XNYS:ACC American Campus Communities Inc Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended June 30, 2012.   
 
o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period From ______________________ to _________________________
 
Commission file number 001-32265 (American Campus Communities, Inc.)
Commission file number 333-181102-01 (American Campus Communities Operating Partnership, L.P.)
 
AMERICAN CAMPUS COMMUNITIES, INC.
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P.
(Exact name of registrant as specified in its charter)
 
 Maryland (American Campus Communities, Inc.)
Maryland (American Campus Communities Operating
Partnership, L.P.)
 
 76-0753089 (American Campus Communities, Inc.)
56-2473181 (American Campus Communities Operating
Partnership, L.P.)
 (State or Other Jurisdiction of
Incorporation or Organization)
 
 (IRS Employer Identification No.)
 
12700 Hill Country Blvd., Suite T-200
Austin, TX
(Address of Principal Executive Offices)
 
 
78738
(Zip Code)
 
(512) 732-1000
Registrant’s telephone number, including area code
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
American Campus Communities, Inc.                                                                        Yes x  No o
American Campus Communities Operating Partnership, L.P.                                Yes x  No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
American Campus Communities, Inc.                                                                        Yes x  No o
American Campus Communities Operating Partnership, L.P.                                Yes x  No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
American Campus Communities, Inc.
Large accelerated filer x                       Accelerated Filer o
Non-accelerated filer o (Do not check if a smaller reporting company)                     Smaller reporting company o
American Campus Communities Operating Partnership, L.P.
Large accelerated filer o                       Accelerated Filer o
Non-accelerated filer x  (Do not check if a smaller reporting company)                  Smaller reporting company o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
American Campus Communities, Inc.                                                                        Yes o  No x
American Campus Communities Operating Partnership, L.P                                 Yes o  No x
 
There were 91,982,368 shares of the American Campus Communities, Inc.’s common stock with a par value of $0.01 per share outstanding as of the close of business on July 31, 2012.
 
 
 

 
 
EXPLANATORY NOTE
 
This report combines the reports on Form 10-Q for the quarterly period ended June 30, 2012 of American Campus Communities, Inc. and American Campus Communities Operating Partnership, L.P..  Unless stated otherwise or the context otherwise requires, references to “ACC” mean American Campus Communities, Inc. a Maryland real estate investment trust (“REIT”), and references to “ACCOP” mean American Campus Communities Operating Partnership, L.P., a Maryland limited partnership.  References to the “Company,” “we,” “us” or “our” mean collectively ACC, ACCOP and those entities/subsidiaries owned or controlled by ACC and/or ACCOP.  References to the “Operating Partnership” mean collectively ACCOP and those entities/subsidiaries owned or controlled by ACCOP. The following chart illustrates the Company’s and the Operating Partnership’s corporate structure:
 
 
GRAPHIC
 
The general partner of ACCOP is American Campus Communities Holdings, LLC (“ACC Holdings”), an entity that is wholly-owned by ACC. As of June 30, 2012, ACC Holdings held an ownership interest in ACCOP of less than 1%. The limited partners of ACCOP are ACC and other limited partners consisting of current and former members of management and nonaffiliated third parties.  As of June 30, 2012, ACC owned an approximate 98.7% limited partnership interest in ACCOP.  As the sole member of the general partner of ACCOP, ACC has exclusive control of ACCOP’s day-to-day management.  Management operates the Company and the Operating Partnership as one business. The management of ACC consists of the same members as the management of ACCOP. The Company is structured as an umbrella partnership REIT (“UPREIT”) and ACC contributes all net proceeds from its various equity offerings to the Operating Partnership. In return for those contributions, ACC receives a number of units of ACCOP (“OP Units,” see definition below) equal to the number of common shares it has issued in the equity offering. Contributions of properties to the Company can be structured as tax-deferred transactions through the issuance of OP Units in ACCOP.  Based on the terms of ACCOP’s partnership agreement, OP Units can be exchanged for ACC’s common shares on a one-for-one basis. The Company maintains a one-for-one relationship between the OP Units of ACCOP issued to ACC and ACC Holdings and the common shares issued to the public. The Company believes that combining the reports on Form 10-Q of the Company and the Operating Partnership into this single report provides the following benefits:
 
 
enhances investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
 
eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
 
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
 
 
 

 
 
ACC consolidates ACCOP for financial reporting purposes, and ACC essentially has no assets or liabilities other than its investment in ACCOP. Therefore, the assets and liabilities of the Company and the Operating Partnership are the same on their respective financial statements. However, the Company believes it is important to understand the few differences between the Company and the Operating Partnership in the context of how the entities operate as a consolidated company. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership. ACC also issues public equity from time to time and guarantees certain debt of ACCOP, as disclosed in this report. ACC does not have any indebtedness, as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.  Except for the net proceeds from ACC’s equity offerings, which are contributed to the capital of ACCOP in exchange for OP Units on a one-for-one common share per OP Unit basis, the Operating Partnership generates all remaining capital required by the Company’s business. These sources include, but are not limited to, the Operating Partnership’s working capital, net cash provided by operating activities, borrowings under its credit facilities, and proceeds received from the disposition of certain properties.  Noncontrolling interests, stockholders’ equity, and partners’ capital are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The noncontrolling interests in the Operating Partnership’s financial statements consist of the interests of unaffiliated partners in various consolidated joint ventures. The noncontrolling interests in the Company’s financial statements include the same noncontrolling interests at the Operating Partnership level and OP Unit holders of ACCOP. The differences between stockholders’ equity and partners’ capital result from differences in the equity issued at the Company and Operating Partnership levels.
 
To help investors understand the significant differences between the Company and the Operating Partnership, this report provides separate consolidated financial statements for the Company and the Operating Partnership. A single set of consolidated notes to such financial statements is presented that includes separate discussions for the Company and the Operating Partnership when applicable (for example, noncontrolling interests, stockholders’ equity or partners’ capital, earnings per share or unit, etc.).  A combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section is also included that presents discrete information related to each entity, as applicable. This report also includes separate Part I, Item 4 Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.
 
In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the Company operates its business through the Operating Partnership. The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.
 
 
 

 
 
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2012
 
TABLE OF CONTENTS
 
   
PAGE NO.
     
PART I.
   
       
Item 1.
Consolidated Financial Statements of American Campus Communities, Inc. and Subsidiaries:
   
       
 
Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011
 
1
       
 
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011 (all unaudited)   
 
2
       
 
Consolidated Statement of Changes in Equity for the six months ended June 30, 2012 (unaudited)   
 
3
       
 
Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (all unaudited)
 
4
       
 
Consolidated Financial Statements of American Campus Communities Operating Partnership, L.P. and Subsidiaries:
   
       
 
Consolidated Balance Sheets as of June 30, 2012 (unaudited) and December 31, 2011
 
5
       
 
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011 (all unaudited)   
 
6
       
 
Consolidated Statement of Changes in Capital for the six months ended June 30, 2012 (unaudited)  
 
7
       
 
Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (all unaudited)
 
8
       
 
Notes to Consolidated Financial Statements of American Campus Communities, Inc. and Subsidiaries and American Campus Communities Operating Partnership, L.P. and Subsidiaries
 
9
       
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
28
       
Item 3.
Quantitative and Qualitative Disclosure about Market Risk
 
45
       
Item 4.
Controls and Procedures
 
45
     
PART II.    
   
       
Item 6.
Exhibits
 
46
     
SIGNATURES
 
47
 
 
 

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
 
   
June 30, 2012
   
December 31, 2011
 
   
(Unaudited)
       
Assets
           
             
Investments in real estate:
           
Wholly-owned properties, net
  $ 3,016,961     $ 2,761,757  
Wholly-owned property held for sale
    -       27,300  
On-campus participating properties, net
    58,298       59,850  
Investments in real estate, net
    3,075,259       2,848,907  
                 
Cash and cash equivalents
    17,606       22,399  
Restricted cash
    39,803       22,956  
Student contracts receivable, net
    3,908       5,324  
Other assets
    103,933       108,996  
                 
Total assets
  $ 3,240,509     $ 3,008,582  
                 
Liabilities and equity
               
                 
Liabilities:
               
Secured mortgage, construction and bond debt
  $ 919,847     $ 858,530  
Unsecured term loan
    350,000       200,000  
Unsecured revolving credit facility
    241,000       273,000  
Secured agency facility
    116,000       116,000  
Accounts payable and accrued expenses
    38,144       36,884  
Other liabilities
    76,122       77,840  
Total liabilities
    1,741,113       1,562,254  
                 
Commitments and contingencies (Note 14)
               
                 
Redeemable noncontrolling interests
    42,884       42,529  
                 
Equity:
               
American Campus Communities, Inc. stockholders’ equity:
Common stock, $.01 par value, 800,000,000 shares authorized, 74,732,368 and 72,759,546 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively
    744       725  
Additional paid in capital
    1,737,397       1,664,416  
Accumulated earnings and dividends
    (305,054 )     (286,565 )
Accumulated other comprehensive loss
    (5,165 )     (3,360 )
Total American Campus Communities, Inc. stockholders’ equity
    1,427,922       1,375,216  
Noncontrolling interests - partially owned properties
    28,590       28,583  
Total equity
    1,456,512       1,403,799  
                 
Total liabilities and equity
  $ 3,240,509     $ 3,008,582  
 
See accompanying notes to consolidated financial statements.
 
 
1

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands, except share and per share data)
 
   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2012
   
2011
   
2012
   
2011
 
Revenues
                       
Wholly-owned properties
  $ 96,561     $ 81,801     $ 196,151     $ 167,425  
On-campus participating properties
    4,712       4,457       12,679       12,104  
Third-party development services
    3,866       758       5,960       4,582  
Third-party management services
    1,638       1,803       3,396       3,633  
Resident services
    185       274       528       615  
Total revenues
    106,962       89,093       218,714       188,359  
                                 
Operating expenses
                               
Wholly-owned properties
    45,160       37,348       88,883       74,942  
On-campus participating properties
    2,801       2,881       5,296       4,625  
Third-party development and management services
    2,626       2,631       5,411       5,313  
General and administrative
    4,638       3,278       8,178       6,051  
Depreciation and amortization
    24,482       21,477       48,881       42,712  
Ground/facility leases
    804       658       1,768       1,814  
Total operating expenses
    80,511       68,273       158,417       135,457  
                                 
Operating income
    26,451       20,820       60,297       52,902  
                                 
Nonoperating income and (expenses)
                               
Interest income
    414       159       930       209  
Interest expense
    (12,808 )     (12,178 )     (26,090 )     (26,191 )
Amortization of deferred financing costs
    (981 )     (1,329 )     (1,982 )     (2,559 )
(Loss) income from unconsolidated joint ventures
    -       (13 )     444       (25 )
Other nonoperating loss
    -       -       (122 )     -  
Total nonoperating expenses
    (13,375 )      (13,361 )     (26,820 )     (28,566 )
                                 
Income before income taxes and discontinued operations
     13,076        7,459        33,477        24,336  
Income tax provision
    (156 )     (142 )     (312 )     (285 )
Income from continuing operations
    12,920       7,317       33,165       24,051  
Discontinued operations
                               
Income attributable to discontinued operations
    4       290       564       1,436  
Gain from disposition of real estate
    83       14,574       83       14,574  
Total discontinued operations
     87       14,864       647       16,010  
Net income
    13,007       22,181       33,812       40,061  
Net income attributable to noncontrolling interests
                               
Redeemable noncontrolling interests
    (188 )     (334 )     (475 )     (621 )
Partially owned properties
    (491 )     (107 )     (983 )     (287 )
Net income attributable to noncontrolling interests
    (679 )     (441 )     (1,458 )     (908 )
Net income attributable to common shareholders
  $ 12,328     $ 21,740     $ 32,354     $ 39,153  
Other comprehensive (loss) income
                               
Change in fair value of interest rate swaps
    (5,209 )     182       (1,805 )     927  
Comprehensive income
  $ 7,119     $ 21,922     $ 30,549     $ 40,080  
Income per share attributable to common shareholders - basic
                               
Income from continuing operations per share
  $ 0.16     $ 0.10     $ 0.42     $ 0.34  
Net income per share
  $ 0.16     $ 0.31     $ 0.43     $ 0.57  
Income per share attributable to common shareholders - diluted
                               
Income from continuing operations per share
  $ 0.16     $ 0.10     $ 0.41     $ 0.34  
Net income per share
  $ 0.16     $ 0.31     $ 0.42     $ 0.57  
Weighted-average common shares outstanding
                               
Basic
    74,718,934       68,655,732       74,467,893        67,810,944
Diluted
    75,305,780       69,211,856       75,085,040        68,387,966
                                 
Distributions declared per common share
  $ 0.3375     $ 0.3375     $ 0.675     $ 0.675  
 
See accompanying notes to consolidated financial statements.
 
 
2

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited, in thousands, except share data)
 
   
Common
Shares
   
Par Value of
Common
Shares
   
Additional Paid
in Capital
   
Accumulated
Earnings and
Dividends
   
Accumulated
Other
Comprehensive
Loss
   
Noncontrolling
Interests
   
Total
 
Equity, December 31, 2011
    72,759,546     $ 725     $ 1,664,416     $ (286,565 )   $ (3,360 )   $ 28,583     $ 1,403,799  
Net proceeds from sale of common stock
    1,802,306       18       73,205       -       -       -       73,223  
Adjustments to reflect redeemable noncontrolling interests at fair value
    -       -       (1,489 )     -       -       -       (1,489 )
Amortization of restricted stock awards
    -       -       2,623       -       -       -       2,623  
Vesting of restricted stock awards
    113,345       -       (2,156 )     -       -       -       (2,156 )
Distributions to common and restricted stockholders
    -       -       -       (50,843 )     -       -       (50,843 )
Distributions to joint venture partners
    -       -       -       -       -       (976 )     (976 )
Conversion of common units to common stock
    57,171       1       888       -       -       -       889  
Redemption of common units
    -       -       (90 )     -       -       -       (90 )
Change in fair value of interest rate swaps
    -       -       -       -       (1,805 )     -       (1,805 )
Net income
    -       -       -       32,354       -       983       33,337  
Equity, June 30, 2012
    74,732,368     $ 744     $ 1,737,397     $ (305,054 )   $ (5,165 )   $ 28,590     $ 1,456,512  
 
See accompanying notes to consolidated financial statements.
 
 
3

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
   
Six Months Ended June 30,
 
   
2012
   
2011
 
Operating activities
           
Net income
  $ 33,812     $ 40,061  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Gain from disposition of real estate
    (83 )     (14,574 )
Loss on remeasurement of equity method investment
    122       -  
Depreciation and amortization
    48,881       44,376  
Amortization of deferred financing costs and debt premiums/discounts
    1,444       (419 )
Share-based compensation
    2,623       2,191  
(Income) loss from unconsolidated joint ventures
    (444 )     25  
Income tax provision
    312       285  
Changes in operating assets and liabilities:
               
Restricted cash
    (2,755 )     (1,880 )
Student contracts receivable, net
    1,487       2,120  
Other assets
    4,429       (9,444 )
Accounts payable and accrued expenses
    (4,131 )     (5,704 )
Other liabilities
    (4,338 )     (4,284 )
Net cash provided by operating activities
    81,359       52,753  
                 
Investing activities
               
Net proceeds from disposition of real estate
    28,167       80,883  
Cash paid for property acquisitions
    (55,844 )     -  
Cash paid for land acquisitions
    (19,706 )     (7,970 )
Capital expenditures for wholly-owned properties
    (9,652 )     (9,258 )
Investments in wholly-owned properties under development
    (188,662 )     (72,490 )
Capital expenditures for on-campus participating properties
    (762 )     (907 )
Cash paid for increased ownership in consolidated subsidiaries
    -       (3,275 )
Investment in loan receivable
    (7,211 )     -  
Repayment of mezzanine loan
    4,000       -  
Increase in escrow deposits
    (12,196 )     (445 )
Change in restricted cash related to capital reserves
    (299 )     1,080  
Proceeds from insurance settlement
    -       1,546  
Purchase of corporate furniture, fixtures and equipment
    (744 )     (727 )
Net cash used in investing activities
    (262,909 )     (11,563 )
                 
Financing activities
               
Proceeds from sale of common stock
    75,000       83,727  
Offering costs
    (1,631 )     (1,418 )
Pay-off of mortgage and construction loans
    (16,180 )     (225,528 )
Proceeds from unsecured term loan
    150,000       200,000  
Pay-off of secured term loan
    -       (100,000 )
Proceeds from credit facilities
    155,000       60,000  
Paydowns of credit facilities
    (187,000 )     (65,000 )
Proceeds from construction loans
    62,057       -  
Principal payments on debt
    (5,330 )     (4,424 )
Change in construction accounts payable
    847       -  
Redemption of common units for cash
    (132 )     -  
Debt issuance and assumption costs
    (3,377 )     (6,750 )
Distributions to common and restricted stockholders
    (50,843 )     (46,080 )
Distributions to noncontrolling partners
    (1,654 )     (961 )
Net cash provided by (used in) financing activities
    176,757       (106,434 )
                 
Net change in cash and cash equivalents
    (4,793 )     (65,244 )
Cash and cash equivalents at beginning of period
    22,399       113,507  
Cash and cash equivalents at end of period
  $ 17,606     $ 48,263  
                 
Supplemental disclosure of non-cash investing and financing activities
               
Loans assumed in connection with property acquisitions
  $ (19,004 )   $ -  
Change in fair value of derivative instruments, net
  $ (1,805 )   $ 927  
                 
Supplemental disclosure of cash flow information
               
Interest paid
  $ 31,359     $ 29,393  
 
See accompanying notes to consolidated financial statements.
 
 
4

 
 
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
 
   
June 30, 2012
   
December 31, 2011
 
   
(Unaudited)
       
Assets
           
             
Investments in real estate:
           
Wholly-owned properties, net
  $ 3,016,961     $ 2,761,757  
Wholly-owned property held for sale
    -       27,300  
On-campus participating properties, net
    58,298       59,850  
Investments in real estate, net
    3,075,259       2,848,907  
                 
Cash and cash equivalents
    17,606       22,399  
Restricted cash
    39,803       22,956  
Student contracts receivable, net
    3,908       5,324  
Other assets
    103,933       108,996  
                 
Total assets
  $ 3,240,509     $ 3,008,582  
                 
Liabilities and capital
               
                 
Liabilities:
               
Secured mortgage, construction and bond debt
  $ 919,847     $ 858,530  
Unsecured term loan
    350,000       200,000  
Unsecured revolving credit facility
    241,000       273,000  
Secured agency facility
    116,000       116,000  
Accounts payable and accrued expenses
    38,144       36,884  
Other liabilities
    76,122       77,840  
Total liabilities
    1,741,113       1,562,254  
                 
Commitments and contingencies (Note 14)
               
                 
Redeemable limited partners
    42,884       42,529  
                 
Capital:
               
Partners’ capital:                
General partner – 12,222 OP units outstanding at both June 30, 2012 and December 31, 2011
    122       125  
Limited partner - 74,720,146 and 72,747,324 OP units outstanding at June 30, 2012 and December 31, 2011, respectively
    1,432,965       1,378,451  
Accumulated other comprehensive loss
    (5,165 )     (3,360 )
Total partners’ capital
    1,427,922       1,375,216  
Noncontrolling interests - partially owned properties
    28,590       28,583  
Total capital
    1,456,512       1,403,799  
                 
Total liabilities and capital
  $ 3,240,509     $ 3,008,582  
 
See accompanying notes to consolidated financial statements.
 
 
5

 
 
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands, except unit and per unit data)
 
   
Three Months Ended June 30,
   
Six Months Ended June 30,
   
2012
   
2011
   
2012
   
2011
Revenues
                     
Wholly-owned properties
  $ 96,561     $ 81,801     $ 196,151     $ 167,425  
On-campus participating properties
    4,712       4,457       12,679       12,104  
Third-party development services
    3,866       758       5,960       4,582  
Third-party management services
    1,638       1,803       3,396       3,633  
Resident services
    185       274       528       615  
Total revenues
    106,962       89,093       218,714       188,359  
                                 
Operating expenses
                               
Wholly-owned properties
    45,160       37,348       88,883       74,942  
On-campus participating properties
    2,801       2,881       5,296       4,625  
Third-party development and management services
    2,626       2,631       5,411       5,313  
General and administrative
    4,638       3,278       8,178       6,051  
Depreciation and amortization
    24,482       21,477       48,881       42,712  
Ground/facility leases
    804       658       1,768       1,814  
Total operating expenses
    80,511       68,273       158,417       135,457  
                                 
Operating income
    26,451       20,820       60,297       52,902  
                                 
Nonoperating income and (expenses)
                               
Interest income
    414       159       930       209  
Interest expense
    (12,808 )     (12,178 )     (26,090 )     (26,191 )
Amortization of deferred financing costs
    (981 )     (1,329 )     (1,982 )     (2,559 )
(Loss) income from unconsolidated joint ventures
    -       (13 )     444       (25 )
Other nonoperating loss
    -       -       (122 )     -  
Total nonoperating expenses
    (13,375 )     (13,361 )     (26,820 )     (28,566 )
                                 
Income before income taxes and discontinued operations
    13,076       7,459       33,477       24,336  
Income tax provision
    (156 )     (142 )     (312 )     (285 )
Income from continuing operations
    12,920       7,317       33,165       24,051  
Discontinued operations
                               
Income attributable to discontinued operations
    4       290       564       1,436  
Gain from disposition of real estate
    83       14,574       83       14,574  
Total discontinued operations
     87       14,864       647       16,010  
Net income
    13,007       22,181       33,812       40,061  
Net income attributable to noncontrolling interests – partially owned properties
    (491 )     (107 )     (983 )     (287 )
Net income attributable to American Campus Communities Operating Partnership, L.P.
    12,516       22,074       32,829       39,774  
Series A preferred unit distributions
    (45 )     (45 )     (91 )     (91 )
Net income available to common unitholders
  $ 12,471     $ 22,029     $ 32,738     $ 39,683  
Other comprehensive (loss) income
                               
Change in fair value of interest rate swaps
    (5,209 )     182       (1,805 )     927  
Comprehensive income
  $ 7,262     $ 22,211     $ 30,933     $ 40,610  
Income per unit attributable to common unitholders – basic
                               
Income from continuing operations per unit
  $ 0.16     $ 0.10     $ 0.42     $ 0.34  
Net income per unit
  $ 0.16     $ 0.31     $ 0.43     $ 0.57  
Income per unit attributable to common unitholders – diluted
                               
Income from continuing operations per unit
  $ 0.16     $ 0.10     $ 0.41     $ 0.34  
Net income per unit
  $ 0.16     $ 0.31     $ 0.42     $ 0.57  
Weighted-average common units outstanding
                               
Basic
    75,582,468       69,563,167       75,349,378       68,735,261  
Diluted
    76,169,314       70,119,291       75,966,525       69,312,283  
                                 
Distributions declared per common unit
  $ 0.3375     $ 0.3375     $ 0.675     $ 0.675  
 
See accompanying notes to consolidated financial statements.
 
 
6

 
 
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL
(unaudited, in thousands, except unit data)
 
   
General Partner
   
Limited Partner
    Accumulated
Other
Comprehensive
Loss
    Noncontrolling
Interests -
Partially Owned
Properties
    Total  
   
Units
   
Amount
   
Units
   
Amount
           
Balance as of December 31, 2011
    12,222     $ 125       72,747,324     $ 1,378,451     $ (3,360 )   $ 28,583     $ 1,403,799  
Issuance of units in exchange for contributions of equity offering proceeds
    -       -       1,802,306       73,223       -       -       73,223  
Adjustments to reflect redeemable limited partners’ interest at fair value
    -       -       -       (1,489 )     -       -       (1,489 )
Amortization of restricted stock awards
    -       -       -       2,623       -       -       2,623  
Vesting of restricted stock awards
    -       -       113,345       (2,156 )     -       -       (2,156 )
Distributions
    -       (8 )     -       (50,835 )     -       -       (50,843 )
Distributions to joint venture partners
    -       -       -       -       -       (976 )     (976 )
Conversion of common units to common stock
    -       -       57,171       889       -       -       889  
Redemption of common units
    -       -       -       (90 )     -       -       (90 )
Change in fair value of interest rate swaps
    -       -       -       -       (1,805 )     -       (1,805 )
Net income
    -       5       -       32,349       -       983       33,337  
Balance as of June 30, 2012
    12,222     $ 122       74,720,146     $ 1,432,965     $ (5,165 )   $ 28,590     $ 1,456,512  
 
See accompanying notes to consolidated financial statements.
 
 
7

 
 
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
   
Six Months Ended June 30,
 
   
2012
   
2011
 
Operating activities
           
Net income
  $ 33,812     $ 40,061  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Gain from disposition of real estate
    (83 )     (14,574 )
Loss on remeasurement of equity method investment
    122       -  
Depreciation and amortization
    48,881       44,376  
Amortization of deferred financing costs and debt premiums/discounts
    1,444       (419 )
Share-based compensation
    2,623       2,191  
(Income) loss from unconsolidated joint ventures
    (444 )     25  
Income tax provision
    312       285  
Changes in operating assets and liabilities:
               
Restricted cash
    (2,755 )     (1,880 )
Student contracts receivable, net
    1,487       2,120  
Other assets
    4,429       (9,444 )
Accounts payable and accrued expenses
    (4,131 )     (5,704 )
Other liabilities
    (4,338 )     (4,284 )
Net cash provided by operating activities
    81,359       52,753  
                 
Investing activities
               
Net proceeds from dispositions of real estate
    28,167       80,883  
Cash paid for property acquisitions
    (55,844 )     -  
Cash paid for land acquisitions
    (19,706 )     (7,970 )
Capital expenditures for wholly-owned properties
    (9,652 )     (9,258 )
Investments in wholly-owned properties under development
    (188,662 )     (72,490 )
Capital expenditures for on-campus participating properties
    (762 )     (907 )
Cash paid for increased ownership in consolidated subsidiaries
    -       (3,275 )
Investment in loan receivable
    (7,211 )     -  
Repayment of mezzanine loan
    4,000       -  
Increase in escrow deposits
    (12,196 )     (445 )
Change in restricted cash related to capital reserves
    (299 )     1,080  
Proceeds from insurance settlement
    -       1,546  
Purchase of corporate furniture, fixtures and equipment
    (744 )     (727 )
Net cash used in investing activities
    (262,909 )     (11,563 )
                 
Financing activities
               
Proceeds from issuance of common units in exchange for contributions, net
    73,369       82,309  
Pay-off of mortgage and construction loans
    (16,180 )     (225,528 )
Proceeds from unsecured term loan
    150,000       200,000  
Pay-off of secured term loan
    -       (100,000 )
Proceeds from credit facilities
    155,000       60,000  
Paydowns of credit facilities
    (187,000 )     (65,000 )
Proceeds from construction loans
    62,057       -  
Principal payments on debt
    (5,330 )     (4,424 )
Change in construction accounts payable
    847       -  
Redemption of common units for cash
    (132 )     -  
Debt issuance and assumption costs
    (3,377 )     (6,750 )
Distributions paid on unvested restricted stock awards
    (456 )     (424 )
Distributions paid on common units
    (50,974 )     (46,279 )
Distributions paid on preferred units
    (91 )     (91 )
Distributions paid to noncontrolling partners - partially owned properties
    (976 )     (247 )
Net cash provided by (used in) financing activities
    176,757       (106,434 )
                 
Net change in cash and cash equivalents
    (4,793 )     (65,244 )
Cash and cash equivalents at beginning of period
    22,399       113,507  
Cash and cash equivalents at end of period
  $ 17,606     $ 48,263  
                 
Supplemental disclosure of non-cash investing and financing activities
               
Loans assumed in connection with property acquisitions
  $ (19,004 )   $ -  
Change in fair value of derivative instruments, net
  $ (1,805 )   $ 927  
                 
Supplemental disclosure of cash flow information
               
Interest paid
  $ 31,359     $ 29,393  
 
See accompanying notes to consolidated financial statements.
 
 
8

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
1. Organization and Description of Business
 
American Campus Communities, Inc. (“ACC”) is a real estate investment trust (“REIT”) that commenced operations effective with the completion of an initial public offering (“IPO”) on August 17, 2004. Through ACC’s controlling interest in American Campus Communities Operating Partnership L.P. (“ACCOP”), ACC is one of the largest owners, managers and developers of high quality student housing properties in the United States in terms of beds owned and under management. ACC is a fully integrated, self-managed and self-administered equity REIT with expertise in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. ACC’s common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “ACC.”
 
The general partner of ACCOP is American Campus Communities Holdings, LLC (“ACC Holdings”), an entity that is wholly-owned by ACC. As of June 30, 2012, ACC Holdings held an ownership interest in ACCOP of less than 1%. The limited partners of ACCOP are ACC and other limited partners consisting of current and former members of management and nonaffiliated third parties.  As of June 30, 2012, ACC owned an approximate 98.7% limited partnership interest in ACCOP.  As the sole member of the general partner of ACCOP, ACC has exclusive control of ACCOP’s day-to-day management.  Management operates ACC and ACCOP as one business.  The management of ACC consists of the same members as the management of ACCOP.  ACC consolidates ACCOP for financial reporting purposes, and ACC does not have significant assets other than its investment in ACCOP.  Therefore, the assets and liabilities of ACC and ACCOP are the same on their respective financial statements. References to the “Company,” “we,” “us” or “our” mean collectively ACC, ACCOP and those entities/subsidiaries owned or controlled by ACC and/or ACCOP.  References to the “Operating Partnership” mean collectively ACCOP and those entities/subsidiaries owned or controlled by ACCOP.  Unless otherwise indicated, the accompanying Notes to the Consolidated Financial Statements apply to both the Company and the Operating Partnership.
 
As of June 30, 2012, our property portfolio contained 124 properties with approximately 76,200 beds in approximately 24,100 apartment units.  Our property portfolio consisted of 107 owned off-campus student housing properties that are in close proximity to colleges and universities, 12 American Campus Equity (“ACE®”) properties operated under ground/facility leases with six university systems, four on-campus participating properties operated under ground/facility leases with the related university systems, and one property containing a retail shopping center which we plan to develop into a mixed-use community including both student housing and retail.  Of the 124 properties, 18 were under development as of June 30, 2012, and when completed will consist of a total of approximately 10,900 beds in approximately 3,100 units.  Our communities contain modern housing units and are supported by a resident assistant system and other student-oriented programming, with many offering resort-style amenities.
 
Through ACC’s taxable REIT subsidiaries (“TRS”), we also provide construction management and development services, primarily for student housing properties owned by colleges and universities, charitable foundations, and others.  As of June 30, 2012, also through ACC’s TRS entities, we provided third-party management and leasing services for 29 properties that represented approximately 23,700 beds in approximately 9,400 units.  Third-party management and leasing services are typically provided pursuant to management contracts that have initial terms that range from one to five years.  As of June 30, 2012, our total owned and third-party managed portfolio included 153 properties with approximately 99,900 beds in approximately 33,500 units.
 
2. Summary of Significant Accounting Policies
 
Basis of Presentation
 
The accompanying consolidated financial statements, presented in U.S. dollars, are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements, and revenue and expenses during the reporting periods. Our actual results could differ from those estimates and assumptions. All material intercompany transactions among consolidated entities have been eliminated. All dollar amounts in the tables herein, except share, per share, unit and per unit amounts, are stated in thousands unless otherwise indicated. Certain prior period amounts have been reclassified to conform to the current period presentation.
 
 
9

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
Interim Financial Statements
 
The accompanying interim financial statements are unaudited, but have been prepared in accordance with GAAP for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission.  Accordingly, they do not include all disclosures required by GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements of the Company for these interim periods have been included.  Because of the seasonal nature of the Company’s operations, the results of operations and cash flows for any interim period are not necessarily indicative of results for other interim periods or for the full year.  These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and the Operating Partnership’s Current Report on Form 8-K for the year ended December 31, 2011.
 
Use of Estimates
 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Investments in Real Estate
 
Investments in real estate are recorded at historical cost. Major improvements that extend the life of an asset are capitalized and depreciated over the remaining useful life of the asset. The cost of ordinary repairs and maintenance are charged to expense when incurred. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives of the assets as follows:
 
Buildings and improvements
 
7-40 years
Leasehold interest - on-campus
   participating properties
 
25-34 years (shorter of useful life or respective lease term)
Furniture, fixtures and equipment
 
3-7 years
 
Project costs directly associated with the development and construction of an owned real estate project, which include interest, property taxes, and amortization of deferred finance costs, are capitalized as construction in progress.  Upon completion of the project, costs are transferred into the applicable asset category and depreciation commences.  Interest totaling approximately $3.5 million and $2.1 million was capitalized during the three months ended June 30, 2012 and 2011, respectively, and $6.0 million and $3.1 million was capitalized during the six months ended June 30, 2012 and 2011, respectively.  Amortization of deferred financing costs totaling approximately $0.1 million and $54,000 was capitalized as construction in progress during the three months ended June 30, 2012 and 2011, respectively, and $0.2 million and $0.1 million was capitalized as construction in progress during the six months ended June 30, 2012 and 2011, respectively.
 
Management assesses whether there has been an impairment in the value of the Company’s investments in real estate whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Impairment is recognized when estimated expected future undiscounted cash flows are less than the carrying value of the property. The estimation of expected future net cash flows is inherently uncertain and relies on assumptions regarding current and future economics and market conditions. If such conditions change, then an adjustment to the carrying value of the Company’s long-lived assets could occur in the future period in which the conditions change. To the extent that a property is impaired, the excess of the carrying amount of the property over its estimated fair value is charged to earnings. The Company believes that there were no impairments of the carrying values of its investments in real estate as of June 30, 2012.
 
10

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
The Company allocates the purchase price of acquired properties to net tangible and identified intangible assets based on relative fair values. Fair value estimates are based on information obtained from a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. Information obtained about each property as a result of due diligence, marketing and leasing activities is also considered. The value of in-place leases is based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued “as-if” vacant.  As lease terms are typically one year or less, rates on in-place leases generally approximate market rental rates. Factors considered in the valuation of in-place leases include an estimate of the carrying costs during the expected lease-up period considering current market conditions, nature of the tenancy, and costs to execute similar leases. Carrying costs include estimates of lost rentals at market rates during the expected lease-up period, as well as marketing and other operating expenses. The value of in-place leases is amortized over the remaining initial term of the respective leases, generally less than one year. The purchase price of property acquisitions is not expected to be allocated to tenant relationships, considering the terms of the leases and the expected levels of renewals.
 
Long-Lived Assets–Held for Sale
 
Long-lived assets to be disposed of are classified as held for sale in the period in which all of the following criteria are met:
 
 
a.
Management, having the authority to approve the action, commits to a plan to sell the asset.
 
b.
The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets.
 
c.
An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated.
 
d.
The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year.
 
e.
The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value.
 
f.
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
 
Concurrent with this classification, the asset is recorded at the lower of cost or fair value less estimated selling costs, and depreciation ceases.
 
Intangible Assets
 
In connection with property acquisitions completed in 2012 and 2011, the Company capitalized approximately $1.6 million and $2.6 million, respectively, related to management’s estimate of the fair value of the in-place leases assumed.  These intangible assets are amortized on a straight-line basis over the average remaining term of the underlying leases.  Amortization expense was approximately $1.2 million and $1.4 million for the three months ended June 30, 2012 and 2011, respectively, and $2.1 million and $2.9 million for the six months ended June 30, 2012 and 2011, respectively.  Accumulated amortization at June 30, 2012 and December 31, 2011 was approximately $7.7 million and $8.0 million, respectively.  Intangible assets, net of amortization, are included in other assets on the accompanying consolidated balance sheets and the amortization of intangible assets is included in depreciation and amortization expense in the accompanying consolidated statements of comprehensive income.  See Note 3 herein for a detailed discussion of the property acquisitions completed during 2012 and 2011.
 
Third-Party Development Services Revenue and Costs
 
Pre-development expenditures such as architectural fees, permits and deposits associated with the pursuit of third-party and owned development projects are expensed as incurred, until such time that management believes it is probable that the contract will be executed and/or construction will commence. Because the Company frequently incurs these pre-development expenditures before a financing commitment and/or required permits and authorizations have been obtained, the Company bears the risk of loss of these pre-development expenditures if financing cannot ultimately be arranged on acceptable terms or the Company is unable to successfully obtain the required permits and authorizations. As such, management evaluates the status of third-party and owned projects that have not yet commenced construction on a periodic basis and expenses any deferred costs related to projects whose current status indicates the commencement of construction is unlikely and/or the costs may not provide future value to the Company in the form of revenues. Such write-offs are included in third-party development and management services expenses (in the case of third-party development projects) or general and administrative expenses (in the case of owned development projects) on the accompanying consolidated statements of comprehensive income.  As of June 30, 2012, the Company has deferred approximately $2.2 million in pre-development costs related to third-party and owned development projects that have not yet commenced construction. Such costs are included in other assets on the accompanying consolidated balance sheets.
 
 
11

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
Earnings per Share –Company
 
Basic earnings per share is computed using net income attributable to common shareholders and the weighted average number of shares of the Company’s common stock outstanding during the period.  Diluted earnings per share reflect common shares issuable from the assumed conversion of common and preferred Operating Partnership units (“OP Units”) and common share awards granted.  Only those items having a dilutive impact on basic earnings per share are included in diluted earnings per share.
 
The following potentially dilutive securities were outstanding for the three and six months ended June 30, 2012 and 2011, but were not included in the computation of diluted earnings per share because the effects of their inclusion would be anti-dilutive.
 
   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2012
   
2011
   
2012
   
2011
 
Common OP Units (Note 10)
    863,534       907,435       881,485       924,317  
Preferred OP Units (Note 10)
    114,128       114,128       114,128       114,401  
Total potentially dilutive securities
    977,662       1,021,563       995,613       1,038,718  
 
The following is a summary of the elements used in calculating basic earnings per share:
             
   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2012
   
2011
   
2012
   
2011
 
Basic earnings per share calculation:
                       
Income from continuing operations
  $ 12,920     $ 7,317     $ 33,165     $ 24,051  
Income from continuing operations attributable to noncontrolling interests
    (677 )     (222 )     (1,449 )     (671 )
Income from continuing operations attributable to common shareholders
    12,243       7,095       31,716       23,380  
Amount allocated to participating securities
    (198 )     (188 )     (456 )     (424 )
Income from continuing operations attributable to common shareholders, net of amount allocated to participating securities
    12,045       6,907       31,260       22,956  
                                 
Income from discontinued operations
    87       14,864       647       16,010  
Income from discontinued operations attributable to noncontrolling
interests
    (2     (219 )     (9 )     (237 )
Income from discontinued operations attributable to common shareholders
    85       14,645       638       15,773  
Net income attributable to common shareholders, as adjusted - basic
  $ 12,130     $ 21,552     $ 31,898     $ 38,729  
 
 
12

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
                         
   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2012
   
2011
   
2012
   
2011
 
Income from continuing operations attributable to common shareholders, as adjusted – per share
  $ 0.16     $ 0.10     $ 0.42     $ 0.34  
Income from discontinued operations attributable to common shareholders – per share
  $ -     $ 0.21     $ 0.01     $ 0.23  
Net income attributable to common shareholders, as adjusted – per share
  $ 0.16     $ 0.31     $ 0.43     $ 0.57  
                                 
Basic weighted average common shares outstanding
    74,718,934       68,655,732       74,467,893       67,810,944  
                                 
Diluted earnings per share calculation:
                               
Income from continuing operations attributable to common shareholders, net of amount allocated to participating securities
  $ 12,045     $ 6,907     $ 31,260     $ 22,956  
Income from discontinued operations attributable to common shareholders
    85       14,645       638       15,773  
Net income attributable to common shareholders, as adjusted - diluted
  $ 12,130     $ 21,552     $ 31,898     $ 38,729  
                                 
Income from continuing operations attributable to common shareholders, net of amount allocated to participating securities – per share
  $ 0.16     $ 0.10     $ 0.41     $ 0.34  
Income from discontinued operations attributable to common shareholders – per share
  $ -     $ 0.21     $ 0.01     $ 0.23  
Net income attributable to common shareholders – per share
  $ 0.16     $ 0.31     $ 0.42     $ 0.57  
                                 
Basic weighted average common shares outstanding
    74,718,934       68,655,732       74,467,893       67,810,944  
Restricted Stock Awards (Note 11)
    586,846       556,124       617,147       577,022  
Diluted weighted average common shares outstanding
    75,305,780       69,211,856       75,085,040       68,387,966  
 
Earnings per Unit – Operating Partnership
 
Basic earnings per OP Unit is computed using net income attributable to common unitholders and the weighted average number of common units outstanding during the period.  Diluted earnings per OP Unit reflects the potential dilution that could occur if securities or other contracts to issue OP Units were exercised or converted into OP Units or resulted in the issuance of OP Units and then shared in the earnings of the Operating Partnership.
 
 
13

 
 
AMERICAN CAMPUS COMMUNITIES, INC. AND SUBSIDIARIES
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
The following is a summary of the elements used in calculating basic earnings per unit:
 
   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2012
   
2011