Campus Crest Communities, Inc. (NYSE: CCG) (the "Company"), a leading
developer, builder, owner and manager of high-quality student housing
properties, today announced results for the three and twelve months
ended December 31, 2013.
Fourth Quarter 2013
Full Year 2013
Financial Results for the Three and Twelve Months Ended December 31,
For the three and twelve months ended December 31, 2013, Funds From
Operations ("FFO") and FFOA are shown in the table below.
Per share -
A reconciliation of net income attributable to common stockholders to
FFO and to FFOA can be found at the end of this release.
For the three months ended December 31, 2013, the Company reported total
revenues of $35.0 million and net income (loss) attributable to common
stockholders of ($12.0) million, compared to $32.3 million and $1.1
million, respectively, in the same period in 2012. For the twelve months
ended December 31, 2013, the Company reported total revenues of $142.3
million and net income (loss) attributable to common stockholders of
($4.5) million, compared to $128.4 million and $6.6 million,
respectively, in the same period in 2012.
For the three and twelve months ended December 31, 2013, results for
wholly-owned same store properties were as follows:
Same Store Results
The decrease in same-store NOI for the three and twelve months ended
December 31, 2013 was primarily a result of an increase in bad debt
expense of $1.2 million for both the quarter and the year.
NOI margin is calculated by dividing NOI for the period by total student
housing rental and services revenues for the period. A reconciliation of
net income attributable to common stockholders to NOI can be found at
the end of this release. In addition, details regarding same store NOI
and calculations thereof may be found in the Supplemental Analyst
Package located at http://investors.campuscrest.com/.
As of December 31, 2013, the Company owned interests in 79 properties
totaling approximately 43,256 beds across North America. A summary of
the leasing for the 2014 - 2015 academic year follows:
2014/2015 Academic Year Leasing Summary
The Company expects to deliver eight new development projects, totaling
5,213 beds, for the 2014/2015 academic year, at a total cost of
approximately $384.9 million, of which $214.5 million is the Company's
share. The assets are located a median of 0.3 miles to campuses of
primary non-flagship and flagship universities.
The Company expects to deliver two redevelopment projects, totaling
2,242 beds, for the 2014/2015 academic year, at a total cost of
approximately $166.4 million, of which $58.2 million is the Company's
share. The two assets are located in downtown Montréal, Québec.
On September 30, 2013, the Company entered into an amendment to the
purchase and sale agreement for the Copper Beech portfolio that, subject
to receipt of required third-party lender consents, enabled the Company
to acquire a 67% ownership interest in 30 properties, while deferring
ownership in 7 properties until the Company exercises future purchase
options. As of December 31, 2013, the Company held a 67% effective
interest in 28 operating and 2 non-operating properties.
In January 2014, the Company acquired from Harrison Street Real Estate
Capital the remaining 80% interest in The Grove at Denton, Texas, for
approximately $7.7 million.
On December 27, 2013, the Company completed the sale of four
wholly-owned Grove-branded student housing properties. The four
properties were unencumbered and generated net sales proceeds to the
Company of approximately $50.0 million.
Balance Sheet and Capital Markets
On October 9, 2013, the Company closed on two capital markets offerings:
As of December 31, 2013, the Company had $26.7 million of restricted
cash from the asset sales mentioned above that were structured as a 1031
exchange. Additionally, as of December 31, 2013, the Company had not
sold any shares under its $100.0 million At-the-Market common equity
On January 28, 2014, the Company announced that its Board of Directors
declared its first quarter 2014 common stock dividend of $0.165 per
share. The dividend is payable on April 9, 2014 to stockholders of
record as of March 26, 2014.
The Board of Directors also declared a cash dividend of $0.50 per Series
A Cumulative Redeemable Preferred Share for the first quarter of 2014.
The preferred share dividend is payable on April 15, 2014 to
stockholders of record as of March 26, 2014.
2014 Earnings Guidance and Outlook
Based on the current expectations and judgment of the Company's
management team, the Company anticipates that fiscal year 2014 FFOA will
be in the range of $0.72 to $0.74 per fully diluted share. This reflects
a blend of 2013/2014 and 2014/2015 academic years as well as the base
case for Copper Beech in the event the Company does not elect to
exercise purchase option one. The following table provides details of
our 2014 guidance:
As a result of certain transactions at the end of 2013 and assumptions
for 2014, the Company expects to have short term dilution of
approximately $0.16 to $0.18 per fully diluted share that is embedded in
the above guidance. This dilution is partially offset in 2014 by the
impact of other items, such as the delivery of new properties in the
third quarter 2014 that were funded by the 2013 transactions. These
transactions and assumptions include:
Our FFOA guidance excludes non-recurring and non-cash items, such as the
write-off of deferred financing costs as a result of early payoff of
financings, potential impairments, transaction costs associated with the
Copper Beech investment and other acquisitions and the mark-to-market
adjustment of the Copper Beech debt. Additionally, it excludes the
potential impact of any asset dispositions or capital raises.
Conference Call Details
The Company will host a conference call on Thursday, February 27, 2014,
at 9:00 a.m. (EST) to discuss the financial results, as well as the
Company's outlook for 2014.
The call can be accessed live over the phone by dialing 877-407-0789, or
for international callers, 201-689-8562. A replay will be available
shortly after the call and can be accessed by dialing 877-870-5176, or
for international callers, 858-384-5517. The pin number for the replay
is 13574886. The replay will be available until March 6, 2014.
Interested parties may also listen to a simultaneous webcast of the
conference call by logging onto the Company's website at http://investors.campuscrest.com/.
A recording of the call will also be available on the Company's website
following the call.
The Company has published a Supplemental Analyst Package in order
to provide additional disclosure and financial information for the
benefit of the Company's stakeholders. These can be found under the
"Earnings Center" tab in the Investors section of the Company's web site
About Campus Crest Communities, Inc.
Campus Crest Communities, Inc. is a leading developer, builder, owner
and manager of high-quality student housing properties located close to
college campuses in targeted markets. Pro forma for the Copper Beech
restructure, the Company has ownership interests in 80 student housing
properties and over 43,000 beds across North America, of which 70 are
operating and 10 are development or redevelopment properties. The
Company is an equity REIT that differentiates itself through its
vertical integration and consistent branding across the portfolio
through three unique brands targeting different segments of the college
student population. The Grove® brand offers more traditional apartment
floor plans and focuses on customer service, privacy, on-site amenities
and a proprietary residence life program. The Copper Beech brand and
townhome product offers more residential-type living to students looking
for a larger floor plan with a front door and back porch. The evo brand
provides urban students with a luxury student housing option with all
the conveniences of city living. Additional information can be found on
the Company's website at http://www.campuscrest.com/.
This press release, together with other statements and information
publicly disseminated by the Company, contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. The Company intends such forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995 and
includes this statement for purposes of complying with these safe harbor
provisions. Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical
facts. In some cases, you can identify forward-looking statements by the
use of forward-looking terminology such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts" or "potential" or the negative of these words and phrases or
similar words or phrases which are predictions of or indicate future
events or trends and which do not relate solely to historical matters.
Forward-looking statements in this press release include, among others,
the performance of properties in occupancy and yield targets, outlook
and guidance for full year 2014 FFOA and the related underlying
assumptions, growth and development opportunities, leasing activities,
financing strategies, and development and construction projects. You
should not rely on forward-looking statements since they involve known
and unknown risks, uncertainties, assumptions and contingencies, many of
which are beyond the Company's control that may cause actual results to
differ significantly from those expressed in any forward-looking
statement. All forward-looking statements reflect the Company's good
faith beliefs, assumptions and expectations, but they are not guarantees
of future performance. Furthermore, except as otherwise required by
federal securities laws, the Company disclaims any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, new information, data or
methods, future events or other changes. For a further discussion of
these and other factors that could cause the Company's future results to
differ materially from any forward-looking statements, see the risk
factors discussed in the Company's most recent Annual Report on Form
10-K, as updated in the Company's Quarterly Reports on Form 10-Q.
1 For the three months ended December 31, 2013,
includes $286 of Copper Beech-related transaction costs. For
twelve months ended December 31, 2013, includes $1,070 of Copper
Beech-related transaction costs and $51 of Toledo, OH-related
7 For the three and twelve months ended December 31,
2013, includes a $4,729 impairment from the disposition of The
Grove at Jacksonville, The Grove at Jonesboro, The Grove at
Wichita, and The Grove at Wichita Falls on December 27, 2013.
Funds from operations adjusted (FFOA) available to commonshares
and OP units
Non-GAAP Financial Measures
FFO and FFOA
FFO is a non-GAAP financial measure. We calculate FFO in accordance with
the definition that was adopted by the Board of Governors of NAREIT.
FFO, as defined by NAREIT, represents net income (loss) determined in
accordance with U.S. GAAP, excluding extraordinary items as defined
under GAAP and gains or losses from sales of previously depreciated
operating real estate assets, plus specified non-cash items, such as
real estate asset depreciation and amortization, and after adjustments
for unconsolidated partnerships and joint ventures. In addition, in
October 2011, NAREIT communicated to its members that the exclusion of
impairment write-downs of depreciable real estate is consistent with the
definition of FFO.
We use FFO as a supplemental performance measure because, in excluding
real estate-related depreciation and amortization and gains and losses
from property dispositions, it provides a performance measure that, when
compared year over year, captures trends in occupancy rates, rental
rates and operating expenses. We also believe that, as a widely
recognized measure of the performance of equity REITs, FFO will be used
by investors as a basis to compare our operating performance with that
of other REITs. However, because FFO excludes depreciation and
amortization and captures neither the changes in the value of our
properties that result from use or market conditions nor the level of
capital expenditures necessary to maintain the operating performance of
our properties, all of which have real economic effects and could
materially and adversely impact our results of operations, the utility
of FFO as a measure of our performance is limited.
While FFO is a relevant and widely used measure of operating performance
of equity REITs, other equity REITs may use different methodologies for
calculating FFO and, accordingly, FFO as disclosed by such other REITs
may not be comparable to FFO published herein. Therefore, we believe
that in order to facilitate a clear understanding of our historical
operating results, FFO should be examined in conjunction with net income
(loss) (computed in accordance with U.S. GAAP) as presented in the
consolidated financial statements included elsewhere in this document.
FFO should not be considered as an alternative to net income (loss)
(computed in accordance with U.S. GAAP) as an indicator of our
properties' financial performance or to cash flow from operating
activities (computed in accordance with U.S. GAAP) as an indicator of
our liquidity, nor is it indicative of funds available to fund our cash
needs, including our ability to pay dividends or make distributions.
FFOA is a non-GAAP financial measure. In addition to FFO, we believe it
is also a meaningful measure of our performance to adjust FFO to exclude
the write-off of unamortized deferred financing fees, transaction costs,
the write-off of development cost and fair value debt adjustments on
equity method investments. Excluding the write-off of unamortized
deferred financing fees, transaction costs and fair value debt
adjustments on equity method investments adjusts FFO to be more
reflective of operating results prior to capital replacement or
expansion, debt service obligations or other commitments and
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
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