a50563458.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K/A
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported):  February 13, 2013 (November 30, 2012)
 
AMERICAN CAMPUS COMMUNITIES, INC.
 
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P.
(Exact name of Registrant as specified in its Charter)
 
Maryland
Maryland
001-32265
333-181102-01
76-0753089
56-2473181
(State or other jurisdiction of
incorporation or organization)
(Commission file number)
 
(I.R.S. Employer
Identification Number)

12700 Hill Country Boulevard, Suite T-200
Austin, TX 78738
(Address of principal executive offices) (Zip Code)
 
Registrant's telephone number, including area code:  (512) 732-1000
 
Not applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
__  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
__   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
__   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
__   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

 
 
Item 2.01                      Completion of Acquisition or Disposition of Assets

Explanatory Note

On December 3, 2012, American Campus Communities, Inc. and American Campus Communities Operating Partnership, L.P. (collectively referred to as the “Company”, “we”, “our”, and “us”) filed a current report on Form 8-K (the “Initial Report”) disclosing our November 30, 2012 acquisition of 19 student housing properties with 12,049 beds, including 366 beds at an additional phase currently under development at an existing property, for an aggregate purchase price of $862.8 million (hereinafter referred to as the “Kayne Anderson Portfolio”).  Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, we hereby amend the Initial Report to provide (i) Item 9.01(a), audited statement of revenues and certain expenses for the properties acquired in this transaction, and (ii) Item 9.01(b), unaudited pro forma financial information on this acquisition and other transactions we completed through the date of this filing.
 
     
Page
 
Item 9.01  Financial Statements and Exhibits
   
       
 
(a) Financial Statements under Rule 3-14 of Regulation S-X
   
 
        Report of Independent Registered Public Accounting Firm
 
1
 
 Combined Statement of Revenues and Certain Expenses for the nine months
   ended September 30, 2012 (unaudited) and for the year ended December 31,
   2011
 
2
 
Notes to Combined Statement of Revenues and Certain Expenses
 
3
       
 
(b) Unaudited Pro Forma Condensed Consolidated Information
   
 
     American Campus Communities, Inc. and Subsidiaries
   
 
       Pro Forma Condensed Consolidated Financial Statements
 
5
 
       Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2012
 
6
 
       Pro Forma Condensed Consolidated Statement of Operations for the Year Ended
         December 31, 2011
 
7
 
       Pro Forma Condensed Consolidated Statement of Operations for the Nine Months
         Ended September 30, 2012
 
8
 
       Notes to Pro Forma Condensed Consolidated Financial Statements
 
9
       
 
American Campus Communities Operating Partnership, L.P. and Subsidiaries
   
 
        Pro Forma Condensed Consolidated Financial Statements
 
13
 
        Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2012
 
14
 
        Pro Forma Condensed Consolidated Statement of Operations for the Year Ended
          December 31, 2011
 
15
 
        Pro Forma Condensed Consolidated Statement of Operations for the Nine Months
          Ended September 30, 2012
 
16
 
        Notes to Pro Forma Condensed Consolidated Financial Statements
 
17
       
 
(c) Exhibits
   
 
     The Exhibit to this Report is listed on the Exhibit Index attached hereto.
   
 
 
 

 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: February 13, 2013
AMERICAN CAMPUS COMMUNITIES, INC.
 
       
 
By:
/s/ Jonathan A. Graf  
   
Jonathan A. Graf
 
   
Executive Vice President, Chief Financial Officer,
 
   
Secretary and Treasurer
 
 
 
AMERICAN CAMPUS COMMUNITIES OPERATING
 
 
PARTNERSHIP, L.P.
 
       
 
By:
American Campus Communities Holdings LLC, its
 
   
general partner
 
 
 
By:
American Campus Communities, Inc., its sole
member
         
   
By:
/s/ Jonathan A. Graf
     
Jonathan A. Graf
     
Executive Vice President, Chief
Financial Officer, Secretary and
Treasurer
 
 
 

 
 
EXHIBIT INDEX

 
Exhibit No.
 
 
Description of Document
     
23.1
 
Consent of Ernst & Young LLP, Independent Auditors.
 
 
 

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 

 
To the Board of Directors and Shareholders of
American Campus Communities, Inc.

To the Partners of
American Campus Communities Operating Partnership, L.P.

We have audited the accompanying combined statement of revenues and certain expenses of the Kayne Anderson Portfolio (the “Portfolio”) for the year ended December 31, 2011 (the “Historical Summary”). This Historical Summary is the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on the Historical Summary based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement.  An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio’s internal control over financial reporting.  Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary.   An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall Historical Summary presentation.  We believe that our audit provides a reasonable basis for our opinion.

The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 2 and is not intended to be a complete presentation of the Portfolio’s revenues and expenses.

In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the combined revenues and certain expenses of the Portfolio for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young, LLP


Austin, TX
February 13, 2013
 
 
1

 
 
Kayne Anderson Portfolio
Combined Statement of Revenues and Certain Expenses
(dollars in thousands)

   
Nine Months Ended
September 30, 2012 (unaudited)
   
Year Ended
December 31, 2011
 
Revenues:
           
  Rental revenues
  $ 53,132     $ 46,924  
  Other income
    4,211       3,224  
  Total revenues
    57,343       50,148  
                 
Certain expenses:
               
  Rental property operating and maintenance
    14,371       12,660  
  Real estate and property taxes
    4,504       2,571  
  General and administrative
    2,393       2,182  
  Total certain expenses
    21,268       17,413  
                 
Revenues in excess of certain expenses
  $ 36,075     $ 32,735  
   
See accompanying notes to combined statement of revenues and certain expenses
 
 
 
2

 
 
Kayne Anderson Portfolio
Notes to Combined Statement of Revenues and Certain Expenses
 
1. Description of Real Estate

On November 30, 2012, American Campus Communities, Inc., through its consolidated operating partnership, American Campus Communities Operating Partnership, L.P. (collectively referred to as the “Company”, “we”, “our”, and “us”), acquired the 19-property Kayne Anderson Portfolio for a purchase price of $830.5 million, which included the assumption of approximately $395.5 million of outstanding mortgage debt and approximately $438.0 million in cash, excluding transaction costs and prorations.
The accompanying combined statement of revenues and certain expenses include the combined operations for the entire 19-property Kayne Anderson Portfolio containing 11,683 (unaudited) beds.  The Kayne Anderson Portfolio consists of the following properties:

       
Units
   
Beds
 
Property
 
Primary University Served
 
(unaudited)
 
West 27th Place (1)
 
University of Southern California
    161       475  
The Cottages of Durham (2)
 
University of New Hampshire
    141       619  
The Province - Rochester
 
Rochester Institute of Technology
    336       816  
The Province – Greensboro (1)
 
University of North Carolina at Greensboro
    219       696  
U Pointe Kennesaw (2)
 
Kennesaw State University
    216       795  
The Province – Tampa
 
University of South Florida
    287       947  
The Lofts at Capital Garage
 
Virginia Commonwealth University
    36       144  
RAMZ Apartments on Broad
 
Virginia Commonwealth University
    88       172  
5 Twenty Four Angliana
 
University of Kentucky
    228       740  
5 Twenty Five Angliana (2)
 
University of Kentucky
    148       320  
The Province - Louisville
 
University of Louisville
    366       858  
The Province - Dayton
 
Wright State University
    200       657  
The Lodges of East Lansing (1) (3)
 
Michigan State University
    220       683  
The Cottages of Baton Rouge (1)
 
Louisiana State University
    382       1,290  
U Club Cottages (1)
 
Louisiana State University
    105       308  
The Cottages of Columbia
 
University of Missouri
    145       513  
Forest Village and Woodlake
 
University of Missouri
    352       704  
Grindstone Canyon
 
University of Missouri
    201       384  
25Twenty (1)
 
Texas Tech University
    249       562  
Total
    4,080       11,683  
 
 
(1)
These properties commenced operations during the fall semester of 2011.
 
(2)
These properties commenced operations during the fall semester of 2012.
 
(3)
In addition to $438.0 million of cash paid to purchase the 19 properties listed above, the Company paid an additional $8.3 million on November 30, 2012 towards the purchase of an additional phase currently under development and scheduled for completion during the third quarter 2013.  The acquisition of this additional phase is subject to certain closing conditions, including satisfactory completion of such phase.  The remainder of the purchase price in the amount of $24.0 million is due at closing and is excluded from the purchase price of $830.5 million disclosed above.  The additional phase includes 144 units containing 366 beds and is excluded from the table above.

2. Basis of Presentation

The accompanying combined statement of revenues and certain expenses for the nine months ended September 30, 2012 and for the year ended December 31, 2011 were prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”), which requires certain information with respect to real estate operations to be included with certain filings with the SEC.  The statement of revenues and certain expenses is not intended to be a complete presentation of the actual operations of the properties for the periods presented, as certain expenses which may not be comparable to the expenses to be incurred in the proposed future operations of the Kayne Anderson Portfolio have been excluded.  Expenses excluded consist of interest expense, depreciation, amortization, property management fees, sales and marketing expenses related to properties under development and certain corporate expenses not directly related to the future operations of the Kayne Anderson Portfolio. The statement of revenues and certain expenses and notes thereto for the nine months ended September 30, 2012 included in this report is unaudited.  In the opinion of management, all adjustments necessary for a fair presentation of such statement of revenues and certain expenses have been included.  Such adjustments consisted of normal recurring items.  Interim results are not necessarily indicative of results for a full year.
 
 
3

 
 
Kayne Anderson Portfolio
Notes to Combined Statement of Revenues and Certain Expenses
 
3.  Summary of Significant Accounting Policies

Principles of Combination

Due to our purchase of the Kayne Anderson Portfolio in a single transaction and common management of the Kayne Anderson Portfolio, we view it on a combined basis.  The combined financial statements include selected accounts of the Kayne Anderson Portfolio described in Note 2.  All significant intercompany accounts and transactions have been eliminated in the combined statement of revenues and certain expenses.

Rental Revenue Recognition

Rental revenue attributable to student leases is recognized monthly, as earned, on the accrual basis, which is not materially different than on a straight-line basis.  All leases related to the student housing properties have been classified as operating leases and generally are for a term of one year or less.

Rental revenue attributable to retail leases, which are classified as operating leases, is recognized on a straight-line basis over the life of the lease.

Other income includes food and beverage provided to students on certain campuses, parking, summer camps and tenant recoveries for reimbursements of real estate and other operating expenses and, is recognized as revenue in the period the expenses were incurred.

Use of Estimates

The preparation of the combined statement of revenues and certain expenses in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the combined statement of revenues and certain expenses and accompanying notes.  Actual results could differ from those estimates.

4.  Commitments and Contingencies

In the normal course of business, the Kayne Anderson Portfolio is subject to claims, lawsuits, and legal proceedings.  While it is not possible to ascertain the ultimate outcome of such matters, in management’s opinion, the liabilities, if any, in excess of the amounts provided or covered by insurance, will not have a material adverse effect on the results of operations of the Kayne Anderson Portfolio or the Company.
 
 
4

 
 
American Campus Communities, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
 
The following unaudited pro forma condensed consolidated balance sheet of American Campus Communities, Inc. and subsidiaries (“the Company”) as of September 30, 2012 has been prepared as if all of the 2012 acquisitions, and the Company’s October 2012 equity offering and subsequent pay down of the Company’s unsecured revolving credit facility with a portion of the offering proceeds, had been completed on September 30, 2012.  The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2011 and for the nine months ended September 30, 2012, are presented as if all of the 2011 and 2012 acquisitions, the Company’s July and October 2012 equity offerings and subsequent pay downs of the Company’s unsecured revolving credit facility with a portion of the offering proceeds, had been completed on January 1, 2011.

These pro forma condensed consolidated financial statements should be read in conjunction with (a) the Company’s 2011 Annual Report on Form 10-K and (b) the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2012.

The pro forma condensed consolidated financial statements are unaudited and do not purport to represent what the Company’s financial position or results of operations would have been assuming the completion of the acquisition of the Kayne Anderson Portfolio had occurred on September 30, 2012 or January 1, 2011, nor do they purport to project the financial position or results of operations of the Company at any future date or for any future period.  In addition, the pro forma condensed consolidated balance sheet includes pro forma allocations of the purchase price of the Kayne Anderson Portfolio based upon preliminary estimates of the fair value of the assets and liabilities acquired in connection with the acquisition.  As of September 30, 2012, the allocation of the purchase price of the Kayne Anderson Portfolio is preliminary pending the receipt of information necessary to complete the valuation of certain tangible and intangible assets and liabilities.

In the opinion of management, all adjustments necessary to reflect the effects of the transaction described above have been included in the pro forma condensed consolidated financial statements.
 
 
5

 
 
American Campus Communities, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2012
(unaudited, dollars in thousands)
 
   
American Campus Communities, Inc.
and Subsidiaries
Historical
   
Completed
Transactions (A)
   
Kayne Anderson
Portfolio
Pro Forma
Adjustments
     
American Campus Communities, Inc.
and Subsidiaries
Pro Forma
 
Assets
                         
Investments in real estate, net
  $ 4,024,847     $ 30,885     $ 874,940  
(B)
  $ 4,930,672  
Cash and cash equivalents
    18,011       (27,073 )     136,979  
(C)
    127,917  
Restricted cash
    51,078       -       6,635  
(D)
    57,713  
Student contracts receivable, net
    9,483       -       -         9,483  
Other assets
    111,153       (3,757 )     26,435  
(E)
    133,831  
Total assets
  $ 4,214,572     $ 55     $ 1,044,989       $ 5,259,616  
                                   
Liability and stockholders’ equity
                                 
                                   
Liabilities:
                                 
  Secured mortgage, construction and bond
    debt
  $ 1,157,388     $ -     $ 454,700  
(F)
  $ 1,612,088  
  Unsecured term loan
    350,000       -       -         350,000  
  Unsecured revolving credit facility
    206,000       -       52,000  
(G)
    258,000  
  Secured agency facility
    116,000       -       -         116,000  
  Accounts payable and accrued expenses
    57,700       55       2,857  
(H)
    60,612  
  Other liabilities
    113,637       -       4,132  
(I)
    117,769  
Total liabilities
    2,000,725       55       513,689         2,514,469  
                                   
Redeemable noncontrolling interests
    56,838       -       -         56,838  
                                   
Equity:
                                 
  American Campus Communities, Inc.
    stockholders’ equity:
                                 
    Common stock
    917       -       127  
(J)
    1,044  
    Additional paid in capital
    2,470,737       -       531,173  
(J)
    3,001,910  
    Accumulated earnings and distributions
    (335,667 )     -       -         (335,667 )
    Accumulated other comprehensive loss
    (7,551 )     -       -         (7,551 )
    Total American Campus Communities,
      Inc. stockholders’ equity
    2,128,436       -       531,300         2,659,736  
  Noncontrolling interests
    28,573       -       -         28,573  
Total equity
    2,157,009       -       531,300         2,688,309  
                                   
Total liabilities and equity
  $ 4,214,572     $ 55     $ 1,044,989       $ 5,259,616  
 
 
6

 
 
American Campus Communities, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2011
(unaudited, dollars in thousands, except share and per share data)
 
   
American
Campus Communities,
Inc. and Subsidiaries Historical (a)
   
Completed Transactions
(b)
   
Kayne
Anderson
Portfolio
(c)
   
Pro Forma Adjustments
     
American
Campus Communities,
Inc. and Subsidiaries
Pro Forma
 
Revenues
  $ 386,767     $ 88,349     $ 50,148     $ -       $ 525,264  
                                           
Operating expenses
                                         
  Property operating expenses
    174,037       39,338       17,413       -         230,788  
  Third party development and management services
    11,368       -       -       -         11,368  
  General and administrative
    12,752       -       -       -         12,752  
  Depreciation and amortization
    86,229       38,457       -       35,133  
(d)
    159,819  
  Ground/facility lease
    3,608       -       -       -         3,608  
Total operating expenses
    287,994       77,795       17,413       35,133         418,335  
                                           
Operating income (loss)
    98,773       10,554       32,735       (35,133 )       106,929  
                                           
Nonoperating income and (expenses)
                                         
  Interest income
    582       -       -       -         582  
  Interest expense
    (51,593 )     (8,903 )     (13,053 )     7,898  
(e)
    (65,651 )
  Amortization of deferred financing costs
    (5,107 )     (526 )     -       (511 )
(f)
    (6,144 )
  Loss from unconsolidated joint venture
    (641 )     -       -       641  
(g)
    -  
Total nonoperating expenses
    (56,759 )     (9,429 )     (13,053 )     8,028         (71,213 )
                                           
Income from continuing operations before income taxes
    42,014       1,125       19,682       (27,105 )       35,716  
Income tax provision
    (433 )     -       -       -         (433 )
Income from continuing operations
    41,581       1,125       19,682       (27,105 )       35,283  
Income from continuing operations attributable to
  noncontrolling interests
    (1,100 )     -       -       123  
(h)
    (977 )
Income from continuing operations attributable to
  common shareholders
    40,481        1,125        19,682       (26,982 )       34,306  
Amount allocated to participating securities
    (773 )     -       -       -         (773 )
Income from continuing operations attributable to
  common shareholders, net of amount allocated to
  participating securities
  $ 39,708     $  1,125     $  19,682     $ (26,982 )     $ 33,533  
                                           
Income from continuing operations attributable to
  common shareholders, as adjusted – per share - basic
  $ 0.57                               $ 0.34  
                                           
Income from continuing operations attributable to
  common shareholders, as adjusted – per share - diluted
  $ 0.57                               $ 0.34  
                                           
Weighted average common shares outstanding:
                                         
  Basic
    69,243,203                       29,900,000  
(i)
    99,143,203  
  Diluted
    69,807,394                       30,225,098  
(j)
    100,032,492  
 
 
7

 
 
American Campus Communities, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2012
(unaudited, dollars in thousands, except share and per share data)
 
   
American
Campus Communities,
Inc. and Subsidiaries Historical
   
Completed Transactions
(a)
   
Kayne
Anderson
Portfolio
(b)
   
Pro Forma Adjustments
     
American
Campus Communities,
Inc. and Subsidiaries
Pro Forma
 
Revenues
  $ 335,604     $ 49,290     $ 57,343     $ -       $ 442,237  
                                           
Operating expenses
                                         
  Property operating expenses
    157,027       18,528       21,268       -         196,823  
  Third party development and management services
    8,013       -       -       -         8,013  
  General and administrative
    15,760       -       -       -         15,760  
  Depreciation and amortization
    76,838       14,358       -       20,191  
(c)
    111,387  
  Ground/facility lease
    2,861       -       -       -         2,861  
Total operating expenses
    260,499       32,886       21,268       20,191         334,844  
                                           
Operating income (loss)
    75,105       16,404       36,075       (20,191 )       107,393  
                                           
Nonoperating income and (expenses)
                                         
  Interest income
    1,358       -       -       -         1,358  
  Interest expense
    (39,591 )     (6,427 )     (15,743 )     5,465  
(d)
    (56,296 )
  Amortization of deferred financing costs
    (3,047 )     (354 )     -       (383 )
(e)
    (3,784 )
  Income from unconsolidated joint venture
    444       -       -       (444 )
(f)
    -  
  Other nonoperating loss
    14       -       -       (14 )
(g)
    -  
Total nonoperating expenses
    (40,822 )     (6,781 )     (15,743 )     4,624         (58,722 )
                                           
Income from continuing operations before income taxes
    34,283       9,623       20,332       (15,567 )       48,671  
Income tax provision
    (493 )     -       -       -         (493 )
Income from continuing operations
    33,790       9,623       20,332       (15,567 )       48,178  
Income from continuing operations attributable to
  noncontrolling interests
    (1,839 )     -       -       (136 )
(h)
    (1,975 )
Income from continuing operations attributable to
  common shareholders
    31,951        9,623        20,332       (15,703 )       46,203  
Amount allocated to participating securities
    (652 )     -       -       -         (652 )
Income from continuing operations attributable to
  common shareholders, net of amount allocated to
  participating securities
  $ 31,299     $  9,623     $  20,332     $ (15,703 )     $ 45,551  
                                           
Income from continuing operations attributable to
  common shareholders, as adjusted – per share - basic
  $ 0.40                               $ 0.44  
                                           
Income from continuing operations attributable to
  common shareholders, as adjusted – per share - diluted
  $ 0.39                               $ 0.43  
                                           
Weighted average common shares outstanding:
                                         
  Basic
    79,404,323                       25,052,372  
(i)
    104,456,695  
  Diluted
    80,009,463                       25,357,300  
(j)
    105,366,763  
 
 
8

 
 
American Campus Communities, Inc. and Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
 
1.  Adjustments to Pro Forma Condensed Consolidated Balance Sheet

 
(A)
In December 2012, the Company acquired a 608-bed property in Kent, Ohio for a purchase price of approximately $31.2 million.  For pro forma purposes, we have reflected this acquisition as if it occurred on September 30, 2012.
 
 
(B)
Reflects the Company’s acquisition of the Kayne Anderson Portfolio, assuming it had occurred on September 30, 2012.  Pro forma adjustments related to the purchase price allocation of the Kayne Anderson Portfolio are preliminary and subject to change.

 
(C)
Reflects the following activity:

   
Amount (in 000s)
 
October 2012 equity offering proceeds, net of underwriters’ discount
  $ 531,300  
Pay down of revolving credit facility with October 2012 offering proceeds
    (206,000 )
Cash paid for the purchase of Kayne Anderson Portfolio
    (446,321 )
Borrowed from revolving credit facility to fund cash consideration
    258,000  
Net increase to cash and cash equivalents
  $ 136,979  
 
 
(D)
Reflects the assumption of escrow accounts required by lenders of the fixed-rate mortgage debt assumed.
 
 
(E)
Reflects the following: (i) approximately $8.8 million recorded to reflect intangible assets associated with the value of in-place student and in-place retail leases assumed, (ii) approximately $4.1 million in deferred financing costs incurred in connection with the assumption of mortgage debt, (iii) approximately $1.5 million in prepaid expenses, deposits and other assets assumed at closing, (iv) $3.7 million recorded to reflect estimated tax incentives assumed from the seller, and an (v) $8.3 million deposit paid at closing towards the purchase of an additional phase currently under development at an existing property.

 
(F)
Reflects the following: (i) approximately $395.5 million in fixed rate mortgage debt assumed at a weighted average interest rate of 5.28% and (ii) approximately $59.2 million of debt premiums recorded to reflect the fair market value of debt assumed.
 
 
(G)
Reflects a $206.0 million pay down of the Company’s unsecured revolving credit facility with a portion of the October 2012 equity offering proceeds offset by a $258.0 million borrowing from the unsecured revolving credit facility used as consideration towards the purchase of the Kayne Anderson Portfolio.

 
(H)
Reflects accrued expenses and accrued property taxes assumed at closing.
 
 
(I)
Reflects approximately $2.8 million of deferred income and prepaid rent, approximately $1.0 million of security deposits and approximately $0.3 million of other liabilities assumed at closing.

 
(J)
Reflects the October 2012 equity offering as if it had occurred on September 30, 2012.  The offering consisted of the sale of 12,650,000 shares of the Company’s common stock at a price of $43.75 per share.  The aggregate proceeds to the Company, net of the underwriting discount, was approximately $531.3 million.

2.  Adjustments to Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2011

 
(a)
The Company sold two properties in October 2012 that were classified as held for sale as of September 30, 2012.  The results of operations for these two properties are excluded from the pro forma condensed consolidated statement of operations for the year ended December 31, 2011.
 
 
9

 
 
American Campus Communities, Inc. and Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
 
 
(b)
Reflects the historical operations as well as certain pro forma adjustments for the following properties acquired during 2012 and 2011:
 
Property
 
Acquisition Date
 
Units
   
Beds
 
15-property portfolio(1)
 
September 14, 2012
    2,498       6,579  
The Block
 
August 21, 2012
    669       1,555  
University Commons
 
June 27, 2012
    164       480  
Avalon Heights
 
May 1, 2012
    210       754  
University Heights
 
January 12, 2012
    204       636  
The Varsity
 
December 28, 2011
    258       901  
26 West
 
December 7, 2011
    367       1,026  
Studio Green
 
November 4, 2011
    112       448  
Eagles Trail
 
September 22, 2011
    216       792  
University Shoppes (2)
 
July 29, 2011
    N/A       N/A  
 
 
(1)
The Company acquired a 15-property student housing portfolio (hereinafter referred to as the “Campus Acquisitions Portfolio”).
 
(2)
This property contained a retail shopping center which the Company is currently developing into a mixed-use community including both student housing and retail.
 
 
(c)
Reflects the historical operations of the Kayne Anderson Portfolio for the year ended December 31, 2011.
 
 
(d)
Reflects depreciation expense on the tangible fixed assets acquired and recorded at fair value and the amortization of intangible lease assets recognized upon acquisition of the Kayne Anderson Portfolio.

 
(e)
Reflects the amortization of debt premiums of approximately $7.3 million recorded in order to reflect the Kayne Anderson Portfolio mortgage debt assumed by the Company at fair market value as well as a reduction to interest expense of approximately $0.6 million associated with the net pay down of the unsecured revolving credit facility with equity offering proceeds.

 
(f)
Reflects the amortization of financing costs incurred in connection with the Kayne Anderson Portfolio mortgage debt assumed by the Company.

 
(g)
In January 2012, the Company acquired the remaining 90% interest in University Heights from one of our joint ventures with Fidelity (“Fund II”).  This adjustment reflects the elimination of our 10% share of the historical net loss for University Heights since we are presenting all 2012 acquisitions as if they occurred on January 1, 2011.

 
(h)
Represents the approximate 1.2% share of income from continuing operations allocable to certain external holders of common units of limited partnership interest in the Operating Partnership.

 
(i)
Reflects the July and October 2012 equity offerings, which consisted of the sale of 29,900,000 shares of the Company’s common stock, as if the offerings occurred on January 1, 2011.

 
(j)
Reflects the July and October 2012 equity offerings discussed above and the issuance of 325,098 units of common limited partnership interest in the Operating Partnership, as if all three events occurred on January 1, 2011.

 
10

 
 
American Campus Communities, Inc. and Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
 
3.
Adjustments to Pro Forma Condensed Consolidated Statement of Operations for the Nine Months Ended
 
September 30, 2012

 
(a)
Reflects the historical operations as well as certain pro forma adjustments for the following properties acquired during 2012:
 
Property
 
Acquisition Date
 
Units
   
Beds
 
University Edge
 
December 4, 2012
    201       608  
The Retreat
 
September 21, 2012
    187       780  
Campus Acquisitions Portfolio
 
September 14, 2012
    2,498       6,579  
The Block
 
August 21, 2012
    669       1,555  
University Commons
 
June 27, 2012
    164       480  
Avalon Heights
 
May 1, 2012
    210       754  
University Heights
 
January 12, 2012
    204       636  
 
 
(b)
Reflects the historical operations of the Kayne Anderson Portfolio for the nine months ended September 30, 2012.

 
(c)
Reflects depreciation expense on the tangible fixed assets acquired and recorded at fair value.  For pro forma purposes we assumed the value assigned to in-place student leases recognized upon acquisition of the Kayne Anderson Portfolio was fully amortized by the end of 2011.
 
 
(d)
Reflects the amortization of debt premiums of approximately $5.5 million recorded in order to reflect the Kayne Anderson Portfolio mortgage debt assumed by the Company at fair market value.

 
(e)
Reflects the amortization of financing costs incurred in connection with the Kayne Anderson Portfolio mortgage debt assumed by the Company.

 
(f)
In January 2012, the Company acquired the remaining 90% interest in University Heights from one of our joint ventures with Fidelity (Fund II).  This adjustment reflects the elimination of our 10% share of the historical net income for University Heights since we are presenting all 2012 acquisitions as if they occurred on January 1, 2011.

 
(g)
The acquisition of University Heights (discussed more fully above) and The Retreat were each accounted for as a business combination achieved in stages and as a result, the Company was required to remeasure its equity method investment in University Heights and The Retreat to their respective acquisition-date fair values and recognize the resulting loss/gain in earnings.  This adjustment reflects the elimination of the recognized loss/gain since we are presenting all 2012 acquisitions as if they occurred on January 1, 2011.
 
 
(h)
Represents the approximate 1.1% share of income from continuing operations allocable to certain external holders of common units of limited partnership interest in the Operating Partnership.

 
(i)
We made the following adjustments to basic weighted average common shares outstanding to reflect the following events as if they had occurred on January 1, 2011:
 
   
Common Shares
 
Shares sold in connection with October 2012 equity offering
    12,650,000  
Shares sold in connection with July 2012 equity offering
    17,250,000  
Less:  weighted average common shares outstanding as of Sept. 30, 2012 related to
  shares sold in connection with July 2012 equity offering
    (4,847,628 )
Net adjustment to weighted average common shares outstanding - basic
    25,052,372  
 
 
11

 
 
American Campus Communities, Inc. and Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
 
 
(j)
In addition to the adjustments made above to basic weighted average common shares outstanding, we also made the following adjustments to diluted weighted average common shares outstanding, to reflect the issuance of units of common limited partnership interest in the Operating Partnership, as if it had occurred on January 1, 2011:

   
Common Shares
 
Net adjustment to weighted average common shares outstanding - basic
    25,052,372  
Issuance of units of common limited partnership interest in the Operating
  Partnership as consideration for the purchase of Campus Acquisitions Portfolio
    325,098  
Less: weighted average common shares outstanding as of Sept. 30, 2012 related to
  the issuance of 325,098 units of common limited partnership interest
    (20,170 )
Net adjustment to weighted average common shares outstanding - diluted
    25,357,300  
 
 
12

 
 
American Campus Communities Operating Partnership, L.P. and Subsidiaries
Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
 
The following unaudited pro forma condensed consolidated balance sheet of American Campus Communities Operating Partnership, L.P. (the “Operating Partnership”) as of September 30, 2012 has been prepared as if all of the 2012 acquisitions, and the Company’s October 2012 equity offering and subsequent pay down of the Company’s unsecured revolving credit facility with a portion of the offering proceeds, had been completed on September 30, 2012.  The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2011 and for the nine months ended September 30, 2012, are presented as if all of the 2011 and 2012 acquisitions, the Company’s July and October 2012 equity offerings and subsequent pay downs of the Company’s unsecured revolving credit facility with a portion of the offering proceeds, had been completed on January 1, 2011.

These pro forma condensed consolidated financial statements should be read in conjunction with (a) the Operating Partnership’s Current Report on Form 8-K for the year ended December 31, 2011, and (b) the Operating Partnership’s Quarterly Report on Form 10-Q for the period ended September 30, 2012.

The pro forma condensed consolidated financial statements are unaudited and do not purport to represent what the Operating Partnership’s financial position or results of operations would have been assuming the completion of the acquisition of the Kayne Anderson Portfolio had occurred on September 30, 2012 or January 1, 2011, nor do they purport to project the financial position or results of operations of the Operating Partnership at any future date or for any future period.  In addition, the pro forma condensed consolidated balance sheet includes pro forma allocations of the purchase price of the Kayne Anderson Portfolio based upon preliminary estimates of the fair value of the assets and liabilities acquired in connection with the acquisition.  As of September 30, 2012, the allocation of the purchase price of the Kayne Anderson Portfolio is preliminary pending the receipt of information necessary to complete the valuation of certain tangible and intangible assets and liabilities.
 
In the opinion of management, all adjustments necessary to reflect the effects of the transaction described above have been included in the pro forma condensed consolidated financial statements.
 
 
13

 
 
American Campus Communities Operating Partnership, L.P. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2012
(unaudited, dollars in thousands)
 
   
American Campus Communities
Operating
Partnership, L.P.
and Subsidiaries
Historical
   
Completed
Transactions (A)
   
Kayne Anderson
Portfolio
Pro Forma
Adjustments
     
American Campus Communities
Operating
Partnership, L.P.
and Subsidiaries
Pro Forma
 
Assets
                         
Investments in real estate, net
  $ 4,024,847     $ 30,885     $ 874,940  
(B)
  $ 4,930,672  
Cash and cash equivalents
    18,011       (27,073 )     136,979  
(C)
    127,917  
Restricted cash
    51,078       -       6,635  
(D)
    57,713  
Student contracts receivable, net
    9,483       -       -         9,483  
Other assets
    111,153       (3,757 )     26,435  
(E)
    133,831  
Total assets
  $ 4,214,572     $ 55     $ 1,044,989       $ 5,259,616  
                                   
Liability and capital
                                 
                                   
Liabilities:
                                 
  Secured mortgage, construction and bond
    debt
  $ 1,157,388     $ -     $ 454,700  
(F)
  $ 1,612,088  
  Unsecured term loan
    350,000       -       -         350,000  
  Unsecured revolving credit facility
    206,000       -       52,000  
(G)
    258,000  
  Secured agency facility
    116,000       -       -         116,000  
  Accounts payable and accrued expenses
    57,700       55       2,857  
(H)
    60,612  
  Other liabilities
    113,637       -       4,132  
(I)
    117,769  
Total liabilities
    2,000,725       55       513,689         2,514,469  
                                   
Redeemable limited partners
    56,838       -       -         56,838  
                                   
Capital:
                                 
  Partners capital
                                 
    General partner
    118       -       -         118  
    Limited partner
    2,135,869       -       531,300  
(J)
    2,667,169  
  Accumulated other comprehensive loss
    (7,551 )     -       -         (7,551 )
  Total partners’ capital
    2,128,436       -       531,300         2,659,736  
  Noncontrolling interests – partially owned
    properties
    28,573       -       -         28,573  
Total capital
    2,157,009       -       531,300         2,688,309  
                                   
Total liabilities and capital
  $ 4,214,572     $ 55     $ 1,044,989       $ 5,259,616  
 
 
14

 
 
American Campus Communities Operating Partnership, L.P. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2011
(unaudited, dollars in thousands, except share and per share data)
 
   
American
Campus Communities Operating Partnership, L.P. and Subsidiaries
Historical (a)
   
Completed Transactions
(b)
   
Kayne
Anderson
Portfolio
(c)
   
Pro Forma Adjustments
     
American
Campus Communities Operating Partnership, L.P. and Subsidiaries
Pro Forma
 
Revenues
  $ 386,767     $ 88,349     $ 50,148     $ -       $ 525,264  
                                           
Operating expenses
                                         
  Property operating expenses
    174,037       39,338       17,413       -         230,788  
  Third party development and management services
    11,368       -       -       -         11,368  
  General and administrative
    12,752       -       -       -         12,752  
  Depreciation and amortization
    86,229       38,457       -       35,133  
(d)
    159,819  
  Ground/facility lease
    3,608       -       -       -         3,608  
Total operating expenses
    287,994       77,795       17,413       35,133         418,335  
                                           
Operating income (loss)
    98,773       10,554       32,735       (35,133 )       106,929  
                                           
Nonoperating income and (expenses)
                                         
  Interest income
    582       -       -       -         582  
  Interest expense
    (51,593 )     (8,903 )     (13,053 )     7,898  
(e)
    (65,651 )
  Amortization of deferred financing costs
    (5,107 )     (526 )     -       (511 )
(f)
    (6,144 )
  Income from unconsolidated joint venture
    (641 )     -       -       641  
(g)
    -  
Total nonoperating expenses
    (56,759 )     (9,429 )     (13,053 )     8,028         (71,213 )
                                           
Income from continuing operations before income taxes
    42,014       1,125       19,682       (27,105 )       35,716  
Income tax provision
    (433 )     -       -       -         (433 )
Income from continuing operations
    41,581       1,125       19,682       (27,105 )       35,283  
Income from continuing operations attributable to
  noncontrolling interests – partially owned properties
    (413 )     -       -       -         (413 )
Income from continuing operations attributable to
  American Campus Communities Operating
  Partnership, L.P.
    41,168          1,125          19,682       (27,105 )       34,870  
Income from continuing operations attributable to
  Series A preferred units
    (157 )     -       -       -         (157 )
Income from continuing operations available to
  common unitholders
    41,011        1,125        19,682       (27,105 )       34,713  
Amount allocated to participating securities
    (773 )     -       -       -         (773 )
Income from continuing operations attributable to
  common unitholders, net of amount allocated to
  participating securities
  $ 40,238     $  1,125     $  19,682     $ (27,105 )     $ 33,940  
                                           
Income from continuing operations attributable to
  common unitholders, as adjusted – per unit - basic
  $ 0.57                               $ 0.34  
                                           
Income from continuing operations attributable to
  common unitholders, as adjusted – per unit - diluted
  $ 0.57                               $ 0.34  
                                           
Weighted-average common units outstanding:
                                         
  Basic
    70,156,335                       30,225,098  
(h)
    100,381,433  
  Diluted
    70,720,526                       30,225,098  
(h)
    100,945,624  
 
 
15

 
 
American Campus Communities Operating Partnership, L.P. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2012
(unaudited, dollars in thousands, except share and per share data)
 
   
American
Campus Communities Operating Partnership, L.P. and Subsidiaries
Historical
   
Completed Transactions
(a)
   
Kayne
Anderson
Portfolio
(b)
   
Pro Forma Adjustments
     
American
Campus Communities Operating Partnership, L.P. and Subsidiaries
Pro Forma
 
Revenues
  $ 335,604     $ 49,290     $ 57,343     $ -       $ 442,237  
                                           
Operating expenses
                                         
  Property operating expenses
    157,027       18,528       21,268       -         196,823  
  Third party development and management services
    8,013       -       -       -         8,013  
  General and administrative
    15,760       -       -       -         15,760  
  Depreciation and amortization
    76,838       14,358       -       20,191  
(c)
    111,387  
  Ground/facility lease
    2,861       -       -       -         2,861  
Total operating expenses
    260,499       32,886       21,268       20,191         334,844  
                                           
Operating income (loss)
    75,105       16,404       36,075       (20,191 )       107,393  
                                           
Nonoperating income and (expenses)
                                         
  Interest income
    1,358       -       -       -         1,358  
  Interest expense
    (39,591 )     (6,427 )     (15,743 )     5,465  
(d)
    (56,296 )
  Amortization of deferred financing costs
    (3,047 )     (354 )     -       (383 )
(e)
    (3,784 )
  Income from unconsolidated joint venture
    444       -       -       (444 )
(f)
    -  
  Other nonoperating loss
    14       -       -       (14 )
(g)
    -  
Total nonoperating expenses
    (40,822 )     (6,781 )     (15,743 )     4,624         (58,722 )
                                           
Income from continuing operations before income taxes
    34,283       9,623       20,332       (15,567 )       48,671  
Income tax provision
    (493 )     -       -       -         (493 )
Income from continuing operations
    33,790       9,623       20,332       (15,567 )       48,178  
Income from continuing operations attributable to
  noncontrolling interests – partially owned properties
    (1,312 )     -       -       -         (1,312 )
Income from continuing operations attributable to
  American Campus Communities Operating
  Partnership, L.P.
    32,478        9,623        20,332       (15,567 )       46,866  
Income from continuing operations attributable to
  Series A preferred units
    (135 )     -       -       -         (135 )
Income from continuing operations available to
  common unitholders
    32,343        9,623        20,332       (15,567 )       46,731  
Amount allocated to participating securities
    (652 )     -       -       -         (652 )
Income from continuing operations attributable to
  common unitholders, net of amount allocated to
  participating securities
  $ 31,691     $  9,623     $  20,332     $ (15,567 )     $ 46,079  
                                           
Income from continuing operations attributable to
  common unitholders, as adjusted – per unit - basic
  $ 0.40                               $ 0.44  
                                           
Income from continuing operations attributable to
  common unitholders, as adjusted – per unit - diluted
  $ 0.39                               $ 0.43  
                                           
Weighted average common units outstanding:
                                         
  Basic
    80,291,801                       25,357,300  
(h)
    105,649,101  
  Diluted
    80,896,941                       25,357,300  
(h)
    106,254,241  
 
 
16

 
 
American Campus Communities Operating Partnership, L.P. And Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
 
1.  Adjustments to Pro Forma Condensed Consolidated Balance Sheet
 
 
(A)
In December 2012, the Company acquired a 608-bed property in Kent, Ohio for a purchase price of approximately $31.2 million.  For pro forma purposes, we have reflected this acquisition as if it occurred on September 30, 2012.

 
(B)
Reflects the Company’s acquisition of the Kayne Anderson Portfolio, assuming it had occurred on September 30, 2012.  Pro forma adjustments related to the purchase price allocation of the Kayne Anderson Portfolio are preliminary and subject to change.

 
(C)
Reflects the following activity:

   
Amount (in 000s)
 
October 2012 equity offering proceeds, net of underwriters’ discount
  $ 531,300  
Pay down of revolving credit facility with October 2012 offering proceeds
    (206,000 )
Cash paid for the purchase of Kayne Anderson Portfolio
    (446,321 )
Borrowed from revolving credit facility to fund cash consideration
    258,000  
Net increase to cash and cash equivalents
  $ 136,979  
 
 
(D)
Reflects the assumption of escrow accounts required by lenders of the fixed-rate mortgage debt assumed.
 
 
(E)
Reflects the following: (i) approximately $8.8 million recorded to reflect intangible assets associated with the value of in-place student and in-place retail leases assumed, (ii) approximately $4.1 million in deferred financing costs incurred in connection with the assumption of mortgage debt, (iii) approximately $1.5 million in prepaid expenses, deposits and other assets assumed at closing, (iv) $3.7 million recorded to reflect estimated tax incentives assumed from the seller, and an (v) $8.3 million deposit paid at closing towards the purchase of an additional phase currently under development at an existing property.

 
(F)
Reflects the following: (i) approximately $395.5 million in fixed-rate mortgage debt assumed at a weighted average interest rate of 5.28% and (ii) approximately $59.2 million of debt premiums recorded to reflect the fair market value of debt assumed.
 
 
(G)
Reflects a $206.0 million pay down of the Company’s unsecured revolving credit facility with a portion of the October 2012 equity offering proceeds offset by a $258.0 million borrowing from the unsecured revolving credit facility used as consideration towards the purchase of the Kayne Anderson Portfolio.
 
 
(H)
Reflects accrued expenses and accrued property taxes assumed at closing.
 
 
(I)
Reflects approximately $2.8 million of deferred income and prepaid rent, approximately $1.0 million of security deposits and approximately $0.3 million of other liabilities assumed at closing.

 
(J)
Reflects the October 2012 equity offering as if it had occurred on September 30, 2012.  The offering consisted of the sale of 12,650,000 shares of the Company’s common stock at a price of $43.75 per share.  The aggregate proceeds to the Company, net of the underwriting discount, was approximately $531.3 million.

 
17

 
 
American Campus Communities Operating Partnership, L.P. And Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements
 
2.  Adjustments to Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2011

 
(a)
The Company sold two properties in October 2012 that were classified as held for sale as of September 30, 2012.  The results of operations for these two properties are excluded from the pro forma condensed consolidated statement of operations for the year ended December 31, 2011.
 
 
(b)
Reflects the historical operations as well as certain pro forma adjustments for the following properties acquired during 2012 and 2011:
 
Property
 
Acquisition Date
 
Units
   
Beds
 
Campus Acquisitions Portfolio
 
September 14, 2012
    2,498       6,579  
The Block
 
August 21, 2012
    669       1,555  
University Commons
 
June 27, 2012
    164       480  
Avalon Heights
 
May 1, 2012
    210       754  
University Heights
 
January 12, 2012
    204       636  
The Varsity
 
December 28, 2011
    258       901  
26 West
 
December 7,