefit (expense) |
|
(27,233) |
|
(7,597) |
|
(19,636) |
|
(150,349) |
|
402 |
|
(150,751) |
Income tax benefit (expense) |
|
0 |
|
421 |
|
(421) |
|
(731) |
|
727 |
|
(1,458) |
Income (loss) from
continuing operations |
|
(27,232) |
|
(7,176) |
|
(20,056) |
|
(151,079) |
|
1,129 |
|
(152,208) |
Income (loss) from discontinued
operations |
|
(4,933) |
|
(2,166) |
|
(2,767) |
|
(8,125) |
|
489 |
|
(8,614) |
Net income (loss) |
|
(32,166) |
|
(9,342) |
|
(22,824) |
|
(159,204) |
|
1,618 |
|
(160,822) |
Dividends on preferred
stock |
|
3,050 |
|
2,733 |
|
317 |
|
12,200 |
|
6,183 |
|
6,017 |
Net loss attributable
to noncontrolling interests |
|
(426) |
|
(85) |
|
(341) |
|
(1,200) |
|
(34) |
|
(1,166) |
Net loss attributable
to common stockholders |
|
($34,790) |
|
($11,990) |
|
($22,800) |
|
($170,204) |
|
($4,531) |
|
($165,673) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data -
basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations attributable to common stockholders |
|
($0.45) |
|
($0.15) |
|
|
|
($2.49) |
|
($0.08) |
|
|
Income (loss) from discontinued
operations attributable to common stockholders |
|
($0.08) |
|
($0.03) |
|
|
|
($0.12) |
|
$0.01 |
|
|
Net income (loss) per share attributable to common stockholders |
|
($0.53) |
|
($0.18) |
|
|
|
($2.61) |
|
($0.07) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding, diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
65,154 |
|
64,937 |
|
|
|
65,102 |
|
60,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 For the three months ended December 31, 2014, severance includes termination benefits for former executives in connection with our strategic repositioning.
2 For the three months ended December 31, 2014, amounts include impairment of our property in Toledo, OH.
3 For the three months ended December 31, 2014, amount primarily includes $5,499 of Enterprise Resource Planning system impairment and $1,470 of corporate aircraft impairment
4 For the three and twelve months ended December 31, 2014, includes $339 and $2,671, respectively, of transaction costs related to Copper Beech. Additionally, for the three and twelve months ended December 31, 2013, includes $286 and $1,121, respectively, of transaction costs related to Copper Beech.
5 For the three and twelve months ended December 31, 2014 and the period from March 18, 2013 to 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 enabled the Company to acquire a 67% ownership interest in 28 operating properties, while deferring ownership in seven properties until the Company exercises future purchase options. On August 18, 2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated and a 48% interest in one consolidated operating property.
6 For the three and twelve months ended December 31, 2014, includes $1,431 and $6,491, respectively, of fair value adjustment related to Copper Beech's debt. For the three and twelve months ended December 31, 2013, includes $1,411 and $3,576, respectively, of fair value adjustment related to Copper Beech's debt.
7
For the three months ended December 31, 2014, relates to an impairment of our investments in Montreal.
8 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.
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS TO FUNDS FROM OPERATIONS ("FFO")& FUNDS FROM OPERATIONS ADJUSTED ("FFOA") (unaudited)
(in $000s, except per share data)
|
Three
Months Ended December 31, |
|
Twelve
Months Ended December 31, |
|
2014 |
|
2013 |
|
$
Change |
|
2014 |
|
2013 |
|
$
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to common stockholders |
($34,790) |
|
($11,990) |
|
($22,800) |
|
($170,204) |
|
($4,531) |
|
($165,673) |
Net
loss attributable to noncontrolling interests |
(426) |
|
(85) |
|
(341) |
|
(1,200) |
|
(34) |
|
(1,166) |
Real
estate related depreciation and amortization |
7,683 |
|
6,910 |
|
773 |
|
27,858 |
|
25,503 |
|
2,356 |
Real
estate related depreciation and amortization - unconsolidated entities |
5,178 |
|
14,354 |
|
(9,176) |
|
25,034 |
|
23,272 |
|
1,763 |
FFO
available to common shares and OP units1, 2 |
(22,356) |
|
9,189 |
|
(31,545) |
|
(118,511) |
|
44,209 |
|
(162,721) |
Elimination
of the following: |
|
|
|
|
|
|
|
|
|
|
|
Transaction
costs3 |
2,095 |
|
286 |
|
1,809 |
|
4,426 |
|
2,027 |
|
2,399 |
Impairment
of land, predevelopment costs and asset held for sale |
2,137 |
|
175 |
|
1,962 |
|
31,927 |
|
175 |
|
31,752 |
Impairment
of disposed assets |
- |
|
4,729 |
|
(4,729) |
|
- |
|
4,729 |
|
(4,729) |
Copper
Beech dividend equivalency4 |
1,200 |
|
- |
|
1,200 |
|
1,200 |
|
- |
|
1,200 |
Write
off of corporate other assets |
7,345 |
|
- |
|
7,345 |
|
15,110 |
|
- |
|
15,110 |
Write
off of deferred financing costs |
- |
|
236 |
|
(236) |
|
- |
|
236 |
|
(236) |
Severance5 |
5,439 |
|
- |
|
5,439 |
|
6,159 |
|
- |
|
6,159 |
Change
in valuation allowance for deferred tax asset |
(0) |
|
- |
|
(0) |
|
731 |
|
- |
|
731 |
Discontinued
operations6 |
4,933 |
|
312 |
|
4,621 |
|
8,125 |
|
312 |
|
7,812 |
Impairment
of unconsolidated entities |
3,702 |
|
- |
|
3,702 |
|
54,568 |
|
- |
|
54,568 |
Effect
of not exercising Copper Beech purchase option |
- |
|
- |
|
- |
|
34,048 |
|
- |
|
34,048 |
FV
adjustment of CB debt |
(1,432) |
|
(1,411) |
|
(21) |
|
(6,491) |
|
(3,576) |
|
(2,914) |
Funds
from operations adjusted (FFOA) available to common |
|
|
|
|
|
|
|
|
|
|
|
shares
and OP units |
$3,063 |
|
$13,515 |
|
($10,452) |
|
$31,292 |
|
$48,112 |
|
($16,820) |
|
|
|
|
|
|
|
|
|
|
|
|
FFO
per share - diluted1, 2 |
($0.34) |
|
$0.14 |
|
($0.48) |
|
($1.82) |
|
$0.73 |
|
($2.55) |
FFOA
per share - diluted |
$0.05 |
|
$0.21 |
|
($0.16) |
|
$0.48 |
|
$0.80 |
|
($0.32) |
Weighted
average common shares and OP units outstanding - diluted7 |
65,154 |
|
64,937 |
|
|
|
65,102 |
|
60,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 For the three and twelve months ended December 31, 2014 and the period March 18, 2013 to 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 December 31, 2013, the Company entered into an amendment to the purchase and sale agreement that enabled the Company to acquire a 67% ownership interest in 28 operating properties, while deferring ownership in seven properties until the Company exercises future purchase options. On August 18, 2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated and a 48% interest in one consolidated operating property.
2 For the three and twelve months ended December 31, 2014, includes $1,431 and $6,491, respectively, of fair value adjustment related to Copper Beech's debt. For the three and twelve months ended December 31, 2013, includes $1,411 and $3,576, respectively, of fair value adjustment related to Copper Beech's debt.
3 Includes costs incurred in connection with Copper Beech and Montreal.
4 Amount represents a one time cash dividend equivalency payment made during the three months ended December 31, 2014 to the CB Investors as stipulated in the second amendment to the purchase and sell agreement of Copper Beech.
5 For the three months ended September 30, 2014, $720 of severance was included in general and administrative expense, and was reclassified to the Severance line in the three months ended December 31, 2014.
6 For the three months ended December, 31, 2014, includes expenses related to discontinued construction and development operations of $3,068. See table on page 20 for additional detail on general and administrative expense.
7 For the three and twelve months ended December 31, 2014 and 2013, the diluted shares were used to calculate FFO and FFOA.
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS TO NET OPERATING INCOME ("NOI")
(unaudited)
(in $000s, except per share data)
|
Three
Months Ended December 31, |
|
Twelve
Months Ended December 31, |
|
20141 |
|
20131 |
|
20141 |
|
20131 |
|
|
|
|
|
|
|
|
Net
loss attributable to common stockholders |
($34,790) |
|
($11,990) |
|
($170,204) |
|
($4,531) |
Net
loss attributable to noncontrolling interests |
(426) |
|
(85) |
|
(1,200) |
|
(34) |
Preferred
stock dividends |
3,050 |
|
2,733 |
|
12,200 |
|
6,183 |
Income
tax (benefit) expense |
(0) |
|
(421) |
|
731 |
|
(727) |
Other
(income) expense |
88 |
|
7 |
|
(42) |
|
(1,414) |
Severance |
6,159 |
|
- |
|
6,159 |
|
- |
(Income)
loss on discontinued operations |
4,933 |
|
2,166 |
|
8,125 |
|
(489) |
Interest
expense |
5,526 |
|
4,205 |
|
13,886 |
|
12,969 |
Equity
in losses of unconsolidated entities |
5,572 |
|
7,335 |
|
5,510 |
|
3,727 |
Depreciation
and amortization |
8,822 |
|
6,546 |
|
31,696 |
|
23,700 |
Ground
lease expense |
120 |
|
87 |
|
477 |
|
249 |
General
and administrative expense |
3,250 |
|
2,582 |
|
14,303 |
|
10,658 |
Impairment
of unconsolidated entities |
3,702 |
|
312 |
|
54,568 |
|
312 |
Effect
of not exercising Copper Beech purchase option |
- |
|
- |
|
34,048 |
|
- |
Impairment
of land, predevelopment costs and asset held for sale |
2,137 |
|
- |
|
31,927 |
|
- |
Write-off
of corporate other assets |
7,345 |
|
- |
|
15,110 |
|
- |
Transaction
costs |
339 |
|
286 |
|
2,671 |
|
1,121 |
Property
management services |
(538) |
|
(281) |
|
(1,249) |
|
(820) |
Total
NOI |
$15,289 |
|
$13,482 |
|
$58,715 |
|
$50,904 |
Same
store properties NOI1 |
$12,350 |
|
$12,718 |
|
$42,929 |
|
$46,612 |
New
properties NOI1, 2 |
$2,118 |
|
$0 |
|
$11,408 |
|
$2,742 |
The
Grove at Pullman & Toledo NOI3 |
$822 |
|
$764 |
|
$4,378 |
|
$1,550 |
|
|
|
|
|
|
|
|
1
"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.
2 Includes NOI contribution from Copper Beech at Ames. This is a consolidated joint venture property.
3 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.
WHOLLY OWNED PROPERTY RESULTS OF OPERATIONS (unaudited)
(in $000s, except bed data)
|
|
Three
Months Ended December 31, |
|
Twelve
Months Ended December 31, |
|
|
2014 |
|
2013 |
|
Change |
|
%
Change |
|
2014 |
|
2013 |
|
$
Change |
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same
store properties (Number of properties)1, 2 |
|
30 |
|
30 |
|
|
|
|
|
28 |
|
28 |
|
|
|
|
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month3 |
|
$512 |
|
$507 |
|
$6 |
|
1.1% |
|
$499 |
|
$497 |
|
$2 |
|
0.3% |
Services
revenue per occupied bed per month |
|
15 |
|
21 |
|
(6) |
|
(26.8%) |
|
19 |
|
20 |
|
(1) |
|
(2.8%) |
Total
revenue per occupied bed |
|
$527 |
|
$527 |
|
$0 |
|
0.0% |
|
$519 |
|
$517 |
|
$1 |
|
0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
|
16,308 |
|
16,308 |
|
|
|
|
|
14,920 |
|
14,920 |
|
|
|
|
Average
physical occupancy |
|
91.6% |
|
92.0% |
|
|
|
(0.4%) |
|
90.5% |
|
92.5% |
|
|
|
(2.0%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
|
$24,120 |
|
$23,602 |
|
$518 |
|
2.2% |
|
$83,148 |
|
$85,647 |
|
($2,498) |
|
(2.9%) |
Property
operating expenses |
|
10,388 |
|
10,885 |
|
(497) |
|
(4.6%) |
|
38,837 |
|
39,035 |
|
(198) |
|
(0.5%) |
Net
operating income |
|
$13,732 |
|
$12,717 |
|
$1,015 |
|
8.0% |
|
$44,312 |
|
$46,612 |
|
($2,300) |
|
(4.9%) |
Operating
margin4 |
|
56.9% |
|
53.9% |
|
|
|
3.0% |
|
53.3% |
|
54.4% |
|
|
|
(1.1%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New
properties (Number of properties)5, 6, 7 |
|
6 |
|
- |
|
6 |
|
|
|
8 |
|
2 |
|
6 |
|
|
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month3 |
|
$536 |
|
$
- |
|
$536 |
|
100.0% |
|
$557 |
|
$564 |
|
($7) |
|
(1.3%) |
Services
revenue per occupied bed per month |
|
12 |
|
- |
|
12 |
|
100.0% |
|
16 |
|
16 |
|
(1) |
|
(3.6%) |
Total
revenue per occupied bed |
|
$548 |
|
$
- |
|
$548 |
|
100.0% |
|
$573 |
|
$581 |
|
($8) |
|
(1.3%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
|
3,705 |
|
- |
|
|
|
|
|
3,270 |
|
578 |
|
|
|
|
Average
physical occupancy |
|
82.5% |
|
0.0% |
|
|
|
82.5% |
|
86.4% |
|
86.7% |
|
|
|
(0.3%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
|
$5,027 |
|
$
- |
|
$5,027 |
|
100.0% |
|
$19,413 |
|
$3,493 |
|
$15,920 |
|
455.8% |
Property
operating expenses |
|
2,090 |
|
- |
|
2,090 |
|
100.0% |
|
7,185 |
|
751 |
|
6,434 |
|
856.5% |
Net
operating income |
|
$2,938 |
|
$
- |
|
$2,938 |
|
100.0% |
|
$12,228 |
|
$2,742 |
|
$9,486 |
|
346.0% |
Operating
margin4 |
|
58.4% |
|
0.0% |
|
|
|
58.4% |
|
63.0% |
|
78.5% |
|
|
|
(15.5%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALL
PROPERTIES (Number of properties) |
|
36 |
|
30 |
|
6 |
|
|
|
36 |
|
30 |
|
6 |
|
|
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month3 |
|
$516 |
|
$507 |
|
$10 |
|
1.9% |
|
$509 |
|
$500 |
|
$9 |
|
1.9% |
Services
revenue per occupied bed per month |
|
14 |
|
21 |
|
(6) |
|
(29.5%) |
|
19 |
|
20 |
|
(1) |
|
(5.5%) |
Total
revenue per occupied bed |
|
$531 |
|
$527 |
|
$4 |
|
0.7% |
|
$528 |
|
$520 |
|
$8 |
|
1.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
|
20,013 |
|
16,308 |
|
|
|
|
|
18,190 |
|
15,498 |
|
|
|
|
Average
physical occupancy |
|
89.9% |
|
92.0% |
|
|
|
(2.1%) |
|
89.7% |
|
92.2% |
|
|
|
(2.5%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
|
$29,148 |
|
$23,602 |
|
$5,545 |
|
23.5% |
|
$102,561 |
|
$89,140 |
|
$13,421 |
|
15.1% |
Property
operating expenses |
|
12,478 |
|
10,885 |
|
1,593 |
|
14.6% |
|
46,022 |
|
39,786 |
|
6,236 |
|
15.7% |
Net
operating income |
|
$16,670 |
|
$12,717 |
|
$3,952 |
|
31.1% |
|
$56,539 |
|
$49,354 |
|
$7,185 |
|
14.6% |
Operating
margin4 |
|
57.2% |
|
53.9% |
|
|
|
0.0% |
|
55.1% |
|
55.4% |
|
|
|
(0.3%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Grove at Pullman & Toledo NOI8 |
|
$910 |
|
$764 |
|
|
|
|
|
$4,465 |
|
$1,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 For the three months ended December 31, 2014 and 2013, includes financial results for the 2013 wholly-owned deliveries (The Grove at Ft. Collins, The Grove at Muncie, and The Grove at Flagstaff - Phase II). The Grove at Flagstaff - Phase II is not included as an additional property, but increases the number of beds.
2 Excludes
financial results from The Grove at Pullman. On July 14, 2013, the Company experienced a fire at this property
under development. As of December 2014, all 584 beds were in operation. For comparability of results, Pullman will
continue to be excluded until year over year results are not impacted by the business interruption.
3 For
the three and twelve months ended December 31, 2014, excludes the one-time non-cash impact of the Company’s change in
revenue recognition policy. Beginning with the ‘14/’15 AY, the Company will recognize revenue for new leases over
the term of the lease (typically 11.5 months) rather than in conjunction with the lease payments (typically 12 equal monthly
payments). While this policy change will have no cash impact, and will have minimal year-over-year impact on a go-forward
basis, the adjustment related to changing the policy in Q4 2014 will have the effect of lowering reported revenue in that
quarter.
4
Operating margin is calculated by dividing NOI for the period by total student housing rental and services revenues for the
period.
5 For
the three and twelve months ended December 31, 2014, includes financial results for The Grove at Denton. The Company acquired
its joint venture partner's interest in The Grove at Denton on January 21, 2014. The occupancy data related to Denton is
included in new properties.
6 For the three and twelve months ended December 31, 2014, includes financial results for the 2014 wholly-owned and consolidated deliveries (The Grove at Gainesville, The Grove at Grand Forks, The Grove at Slippery Rock, The Grove at Mt. Pleasant and Copper Beech at Ames).
7 For the three and twelve months ended December 31, 2014 and 2013, excludes financial results from the Toledo, OH redevelopment the Company acquired on March 15, 2013.
8 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.
QUARTERLY WHOLLY OWNED PROPERTY RESULTS OF OPERATIONS (unaudited)
(in $000s, except bed data)
|
|
Three
Months Ended |
|
|
December
31, 2013 |
|
March
31, 2014 |
|
June
30, 2014 |
|
September
30, 2014 |
|
December
31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
Same
store properties (Number of properties)1, 2 |
|
30 |
|
30 |
|
30 |
|
30 |
|
30 |
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month3 |
|
$507 |
|
$503 |
|
$500 |
|
$505 |
|
$512 |
Services
revenue per occupied bed per month |
|
21 |
|
20 |
|
21 |
|
21 |
|
15 |
Total
revenue per occupied bed |
|
$527 |
|
$524 |
|
$521 |
|
$526 |
|
$527 |
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
|
16,308 |
|
16,308 |
|
16,308 |
|
16,308 |
|
16,308 |
Average
physical occupancy |
|
92.0% |
|
90.1% |
|
89.8% |
|
90.1% |
|
91.6% |
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
|
$23,602 |
|
$23,089 |
|
$22,901 |
|
$23,171 |
|
$24,120 |
Property
operating expenses |
|
10,885 |
|
10,275 |
|
10,269 |
|
10,940 |
|
10,388 |
Net
operating income |
|
$12,717 |
|
$12,814 |
|
$12,632 |
|
$12,231 |
|
$13,732 |
Operating
margin4 |
|
53.9% |
|
55.5% |
|
55.2% |
|
52.8% |
|
56.9% |
|
|
|
|
|
|
|
|
|
|
|
New
properties (Number of properties)5, 6, 7 |
|
1 |
|
1 |
|
1 |
|
6 |
|
6 |
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month3 |
|
$568 |
|
$565 |
|
$565 |
|
$549 |
|
$536 |
Services
revenue per occupied bed per month |
|
25 |
|
15 |
|
17 |
|
16 |
|
12 |
Total
revenue per occupied bed |
|
$592 |
|
$580 |
|
$583 |
|
$565 |
|
$548 |
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
|
1,752 |
|
1,752 |
|
1,752 |
|
2,654 |
|
3,705 |
Average
physical occupancy |
|
89.0% |
|
91.6% |
|
95.5% |
|
82.1% |
|
82.5% |
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
|
$924 |
|
$931 |
|
$975 |
|
$3,696 |
|
$5,027 |
Property
operating expenses |
|
579 |
|
420 |
|
453 |
|
1,294 |
|
2,090 |
Net
operating income |
|
$344 |
|
$512 |
|
$523 |
|
$2,402 |
|
$2,938 |
Operating
margin4 |
|
37.3% |
|
54.9% |
|
53.6% |
|
65.0% |
|
58.4% |
|
|
|
|
|
|
|
|
|
|
|
ALL
PROPERTIES (Number of properties) |
|
31 |
|
31 |
|
31 |
|
36 |
|
36 |
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month3 |
|
$509 |
|
$506 |
|
$503 |
|
$511 |
|
$516 |
Services
revenue per occupied bed per month |
|
21 |
|
20 |
|
21 |
|
20 |
|
14 |
Total
revenue per occupied bed |
|
$529 |
|
$526 |
|
$524 |
|
$531 |
|
$531 |
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
|
16,892 |
|
18,060 |
|
18,060 |
|
18,962 |
|
20,013 |
Average
physical occupancy |
|
91.9% |
|
90.2% |
|
90.0% |
|
89.0% |
|
89.9% |
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
|
$24,526 |
|
$24,021 |
|
$23,876 |
|
$26,867 |
|
$29,148 |
Property
operating expenses |
|
11,464 |
|
10,695 |
|
10,721 |
|
12,234 |
|
12,478 |
Net
operating income |
|
$13,062 |
|
$13,326 |
|
$13,155 |
|
$14,633 |
|
$16,670 |
Operating
margin4 |
|
53.3% |
|
55.5% |
|
55.1% |
|
54.5% |
|
57.2% |
|
|
|
|
|
|
|
|
|
|
|
The
Grove at Pullman & Toledo NOI8 |
|
$764 |
|
$759 |
|
$753 |
|
$876 |
|
$910 |
|
|
|
|
|
|
|
|
|
|
|
1 For the three months ended December 31, 2013, March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014, includes financial results for the 2013 wholly-owned deliveries (The Grove at Ft. Collins, The Grove at Muncie, and The Grove at Flagstaff - Phase II). The Grove at Flagstaff - Phase II is not included as an additional property, but increases the number of beds.
2 Excludes
financial results from The Grove at Pullman. On July 14, 2013, the Company experienced a fire at this property
under development. As of December 2014, all 584 beds were in operation. For comparability of results, Pullman will
continue to be excluded until year over year results are not impacted by the business interruption.
3
For the three and twelve months ended December 31, 2014, excludes the one-time non-cash impact of the Company’s change
in revenue recognition policy. Beginning with the ‘14/’15 AY year, the Company will recognize revenue for new
leases over the term of the lease (typically 11.5 months) rather than in conjunction with the lease payments (typically 12
equal monthly payments). While this policy change will have no cash impact, and will have minimal year-over-year impact on a
go-forward basis, the adjustment related to changing the policy in Q4 2014 will have the effect of lowering reported revenue
in that quarter.
4
Operating margin is calculated by dividing NOI for the period by total student housing rental and services revenues for the
period.
5
For the three months ended September 30, 2014 and December 31, 2014, includes financial results for the 2014
wholly-owned deliveries (The Grove at Gainesville, The Grove at Grand Forks, The Grove at Slippery Rock, The Grove at Mt.
Pleasant and Copper Beech at Ames).
6 For the three months ended December 31, 2013, March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014, excludes financial results from the Toledo, OH redevelopment the Company acquired on March 15, 2013.
7 For the three months ended December 31, 2013, March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014, includes financial results for The Grove at Denton. The Company acquired its joint venture partner's interest in the Grove at Denton on January 21, 2014.
8 For the three months ended December 31, 2013, March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014 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, WA.
SAME STORE WHOLLY OWNED OPERATING EXPENSES (unaudited)
(in $000s, except bed data)
|
Three
Months Ended December 31, 2014 |
|
Three
Months Ended December 31, 2013 |
|
Y-o-Y
Total Change |
|
Total |
|
%
of Total |
|
Per
Bed/Month |
|
|
Total |
|
%
of Total |
|
Per
Bed/Month |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll |
$2,395 |
|
23.3% |
|
$49 |
|
|
$2,307 |
|
21.1% |
|
$47 |
|
$88 |
|
3.8% |
Marketing |
242 |
|
2.4% |
|
5 |
|
|
414 |
|
3.8% |
|
8 |
|
(173) |
|
(41.6%) |
Office, Administration & Other |
810 |
|
7.9% |
|
17 |
|
|
705 |
|
6.5% |
|
14 |
|
106 |
|
15.0% |
Bad Debt |
831 |
|
8.1% |
|
17 |
|
|
1,508 |
|
13.8% |
|
31 |
|
(677) |
|
(44.9%) |
Utilities |
3,619 |
|
35.3% |
|
74 |
|
|
3,291 |
|
30.2% |
|
67 |
|
329 |
|
10.0% |
Repairs and Maintenance1 |
256 |
|
2.5% |
|
5 |
|
|
949 |
|
8.7% |
|
19 |
|
(693) |
|
(73.0%) |
Taxes and Insurance |
2,110 |
|
20.6% |
|
43 |
|
|
1,738 |
|
15.9% |
|
36 |
|
372 |
|
21.4% |
Total |
$10,263 |
|
100.0% |
|
$210 |
|
|
$10,912 |
|
100.0% |
|
$223 |
|
($649) |
|
(5.9%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly Owned Beds |
16,308 |
|
|
|
|
|
|
16,308 |
|
|
|
|
|
|
|
|
Wholly Owned Properties |
30 |
|
|
|
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31, 2014 |
|
Twelve
Months Ended December 31, 2013 |
|
Y-o-Y
Total Change |
|
Total |
|
% of Total |
|
Per
Bed/Month |
|
|
Total |
|
% of Total |
|
Per
Bed/Month |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll |
$8,592 |
|
22.5% |
|
$48 |
|
|
$8,855 |
|
23.0% |
|
$49 |
|
($263) |
|
(3.0%) |
Marketing |
1,066 |
|
2.8% |
|
6 |
|
|
1,165 |
|
3.0% |
|
7 |
|
(99) |
|
(8.5%) |
Office, Administration & Other |
2,477 |
|
6.5% |
|
14 |
|
|
2,553 |
|
6.6% |
|
14 |
|
(76) |
|
(3.0%) |
Bad Debt |
2,813 |
|
7.4% |
|
16 |
|
|
2,802 |
|
7.3% |
|
16 |
|
11 |
|
0.4% |
Utilities |
12,398 |
|
32.5% |
|
69 |
|
|
12,141 |
|
31.6% |
|
68 |
|
256 |
|
2.1% |
Repairs and Maintenance1 |
2,792 |
|
7.3% |
|
16 |
|
|
3,539 |
|
9.2% |
|
20 |
|
(747) |
|
(21.1%) |
Taxes and Insurance |
8,036 |
|
21.1% |
|
45 |
|
|
7,378 |
|
19.2% |
|
41 |
|
657 |
|
8.9% |
Total |
$38,173 |
|
100.0% |
|
$213 |
|
|
$38,433 |
|
100.0% |
|
$215 |
|
($260) |
|
(0.7%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly Owned Beds |
14,920 |
|
|
|
|
|
|
14,920 |
|
|
|
|
|
|
|
|
Wholly Owned Properties |
28 |
|
|
|
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
During the three months ended December 31, 2014, the Company changed its accounting policy in connection with turn expenses
to recognize costs in the period in which they are incurred as compared to its previous policy of accounting for the costs of
turn ratably over the twelve month academic year. As a result, on a going forward basis, expenses for turn will be recognized
during the third quarter of the year.
HSRE, BEAUMONT AND COPPER BEECH JOINT VENTURE PROPERTY RESULTS OF OPERATIONS (unaudited)
(in $000s, except per bed data)
|
Three
Months Ended December 31, |
|
Twelve
Months Ended December 31, |
|
2014 |
|
2013 |
|
Change |
|
%
Change |
|
2014 |
|
2013 |
|
Change |
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HSRE
AND BEAUMONT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same
store properties (Number of properties)1 |
9 |
|
9 |
|
|
|
|
|
6 |
|
6 |
|
|
|
|
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month2 |
$510 |
|
$503 |
|
$7 |
|
1.3% |
|
$460 |
|
$468 |
|
($9) |
|
(1.8%) |
Services
revenue per occupied bed per month |
13 |
|
20 |
|
(7) |
|
(36.5%) |
|
18 |
|
20 |
|
(2) |
|
(10.1%) |
Total
revenue per occupied bed |
$522 |
|
$523 |
|
($1) |
|
(0.1%) |
|
$478 |
|
$488 |
|
($11) |
|
(2.2%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
5,148 |
|
5,148 |
|
|
|
|
|
3,364 |
|
3,364 |
|
|
|
|
Average
physical occupancy |
79.2% |
|
81.7% |
|
|
|
(2.5%) |
|
79.9% |
|
79.4% |
|
|
|
0.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
$6,390 |
|
$6,602 |
|
($212) |
|
(3.2%) |
|
$15,402 |
|
$15,656 |
|
($254) |
|
(1.6%) |
Property
operating expenses |
3,263 |
|
3,473 |
|
(210) |
|
(6.0%) |
|
7,966 |
|
8,314 |
|
(348) |
|
(4.2%) |
Net
operating income |
$3,127 |
|
$3,130 |
|
($2) |
|
(0.1%) |
|
$7,437 |
|
$7,342 |
|
$94 |
|
1.3% |
Operating
margin3 |
48.9% |
|
47.4% |
|
|
|
1.5% |
|
48.3% |
|
46.9% |
|
|
|
1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALL
PROPERTIES (Number of properties)1,4 |
14 |
|
9 |
|
5 |
|
|
|
14 |
|
9 |
|
5 |
|
|
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month2 |
$592 |
|
$503 |
|
$89 |
|
17.7% |
|
$535 |
|
$486 |
|
$49 |
|
10.2% |
Services
revenue per occupied bed per month |
14 |
|
$20 |
|
(6) |
|
(30.5%) |
|
18 |
|
$21 |
|
(3) |
|
(15.0%) |
Total
revenue per occupied bed |
$606 |
|
$523 |
|
$83 |
|
15.8% |
|
$553 |
|
$506 |
|
$46 |
|
9.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
9,437 |
|
5,148 |
|
4,289 |
|
83.3% |
|
6,754 |
|
4,107 |
|
2,647 |
|
64.4% |
Average
physical occupancy |
58.7% |
|
81.7% |
|
|
|
(23.0%) |
|
69.0% |
|
79.6% |
|
|
|
(10.6%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
$10,072 |
|
$6,602 |
|
$3,470 |
|
52.6% |
|
$30,929 |
|
$19,878 |
|
$11,051 |
|
55.6% |
Property
operating expenses |
7,614 |
|
3,473 |
|
4,141 |
|
119.3% |
|
19,324 |
|
9,670 |
|
9,655 |
|
99.8% |
Net
operating income |
$2,458 |
|
$3,130 |
|
($672) |
|
(21.5%) |
|
$11,605 |
|
$10,208 |
|
$1,397 |
|
13.7% |
Operating
margin3 |
24.4% |
|
47.4% |
|
|
|
(23.0%) |
|
37.5% |
|
51.4% |
|
|
|
(13.9%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
investments5, 6 |
$7,323 |
|
$11,828 |
|
($4,505) |
|
|
|
$7,323 |
|
$11,828 |
|
($4,505) |
|
|
COPPER
BEECH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALL
PROPERTIES (Number of properties)7, 8 |
35 |
|
35 |
|
- |
|
|
|
35 |
|
35 |
|
- |
|
|
Revenue
per occupied bed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenue per occupied bed per month |
$461 |
|
$460 |
|
$1 |
|
0.2% |
|
$462 |
|
$456 |
|
$6 |
|
1.3% |
Services
revenue per occupied bed per month |
27 |
|
26 |
|
1 |
|
3.9% |
|
35 |
|
34 |
|
1 |
|
1.7% |
Total
revenue per occupied bed |
$488 |
|
$487 |
|
$2 |
|
0.4% |
|
$497 |
|
$490 |
|
$7 |
|
1.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
number of owned beds |
16,647 |
|
16,647 |
|
|
|
|
|
16,647 |
|
16,647 |
|
|
|
|
Average
physical occupancy |
93.7% |
|
90.9% |
|
|
|
2.8% |
|
91.3% |
|
92.5% |
|
|
|
(1.2%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue |
$22,848 |
|
$22,090 |
|
$758 |
|
3.4% |
|
$90,590 |
|
$90,539 |
|
$51 |
|
0.1% |
Property
operating expenses9 |
7,889 |
|
8,771 |
|
(883) |
|
(10.1%) |
|
33,621 |
|
34,222 |
|
(601) |
|
(1.8%) |
Net
operating income |
$14,959 |
|
$13,318 |
|
$1,641 |
|
12.3% |
|
$56,968 |
|
$56,316 |
|
$652 |
|
1.2% |
Operating
margin3 |
65.5% |
|
60.3% |
|
|
|
5.2% |
|
62.9% |
|
62.2% |
|
|
|
0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Excludes The Grove at Denton; the Company acquired its joint venture partner's interest in this property on January 21, 2014.
2 For
the three and twelve months ended December 31, 2014, excludes the one-time non-cash impact of the Company’s change in
revenue recognition policy. Beginning with the ‘14/’15 AY year, the Company will recognize revenue for new leases
over the term of the lease (typically 11.5 months) rather than in conjunction with the lease payments (typically 12 equal
monthly payments). While this policy change will have no cash impact, and will have minimal year-over-year impact on a
go-forward basis, the adjustment related to changing the policy in Q4 2014 will have the effect of lowering reported revenue
in that quarter.
3 Operating margin is calculated by dividing NOI for the period by total student housing rental and services revenues for the period. Expenses include property management fees.
4 For the three and twelve months ended December 31, 2014, includes financial results for the 2013 joint venture deliveries (The Grove at Indiana, The Grove at Norman, and The Grove at State College) as well as the 2014 joint venture deliveries (The Grove at Greensboro, The Grove at Louisville, evo at Cira Centre South, evo à Square Victoria and evo à Sherbrooke).
5 As of December 31, 2014, the Company held preferred investment in The Grove at Indiana, The Grove at Greensboro and The Grove at Louisville of approximately $7,323. These preferred interests entitle the Company to a 9.0% return on the investment but otherwise does not change its effective ownership interest in these properties.
6 As of December 31, 2013, the Company held preferred investment in The Grove at San Angelo, The Grove at Conway and The Grove at Indiana of approximately $11,828. These preferred interests entitle the Company to a 9.0% return on the investment but otherwise do not change its effective ownership interest in these properties. In January 2014, the Company amended and restated the HSRE-Campus Crest I, LLC operating agreement, which related to The Grove at San Angelo and The Grove at Conway, which had the effect of exchanging its Class B member preferred interests for limited partnership units, effectively increasing its equity investment in the joint venture to 63.9% from 49.9%. In the event of a sale, the partners are to share equally in the net proceeds. There were no other material changes to the agreement.
7 For the three months ended December 31, 2014, results reflect operating results for the 35 operating properties. Results exclude Copper Beech at Ames, which is the only Copper Beech property included in our consolidated results as of December 31, 2014.
8 For the twelve months ended December 31, 2013, includes results from the Company’s initial investment in Copper Beech on March 18, 2013.
9
During the three months ended December 31, 2014, the Company changed its accounting policy in connection with turn expenses
to recognize costs in the period in which they are incurred as compared to its previous policy of accounting for the costs of
turn ratably over the twelve month academic year. As a result, expenses for turn will be recognized during the third quarter
of the year.
CAPITAL STRUCTURE AS OF DECEMBER 31, 2014
(in $000s, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing common stock price at December 31, 2014 |
|
|
|
|
|
|
$7.31 |
|
|
|
|
|
|
|
|
Common stock |
|
|
|
|
|
|
64,455 |
Operating partnership units |
|
|
|
|
|
|
401 |
Restricted stock |
|
|
|
|
|
|
288 |
Total shares and units outstanding |
|
|
|
|
|
|
65,143 |
|
|
|
|
|
|
|
|
Total equity market value |
|
|
|
|
|
|
$476,199 |
Total preferred equity outstanding1 |
|
|
|
|
|
|
152,500 |
Total consolidated debt outstanding |
|
|
|
|
|
|
618,419 |
Total market capitalization |
|
|
|
|
|
|
$1,247,118 |
|
|
|
|
|
|
|
|
Debt to total market capitalization3 |
|
|
|
|
|
|
49.6% |
Debt to gross assets2, 3 |
|
|
|
|
|
|
47.2% |
|
|
|
|
|
|
|
|
Total number of unencumbered operating properties |
|
|
|
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
Average |
|
Principal |
|
% of Total |
|
Average |
|
Years to |
Consolidated Debt3, 4 |
Outstanding |
|
Principal Outstanding |
|
Interest Rate |
|
Maturity |
|
|
|
|
|
|
|
|
Fixed rate mortgage loans |
$163,341 |
|
26.4% |
|
4.95% |
|
4.4 |
Variable rate mortgage loan |
16,613 |
|
2.7% |
|
2.32% |
|
2.2 |
Construction loans |
120,719 |
|
19.5% |
|
2.30% |
|
1.5 |
Variable rate credit facility |
217,500 |
|
35.2% |
|
2.67% |
|
2.0 |
Exchangeable Notes5 |
97,419 |
|
15.8% |
|
5.53% |
|
3.8 |
Other debt6 |
2,827 |
|
0.5% |
|
4.93% |
|
14.2 |
Total/Weighted Average |
$618,419 |
|
100.0% |
|
3.65% |
|
2.9 |
1 8.00% Series A cumulative redeemable preferred stock redeemable February 2017.
2 Gross assets is defined as total assets plus accumulated depreciation, as reported in the Company's December 31, 2014 consolidated balance sheet.
3 Excludes debt associated with HSRE and Beaumont joint ventures. See page 13 for details related to this debt. The Company is the guarantor of these loans.
4 Excludes debt associated with the Company’s investment in Copper Beech. See page 15 for details related to this debt.
5 Senior unsecured exchangeable notes, maturity in October 2018.
6 Includes $2,552 bond assumed as a part of the purchase of the Flagstaff, AZ property.
OUTSTANDING DEBT AND MATURITY SCHEDULE |
(in $000s) |
|
Principal Balance |
|
Interest Rate |
|
Maturity |
|
Years to |
|
|
Consolidated Debt |
at 12/31/2014 |
|
|
Date |
|
Maturity |
|
Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit facility |
$217,500 |
|
2.7% |
|
1/8/2017 |
|
2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Exchangeable Notes1 |
97,419 |
|
5.5% |
|
10/9/2018 |
|
3.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Other debt2 |
2,827 |
|
4.9% |
|
10/31/2031 |
|
17.1 |
|
Miscellaneous debt |
|
|
|
|
|
|
|
|
|
|
Construction loans |
|
|
|
|
|
|
|
|
|
The Grove at Ft. Collins |
19,073 |
|
2.1% |
|
7/13/2015 |
|
0.5 |
|
Two twelve month extension options |
The Grove at Muncie |
13,892 |
|
2.4% |
|
7/3/2015 |
|
0.5 |
|
Two twelve month extension options |
The Grove at Pullman |
10,886 |
|
2.4% |
|
9/5/2015 |
|
0.7 |
|
Two twelve month extension options |
The Grove at Grand Forks |
12,474 |
|
2.2% |
|
2/5/2017 |
|
2.1 |
|
One eighteen month extension option |
The Grove at Slippery Rock |
16,031 |
|
2.3% |
|
6/21/2016 |
|
1.5 |
|
Two twelve month extension options |
The Grove at Gainesville |
22,836 |
|
2.3% |
|
3/13/2017 |
|
2.2 |
|
|
Copper Beech at Ames |
21,170 |
|
2.4% |
|
5/2/2017 |
|
2.4 |
|
|
Toledo |
4,357 |
|
2.3% |
|
11/25/2017 |
|
2.9 |
|
|
Sub Total |
$120,719 |
|
2.3% |
|
|
|
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Grove at Milledgeville |
$15,640 |
|
6.1% |
|
10/1/2016 |
|
1.8 |
|
Principal and interest |
The Grove at Carrollton |
14,101 |
|
6.1% |
|
10/11/2016 |
|
1.8 |
|
Principal and interest |
The Grove at Las Cruces |
14,573 |
|
6.1% |
|
10/11/2016 |
|
1.8 |
|
Principal and interest |
The Grove at Asheville |
14,304 |
|
5.8% |
|
4/11/2017 |
|
2.3 |
|
Principal and interest |
The Grove at Ellensburg |
15,845 |
|
5.1% |
|
9/1/2018 |
|
3.7 |
|
Principal and interest |
The Grove at Nacogdoches |
16,857 |
|
5.0% |
|
9/1/2018 |
|
3.7 |
|
Principal and interest |
The Grove at Greeley |
14,945 |
|
4.3% |
|
10/1/2018 |
|
3.8 |
|
Principal and interest |
The Grove at Columbia |
22,738 |
|
3.8% |
|
7/1/2022 |
|
7.6 |
|
Principal and interest |
The Grove at Clarksville |
16,238 |
|
4.0% |
|
7/1/2022 |
|
7.6 |
|
Interest only until 7/2014 |
The Grove at Statesboro |
18,100 |
|
4.0% |
|
1/1/2023 |
|
8.1 |
|
Interest only until 1/2015 |
The Grove at Denton |
16,613 |
|
2.3% |
|
3/1/2017 |
|
2.2 |
|
Principal and interest, floating rate |
Sub Total |
$179,954 |
|
4.7% |
|
|
|
4.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Total / Weighted Average |
$618,419 |
|
3.7% |
|
|
|
3.0 |
|
|
1 Senior unsecured exchangeable notes, maturity in October 2018.
2 Includes $2,552 bond assumed as a part of the purchase of the Flagstaff, AZ property.
HSRE & BEAUMONT JOINT VENTURE DEBT SUMMARY |
(in $000s) |
|
|
Principal Balance |
|
Maturity |
Years to |
|
Property |
Ownership |
at 12/31/2014 |
Interest Rate |
Date |
Maturity |
Notes |
|
|
|
|
|
|
|
The Grove at Laramie1 |
10.0% |
$17,211 |
2.82% |
1/5/2015 |
0.0 |
Interest only |
The Grove at San Angelo2 |
63.9% |
11,166 |
2.67% |
2/9/2015 |
0.1 |
Interest only |
The Grove at Lawrence2 |
63.9% |
11,492 |
2.67% |
2/9/2015 |
0.1 |
Interest only |
The Grove at Conway2 |
63.9% |
9,827 |
2.67% |
2/9/2015 |
0.1 |
Interest only |
The Grove at Stillwater3 |
10.0% |
13,325 |
2.92% |
n/a |
n/a |
Interest only |
The Grove at Fayetteville4 |
10.0% |
19,078 |
2.92% |
4/20/2015 |
0.3 |
Interest only |
The Grove at Norman |
20.0% |
17,871 |
2.82% |
5/8/2015 |
0.4 |
Interest only |
The Grove at State College |
20.0% |
18,619 |
2.22% |
9/30/2015 |
0.7 |
Interest only |
The Grove at Indiana |
20.0% |
17,217 |
2.42% |
12/19/2015 |
1.0 |
Interest only |
evo à Square Victoria and evo à Sherbrooke |
47.0% |
87,970 |
6.39% |
1/13/2016 |
1.0 |
Interest only |
evo at Cira Centre South |
30.0% |
90,204 |
2.37% |
7/25/2016 |
1.6 |
Interest only |
The Grove at Louisville |
30.0% |
23,759 |
2.42% |
9/6/2016 |
1.7 |
Interest only |
The Grove at Greensboro |
30.0% |
16,980 |
2.27% |
9/30/2018 |
3.8 |
Interest only |
|
|
|
|
|
|
|
Total / Weighted Average |
|
$354,719 |
3.48% |
|
1.1 |
|
Note: The Company's pro rata share of HSRE and Beaumont joint venture debt as of December 31, 2014 was $117,090.
1 Maturity date has been extended through May 5, 2015
2 Maturity
date has been extended through May 9, 2015
3 The Grove at Stillwater was sold in January 2015.
4 Maturity date has been extended through April 20, 2015
COPPER BEECH JOINT VENTURE DEBT SUMMARY |
(in $000s) |
|
|
Effective |
|
Principal
Balance |
|
|
|
Maturity |
|
Years
to |
|
|
Property |
|
Ownership1 |
|
at
12/31/2014 |
|
Interest
Rate |
|
Date |
|
Maturity |
|
Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated Properties:
48% Effective Ownership Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper Beech at West Lafayette, IN
– Baywater2 |
|
48.0% |
|
$13,872 |
|
5.2% |
|
2/11/2015 |
|
0.1 |
|
Principal
and interest |
Copper Beech at Statesboro, GA -
Phase II3 |
|
48.0% |
|
9,703 |
|
2.7% |
|
5/1/2015 |
|
0.3 |
|
Principal
and interest |
Copper Beech at Mount Pleasant, MI
- Phase II3 |
|
48.0% |
|
10,130 |
|
2.7% |
|
5/1/2015 |
|
0.3 |
|
Principal
and interest |
Copper Beech at State College, PA
- Parkway Plaza |
|
48.0% |
|
18,283 |
|
5.2% |
|
10/1/2015 |
|
0.8 |
|
Principal
and interest |
Copper Beech at Indiana, PA - IUP
II |
|
48.0% |
|
5,916 |
|
5.9% |
|
10/1/2015 |
|
0.8 |
|
Principal
and interest |
Copper Beech at Mount Pleasant, MI
- Phase I |
|
48.0% |
|
18,178 |
|
5.5% |
|
10/1/2015 |
|
0.8 |
|
Principal
and interest |
Copper Beech at Bowling Green, OH
- Phase I |
|
48.0% |
|
12,269 |
|
5.6% |
|
10/1/2015 |
|
0.8 |
|
Principal
and interest |
Copper Beech at State College, PA
- CB I |
|
48.0% |
|
4,979 |
|
5.6% |
|
2/11/2016 |
|
1.1 |
|
Principal
and interest |
Copper Beech at Indiana, PA - IUP
Buy |
|
48.0% |
|
2,335 |
|
5.5% |
|
6/6/2016 |
|
1.4 |
|
Principal
and interest |
Copper Beech at Morgantown, WV |
|
48.0% |
|
34,747 |
|
5.5% |
|
6/6/2016 |
|
1.4 |
|
Principal
and interest |
Copper Beech at Harrisonburg, VA |
|
48.0% |
|
53,572 |
|
5.5% |
|
6/6/2016 |
|
1.4 |
|
Principal
and interest |
Copper Beech at San Marcos, TX -
Phase I |
|
48.0% |
|
33,120 |
|
5.5% |
|
6/6/2016 |
|
1.4 |
|
Principal
and interest |
Copper Beech at Bloomington, IN |
|
48.0% |
|
10,461 |
|
6.2% |
|
10/1/2016 |
|
1.8 |
|
Principal
and interest |
Copper Beech at Allendale, MI - Phase
I |
|
48.0% |
|
22,861 |
|
6.0% |
|
10/1/2016 |
|
1.8 |
|
Principal
and interest |
Copper Beech at Columbia, MO |
|
48.0% |
|
23,614 |
|
6.2% |
|
10/1/2016 |
|
1.8 |
|
Principal
and interest |
Copper Beech at Radford, VA |
|
48.0% |
|
11,934 |
|
6.0% |
|
11/6/2016 |
|
1.9 |
|
Principal
and interest |
Copper Beech at Indiana, PA - IUP
I |
|
48.0% |
|
6,500 |
|
2.2% |
|
6/2/2017 |
|
2.4 |
|
Principal and
interest |
Copper Beech at Allendale, MI - Phase
II |
|
48.0% |
|
11,595 |
|
6.3% |
|
9/6/2017 |
|
2.7 |
|
Principal
and interest |
Copper Beech at Columbia, SC - Phase
I |
|
48.0% |
|
36,001 |
|
6.3% |
|
9/6/2017 |
|
2.7 |
|
Principal
and interest |
Copper Beech at Statesboro, GA -
Phase I |
|
48.0% |
|
30,173 |
|
5.8% |
|
10/6/2017 |
|
2.8 |
|
Principal
and interest |
Copper Beech at Kalamazoo, MI - Phase
I |
|
48.0% |
|
29,637 |
|
5.8% |
|
10/6/2017 |
|
2.8 |
|
Principal
and interest |
Copper Beech at State College, PA
- CB II |
|
48.0% |
|
8,444 |
|
6.0% |
|
8/1/2019 |
|
4.6 |
|
Principal
and interest |
Copper Beech at Columbia, SC - Phase
II |
|
48.0% |
|
5,914 |
|
5.4% |
|
8/1/2020 |
|
5.6 |
|
Principal
and interest |
Copper Beech at Greenville, NC |
|
48.0% |
|
46,726 |
|
5.3% |
|
9/1/2020 |
|
5.7 |
|
Principal
and interest |
Copper Beech at State College, PA
- Oakwood |
|
48.0% |
|
5,569 |
|
5.0% |
|
10/1/2020 |
|
5.8 |
|
Principal
and interest |
Copper Beech at Kalamazoo, MI - Phase
II |
|
48.0% |
|
7,838 |
|
5.7% |
|
10/1/2020 |
|
5.8 |
|
Principal
and interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-Total
/ Weighted Average |
|
|
|
$474,371 |
|
5.50% |
|
|
|
2.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Property: 48%
Ownership Interest |
|
|
|
|
|
|
|
|
|
|
|
|
Copper Beech at Ames, IA |
|
48.0% |
|
$21,170 |
|
2.4% |
|
5/2/2017 |
|
2.3 |
|
Principal
and interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
/ Weighted Average |
|
|
|
$495,540 |
|
5.37% |
|
|
|
2.3 |
|
|
Note: The Company's pro rata share of Copper Beech debt as of December 31, 2014 was $237,859.
1
The Company made its initial investment in Copper Beech 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
enabled the Company to acquire a 67% ownership interest in 28 operating properties, while deferring ownership in seven
properties until the Company exercises future purchase options. On August 18, 2014, the Company elected to not exercise the
first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014,
the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated and a 48%
interest in one consolidated operating property.
2
Principal was repaid in full in first quarter 2015.
3
Automatic extension to November 1, 2016 available for Copper Beech at Statesboro, GA - Phase II. Automatic extension to
February 1, 2017 available for Copper Beech at Mount Pleasant, MI - Phase II.
Illustrative Estimated Total Pro Rata Debt as of Close of Copper Beech Transaction1 |
(in $000s) |
|
|
As of |
|
CB Related
Adjustments |
|
Illustrative as |
|
|
12/31/2014 |
|
|
of CB Close |
|
|
|
|
|
|
|
Cash & Equivalents |
|
$15,240 |
|
($807) |
|
$14,433 |
|
|
|
|
|
|
|
Consolidated Debt |
|
|
|
|
|
|
Mortgage Loans2 |
|
179,954 |
|
321,043 |
|
500,997 |
Construction Loans |
|
120,719 |
|
- |
|
120,719 |
Credit Facility3 |
|
217,500 |
|
46,000 |
|
263,500 |
Exchangeable Notes |
|
97,419 |
|
- |
|
97,419 |
Other Debt |
|
2,827 |
|
- |
|
2,827 |
Total Consolidated Debt |
|
618,419 |
|
367,043 |
|
985,462 |
|
|
|
|
|
|
|
Unconsolidated Debt (Pro Rata) |
|
|
|
|
|
|
Joint Venture Debt - HSRE |
|
75,744 |
|
- |
|
75,744 |
Joint Venture Debt - Beaumont |
|
41,346 |
|
- |
|
41,346 |
Joint Venture Debt - Copper Beech4 |
|
227,698 |
|
(154,100) |
|
73,597 |
Total Unconsolidated Debt |
|
344,788 |
|
(154,100) |
|
190,688 |
|
|
|
|
|
|
|
Total Pro Rata Debt, net of cash |
|
947,967 |
|
213,749 |
|
1,161,716 |
|
|
|
|
|
|
|
Preferred Equity |
|
152,500 |
|
- |
|
152,500 |
|
|
|
|
|
|
|
Total Pro Rata Debt and Preferred Equity |
|
1,100,467 |
|
213,749 |
|
1,314,216 |
|
|
|
|
|
|
|
Total Equity Market Value5 |
|
476,199 |
|
90,701 |
|
566,900 |
|
|
|
|
|
|
|
Total Market Cap Plus Pro Rata JV Debt |
|
$1,576,666 |
|
$304,450 |
|
$1,881,116 |
|
|
|
|
|
|
|
Debt to Total Market Cap Plus JV Debt |
|
|
|
|
|
|
Total Pro Rata Debt |
|
60.1% |
|
|
|
61.8% |
Total Pro Rata Debt plus Preferred Equity |
|
69.8% |
|
|
|
69.9% |
|
|
|
|
|
|
|
1 The information shown in the table above is for illustrative purposes only and should not be construed as pro forma information in accordance with Article 11 of Regulation S-X.
2 Reflects estimated impact of consolidation of wholly owned Copper Beech debt following close of transaction, excluding any potential impact of purchase price accounting.
3 Reflects incremental credit facility borrowing to fund closing of Copper Beech transaction; pro forma credit facility availability is approximately $33 million after inclusion of unencumbered Copper Beech assets in the borrowing base. The Company received a waiver on February 25, 2015 that provides the following covenant tests through 3Q2015: Total Leverage: 65.0%; Fixed Charge Coverage: 1.30x; FFO Payout Ratio: pro forma treatment as if TTM quarterly dividend rate was $0.09/share.
4 Illustrative column reflects pro rata debt related to four properties that continue to be held in a joint venture with Copper Beech.
5 CB related adjustment reflects 12.4 million OP units issued in conjunction with Copper Beech close based on December 31, 2014 closing common stock price of $7.31.
PORTFOLIO OVERVIEW AND OCCUPANCY |
|
|
|
|
|
|
|
|
Occupancy |
|
|
|
|
Year
Opened/ |
|
|
|
December
31, |
Property |
Grouping1 |
|
Primary University |
Acquired |
Properties |
Units |
Beds |
2014 |
2013 |
Change |
|
|
|
|
|
|
|
|
|
|
|
Wholly Owned Operating Properties |
|
|
|
|
|
|
|
|
|
|
The Grove at Asheville, NC |
(A) |
|
UNC - Asheville |
2005 |
|
154 |
448 |
98.2% |
99.8% |
(1.6%) |
The Grove
at Carrollton, GA |
(A) |
|
University
of West Georgia |
2006 |
|
168 |
492 |
91.1% |
99.4% |
(8.3%) |
The Grove
at Las Cruces, NM |
(A) |
|
New Mexico
State University |
2006 |
|
168 |
492 |
82.9% |
85.0% |
(2.0%) |
The Grove
at Milledgeville, GA |
(A) |
|
Georgia
College & State University |
2006 |
|
168 |
492 |
99.4% |
99.4% |
0.0% |
The Grove
at Abilene, TX |
(A) |
|
Abilene
Christian University |
2007 |
|
192 |
504 |
92.9% |
95.2% |
(2.4%) |
The Grove
at Ellensburg, WA |
(A) |
|
Central
Washington University |
2007 |
|
192 |
504 |
97.4% |
99.0% |
(1.6%) |
The Grove at Greeley, CO |
(A) |
|
University of Northern Colorado |
2007 |
|
192 |
504 |
99.0% |
99.4% |
(0.4%) |
The Grove at Mobile, AL--Phase I
& II2 |
(A) |
|
University of South Alabama |
2007/2008 |
|
384 |
1,008 |
85.9% |
79.2% |
6.7% |
The Grove at Nacogdoches,
TX--Phase I & II2 |
(A) |
|
Stephen F. Austin State Univ. |
2007/2012 |
|
260 |
682 |
84.9% |
87.4% |
(2.5%) |
The Grove at Cheney, WA |
(A) |
|
Eastern Washington University |
2008 |
|
192 |
512 |
92.0% |
95.1% |
(3.1%) |
The Grove at Lubbock, TX |
(A) |
|
Texas Tech University |
2008 |
|
192 |
504 |
93.8% |
93.1% |
0.8% |
The Grove at Stephenville, TX |
(A) |
|
Tarleton State University |
2008 |
|
192 |
504 |
99.4% |
99.4% |
0.0% |
The Grove at Troy, AL |
(A) |
|
Troy University |
2008 |
|
192 |
514 |
94.4% |
93.4% |
1.0% |
The Grove at Waco, TX |
(A) |
|
Baylor University |
2008 |
|
192 |
504 |
90.1% |
91.1% |
(1.0%) |
The Grove at Murfreesboro, TN |
(A) |
|
Middle Tennessee State University |
2009 |
|
186 |
504 |
98.0% |
98.8% |
(0.8%) |
The Grove at San Marcos, TX |
(A) |
|
Texas State University |
2009 |
|
192 |
504 |
97.2% |
100.0% |
(2.8%) |
The Grove at Moscow, ID |
(A) |
|
University of Idaho |
2009 |
|
192 |
504 |
85.7% |
99.8% |
(14.1%) |
The Grove at Huntsville, TX |
(A) |
|
Sam Houston State University |
2010 |
|
192 |
504 |
99.6% |
100.0% |
(0.4%) |
The Grove at Statesboro, GA |
(A) |
|
Georgia Southern University |
2010 |
|
200 |
536 |
86.0% |
75.2% |
10.8% |
The Grove at Ames, IA |
(A) |
|
Iowa State University |
2011 |
|
216 |
584 |
97.9% |
100.0% |
(2.1%) |
The Grove at Clarksville, TN |
(A) |
|
Austin Peay State University |
2011 |
|
208 |
560 |
72.3% |
89.5% |
(17.1%) |
The Grove at Columbia, MO |
(A) |
|
University of Missouri |
2011 |
|
216 |
632 |
73.1% |
73.6% |
(0.5%) |
The Grove at Ft. Wayne, IN |
(A) |
|
Indiana University-Purdue University
Ft. Wayne |
2011 |
|
204 |
540 |
77.4% |
93.7% |
(16.3%) |
The Grove at Valdosta, GA |
(A) |
|
Valdosta State University |
2011 |
|
216 |
584 |
87.3% |
88.4% |
(1.0%) |
The Grove at Denton, TX |
(A) |
|
University of North Texas |
2011 |
|
216 |
584 |
100.0% |
91.4% |
8.5% |
The Grove at Auburn, AL |
(A) |
|
Auburn University |
2012 |
|
216 |
600 |
99.8% |
99.8% |
0.0% |
The Grove at Flagstaff, AZ |
(A) |
|
Northern Arizona University |
2012 |
|
216 |
584 |
99.1% |
99.8% |
(0.7%) |
The Grove at Orono, ME |
(A) |
|
University of Maine |
2012 |
|
188 |
620 |
99.2% |
93.5% |
5.6% |
The Grove at Ft. Collins, CO |
(B) |
|
Colorado State University |
2013 |
|
218 |
612 |
99.3% |
100.0% |
(0.7%) |
The Grove at Muncie, IN |
(B) |
|
Ball State University |
2013 |
|
216 |
584 |
85.6% |
70.5% |
15.1% |
The Grove at Pullman, WA3 |
(B) |
|
Washington State University |
2013 |
|
216 |
584 |
100.0% |
100.0% |
0.0% |
The Grove at Flagstaff, AZ - Phase
II2 |
(B) |
|
Northern Arizona University |
2013 |
|
54 |
192 |
99.0% |
100.0% |
(1.0%) |
The Grove
at Gainesville, FL |
(C) |
|
University
of Florida |
2014 |
|
256 |
682 |
57.8% |
n/a |
n/a |
The Grove
at Grand Forks, ND |
(C) |
|
University
of North Dakota |
2014 |
|
224 |
600 |
99.2% |
n/a |
n/a |
The Grove
at Mt. Pleasant, MI |
(C) |
|
Central
Michigan University |
2014 |
|
224 |
584 |
76.5% |
n/a |
n/a |
The Grove
at Slippery Rock, PA |
(C) |
|
Slippery
Rock University |
2014 |
|
201 |
603 |
85.7% |
n/a |
n/a |
Total
- Wholly Owned Operating Properties |
|
|
|
|
36 |
7,305 |
19,945 |
90.4% |
92.7% |
(2.3%) |
1 Groupings detailed as follows: (A) reflects the same store properties as of December 31, 2014; (B) reflects the 2013 development deliveries; (C) reflects the 2014 development deliveries.
2 The Grove at Mobile, AL--Phase I & II are counted as two properties in the Company's property count. The Grove at Nacogdoches, TX - Phase II and The Grove at Flagstaff, AZ - Phase II are not counted as a separate assets from Phase I of each respective asset.
3 On July 14, 2013, the Company experienced a fire at this development. As of December 31, 2014, all 584 beds are in operation.
PORTFOLIO OVERVIEW AND OCCUPANCY (cont'd) |
|
|
|
|
|
|
|
|
Occupancy |
|
|
|
|
Year
Opened/ |
|
|
|
December
31, |
Property |
Grouping1 |
|
Primary
University |
Acquired |
Properties |
Units |
Beds |
2014 |
2013 |
Change |
|
|
|
|
|
|
|
|
|
|
|
Joint Venture Operating Properties |
|
|
|
|
|
|
|
|
|
|
The Grove
at Lawrence, KS |
(A) |
|
University
of Kansas |
2009 |
|
172 |
500 |
74.4% |
86.0% |
(11.6%) |
The Grove
at San Angelo, TX |
(A) |
|
Angelo State
University |
2009 |
|
192 |
504 |
98.8% |
96.8% |
2.0% |
The Grove
at Conway, AR |
(A) |
|
University
of Central Arkansas |
2010 |
|
180 |
504 |
64.5% |
70.2% |
(5.8%) |
The Grove
at Fayetteville, AR |
(A) |
|
University
of Arkansas |
2012 |
|
232 |
632 |
67.2% |
60.9% |
6.3% |
The Grove
at Laramie, WY |
(A) |
|
University
of Wyoming |
2012 |
|
224 |
612 |
82.4% |
84.0% |
(1.6%) |
The Grove
at Stillwater, OK |
(A) |
|
Oklahoma
State University |
2012 |
|
206 |
612 |
81.9% |
95.4% |
(13.6%) |
The Grove
at Indiana, PA |
(B) |
|
Indiana
University of Pennsylvania |
2013 |
|
224 |
600 |
65.0% |
92.0% |
(27.0%) |
The Grove
at Norman, OK |
(B) |
|
University
of Oklahoma |
2013 |
|
224 |
600 |
75.9% |
85.1% |
(9.2%) |
The Grove
at State College, PA |
(B) |
|
Penn State
University |
2013 |
|
216 |
584 |
97.2% |
68.8% |
28.3% |
The Grove
at Greensboro, NC |
(C) |
|
University of North Carolina at Greensboro |
2014 |
|
216 |
584 |
56.8% |
n/a |
n/a |
The Grove
at Louisville, KY |
(C) |
|
University of Louisville |
2014 |
|
252 |
656 |
60.7% |
n/a |
n/a |
evo at Cira
Centre South |
(C) |
|
University
of Pennsylvania / Drexel University |
2014 |
|
344 |
850 |
51.2% |
n/a |
n/a |
evo à
Square Victoria |
(C) |
|
Concordia
University / McGill University / (ÉTS) |
2014 |
|
715 |
1,294 |
16.4% |
n/a |
n/a |
evo à
Sherbrooke |
(C) |
|
McGill University |
2014 |
|
488 |
929 |
11.0% |
n/a |
n/a |
|
|
|
|
|
|
|
|
|
|
|
Total
- Joint Venture Operating Properties |
|
|
|
|
14 |
3,885 |
9,461 |
59.8% |
81.9% |
(22.2%) |
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Properties2 |
|
|
|
|
50 |
11,190 |
29,406 |
80.1% |
90.2% |
(10.2%) |
|
|
|
|
|
|
|
|
|
|
|
Same Store Properties (A) |
|
|
|
|
|
|
|
|
|
|
Wholly-Owned |
|
|
|
|
28 |
5,696 |
15,504 |
91.6% |
92.8% |
(1.3%) |
Joint Venture |
|
|
|
|
6 |
1,206 |
3,364 |
78.0% |
81.9% |
(3.9%) |
Total - Same Store |
|
|
|
|
34 |
6,902 |
18,868 |
89.1% |
90.9% |
(1.7%) |
|
|
|
|
|
|
|
|
|
|
|
2013 Deliveries (B) |
|
|
|
|
|
|
|
|
|
|
Wholly-Owned |
|
|
|
|
4 |
704 |
1,972 |
95.4% |
91.3% |
4.2% |
Joint Venture |
|
|
|
|
3 |
664 |
1,784 |
79.2% |
82.1% |
(2.9%) |
Total - 2013 Deliveries |
|
|
|
|
7 |
1,368 |
3,756 |
87.7% |
86.9% |
0.8% |
|
|
|
|
|
|
|
|
|
|
|
2014 Deliveries (C)3 |
|
|
|
|
|
|
|
|
|
|
Wholly-Owned |
|
|
|
|
4 |
905 |
2,469 |
79.1% |
n/a |
n/a |
Joint Venture |
|
|
|
|
5 |
2,015 |
4,313 |
34.3% |
n/a |
n/a |
Total - 2014 Deliveries |
|
|
|
|
9 |
2,920 |
6,782 |
50.6% |
n/a |
n/a |
1 Groupings detailed as follows: (A) reflects the same store properties as of December 31, 2014; (B) reflects the 2013 development deliveries; (C) reflects the 2014 development deliveries.
2 The redevelopment of the 100% owned property in Toledo, OH is excluded. The Grove at Denton is included for purposes of this presentation. The Company acquired its joint venture partner's interest in the Grove at Denton on January 21, 2014. The occupancy data related to Denton is included in 2014 deliveries.
3 Does not include the Copper Beech at Ames 2014 delivery, which is included on page 19.
COPPER
BEECH PORTFOLIO OVERVIEW AND OCCUPANCY1
|
|
|
|
|
|
|
|
Occupancy |
|
|
|
Year
Opened/ |
|
|
|
|
December
31, |
Property |
|
Primary University |
Acquired |
|
Properties |
Units |
Beds |
2014 |
|
2013 |
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated Properties: 48% Effective Ownership Interest |
|
|
|
|
|
|
|
|
|
|
|
Copper Beech at State College, PA
- Parkway Plaza |
|
Penn State University |
1967 |
|
|
429 |
633 |
98.9% |
|
88.3% |
10.6% |
Copper Beech at Bloomington, IN
- Colonial Crest |
|
Indiana University |
1970 |
|
|
206 |
402 |
82.3% |
|
82.3% |
0.0% |
Copper Beech at Indiana, PA - IUP
I |
|
Indiana University of Pennsylvania |
1971 |
|
|
95 |
239 |
97.5% |
|
100.0% |
(2.5%) |
Copper Beech at Indiana, PA - IUP
II |
|
Indiana University of Pennsylvania |
1973 |
|
|
72 |
172 |
100.0% |
|
100.0% |
0.0% |
Copper Beech at Indiana, PA - IUP
Buy |
|
Indiana University of Pennsylvania |
1975 |
|
|
43 |
76 |
98.7% |
|
97.4% |
1.3% |
Copper Beech at State College, PA
- CB I |
|
Penn State University |
1996 |
|
|
59 |
177 |
100.0% |
|
91.5% |
8.5% |
Copper Beech at State College, PA
- CB II |
|
Penn State University |
1998 |
|
|
87 |
257 |
100.0% |
|
93.0% |
7.0% |
Copper Beech at State College, PA
- Oakwood |
|
Penn State University |
2000 |
|
|
48 |
144 |
99.3% |
|
77.1% |
22.2% |
Copper Beech at Harrisonburg, VA
- Grand Duke |
|
James Madison University |
2001 |
|
|
120 |
124 |
100.0% |
|
97.6% |
2.4% |
Copper Beech at State College, PA
- Northbrook Greens |
|
Penn State University |
2003 |
|
|
166 |
250 |
100.0% |
|
100.0% |
0.0% |
Copper Beech at West Lafayette,
IN – Klondike |
|
Purdue University |
2003 |
|
|
219 |
486 |
85.8% |
|
91.4% |
(5.6%) |
Copper Beech at State College, PA
- Oak Hill |
|
Penn State University |
2003 |
|
|
106 |
318 |
100.0% |
|
68.9% |
31.1% |
Copper Beech at West Lafayette,
IN – Baywater |
|
Purdue University |
2004 |
|
|
137 |
488 |
83.8% |
|
98.8% |
(15.0%) |
Copper Beech at Radford, VA |
|
Radford University |
2005 |
|
|
222 |
500 |
99.8% |
|
99.6% |
0.2% |
Copper Beech at Bloomington, IN |
|
Indiana University |
2005 |
|
|
107 |
297 |
69.7% |
|
83.8% |
(14.1%) |
Copper Beech at Mount Pleasant,
MI - Phase I |
|
Central Michigan University |
2005 |
|
|
204 |
632 |
97.5% |
|
100.0% |
(2.5%) |
Copper Beech at Bowling Green, OH
- Phase I |
|
Bowling Green University |
2005 |
|
|
128 |
400 |
99.8% |
|
98.8% |
1.0% |
Copper Beech at Fresno, CA |
|
California State University at Fresno |
2006 |
|
|
178 |
506 |
91.3% |
|
91.3% |
0.0% |
Copper Beech at Allendale, MI -
Phase I |
|
Grand Valley State University |
2006 |
|
|
206 |
614 |
100.0% |
|
100.0% |
0.0% |
Copper Beech at Columbia, MO |
|
University of Missouri |
2006 |
|
|
214 |
654 |
88.1% |
|
100.0% |
(11.9%) |
Copper Beech at Bowling Green, OH
- Phase II |
|
Bowling Green University |
2007 |
|
|
72 |
216 |
100.0% |
|
99.5% |
0.5% |
Copper Beech at Allendale, MI -
Phase II |
|
Grand Valley State University |
2007 |
|
|
82 |
290 |
100.0% |
|
100.0% |
0.0% |
Copper Beech at Columbia, SC - Phase
I |
|
University of South Carolina |
2007 |
|
|
278 |
824 |
96.0% |
|
99.4% |
(3.4%) |
Copper Beech at Statesboro, GA -
Phase I |
|
Georgia Southern University |
2007 |
|
|
246 |
754 |
96.6% |
|
65.3% |
31.3% |
Copper Beech at Kalamazoo, MI -
Phase I |
|
Western Michigan University |
2007 |
|
|
256 |
784 |
82.1% |
|
85.8% |
(3.7%) |
Copper Beech at Columbia, SC - Phase
II |
|
University of South Carolina |
2008 |
|
|
72 |
178 |
96.1% |
|
99.4% |
(3.4%) |
Copper Beech at Harrisonburg, VA |
|
James Madison University |
2008 |
|
|
414 |
1,218 |
99.8% |
|
99.7% |
0.1% |
Copper Beech at Greenville, NC |
|
East Carolina University |
2008 |
|
|
439 |
1,232 |
95.2% |
|
97.6% |
(2.4%) |
Copper Beech at Kalamazoo, MI -
Phase II |
|
Western Michigan University |
2008 |
|
|
115 |
340 |
68.8% |
|
77.4% |
(8.5%) |
Copper Beech at Auburn, AL |
|
Auburn University |
2009 |
|
|
271 |
754 |
92.8% |
|
76.3% |
16.6% |
Copper Beech at Morgantown, WV |
|
West Virginia University |
2010 |
|
|
335 |
920 |
99.8% |
|
99.9% |
(0.1%) |
Copper Beech at San Marcos, TX -
Phase I |
|
Texas State University |
2011 |
|
|
273 |
840 |
89.2% |
|
90.1% |
(1.0%) |
Copper Beech at San Marcos, TX -
Phase II |
|
Texas State University |
2012 |
|
|
142 |
410 |
88.0% |
|
92.4% |
(4.4%) |
Copper Beech at Mount Pleasant,
MI - Phase II |
|
Central Michigan University |
2013 |
|
|
119 |
256 |
98.4% |
|
40.6% |
57.8% |
Copper Beech at Statesboro, GA - Phase II |
|
Georgia Southern University |
2013 |
|
|
82 |
262 |
98.5% |
|
43.5% |
55.0% |
|
|
|
|
|
|
|
|
|
|
|
|
Sub-Total
/ Weighted Average |
|
|
|
|
35 |
6,242 |
16,647 |
93.7% |
|
90.7% |
3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Property: 48% Ownership Interest |
|
|
|
|
|
|
|
|
|
|
|
Copper Beech at Ames, IA |
|
Iowa State University |
2014 |
|
1 |
219 |
636 |
79.5% |
|
n/a |
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
Total
- Copper Beech Portfolio |
|
|
|
|
36 |
6,461 |
17,283 |
93.2% |
|
90.7% |
2.5% |
|
|
|
|
|
|
|
|
|
|
|
|
1 The Company made its initial investment in Copper Beech 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 enabled the Company to acquire a 67% ownership interest in 28 operating properties, while deferring ownership in seven properties until the Company exercises future purchase options. On August 18, 2014, the Company elected to not exercise the first purchase option and reverted to a 48% interest ownership interest in 35 operating properties. As of December 31, 2014, the Company held a 48% effective interest in 35 operating and two non-operating properties which are unconsolidated and a 48% ownership interest in one consolidated operating property.
Illustrative1 Bridges of Key Metrics
(in $000s)
Illustrative1
Q4 2014 Pro Rata NOI Bridge |
|
|
|
|
Illustrative1
Q4 2014 Interest Expense Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 Wholly Owned NOI2 |
|
$17,580 |
|
|
Q4 Interest Expense As Reported |
|
$5,526 |
|
|
|
|
|
|
|
|
Q4 Illustrative Pro Rata Copper Beech NOI3 |
|
11,900 |
|
|
Q4 Wholly Owned Capitalized Interest Expense |
|
112 |
|
|
|
|
|
|
|
|
Q4 Joint Venture Pro Rata NOI, excluding Montreal4 |
|
1,050 |
|
|
Pro Rata JV Interest Expense, excluding Montreal4 |
|
496 |
|
|
|
|
|
|
|
|
Illustrative Q4 2014 Pro Rata NOI, excluding Montreal |
|
$30,529 |
|
|
Pro Rata Montreal Interest Expense4 |
|
654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Illustrative Pro Rata Copper Beech Interest Expense3 |
|
5,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Illustrative Q4 2014 Pro Rata Interest Expense |
|
$11,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2014 G&A
Bridge to Estimated1 2015 Net G&A |
|
|
|
|
Illustrative1
Q4 2014 FFOA Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2014 G&A |
|
|
|
|
Q4 2014 FFOA10 |
|
$3,063 |
|
|
|
|
|
Per Diluted Share |
|
$0.05 |
Net G&A, as reported |
|
$14,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized G&A Expenses5 |
|
19,789 |
|
|
Impact of Accounting Policy Changes11 |
|
1,458 |
|
|
|
|
|
|
|
|
Discontinued Operations6 |
|
3,068 |
|
|
Impact of Montreal Joint Venture |
|
1,875 |
|
|
|
|
|
|
|
|
FY 2014 Gross G&A |
|
$37,160 |
|
|
Illustrative FFOA Before Copper Beech Adjustment |
|
$6,395 |
|
|
|
|
|
Per Diluted Share12 |
|
$0.10 |
Estimated
FY 2015 G&A Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identified Near-term Cost Savings7 |
|
(14,000) |
|
|
Illustrative Copper Beech Contribution Adjustment13 |
|
2,430 |
|
|
|
|
|
|
|
|
FY 2015 Estimated Capitalized Expense8 |
|
($2,100) |
|
|
Illustrative Q4 2014 FFOA |
|
$8,825 |
|
|
|
|
|
Per Diluted Share14 |
|
$0.11 |
FY 2015 Estimated Net G&A9 |
|
$21,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 The information shown in the table above is for illustrative purposes only and should not be construed as pro forma information in accordance with Article 11 of Regulation S-X.
2 Excludes the one-time non-cash impact of the Company’s change in revenue recognition policy. Beginning with the ‘14/’15 AY, the Company will recognize revenue for new leases over the term of the lease (typically 11.5 months) rather than in conjunction with the lease payments (typically 12 equal monthly payments). While this policy change will have no cash impact, and will have minimal year-over-year impact on a go-forward basis, the adjustment related to changing the policy in Q4 2014 will have the effect of lowering reported revenue in that quarter.
3 Represents illustrative pro rata contribution from Copper Beech based on the Company's ownership percentage of Copper Beech properties as of the closing of the transaction announced November 4, 2014.
4 Pro rata contribution of joint ventures that is reflected in "equity in earnings of unconsolidated entities" in the Company's financial statements.
5 Expenses related to construction and development activities, as well as property management and corporate overhead that were allocated to properties under construction.
6 Expenses related to the discontinued construction and development operations.
7 Identified near-term variable cost savings expected to be realized in 2015. Additional variable cost savings are targeted to be realized throughout the year, as well as fixed cost reductions that will be realized over time as the Company executes on its process review and improvement initiatives as part of its strategic repositioning.
8 Ongoing overhead costs related to property capital improvement activities of the Company.
9 Estimated 2015 G&A does not include potential incremental cost related to additions to the executive management team.
10 Refer to page 6 for a calculation of FFOA.
11 One-time, non-cash impact of the Company’s change in revenue recognition policy. See footnote 2. Also excludes the impact of the Company's change its accounting policy in connection with turn expenses to recognize costs in the period in which they are incurred as compared to its previous policy of accounting for the costs of turn ratably over the twelve months academic year. As a result, on a go-forward basis, expenses for turn will be recognized during the third quarter of the year.
12 Based on 65.2 million weighted average diluted shares outstanding for the three months ended 12/31/14.
13 Represents incremental FFOA contribution based on the Company's ownership percentage of Copper Beech properties as of the closing of the transaction announced November 4, 2014.
14 Based on illustrative shares outstanding including 12.4 million OP units issued in conjunction with the closing of Copper Beech transaction announced November 4, 2014.
Executive
Management |
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Aaron Halfacre |
President and Chief Investment Officer |
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Scott Rochon |
Acting Chief Financial Officer and Chief Accounting
Officer |
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Corporate Headquarters |
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Investor Relations |
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2100 Rexford Road
#414 |
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(704) 496-2571 |
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Charlotte, NC 28211 |
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investor.relations@campuscrest.com |
(704) 496-2500 |
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Covering Analysts |
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Barclays Capital Inc. |
Ross Smotrich |
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(212) 526-2306 |
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ross.smotrich@barclays.com |
Citigroup Global Markets Inc. |
Michael Bilerman / Nick Joseph |
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(212) 816-1383 / (212) 816-1909 |
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michael.bilerman@citi.com / nicholas.joseph@citi.com |
MLV & Co LLC |
Ryan Meliker / Michael Kodesch |
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(212) 542-5872 / (646) 556-9188 |
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rmeliker@mlvco.com / mkodesch@mlvco.com |
Raymond James & Associates |
Paul D. Puryear / Buck Horne |
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(727) 567-2253 / (727) 567-2561 |
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paul.puryear@raymondjames.com / buck.horne@raymondjames.com |
RBC Capital Markets, LLC |
Mike Salinsky |
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(440) 715-2648 |
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mike.salinsky@rbccm.com |
Bank of America Merrill Lynch |
Jana Galan / Jane Wong |
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(646) 855-3081 / (646) 855-3378 |
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jana.galan@baml.com / jane.wong1@baml.com |
Wunderlich Securities |
Craig Kucera |
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(540) 277-3366 |
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ckucera@wundernet.com |
Green Street Advisors, Inc. |
Dave Bragg / Ryan Burke |
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(949) 640-8780 |
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dbragg@greenstreetadvisors.com / rburke@greenstreetadvisors.com |
FORWARD - LOOKING STATEMENTS
This document, 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 2013 FFO 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.
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