|
||
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Maryland
|
20-1352180
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
530
Oak Court Drive, Suite 300, Memphis, Tennessee
|
38117
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code: (901) 259-2500
|
||
Not
Applicable
|
||
(Former
name, former address and former fiscal year, if changed since last
report)
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o
(Do
not check if a smaller reporting company)
|
Smaller
reporting company o
|
Page
|
||
PART
I—FINANCIAL INFORMATION
|
3
|
|
|
||
Item 1.
Financial Statements
|
3
|
|
|
||
Condensed
Consolidated Balance Sheets of Education Realty Trust, Inc. and
Subsidiaries as of March 31, 2010 and December 31,
2009
|
3
|
|
|
||
Condensed
Consolidated Statements of Operations of Education Realty Trust, Inc. and
Subsidiaries for the three months ended March 31, 2010 and
2009
|
4
|
|
Condensed
Consolidated Statements of Changes in Equity of Education Realty Trust,
Inc. and Subsidiaries for the three months ended March 31, 2010 and the
year ended December 31, 2009
|
6
|
|
Condensed
Consolidated Statements of Cash Flows of Education Realty Trust, Inc. and
Subsidiaries for the three months ended March 31, 2010 and
2009
|
7
|
|
|
||
Notes
to Condensed Consolidated Financial Statements
|
9
|
|
|
||
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
|
23
|
|
|
||
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
|
37
|
|
|
||
Item 4.
Controls and Procedures
|
38
|
|
|
||
PART
II — OTHER INFORMATION
|
39
|
|
|
||
Item 1.
Legal Proceedings
|
39
|
|
|
||
Item 1A.
Risk Factors
|
39
|
|
|
||
Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds
|
40
|
|
|
||
Item 3.
Defaults upon Senior Securities
|
41
|
|
|
||
Item 4.
Removed and Reserved
|
41
|
|
|
||
Item 5.
Other Information
|
41
|
|
|
||
Item 6.
Exhibits
|
41
|
|
|
||
Signatures
|
42
|
March
31, 2010
|
December
31, 2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Assets:
|
||||||||
Student
housing properties, net
|
$
|
746,616
|
$
|
749,884
|
||||
Corporate
office furniture, net
|
1,045
|
1,118
|
||||||
Cash
and cash equivalents
|
28,384
|
31,169
|
||||||
Restricted
cash
|
4,282
|
4,579
|
||||||
Student
contracts receivable, net
|
268
|
386
|
||||||
Receivable
from affiliate
|
19
|
18
|
||||||
Management
fee receivable from third party
|
311
|
277
|
||||||
Goodwill
and other intangibles, net
|
3,070
|
3,073
|
||||||
Other
assets
|
15,726
|
14,109
|
||||||
Total
assets
|
$
|
799,721
|
$
|
804,613
|
||||
LIABILITIES
AND EQUITY
|
||||||||
Liabilities:
|
||||||||
Mortgage
and construction loans, net of unamortized
premium/discount
|
$
|
405,300
|
$
|
406,365
|
||||
Accounts
payable
|
336
|
235
|
||||||
Accrued
expenses
|
11,493
|
11,423
|
||||||
Deferred
revenue
|
8,790
|
10,346
|
||||||
Total
liabilities
|
425,919
|
428,369
|
||||||
Commitments
and contingencies (see Note 6)
|
—
|
—
|
||||||
Redeemable
noncontrolling interests
|
11,228
|
11,079
|
||||||
Equity:
|
||||||||
Education
Realty Trust, Inc. stockholders’ equity:
|
||||||||
Common
stock, $.01 par value, 200,000,000 shares authorized, 56,714,466 and
56,705,605 shares issued and outstanding at March 31, 2010 and
December 31, 2009, respectively
|
567
|
567
|
||||||
Preferred
stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and
outstanding
|
—
|
—
|
||||||
Additional
paid-in capital
|
408,429
|
410,455
|
||||||
Accumulated
deficit
|
(48,466
|
)
|
(48,636
|
)
|
||||
Total
Education Realty Trust, Inc. stockholders’ equity
|
360,530
|
362,386
|
||||||
Noncontrolling
interest
|
2,044
|
2,779
|
||||||
Total
equity
|
362,574
|
365,165
|
||||||
Total
liabilities and equity
|
$
|
799,721
|
$
|
804,613
|
Three
months
|
Three
months
|
|||||||
ended
|
ended
|
|||||||
March
31,
|
March
31,
|
|||||||
2010
|
2009
|
|||||||
Revenues:
|
||||||||
Student
housing leasing revenue
|
$
|
29,651
|
$
|
29,313
|
||||
Third-party
development services
|
693
|
1,457
|
||||||
Third-party
management services
|
866
|
909
|
||||||
Operating
expense reimbursements
|
1,908
|
2,190
|
||||||
Total
revenues
|
33,118
|
33,869
|
||||||
Operating
expenses:
|
||||||||
Student
housing leasing operations
|
13,438
|
13,170
|
||||||
General
and administrative
|
4,300
|
3,994
|
||||||
Depreciation
and amortization
|
7,416
|
7,164
|
||||||
Reimbursable
operating expenses
|
1,908
|
2,190
|
||||||
Total
operating expenses
|
27,062
|
26,518
|
||||||
Operating
income
|
6,056
|
7,351
|
||||||
Nonoperating
expenses:
|
||||||||
Interest
expense
|
5,611
|
6,352
|
||||||
Amortization
of deferred financing costs
|
334
|
301
|
||||||
Interest
income
|
(117
|
)
|
(49
|
)
|
||||
Total
nonoperating expenses
|
5,828
|
6,604
|
||||||
Income
from continuing operations before equity in earnings of unconsolidated
entities, income taxes, redeemable noncontrolling interests and
discontinued operations
|
228
|
747
|
||||||
Equity
in earnings of unconsolidated entities
|
79
|
100
|
||||||
Income
from continuing operations before income taxes, redeemable noncontrolling
interests and discontinued operations
|
307
|
847
|
||||||
Income
tax expense (benefit)
|
(74
|
) |
188
|
|||||
Income
from continuing operations before redeemable noncontrolling interests and
discontinued operations
|
381
|
659
|
||||||
Income
attributable to redeemable noncontrolling interests
|
205
|
201
|
||||||
Income
from continuing operations
|
176
|
458
|
||||||
Loss
from discontinued operations
|
—
|
(16
|
)
|
|||||
Net
income
|
176
|
442
|
||||||
Less:
Net income attributable to the noncontrolling interest
|
6
|
9
|
||||||
Net
income attributable to Education Realty Trust, Inc.
|
$
|
170
|
$
|
433
|
Three
months
|
Three
months
|
|||||||
ended
|
ended
|
|||||||
March
31,
|
March
31,
|
|||||||
2010
|
2009
|
|||||||
Earnings
per share information:
|
||||||||
Income
attributable to Education Realty Trust, Inc. common stockholders per share
— basic and diluted:
|
||||||||
Continuing
operations
|
$
|
0.00
|
$
|
0.02
|
||||
Discontinued
operations
|
—
|
—
|
||||||
Net
income attributable to Education Realty Trust, Inc. common stockholders
per share
|
$
|
0.00
|
$
|
0.02
|
||||
Weighted
average common shares outstanding – basic
|
56,759,922
|
28,516,522
|
||||||
Weighted
average common shares outstanding – diluted
|
57,870,917
|
29,637,517
|
||||||
Amounts
attributable to Education Realty Trust, Inc. – common
stockholders:
|
||||||||
Income
from continuing operations, net of tax
|
$
|
170
|
$
|
449
|
||||
Loss
from discontinued operations, net of tax
|
—
|
(16
|
)
|
|||||
Net
income
|
170
|
433
|
||||||
Distributions
per share of common stock
|
$
|
0.0500
|
$
|
0.1025
|
Common
Stock
|
Additional
|
|||||||||||||||||||||||
Paid-In
|
Accumulated
|
Noncontrolling
|
||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Interest
|
Total
|
|||||||||||||||||||
Balance,
December 31, 2008
|
28,475,855
|
$
|
285
|
$
|
308,356
|
$
|
(41,381
|
)
|
$
|
2,918
|
$
|
270,178
|
||||||||||||
Common
stock issued to officers and directors
|
4,000
|
—
|
15
|
—
|
—
|
15
|
||||||||||||||||||
Amortization
of restricted stock
|
9,000
|
—
|
151
|
—
|
—
|
151
|
||||||||||||||||||
Cash
dividends
|
—
|
—
|
(2,923
|
)
|
—
|
(27
|
)
|
(2,950
|
)
|
|||||||||||||||
PIU’s
issued
|
—
|
—
|
—
|
—
|
13
|
13
|
||||||||||||||||||
Net
income
|
—
|
—
|
—
|
433
|
9
|
442
|
||||||||||||||||||
Balance,
March 31, 2009
|
28,488,855
|
$
|
285
|
$
|
305,599
|
$
|
(40,948
|
)
|
$
|
2,913
|
$
|
267,849
|
||||||||||||
Balance,
December 31, 2009
|
56,705,605
|
$
|
567
|
$
|
410,455
|
(48,636
|
) |
$
|
2,779
|
$
|
365,165
|
|||||||||||||
Common
stock issued to officers and directors
|
4,000
|
—
|
22
|
—
|
—
|
22
|
||||||||||||||||||
Amortization
of restricted stock
|
4,861
|
—
|
60
|
—
|
—
|
60
|
||||||||||||||||||
PIU’s
forfeited
|
—
|
—
|
730
|
—
|
(730
|
) |
—
|
|||||||||||||||||
Cash
dividends
|
—
|
—
|
(2,838
|
) |
—
|
(11
|
) |
(2,849
|
) | |||||||||||||||
Net
income
|
—
|
—
|
—
|
170
|
6
|
176
|
||||||||||||||||||
Balance,
March 31, 2010
|
56,714,466
|
$
|
567
|
$
|
408,429
|
$
|
(48,466
|
)
|
$
|
2,044
|
$
|
362,574
|
Three
months
|
Three
months
|
|||||||
ended
|
ended
|
|||||||
March
31,
|
March
31,
|
|||||||
2010
|
2009
|
|||||||
Operating
activities:
|
||||||||
Net
income
|
$
|
176
|
$
|
442
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
7,416
|
7,164
|
||||||
Depreciation
included in discontinued operations
|
—
|
25
|
||||||
Deferred tax
expense (benefit)
|
171
|
(38
|
)
|
|||||
Loss
(gain) on disposal of assets
|
5
|
(71
|
)
|
|||||
Amortization
of deferred financing costs
|
334
|
301
|
||||||
Loss
(gain) on interest rate cap
|
188
|
(8
|
)
|
|||||
Amortization
of unamortized debt premiums/discounts
|
(99
|
)
|
(101
|
)
|
||||
Distributions
of earnings from unconsolidated entities
|
122
|
85
|
||||||
Noncash
compensation expense related to PIUs and restricted stock
|
182
|
192
|
||||||
Equity
in earnings of unconsolidated entities
|
(79
|
)
|
(100
|
)
|
||||
Redeemable
noncontrolling interests
|
205
|
201
|
||||||
Change
in operating assets and liabilities
|
(3,757
|
)
|
4,317
|
|||||
Net
cash provided by operating activities
|
4,864
|
12,409
|
||||||
Investing
activities:
|
||||||||
Purchase
of corporate furniture and fixtures
|
(31
|
)
|
(23
|
)
|
||||
Restricted
cash
|
297
|
253
|
||||||
Investment
in student housing properties
|
(4,046
|
)
|
(2,614
|
)
|
||||
Payments
on note receivable
|
22
|
—
|
||||||
Insurance
proceeds received from property damage
|
—
|
75
|
||||||
Investment
in assets under development
|
—
|
(9,338
|
)
|
|||||
Investment
in unconsolidated entities
|
(26
|
)
|
(171
|
)
|
||||
Net
cash used in investing activities
|
(3,784
|
)
|
(11,818
|
)
|
||||
Financing
activities:
|
||||||||
Payment
of mortgage notes
|
(966
|
)
|
(639
|
)
|
||||
Borrowings
under mortgage notes and construction loans
|
—
|
3,268
|
||||||
Debt
refund (issuance) costs
|
7
|
(268
|
)
|
|||||
Dividends
and distributions paid to common and restricted
stockholders
|
(2,838
|
)
|
(2,923
|
)
|
||||
Dividends
and distributions paid to noncontrolling interests
|
(68
|
)
|
(143
|
)
|
||||
Net
cash used in financing activities
|
(3,865
|
)
|
(705
|
)
|
||||
Net
decrease in cash and cash equivalents
|
(2,785
|
)
|
(114
|
)
|
||||
Cash
and cash equivalents, beginning of period
|
31,169
|
9,003
|
||||||
Cash
and cash equivalents, end of period
|
$
|
28,384
|
$
|
8,889
|
Three
months
|
Three
months
|
|||||||
ended
|
ended
|
|||||||
March
31,
|
March
31,
|
|||||||
2010
|
2009
|
|||||||
Supplemental
disclosure of cash flow information:
|
||||||||
Interest
paid
|
$
|
5,194
|
$
|
5,685
|
||||
Income
taxes paid
|
$
|
82
|
$
|
126
|
•
|
Allen
& O’Hara Education Services, Inc. (“AOES”), a Delaware corporation
performing collegiate student housing management
activities.
|
||
•
|
Allen
& O’Hara Development Company, LLC (“AODC”), a Delaware limited
liability company providing development consulting services for third
party collegiate student housing
communities.
|
2010
|
2009
|
|||||||
Basic
weighted average shares of common stock outstanding
|
56,759,922 | 28,516,522 | ||||||
Operating
Partnership Units
|
903,738 | 913,738 | ||||||
University
Towers Operating Partnership Units
|
207,257 | 207,257 | ||||||
Diluted
weighted average shares of common stock outstanding
|
57,870,917 | 29,637,517 |
•
|
University
Village-Greensboro LLC, a Delaware limited liability company, 25% owned by
the Operating Partnership
|
||
•
|
WEDR
Riverside Investors V, LLC, a Delaware limited liability company, 10%
owned by the Operating Partnership
|
||
•
|
APF
EDR, LP, a Delaware limited partnership, 10% owned by the Operating
Partnership
|
||
•
|
APF
EDR Food Services, LP, a Delaware limited partnership, 10% owned by the
Operating Partnership
|
||
•
|
WEDR
Stinson Investors V, LLC, a Delaware limited liability company, 10% owned
by the Operating Partnership
|
2010
|
2009
|
|||||||
Results
of Operations:
|
||||||||
Revenues
|
$
|
4,192
|
$
|
4,593
|
||||
Net
income
|
409
|
601
|
||||||
Equity
in earnings of unconsolidated entities
|
$
|
79
|
$
|
100
|
Fiscal
Year Ending
|
||||
2010
(9 months ending December 31, 2010)
|
$
|
22,991
|
||
2011
|
12,952
|
|||
2012
|
68,617
|
|||
2013
|
33,028
|
|||
2014
|
100,115
|
|||
Thereafter
|
166,899
|
|||
Total
|
404,602
|
|||
Unamortized
debt premium/discounts
|
698
|
|||
Outstanding
at March 31, 2010, net of unamortized premiums/discounts
|
$
|
405,300
|
Three
Months Ended March 31, 2010
|
Three
Months Ended March 31, 2009
|
||||||||||||||||||||||||||||||||||
Student
|
Development
|
Student
|
Development
|
||||||||||||||||||||||||||||||||
Housing
|
Consulting
|
Management
|
Housing
|
Consulting
|
Management
|
||||||||||||||||||||||||||||||
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
||||||||||||||||||||||||||
Segment
revenues:
|
|||||||||||||||||||||||||||||||||||
Student
housing leasing revenue
|
$
|
29,651
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
29,651
|
$
|
29,313
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
29,313
|
|||||||||||||||
Third-party
development consulting services
|
—
|
693
|
—
|
—
|
693
|
—
|
1,457
|
—
|
—
|
1,457
|
|||||||||||||||||||||||||
Third-party
management services
|
—
|
—
|
866
|
—
|
866
|
—
|
—
|
909
|
—
|
909
|
|||||||||||||||||||||||||
Intersegment
revenues
|
—
|
—
|
1,131
|
(1,131
|
)
|
—
|
—
|
474
|
1,125
|
(1,599
|
)
|
—
|
|||||||||||||||||||||||
Operating
expense reimbursements
|
—
|
—
|
—
|
1,908
|
1,908
|
—
|
—
|
—
|
2,190
|
2,190
|
|||||||||||||||||||||||||
Total
segment revenues
|
29,651
|
693
|
1,997
|
777
|
33,118
|
29,313
|
1,931
|
2,034
|
591
|
33,869
|
|||||||||||||||||||||||||
Segment
operating expenses:
|
|||||||||||||||||||||||||||||||||||
Student
housing leasing operations
|
13,438
|
—
|
—
|
—
|
13,438
|
13,170
|
—
|
—
|
—
|
13,170
|
|||||||||||||||||||||||||
General
and administrative
|
—
|
778
|
2,106
|
—
|
2,884
|
—
|
732
|
1,968
|
(37
|
)
|
2,663
|
||||||||||||||||||||||||
Intersegment
expenses
|
1,131
|
—
|
—
|
(1,131
|
)
|
—
|
1,125
|
—
|
—
|
(1,125
|
)
|
—
|
|||||||||||||||||||||||
Reimbursable
operating expenses
|
—
|
—
|
—
|
1,908
|
1,908
|
—
|
—
|
—
|
2,190
|
2,190
|
|||||||||||||||||||||||||
Total
segment operating expenses
|
14,569
|
778
|
2,106
|
777
|
18,230
|
14,295
|
732
|
1,968
|
1,028
|
18,023
|
|||||||||||||||||||||||||
Net
operating income (loss)
|
15,082
|
(85
|
)
|
(109
|
) |
—
|
14,888
|
15,018
|
1,199
|
66
|
(437
|
)
|
15,846
|
||||||||||||||||||||||
Nonoperating
expenses(1)
|
12,992
|
(23
|
)
|
—
|
—
|
12,969
|
13,429
|
(11
|
)
|
—
|
—
|
13,418
|
Three
Months Ended March 31, 2010
|
Three
Months Ended March 31, 2009
|
|||||||||||||||||||||||||||||||||||||||
Student
|
Development
|
Student
|
Development
|
|||||||||||||||||||||||||||||||||||||
Housing
|
Consulting
|
Management
|
Housing
|
Consulting
|
Management
|
|||||||||||||||||||||||||||||||||||
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
|||||||||||||||||||||||||||||||
Income
(loss) before equity in earnings of unconsolidated entities, income taxes,
redeemable noncontrolling interests and discontinued
operations
|
2,090
|
(62
|
)
|
(109
|
)
|
—
|
1,919
|
1,589
|
1,210
|
66
|
(437
|
)
|
2,428
|
|||||||||||||||||||||||||||
Equity
in earnings of unconsolidated entities
|
79
|
—
|
—
|
—
|
79
|
100
|
—
|
—
|
—
|
100
|
||||||||||||||||||||||||||||||
Income
(loss) before income taxes, redeemable noncontrolling interests and
discontinued operations(2)
|
$
|
2,169
|
$
|
(62
|
)
|
$
|
(109
|
)
|
$
|
—
|
$
|
1,998
|
$
|
1,689
|
$
|
1,210
|
$
|
66
|
$
|
(437
|
)
|
$
|
2,528
|
|||||||||||||||||
Total
segment assets, as of March 31, 2010 and December 31, 2009
(3)
|
$
|
763,254
|
$
|
3,914
|
$
|
4,139
|
$
|
—
|
$
|
771,307
|
$
|
766,655
|
$
|
3,742
|
$
|
5,535
|
$
|
—
|
$
|
775,932
|
(1)
|
Nonoperating
expenses include interest expense, interest income, gains (losses) on the
extinguishment of debt, amortization of deferred financing costs,
depreciation, amortization of intangibles and impairment losses on assets.
Certain expenses which are classified as operating expenses in accordance
with GAAP, are classified as nonoperating expenses for presentation
purposes above based on how management evaluates segment operating
performance.
|
||||||||||
(2)
|
The
following is a reconciliation of the reportable segments’ net income
before income taxes, redeemable noncontrolling interests and discontinued
operations to the Trust’s consolidated net income before income taxes,
redeemable noncontrolling interests and discontinued operations for the
three months ended March 31:
|
2010
|
2009
|
|||||||
Income
before income taxes, redeemable noncontrolling interests and discontinued
operations for reportable segments
|
$
|
1,998
|
$
|
2,528
|
||||
Other
unallocated corporate expenses
|
(1,691
|
)
|
(1,681
|
)
|
||||
Income
before income taxes, redeemable noncontrolling interests and discontinued
operations
|
$
|
307
|
$
|
847
|
||||
(3)
|
The
decrease in segment assets related to management services is primarily due
to a decrease in operating cash related to the timing of insurance
payments offset by the increase in prepaid
insurance.
|
Three months
|
||||
Ended March 31,
|
||||
2009
|
||||
Student
housing leasing revenue
|
$
|
121
|
||
Student
housing leasing operating expenses
|
112
|
|||
Depreciation
and amortization
|
25
|
|||
Loss
from discontinued operations attributable to Education Realty Trust,
Inc.
|
$
|
(16
|
)
|
Stock
|
||||||||||||
PIUs
|
|
Awards
(1)
|
Total
|
|
||||||||
Outstanding
at December 31, 2009
|
275,000
|
216,000
|
491,000
|
|||||||||
Granted
|
—
|
54,000
|
54,000
|
|||||||||
Forfeited
|
(62,500
|
)
|
—
|
(62,500
|
)
|
|||||||
Outstanding
at March 31, 2010
|
212,500
|
270,000
|
482,500
|
|||||||||
Vested
at March 31, 2010
|
212,500
|
222,500
|
435,000
|
|
(1)
|
Includes
restricted stock awards.
|
•
|
market
analysis and evaluation of student housing needs and
options;
|
•
|
cooperation
with college or university in architectural
design;
|
•
|
negotiation
of ground lease, development agreement, construction contract,
architectural contract and bond
documents;
|
•
|
oversight
of architectural design process;
|
•
|
coordination
of governmental and university plan
approvals;
|
•
|
oversight
of construction process;
|
•
|
design,
purchase and installation of
furniture;
|
•
|
pre-opening
marketing to students; and
|
•
|
obtaining
final approvals of construction.
|
Three
Months Ended March 31, 2010
|
Three Months
Ended March 31, 2009
|
|||||||||||||||||||||||||||||||||||||||
Student
|
Development
|
Student
|
Development
|
|||||||||||||||||||||||||||||||||||||
Housing
|
Consulting
|
Management
|
Housing
|
Consulting
|
Management
|
|||||||||||||||||||||||||||||||||||
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
|||||||||||||||||||||||||||||||
Segment
revenues:
|
||||||||||||||||||||||||||||||||||||||||
Student
housing leasing revenue
|
$
|
29,651
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
29,651
|
$
|
29,313
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
29,313
|
||||||||||||||||||||
Third-party
development consulting services
|
—
|
693
|
—
|
—
|
693
|
—
|
1,457
|
—
|
—
|
1,457
|
||||||||||||||||||||||||||||||
Third-party
management services
|
—
|
—
|
866
|
—
|
866
|
—
|
—
|
909
|
—
|
909
|
||||||||||||||||||||||||||||||
Intersegment
revenues
|
—
|
—
|
1,131
|
(1,131
|
)
|
—
|
—
|
474
|
1,125
|
(1,599
|
)
|
—
|
||||||||||||||||||||||||||||
Operating
expense reimbursements
|
—
|
—
|
—
|
1,908
|
1,908
|
—
|
—
|
—
|
2,190
|
2,190
|
||||||||||||||||||||||||||||||
Total
segment revenues
|
29,651
|
693
|
1,997
|
777
|
33,118
|
29,313
|
1,931
|
2,034
|
591
|
33,869
|
||||||||||||||||||||||||||||||
Segment
operating expenses:
|
Three
Months Ended March 31, 2010
|
Three Months
Ended March 31, 2009
|
|||||||||||||||||||||||||||||||||||||||
Student
|
Development
|
Student
|
Development
|
|||||||||||||||||||||||||||||||||||||
Housing
|
Consulting
|
Management
|
Housing
|
Consulting
|
Management
|
|||||||||||||||||||||||||||||||||||
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
Leasing
|
Services
|
Services
|
Eliminations
|
Total
|
|||||||||||||||||||||||||||||||
Student
housing leasing operations
|
13,438
|
—
|
—
|
—
|
13,438
|
13,170
|
—
|
—
|
—
|
13,170
|
||||||||||||||||||||||||||||||
General
and administrative
|
—
|
778
|
2,106
|
—
|
2,884
|
—
|
732
|
1,968
|
(37
|
)
|
2,663
|
|||||||||||||||||||||||||||||
Intersegment
expenses
|
1,131
|
—
|
—
|
(1,131
|
)
|
—
|
1,125
|
—
|
—
|
(1,125
|
)
|
—
|
||||||||||||||||||||||||||||
Reimbursable
operating expenses
|
—
|
—
|
—
|
1,908
|
1,908
|
—
|
—
|
—
|
2,190
|
2,190
|
||||||||||||||||||||||||||||||
Total
segment operating expenses
|
14,569
|
778
|
2,106
|
777
|
18,230
|
14,295
|
732
|
1,968
|
1,028
|
18,023
|
||||||||||||||||||||||||||||||
Net
operating income (loss)
|
15,082
|
(85
|
)
|
(109
|
) |
—
|
14,888
|
15,018
|
1,199
|
66
|
(437
|
)
|
15,846
|
|||||||||||||||||||||||||||
Nonoperating
expenses(1)
|
12,992
|
(23
|
)
|
—
|
—
|
12,969
|
13,429
|
(11
|
)
|
—
|
—
|
13,418
|
||||||||||||||||||||||||||||
Income
before equity in earnings of unconsolidated entities, income taxes,
redeemable noncontrolling interests and discontinued
operations
|
2,090
|
(62
|
)
|
(109
|
) |
—
|
1,919
|
1,589
|
1,210
|
66
|
(437
|
)
|
2,428
|
|||||||||||||||||||||||||||
Equity
in earnings of unconsolidated entities
|
79
|
—
|
—
|
—
|
79
|
100
|
—
|
—
|
—
|
100
|
||||||||||||||||||||||||||||||
Income
before income taxes, redeemable noncontrolling interests and discontinued
operations(2)
|
$
|
2,169
|
$
|
(62
|
)
|
$
|
(109
|
) |
$
|
—
|
$
|
1,998
|
$
|
1,689
|
$
|
1,210
|
$
|
66
|
$
|
(437
|
)
|
$
|
2,528
|
(1)
|
Nonoperating
expenses include interest expense, interest income, gains (losses) on the
extinguishment of debt, amortization of deferred financing costs,
depreciation, amortization of intangibles and impairment losses on assets.
Certain expenses which are classified as operating expenses in accordance
with GAAP, are classified as nonoperating expenses for presentation
purposes above based on how management evaluates segment operating
performance.
|
|
(2)
|
The
following is a reconciliation of the reportable segments’ net income
before income taxes, redeemable noncontrolling interests and discontinued
operations to the Trust’s consolidated net income before income taxes,
redeemable noncontrolling interests and discontinued operations for the
three months ended March 31:
|
2010
|
2009
|
|||||||
Income
before income taxes, redeemable noncontrolling interests and discontinued
operations for reportable segments
|
$
|
1,998
|
$
|
2,528
|
||||
Other
unallocated corporate expenses
|
(1,691
|
)
|
(1,681
|
)
|
||||
Income
before income taxes, redeemable noncontrolling interests and discontinued
operations
|
$
|
307
|
$
|
847
|
Three
months ended |
|
Three
months ended |
Favorable
(Unfavorable)
|
|||||||||
Wholly-owned
communities:
|
||||||||||||
Occupancy
|
||||||||||||
Physical
(1)
|
89.8
|
%
|
89.4
|
%
|
40
|
bps
|
||||||
Economic
(2)
|
88.2
|
%
|
89.4
|
%
|
(120
|
)bps
|
||||||
NARPAB
(3)
|
$
|
370
|
$
|
373
|
$
|
(3
|
)
|
|||||
Other
income per avail. bed (4)
|
$
|
18
|
$
|
21
|
$
|
(3
|
)
|
|||||
RevPAB
(5)
|
$
|
388
|
$
|
394
|
$
|
(6
|
)
|
|||||
Operating
expense per bed (6)
|
$
|
176
|
$
|
177
|
$
|
1
|
||||||
Operating
margin (9)
|
54.7
|
%
|
55.2
|
%
|
(49
|
)bps
|
||||||
Design
Beds (7)
|
76,362
|
74,364
|
1,998
|
|||||||||
Same-communities:
|
||||||||||||
Occupancy
|
||||||||||||
Physical
(1)
|
90.4
|
%
|
89.3
|
%
|
110
|
bps
|
||||||
Economic
(2)
|
89.4
|
%
|
89.4
|
%
|
—
|
|||||||
NARPAB
(3)
|
$
|
366
|
$
|
371
|
$
|
(5
|
)
|
|||||
Other
income per avail. bed (4)
|
$
|
18
|
$
|
21
|
$
|
(3
|
)
|
|||||
RevPAB
(5)
|
$
|
384
|
$
|
392
|
$
|
(8
|
)
|
|||||
Operating
expense per bed (6)
|
$
|
176
|
$
|
176
|
$
|
—
|
||||||
Operating
margin (9)
|
54.2
|
%
|
55.1
|
%
|
(90
|
)bps
|
||||||
Design
Beds (7)
|
72,762
|
72,780
|
(18
|
)
|
(1)
|
Physical
occupancy represents a weighted average of the month-end occupancies for
the respective period.
|
(2)
|
Economic
occupancy represents the effective occupancy calculated by taking net
apartment rent accounted for on a GAAP basis for the respective period
divided by market rent for the respective period.
|
(3)
|
NarPAB
represents GAAP net apartment rent for the respective period divided by
the sum of the design beds in the portfolio for each of the included
months.
|
(4)
|
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
miscellaneous fees.
|
(5)
|
Represents
total revenue (net apartment rent plus other income) for the respective
period divided by the sum of the design beds in the portfolio for each of
the included months.
|
(6)
|
Represents
property-level operating expense excluding management fees, depreciation
and amortization divided by the sum of the design beds for each of the
included months.
|
(7)
|
Represents
the sum of the monthly design beds in the portfolio during the
period.
|
(8)
|
This
information excludes property information related to College Station
(discontinued operations).
|
(9)
|
Represents
operating income divided by
revenue.
|
Recognized
Earnings
|
||||||||||||||||
Project
|
Beds
|
Fee
Type
|
2010
|
|
2009
|
Difference
|
||||||||||
University
of Michigan
|
896
|
Development fee
|
$
|
1
|
$
|
34
|
$
|
(33
|
) | |||||||
Fontainebleu
Renovation Project
|
435
|
Development fee
|
—
|
46
|
(46
|
) | ||||||||||
West
Chester— Phase I
|
1,197
|
Development fee
|
—
|
518
|
(518
|
) | ||||||||||
Indiana
University of Pennsylvania — Phase III
|
1,084
|
Development fee
|
—
|
473
|
(473
|
) | ||||||||||
Indiana
University of Pennsylvania — Phase IV
|
596
|
Development fee
|
333
|
—
|
333
|
|||||||||||
Colorado
State University — Pueblo I
|
253
|
Development fee
|
—
|
195
|
(195
|
) | ||||||||||
Colorado
State University — Pueblo II
|
500
|
Development fee
|
359
|
9
|
350
|
|||||||||||
Auraria
Higher Education System
|
685
|
Development fee
|
—
|
182
|
(182
|
) | ||||||||||
Third-party
development consulting services
|
693
|
1,457
|
(764
|
) | ||||||||||||
Southern
Illinois University— Carbondale
|
768
|
Construction
oversight fee
|
—
|
35
|
(35
|
) | ||||||||||
Syracuse
University
|
432
|
Development fee
|
—
|
439
|
(439
|
) | ||||||||||
Intersegment
development services
|
—
|
474
|
(474
|
) | ||||||||||||
Development
consulting services
|
$
|
693
|
$
|
1,931
|
$
|
(1,238
|
)
|
Three
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Net
income attributable to Education Realty Trust, Inc.
|
$
|
170
|
$
|
433
|
||||
Student
housing property depreciation and amortization of lease
intangibles
|
7,310
|
7,005
|
||||||
Real
estate depreciation and amortization included in equity in earnings of
investees
|
124
|
122
|
||||||
Depreciation
and amortization of discontinued operations
|
—
|
25
|
||||||
Noncontrolling
interests
|
211
|
210
|
||||||
Funds
from operations
|
$
|
7,815
|
$
|
7,795
|
Payment
due by Period
|
||||||||||||||||||||
Less
than
|
1-3
|
3-5
|
More
than 5
|
|||||||||||||||||
1
Year
|
Years
|
Years
|
Years
|
Total
|
||||||||||||||||
Commitments
and Contractual Obligations:
|
||||||||||||||||||||
Long-Term
Debt Obligations(1)
|
$
|
22,991
|
$
|
81,569
|
$
|
133,143
|
$
|
166,899
|
$
|
404,602
|
||||||||||
Contractual
Interest Obligations(2)
|
16,220
|
39,037
|
26,488
|
24,746
|
106,491
|
|||||||||||||||
Operating
Lease and Future Purchase Obligations (3)
|
3,337
|
6,511
|
2,262
|
120
|
12,230
|
|||||||||||||||
Capital
Reserve Obligations(4)
|
1,347
|
3,524
|
2,861
|
3,052
|
10,784
|
|||||||||||||||
Total
|
$
|
43,895
|
$
|
130,641
|
$
|
164,754
|
$
|
194,817
|
$
|
534,107
|
(1)
|
Includes
required monthly principal amortization and amounts due at maturity on
first mortgage debt secured by student housing properties and amounts due
under the Second Amended Revolver and construction loan agreements. The
first mortgage debt does not include $698 of unamortized debt
premium.
|
(2)
|
Includes
contractual fixed-rate interest payments as well as estimates of variable
rate interest payments based on variable interest rates effective as of
March 31, 2010. The Trust has $78,041 of variable rate debt as
of March 31, 2010.
|
|
(3)
|
Includes
future minimum lease commitments under operating lease obligations and
future purchase obligations for advertising.
|
|
(4)
|
Includes
future annual contributions to the capital reserve as required by certain
mortgage debt.
|
Period
|
Total
Number
of Shares
Purchased(1)
|
Average
Price Paid per
Share
|
Total
Number of
Shares
Purchased as
Part
of Publicly
Announced
Plans or
Programs
|
Maximum
Number
(or
Approximate
Dollar
Value) of
Shares
that May
Yet
Be
Purchased
Under
the Plans
or
Programs
|
||||||||||||
January
1-31, 2010
|
440 | $ | 5.33 | ― | ― | |||||||||||
February
1-28, 2010
|
849 | 5.30 | ― | ― | ||||||||||||
March
1-31, 2010
|
348 | 5.74 | ― | ― | ||||||||||||
Total
|
1,637 | $ | 5.40 | ― | ― |
|
EDUCATION
REALTY TRUST, INC.
|
|
Date:
May 6, 2010
|
By /s/ Randy Churchey
|
|
Randy
Churchey
|
||
President,
Chief Executive Officer and
|
||
Director
(Principal Executive Officer)
|
||
Date:
May 6, 2010
|
By /s/ Randall H. Brown
|
|
Randall H.
Brown
|
||
Executive
Vice President, Chief Financial
|
||
Officer,
Treasurer and Secretary
|
||
(Principal
Financial Officer)
|
||
Date:
May 6, 2010
|
By /s/ J. Drew Koester
|
|
J. Drew
Koester
|
||
Vice
President, Assistant Secretary and Chief
Accounting
Officer
|
||
(Principal
Accounting Officer)
|
Exhibit
No.
|
|
3.1
|
Second
Articles of Amendment and Restatement of Education Realty Trust, Inc.
(Incorporated by reference to Exhibit 3.1 to the Trust’s Amendment No. 2
to its Registration Statement on Form S-11 (File No. 333-119264), filed on
December 10, 2004).
|
3.2
|
Amended
and Restated Bylaws of Education Realty Trust, Inc. (Incorporated by
reference to Exhibit 3.2 to the Trust’s Current Report on Form 8-K, filed
on February 20, 2009).
|
4.1
|
Form
of Certificate for Common Stock of Education Realty Trust, Inc.
(Incorporated by reference to Exhibit 4.1 to the Trust’s Annual Report on
Form 10-K, filed on March 16, 2010).
|
10.1
|
Executive
Employment Agreement between Education Realty Trust, Inc. and Randall L.
Churchey, effective as of January 1, 2010. (Incorporated by reference to
Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on January
12, 2010).
|
10.2
|
Restricted
Stock Award Agreement between Education Realty Trust, Inc. and Randall L.
Churchey, dated as of January 12, 2010 (Incorporated by reference to
Exhibit 10.2 to the Trust’s Current Report on Form 8-K, filed on January
12, 2010).
|
10.3
|
Separation
and Release Agreement by and between Craig L. Cardwell and Education
Realty Trust, Inc., dated as of February 1, 2010 (Incorporated by
reference to Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed
on February 2, 2010).
|
10.4
|
Amendment,
Waiver and Retirement Agreement by and between Education Realty Trust,
Inc. and Thomas J. Hickey, dated as of March 15, 2010 (Incorporated by
reference to Exhibit 10.16 to the Trust’s Annual Report on Form 10-K,
filed on March 16, 2010).
|
10.5
|
Incentive
Compensation Plan for Executive Officers (Incorporated by reference to
Exhibit 10.38 to the Trust’s Annual Report on Form 10-K, filed on March
16, 2010).
|
10.6
|
Education
Realty Trust, Inc. 2010 Long-Term Incentive Plan (Incorporated by
reference to Exhibit 10.40 to the Trust’s Annual Report on Form 10-K,
filed on March 16, 2010).
|
10.7
|
Form
of Restricted Stock Award Agreement (Time-Vested Restricted Stock) for the
Education Realty Trust, Inc. 2010 Long-Term Incentive Plan (Incorporated
by reference to Exhibit 10.41 to the Trust’s Annual Report on Form 10-K,
filed on March 16, 2010).
|
10.8
|
Form
of Restricted Stock Unit Award Agreement (Performance Shares) for the
Education Realty Trust, Inc. 2010 Long-Term Incentive Plan (Incorporated
by reference to Exhibit 10.42 to the Trust’s Annual Report on Form 10-K,
filed on March 16, 2010).
|
10.9
|
Amendment
No. 1 to Amended and Restated Master Credit Facility Agreement, dated as
of February 25, 2010, Education Realty Trust, Inc., Education Realty
Operating Partnership, LP and certain subsidiaries, Red Mortgage Capital
Inc. and Fannie Mae (Incorporated by reference to Exhibit 10.45 to the
Trust’s Annual Report on Form 10-K, filed on March 16,
2010).
|
10.10
|
Amendment
No. 1 to the Education Realty Trust, Inc. 2004 Incentive Plan
(Incorporated by reference to Exhibit 10.47 to the Trust’s Annual Report
on Form 10-K, filed on March 16, 2010).
|
12
|
Statement
Regarding Computation of Ratios, filed herewith.
|
31.1
|
Certification
Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act
(filed herewith).
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
(filed herewith).
|
32.1
|
Chief
Executive Officer certification pursuant to 18 U.S.C. Section 1350,
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(furnished herewith).
|
32.2
|
Chief
Financial Officer certification pursuant to 18 U.S.C. Section 1350,
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(furnished herewith).
|
*
|
In
accordance with Release No. 34-47986, this Exhibit is hereby furnished to
the SEC as an accompanying document and is not deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934 or otherwise subject
to the liabilities of that Section, nor shall it be deemed incorporated by
reference into any filing under the Securities Act of
1933.
|