þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
(State or other jurisdiction of
incorporation or organization)
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27-2481988
(I.R.S. Employer
Identification No.)
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2100 Rexford Road, Suite 414, Charlotte, NC
(Address of principal executive offices)
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28211
(Zip Code)
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Large accelerated filer ¨
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Accelerated filer þ
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Non-accelerated filer ¨
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Smaller reporting company ¨
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(Do not check if a smaller reporting
company) |
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Class
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Outstanding at October 30, 2013
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Common Stock, $0.01 par value per share
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64,510,382 shares
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Page
No.
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Part I. Financial Information
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Item 1. Financial Statements (unaudited)
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Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012
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3
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Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2013 and 2012
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4
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Condensed Consolidated Statement of Changes in Equity for the nine months ended September 30, 2013
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5
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Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012
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6
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Notes to Condensed Consolidated Financial Statements
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7
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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31
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
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50
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Item 4. Controls and Procedures
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50
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Part II. Other Information
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Item 1. Legal Proceedings
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51
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Item 1A. Risk Factors
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51
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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51
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Item 3. Defaults Upon Senior Securities
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51
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Item 4. Mine Safety Disclosures
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51
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Item 5. Other Information
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51
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Item 6. Exhibits
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52
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SIGNATURES
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53
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2 | ||
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September 30,
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December 31,
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2013
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2012
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ASSETS
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Investment in real estate, net:
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Student housing properties
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$
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771,467
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$
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669,387
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Accumulated depreciation
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(115,817)
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(97,820)
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Development in process
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69,023
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50,781
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Investment in real estate, net
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724,673
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622,348
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Investment in unconsolidated entities
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323,268
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22,555
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Cash and cash equivalents
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22,835
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5,970
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Restricted cash
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8,169
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3,902
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Student receivables, net of allowance for doubtful accounts of $1,827 and $121,
respectively |
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3,625
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2,193
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Notes receivable
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31,700
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-
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Cost and earnings in excess of construction billings
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32,749
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23,077
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Other assets, net
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37,733
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16,275
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Total assets
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$
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1,184,752
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$
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696,320
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LIABILITIES AND EQUITY
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Liabilities:
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Mortgage and construction loans
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$
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240,571
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$
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218,337
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Line of credit and other debt
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247,188
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75,375
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Accounts payable and accrued expenses
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57,297
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45,634
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Construction billings in excess of cost and earnings
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1,799
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49
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Other liabilities
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15,423
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12,023
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Total liabilities
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562,278
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351,418
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Commitments and contingencies
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Equity:
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Preferred stock, $0.01 par value, 50,000,000 and 10,000,000 shares authorized:
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8.00% Series A Cumulative Redeemable Preferred Stock (liquidation preference
$25.00 per share), 2,300,000 issued and outstanding at September 30, 2013 and December 31, 2012 |
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23
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23
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Common stock, $0.01 par value, 500,000,000 and 90,000,000 shares authorized,
64,512,286 and 38,558,048 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively |
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645
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386
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Additional common and preferred paid-in capital
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678,505
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377,180
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Accumulated deficit and distributions
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(61,510)
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(37,047)
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Accumulated other comprehensive income (loss)
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88
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(58)
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Total Campus Crest Communities, Inc. stockholders' equity
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617,751
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340,484
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Noncontrolling interests
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4,723
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4,418
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Total equity
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622,474
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344,902
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Total liabilities and equity
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$
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1,184,752
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$
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696,320
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3 | ||
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Three Months Ended
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Nine Months Ended
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||||||||
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September 30,
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September 30,
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September 30,
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September 30,
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2013
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2012
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2013
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2012
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Revenues:
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Student housing rental
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$
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24,496
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$
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21,449
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$
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70,960
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$
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57,160
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Student housing services
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972
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934
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2,934
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2,430
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Development, construction and management services
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14,778
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12,103
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40,573
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43,162
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Total revenues
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40,246
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34,486
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114,467
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102,752
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Operating expenses:
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Student housing operations
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11,381
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10,123
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33,438
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27,631
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Development, construction and management services
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14,028
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11,374
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38,343
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40,260
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General and administrative
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2,424
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1,972
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8,076
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6,517
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Transaction costs
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247
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-
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835
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-
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Ground leases
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54
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54
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162
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163
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Depreciation and amortization
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6,126
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5,799
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19,224
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17,528
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Total operating expenses
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34,260
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29,322
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100,078
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92,099
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Equity in earnings of unconsolidated entities
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1,302
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86
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3,608
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|
283
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Operating income
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7,288
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|
|
5,250
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17,997
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10,936
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Nonoperating income (expense):
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Interest expense, net
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(3,091)
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(2,623)
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(8,764)
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|
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(8,395)
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Change in fair value of interest rate derivatives
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-
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(57)
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|
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(73)
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|
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(160)
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Other income (expense)
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696
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-
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1,494
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(75)
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Gain on purchase of previously unconsolidated entities
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-
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6,554
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-
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6,554
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Total nonoperating income (expense), net
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(2,395)
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3,874
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(7,343)
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(2,076)
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Net income before income taxes
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4,893
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|
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9,124
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10,654
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8,860
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Income tax (expense) benefit
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(40)
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|
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(74)
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|
|
306
|
|
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(330)
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Net income
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|
|
4,853
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9,050
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10,960
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8,530
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Net income attributable to noncontrolling interests
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|
26
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|
|
61
|
|
|
51
|
|
|
38
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Dividends on preferred stock
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1,150
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|
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1,150
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|
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3,450
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|
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2,964
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Net income attributable to common stockholders
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$
|
3,677
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$
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7,839
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$
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7,459
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$
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5,528
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|
|
|
|
|
|
|
|
|
|
|
|
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Net income per share attributable to common
stockholders - basic and diluted: |
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$
|
0.06
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$
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0.20
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$
|
0.13
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$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
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Basic
|
|
|
64,518
|
|
|
38,479
|
|
|
58,461
|
|
|
33,514
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|
Diluted
|
|
|
64,953
|
|
|
38,915
|
|
|
58,896
|
|
|
33,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Distributions per common share
|
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$
|
0.165
|
|
$
|
0.16
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|
$
|
0.495
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|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Condensed consolidated statements of comprehensive income :
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income
|
|
$
|
4,853
|
|
$
|
9,050
|
|
$
|
10,960
|
|
$
|
8,530
|
|
Foreign currency translation
|
|
|
88
|
|
|
-
|
|
|
88
|
|
|
-
|
|
Change in fair value of interest rate derivatives
|
|
|
-
|
|
|
100
|
|
|
59
|
|
|
221
|
|
Comprehensive income
|
|
|
4,941
|
|
|
9,150
|
|
|
11,107
|
|
|
8,751
|
|
Comprehensive income attributable to noncontrolling
interests |
|
|
26
|
|
|
61
|
|
|
51
|
|
|
40
|
|
Dividends on preferred stock
|
|
|
1,150
|
|
|
1,150
|
|
|
3,450
|
|
|
2,964
|
|
Comprehensive income attributable to common
stockholders |
|
$
|
3,765
|
|
$
|
7,939
|
|
$
|
7,606
|
|
$
|
5,747
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|
4 | ||
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Campus Crest Communities, Inc. Stockholders' Equity
|
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||||||||||||||||
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Series A
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Additional
|
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|
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Accumulated
|
|
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|
|
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|||
|
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Cumulative
|
|
|
|
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Common and
|
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Accumulated
|
|
Other
|
|
|
|
|
|
|
|
|
|
|||||
|
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Redeemable
|
|
Common
|
|
Preferred Paid-
|
|
Deficit and
|
|
Comprehensive
|
|
Total Stockholders'
|
|
Noncontrolling
|
|
Total
|
|
||||||||
|
|
Preferred Stock
|
|
Stock
|
|
in Capital
|
|
Distributions
|
|
Income (Loss)
|
|
Equity
|
|
Interests
|
|
Equity
|
|
||||||||
Balance at December 31, 2012
|
|
$
|
23
|
|
$
|
386
|
|
$
|
377,180
|
|
$
|
(37,047)
|
|
$
|
(58)
|
|
$
|
340,484
|
|
$
|
4,418
|
|
$
|
344,902
|
|
Net proceeds of sale of
common stock |
|
|
-
|
|
|
255
|
|
|
299,446
|
|
|
-
|
|
|
-
|
|
|
299,701
|
|
|
-
|
|
|
299,701
|
|
Issuance of restricted stock
|
|
|
-
|
|
|
4
|
|
|
(4)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Amortization of restricted
stock awards and operating partnership units |
|
|
-
|
|
|
-
|
|
|
1,883
|
|
|
-
|
|
|
-
|
|
|
1,883
|
|
|
468
|
|
|
2,351
|
|
Dividends on preferred stock
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,450)
|
|
|
-
|
|
|
(3,450)
|
|
|
|
|
|
(3,450)
|
|
Dividends on common stock
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(31,922)
|
|
|
-
|
|
|
(31,922)
|
|
|
-
|
|
|
(31,922)
|
|
Dividends to noncontrolling
interests |
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(215)
|
|
|
(215)
|
|
Change in fair value of
interest rate derivatives |
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
58
|
|
|
58
|
|
|
1
|
|
|
59
|
|
Foreign currency translation
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
88
|
|
|
88
|
|
|
-
|
|
|
88
|
|
Net income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10,909
|
|
|
-
|
|
|
10,909
|
|
|
51
|
|
|
10,960
|
|
Balance at September 30, 2013
|
|
$
|
23
|
|
$
|
645
|
|
$
|
678,505
|
|
$
|
(61,510)
|
|
$
|
88
|
|
$
|
617,751
|
|
$
|
4,723
|
|
$
|
622,474
|
|
5 | ||
|
|
Nine Months Ended
|
|
||||
|
|
September 30,
2013 |
|
September 30,
2012 |
|
||
Operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
10,960
|
|
$
|
8,530
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
19,224
|
|
|
17,528
|
|
Impairment of damaged assets
|
|
|
3,312
|
|
|
-
|
|
Amortization of deferred financing costs
|
|
|
1,089
|
|
|
2,341
|
|
Gain on purchase of previously unconsolidated entities
|
|
|
-
|
|
|
(6,554)
|
|
Loss on disposal of assets
|
|
|
-
|
|
|
149
|
|
Provision for bad debts
|
|
|
1,835
|
|
|
1,345
|
|
Equity in (earnings) loss of unconsolidated entities
|
|
|
(3,608)
|
|
|
135
|
|
Distributions of earnings from unconsolidated entities
|
|
|
305
|
|
|
237
|
|
Share-based compensation expense
|
|
|
2,352
|
|
|
762
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
(723)
|
|
|
(1,876)
|
|
Student receivables
|
|
|
(3,270)
|
|
|
(1,966)
|
|
Construction billings
|
|
|
(7,922)
|
|
|
(6,429)
|
|
Accounts payable and accrued expenses and other liabilities
|
|
|
19,528
|
|
|
5,293
|
|
Other
|
|
|
(10,698)
|
|
|
3,447
|
|
Net cash provided by operating activities
|
|
|
32,384
|
|
|
22,942
|
|
Investing activities:
|
|
|
|
|
|
|
|
Investments in development in process
|
|
|
(102,928)
|
|
|
(84,174)
|
|
Investments in student housing properties
|
|
|
(7,835)
|
|
|
(6,074)
|
|
Insurance proceeds received for damaged assets
|
|
|
1,000
|
|
|
-
|
|
Acquisitions of previously unconsolidated entities, net of cash acquired
|
|
|
-
|
|
|
(15,877)
|
|
Acquisitions of student housing properties, net of cash acquired
|
|
|
(13,801)
|
|
|
-
|
|
Investments in unconsolidated entities
|
|
|
(300,889)
|
|
|
(3,072)
|
|
Capital distributions from unconsolidated entities
|
|
|
4,098
|
|
|
2,994
|
|
Issuance of notes receivable
|
|
|
(31,700)
|
|
|
-
|
|
Other capital expenditures
|
|
|
(12,122)
|
|
|
(980)
|
|
Change in restricted cash
|
|
|
(3,544)
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(467,721)
|
|
|
(107,183)
|
|
Financing activities:
|
|
|
|
|
|
|
|
Proceeds from mortgage and construction loans
|
|
|
35,730
|
|
|
79,121
|
|
Repayments of mortgage and construction loans
|
|
|
(13,496)
|
|
|
(76,722)
|
|
Proceeds from line of credit and other debt
|
|
|
189,376
|
|
|
43,900
|
|
Repayments of line of credit and other debt
|
|
|
(18,182)
|
|
|
(66,078)
|
|
Debt issuance costs
|
|
|
(863)
|
|
|
(1,028)
|
|
Dividends paid to common stockholders
|
|
|
(36,399)
|
|
|
(14,858)
|
|
Dividends paid to preferred stockholders
|
|
|
(3,450)
|
|
|
(2,006)
|
|
Dividends to noncontrolling interests
|
|
|
(215)
|
|
|
(211)
|
|
Proceeds from sale of preferred stock
|
|
|
-
|
|
|
57,500
|
|
Proceeds from sale of common stock
|
|
|
312,736
|
|
|
75,573
|
|
Payment of offering costs
|
|
|
(13,035)
|
|
|
(5,701)
|
|
Net cash provided by financing activities
|
|
|
452,202
|
|
|
89,490
|
|
Net change in cash and cash equivalents
|
|
|
16,865
|
|
|
5,249
|
|
Cash and cash equivalents at beginning of period
|
|
|
5,970
|
|
|
10,735
|
|
Cash and cash equivalents at end of period
|
|
$
|
22,835
|
|
$
|
15,984
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid for interest, net of amounts capitalized
|
|
$
|
8,398
|
|
$
|
7,820
|
|
Cash paid for income taxes
|
|
|
145
|
|
|
571
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activity:
|
|
|
|
|
|
|
|
Common and preferred stock dividends declared but not paid
|
|
$
|
11,687
|
|
$
|
6,002
|
|
Assumption of mortgage debt related to purchase of previously unconsolidated entities
|
|
|
-
|
|
|
27,299
|
|
Change in payables related to dividends to common and preferred stockholders and
noncontrolling interest |
|
|
4,477
|
|
|
2,206
|
|
Change in payables related to capital expenditures
|
|
|
1,194
|
|
|
1,781
|
|
Change in payables related to investment in unconsolidated entities
|
|
|
6,588
|
|
|
2,893
|
|
6 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
|
Properties in
|
|
|
Properties Under
|
|
|
|
Operation
|
|
|
Construction (1)
|
|
Wholly owned Grove properties
|
|
35
|
|
|
3
|
|
Joint Venture Grove properties
|
|
10
|
|
|
4
|
|
Total Grove Properties
|
|
45
|
|
|
7
|
|
CB Portfolio(2)
|
|
35
|
|
|
1
|
|
Total Portfolio(3)
|
|
80
|
|
|
8
|
|
(1)
|
For delivery in the 2014-2015 academic year, consolidated entities under construction include. The Grove at Slippery Rock, Pennsylvania, The Grove at Grand Forks, North Dakota and The Grove at Mt. Pleasant, Michigan. For delivery in the 2014-2015 academic year, joint venture Grove properties under construction include evo at Cira Centre South, Pennsylvania, The Grove at Louisville, Kentucky, The Grove at Greensboro, North Carolina, and evo à Square Victoria, Montreal.
|
|
|
(2)
|
We amended our agreement with Copper Beech (defined in Note 4) to assume a 67% ownership in 28 properties instead of a 48% ownership in 35 properties subsequent quarter end. See Note 4.
|
|
|
(3)
|
The re-development of our 100% owned property in Toledo, OH, which was acquired in March 2013, is excluded. We expect to announce more details on the redevelopment in 2014. See Note 4.
|
7 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Land improvements
|
|
15 years
|
Buildings and leasehold improvements
|
|
10-40 years
|
Furniture, fixtures and equipment
|
|
2-15 years
|
8 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
9 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
10 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
Level 1
|
Observable inputs, such as quoted prices in active markets at the measurement date, for identical, unrestricted assets or liabilities.
|
|
|
|
|
Level 2
|
Other inputs that are observable directly or indirectly, such as quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
|
|
|
|
|
Level 3
|
Unobservable inputs for which there is little or no market data and which we make our own assumptions about how market participants would price the asset or liability.
|
11 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
12 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Land
|
|
$
|
64,302
|
|
$
|
53,984
|
|
Buildings and improvements
|
|
|
641,796
|
|
|
552,984
|
|
Furniture, fixtures and equipment
|
|
|
65,369
|
|
|
62,419
|
|
|
|
|
771,467
|
|
|
669,387
|
|
|
|
|
|
|
|
|
|
Less: accumulated depreciation
|
|
|
(115,817)
|
|
|
(97,820)
|
|
|
|
$
|
655,650
|
|
$
|
571,567
|
|
13 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Number of Properties(1)
|
|
Date of Closing
|
|
6
|
|
March 18, 2013
|
|
1
|
|
April 5, 2013
|
|
1
|
|
May 1, 2013
|
|
1
|
|
July 1, 2013
|
|
1
|
|
July 11, 2013
|
|
2
|
|
July 17, 2013
|
|
1
|
|
July 18, 2013
|
|
3
|
|
July 19, 2013
|
|
2
|
|
August 2, 2013
|
|
2
|
|
August 6, 2013
|
|
2
|
|
August 8, 2013
|
|
1
|
|
August 12, 2013
|
|
6
|
|
August 16, 2013
|
|
4
|
|
September 6, 2013
|
|
2
|
|
September 6, 2013
|
|
(1)
|
Represents the total number of properties in which the Company initially acquired a 48.0% interest. Pursuant to the terms of the amendment to the Copper Beech Portfolio purchase and sale agreement, the Company agreed to transfer its 48.0% interest in each of seven properties in the Copper Beech Portfolio back to the CB Investors. The Company's interests in these seven properties were acquired on March 18, 2013, July 1, 2013, July 19, 2013, August 6, 2013 and August 8, 2013.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
40,246
|
|
$
|
34,486
|
|
$
|
114,467
|
|
$
|
102,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
4,690
|
|
|
10,113
|
|
|
10,858
|
|
|
11,230
|
|
Net income attributable to common stockholders
|
|
|
3,514
|
|
|
8,902
|
|
|
7,357
|
|
|
8,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to common
stockholders - basic and diluted: |
|
$
|
0.05
|
|
$
|
0.14
|
|
$
|
0.11
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
64,518
|
|
|
64,009
|
|
|
64,446
|
|
|
59,044
|
|
Diluted
|
|
|
64,953
|
|
|
64,445
|
|
|
64,881
|
|
|
59,480
|
|
14 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
Through May 2015, we have the option to acquire an additional 3.9% interest in the Initial Copper Beech Properties and an additional 70.9% interest in the Deferred Copper Beech Properties, increasing our aggregate interest in all 37 properties in the Copper Beech Portfolio to 88.9%, which will entitle us to 100% of the operating cash flows of the Initial Copper Beech Properties and the Deferred Copper Beech Properties. The aggregate purchase price for the exercise of this purchase option is approximately $100.7 million plus debt repayment of approximately $19.0 million.
|
Land
|
|
$
|
2,772
|
|
Buildings and improvements
|
|
|
10,232
|
|
Furniture and fixtures
|
|
|
561
|
|
Other
|
|
|
236
|
|
|
|
$
|
13,801
|
|
15 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Properties
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
||
|
|
Our
|
|
|
|
Year
|
|
In
|
|
Under
|
|
|
Our Total
|
|
|
Amount
|
|
Interest
|
|
|
|
|
|
Unconsolidated Entities
|
|
Ownership
|
|
|
|
Founded
|
|
Operations
|
|
Development
|
|
|
Investment
|
|
|
Outstanding
|
|
Rate
|
|
|
|
Maturity Date / Range
|
|
HSRE-Campus Crest I, LLC
|
|
49.9
|
%
|
|
|
2009
|
|
3
|
|
-
|
|
$
|
10,751
|
|
$
|
32,980
|
|
2.68
|
%
|
(1)
|
|
11/09/2013 1/09/2014
|
|
HSRE-Campus Crest IV, LLC
|
|
20.0
|
%
|
|
|
2011
|
|
1
|
|
-
|
|
|
2,271
|
|
|
16,893
|
|
5.75
|
%
|
(2)
|
|
12/1/2013
|
|
HSRE-Campus Crest V, LLC
|
|
10.0
|
%
|
|
|
2011
|
|
3
|
|
-
|
|
|
3,297
|
|
|
45,670
|
|
2.90
|
%
|
(1)
|
|
12/20/2014 01/05/2015
|
|
HSRE-Campus Crest VI, LLC
|
|
20.0
|
%
|
|
|
2012
|
|
3
|
|
-
|
|
|
7,226
|
|
|
32,994
|
|
2.55
|
%
|
(1)
|
|
5/08/2015 12/19/2015
|
|
HSRE-Campus Crest IX, LLC
|
|
30.0
|
%
|
|
|
2013
|
|
-
|
|
1
|
|
|
12,427
|
|
|
-
|
|
n/a
|
|
|
|
n/a
|
|
HSRE-Campus Crest X, LLC
|
|
30.0
|
%
|
|
|
2013
|
|
-
|
|
2
|
|
|
7,420
|
|
|
-
|
|
n/a
|
|
|
|
n/a
|
|
CB Portfolio
|
|
47.2
|
%
|
(3)
|
|
2013
|
|
35
|
|
1
|
|
|
241,821
|
|
|
478,474
|
|
5.57
|
%
|
(4)
|
|
10/01/2013 10/01/2020
|
|
DCV Holdings, LP
|
|
20.0
|
%
|
|
|
2013
|
|
-
|
|
1
|
|
|
38,055
|
|
|
-
|
|
n/a
|
|
|
|
n/a
|
|
Total Unconsolidated Entities
|
|
|
|
|
|
|
|
45
|
|
5
|
|
$
|
323,268
|
|
$
|
607,011
|
|
5.05
|
%
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
||
|
|
2013
|
|
2012
|
|
||
Assets
|
|
|
|
|
|
|
|
Student housing properties, net
|
|
$
|
326,956
|
|
$
|
143,108
|
|
Other assets
|
|
|
17,883
|
|
|
40,154
|
|
Total assets
|
|
$
|
344,839
|
|
$
|
183,262
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Mortgage and construction loans
|
|
$
|
128,537
|
|
$
|
92,456
|
|
Other liabilities
|
|
|
42,337
|
|
|
30,402
|
|
Owners' equity
|
|
|
173,965
|
|
|
60,404
|
|
Total liabilities and owners' equity
|
|
$
|
344,839
|
|
$
|
183,262
|
|
|
|
|
|
|
|
|
|
Company's share of historical owners' equity
|
|
$
|
33,163
|
|
$
|
14,078
|
|
Preferred investment(1)
|
|
|
49,521
|
|
|
11,828
|
|
Net difference in carrying value of investment versus net book value of underlying
net assets(2) |
|
|
(1,237)
|
|
|
(3,351)
|
|
Carrying value of investment in unconsolidated entities
|
|
$
|
81,447
|
|
$
|
22,555
|
|
16 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
|
September 30,
|
|
|
|
|
2013
|
|
|
Assets
|
|
|
|
|
Student housing properties, net
|
|
$
|
953,835
|
|
Intangible assets
|
|
|
7,230
|
|
Other assets
|
|
|
9,557
|
|
Total assets
|
|
$
|
970,622
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
Mortgage and construction loans
|
|
$
|
515,859
|
|
Other liabilities
|
|
|
20,073
|
|
Owners' equity
|
|
|
434,690
|
|
Total liabilities and owners' equity
|
|
$
|
970,622
|
|
|
|
|
|
|
Company's share of historical owners' equity
|
|
$
|
225,181
|
|
Net difference in carrying value of investment versus net book
value of underlying net assets(1) |
|
|
16,640
|
|
Carrying value of investment in Copper Beech
|
|
$
|
241,821
|
|
(1)
|
This amount represents the aggregate difference between our historical cost basis and the basis reflected at the entity level, which is typically amortized over the life of the related asset. The basis differential occurs primarily due to the capitalization of additional investment in the unconsolidated entity.
|
|
|
Three months ended
|
|
Nine months ended
|
|
||||||||
|
|
September 30,
2013 |
|
September 30,
2012 |
|
September 30,
2013 |
|
September 30,
2012 |
|
||||
Revenues
|
|
$
|
6,341
|
|
$
|
4,162
|
|
$
|
15,922
|
|
$
|
13,337
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
3,070
|
|
|
2,159
|
|
|
8,327
|
|
|
7,242
|
|
Interest expense
|
|
|
1,260
|
|
|
1,091
|
|
|
3,553
|
|
|
3,790
|
|
Depreciation and amortization
|
|
|
1,592
|
|
|
1,134
|
|
|
4,298
|
|
|
3,555
|
|
Other expenses
|
|
|
4,571
|
|
|
-
|
|
|
4,588
|
|
|
-
|
|
Total expenses
|
|
|
10,493
|
|
|
4,384
|
|
|
20,766
|
|
|
14,587
|
|
Net loss
|
|
$
|
(4,152)
|
|
$
|
(222)
|
|
$
|
(4,844)
|
|
$
|
(1,250)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company’s share of net income (loss)(1)
|
|
$
|
(650)
|
|
$
|
(20)
|
|
$
|
(658)
|
|
$
|
(135)
|
|
Income on preferred investments
|
|
|
479
|
|
|
106
|
|
|
684
|
|
|
418
|
|
Equity in earnings of unconsolidated entities
|
|
$
|
(171)
|
|
$
|
86
|
|
$
|
26
|
|
$
|
283
|
|
17 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
|
Three months ended
|
|
Nine months ended
|
|
||
|
|
September 30,
2013 |
|
September 30,
2013 |
|
||
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
22,899
|
|
$
|
49,400
|
|
Direct operating expenses
|
|
|
10,526
|
|
|
20,963
|
|
Revenues less direct operating expenses
|
|
|
12,373
|
|
|
28,437
|
|
Interest expense
|
|
|
4,008
|
|
|
9,072
|
|
Depreciation and amortization
|
|
|
9,304
|
|
|
22,363
|
|
Net loss based on the Company's purchase price
|
|
$
|
(939)
|
|
$
|
(2,998)
|
|
|
|
|
|
|
|
|
|
Company’s share of net income (loss)(1)
|
|
$
|
1,473
|
|
$
|
3,582
|
|
(1)
|
Amount differs from net loss multiplied by our ownership percentage due to the amortization of the aggregate difference between our historical cost basis and our basis reflected at the entity level and our preferred payment.
|
18 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Net loss incurred by the CB Portfolio based on the Company’s purchase price(1)
|
|
$
|
(2,998)
|
|
Campus Crest’s share of net loss
|
|
|
(972)
|
|
Campus Crest percentage of preferred payment(2)
|
|
|
4,590
|
|
Campus Crest income from Copper Beech
|
|
|
3,618
|
|
Amortization of basis difference(3)
|
|
|
(87)
|
|
Total equity in earnings in CB Portfolio
|
|
$
|
3,531
|
|
|
(1)
|
The basis of the financial statements of the CB Portfolio used in the calculation of the Company’s equity in earnings for the period from March 18, 2013 to September 30, 2013 was computed using the Company’s cost basis for its investment in the CB Portfolio’s underlying assets and liabilities, including the effects of provisional purchase price adjustments, for its properties at the dates the Company acquired its interests in the CB Portfolio. For the period from March 18, 2013 to September 30, 2013 this included 35 properties.
|
|
|
We consummated the acquisition of a 48.0% interest in 35 properties of the CB Portfolio. As a result of lender consents that were required to be obtained from various lenders to the CB Portfolio prior to our ownership, we completed our acquisition of the 48.0% interest in stages, which resulted in a variation in our ownership percentage from 25.3% to 48.0% in all 35 of the CB Portfolio properties from March 18, 2013 to September 30, 2013. Accordingly, the Company recognized its proportionate share of earnings of the CB Portfolio for the specific percentage of ownership interest we held during the applicable period.
|
|
(2)
|
As part of the purchase and sale agreement, the Company was entitled to receive a $13.0 million preferred payment over a one year period beginning March 18, 2013 and ending on March 17, 2014. As such, for the period from March 18, 2013 to September 30, 2013 the Company recorded in income its proportionate share of this payment, which corresponds to the portion of the CB Portfolio held by the other owners of Copper Beech.
|
|
(3)
|
Included in the calculation of equity in earnings in the CB Portfolio is the amortization of the net difference in the Company’s carrying value of investment as compared to the underlying equity in net assets of the investee.
|
19 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
|
September 30,
|
|
December 31,
|
|
||
|
|
2013
|
|
2012
|
|
||
Fixed-rate mortgage loans
|
|
$
|
165,846
|
|
$
|
166,706
|
|
Variable-rate mortgage loans
|
|
|
-
|
|
|
12,635
|
|
Construction loans
|
|
|
74,725
|
|
|
38,996
|
|
Line of credit
|
|
|
210,500
|
|
|
72,000
|
|
Other debt
|
|
|
36,688
|
|
|
3,375
|
|
|
|
$
|
487,759
|
|
$
|
293,712
|
|
20 | ||
CAMPUS CREST COMMUNITIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
|
|
Face
Amount |
|
Principal
Outstanding at 9/30/2013 |
|
Principal
Outstanding at 12/31/2012 |
|
Stated Interest
Rate |
|
Interest
Rate at 9/30/2013 |
|
|
Maturity
Date (1) |
|
|
Amortization
|
|
|||
Construction loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Grove at Orono
|
|
$
|
15,206
|
|
$
|
14,243
|
|
$
|
10,506
|
|
LIBOR + 250 bps
|
|
2.68
|
%
|
|
6/30/2014
|
|
|
Interest only
|
|
The Grove at Auburn
|
|
|
16,294
|
|
|
13,157
|
|
|
13,157
|
|
LIBOR + 295 bps
|
|
3.13
|
%
|
|
7/22/2014
|
|
|
Interest only
|
|
The Grove at Flagstaff
|
|
|
19,842
|
|
|
19,330
|
|
|
15,331
|
|
Prime + 25 bps / LIBOR + 250 bps
|
|
2.68
|
%
|
|
12/9/2014
|
|
|
Interest only
|
|
The Grove at Muncie
|
|
|
14,567
|
|
|
11,252
|
|
|
1
|
|
LIBOR + 225 bps
|
|
2.43
|
%
|
|
7/3/2015
|
|
|
Interest only
|
(2)
|
The Grove at Slippery Rock
|
|
|
17,961
|
|
|
-
|
|
|
-
|
|
Base Rate + 115 bps / LIBOR + 215 bps
|
|
2.33
|
%
|
|
6/21/2016
|
|
|
Interest only
|
|
The Grove at Fort Collins
|
|
|
19,073
|
|
|
16,744
|
|
|
1
|
|
LIBOR + 225 bps
|
|
2.43
|
%
|
|
7/13/2015
|
|
|
Interest Only
|
|
The Grove at Pullman
|
|
|
16,016
|
|
|
-
|
|
|
-
|
|
LIBOR + 220 bps
|
|
2.38
|
%
|
|
9/5/2015
|
|
|
Interest Only
|
|
Mortgage loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Grove at Huntsville
|
|
|
-
|
|
|
-
|
|
|
12,635
|
|
LIBOR + 250 bps
|
|
N/A
|
|
|