Form 8-K Education Realty Trust, For: Aug 01 Filed by: EDUCATION REALTY OPERATING PARTNERSHIP L P

August 1, 2016 7:09 AM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): August 1, 2016

Education Realty Trust, Inc.

Education Realty Operating Partnership, LP

(Exact Name of Registrant as Specified in Charter)



Maryland	001-32417	20-1352180
Delaware	333-199988-01	20-1352332
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)



999 South Shady Grove Road, Suite 600 Memphis, Tennessee		38120
(Address of Principal Executive Offices)		(Zip Code)

901-259-2500

(Registrant’s telephone number, including area code)

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 (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 August 1, 2016, Education Realty Trust, Inc. (the "Company") issued a press release announcing its results of operations for the three and six months ended June 30, 2016 and made available updated supplemental information concerning the ownership, operations and portfolio of the Company. A copy of the press release and this supplemental information are furnished as Exhibits 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.

This Current Report on Form 8-K and the exhibits attached hereto are being furnished by the Company pursuant to Item 2.02 and Item 7.01 of Form 8-K in satisfaction of the public disclosure requirements of Regulation FD and Item 2.02 of Form 8-K, insofar as they disclose historical information regarding the Company’s results of operations or financial condition for the three and six months ended June 30, 2016.

In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Current Report on Form 8-K (including Exhibits 99.1 and 99.2 hereto), shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

The disclosure contained in Item 2.02 is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are being furnished herewith to this Current Report on Form 8-K.



Exhibit No.		Description
99.1		Press Release dated August 1, 2016
99.2		Second Quarter 2016 Supplemental Financial Report

SIGNATURE

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.



	EDUCATION REALTY TRUST, INC.

Date: August 1, 2016	By:	/s/ Edwin B. Brewer, Jr.
		Edwin B. Brewer, Jr. Executive Vice President and Chief Financial Officer


	EDUCATION REALTY OPERATING PARTNERSHIP, LP

Date: August 1, 2016	By: EDUCATION REALTY OP GP, INC., its general partner

		By: /s/ Edwin B. Brewer, Jr.
		Edwin B. Brewer, Jr. Executive Vice President and Chief Financial Officer

INDEX TO EXHIBITS



Exhibit No.		Description
99.1		Press Release dated August 1, 2016
99.2		Second Quarter 2016 Supplemental Financial Report

EdR ANNOUNCES SECOND QUARTER 2016 RESULTS

MEMPHIS, TN, August 1, 2016 - EdR (NYSE: EDR), one of the nation’s largest developers, owners and managers of high-quality collegiate housing communities, today announced results for the quarter ended June 30, 2016.

Company Highlights


•	Net income attributable to common stockholders increased $14.7 million to $17.6 million for the second quarter, with net income attributable to common stockholders per diluted share up $0.20 to $0.26 per share;


•	Operating income for the quarter increased 6.1% for the second quarter on a 13.6% increase in revenue and a 15.0% increase in operating expenses. Year to date, operating income was up 30.4% on revenue growth of 14.1% and a 10.3% increase in operating expenses;

•

Same-community NOI increased 2.6% for the quarter, on a 4.2% increase in revenue and a 6.4% increase in operating expenses. Year to date, same-community NOI was up 5.8% on revenue growth of 4.1% and a 1.5% increase in operating expenses. Excluding the $0.8 million additional property tax assessment in the first quarter of 2015, as previously disclosed in our first quarter earnings release, year to date operating expenses and NOI increased 3.4% and 4.5%, respectively, over the prior year;


•	Core funds from operations (“Core FFO”) increased 31.7% for the second quarter with Core FFO per share/unit down $0.02, or 4.9%, from prior year to $0.39. Core FFO declined on a per share/unit basis primarily due to a 39.9% increase in weighted average shares related to deleveraging equity transactions in 2016 and late 2015;


•	Preleasing occupancy for the 2016-2017 lease term is 120 basis points behind last year with the same-community portfolio 95.1% preleased. We currently anticipate opening occupancies to be in a range of 50 bps down to even vs the prior year, with rate growth of approximately 3.4%, resulting in projected rental revenue growth for the 2016-2017 lease term ranging from 3.0 to 3.5%;


•	Began construction on the owned on-campus ONE Plan replacement housing development at Northern Michigan University. The $75.4 million development will be delivered in multiple phases with 800 beds scheduled to be delivered in summer/December 2017 and the remaining 400 beds delivering summer 2018;


•	Began construction on a 723-bed community adjacent to the University of Pittsburgh. EdR will own 80% of the joint venture and manage the $106.1 million community upon opening summer 2018;


•	Initiated plans in July, for the tear-down and redevelopment of our existing, 22-year-old, 336-bed community serving Florida State University. Construction is expected to begin in summer of 2017 on the new 592-bed, $37.5 million project with an expected delivery date of summer 2018;


•	Purchased the remaining 25% interest in The Retreat at Louisville from our development partner for $4.4 million and repaid the related $35.7 million variable rate construction loan bearing interest at approximately 2.5%;


•	Started construction on the previously announced third-party developments at Texas A&M Commerce, Shepherd University and East Stroudsburg University, each for delivery in summer 2017;

•

Announced that, in EdR's markets, 2017 new student housing supply as a percentage of enrollment is expected to exceed enrollment growth by 40 basis points. This excess is consistent with the supply to enrollment gap EdR experienced in its markets over the last four years, which ranged from 30 to 90 bps. During this same four year period EdR's compounded annual growth in same-community revenue was 4.0%;


•	Completed the previously announced disposition of two assets, The Reserve at Athens (University of Georgia) and The Commons at Tallahassee (Florida State University), for combined proceeds of $42.0 million, recognizing a gain on sale of $12.1 million. The communities included a total of 1,344 beds, were an average of 18 years old and an average 1.9 miles from campus;


•	Sold 6.97 million shares under our ATM program at a weighted average net price of $42.51, raising net proceeds of $296.2 million; $238.3 million was raised through June 30, 2016 and $57.9 million was raised in July 2016; and


•	Reaffirmed 2016 guidance, including diluted earnings per share in the range of $0.76 to $0.82 and Core FFO per share/unit in the range of $1.73 to $1.79.

"It has been a great first half of the year for EdR," stated Randy Churchey, EdR's chief executive officer. "Our same-community portfolio is performing well with year to date NOI growth of nearly 6% on strong revenue growth and modest expense growth. We were able to build upon our first quarter announcements by adding two additional off-campus developments, totaling an EdR investment of $122 million, as well as announcing another pending acquisition at a tier-one university. We continue to see ample opportunities for external growth, both on and off campus."

Net Income Attributable to Common Stockholders

Net income attributable to common stockholders for the quarter was $17.6 million, or $0.26, per diluted share as compared to net income of $2.9 million, or $0.06, per diluted share, for the second quarter of 2015. The $14.7 million increase in net income attributable to common stockholders relates primarily to the following:


•	a $4.7 million increase in total community NOI,


•	a $12.1 million gain on sale of collegiate housing assets recognized in 2016,


•	a $1.8 million decrease in net interest expense and


•	a $0.6 million reduction in development pursuit costs, partially offset by


•	a $1.2 million increase in general and administrative expenses, and


•	a $3.2 million increase in depreciation.

Operating Income

Operating income for the second quarter was $9.5 million as compared to $8.9 million for the second quarter of 2015. The $0.6 million increase relates primarily to the following:


•	a $4.7 million increase in total community NOI and


•	a $0.6 million reduction in development pursuit costs, partially offset by


•	a $1.2 million increase in general and administrative expenses, and


•	a $3.2 million increase in depreciation.

Core Funds From Operations

Core FFO for the quarter was $26.4 million as compared to $20.1 million in the prior year. The $6.3 million increase relates primarily to the following:


•	a $4.7 million increase in total community NOI,


•	a $1.8 million reduction in net interest expense and


•	a $0.6 million reduction in development pursuit costs, partially offset by


•	a $1.2 million increase in general and administrative expenses.

Core FFO per share/unit for the quarter declined $0.02, or 4.9%, to $0.39, primarily due to a 39.9% increase in weighed average shares related to deleveraging equity transactions in 2016 and late 2015.

A reconciliation of funds from operations (“FFO”) and Core FFO to GAAP net income attributable to common stockholders is included with the financial tables accompanying this release.

Same-Community Results

Same community NOI for the second quarter increased 2.6% to $29.8 million on revenue growth of 4.2%, comprised of a 2.6% increase in rental rates, a 0.5% increase in occupancy and a 1.1% increase in other income, partially offset by a 6.4%, or $1.3 million, increase in operating expenses. Operating expense growth was higher than our previously announced annual guidance range but in line with expectations for the quarter. Year to date, NOI is up 5.8% on revenue growth of 4.1% and a 1.5% increase in operating expenses. Excluding the $0.8 million additional property tax assessment in the first quarter of 2015, as previously disclosed in our first quarter earnings release, year to date operating expenses and NOI increased 3.4% and 4.5%, respectively, over the prior year.

2016-2017 Preleasing

The same-community leasing portfolio occupancy is currently 120 basis points behind prior year with 95.1% of the beds preleased for the fall. The 120 basis point shortfall in leasing velocity represents 352 less beds leased. Two of our communities alone, The Reserve at Columbia (a 676-bed community at the University

of Missouri) and the Reserve at Stinson (a 612-bed community at the University of Oklahoma), are 363 beds behind prior year and are account for the leasing gap. The Reserve at Columbia is currently 76% preleased compared to 100% a year ago, mainly as a result of a 13% decline in full-time enrollment anticipated by The University of Missouri due to racial strife it experienced in 2015. We remain confident in the long term prospects of this market but the 2016-2017 opening occupancy will be down from prior year and we do not expect to make up as much of the shortfall as we previously anticipated. The Reserve at Stinson, which opened the 2015/2016 lease year 88% occupied, is currently 52% leased, compared to 84% a year ago. We made an adjustment to the rate structure at this community to include utilities, which was not accepted by the market and after readjusting rates the community has struggled to regain leasing momentum.

The remainder of the same-community portfolio (26,249 beds) continues to perform as expected and is currently 96.6% preleased for the fall compared to 96.5% a year ago.

We currently anticipate same-community opening occupancies to be in a range of 50 bps down to even vs the prior year with rate growth of approximately 3.4%, resulting in rental revenue growth for the 2016-2017 lease term ranging from 3.0% to 3.5%.

Our new-community leasing portfolio, which includes 2016 developments and all acquisitions since summer of 2015, is currently 85% preleased for the fall and is expected to meet first year underwritten occupancies by the end of the leasing cycle.

Preleasing occupancy at our managed portfolio is currently 334 bps ahead of prior year with 96.6% of the beds preleased and preleasing occupancy at our unconsolidated joint ventures in the aggregate is 457 basis points ahead of the prior year with 96.7% of beds preleased.

The Company provides additional leasing information in its quarterly earnings supplement located at http://www.snl.com/irweblinkx/yearlypresentations.aspx?iid=4095382.

Market Supply and Demand

AXIOMetrics recently reported that on a national level new student housing supply in 2017 is anticipated to decline approximately 8% from 2016 levels and that over the next five years annual effective rent growth is expected to average 3.3%, with occupancy remaining relatively stable in the mid 95% range. Based on data from AXIOMetrics and market data from our community managers, in EdR markets, 2017 new student housing supply as a percentage of enrollment is expected to exceed enrollment growth by 40 basis points. This 40 basis point spread is comprised of supply growth representing 2.2% of enrollment as compared to an expected enrollment growth of 1.8%. The 40 basis point excess is consistent with the supply to enrollment gap EdR experienced in its markets over the last four years as follows:




EdR Markets (% of enrollment):	2013		2014		2015		2016			2017
Projected new supply	2.2	%	2.2	%	2.0	%	1.8	%		2.2	%
Projected enrollment growth	1.3	%	1.4	%	1.5	%	1.5	%		1.8	%
	0.9	%	0.8	%	0.5	%	0.3	%		0.4	%

Same-community:
Occupancy increase	3.0	%	2.0	%	0.4	%	(0.3	)%	⁽¹⁾
Rate increase	2.0	%	2.0	%	3.4	%	3.4	%	⁽¹⁾
Total leasing revenue growth	5.0	%	4.0	%	3.8	%	3.1	%

⁽¹⁾Represents current rate guidance and the midpoint of current occupancy guidance.

The Company provides additional enrollment and supply information by market in its quarterly earnings supplement located at http://www.snl.com/irweblinkx/yearlypresentations.aspx?iid=4095382.

Investment Activity

During the quarter, EdR closed on the previously announced acquisition of the Hub at Madison, a 1,036-bed community pedestrian to the University of Wisconsin. EdR also has three previously announced pending acquisitions, including a community with 311 beds at the University of Arizona and two communities totaling 194 beds serving Colorado State University, that are expected to close in the third quarter of 2016.

Additionally, in July 2016 EdR entered into an agreement to acquire a 700-bed community serving a tier-one university for approximately $80 million. The community is adjacent to campus and currently under development for a fall 2016 opening. Closing is subject to customary conditions, including normal due diligence, and is targeted for October 2016.

On the development front, EdR's 2016 developments at Virginia Tech, the University of Kentucky and the University of Mississippi are on budget and on track for student move-ins later this month. In addition, our 2017 developments at Boise State, Michigan State, Texas State, Oklahoma State and the University of Kentucky continue to proceed as planned and are on pace for their targeted openings.

EdR made significant progress on the recently awarded ONE Plan owned on-campus project at Northern Michigan University. Final agreements have been signed and construction on the $75.4 million, 1,200 bed replacement housing began in July. The development is expected to be delivered in phases with approximately 800 beds being delivered in summer/December of 2017 and the remaining 400 beds being delivered in summer 2018.

At quarter end, EdR began construction on a 723-bed community adjacent to the University of Pittsburgh. EdR will be 80% owner of the joint venture and will manage the $106.1 million community, upon opening in summer 2018. Built on what is currently a parking lot one block south of the Pitt campus, the community will consist of studio, one, two and three-bedroom configurations featuring in-unit washer/dryers, granite countertops and robust internet and Wi-Fi throughout the community. The building will also feature 381 structured parking spaces and 10,000 sq ft of retail space.

In July, EdR initiated plans for the tear-down and redevelopment of Players Club, our 22-year-old community at Florida State University. EdR will maximize the value of the location by replacing the 336-bed community

with a new 592-bed community. Construction is expected to begin on the $37.5 million project after the 2016-2017 academic year and final move-out of our residents in June of 2017 for an expected summer 2018 opening.

Additionally, EdR began construction on three previously announced third-party on-campus developments at Texas A&M Commerce, Shepherd University and East Stroudsburg University, each targeting summer 2017 deliveries.

"It is exciting to see our development team continue to capitalize on development opportunities," stated Tom Trubiana, EdR's president. "The two newly announced developments and one additional acquisition will be great additions to our portfolio, providing entry into a new market and improving our presence in current markets. Our team has worked hard to build a reputation as a good partner and it is serving us well in competing for on-campus mandates as well as sourcing off-campus opportunities."

Over the last six to eight months the industry has seen a significant tightening in the construction lending market that EdR thinks bodes well for both its opportunity for off-campus development joint ventures as well as future levels of new supply. This tightening trend, which includes tighter loan to cost limits, 50 to 100 basis point increases in interest rates and higher cash equity requirements, is making construction lending harder to obtain by merchant developers. Although this is not expected to impact the permanent financing markets or our ability to borrow, we do anticipate that the tighter construction lending market may result in lower levels of new supply in coming years as well as an increase in EdR's joint venture opportunities with developers that cannot obtain favorable financing on their own.

Dispositions / Capital Recycling

EdR completed the previously announced dispositions of The Reserve at Athens (University of Georgia) and The Commons at Tallahassee (Florida State University) for total proceeds of $42.0 million, recognizing a gain on sale of $12.1 million in the second quarter. The communities included a total of 1,344 beds, were an average of 18 years old and an average 1.9 miles from campus.

Capital Structure

At June 30, 2016, the Company had cash and cash equivalents totaling $230.4 million and availability on its unsecured revolving credit facility of $500 million. The Company's net debt to gross assets was 12.2%, its net debt to EBITDA - adjusted was 0.6x, and its interest coverage ratio was 6.1x.

EdR raised $238.3 million of net proceeds in the second quarter and $57.9 million in July, selling 6.97 million shares in the aggregate through its ATM program at a weighted average net price of $42.51, completing its active ATM authorization. Today the Company filed a new $300 million ATM program.

At June 30, 2016, the Company had capital commitments of $571 million, which included $417 million remaining to be funded on its $635 million of active 2016, 2017 and 2018 developments along with $154 million to be funded on announced acquisitions that are yet to be closed. The Company estimates, that of its $571 million in remaining capital commitments, $284 million will be funded in 2016, $235 million will be funded in 2017 and $52 will be funded in 2018.

"Even though these capital commitments will be drawn during 2016, 2017 and 2018, due to our current low leverage, we can fund them today with cash on hand of $230 million, July ATM proceeds of $58 million and borrowings under our line of credit, on which we have $500 million of availability, of $283 million, which would result in debt to gross assets of only 27%. What a great financial position," stated Bill Brewer, EdR's chief financial officer.

Earnings Guidance and Outlook

Based on the Company's current estimates and including the newly announced developments and ATM activity, management is reaffirming its 2016 guidance, including diluted earnings per share in the range of $0.76 to $0.82 and Core FFO per share/unit in the range of $1.73 to $1.79. Although Core FFO per share/unit is unchanged, our estimates for full year third-party development fees, interest expense and weighted average shares/units outstanding are being updated as noted below:


•	Third-party development fees are increased by $1.5 million - $2.0 Million to a range of $2.5 - $3.5 million, reflecting the new project starts at Texas A&M Commerce, East Stroudsburg University and Shepherd University.


•	Interest expense, net of capitalized interest and including amortization of deferred financing costs, is reduced by $1.8 million - $2.1 million to a range of $16.9 - $18.2 million, reflecting lower debt balances and interest rates as well as higher capitalized interest from additional assets under development.


•	The full-year weighted average shares/units increased to 69.6 million, reflecting actual shares sold to date and the assumption of no new equity raised for the remainder of 2016.

Webcast and Conference Call

EdR will host a conference call for investors and other interested parties beginning at 10:00 a.m. Eastern Time on Monday, August 1, 2016. The call will be hosted by Randy Churchey, EdR's chairman and chief executive officer.

The conference call will be accessible by telephone and the Internet. To access the call, participants in the U.S. may dial (877) 705-6003, and participants outside the U.S. may dial (201) 493-6725. Participants may also access the call via live webcast by visiting the Company's investor relations Web site at www.EdRTrust.com.

The replay of the call will be available at approximately 1:00 p.m. Eastern Time on Monday, August 1, 2016 through midnight Eastern Time on August 16, 2016. To access the replay, the domestic dial-in number is (877) 870-5176, the international dial-in number is (858) 384-5517, and the passcode is 13638550. The archive of the webcast will be available on the Company's Web site for a limited time.

About EdR

EdR (NYSE: EDR) is one of America's largest owners, developers and managers of collegiate housing. EdR is a self-administered and self-managed real estate investment trust that owns or manages 79 communities

with more than 41,000 beds serving 52 universities in 24 states. EdR is a member of the Russell 2000 Index, the S&P MidCap 400 and the Morgan Stanley REIT indices. For details, please visit the Company's Web site at www.EdRtrust.com.

Contact:

J. Drew Koester

Senior Vice President

Capital Markets and Investor Relations

(901) 259-2500

Bill Brewer

Executive Vice President and

Chief Financial Officer

(901) 259-2500

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 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 EdR's most recent annual report on Form 10-K and quarterly reports on Form 10-Q, and as described in EdR's 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.

No Offer of Securities

Nothing in this press release shall constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any offer or sale of securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction. Any offering of securities will be made only by means of an applicable prospectus.

Non-GAAP Financial Measures

Funds from Operations (FFO)

As defined by the National Association of Real Estate Investment Trusts, FFO represents net income (loss) (computed in accordance with U.S. generally accepted accounting principles ("GAAP")), excluding gains (or losses) from sales of collegiate housing assets and impairment write downs of depreciable real estate, plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. The Company presents FFO available to all stockholders and unitholders because management considers it to be an important supplemental measure of the Company’s operating performance, believes it assists in the comparison of the Company’s operating performance between periods to that of different REITs and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their operating results. As such, the Company also excludes the impact of noncontrolling interests, only as they relate to operating partnership units, in the calculation. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from collegiate housing asset dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.

We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999, April 2002 and by the October 2011 guidance described above), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties. We believe that net income is the most directly comparable GAAP measure to FFO available to stockholders and unitholders. FFO should not be considered as an alternative to net income (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 is it indicative of funds available to fund our cash needs, including our ability to make distributions.

The Company also uses core funds from operations, or Core FFO, as an operating performance measure. Core FFO available to stockholders and unitholders is defined as FFO adjusted to exclude the impact of straight-line adjustment for ground leases, gains/losses on extinguishment of debt, transaction costs related to acquisitions, and severance costs. The Company believes that these adjustments are appropriate in determining Core FFO as they are not indicative of the operating performance of the Company’s assets. In addition the Company believes that Core FFO is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as most REITs provide some form of adjusted or modified FFO.

Net Operating Income (NOI)

The Company considers NOI to be a useful measure of its collegiate housing operating performance. The Company defines NOI as rental and other community-level revenues earned from our collegiate housing communities less community-level operating expenses, excluding third party management fees and expenses, third party development consulting fees and expenses, depreciation, amortization, ground lease expense and impairment charges and including regional and other corporate costs of supporting the communities. Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to other REITs. The Company believes that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. The Company uses NOI to evaluate performance on a community-by-community basis because it allows management to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on the Company’s operating results. However, NOI should only be used as an alternative measure of the Company’s financial performance.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)

Adjusted EBITDA is defined as GAAP net income excluding: (1) straight line adjustment for ground leases; (2) acquisition costs; (3) depreciation and amortization; (4) loss on impairment of collegiate housing assets, (5) gain on sale of collegiate housing properties; (6) interest expense and income; (7) amortization of deferred financing costs; (8) income tax expense (benefit); (9) noncontrolling interests: and (10) loss on extinguishment of debt. Management considers Adjusted EBITDA useful to an investor in evaluating and facilitating comparisons of the Company's operating performance between periods and between REITs by removing the impact of the Company's capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results.

EdR AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)



		June 30, 2016			December 31, 2015
		(unaudited)
Assets
	Collegiate housing properties, net	$	1,898,602		$	1,774,796
	Assets under development	265,337			117,384
	Cash and cash equivalents	230,402			33,742
	Restricted cash	8,674			9,784
	Other assets	63,457			66,125

Total assets		$	2,466,472		$	2,001,831

Liabilities and equity
Liabilities:
	Mortgage and construction loans, net of unamortized premium and deferred financing costs	$	98,369		$	204,511
	Unsecured revolving credit facility	—			—
	Unsecured term loans, net of unamortized deferred financing costs	186,643			186,518
	Unsecured senior notes, net of unamortized deferred financing costs	247,808			247,678
	Accounts payable and accrued expenses	114,403			85,670
	Deferred revenue	11,890			19,024
Total liabilities		659,113			743,401

Commitments and contingencies		—			—

Redeemable noncontrolling interests		11,828			13,560

Equity:
EdR stockholders’ equity:
	Common stock, $0.01 par value per share, 200,000,000 shares authorized, 71,760,137 and 56,879,003 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	718			569


	Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, no shares issued and outstanding	—			—
	Additional paid-in capital	1,791,014			1,263,603
	Retained earnings (accumulated deficit)	—			(21,998		)
	Accumulated other comprehensive loss	(9,963		)	(5,475		)
Total EdR stockholders’ equity		1,781,769			1,236,699
Noncontrolling interests		13,762			8,171
Total equity		1,795,531			1,244,870

Total liabilities and equity		$	2,466,472		$	2,001,831

EdR AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Amounts in thousands, except per share data)

(Unaudited)



	Three months ended June 30,
	2016			2015
Revenues:
Collegiate housing leasing revenue	$	61,690		$	53,734
Third-party development consulting services	467			444
Third-party management services	697			780
Operating expense reimbursements	2,286			2,366
Total revenues	65,140			57,324

Operating expenses:
Collegiate housing leasing operations	26,166			22,868
Development and management services	2,728			2,507
General and administrative	2,921			1,769
Development pursuit, acquisition costs and severance	158			790
Depreciation and amortization	19,099			15,911
Ground lease expense	2,296			2,170
Reimbursable operating expenses	2,286			2,366
Total operating expenses	55,654			48,381

Operating income	9,486			8,943

Nonoperating (income) expenses:
Interest expense	3,635			5,451
Amortization of deferred financing costs	457			491
Interest income	(200		)	(67		)
Loss on extinguishment of debt	216			—
Total nonoperating expenses	4,108			5,875

Income before equity in earnings (losses) of unconsolidated entities, income taxes and gain on sale of collegiate housing properties	5,378			3,068

Equity in earnings (losses) of unconsolidated entities	107			(202		)
Income before income taxes and gain on sale of collegiate housing properties	5,485			2,866
Less: Income tax expense	89			90
Income before gain from sale of collegiate housing properties	5,396			2,776
Gain on sale of collegiate housing properties	12,083			—
Net income	17,479			2,776
Less: Net loss attributable to the noncontrolling interests	(176		)	(141		)
Net income attributable to EdR	$	17,655		$	2,917

Other comprehensive income (loss):
Gain (loss) on cash flow hedging derivatives	(1,042		)	2,091
Comprehensive income attributable to EdR	$	16,613		$	5,008

Earnings per share information:
Net income attributable to EdR common stockholders per share – basic	$	0.26		$	0.06
Net income attributable to EdR common stockholders per share – diluted	$	0.26		$	0.06

Weighted average share of common stock outstanding – basic	68,025			48,514
Weighted average share of common stock outstanding – diluted	68,293			48,832

EdR AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Amounts in thousands, except per share data)

(Unaudited)



	Six months ended June 30,
	2016			2015
Revenues:
Collegiate housing leasing revenue	$	131,873		$	114,117
Third-party development consulting services	950			1,041
Third-party management services	1,591			1,833
Operating expense reimbursements	4,105			4,462
Total revenues	138,519			121,453

Operating expenses:
Collegiate housing leasing operations	51,055			47,008
Development and management services	5,249			5,209
General and administrative	5,502			4,239
Development pursuit, acquisition costs and severance	686			959
Depreciation and amortization	36,615			31,777
Ground lease expense	5,605			5,018
Reimbursable operating expenses	4,105			4,462
Total operating expenses	108,817			98,672

Operating income	29,702			22,781

Nonoperating (income) expenses:
Interest expense	8,298			11,392
Amortization of deferred financing costs	937			1,007
Interest income	(274		)	(105		)
Loss on extinguishment of debt	10,136			—
Total nonoperating expenses	19,097			12,294

Income before equity in losses of unconsolidated entities, income taxes and gain on sale of collegiate housing properties	10,605			10,487

Equity in losses of unconsolidated entities	(137		)	(396		)
Income before income taxes and gain on sale of collegiate housing properties	10,468			10,091
Less: Income tax expense	140			168
Income before gain on sale of collegiate housing properties	10,328			9,923
Gain on sale of collegiate housing properties	23,956			—
Net income	34,284			9,923
Less: Net income (loss) attributable to the noncontrolling interests	(40		)	65
Net income attributable to EdR	$	34,324		$	9,858

Other comprehensive loss:
Loss on cash flow hedging derivatives	(4,488		)	(348		)
Comprehensive income attributable to EdR	$	29,836		$	9,510

Earnings per share information:
Net income attributable to EdR common stockholders per share – basic	$	0.53		$	0.20
Net income attributable to EdR common stockholders per share – diluted	$	0.52		$	0.20

Weighted average share of common stock outstanding – basic	65,352			48,345
Weighted average share of common stock outstanding – diluted	65,629			48,665

EdR AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO FFO AND CORE FFO

(Amounts in thousands, except per share/unit data)

(Unaudited)



	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015

Net income attributable to EdR	$	17,655		$	2,917		$	34,324		$	9,858

Gain on sale of collegiate housing assets	(12,083		)	—			(23,956		)	—
Real estate related depreciation and amortization	18,695			15,517			35,808			31,040
Equity portion of real estate depreciation and amortization on equity investees	657			423			1,323			843
Noncontrolling interests	(88		)	(90		)	117			122
Funds from operations ("FFO") available to stockholders and unitholders	$	24,836		$	18,767		$	47,616		$	41,863

FFO adjustments:
Loss on extinguishment of debt	216			—			10,136			—
Acquisition costs	178			90			238			90
Straight-line adjustment for ground leases ⁽¹⁾	1,187			1,200			2,373			2,401
FFO adjustments	1,581			1,290			12,747			2,491

Core funds from operations ("Core FFO") available to stockholders and unitholders	$	26,417		$	20,057		$	60,363		$	44,354

FFO per weighted average share/unit ⁽²⁾	$	0.36		$	0.38		$	0.73		$	0.86

Core FFO per weighted average share/unit ⁽²⁾	$	0.39		$	0.41		$	0.92		$	0.91

Weighted average shares/units ⁽²⁾	68,293			48,832			65,629			48,665


⁽¹⁾ 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.
⁽²⁾ 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.

EdR AND SUBSIDIARIES

2016 GUIDANCE - RECONCILIATION OF FFO and CORE FFO

(Amounts in thousands, except per share/unit data)

(Unaudited)



	Year ending December 31, 2016
	Low End			High End


Net income attributable to EdR	$	52,900		$	57,100

Gain on sale of collegiate housing assets	(23,956		)	(23,956		)
Real estate related depreciation and amortization	73,200			73,200
Equity portion of real estate depreciation and amortization on equity investees	2,800			2,800
Noncontrolling interests	250			250
Funds from operations ("FFO") available to stockholders and unitholders	$	105,194		$	109,394

FFO adjustments:
Loss on extinguishment of debt	10,136			10,136
Acquisition costs	250			250
Straight-line adjustment for ground leases ⁽¹⁾	4,800			4,800
FFO adjustments	15,186			15,186

Core funds from operations ("Core FFO") available to stockholders and unitholders	$	120,380		$	124,580

Net income attributable to EdR common stockholders per share – diluted	$	0.76		$	0.82

FFO per weighted average share/unit ⁽²⁾	$	1.51		$	1.57

Core FFO per weighted average share/unit ⁽²⁾	$	1.73		$	1.79

Weighted average shares/units ⁽²⁾	69,600			69,600


⁽¹⁾ 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.
⁽²⁾ 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.

EdR AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)

The following is a reconciliation of the Company's GAAP operating income to NOI for three and six months ended June 30, 2016 and 2015 (in thousands):



	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Operating income	$	9,486	$	8,943	$	29,702	$	22,781
Less: Third-party development services revenue	467		444		950		1,041
Less: Third-party management services revenue	697		780		1,591		1,833
Plus: Development and management services expenses	2,728		2,507		5,249		5,209
Plus: General and administrative expenses, development pursuit, acquisition costs and severance	3,079		2,559		6,188		5,198
Plus: Ground leases	2,296		2,170		5,605		5,018
Plus: Depreciation and amortization	19,099		15,911		36,615		31,777
NOI	$	35,524	$	30,866	$	80,818	$	67,109

The following is a reconciliation of the Company's GAAP net income to Adjusted EBITDA for the trailing twelve months ended June 30, 2016 (in thousands):



	Six months ended			Plus: Year Ended			Less: Six Months Ended			Trailing Twelve Months Ended
	June 30, 2016			December 31, 2015			June 30, 2015			June 30, 2016
Net income attributable to common stockholders	$	34,324		$	19,911		$	9,858		$	44,377
Straight line adjustment for ground leases	2,373			4,782			2,401			4,754
Acquisition costs	238			293			90			441
Depreciation and amortization	36,615			68,022			31,777			72,860
Gain on sale of collegiate housing properties	(23,956		)	(2,770		)	—			(26,726		)
Interest expense	8,298			24,449			11,392			21,355
Amortization of deferred financing costs	937			2,089			1,007			2,019
Interest income	(274		)	(213		)	(105		)	(382		)
Loss on extinguishment of debt	10,136			403			—			10,539
Income tax expense	140			347			168			319
Noncontrolling interest	(40		)	171			65			66
Adjusted EBITDA	$	68,791		$	117,484		$	56,653		$	129,622
Annualize acquisitions, developments and dispositions⁽¹⁾	—			—			—			8,638
Pro Forma Adjusted EBITDA	$	68,791		$	117,484		$	56,653		$	138,260

⁽¹⁾ Pro forma adjustment to reflect all acquisitions, dispositions and development deliveries as if such transactions had occurred on the first day of the period presented.

EdR AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)

The following is a reconciliation of our GAAP total assets to gross assets as of June 30, 2016 and December 31, 2015 (dollars in thousands):



	June 30, 2016			December 31, 2015
Mortgage and construction loans, excluding unamortized premium and deferred financing costs of $947 and $953 as of June 30, 2016 and December 31, 2015, respectively	$	99,316		$	205,464
Unsecured term loan, excluding unamortized deferred financing costs of $857 and $982 as of June 30, 2016 and December 31, 2015, respectively	187,500			187,500
Unsecured Senior Notes, excluding unamortized deferred financing costs of $2,192 and $2,322 as of June 30, 2016 and December 31, 2015, respectively	250,000			250,000
Total debt, excluding unamortized premium and deferred financing costs	$	536,816		$	642,964

Total assets	$	2,466,472		$	2,001,831
Accumulated depreciation⁽¹⁾	284,681			270,993
Gross assets	$	2,751,153		2,272,824

Debt to gross assets	19.5		%	28.3		%

⁽¹⁾ Represents accumulated depreciation on real estate assets.



		FINANCIAL HIGHLIGHTS



		FINANCIAL HIGHLIGHTS



		FINANCIAL HIGHLIGHTS



(Amounts in thousands, except per share data, unaudited)

OPERATING DATA:
		Three months ended June 30,									Six Months Ended June 30,
		2016		2015		$ Chg			% Chg		2016		2015		$ Chg			% Chg
	Same-community revenue	$	51,584	$	49,499	$	2,085		4.2	%	$	110,074	$	105,744	$	4,330		4.1	%
	Total community revenue	61,690		53,734		7,956			14.8	%	131,873		114,117		17,756			15.6	%
	Total revenue	65,140		57,324		7,816			13.6	%	138,519		121,453		17,066			14.1	%

	Same-community net operating income	29,834		29,065		769			2.6	%	67,264		63,547		3,717			5.8	%
	Total community net operating income	35,524		30,866		4,658			15.1	%	80,818		67,109		13,709			20.4	%
	Total operating income	9,486		8,943		543			6.1	%	29,702		22,781		6,921			30.4	%

	Net income attributable to EdR	17,655		2,917		14,738			505.2	%	34,324		9,858		24,466			248.2	%
	Per share - basic	$	0.26	$	0.06	$	0.20		333.3	%	$	0.53	$	0.20	$	0.33		165.0	%
	Per share - diluted	$	0.26	$	0.06	$	0.20		333.3	%	$	0.52	$	0.20	$	0.32		160.0	%

	Funds from operations (FFO)	24,836		18,767		6,069			32.3	%	47,616		41,863		5,753			13.7	%
	Per weighted average share/unit ⁽¹⁾	$	0.36	$	0.38	$	(0.02	)	(5.3	)%	$	0.73	$	0.86	$	(0.13	)	(15.1	)%

	Core funds from operations (Core FFO)	26,417		20,057		6,360			31.7	%	60,363		44,354		16,009			36.1	%
	Per weighted average share/unit ⁽¹⁾	$	0.39	$	0.41	$	(0.02	)	(4.9	)%	$	0.92	$	0.91	$	0.01		1.1	%

FINANCIAL RATIOS:
		6/30/2016				12/31/2015
	Net debt to gross assets	12.2%				27.2%
	Debt to gross assets	19.5%				28.3%
	Net debt to enterprise value	8.4%				22.0%
	Interest coverage ratio (TTM)	6.1x				4.8x
	Net debt to EBITDA - Adjusted (TTM)	0.6x				4.0x


⁽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.



SECOND QUARTER	1



		BALANCE SHEET



(Amount in thousands, except share and per share data)		June 30, 2016			December 31, 2015
Assets		(unaudited)
	Collegiate housing properties, net ⁽¹⁾	$	1,898,602		$	1,774,796
	Assets under development	265,337			117,384
	Cash and cash equivalents	230,402			33,742
	Restricted cash	8,674			9,784
	Other assets	63,457			66,125
Total assets		$	2,466,472		$	2,001,831

Liabilities and equity
Liabilities:
	Mortgage and construction loans, net of unamortized premium and deferred financing costs	$	98,369		$	204,511
	Unsecured revolving credit facility	—			—
	Unsecured term loans, net of unamortized deferred financing costs	186,643			186,518
	Unsecured senior notes, net of unamortized deferred financing costs	247,808			247,678
	Accounts payable and accrued expenses	114,403			85,670
	Deferred revenue	11,890			19,024
Total liabilities		659,113			743,401

Commitments and contingencies		—			—

Redeemable noncontrolling interests		11,828			13,560

Equity:
EdR stockholders' equity:
	Common stock, $0.01 par value per share, 200,000,000 shares authorized, 71,760,137 and 56,879,003 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	718			569
	Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, no shares issued and outstanding	—			—
	Additional paid-in capital	1,791,014			1,263,603
	Retained earnings (accumulated deficit)	—			(21,998		)
	Accumulated other comprehensive loss	(9,963		)	(5,475		)
Total EdR stockholders' equity		1,781,769			1,236,699
Noncontrolling interest		13,762			8,171
Total equity		1,795,531			1,244,870
Total liabilities and equity		$	2,466,472		$	2,001,831

⁽¹⁾ Amount is net of accumulated depreciation of $284,681 and $270,993, as of June 30, 2016 and December 31, 2015, respectively.



SECOND QUARTER	2



		OPERATING RESULTS



(Amounts in thousands, except per share data, unaudited)
	Three months ended June 30,									Six months ended June 30,
	2016			2015			$ Change			2016			2015			$ Change
Revenues:
Collegiate housing leasing revenue	$	61,690		$	53,734		$	7,956		$	131,873		$	114,117		$	17,756
Third-party development consulting services	467			444			23			950			1,041			(91		)
Third-party management services	697			780			(83		)	1,591			1,833			(242		)
Operating expense reimbursements	2,286			2,366			(80		)	4,105			4,462			(357		)
Total revenues	65,140			57,324			7,816			138,519			121,453			17,066
Operating expenses:
Collegiate housing leasing operations	26,166			22,868			3,298			51,055			47,008			4,047
Development and management services	2,728			2,507			221			5,249			5,209			40
General and administrative	2,921			1,769			1,152			5,502			4,239			1,263
Development pursuit, acquisition costs and severance	158			790			(632		)	686			959			(273		)
Depreciation and amortization	19,099			15,911			3,188			36,615			31,777			4,838
Ground lease expense	2,296			2,170			126			5,605			5,018			587
Reimbursable operating expenses	2,286			2,366			(80		)	4,105			4,462			(357		)
Total operating expenses	55,654			48,381			7,273			108,817			98,672			10,145
Operating income	9,486			8,943			543			29,702			22,781			6,921
Nonoperating (income) expenses:
Interest expense	3,635			5,451			(1,816		)	8,298			11,392			(3,094		)
Amortization of deferred financing costs	457			491			(34		)	937			1,007			(70		)
Interest income	(200		)	(67		)	(133		)	(274		)	(105		)	(169		)
Loss on extinguishment of debt	216			—			216			10,136			—			10,136
Total nonoperating expenses	4,108			5,875			(1,767		)	19,097			12,294			6,803
Income before equity in earnings (losses) of unconsolidated entities, income taxes and gain on sale of collegiate housing properties	5,378			3,068			2,310			10,605			10,487			118
Equity in earnings (losses) of unconsolidated entities	107			(202		)	309			(137		)	(396		)	259
Income before income taxes and gain on sale of collegiate housing properties	5,485			2,866			2,619			10,468			10,091			377
Income tax expense	89			90			(1		)	140			168			(28		)
Income before gain on sale of collegiate housing properties	5,396			2,776			2,620			10,328			9,923			405
Gain on sale of collegiate housing properties	12,083			—			12,083			23,956			—			23,956
Net income	17,479			2,776			14,703			34,284			9,923			24,361
Less: Net income (loss) attributable to the noncontrolling interests	(176		)	(141		)	(35		)	(40		)	65			(105		)
Net income attributable to Education Realty Trust, Inc.	$	17,655		$	2,917		$	14,738		$	34,324		$	9,858		$	24,466



SECOND QUARTER	3



		OPERATING RESULTS



(Amounts in thousands, except per share data, unaudited)
	Three months ended June 30,								Six months ended June 30,
	2016			2015		$ Change			2016			2015			$ Change
Other comprehensive income:
(Loss) gain on cash flow hedging derivatives	(1,042		)	2,091		(3,133		)	(4,488		)	(348		)	(4,140		)
Comprehensive income	$	16,613		$	5,008	$	11,605		$	29,836		$	9,510		$	20,326


Earnings per share information:
Net income attributable to Education Realty Trust, Inc. common stockholders per share – basic	$	0.26		$	0.06	$	0.20		$	0.53		$	0.20		$	0.33
Net income attributable to Education Realty Trust, Inc. common stockholders per share – diluted	$	0.26		$	0.06	$	0.20		$	0.52		$	0.20		$	0.32

Weighted average shares of common stock outstanding – basic	68,025			48,514		19,511			65,352			48,345			17,007
Weighted average shares of common stock outstanding – diluted ⁽¹⁾	68,293			48,832		19,461			65,629			48,665			16,964


⁽¹⁾ Weighted average shares of common stock outstanding - diluted assumes the conversion of outstanding redeemable Operating Partnership Units and University Towers Operating Partnership Units.



SECOND QUARTER	4



		FUNDS FROM OPERATIONS



(Amounts in thousands, except per share data, unaudited)		Three months ended June 30,									Six months ended June 30,
		2016			2015			$ Change			2016			2015		$ Change
Net income attributable to EdR		$	17,655		$	2,917		$	14,738		$	34,324		$	9,858	$	24,466
	Gain on sale of collegiate housing assets	(12,083		)	—			(12,083		)	(23,956		)	—		(23,956		)
	Real estate related depreciation and amortization	18,695			15,517			3,178			35,808			31,040		4,768
	Equity portion of real estate depreciation and amortization on equity investees	657			423			234			1,323			843		480
	Noncontrolling interests	(88		)	(90		)	2			117			122		(5		)
Funds from operations ("FFO") available to stockholders and unitholders		24,836			18,767			6,069			47,616			41,863		5,753
	percent change							32.3		%						13.7		%

FFO adjustments:
	Loss on extinguishment of debt	216			—			216			10,136			—		10,136
	Acquisition costs	178			90			88			238			90		148
	Straight-line adjustment for ground leases ⁽¹⁾	1,187			1,200			(13		)	2,373			2,401		(28		)
FFO adjustments		1,581			1,290			291			12,747			2,491		10,256

Core funds from operations ("Core FFO") available to stockholders and unitholders		$	26,417		$	20,057		$	6,360		$	60,363		$	44,354	$	16,009
	percent change							31.7		%						36.1		%

FFO per weighted average share/unit ⁽²⁾		$	0.36		$	0.38		$	(0.02	)	$	0.73		$	0.86	$	(0.13	)
	percent change							(5.3		)%						(15.1		)%
Core FFO per weighted average share/unit ⁽²⁾		$	0.39		$	0.41		$	(0.02	)	$	0.92		$	0.91	$	0.01
	percent change							(4.9		)%						1.1		%

Weighted average shares/units ⁽²⁾		68,293			48,832			19,461			65,629			48,665		16,964
	percent change							39.9		%						34.9		%


⁽¹⁾ 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.
⁽²⁾ 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.



SECOND QUARTER	5



		COMMUNITY OPERATING RESULTS



(Amounts in thousands, unaudited)

		Three Months Ended June 30,									Six months ended June 30,
		2016		2015		$ Change			% Change		2016		2015		$ Change			% Change
Revenues
	Same-communities⁽¹⁾	$	51,584	$	49,499	$	2,085		4.2	%	$	110,074	$	105,744	$	4,330		4.1	%
	New-communities ⁽²⁾	8,527		1,365		7,162			NM		17,996		2,672		15,324			NM
	Sold-communities⁽³⁾	1,579		2,870		(1,291		)	NM		3,803		5,701		(1,898		)	NM
Total revenues		61,690		53,734		7,956			14.8	%	131,873		114,117		17,756			15.6	%

Operating expenses ⁽⁴⁾
	Same-communities⁽¹⁾	21,750		20,434		1,316			6.4	%	42,810		42,197		613			1.5	%
	New-communities ⁽²⁾	3,542		833		2,709			NM		6,071		1,624		4,447			NM
	Sold-communities⁽³⁾	874		1,601		(727		)	NM		2,174		3,187		(1,013		)	NM
Total operating expenses		26,166		22,868		3,298			14.4	%	51,055		47,008		4,047			8.6	%

Net operating income
	Same-communities⁽¹⁾	29,834		29,065		769			2.6	%	67,264		63,547		3,717			5.8	%
	New-communities ⁽²⁾	4,985		532		4,453			NM		11,925		1,048		10,877			NM
	Sold-communities⁽³⁾	705		1,269		(564		)	NM		1,629		2,514		(885		)	NM
Total net operating income		$	35,524	$	30,866	$	4,658		15.1	%	$	80,818	$	67,109	$	13,709		20.4	%



⁽¹⁾ Same-communities are defined as those communities that have been open and operating for the whole time in the current and prior periods. See page 25 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⁾ Represents operating results from communities sold in 2015 and 2016.
⁽⁴⁾ 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.



SECOND QUARTER	6



	SAME-COMMUNITY EXPENSES BY CATEGORY



(Amounts in thousands, except bed and per-bed data, unaudited)
	Three months ended June 30, 2016						Three months ended June 30, 2015
	Amount		Per Bed		% of Total Operating Expenses		Amount		Per Bed		% of Total Operating Expenses		$ Change				% Change
Utilities⁽¹⁾	$	6,203	$	249	28	%	$	5,917	$	238	29	%	$	286			4.8	%
On-Site Payroll	4,045		163		19	%	4,054		163		20	%	(9		)		(0.2	)%
General & Administrative⁽²⁾	3,450		139		16	%	3,235		130		16	%	215				6.6	%
Maintenance & Repairs⁽³⁾	1,815		73		8	%	1,687		68		8	%	128				7.6	%
Marketing	816		33		4	%	785		32		4	%	31				3.9	%
Total Direct Operating Expenses	$	16,329	$	657	75	%	$	15,678	$	631	77	%	$	651			4.2	%

Real Estate Taxes	4,869		196		22	%	4,138		166		20	%	731				17.7	%
Insurance	552		22		3	%	618		25		3	%	(66		)		(10.7	)%
Total Fixed Operating Expenses	$	5,421	$	218	25	%	$	4,756	$	191	23	%	$	665			14.0	%
Total Property Operating Expenses	$	21,750	$	875	100	%	$	20,434	$	822	100	%	$	1,316			6.4	%

	Six months ended June 30, 2016						Six months ended June 30, 2015
	Amount		Per Bed		% of Total Operating Expenses		Amount		Per Bed		% of Total Operating Expenses		$ Change				% Change
Utilities⁽¹⁾	$	12,204	$	491	29	%	$	12,073	$	485	29	%	$	131			1.1	%
On-Site Payroll	8,184		329		19	%	8,121		326		19	%	63				0.8	%
General & Administrative⁽²⁾	6,895		277		16	%	6,859		276		16	%	36				0.5	%
Maintenance & Repairs⁽³⁾	3,111		125		7	%	2,875		116		7	%	236				8.2	%
Marketing	1,762		71		4	%	1,799		72		4	%	(37		)		(2.1	)%
Total Direct Operating Expenses	$	32,156	$	1,293	75	%	$	31,727	$	1,275	75	%	$	429			1.4	%

Real Estate Taxes	9,547		384		22	%	9,232		$	371	22	%	$	315		⁽⁴⁾	3.4	%
Insurance	1,107		44		3	%	1,238		50		3	%	(131		)		(10.6	)%
Total Fixed Operating Expenses	$	10,654	$	428	25	%	$	10,470	$	421	25	%	$	184			1.8	%
Total Property Operating Expenses	$	42,810	$	1,721	100	%	$	42,197	$	1,696	100	%	$	613			1.5	%

Same-community beds	24,880

⁽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⁾ During the first quarter of 2015, the Company recognized $0.8 million in real estate taxes related to a tax assessment covering several prior assessment years. Without the charge in the prior year, real estate taxes would have increased approximately $1.1 million (13%) and total property operating expenses would have increased 3.4% over the prior year.



SECOND QUARTER	7



	COMMUNITY OPERATIONS - TRAILING FIVE QUARTERS



(Amounts in thousands, except beds and per bed amounts)		Three Months Ended															Total / Weighted Average - Trailing Twelve Months
		June 30, 2015			September 30, 2015			December 31, 2015			March 31, 2016			June 30, 2016			Total / Weighted Average - Trailing Twelve Months
2016 Same Communities
	Revenue	$	49,499		$	47,304		$	59,270		$	58,490		$	51,584		$	216,648
	Operating Expenses	20,434			24,631			21,500			21,060			21,750			88,941
	Net Operating Income	$	29,065		$	22,673		$	37,770		$	37,430		$	29,834		$	127,707
	Margin	59		%	48		%	64		%	64		%	58		%	59		%
	Beds	74,640			74,640			74,640			74,640			74,640			298,560
	Occupancy⁽¹⁾	83.9		%	89.1		%	97.6		%	96.7		%	84.4		%	91.9		%
	Net Apartment Rent per Occupied Bed	$	733		$	639		$	769		$	761		$	754		$	732
	Other Income per Occupied Bed	57			72			45			49			65			57
	Total Revenue per Occupied Bed	$	790		$	711		$	814		$	810		$	819		$	789
	Operating Expense per Available Bed	$	274		$	330		$	288		$	282		$	291		$	298

2016 New Communities
	Revenue	$	1,365		$	4,822		$	9,646		$	9,469		$	8,527		$	32,464
	Operating Expenses	833			1,860			2,720			2,529			3,542			10,651
	Net Operating Income	$	532		$	2,962		$	6,926		$	6,940		$	4,985		$	21,813
	Margin	39		%	61		%	72		%	73		%	58		%	67		%
	Beds	2,154			8,085			11,376			11,570			14,030			45,061
	Occupancy⁽¹⁾	96.1		%	89.2		%	92.9		%	92.6		%	65.9		%	83.8		%
	Net Apartment Rent per Occupied Bed	$	631		$	615		$	885		$	849		$	863		$	818
	Other Income per Occupied Bed	29			53			28			34			59			42
	Total Revenue per Occupied Bed	$	660		$	668		$	913		$	883		$	922		$	860
	Operating Expense per Available Bed	$	387		$	230		$	239		$	219		$	252		$	236

2016 Sold Communities
	Revenue	$	2,870		$	2,599		$	2,864		$	2,224		$	1,579		$	9,266
	Operating Expenses	1,601			1,953			1,611			1,300			874			5,738
	Net Operating Income	$	1,269		$	646		$	1,253		$	924		$	705		$	3,528
	Margin	44		%	25		%	44		%	42		%	45		%	38		%
	Beds	6,264			6,264			6,264			5,184			4,032			21,744
	Occupancy⁽¹⁾	87.3		%	87.6		%	86.6		%	85.9		%	93.3		%	88.0		%
	Net Apartment Rent per Occupied Bed	$	505		$	447		$	510		$	472		$	388		$	459
	Other Income per Occupied Bed	20			27			19			27			31			25
	Total Revenue per Occupied Bed	$	525		$	474		$	529		$	499		$	419		$	484
	Operating Expense per Available Bed	$	255		$	312		$	257		$	251		$	217		$	264



SECOND QUARTER	8



	COMMUNITY OPERATIONS - TRAILING FIVE QUARTERS



(Amounts in thousands, except beds and per bed amounts)		Three Months Ended															Total / Weighted Average - Trailing Twelve Months
		June 30, 2015			September 30, 2015			December 31, 2015			March 31, 2016			June 30, 2016			Total / Weighted Average - Trailing Twelve Months
2016 Total Communities
	Revenue	$	53,734		$	54,725		$	71,780		$	70,183		$	61,690		$	258,378
	Operating Expenses	22,868			28,444			25,831			24,889			26,166			105,330
	Net Operating Income	$	30,866		$	26,281		$	45,949		$	45,294		$	35,524		$	153,048
	Margin	57		%	48		%	64		%	65		%	58		%	59		%
	Beds	83,058			88,989			92,280			91,394			92,702			365,365
	Occupancy⁽¹⁾	84.5		%	89.0		%	96.3		%	95.5		%	82.0		%	90.7		%
	Net Apartment Rent per Occupied Bed	$	712		$	624		$	767		$	757		$	749		$	726
	Other Income per Occupied Bed	53			67			41			46			63			54
	Total Revenue per Occupied Bed	$	765		$	691		$	808		$	803		$	812		$	780
	Operating Expense per Available Bed	$	275		$	320		$	280		$	272		$	282		$	288

⁽¹⁾ Represents the weighted average physical occupancy for the period presented.



SECOND QUARTER	9



	PRELEASING SUMMARY



						Preleasing at July 29,
	Design Beds	% of NOI		2015 Opening Occupancy		2016		2015		Preleasing Ahead/(Behind)		Projected Rate Growth

Same-Communities - by Tier
Prior Year Occupancy Below 90% (Tier 1)	2,000	3.8	%	82.5	%	74.8	%	76.8	%	(2.0	)%	0.4	%
Prior Year Occupancy 90% to 96.9% (Tier 2)	4,558	11.2	%	95.2	%	93.2	%	90.5	%	2.7	%	2.1	%
Prior Year Occupancy 97% and Above (Tier 3)	20,979	85.0	%	99.8	%	97.4	%	99.5	%	(2.1	)%	3.8	%
Total Same-Communities ⁽¹⁾	27,537	100.0	%	97.8	%	95.1	%	96.3	%	(1.2	)%	3.4	%
Total New-Communities ⁽²⁾	4,685					85.4	%
Total Communities	32,222					93.6	%

Projected Fall Revenue:
The same-community portfolio is projected to obtain a 3.0% to 3.5% increase in revenue for the upcoming lease term, with net rates up 3.4% and occupancies in a range of 50 basis points down to consistent with the prior year.




⁽¹⁾ The same-community designation for leasing purposes is different than for financial reporting purposes. A community is considered same-community for leasing when the Company has managed the leasing process for at least two leasing cycles, including the 2016/2017 leasing cycle. Design Beds for Same-Communities included in the 2016 Preleasing Summary above include the following design beds: (1) total same-community design beds on page 25 of 24,880 plus 2,657 design beds on communities that are considered same for leasing purposes (see note 1 on page 25).

⁽²⁾The new-community designation for leasing purposes is different than for financial statement purposes. A community is considered new-community for leasing when the Company has not previously managed the leasing process. Design beds for Total New-Communities above include the following: (1) our 2015 acquisitions of the Commons on Bridge (150 beds) and The Province Boulder (317 beds) plus (2) our 2016 acquisitions of Lokal (194 beds) and The Hub at Madison (1,036 beds) plus (3) beds at our 2016 development deliveries of The Retreat at Oxford (1,018 beds), The Retreat at Blacksburg (829 beds), and Limestone Park I & II (1,141 beds).



SECOND QUARTER	10



	SAME-COMMUNITY PRELEASING BY REGION AND DISTANCE



						Preleasing at July 29,
	Design Beds	% of NOI		2015 Opening Occupancy		2016		2015		Preleasing Ahead/(Behind)		Projected Rate Growth

Same-Communities - by Region ⁽¹⁾
Mid-Atlantic	5,818	24.8	%	99.0	%	97.2	%	98.7	%	(1.5	)%	3.0	%
Midwest	2,276	4.8	%	91.3	%	70.4	%	87.6	%	(17.2	)%	0.2	%
North	3,205	10.0	%	98.1	%	96.7	%	95.5	%	1.2	%	2.7	%
South Central	8,674	34.9	%	98.1	%	97.6	%	97.6	%	—	%	3.3	%
Southeast	4,337	12.2	%	98.0	%	97.9	%	96.1	%	1.8	%	3.7	%
West	3,227	13.3	%	98.8	%	96.1	%	96.0	%	0.1	%	6.0	%
Total Same-Communities	27,537	100.0	%	97.8	%	95.1	%	96.3	%	(1.2	)%	3.4	%


Same-Communities - by Distance from Campus
0-0.2 miles	19,488	79.7	%	98.4	%	97.2	%	97.4	%	(0.2	)%	3.6	%
0.21-0.49 miles	2,144	5.6	%	96.4	%	84.3	%	92.9	%	(8.6	)%	3.0	%
0.5-0.99 miles	336	0.6	%	95.5	%	80.7	%	92.9	%	(12.2	)%	9.7	%
1.0-1.99 miles	3,709	10.4	%	96.8	%	90.4	%	95.3	%	(4.9	)%	2.4	%
2.0 & > miles	1,860	3.7	%	94.8	%	97.0	%	92.0	%	5.0	%	1.2	%
Total Same-Communities	27,537	100.0	%	97.8	%	95.1	%	96.3	%	(1.2	)%	3.4	%

⁽¹⁾ See definition of regions on page 27.



SECOND QUARTER	11



	TOP EdR MARKETS AND STATES BY REVENUE

*The data above is based on revenue for the twelve months ended June 30, 2016 and excludes properties that were sold during the period.

⁽¹⁾ All revenue at the University of Kentucky is from ONE Plan^SM on-campus collegiate housing communities.



SECOND QUARTER	12



	TOP EdR MARKETS AND STATES BY REVENUE

*The data above is based on revenue for the twelve months ended June 30, 2016 and excludes properties that were sold during the period.



SECOND QUARTER	13



	NEW SUPPLY AND ENROLLMENT - EdR MARKETS

EdR Market Supply, Enrollment and Revenue Growth




EdR Markets (% of enrollment):	2013		2014		2015		2016*			2017*
Projected new supply	2.2	%	2.2	%	2.0	%	1.8	%		2.2	%
Projected enrollment growth	1.3	%	1.4	%	1.5	%	1.5	%		1.8	%
	0.9	%	0.8	%	0.5	%	0.3	%		0.4	%

Same-community:
Occupancy increase	3.0	%	2.0	%	0.4	%	(0.3	)%	⁽¹⁾
Rate increase	2.0	%	2.0	%	3.4	%	3.4	%	⁽¹⁾
Total leasing revenue growth	5.0	%	4.0	%	3.8	%	3.1	%

*Enrollment projection represents the 3-year enrollment CAGR through 2015 for our markets.
⁽¹⁾2016 represents current guidance with occupancy growth in the midpoint of the range of 50 bps down to consistent with the prior year, and revenue growth of between 3.0% and 3.5%.



SECOND QUARTER	14



	OWNED COMMUNITY PROJECTED 2017 NEW SUPPLY AND DEMAND INFORMATION




By Region

Region⁽²⁾	% of Owned Beds	EdR NOI % ⁽¹⁾	Enrollment Growth 3 Year CAGR - Universities Served	2017 New Supply %	Variance
West	11%	14%	2.0%	2.3%	(0.3)%
Mid Atlantic	18%	20%	1.8%	1.1%	0.7%
North	18%	17%	(0.1)%	2.0%	(2.1)%
South Central	34%	35%	2.4%	3.2%	(0.8)%
Southeast	12%	9%	3.0%	0.9%	2.1%
Midwest	7%	5%	1.2%	3.2%	(2.0)%
Total	100%	100%	1.8%	2.2%	(0.4)%



Projected 2017 New Supply Sorted by Percentage Increase				University Markets with >5% Increase in 2017 Supply

New Supply Growth	University Markets	EdR Beds	Pro Forma EdR NOI %⁽¹⁾	University	New Supply Increase	Pro Forma EdR NOI %⁽¹⁾
0%	40%	27%	29%	Colorado State University	8.5%	1.3%
0.1% to 1.0%	18%	12%	13%	University of Tennessee	6.2%	1.7%
1.0% - 3.0%	22%	25%	22%	University of Oklahoma	7.2%	0.7%
3.0% - 5.0%	8%	27%	29%	Texas Tech University	6.3%	2.2%
> 5.0%	12%	9%	7%	University of Missouri	5.3%	1.1%
Total	100%	100%	100%			7.0%

NOTE: Schedule represents all markets served by EdR communities and includes the 2016 acquisitions and developments and all announced 2017 developments and acquisitions. Data was obtained from the National Center for Education Statistics, AXIOMetrics and local market data.

⁽¹⁾ NOI is based on 2016 forecast net operating income with proforma adjustments for 2016 developments and completed or pending acquisitions.
⁽²⁾See definition of regions on page 27.



SECOND QUARTER	15



		OWNED DEVELOPMENT SUMMARY



(Amounts in thousands, except bed counts)

Active Projects	Project Type	Bed Count	Estimated Start Date	Anticipated Completion Date	Total Project Development Cost		EdR's Ownership Percentage		EdR's Share of Development Cost		EdR's Share of Development Cost to be Funded
University of Kentucky - Holmes Hall and Boyd Hall (formerly Limestone Park I & II)⁽¹⁾	ONE Plan ⁽²⁾	1,141	In progress	Summer 2016	$	83,911	100	%	$	83,911	$	4,510
University of Mississippi - The Retreat - Phase II	Wholly Owned	350	In progress	Summer 2016	26,161		100	%	26,161		1,728
Virginia Polytechnic Institute and State University - Retreat at Blacksburg - Ph I & II	Joint Venture	829	In progress	Summer 2016	64,433		75	%	48,325		8,478
Total - 2016 Deliveries		2,320			$	174,505			$	158,397	$	14,716

University of Kentucky - University Flats	ONE Plan ⁽²⁾	771	In progress	Summer 2017	$	74,038	100	%	$	74,038	$	49,951
Boise State University	ONE Plan ⁽²⁾	656	In progress	Summer 2017	39,763		100	%	39,763		34,673
University of Kentucky - Lewis Hall	ONE Plan⁽²⁾	346	In progress	Summer 2017	26,935		100	%	26,935		23,771
Michigan State University - SkyVue	Joint Venture	824	In progress	Summer 2017	89,906		90	%	80,915		54,129
Texas State University - The Local: Downtown	Joint Venture	304	In progress	Summer 2017	29,631		80	%	23,705		16,980
Oklahoma State University - Avid Square	Joint Venture	475	In progress	Summer 2017	47,227		70	%	33,059		24,730
Northern Michigan University	ONE Plan⁽²⁾	800	In progress	Summer / Dec 2017	50,267		100	%	50,267		50,267
Total - 2017 Deliveries		4,176			$	357,767			$	328,682	$	254,501

University of Pittsburgh	Joint Venture	723	In progress	Summer 2018	$	106,098	80	%	$	84,878	$	84,878
Florida State University - Players Club Redevelopment	Wholly Owned	592	Summer 2017	Summer 2018	37,458		100	%	37,458		37,458
Northern Michigan University	ONE Plan⁽²⁾	400	In progress	Summer 2018	25,133		100	%	25,133		25,133
Total - 2018 Deliveries		1,715			$	168,689			$	147,469	$	147,469

Total Active Projects		8,211			$	700,961			$	634,548	$	416,686

Recently Awarded	Project Type	Bed Count	Estimated Start Date	Anticipated Completion Date	Total Project Development Cost
Cornell University - Maplewood	ONE Plan ⁽²⁾	850	Fall 2016	Summer 2018	$	80,000

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.
⁽¹⁾ This project, once complete, will consist of multiple communities.
⁽²⁾ The On-Campus Equity Plan, or The ONE Plan^SM, 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 Plan^SM offers one service provider and one equity source to universities seeking to modernize on-campus housing to meet the needs of today's students.



SECOND QUARTER	16



		CAPITAL ALLOCATION - LONG TERM FUNDING PLAN



(Amounts in millions)

Sources and Uses of Capital for All Announced Transactions

Estimated Capital Uses:
	Acquisition or Development Costs		Less: Costs Incurred to Date			Remaining Capital Needs
2016 Announced Acquisitions⁽¹⁾	$	154.0	$	—		$	154.0
2016 Development Deliveries⁽²⁾	158.4		143.7			14.7
2017 Development Deliveries⁽²⁾	328.7		74.2			254.5
2018 Development Deliveries⁽²⁾	147.5		—			147.5

	$	788.6	$	217.9		$	570.7

Estimated Capital Sources:
						Capital Sources
Cash on Hand⁽³⁾						$	230.0
Cash from July 2016 ATM Sales⁽⁴⁾						57.9
Draws on Revolving Credit Facility⁽⁵⁾						282.8
						$	570.7

Debt to Gross Assets

			June 30, 2016			June 30, 2016 Pro Forma⁽⁶⁾
Debt to gross assets			19.5		%	26.5		%

NOTE - This analysis demonstrates that EdR could fund all announced acquisitions and developments as of June 30, 2016 and our debt to gross assets is still less than 30%.

⁽¹⁾Represents acquisition costs of announced acquisitions that are expected to close in 2016.

⁽²⁾Represents EdR's share of development costs - see page 16 for details.

⁽³⁾ Represents cash on hand at June 30, 2016.

⁽⁴⁾Represents cash raised from ATM sales in July 2016.

⁽⁵⁾Represents anticipated draws on the revolving credit facility; the current balance is $0.

⁽⁶⁾Represents pro forma debt to gross assets as if all announced acquisitions and developments were funded as of June 30, 2016.



SECOND QUARTER	17



	THIRD-PARTY DEVELOPMENT SUMMARY



(Amounts in thousands except bed counts)


THIRD-PARTY PROJECTS
Active Projects	Bed Count	Estimated Start Date	Anticipated Completion Date	Project Development Cost		Total Project Fees		Fees Earned Prior Year ⁽¹⁾		Fees Earned Six Months Ended June 30, 2016 ⁽¹⁾		Remaining Fees to Earn
University of Cal. Berkeley - Bowles Hall	186	In progress	Summer 2016	$	35,947	$	1,768	$	826	$	764	$	178
Clarion University of Pennsylvania	728	In progress	(2)	55,104		2,092		2,046		30		16
East Stroudsburg University - Pennsylvania Ph II	488	In progress	Summer 2017	45,349		1,374		—		—		1,374
Texas A&M - Commerce	490	In progress	Summer 2017	29,925		1,260		—		—		1,260
Shepherd University	298	In progress	Summer 2017	22,385		1,025		—		36		989
Total	2,190			$	188,710	$	7,519	$	2,872	$	830	$	3,817

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 and ground leases, and obtaining financing. A previously announced third-party development at Southeastern Louisiana University has been removed from the schedule above, as the predevelopment agreement was terminated in June 2016.

⁽¹⁾ Amount may not tie to third-party development services revenue on the statement of operations as this schedule only includes fees earned on projects that are in progress or recently completed.
⁽²⁾ The first phase of the project at Clarion University of Pennsylvania for collegiate housing delivered in August 2015, the second phase of the project for collegiate housing delivered in December 2015 and a third phase of the project for other capital improvements is scheduled to deliver in the summer of 2016.



SECOND QUARTER	18



		CAPITAL STRUCTURE




as of June 30, 2016					Principal Outstanding		Weighted Average Interest Rate		Average Term to Maturity (in years)
(Amounts in thousands)

Total Debt to Gross Assets
Debt⁽¹⁾	$	536,816		Variable Rate - Mortgage Debt	33,300		2.6	%	1.0
Gross Assets⁽²⁾	2,751,153			Variable Rate - Construction Debt	66,016		2.5	%	2.1
Debt to Gross Assets	19.5		%	Fixed Rate - 5 Yr. Unsecured Term Loan ⁽⁶⁾	65,000		2.9	%	2.5
				Fixed Rate - 7 Yr. Unsecured Term Loan ⁽⁶⁾	122,500		3.9	%	4.5
Net Debt to Gross Assets				Fixed Rate - Unsecured Senior Notes	250,000		4.6	%	8.4
Net Debt	$	306,414		Variable Rate - Unsecured Revolving Credit Facility	—		1.7	%	2.4
Gross Assets⁽⁷⁾	2,520,751			Debt⁽¹⁾ / Weighted Average	$	536,816	3.8	%	5.6
Net Debt to Gross Assets	12.2		%	Less: Cash	230,402
				Net Debt	$	306,414
Net Debt to Enterprise Value
Net Debt	$	306,414
Market Equity ⁽³⁾	3,323,722			Interest Coverage (TTM)⁽⁴⁾	6.1x
Enterprise Value	$	3,630,136		Net Debt to EBITDA - Adjusted (TTM)⁽⁵⁾	0.6x
				Variable Rate Debt to Total Debt	18.5%
Net Debt to Enterprise Value	8.4		%


⁽¹⁾ Excludes unamortized deferred financing costs of $4.0 million.
⁽²⁾ Excludes accumulated depreciation of $284.7 million.
⁽³⁾Market equity includes 71,760,137 shares of the Company's common stock and 275,461 units outstanding, which are convertible into common shares, and is calculated using $46.14 per share, the closing price of the Company's common stock on June 30, 2016.
⁽⁴⁾ Equals Adjusted EBITDA of $129.6 million divided by interest expense of $21.4 million. See page 22 for reconciliation to Adjusted EBITDA.
⁽⁵⁾ Net Debt to EBITDA - Adjusted is calculated to normalize the impact of non-income producing construction debt. In the calculation, Net Debt is total debt (excluding the unamortized deferred financing costs) less cash and excludes non income-producing debt related to assets under development at time of calculation. EBITDA is Proforma Adjusted EBITDA, which includes proforma adjustments to reflect all acquisitions, development deliveries and dispositions as if such had occurred at the beginning of the 12 month period being presented.
⁽⁶⁾ 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.
⁽⁷⁾ Excludes accumulated depreciation of $284.7 million and cash of $230.4 million.



SECOND QUARTER	19



		CAPITAL STRUCTURE



NOTE: At June 30, 2016, the Trust had $230.4 million of cash on hand.

Weighted Average Interest Rate of Debt Maturing Each Year ⁽²⁾
	2016	2017	2018	2019	2020	2021	2022	2023	2024
Fixed Rate Debt	—%	—%	—%	2.9%	—%	3.9%	—%	—%	4.6%
Variable Rate Debt	—%	2.5%	—%	2.5%	—%	—%	—%	—%	—%
Total Debt	—%	2.5%	—%	2.7%	—%	3.9%	—%	—%	4.6%

⁽¹⁾ The unsecured revolving credit facility has an initial maturity of November 19, 2018 and has a one-year extension option that may be exercised if certain conditions are met. The revolver has a current balance of $0.
⁽²⁾ 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.



SECOND QUARTER	20



			UNSECURED SENIOR NOTE COVENANTS



as of June 30, 2016
(Amounts in thousands)

Unsecured Senior Note Covenants⁽¹⁾	Requirement			Current Ratio
Total Debt to Total Asset Value	≤ 60%			19.6%
Secured Debt to Total Asset Value	≤ 40%			3.6%
Unencumbered Asset Value to Unsecured Debt	> 150%			597.7%
Interest Coverage	> 1.5x			5.69x


Calculation of Interest Coverage Ratio:
Adjusted Pro Forma EBITDA - TTM:
EdR Adjusted EBITDA⁽²⁾	$	129,622
Pro forma Adjustments - acquisitions & dispositions⁽¹⁾	8,065
Total Adjusted Pro Forma EBITDA - TTM	$	137,687

Pro Forma Interest Expense - TTM:
Interest expense	$	21,355
Add back: Capitalized interest	5,568
Pro forma adjustments⁽¹⁾	(2,745		)
Pro forma interest expense - TTM	$	24,178

Interest Coverage	5.69x

⁽¹⁾Computed in accordance with the First Supplemental Indenture filed November 24, 2014 with the SEC.
⁽²⁾ See page 22 for a reconciliation to EdR Adjusted EBITDA.



SECOND QUARTER	21



	RECONCILIATION OF NON-GAAP MEASURES

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA)



(Amounts in thousands)	Six Months			Plus: Year			Less: Six			Trailing Twelve
	Ended			Ended			Months Ended			Months Ended
	June 30, 2016			December 31, 2015			June 30, 2015			June 30, 2016
Net income attributable to common shareholders	$	34,324		$	19,911		$	9,858		$	44,377
Straight line adjustment for ground leases	2,373			4,782			2,401			4,754
Acquisition costs	238			293			90			441
Depreciation and amortization	36,615			68,022			31,777			72,860
Gain on sale of collegiate housing assets	(23,956		)	(2,770		)	—			(26,726		)
Interest expense	8,298			24,449			11,392			21,355
Amortization of deferred financing costs	937			2,089			1,007			2,019
Interest income	(274		)	(213		)	(105		)	(382		)
Loss on extinguishment of debt	10,136			403			—			10,539
Income tax expense (benefit)	140			347			168			319
Noncontrolling interests	(40		)	171			65			66
Adjusted EBITDA	$	68,791		$	117,484		$	56,653		$	129,622
Annualize acquisitions, developments and dispositions⁽¹⁾	—			—			—			8,638
Pro Forma Adjusted EBITDA	$	68,791		$	117,484		$	56,653		$	138,260

⁽¹⁾ 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.



SECOND QUARTER	22



	RECONCILIATION OF NON-GAAP MEASURES

Net operating income (NOI)



(Amounts in thousands)	Three months ended June 30,				Six months ended June 30
	2016		2015		2016		2015
Operating income	$	9,486	$	8,943	$	29,702	$	22,781
Less: Third-party development services revenue	467		444		950		1,041
Less: Third-party management services revenue	697		780		1,591		1,833
Plus: Development and management services expenses	2,728		2,507		5,249		5,209
Plus: General and administrative expenses, development pursuit, acquisition costs and severance	3,079		2,559		6,188		5,198
Plus: Ground leases	2,296		2,170		5,605		5,018
Plus: Impairment loss on collegiate housing properties	—		—		—		—
Plus: Depreciation and amortization	19,099		15,911		36,615		31,777
NOI	$	35,524	$	30,866	$	80,818	$	67,109

Debt to gross assets



(Amounts in thousands)	June 30, 2016			December 31, 2015
Mortgage and construction loans, excluding unamortized premium and deferred financing costs of $947 and $953 as of June 30, 2016 and December 31, 2015, respectively	$	99,316		$	205,464
Unsecured term loan, excluding unamortized deferred financing costs of $857 and $982 as of June 30, 2016 and December 31, 2015, respectively	187,500			187,500
Unsecured Senior Notes, excluding unamortized deferred financing costs of $2,192 and $2,322 as of June 30, 2016 and December 31, 2015, respectively	250,000			250,000
Total debt, excluding unamortized premium and deferred financing costs	$	536,816		$	642,964

Total assets	$	2,466,472		$	2,001,831
Accumulated depreciation⁽¹⁾	284,681			270,993
Gross assets	$	2,751,153		$	2,272,824

Debt to gross assets	19.5		%	28.3		%
⁽¹⁾ Represents accumulated depreciation on real estate assets.



SECOND QUARTER	23



	UPDATED 2016 GUIDANCE



(Amounts in thousands, except share and per share data)	Year ending December 31, 2016
	Low End			High End

Net income attributable to EdR	$	52,900		$	57,100

Gain on sale of collegiate housing assets	(23,956		)	(23,956		)
Real estate related depreciation and amortization	73,200			73,200
Equity portion of real estate depreciation and amortization on equity investees	2,800			2,800
Noncontrolling interests	250			250
Funds from operations ("FFO") available to stockholders and unitholders	$	105,194		$	109,394

FFO adjustments:
Loss on extinguishment of debt	10,136			10,136
Acquisition costs	250			250
Straight-line adjustment for ground leases ⁽¹⁾	4,800			4,800
FFO adjustments	15,186			15,186

Core funds from operations ("Core FFO") available to stockholders and unitholders	$	120,380		$	124,580

Net income attributable to EdR common stockholders per share – diluted	$	0.76		$	0.82

FFO per weighted average share/unit ⁽²⁾	$	1.51		$	1.57

Core FFO per weighted average share/unit ⁽²⁾	$	1.73		$	1.79

Weighted average shares/units ⁽²⁾	69,600			69,600


⁽¹⁾ Represents the straight-line rent expense adjustment required by GAAP related to ground leases. As 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.
⁽²⁾ FFO and Core FFO per weighted average share/unit were computed using the weighted average of all shares and operating partnership units outstanding, regardless of their dilutive impact.



SECOND QUARTER	24



	COMMUNITY LISTING - OWNED

Name

Primary University Served

Acquisition/Development Date

# of Beds

Name

Primary University Served

Acquisition/Development Date

# of Beds

Players Club

Florida State University

Jan '05

336

3949

Saint Louis University

Aug '13

256

University Towers

North Carolina State University

Jan '05

889

Lymon T. Johnson Hall (ONE Plan)

University of Kentucky

Aug '13

301

The Reserve on Perkins

Oklahoma State University

Jan '05

732

Herman Lee Donovan Hall (formerly
Central Hall II) (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

Commons at Knoxville

University of Tennessee

Jan '05

708

The Cottages on Lindberg

Purdue University

Sept '13

745

Campus Creek

University of Mississippi

Feb '05

636

The Varsity

University of Michigan

Dec '13

415

Campus Lodge

University of Florida

Jun '05

1,115

The Lotus

University of Colorado - Boulder

Nov '11, Aug '14

235

Carrollton Crossing

University of West Georgia

Jan '06

336

109 Tower

Florida International University

Aug '14

542

River Pointe

University of West Georgia

Jan '06

504

The Oaks on the Square- Ph III

University of Connecticut

Aug '14

116

The Reserve at Saluki Pointe

Southern Illinois University

Aug '08, Aug '09

768

Frances Jewell Hall (formerly
Champions Court I) (ONE Plan)

University of Kentucky

Aug '14

740

University Village on Colvin (ONE Plan)

Syracuse University

Aug '09

432

Georgia M. Blazer Hall (formerly
Champions Court II) (ONE Plan)

University of Kentucky

Aug '14

427

GrandMarc at The Corner

University of Virginia

Oct '10

641

Haggin Hall (ONE Plan)

University of Kentucky

Aug '14

396

Wertland Square

University of Virginia

Mar '11

152

Woodland Glen I (ONE Plan)

University of Kentucky

Aug '14

409

Jefferson Commons

University of Virginia

Mar '11

Woodland Glen II (ONE Plan)

University of Kentucky

Aug '14

409

The Berk on College

University of California, Berkeley

May '11

122

The District on Apache

Arizona State University - Tempe

Sept '14

900

The Berk on Arch

University of California, Berkeley

May '11

Total Same-Communities

24,880

University Village Towers

University of California, Riverside

Sept '11

554

Irish Row

University of Notre Dame

Nov '11

326

The Retreat at Oxford⁽³⁾

University of Mississippi

Aug '13

668

GrandMarc at Westberry Place (ONE
Plan)

Texas Christian University

Dec '11

562

Commons on Bridge⁽²⁾

University of Tennessee

June '15

150

The Reserve on Stinson

University of Oklahoma

Jan '12

612

Oaks on the Square- Ph IV⁽¹⁾

University of Connecticut

Aug '15

391

Campus West (ONE Plan)

Syracuse University

Aug '12

313

The Retreat at Louisville⁽¹⁾

University of Louisville

Aug '15

656

East Edge

University of Alabama

Aug '12

774

Woodland Glen III (ONE Plan)⁽¹⁾

University of Kentucky

Aug '15

782

The Province

East Carolina University

Sept '12

728

Woodland Glen IV (ONE Plan)⁽¹⁾

University of Kentucky

Aug '15

578

The District on 5th

University of Arizona

Oct '12

764

Woodland Glen V (ONE Plan)⁽¹⁾

University of Kentucky

Aug '15

250

Campus Village

Michigan State University

Oct '12

355

The Province Boulder⁽²⁾

University of Colorado - Boulder

Sept '15

317

The Province

Kent State University

Nov '12

596

Lokal⁽²⁾

Colorado State University

March '16

194

The Suites at Overton Park

Texas Tech University

Dec '12

465

The Hub at Madison⁽²⁾

University of Wisconsin

May '16

1,036

The Centre at Overton Park

Texas Tech University

Dec '12

400

Total New-Communities

5,022

The Oaks on the Square

University of Connecticut

Aug '12, Aug '13

503

Total Owned-Communities

29,902

⁽¹⁾ The same-community designation for leasing purposes is different than for financial reporting purposes. These communities are considered same-community for 2016/2017 leasing purposes, as the Company managed the leasing process for both the 2015/2016 and 2016/2017 lease cycles. Total same-community beds for leasing purposes is 27,537.

⁽²⁾ These properties are considered new for purposes of leasing, as we did not manage the leasing process for the 2015/2016 lease year.

⁽³⁾ The Retreat at Oxford is considered new for purposes of leasing due to the development of the second phase of the property.



SECOND QUARTER	25



		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	Jeffrey Spector	(646) 855-1363	[email protected]
	CANACCORD\|Genuity	Ryan Meliker	(212) 389-8094	[email protected]
	Evercore ISI	Gwen Clark	(212) 446-5611	[email protected]
	FBR Capital Markets & Co.	David Corak	(703) 312-1610	[email protected]
	Green Street Advisors	Dave Bragg	(949) 706-8142	[email protected]
	Goldman Sachs	Andrew Rosivach	(212) 902-2796	[email protected]
	Hilliard Lyons	Carol Kemple	(502) 588-1839	[email protected]
	J.P. Morgan Securities Inc.	Anthony Paolone	(212) 622-6682	[email protected]
	JMP Securities	Aaron Hecht	(415) 835-3963	[email protected]
	KeyBanc Capital Markets	Jordan Sadler	(917) 368-2280	[email protected]
	RBC Capital Market	Wes Golladay	(440) 715-2650	[email protected]
	Robert W Baird & Co.	Drew Babin	(215) 553-7816	[email protected]
	Sandler O'Neill + Partners, L.P.	Alex Goldfarb	(212) 466-7937	[email protected]
	UBS Securities	Nick Yulico	(212) 713-3402	[email protected]



SECOND QUARTER	26



		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 less cash and excludes non-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.

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: Oklahoma, Missouri; North: Michigan, Ohio, Indiana, Illinois; South Central: Texas, Tennessee, Mississippi, Kentucky; Southeast: Florida, Alabama, Georgia; West: Arizona, California, Colorado.

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.



SECOND QUARTER	27



		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.



SECOND QUARTER	28

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Form 8-K Education Realty Trust, For: Aug 01 Filed by: EDUCATION REALTY OPERATING PARTNERSHIP L P

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