EdR (NYSE:EDR) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 30, 2018 • 10:00 am ET


EdR (NYSE:EDR) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Greetings and welcome to EdR's First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) I would now like to turn the conference over to Drew Koester, Vice President of Capital Markets and Investor Relations.

Drew Koester

Thank you and good morning. We would like to remind you that during today's call, management's prepared remarks and answers to your questions may contain forward-looking statements including statements related to our future performance, future leasing activities, and the impact of certain financing activities. While these statements are based upon our current views and expectations, we can provide no assurances that our currently views are correct or that the expectations will be met. The matters that these statements describe are subject to known and unknown risks and uncertainties and other factors that may cause our actual results to differ materially from the expectations discussed today.

Risk factors relating to the company's results and management statement are detailed in the company's annual report on Form 10-K for the year ended December 31, 2017 and other filings with the Securities and Exchange Commission that are available on our Web site. Forward-looking statements refer only to expectations as of the date on which they are made, EdR assumes no obligation to update or revise such statements as a result of new information, future developments or otherwise. We will also discuss certain non-GAAP financial measures including, but not limited to FFO, NOI and adjusted EBITDA. Definitions of these non-GAAP measures as well as reconciliations to the most comparable GAAP measures are included in the quarterly earnings release, which is available on our Web site. It is now my pleasure to turn the call over to Randy Churchey, Chairman and Chief Executive Officer, Randy?

Randy Churchey

Good morning. Thank you for joining us today. On our call, Chris will cover operations, market dynamics, and fall leasing, Tom will discuss our development pipeline and dispositions, and Bill will provide an update on our capital structure and 2018 financial guidance. First, let me provide some information on internal growth and industry dynamics. The biggest question currently facing the student housing industry is the impact of cumulative supply on future internal growth. We've not seen any meaningful movement in the supply demand dynamics since we updated you in our fourth quarter earnings call. Supply in our markets for 2018 is still projected outpace enrollment growth by 60 basis points.

This is consistent with the last seven years, during which our operations team produced same-community revenue NOI, compounded annual growth rates of 3.3% and 3.4%, respectively. While our full-year internal growth expectations for 2018 fall short of this historical trend, our same-community revenue guidance for the '18, '19 fall leasing cycle is growth of 2% to 4%. We feel that over the long-term student housing will generate average community revenue, same-community revenue and NOI growth of 3%, consistent with historical averages. We believe our best-in-class portfolio of on and off campus