American Campus Communities (ACC) Provides Interim Update, Highlights Leasing Results Above the High-End of Prior Guidance Range and Increases FFOM per share Guidance

October 4, 2021 8:09 AM EDT

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American Campus Communities, Inc. (NYSE: ACC), the nation’s largest owner and manager of high-quality student housing properties, today provided an interim update in connection with the company’s participation in the 2021 National Multifamily Housing Council (NMHC) Student Housing Conference. The company announced an extremely successful completion of the Fall 2021 lease-up, producing occupancy and rental revenue growth above the high end of its previously provided guidance range. Based upon this better than anticipated completion to the leasing season, the company now expects to deliver FFOM per fully diluted share of $2.04 to $2.12 for the year ended December 31, 2021. This represents an increase of $0.08, or 4.0 percent, per fully diluted share at the midpoint, as compared to prior FFOM guidance of $1.93 to $2.07 per fully diluted share.

Academic Year 2021-2022 Leasing Results

As of September 30, 2021, the company’s 2021 and 2022 same store portfolios were 95.8 percent leased with 3.3 and 3.8 percent average rental rate growth over the prior year, respectively. This compares to the company’s previously provided expectations of 92.0 to 94.0 percent leased with 2.5 to 3.0 and 3.0 to 3.5 percent average rental rate growth for the 2021 and 2022 same store portfolios, respectively. Additional details regarding the company’s 2021-2022 academic year leasing results are included in Table 1.

“We are very pleased to have driven a strong finish to the lease-up, with significant activity continuing into August and September, which produced opening academic year revenue growth of over 8 percent and allowed us to increase our guidance midpoint by 4 percent,” said Bill Bayless, American Campus Communities CEO. “Our sector is experiencing substantial tailwinds and appears to have almost entirely recovered from the impacts of COVID. Nearly all universities across the country have resumed in-person academic and social activities. According to RealPage, national student housing occupancy has returned to pre-pandemic levels and new supply is projected to continue to trend downward, with Fall 2022 expected to represent the lowest levels of new student housing beds delivered in more than a decade. These recent trends, including strong demand and low supply, underpin our confidence in the unique value of our portfolio as well as our ability to generate near and long-term shareholder value.”

2021 Outlook

The company is increasing its 2021 outlook primarily to reflect the completion of the Fall 2021 lease-up and anticipated results for the remainder of the year. Based upon these and other factors, management expects that 2021 FFO will be in the range of $2.06 to $2.14 and FFOM will be in the range of $2.04 to $2.12 per fully diluted share, respectively.

“After successfully managing through the disruption caused by the pandemic, we are very excited that the company is positioned to grow 2021 earnings by as much as 3 to 7 percent over 2020,” said Daniel Perry, American Campus Communities CFO. “Even more importantly, with such a successful completion to our Fall 2021 lease-up, we believe net operating income will return to pre-pandemic levels by the fourth quarter of this year, which should translate into significant earnings growth in 2022. Based on our strong recent results and expectations for a favorable operating environment, we are confident in our ability to fund our business through continued strategic capital recycling and free cash flow generation. And finally, we believe FFOM per share growth in the 12-15 percent range is achievable in 2022, and look forward to providing formal guidance when we release our fourth quarter and full year earnings results early next year.”

A reconciliation of the range provided for projected net income to projected FFO and FFOM for the year ended December 31, 2021 is included in Table 2. The company has not sold any shares through its At-The-Market share offering program since its second quarter earnings call in July.

All guidance is based on the current expectations and judgment of the company's management team.

Non-GAAP Financial Measures

The National Association of Real Estate Investment Trusts ("NAREIT") currently defines Funds from Operations ("FFO") as net income or loss attributable to common shares computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses from depreciable operating property sales, impairment charges and real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. We also believe it is meaningful to present a measure we refer to as FFO-Modified, or (“FFOM”), which reflects certain adjustments related to the economic performance of our on-campus participating properties and excludes other items, as we determine in good faith, that do not reflect our core operations on a comparative basis. FFO and FFOM should not be considered as alternatives to net income or loss computed in accordance with GAAP as an indicator of our financial performance or to cash flow from operating activities computed in accordance with GAAP as an indicator of our liquidity, nor are these measures indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

The company defines property net operating income (“NOI”) as property revenues less direct property operating expenses, excluding depreciation, but including allocated corporate general and administrative expenses.



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