EX-99.2 3 q12018supplemental.htm EXHIBIT 99.2 FIRST QUARTER 2018 SUPPLEMENTAL Exhibit
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TABLE OF CONTENTS
 
Financial Highlights
1

Balance Sheet
2

Operating Results
3

Funds from Operations
5

Community Operating Results
6

Same-Community Expenses by Category
7

Community Operations — Trailing Five Quarters
8

Top EdR Markets and States by Revenue
10

New Supply & Enrollment — EdR Markets
12

Owned Development Summary
14

Development Funding
15

Recently Awarded Owned & Third-Party Developments
16

Capital Structure
17

2018 Updated Guidance — Summary
19

2018 Updated Guidance — Detail
20

Community Listing — Owned
24

Investor Relations
26

Definitions
27

Reconciliation of Non-GAAP Measures
28

Safe Harbor
31




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FINANCIAL HIGHLIGHTS

 (Amounts in thousands, except per share data, unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 OPERATING DATA:
 
 
 
 
 
 
 
 
 
Three months ended March 31,
 
 
2018
 
2017
 
$ Chg
 
% Chg
 
Same-community revenue
$
70,866

 
$
70,603

 
$
263

 
0.4
 %
 
Total community revenue
87,749

 
80,785

 
6,964

 
8.6
 %
 
Total revenue
90,728

 
85,798

 
4,930

 
5.7
 %
 
 
 
 
 
 
 
 
 
 
Same-community net operating income
46,538

 
47,229

 
(691
)
 
(1.5
)%
 
Total community net operating income
55,575

 
51,908

 
3,667

 
7.1
 %
 
Total operating income
24,415

 
18,441

 
5,974

 
32.4
 %
 
 
 
 
 
 
 
 
 
 
Net income attributable to EdR
40,958

 
16,157

 
24,801

 
153.5
 %
 
Per share - basic and diluted
$
0.53

 
$
0.21

 
$
0.32

 
152.4
 %
 
 
 
 
 
 
 
 
 
 
Funds from operations (FFO)
42,500

 
42,296

 
204

 
0.5
 %
 
Per weighted average share/unit (1)
$
0.56

 
$
0.57

 
$
(0.01
)
 
(1.8
)%
 
 
 
 
 
 
 
 
 
 
Core funds from operations (Core FFO)
43,671

 
44,018


(347
)
 
(0.8
)%
 
Per weighted average share/unit (1)
$
0.57

 
$
0.60

 
$
(0.03
)
 
(5.0
)%
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS:
 
 
 
 
 
 
 
 
 
3/31/2018
 
12/31/2017
 
Debt to gross assets
28.5%
 
27.5%
 
Net debt to gross assets
22.5%
 
21.4%
 
Interest coverage ratio (TTM)
9.3x
 
10.3x
 
Net debt to EBITDA - Adjusted (TTM)
3.0x
 
3.3x
 
 
 
 
 
 
 
 
 
 
(1)  FFO and Core FFO per share/unit were computed using weighted average shares and units outstanding, regardless of their dilutive impact. See page 5 for a detailed calculation.

FIRST QUARTER 2018

1


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BALANCE SHEET

(Amount in thousands, except share and per share data, unaudited)
 
 
 
 
 
 
 
March 31, 2018
 
December 31, 2017
 
 Assets
 
 
 
 
 
 
Collegiate housing properties, net (1)
 
$
2,348,125

 
$
2,424,304

 
 
Collegiate housing properties - held for sale, net (1)
 
25,818

 

 
 
Assets under development
 
585,640

 
488,614

 
 
Cash and cash equivalents
 
22,902

 
24,787

 
 
Restricted cash
 
4,491

 
4,368

 
 
Other assets
 
77,015

 
73,091

 
 Total assets
 
$
3,063,991

 
$
3,015,164

 
 
 
 
 
 
 
 Liabilities and equity
 
 
 
 
 
 Liabilities:
 
 
 
 
 
 
Unsecured debt, net of unamortized deferred financing costs
 
$
976,589

 
$
933,449

 
 
Accounts payable and accrued expenses
 
152,879

 
162,434

 
 
Deferred revenue
 
22,510

 
20,473

 
 Total liabilities
 
1,151,978

 
1,116,356

 
 
 
 
 
 
 
 
 Commitments and contingencies
 

 

 
 
 
 
 
 
 
 Redeemable noncontrolling interests
 
54,411

 
52,843

 
 
 
 
 
 
 
 
 Equity:
 
 
 
 
 
 EdR stockholders' equity:
 
 
 
 
 
 
Common stock, $0.01 par value per share, 200,000,000 shares authorized, 75,808,889 and 75,779,932 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively
 
757

 
757

 
 
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, no shares issued and outstanding
 

 

 
 
Additional paid-in capital
 
1,842,688

 
1,844,639

 
 
Retained earnings
 
11,369

 

 
 
Accumulated other comprehensive income (loss)
 
1,615

 
(660
)
 
 Total EdR stockholders' equity
 
1,856,429

 
1,844,736

 
 Noncontrolling interest
 
1,173

 
1,229

 
 Total equity
 
1,857,602

 
1,845,965

 
 Total liabilities and equity
 
$
3,063,991

 
$
3,015,164

 
(1) Amount is net of accumulated depreciation of $373,977 and $385,118 as of March 31, 2018 and December 31, 2017, respectively.

FIRST QUARTER 2018

2


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OPERATING RESULTS

(Amounts in thousands, except per share data, unaudited)
 
 
 
 
 
 
Three months ended March 31,
 
2018
 
2017
 
$ Change
Revenues:
 
 
 
 
 
     Collegiate housing leasing revenue
$
87,749

 
$
80,785

 
$
6,964

     Third-party development consulting services

 
1,815

 
(1,815
)
     Third-party management services
905

 
945

 
(40
)
     Operating expense reimbursements
2,074

 
2,253

 
(179
)
     Total revenues
90,728

 
85,798

 
4,930

Operating expenses:
 
 
 
 


     Collegiate housing leasing operations
32,174

 
28,877

 
3,297

     Development and management services
2,851

 
2,901

 
(50
)
     General and administrative
2,919

 
3,207

 
(288
)
     Development pursuit costs

 
220

 
(220
)
     Depreciation and amortization
22,507

 
25,839

 
(3,332
)
     Ground lease expense
3,788

 
3,560

 
228

     Other operating expense (1)

 
500

 
(500
)
     Reimbursable operating expenses
2,074

 
2,253

 
(179
)
     Total operating expenses
66,313

 
67,357

 
(1,044
)
Operating income
24,415

 
18,441

 
5,974

Nonoperating expenses (income):
 
 
 
 


     Interest expense, net of amounts capitalized
4,751

 
3,028

 
1,723

     Amortization of deferred financing costs
363

 
421

 
(58
)
     Interest income
(43
)
 
(32
)
 
(11
)
     Loss on extinguishment of debt

 
22

 
(22
)
Total nonoperating expenses
5,071

 
3,439

 
1,632

Income before equity in (losses) earnings of unconsolidated entities, income taxes and gain on sale of collegiate housing properties
19,344

 
15,002

 
4,342

Equity in (losses) earnings of unconsolidated entities
(58
)
 
255

 
(313
)
Income before income taxes and gain on sale of collegiate housing properties
19,286

 
15,257

 
4,029

Income tax expense (benefit)
66

 
(885
)
 
951

Income before gain on sale of collegiate housing properties
19,220

 
16,142

 
3,078

Gain on sale of collegiate housing properties
21,358

 

 
21,358

Net income
40,578

 
16,142

 
24,436

Less: Net loss attributable to the noncontrolling interests
(380
)
 
(15
)
 
(365
)
Net income attributable to Education Realty Trust, Inc.
$
40,958

 
$
16,157

 
$
24,801


FIRST QUARTER 2018

3


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OPERATING RESULTS

(Amounts in thousands, except per share data, unaudited)
 
 
 
 
 
 
Three months ended March 31,
 
2018
 
2017
 
$ Change
Other comprehensive income:
 
 
 
 
 
      Gain on cash flow hedging derivatives
2,275

 
1,078

 
1,197

Comprehensive income
$
43,233

 
$
17,235

 
$
25,998

 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share information:
 
 
 
 


Net income attributable to Education Realty Trust, Inc. common stockholders per share – basic and diluted (2)
$
0.53

 
$
0.21

 
$
0.32

 
 
 
 
 
 
Weighted average shares of common stock outstanding – basic
76,214

 
73,510

 
2,704

Weighted average shares of common stock outstanding – diluted (3)
76,385

 
73,775

 
2,610

 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents the change in fair value of contingent consideration liabilities associated with our 2016 acquisition of Urbane.
(2) The numerator for earnings per share - diluted also includes $0.7 million and $0.5 million of accretion of redeemable noncontrolling interests for the three months ended March 31, 2018 and 2017, respectively.
(3) Weighted average shares of common stock outstanding - diluted assumes the conversion of outstanding redeemable Operating Partnership Units and University Towers Operating Partnership Units. Weighted average shares outstanding also includes the dilutive impact of shares issuable upon settlement of the forward equity agreements under the treasury stock method (none and 42 thousand shares for the three months ended March 31, 2018 and 2017, respectively).

FIRST QUARTER 2018

4


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FUNDS FROM OPERATIONS


(Amounts in thousands, except per share data, unaudited)
 
Three months ended March 31,
 
 
 
2018
 
2017
 
$ Change
Net income attributable to EdR
 
$
40,958

 
$
16,157

 
$
24,801

 
Gain on sale of collegiate housing assets
 
(21,358
)
 

 
(21,358
)
 
Real estate related depreciation and amortization
 
21,985

 
25,355

 
(3,370
)
 
Equity portion of real estate depreciation and amortization on equity investees
 
912

 
676

 
236

 
Noncontrolling interests
 
3

 
108

 
(105
)
Funds from operations ("FFO") available to stockholders and unitholders
 
42,500

 
42,296

 
204

 
percent change
 
 
 
 
 
0.5
 %
 
 
 
 
 
 
 
 
FFO adjustments:
 
 
 
 
 
 
 
Loss on extinguishment of debt
 

 
22

 
(22
)
 
Acquisition costs
 
1

 
25

 
(24
)
 
Change in fair value of contingent consideration liability (1)
 

 
500

 
(500
)
 
Straight-line adjustment for ground leases (2)
 
1,170

 
1,175

 
(5
)
FFO adjustments
 
1,171

 
1,722

 
(551
)
 
 
 
 
 
 
 
 
Core funds from operations ("Core FFO") available to stockholders and unitholders
 
$
43,671

 
$
44,018

 
$
(347
)
 
percent change
 
 
 
 
 
(0.8
)%
 
 
 
 
 
 
 
 
Earnings per share - diluted (3)
 
$
0.53

 
$
0.21

 
$
0.32

 
percent change
 
 
 
 
 
152.4
 %
FFO per weighted average share/unit (4)
 
$
0.56

 
$
0.57

 
$
(0.01
)
 
percent change
 
 
 
 
 
(1.8
)%
Core FFO per weighted average share/unit (4)
 
$
0.57

 
$
0.60

 
$
(0.03
)
 
percent change
 
 
 
 
 
(5.0
)%
 
 
 
 
 
 
 
 
Weighted average shares/units (4)
 
76,385

 
73,775

 
2,610

 
percent change
 
 
 
 
 
3.5
 %
 
 
 
 
 
 
 
 

(1) Represents the change in fair value of contingent consideration liabilities associated with our 2016 acquisition of Urbane.
(2) This represents the straight-line rent expense adjustment required by GAAP related to ground leases. As the ground lease terms range from 40 to 99 years, the adjustment to straight-line these agreements becomes material to our operating results, distorting the economic results of the communities.
(3) The numerator for earnings per share - diluted also includes $0.7 million and $0.5 million of accretion of redeemable noncontrolling interests for the three months ended March 31, 2018 and 2017, respectively.
(4)  FFO and Core FFO per weighted average share/unit were computed using the weighted average of all shares and partnership units outstanding, regardless of their dilutive impact, and the dilutive impact of the ATM Forward. Weighted average shares outstanding also includes the dilutive impact of shares issuable upon settlement of the forward equity agreements under the treasury stock method (none and 42 thousand shares for the three months ended March 31, 2018 and 2017, respectively).

FIRST QUARTER 2018

5


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COMMUNITY OPERATING RESULTS


(Amounts in thousands, unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31,
 
 
2018
 
2017
 
$ Change
 
% Change
Revenues
 
 
 
 
 
 
 
 
Same-communities(1)
$
70,866

 
$
70,603

 
$
263

 
0.4
 %
 
New-communities(2)
11,395

 
2,862

 
8,533

 
NM

 
Other-communities(3)
2,418

 
2,507

 
(89
)
 
NM

 
Sold-communities(4)
3,070

 
4,813

 
(1,743
)
 
NM

Total revenues
87,749

 
80,785

 
6,964

 
8.6
 %
 
 
 
 
 
 
 
 
 
Operating expenses (5)
 
 
 
 
 
 
 
 
Same-communities(1)
24,328

 
23,374

 
954

 
4.1
 %
 
New-communities(2)
5,063

 
1,699

 
3,364

 
NM

 
Other-communities(3)
1,243

 
1,234

 
9

 
NM

 
Sold-communities(4)
1,540

 
2,570

 
(1,030
)
 
NM

Total operating expenses
32,174

 
28,877

 
3,297

 
11.4
 %
 
 
 
 
 
 
 
 
 
Net operating income
 
 
 
 
 
 
 
 
Same-communities(1)
46,538

 
47,229

 
(691
)
 
(1.5
)%
 
New-communities (2)
6,332

 
1,163

 
5,169

 
NM

 
Other-communities(3)
1,175

 
1,273

 
(98
)
 
NM

 
Sold-communities(4)
1,530

 
2,243

 
(713
)
 
NM

Total net operating income
$
55,575

 
$
51,908

 
$
3,667

 
7.1
 %
 
 
 
 
 
 
 
 
 
 
 
(1) Same-communities are defined as those communities that have been open and operating for the whole time in the current and prior periods and are not conducting substantial development or redevelopment activities or have other significant changes in design beds. See page 24 of this supplement for a listing of same-communities.
(2) See page 25 of this supplement for a listing of which communities are categorized as new-communities.
(3) University Towers moved into other-communities on January 1, 2017 due to the change in the operations of the property related to the University's new live-on requirement.
(4) Represents operating results from communities sold in 2017 and 2018 and two properties that met the held-for-sale accounting treatment at March 31, 2018 and were subsequently sold in April 2018.
(5) Represents community level operating expenses, excluding management fees, depreciation, amortization, ground lease expense and impairment charges, plus regional and other corporate costs of supporting the communities.


FIRST QUARTER 2018

6


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SAME-COMMUNITY EXPENSES BY CATEGORY

(Amounts in thousands, except bed and per-bed data, unaudited)
 
Three months ended March 31, 2018
 
Three months ended March 31, 2017
 
 
 
 
 
Amount
 
Per Bed
 
% of Total Operating Expenses
 
Amount
 
Per Bed
 
% of Total Operating Expenses
 
$ Change
 
% Change
Utilities(1)
$
6,856

 
$
244

 
28
%
 
$
6,567

 
$
234

 
28
%
 
$
289

 
4.4
 %
On-Site Payroll
4,110

 
146

 
17
%
 
4,107

 
146

 
18
%
 
3

 
0.1
 %
General & Administrative(2)
3,255

 
116

 
13
%
 
3,395

 
121

 
14
%
 
(140
)
 
(4.1
)%
Maintenance & Repairs(3)
1,755

 
63

 
7
%
 
1,640

 
58

 
7
%
 
115

 
7.0
 %
Marketing
1,084

 
39

 
4
%
 
841

 
30

 
4
%
 
243

 
28.9
 %
Total Direct Operating Expenses
$
17,060

 
$
608

 
69
%
 
$
16,550

 
$
589

 
71
%
 
$
510

 
3.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate Taxes
6,562

 
234

 
28
%
 
6,173

 
220

 
26
%
 
389

 
6.3
 %
Insurance(4)
706

 
25

 
3
%
 
651

 
23

 
3
%
 
55

 
8.4
 %
Total Fixed Operating Expenses
$
7,268

 
$
259

 
31
%
 
$
6,824

 
$
243

 
29
%
 
$
444

 
6.5
 %
Total Property Operating Expenses
$
24,328

 
$
867

 
100
%
 
$
23,374

 
$
832

 
100
%
 
$
954

 
4.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-community beds
28,079

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents gross costs before recoveries from tenants and includes student amenities such as internet.
(2) Includes property-level general and administrative cost and dining costs as well as regional and other corporate costs of supporting the communities.
(3) Includes general maintenance costs, grounds and landscaping, turn costs and life safety costs.
(4) Effective January 1, 2018, casualty loss was reclassified from general and administrative expense to insurance expense due to a change in the structure of our property insurance program. Prior periods were reclassified to conform to this presentation.

FIRST QUARTER 2018

7


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COMMUNITY OPERATIONS - TRAILING FIVE QUARTERS

(Amounts in thousands, except beds and per bed amounts)
Three Months Ended
 
Total / Weighted Average - Trailing Twelve Months
 
 
 
March 31, 2017
 
June 30, 2017
 
September 30, 2017
 
December 31, 2017
 
March 31, 2018
 
2018 Same-Communities
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
70,603

 
$
61,004

 
$
58,599

 
$
73,778

 
$
70,866

 
$
264,247

 
Operating Expenses
 
23,374

 
24,391

 
29,585

 
23,917

 
24,328

 
102,221

 
Net Operating Income
 
$
47,229

 
$
36,613

 
$
29,014

 
$
49,861

 
$
46,538

 
$
162,026

 
Margin
 
67
%
 
60
%
 
50
%
 
68
%
 
66
%
 
61
%
 
Beds
 
84,243

 
84,243

 
84,243

 
84,243

 
84,243

 
336,972

 
Occupancy(1)
 
94.2
%
 
79.7
%
 
86.1
%
 
94.6
%
 
91.9
%
 
88.1
%
 
Net Apartment Rent per Occupied Bed
 
$
837

 
$
840

 
$
723

 
$
874

 
$
859

 
$
826

 
Other Income per Occupied Bed
 
53

 
68

 
85

 
52

 
56

 
65

 
Total Revenue per Occupied Bed
 
$
890

 
$
908

 
$
808

 
$
926

 
$
915

 
$
891

 
Operating Expense per Available Bed
 
$
277

 
$
290

 
$
351

 
$
284

 
$
289

 
$
303

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018 New-Communities
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
2,862

 
$
3,148

 
$
6,704

 
$
11,094

 
$
11,395

 
$
32,341

 
Operating Expenses
 
1,699

 
2,365

 
3,563

 
4,794

 
5,063

 
15,785

 
Net Operating Income
 
$
1,163

 
$
783

 
$
3,141

 
$
6,300

 
$
6,332

 
$
16,556

 
Margin
 
41
%
 
25
%
 
47
%
 
57
%
 
56
%
 
51
%
 
Beds
 
4,666

 
4,635

 
9,969

 
13,917

 
15,216

 
43,737

 
Occupancy(1)
 
93.5
%
 
94.7
%
 
85.5
%
 
88.3
%
 
85.4
%
 
87.3
%
 
Net Apartment Rent per Occupied Bed
 
$
629

 
$
675

 
$
734

 
$
855

 
$
826

 
$
797

 
Other Income per Occupied Bed
 
26

 
42

 
53

 
48

 
52

 
50

 
Total Revenue per Occupied Bed
 
$
655

 
$
717

 
$
787

 
$
903

 
$
878

 
$
847

 
Operating Expense per Available Bed
 
$
364

 
$
510

 
$
357

 
$
344

 
$
333

 
$
361

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018 Other-Communities(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
2,507

 
$
1,465

 
$
1,748

 
$
2,438

 
$
2,418

 
$
8,069

 
Operating Expenses
 
1,234

 
1,105

 
1,282

 
1,207

 
1,243

 
4,837

 
Net Operating Income
 
$
1,273

 
$
360

 
$
466

 
$
1,231

 
$
1,175

 
$
3,232

 
Margin
 
51
%
 
25
%
 
27
%
 
50
%
 
49
%
 
40
%
 
Beds
 
2,667

 
2,667

 
2,667

 
2,667

 
2,667

 
10,668

 
Occupancy(1)
 
87.9
%
 
29.6
%
 
66.6
%
 
97.9
%
 
98.4
%
 
73.1
%
 
Net Apartment Rent per Occupied Bed
 
$
997

 
$
1,367

 
$
765

 
$
893

 
$
881

 
$
908

 
Other Income per Occupied Bed
 
73

 
487

 
219

 
41

 
41

 
127

 
Total Revenue per Occupied Bed
 
$
1,070

 
$
1,854

 
$
984

 
$
934

 
$
922

 
$
1,035

 
Operating Expense per Available Bed
 
$
463

 
$
414

 
$
481

 
$
452

 
$
466

 
$
453

 
 
 
 
 
 
 
 
 
 
 
 
 
 

FIRST QUARTER 2018

8


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COMMUNITY OPERATIONS - TRAILING FIVE QUARTERS

(Amounts in thousands, except beds and per bed amounts)
Three Months Ended
 
Total / Weighted Average - Trailing Twelve Months
 
 
 
March 31, 2017
 
June 30, 2017
 
September 30, 2017
 
December 31, 2017
 
March 31, 2018
 
2018 Sold-Communities (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
4,813

 
$
4,454

 
$
4,033

 
$
4,476

 
$
3,070

 
$
16,033

 
Operating Expenses
 
2,570

 
2,467

 
2,656

 
2,150

 
1,540

 
8,813

 
Net Operating Income
 
$
2,243

 
$
1,987

 
$
1,377

 
$
2,326

 
$
1,530

 
$
7,220

 
Margin
 
47
%
 
45
%
 
34
%
 
52
%
 
50
%
 
45
%
 
Beds
 
10,275

 
9,663

 
8,439

 
8,439

 
6,484

 
33,025

 
Occupancy(1)
 
88.0
%
 
88.3
%
 
94.5
%
 
96.4
%
 
94.7
%
 
93.2
%
 
Net Apartment Rent per Occupied Bed
 
$
506

 
$
495

 
$
463

 
$
520

 
$
455

 
$
485

 
Other Income per Occupied Bed
 
26

 
27

 
43

 
30

 
45

 
36

 
Total Revenue per Occupied Bed
 
$
532

 
$
522

 
$
506

 
$
550

 
$
500

 
$
521

 
Operating Expense per Available Bed
 
$
250

 
$
255

 
$
315

 
$
255

 
$
238

 
$
267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018 Total Communities
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
80,785

 
$
70,071

 
$
71,084

 
$
91,786

 
$
87,749

 
$
320,690

 
Operating Expenses
 
28,877

 
30,328

 
37,086

 
32,068

 
32,174

 
131,656

 
Net Operating Income
 
$
51,908

 
$
39,743

 
$
33,998

 
$
59,718

 
$
55,575

 
$
189,034

 
Margin
 
64
%
 
57
%
 
48
%
 
65
%
 
63
%
 
59
%
 
Beds
 
101,851

 
101,208

 
105,318

 
109,266

 
108,610

 
424,402

 
Occupancy(1)
 
93.3
%
 
79.9
%
 
86.2
%
 
94.0
%
 
91.3
%
 
88.0
%
 
Net Apartment Rent per Occupied Bed
 
$
800

 
$
800

 
$
702

 
$
844

 
$
830

 
$
796

 
Other Income per Occupied Bed
 
50

 
66

 
81

 
49

 
55

 
62

 
Total Revenue per Occupied Bed
 
$
850

 
$
866

 
$
783

 
$
893

 
$
885

 
$
858

 
Operating Expense per Available Bed
 
$
284

 
$
300

 
$
352

 
$
293

 
$
296

 
$
310

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents the weighted average physical occupancy for the period presented.
(2) University Towers moved into other-communities on January 1, 2017 due to the change in the operations of the property related to the university's new freshman live-on requirement.
(3) Includes properties sold in 2017 and first quarter 2018 and two properties that met the held-for-sale accounting treatment at March 31, 2018 and were subsequently sold in April 2018. This does not include any other communities which may be sold in 2018 per our guidance.

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TOP EdR MARKETS AND STATES BY REVENUE

chart-8cff9d18045b5c8ab46.jpg
*The data above is based on revenue for the twelve months ended March 31, 2018 and excludes properties that were sold during the period and properties held for sale at March 31, 2018.
(1) All revenue at the University of Kentucky is from ONE PlanSM on-campus collegiate housing communities.

FIRST QUARTER 2018

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TOP EdR MARKETS AND STATES BY REVENUE


chart-f1f89a4c8af05b4c981.jpg

*The data above is based on revenue for the twelve months ended March 31, 2018 and excludes properties that were sold during the period and properties held for sale at March 31, 2018.


FIRST QUARTER 2018

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NEW SUPPLY AND ENROLLMENT - EdR MARKETS

EdR Market Supply, Enrollment and Revenue Growth
            
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EdR Markets:
 
2013
 
2014
 
2015
 
2016
 
2017 (1)
 
2018 Est (2)
 
New supply as % of enrollment
 
2.2
%
 
2.2
%
 
2.0
%
 
1.8
 %
 
2.1
 %
 
1.9
%
 
Enrollment growth
 
1.3
%
 
1.4
%
 
1.5
%
 
1.5
 %
 
1.4
 %
 
1.3
%
 
 
 
0.9
%
 
0.8
%
 
0.5
%
 
0.3
 %
 
0.7
 %
 
0.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-community:
 
 
 
 
 
 
 
 
 
 
 
 
 
Occupancy increase (decrease)
 
3.0
%
 
2.0
%
 
0.4
%
 
(1.1
)%
 
(1.2
)%
 
 
 
Rate increase
 
2.0
%
 
2.0
%
 
3.4
%
 
3.4
 %
 
3.0
 %
 
 
 
Total leasing revenue growth
 
5.0
%
 
4.0
%
 
3.8
%
 
2.3
 %
 
1.8
 %
 
3.0
%
(3) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) The estimated enrollment growth is based on the 3-year enrollment CAGR through 2016.
 
(2) Data includes the existing portfolio plus 2018 developments but does not include communities we sold in 2018 and two properties that met the held-for-sale accounting treatment at March 31, 2018. The estimated enrollment growth is based on the 3-year enrollment CAGR through 2016 for the included communities.
 
(3) Represents the midpoint of 2018/2019 leasing guidance.
 



















FIRST QUARTER 2018

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OWNED COMMUNITY PROJECTED 2018 NEW SUPPLY AND DEMAND INFORMATION

 
 
 
 
 
 
Owned Community Projected 2018 New Supply and Demand Information by Region
 
 
 
 
 
 
 
 
Region (2)
% of Owned Beds
Pro Forma EdR NOI% (1)
Enrollment Growth 3 Year CAGR - Universities Served
2018 New Supply as a % of Enrollment
Variance
West
18%
23%
1.6%
2.8%
(1.2)%
Mid Atlantic
21%
22%
1.5%
2.3%
(0.8)%
North
18%
16%
(0.4)%
1.4%
(1.8)%
South Central
28%
26%
1.9%
0.6%
1.3%
Southeast
7%
7%
1.4%
2.8%
(1.4)%
Midwest
8%
6%
1.0%
2.1%
(1.1)%
     Total
100%
100%
1.3%
1.9%
(0.6)%
 
 
 
 
 
 
 
 
 
 
 
 

Projected 2018 New Supply Sorted by Percentage Increase
 
 
 
 
New Supply Growth
University Markets
EdR Beds
Pro Forma
EdR NOI %
(1)
0%
46%
52%
51%
0.1% to 1.0%
—%
—%
—%
1.0% - 3.0%
28%
21%
21%
3.0% - 5.0%
12%
10%
11%
> 5.0%
14%
17%
17%
     Total
100%
100%
100%
University Markets with >5% Increase in 2018 Supply as a % of Enrollment
 
 
 
University
New Supply Increase
Pro Forma EdR NOI %(1)
Florida State University
6.3%
2%
Northern Michigan University
6.2%
2%
University of Mississippi
6.1%
2%
Arizona State University - Tempe
5.5%
8%
East Carolina University
5.5%
1%
Syracuse University
5.3%
2%
     Total
35%
17%

NOTE: Schedule represents all markets served by EdR communities and includes the 2017 acquisitions and developments and all announced 2018 developments. Data was obtained from the National Center for Education Statistics, AXIOMetrics and local market data.

 
 
 
 
 
 
 
 
(1) NOI is based on 2017 actual net operating income with pro forma adjustments for 2017 and 2018 developments and acquisitions that have been operating for less than 12 months.
(2) See definition of regions on page 27.





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OWNED DEVELOPMENT SUMMARY


(Amounts in thousands, except bed counts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Development Cost Funded by EdR's Balance Sheet (Excludes Partner Contribution)(2)
 
 
 
Active Projects
Project Type
EdR's Ownership Percentage
Bed Count
Estimated Start Date
Anticipated Completion Date
Budgeted Total Project Development Cost
 
EdR's Economic Ownership Cost(1)
 
 
EdR's Remaining Cost to be Funded
 
Northern Michigan University - The Woods Phase II
ONE Plan (3)
100%
433

Opened in January 2018
$
24,600

 
$
24,600

 
$
24,600

 
$

 
University of Pittsburgh - One on Centre
Joint Venture
80%
723

In progress
Summer 2018
106,100

 
84,900

 
100,300

 
31,400

 
Florida State University - Players Club redevelopment
Wholly Owned
100%
592

In progress
Summer 2018
38,000

 
38,000

 
38,000

 
16,700

 
Northern Michigan University - The Woods Phase III
ONE Plan (3)
100%
379

In progress
Summer 2018
29,000

 
29,000

 
29,000

 
15,900

 
University of Minnesota - Hub at Minneapolis
Joint Venture
51%
707

In progress
Summer 2018
97,900

 
49,900

 
83,500

 
34,400

 
Arizona State University - Union at Tempe
Joint Venture
90%
839

In progress
Summer 2018
164,900

 
148,400

 
159,100

 
38,700

 
Cornell University - Maplewood
ONE Plan (3)
100%
872

In progress
Summer 2018
86,000

 
86,000

 
86,000

 
47,300

 
Colorado State University - Union on Plum
Joint Venture
70%
229

In progress
Summer 2018
28,200

 
19,700

 
25,700

 
10,500

 
Iowa State University - Union on Lincoln Way
Joint Venture
70%
542

In progress
Summer 2018
51,900

 
36,300

 
47,300

 
20,500

 
University of Hawai'i - Hale Mahana
Joint Venture
90%
589

In progress
Summer 2018
109,600

 
98,600

 
106,300

 
36,900

 
Oklahoma State University - One on 4th
Joint Venture
70%
475

In progress
Summer 2018
47,200

 
33,000

 
43,700

 
9,600

 
            Total - 2018 Deliveries
 
 
6,380

 
 
$
783,400

 
$
648,400

 
$
743,500

 
$
261,900

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lehigh University - SouthSide Commons
ONE Plan (3)
100%
428

In progress
Summer 2019
$
48,300

 
$
48,300

 
$
48,300

 
$
45,400

 
Mississippi State University - College View
ONE Plan (3)
100%
656

In progress
Summer 2019
69,200

 
69,200

 
69,200

 
67,600

 
            Total - 2019 Deliveries
 
 
1,084

 
 
$
117,500

 
$
117,500

 
$
117,500

 
$
113,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Active Projects
 
 
7,464

 
 
$
900,900

 
$
765,900

 
$
861,000

 
$
374,900

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents total project cost multiplied by EdR's ownership percentage, which is reflective of EdR's economic interest in operating results.
 
(2) For developments that are consolidated in EdR's financials but less than 100% owned, 100% of the developments costs and debt related to the development is included in EdR's balance sheet. As such, EdR's funding requirement and impact on leverage is equal to total project cost less equity contributed by our joint venture partner.
 
(3) The On-Campus Equity Plan, or The ONE PlanSM, is our equity program for universities, which allows universities to use EdR's equity and financial stability to develop and revitalize campus housing while preserving their credit capacity for other campus projects. The ONE PlanSM offers one service provider and one equity source to universities seeking to modernize on-campus housing to meet the needs of today's students.


FIRST QUARTER 2018

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CAPITAL ALLOCATION - LONG TERM FUNDING PLAN

(Amounts in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sources and Uses of Capital for All Announced Transactions
 
 
 
 
 
 
 
 
 
 
 
Estimated Capital Uses:
 
 
 
 
 
 
 
 
 
 
 
Total Project Development Cost
 
Acquisition or Development Costs funded by EdR Balance Sheet (Excludes Partner Contribution)(1)
 
Less: Costs Incurred to Date(1)
 
Remaining Capital Needs(1)
 
2018 Development Deliveries
 
$
783

 
$
744

 
$
482

 
$
262

 
2019 Development Deliveries
 
118

 
118

 
5

 
113

 
 
 
$
901

 
$
862

 
$
487

 
$
375

 
 
 
 
 
 
 
 
 
 
 
Estimated Capital Sources:
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
Thereafter
 
Capital Sources
 
Disposition proceeds(2)
 
 
 
$
146

 
$

 
$
146

 
Equity Proceeds Available from ATM Forward Sales(3)
 
 
 
188

 

 
188

 
Additional Debt, Including Draws on Revolving Credit Facility(4)
 
 
 
(15
)
 
56

 
41

 
 
 
 
 
$
319

 
$
56

 
$
375

 
 
 
 
 
 
 
 
 
 
 
Debt to Gross Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2018
 
Pro Forma for Funding Needs Through December 31, 2018(5)
 
Pro Forma for Funding Needs Through December 31, 2019(6)
 
Debt to gross assets
 
 
 
28%
 
26%
 
28%
 
 
 
 
 
 
 
 
 
 
 
NOTE: This analysis demonstrates that EdR could fund all announced acquisitions and developments as of March 31, 2018 and our debt to gross assets is still less than 30%.

 
(1) Represents the share of development cost that will be funded by EdR's balance sheet, which excludes any partner contributions - see page 14 for details.
(2) 2018 guidance includes disposition proceeds of $150 to $225 million. Disposition proceeds here reflects the original assumption of high end of guidance proceeds of $225 million less the actual proceeds of $79 million received from dispositions that closed prior to March 31, 2018.
(3) Represents available proceeds from sold but not yet settled ATM forward equity sales at March 31, 2018. The sales can be settled, shares issued and proceeds received at the Company's option through the end of 2018.
(4) The balance on the revolving credit facility as of March 31, 2018 was $392.0 million.
(5) Represents pro forma December 31, 2018 debt to gross assets including the impact of funding only the anticipated capital needed in 2018, in the manner shown in the estimated capital sources table above.
(6) Represents pro forma December 31, 2018 debt to gross assets including the impact of funding all of the anticipated capital needed in the manner shown in the estimated capital sources table above.


FIRST QUARTER 2018

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RECENTLY AWARDED OWNED & THIRD-PARTY DEVELOPMENTS



Recently Awarded Developments
 
 
 
 
 
 
 
 
 
 
 
 
 
POSSIBLE OWNED PROJECTS
 
 
 
 
 
 
 
University
Project Type
Anticipated Beds
Anticipated Completion Date
 
 
 
Cornell University - East Hill Village
ONE Plan
470
Fall 2020
 
 
 
Sacramento State University
ONE Plan
1,094
Fall 2021
 
 
 
 
 
 
 
 
 
 
 
POSSIBLE THIRD-PARTY PROJECTS
 
 
 
 
 
 
 
Recently Awarded
Anticipated Beds
Anticipated Completion Date
 
 
 
 
University of South Florida - St. Petersburg
550
Fall 2020
 
 
 
 
University of South Carolina
3,700
Fall 2020 - 2024
 
 
 
 
University of Massachusetts - Dartmouth
1,200
Fall 2020
 
 
 
 

NOTE: The initiation and completion of an awarded project that has not begun construction is contingent upon execution of transactional documents, including such items as development agreements, construction agreements and ground leases.


FIRST QUARTER 2018

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CAPITAL STRUCTURE

 
 
 
 
 
as of March 31, 2018
 
 
 
 
 
 
(Amounts in thousands)
 
 
 
 
 
 
 
 
CURRENT DEBT
Principal Outstanding
Weighted Average Interest Rate
 
LEVERAGE AND COVERAGE RATIOS
 
 
 
 
 
Current
12/31/2017
Fixed Rate - Unsecured Term Loan Maturing 2022(1)
$
65,000

2.9
%
 
Debt to Gross Assets
28.5%
27.5%
Fixed Rate - Unsecured Term Loan Maturing 2021(1)
122,500

3.5
%
 
Net Debt to Gross Assets
22.5%
21.4%
Fixed Rate - 12 Yr. Unsecured Senior Notes
75,000

4.2
%
 
Net Debt to Enterprise Value
27.7%
25.6%
Fixed Rate - 15 Yr. Unsecured Senior Notes
75,000

4.3
%
 
 
 
 
Fixed Rate - Unsecured Senior Notes
250,000

4.6
%
 
 
 
 
Variable Rate - Unsecured Revolving Credit Facility
392,000

2.7
%
 
 
As Reported
Proforma(4)
Debt(2) / Weighted Average
$
979,500

3.6
%
 
Net Debt to Adjusted EBITDA
4.8x
3.0x
Less: Cash
(22,902
)
 
 
Interest Coverage (TTM)
5.2x
9.3x
Less: Sold but unsettled ATM forward equity(3)
(188,360
)
 
 
 
 
 
Net debt
$
768,238

 
 
UNSECURED SENIOR NOTE COVENANTS(5)
 
 
 
 
 
 
Requirement
Current Ratio
Year of first maturity
2021
 
 
Total Debt to Total Asset Value
≤ 60%
28.5%
Weighted average years to maturity
6.2
 
 
Secured Debt to Total Asset Value
≤ 40%
—%
Variable rate debt to total debt
40.0%
 
 
Unencumbered Asset Value to Unsecured Debt
> 150%
348.4%
Secured debt to total debt
—%
 
 
Interest Coverage Ratio
> 1.5x
5.0x
 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE COMPONENTS
Quarter Ended March 31,
 
 
 
 
 
2018
2017
 

 
 
Interest Expense
$
8,759

$
6,017

 
 
 
 
Capitalized Interest
(4,008
)
(2,989
)
 
 
Interest expense, net of capitalized interest
$
4,751

$
3,028

Note: See reconciliations and calculations on pages 28-29.
 
 


 
 
 
 
 
 
(1) The Trust entered into interest rate swaps to effectively fix the interest rate on the term loans. The weighted average interest rates reflect the swapped (fixed) rate plus the current margin.
(2) Excludes unamortized deferred financing costs of $2.9 million.
(3) Represents available proceeds from sales of common stock sold under ATM forward agreements through March 31, 2018. The forward transactions can be settled, shares issued and proceeds received at any time at the Company's option through December 31, 2018.
(4) These coverage ratios are calculated to adjust for the impact of assets under development, which distort the actual coverage ratios. The net debt to EBITDA calculation excludes debt related to assets under development as that debt is not yet producing EBITDA and also annualized the EBITDA contribution for any developments or acquisitions that have been operating for less than 12 months. Interest coverage ratio is calculated net of capitalized interest related to assets under development.
(5)Computed in accordance with the First Supplemental Indenture filed November 24, 2014 with the SEC. 
 
 
 
 
 
 
 
 
 

FIRST QUARTER 2018

17


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CAPITAL STRUCTURE


chart-07bf6a38e0615701a66.jpg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Interest Rate of Debt Maturing Each Year (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
2019
 
2020
 
2021
 
2022
 
2023
 
2024
 
2025
 
2026
 
2027
 
2028
 
2029
 
2030
 
2031
 
2032
Fixed Rate Debt
 
 
—%
 
—%
 
—%
 
3.5%
 
2.9%
 
—%
 
4.6%
 
—%
 
—%
 
—%
 
—%
 
4.2%
 
—%
 
—%
 
4.3%
Variable Rate Debt
 
 
—%
 
—%
 
—%
 
—%
 
—%
 
2.7%
 
—%
 
—%
 
—%
 
—%
 
—%
 
—%
 
—%
 
—%
 
—%
Total Debt
 
 
—%
 
—%
 
—%
 
3.5%
 
2.9%
 
2.7%
 
4.6%
 
—%
 
—%
 
—%
 
—%
 
4.2%
 
—%
 
—%
 
4.3%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) The Trust entered into interest rate swaps to effectively fix the interest rate on the term loans. The weighted average interest rates reflect the swapped (fixed) rate plus the current margin.

FIRST QUARTER 2018

18


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2018 GUIDANCE

For the Year Ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in thousands, except per share/unit data)
 
 
 
 
 
 
 
ORIGINAL GUIDANCE
 
 
REVISED GUIDANCE
 
 
VARIANCE
 
 
Without Capital Transactions
 
With Capital Transactions
 
 
Without Capital Transactions
 
With Capital Transactions
 
 
Without Capital Transactions
 
With Capital Transactions
 
 
Low
 
High
 
Low
 
High
 
 
Low
 
High
 
Low
 
High
 
 
Low
 
High
 
Low
 
High
Net income attributable to EdR
 
$
45,300

 
$
49,200

 
$
47,000

 
$
51,400

 
 
$
87,658

 
$
91,558

 
$
89,358

 
$
93,758

 
 
$
42,358

 
$
42,358

 
$
42,358

 
$
42,358

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate related depreciation and amortization
 
94,500

 
98,500

 
89,200

 
93,200

 
 
94,500

 
98,500

 
89,200

 
93,200

 
 

 

 

 

Equity portion of real estate depreciation and amortization on equity investees
 
2,400

 
2,400

 
2,400

 
2,400

 
 
2,400

 
2,400

 
2,400

 
2,400

 
 

 

 

 

Gain on sale of collegiate housing properties(1)
 

 

 

 

 
 
(42,358
)
 
(42,358
)
 
(42,358
)
 
(42,358
)
 
 
(42,358
)
 
(42,358
)
 
(42,358
)
 
(42,358
)
Redeemable noncontrolling interests
 
(400
)
 
(400
)
 
(400
)
 
(400
)
 
 
(400
)
 
(400
)
 
(400
)
 
(400
)
 
 

 

 

 

Noncontrolling interest depreciation
 
(2,100
)
 
(2,100
)
 
(2,100
)
 
(2,100
)
 
 
(2,100
)
 
(2,100
)
 
(2,100
)
 
(2,100
)
 
 

 

 

 

Funds from operations ("FFO") available to stockholders and unitholders
 
$
139,700

 
$
147,600

 
$
136,100

 
$
144,500

 
 
$
139,700

 
$
147,600

 
$
136,100

 
$
144,500

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FFO adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Straight-line adjustment for ground leases(2)
 
4,600

 
4,600

 
4,600

 
4,600

 
 
4,600

 
4,600

 
4,600

 
4,600

 
 

 

 

 

FFO adjustments
 
4,600

 
4,600

 
4,600

 
4,600

 
 
4,600

 
4,600

 
4,600

 
4,600

 
 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core funds from operations ("Core FFO") available to stockholders and unitholders
 
$
144,300

 
$
152,200

 
$
140,700

 
$
149,100

 
 
$
144,300

 
$
152,200

 
$
140,700

 
$
149,100

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share – diluted(3)
 
$
0.56

 
$
0.62

 
$
0.58

 
$
0.63

 
 
$
1.12

 
$
1.17

 
$
1.12

 
$
1.18

 
 
$
0.56

 
$
0.55

 
$
0.54

 
$
0.55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FFO per weighted average share/unit(4)
 
$
1.83

 
$
1.93

 
$
1.75

 
$
1.85

 
 
$
1.83

 
$
1.93

 
$
1.75

 
$
1.85

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core FFO per weighted average share/unit(4)
 
$
1.89

 
$
1.99

 
$
1.81

 
$
1.91

 
 
$
1.89

 
$
1.99

 
$
1.81

 
$
1.91

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares/units(4)
 
76,400

 
76,400

 
77,900

 
77,900

 
 
76,400

 
76,400

 
77,900

 
77,900

 
 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note:  See pages 20 to 23 for details on guidance assumptions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Original guidance does not include any gain or loss on dispositions. Revised guidance includes the actual gain recognized on the February 2018 property dispositions for the three months ended March 31, 2018, and an approximate $21.0 million gain expected to be recognized on the April 2018 community dispositions.
(2) This represents the straight-line rent expense adjustment required by GAAP related to ground leases. As the ground lease terms range from 40 to 99 years, the adjustment to straight-line these agreements becomes material to our operating results, distorting the economic results of the communities.
(3) The numerator for earnings per share - diluted also includes $2.2 million of accretion of redeemable noncontrolling interests for the year ended December 31, 2018.
(4) FFO and Core FFO per weighted average share/unit were computed using the weighted average of all shares and partnership units outstanding, regardless of their dilutive impact.

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2018 GUIDANCE

(Amounts in millions, except per share/unit data)
 
 
 
 
 
 
 
 
 
 
 
Management reaffirms 2018 Core FFO guidance, the following updates were made to GAAP earnings per share guidance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on sale of collegiate housing properties recognized for the three months ended March 31, 2018
 
$
42,358

 
 
 
 
 
 
 
Resulting increase in net income attributable to EdR
 
$
42,358

 
 
 
 
 
 
 
Resulting increase in GAAP earnings per share – diluted (midpoint)
 
$
0.55

 
 
 
 
 
 
 
 
 
 
 
2018 Guidance Assumptions
 
Without Capital Transactions
 
With Capital Transactions
 
 
 
Low
 
High
 
Low
 
High
 
Projected earnings per share/unit  diluted
 
$1.12
 
$1.17
 
$1.12
 
$1.18
 
Projected FFO per share/unit
 
$1.83
 
$1.93
 
$1.75
 
$1.85
 
Projected Core FFO per share/unit
 
$1.89
 
$1.99
 
$1.81
 
$1.91
 
Projected weighted average shares/units outstanding (in millions)
 
76.4
 
77.9
 
Projected debt to gross assets - 12/31/2018
 
36%
 
26%
 
 
 
 
 
 
 
 
 
 
 
Components of 2018 Property Net Operating Income
 
Low
 
High
 
% change from 2017
 
2018 Same-communities:
 
 
 
 
 
 
 
 
 
    Revenues
 
$
252.0

 
$
254.7

 
0.8% to 1.8%
 
Operating expenses
 
97.5

 
98.5

 
3.0% to 4.0%
 
Net operating income
 
154.5

 
156.2

 
(0.5)% to 0.5%
 
 
 
 
 
 
 
 
 
 
 
2018 New-communities net operating income, net of $4.1 million in preopening expenses
 
37.5

 
39.0

 
 
 
 
 
Other-community NOI
 
2.5

 
2.5

 
 
 
 
 
NOI from communities expected to sell in 2018
 
5.0

 
6.0

 
 
 
 
 
Total property net operating income
 
$
199.5

 
$
203.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing expectations for 2018/2019 lease-term revenue growth:
 
 
 
 
 
 
 
 
 
Leasing same-community (financial same in 2019)
 
2.0%
 
4.0%
 
 
 
 
 
2018 financial same-community - fall 2018 revenue growth
 
1.5%
 
3.0%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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2018 GUIDANCE

(Amounts in millions, except per share/unit data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Development and Management Services
 
 
 
 
 
 
 
 
 
 
 
Low
 
High
 
 
 
 
 
Third-party development services revenue
 
$—
 
 
 
 
 
Third-party management services revenue
 
$3.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
G&A and Nonoperating Expenses
 
 
 
 
 
 
 
 
 
 
 
Low
 
High
 
 
 
 
 
General and administrative expenses
 
$
24.0

 
$
25.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross interest expense, incl. amortization of deferred financing costs
 
$
37.5

 
$
38.5

 
 
 
 
 
Capitalized interest
 
$
(11.0
)
 
$
(12.0
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Ground lease expense, excluding straight-line rent
 
$
10.0

 
$
10.0

 
 
 
 
 
 
 

 
 
 

 
 
 
Depreciation and amortization
 
$
91.2

 
$
95.2

 
 
 
 
 
Depreciation and amortization add back to Core FFO
 
$
89.2

 
$
93.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
 
 
 
 
 
Low
 
High
 
 
 
 
 
Income tax expense
 
$—
 
 
 
 
 
Equity in earnings of unconsolidated entities
 
$
1.2

 
$
2.0

 
 
 
 
 
Depreciation addback for Core FFO from unconsolidated entities
 
$2.4
 
 
 
 
 
Net income attributable to noncontrolling interest
 
$1.7
 
 
 
 
 
Noncontrolling interest adjustment to FFO
 
$(2.5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Assumptions
 
 
 
 
 
 
 
 
 
 
 
Low
 
High
 
Timing
 
 
 
2018 Development deliveries - total project cost
 
$783.0
 
Fall 2018
 
 
 
2019 Development deliveries - total project cost
 
$118.0
 
Fall 2019
 
 
 
Estimated development costs incurred in 2018
 
$426.0
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Dispositions
 
$
150.0

 
$
225.0

 
Q1 - Q3
 
 
 
Settlement of existing 4.8 million ATM shares
 
$188.4
 
Q2 - Q3 - Q4
 
 
 
Total shares outstanding
 
81.3
 
Year end 2018
 
 
 

FIRST QUARTER 2018

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2018 GUIDANCE

(Amounts in millions, except per share/unit data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leverage - Year End Debt to Gross Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guidance without Capital Transactions
 
36
 %
 
 
 
 
 
 
 
Impact of settling ATM shares
 
(5
)%
 
 
 
 
 
 
 
Impact of closing top end of disposition guidance
 
(5
)%
 
 
 
 
 
 
 
Guidance - with capital transactions
 
26
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Sources and Uses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Sources
 
 
 
 
 
 
 
 
 
Settle existing ATM forward equity shares - 4.8 million shares
 
$
190

 
 
 
 
 
 
 
Proceeds from dispositions
 
225

 
 
 
 
 
 
 
Increase in debt
 
11

 
 
 
 
 
 
 
 
 
$
426

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Uses
 
 
 
 
 
 
 
 
 
2018 Developments
 
$
372

 
 
 
 
 
 
 
2019 Developments
 
54

 
 
 
 
 
 
 
 
 
$
426

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

FIRST QUARTER 2018

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2018 GUIDANCE

(Amounts in millions, except per share/unit data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Midpoint of 2018 Core FFO per share/unit Guidance Compared to 2017 Results
 
 
 
Core FFO
 
Core FFO per Share/Unit
 
Weighted Average Shares/Units
 
Total Shares/Units Outstanding
 
Full Year 2017
 
$
141.5

 
$
1.90

 
74.5

 
76.4

 
 
 
 
 
 
 
 
 
 
 
Impact of difference in weighted average shares and shares outstanding at 12/31/2017
 

 
(0.05
)
 
1.9

 

 
Increase in community NOI
 
25.4

 
0.33

 

 

 
Decrease in third-party fee revenue
 
(6.2
)
 
(0.08
)
 

 

 
Decrease in general and administrative expense
 
4.3

 
0.06

 

 

 
Increase in interest expense, net
 
(16.9
)
 
(0.22
)
 

 

 
All other, net
 
0.2

 

 

 

 
Midpoint of 2018 guidance without Capital Transactions
 
$
148.3

 
$
1.94

 
76.4

 
76.4

 
 
 
 
 
 
 
 
 
 
 
Decrease in NOI from asset dispositions
 
(10.4
)
 
(0.14
)
 

 

 
Net impact on interest expense and share count from asset sales and settling 4.8 million already sold ATM forward equity shares
 
7.0

 
0.06

 
1.5

 
4.8

 
Midpoint of 2018 Core FFO Guidance with Capital Transactions
 
$
144.9

 
$
1.86

 
77.9

 
81.2

 


FIRST QUARTER 2018

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COMMUNITY LISTING - OWNED

Name
 
Primary University Served
 
 Acquisition/Development Date
 
# of Beds
 
Name
 
Primary University Served
 
Acquisition/Development Date
 
# of Beds
Same-Communities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Reserve on Perkins
 
Oklahoma State University
 
Jan '05
 
732

 
Herman Lee Donovan Hall (ONE
Plan)
 
University of Kentucky
 
Aug '13
 
300

The Pointe
 
Pennsylvania State University
 
Jan '05
 
984

 
2400 Nueces (ONE Plan)
 
University of Texas at Austin
 
Aug '13
 
655

The Lofts
 
University of Central Florida
 
Jan '05
 
730

 
Roosevelt Point
 
Arizona State University -
Downtown Phoenix
 
Aug '13
 
609

The Reserve at Columbia
 
University of Missouri
 
Jan '05
 
676

 
The Retreat at State College
 
Pennsylvania State University
 
Sept '13
 
587

Campus Creek
 
University of Mississippi
 
Feb '05
 
636

 
The Cottages on Lindberg
 
Purdue University
 
Sept '13
 
745

The Reserve at Saluki Pointe
 
Southern Illinois University
 
Aug '08, Aug '09
 
768

 
The Varsity
 
University of Michigan
 
Dec '13
 
415

University Village on Colvin (ONE
Plan)
 
Syracuse University
 
Aug '09
 
432

 
The Lotus
 
University of Colorado -
Boulder
 
Nov '11, Aug '14
 
235

GrandMarc at The Corner
 
University of Virginia
 
Oct '10
 
641

 
109 Tower
 
Florida International
University
 
Aug '14
 
542

Wertland Square
 
University of Virginia
 
Mar '11
 
152

 
The Oaks on the Square- Ph III
 
University of Connecticut
 
Aug '14
 
116

Jefferson Commons
 
University of Virginia
 
Mar '11
 
82

 
Frances Jewell Hall (ONE Plan)
 
University of Kentucky
 
Aug '14
 
740

The Berk on College
 
University of California,
Berkeley
 
May '11
 
122

 
Georgia M. Blazer Hall (ONE
Plan)
 
University of Kentucky
 
Aug '14
 
427

The Berk on Arch
 
University of California,
Berkeley
 
May '11
 
43

 
Haggin Hall (ONE Plan)
 
University of Kentucky
 
Aug '14
 
396

University Village Towers
 
University of California,
Riverside
 
Sept '11
 
554

 
Chellgren Hall (ONE Plan)
 
University of Kentucky
 
Aug '14
 
409

Irish Row
 
University of Notre Dame
 
Nov '11
 
326

 
Woodland Glen II (ONE Plan)
 
University of Kentucky
 
Aug '14
 
409

GrandMarc at Westberry Place
(ONE Plan)
 
Texas Christian University
 
Dec '11
 
562

 
The District on Apache
 
Arizona State University -
Tempe
 
Sept '14
 
900

Campus West (ONE Plan)
 
Syracuse University
 
Aug '12
 
313

 
Oaks on the Square- Ph IV
 
University of Connecticut
 
Aug '15
 
391

East Edge
 
University of Alabama
 
Aug '12
 
774

 
The Retreat at Louisville
 
University of Louisville
 
Aug '15
 
656

The Province
 
East Carolina University
 
Sept '12
 
728

 
Woodland Glen III (ONE Plan)
 
University of Kentucky
 
Aug '15
 
782

The District on 5th
 
University of Arizona
 
Oct '12
 
764

 
Woodland Glen IV (ONE Plan)
 
University of Kentucky
 
Aug '15
 
578

Campus Village
 
Michigan State University
 
Oct '12
 
355

 
Woodland Glen V (ONE Plan)
 
University of Kentucky
 
Aug '15
 
250

The Province
 
Kent State University
 
Nov '12
 
596

 
The Province Boulder
 
University of Colorado -
Boulder
 
Sept '15
 
317

The Suites at Overton Park
 
Texas Tech University
 
Dec '12
 
465

 
The Retreat at Oxford
 
University of Mississippi
 
Aug '13, Aug '16
 
1,018

The Centre at Overton Park
 
Texas Tech University
 
Dec '12
 
400

 
Lokal
 
Colorado State University
 
March '16
 
194

The Oaks on the Square
 
University of Connecticut
 
Aug '12, Aug '13
 
503

 
The Hub at Madison
 
University of Wisconsin
 
May '16
 
1,038

3949
 
Saint Louis University
 
Aug '13
 
256

 
Holmes Hall (ONE Plan)
 
University of Kentucky
 
Aug '16
 
645

Lymon T. Johnson Hall (ONE
Plan)
 
University of Kentucky
 
Aug '13
 
301

 
Boyd Hall (ONE Plan)
 
University of Kentucky
 
Aug '16
 
496


FIRST QUARTER 2018

24


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COMMUNITY LISTING - OWNED

Name
 
Primary University Served
 
 Acquisition/Development Date
 
# of Beds
 
Name
 
Primary University Served
 
Acquisition/Development Date
 
# of Beds
Same-Communities, cont.
 
 
 
 
 
 
 
Other-Communities
 
 
 
 
 
 
The Retreat at Blacksburg
 
Virginia Tech
 
Aug '16
 
829

 
University Towers(1)
 
North Carolina State
University
 
Jan '05
 
889

Pura Vida Place
 
Colorado State University
 
Aug '16
 
100

 
 
 
Total Other-Communities
 
 
 
889

Carriage House
 
Colorado State University
 
Aug '16
 
94

 
 
 
 
 
 
 
 
Urbane
 
University of Arizona
 
Sept '16
 
311

 
 
 
Total Owned-Communities
 
 
 
34,040

 
 
Total Same-Communities
 
 
 
28,079

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New-Communities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retreat at Corvallis
 
Oregon State University
 
Jan '17
 
1,016

 
 
 
 
 
 
 
 
319 Bragg
 
Auburn University
 
Feb '17
 
305

 
 
 
 
 
 
 

University Flats (ONE Plan)
 
University of Kentucky
 
Aug '17
 
771

 
 
 
 
 
 
 
 
Sawtooth Hall (ONE Plan)
 
Boise State University
 
Aug '17
 
656

 
 
 
 
 
 
 
 
Lewis Hall (ONE Plan)
 
University of Kentucky
 
Aug '17
 
346

 
 
 
 
 
 
 
 
SkyVue
 
Michigan State University
 
Aug '17
 
824

 
 
 
 
 
 
 

The Local: Downtown
 
Texas State University
 
Aug '17
 
304

 
 
 
 
 
 
 
 
The Woods (ONE Plan)
 
Northern Michigan University
 
Aug '17, Jan '18
 
850

 
 
 
 
 
 
 

 
 
Total New-Communities
 
 
 
5,072

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(1) University Towers moved into other-communities on January 1, 2017 due to the change in the operations of the property related to the university's new freshman live-on requirement.

FIRST QUARTER 2018

25


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INVESTOR RELATIONS

Executive Management
 
 
 
 
Randy Churchey
Chief Executive Officer
 
 
 
Tom Trubiana
President
 
 
 
Bill Brewer
Chief Financial Officer
 
 
 
Christine Richards
Chief Operating Officer
 
 
 
Lindsey Mackie
Chief Accounting Officer
 
 
 
J. Drew Koester
Senior Vice President - Capital Markets and Investor Relations
 
 
 
 
 
 
Corporate Headquarters
 
 
 
 
EdR
 
 
 
 
999 South Shady Grove Road, Suite 600
 
 
 
 
Memphis, TN 38120
 
 
 
 
(901) 259-2500
 
 
 
 
 
 
 
 
Covering Analysts
 
 
 
 
Firm
Analyst
Contact #
Email
 
Bank of America - Merrill
Juan Sanabria
(646) 855-1589
juan.sanabria@baml.com
 
Citi
Nicholas Joseph
(212) 816-1909
nicholas.joseph@citi.com
 
Evercore ISI
Samir Khanal
(212) 888-3796
samir.khanal@evercoreisi.com
 
Green Street Advisors
John Pawlowski

(949) 640-8780
jpawlowski@greenstreetadvisors.com
 
Goldman Sachs
Andrew Rosivach
(212) 902-2796
andrew.rosivach@gs.com
 
Hilliard Lyons
Carol Kemple
(502) 588-1839
ckemple@hilliard.com
 
JMP Securities
Aaron Hecht
(415) 835-3963
ahecht@jmpsecurities.com
 
J.P. Morgan Securities Inc.
Anthony Paolone
(212) 622-6682
anthony.paolone@jpmorgan.com
 
KeyBanc Capital Markets
Austin Wurschmidt
(917) 368-2311
awurschmidt@keybanccm.com
 
Robert W Baird & Co.
Drew Babin
(215) 553-7816
dbabin@rwbaird.com
 
Sandler O'Neill + Partners, L.P.
Alex Goldfarb
(212) 466-7937
agoldfarb@sandleroneill.com


FIRST QUARTER 2018

26


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DEFINITIONS

 
 
Design beds
Represents the sum of the monthly design beds in the portfolio during the period.
 
 
FFO
Funds from operations as defined by the National Association of Real Estate Investment Trusts.
 
 
GAAP
U.S. generally accepted accounting principles.
 
 
Net apartment rent per occupied bed (NarPOB)
Represents GAAP net apartment rent for the respective period divided by the sum of occupied beds in the portfolio for each month included in the period reported.
 
 
Net debt to EBITDA - adjusted
Net debt to EBITDA - adjusted is calculated to normalize the impact of non-producing construction debt. In the calculation, net debt is total debt (excluding unamortized deferred financing costs) less cash and excludes non income-producing debt related to assets under development at time of calculation. EBITDA is Pro Forma Adjusted EBITDA, which includes proforma adjustments to reflect all acquisitions, dispositions and development assets that are open as if such had occurred at the beginning of the 12 month period being presented.
 
 
EBITDAre
EBITDAre is defined as GAAP net income (1) plus interest expense, (2) plus or minus losses/gains on the early extinguishment of debt, (3) less interest income, (4) plus income tax expense, (5) plus depreciation and amortization, (6) plus amortization of deferred financing costs, (7) plus or minus losses and gains on the disposition of depreciated property, including losses/gains on change of control, (8) plus impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of the depreciated property in the affiliate and (9) plus or minus adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates.

 
 
Operating expense per bed
Represents community-level operating expenses excluding management fees, depreciation and amortization.
 
 
Other income per available bed
Represents other GAAP-based income for the respective period divided by the sum of the design beds in the portfolio for each of the included months. Other income includes service/application fees, late fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery, and other misc.
 
 
Physical occupancy
Represents a weighted average of the month end occupancies for each month included in the period reported.
 
 
Regional Definitions
Regions are defined as follows: Mid-Atlantic: North Carolina, Pennsylvania, Connecticut, New York, Virginia; Midwest: Idaho, Iowa, Oklahoma, Missouri; North: Michigan, Minnesota, Ohio, Indiana, Illinois, Wisconsin; South Central: Texas, Tennessee, Mississippi, Kentucky; Southeast: Florida, Alabama, Georgia; West: Arizona, California, Colorado, Oregon, Hawai'i.
 
 
Revenue per occupied bed (RevPOB)
Represents total revenue (net apartment rent plus other income) for the respective period divided by the sum of occupied beds in the portfolio for each month included in the period reported.
 
 
Same community
Includes communities that have been owned for more than a year as of the beginning of the current fiscal year.
 
 
EdR's Economic Ownership of Developments
Represents total project cost multiplied by EdR's ownership percentage, which is reflective of EdR's economic interest in operating results.
 
 
Development Cost Funded by EdR's Balance Sheet
For developments that are consolidated in EdR's financials but less than 100% owned, 100% of the development costs and debt related to the development is included in EdR's balance sheet. As such, EdR's funding requirement and impact on leverage is equal to total project cost less equity contributed by our joint venture partner.


FIRST QUARTER 2018

27


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RECONCILIATION OF NON-GAAP MEASURES


(Amounts in thousands)
Net operating income (NOI)
 
Three months ended March 31,
 
2018
 
2017
Operating income
$
24,415

 
$
18,441

Less: Third-party development services revenue

 
1,815

Less: Third-party management services revenue
905

 
945

Plus: Other operating expense

 
500

Plus: Development and management services expenses
2,851

 
2,901

Plus: General and administrative expenses, development pursuit, acquisition costs and severance
2,919

 
3,427

Plus: Ground leases
3,788

 
3,560

Plus: Depreciation and amortization
22,507

 
25,839

NOI
$
55,575

 
$
51,908


Debt and net debt to gross assets
 
 
March 31, 2018
 
December 31, 2017
Gross unsecured debt, excluding unamortized deferred financing costs
 
$
979,500

 
$
936,500

Less: Cash
 
(22,902
)
 
(24,787
)
Less: Sold but unsettled ATM forward equity
 
(188,360
)
 
(190,215
)
Net debt
 
$
768,238

 
$
721,498

 
 
 
 
 
Total assets
 
$
3,063,991

 
$
3,015,164

Accumulated depreciation(1)
 
373,977

 
385,118

Gross assets
 
3,437,968

 
3,400,282

Less: Cash
 
(22,902
)
 
(24,787
)
Gross assets(2)
 
$
3,415,066

 
$
3,375,495

 
 
 
 
 
Debt to gross assets
 
28.5
%
 
27.5
%
Net debt to gross assets
 
22.5
%
 
21.4
%
 
 
 
 
 
(1) Represents accumulated depreciation on real estate assets.
 
 
 
 
(2) Gross assets used in the net debt to gross assets calculation excludes $22.9 million cash on hand at March 31, 2018.


FIRST QUARTER 2018

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RECONCILIATION OF NON-GAAP MEASURES


(Amounts in thousands)
Net debt to enterprise value
 
 
March 31, 2018
 
December 31, 2017
Net debt
 
$
768,238

 
$
721,498

 
 
 
 
 
Enterprise value:
 
 
 
 
Common stock
 
75,809

 
75,780

Units outstanding
 
249

 
196

Total shares
 
76,058

 
75,976

Closing share price
 
$
32.75

 
$
34.92

Market equity
 
$
2,490,900

 
$
2,653,082

 
 
 
 
 
Net debt to enterprise value
 
27.7
%
 
25.6
%

Interest coverage ratio
 
As Reported
 
Bond Covenant(1)
 
Proforma for Developments
 
Adjusted Pro Forma EBITDA - TTM:
 
 
 
 
 
 
EdR Adjusted EBITDA(2)
$
158,887

 
$
158,887

 
$
158,887

 
Pro forma Adjustments

 
(7,220
)
(3) 
(753
)
(4) 
Total Adjusted Pro Forma EBITDA - TTM
$
158,887

 
$
151,667

 
$
158,134

 
 
 
 
 
 
 
 
Pro Forma Interest Expense - TTM:
 
 
 
 
 
 
Interest expense, net of capitalized interest (TTM)
$
16,991

 
$
16,991

 
$
16,991

 
Add back: Capitalized interest
13,547

 
13,547

 

 
Pro forma adjustments

 
(461
)
 

 
Pro forma interest expense - TTM
$
30,538

 
$
30,077

 
$
16,991

 
 
 
 
 
 
 
 
Interest Coverage
5.2x

 
5.0x

 
9.3x

 
 
 
 
 
 
 
 
(1) Computed in accordance with the First Supplemental Indenture filed November 24, 2014 with the SEC. 
(2) See page 30 for a reconciliation to EdR Adjusted EBITDA.
(3) Includes pro forma adjustments for communities sold during the twelve months ended March 31, 2018.
(4) Includes pro forma adjustments to annualize the EBITDA contribution for any developments or acquisitions that have been operating for less than twelve months. Also includes pro forma adjustments for communities sold during the twelve months ended March 31, 2018.

FIRST QUARTER 2018

29


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RECONCILIATION OF NON-GAAP MEASURES


(Amounts in thousands)
Reconciliation of NAREIT EBITDAre and Adjusted earnings before interest, taxes, depreciation and amortization for real estate (Adjusted EBITDAre)
 
 
Three Months
 
Plus: Year
 
Less: Three
 
Trailing Twelve
 
 
 
Ended
 
Ended
 
Months Ended
 
Months Ended
 
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
March 31, 2018
 
Net income
 
$
40,578

 
$
46,237

 
$
16,142

 
$
70,673

 
Interest expense, net of amounts capitalized
 
4,751

 
15,268

 
3,028

 
16,991

 
Loss on extinguishment of debt
 

 
22

 
22

 

 
Interest income
 
(43
)
 
(98
)
 
(32
)
 
(109
)
 
Income tax expense (benefit)
 
66

 
584

 
(885
)
 
1,535

 
Depreciation and amortization
 
22,870

 
97,075

 
26,260

 
93,685

 
Gain on disposition of depreciated property

 
(21,358
)
 
(691
)
 

 
(22,049
)
 
Adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates
 
1,467

 
5,037

 
1,177

 
5,327

 
NAREIT EBITDAre(1)
 
$
48,331

 
$
163,434

 
$
45,712

 
$
166,053

 
 
 
 
 
 
 
 
 
 
 
Adjustments to NAREIT EBITDAre:
 
 
 
 
 
 
 
 
 
Straight line adjustment for ground leases
 
1,170

 
4,696

 
1,175

 
4,691

 
Acquisition costs
 
1

 
35

 
25

 
11

 
Other operating (income) expense(2)
 

 
(6,041
)
 
500

 
(6,541
)
 
Adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates
 
(1,467
)
 
(5,037
)
 
(1,177
)
 
(5,327
)
 
Adjusted EBITDA
 
$
48,035

 
$
157,087

 
$
46,235

 
$
158,887

 
Annualize acquisitions, developments and dispositions(3)
 

 

 

 
(753
)
 
Pro Forma Adjusted EBITDA
 
$
48,035

 
$
157,087

 
$
46,235

 
$
158,134

 
 
 
 
 
 
 
 
 
 
 
(1) NAREIT EBITDAre is presented in accordance with the white paper issued by the National Association of Real Estate Investment Trust's ("NAREIT") in September 2017.
(2) Included in other operating income for the year ended December 31, 2017 was $4.8 million gain on the settlement of a dispute that arose with the seller of one of our acquired properties post-acquisition and $1.2 million related to changes in fair value of contingent consideration liabilities associated with our 2016 acquisitions of the Hub at Madison and Urbane.
    Included in other operating expense for the three months ended March 31, 2017 was $0.5 million related to changes in fair value of contingent consideration liabilities associated with our 2016 acquisition of Urbane.
(3) Pro forma adjustment to reflect all acquisitions, development deliveries and dispositions as if such transactions had occurred on the first day of the period presented.

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SAFE HARBOR STATEMENT



Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995


Statements about the Company’s business that are not historical facts are “forward-looking statements,” which relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions. 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 are based on current expectations. You should not rely on our forward-looking statements because the matters that they describe are subject to known and unknown risks and uncertainties that could cause the Company’s business, financial condition, liquidity, results of operations, Core FFO, FFO and prospects to differ materially from those expressed or implied by such statements. Such risks are set forth under the captions “Risk Factors,” “Forward-Looking Statements” and "Management’s Discussion and Analysis of Financial Condition and Results of Operations” (or similar captions) in our most recent Annual Report on Form 10-K and our quarterly reports on Form 10-Q, and as described in our other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and, except as otherwise may be required by law, the Company undertakes no obligation to update publicly or revise any guidance or other forward-looking statement, whether as a result of new information, future developments, or otherwise except as required by law.


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