Education Realty Trust Announces Third Quarter 2007 Earnings


MEMPHIS, Tenn., Oct. 31, 2007 (PRIME NEWSWIRE) -- Education Realty Trust, Inc. (NYSE:EDR), a leader in the ownership, development and management of student housing, today announced results for the third quarter of 2007.

Third Quarter 2007 Highlights:



 * Net loss from continuing operations improved to $5.8 million from a
   net loss of $8.0 million for the third quarter of 2006;

 * Funds from operations (FFO) totaled $1.8 million or $0.06 per
   weighted average share/unit versus $0.4 million or $0.02 per
   weighted average share/unit in the third quarter of 2006;

 * Same-community leasing revenue increased 6.7% to $19.4 million;

 * Same-community net operating income increased 12.9% to
   $6.6 million;

 * Same-community Net Apartment Rent increased 3.0% for the 2007-2008
   academic year;

 * As of September 30th opening occupancy for the 2007-2008 academic
   year was 96.2% on a same-community basis, compared to 96.1% for the
   prior academic year.

"Our FFO growth this quarter is the net result of the continued progress we are making on our goals, which includes increasing our revenues from leasing, third-party development and third-party management, the three key drivers of our business," said Education Realty Trust, Inc. Chairman, President and Chief Executive Officer Paul O. Bower. "The seasonality of our business always makes the third quarter very difficult given the lease year turnover. We were pleased that this quarter's successful lease up of our student apartment complex at the University of North Carolina Greensboro affirmed our ground-up development capabilities. Our focus going forward continues to be strong levels of occupancy across our portfolio by providing our student residents compelling accommodations, while controlling our expenses, in order to boost the Company's profitability," Mr. Bower added.

Third Quarter Operating Results

The Company's leasing, third-party management and third-party development revenue increased during the quarter due to improved same-community leasing trends and new development and management contracts. These factors helped total revenue increase 7.2% to $28.3 million for the third quarter of 2007 from $26.4 million in the comparable quarter of 2006.

On a same-community basis, student housing leasing revenue increased $1.2 million or 6.7% year-over-year to $19.4 million for the third quarter of 2007, reflecting improvements in both rate and occupancy. This growth in revenue combined with well-controlled operating expenses improved student housing operating margins to 33.9% in the third quarter of 2007 from 32.0% for the same quarter of last year. As a result same-community net operating income increased 12.9% to $6.6 million in the third quarter of 2007 from $5.8 million in the same period of last year.

New development contracts helped development services revenue increase 50.4% to $1.3 million for the third quarter of 2007 from $0.9 million in the third quarter of 2006. New third-party management contracts added throughout 2007 resulted in a 29.2% growth in management revenue for the third quarter of 2007 compared to the same quarter of 2006. In total, third-party management services revenue increased to $0.8 million for the third quarter of 2007 from $0.6 million in the third quarter of 2006.

Positive operating leverage for the quarter was achieved as evidenced by total company operating expenses increasing just 3.5% to $27.8 million. Operating income was $0.5 million compared to an operating loss of $0.5 million in the same period last year.

Lower total debt helped total non-operating expenses decline 16.8% to $6.4 million in the third quarter of 2007 from $7.7 million in the third quarter of 2006. Interest expense, the primary component of non-operating expenses, declined 16.7% to $6.3 million.

Net loss from continuing operations improved to $5.8 million, or $0.20 per diluted share, in the third quarter of 2007 from a net loss of $8.0 million, or $0.30 per diluted share, in the same period of last year.

Funds from operations (FFO) totaled $1.8 million in the third quarter of 2007, compared to $0.4 million in the third quarter of 2006. FFO per weighted average share/unit was $0.06 compared to $0.02 in the third quarter of 2006. The increased FFO reflects growth in total revenue in addition to increased profitability. A reconciliation of FFO to net loss, in accordance with U.S. generally accepted accounting principles (GAAP) is included in the financial tables accompanying this media release.

Occupancy and Leasing

The average physical occupancy for the third quarter of 2007 improved 50 basis points over the same quarter of last year to 92.2%. Economic occupancy grew 500 basis points to 85.7% for the third quarter of 2007 from 80.7% for the third quarter of 2006. Physical occupancy is the average of occupied rooms at the end of each month, whereas economic occupancy represents net apartment rent on a U.S. GAAP basis as a percentage of potential rent and reflects the impact of straight-line rent which accounts for vacant days during the lease turn in mid-August of each leasing year. The main difference between physical and economic occupancy in the third quarter is due to more leases ending in August of 2007 than 2006 resulting in more occupied days during the month of turn in 2007.

As of September 30 physical occupancy for the 2007-2008 academic year on a same store basis was 96.2% compared to 96.1% for the prior academic year. Net Apartment Rent per Available Bed (NARPAB) increased 3.0% for the 2007-2008 academic year, reflecting improvements in both rate and occupancy over the prior academic year.

Development Activity

The initiation of work on two second-phase projects, combined with revenue from projects started in prior quarters, resulted in strong year-over-year growth in third-party development services revenue in the third quarter of 2007. These projects include a 746 bed community at Slippery Rock University along with a 1,102 bed community at Indiana University of Pennsylvania.

The Company's program of developing student housing for its ownership and management also made great strides during the third quarter of 2007 with the successful opening of the 600 bed student community at the University of North Carolina Greensboro. This project was completed and opened as scheduled in August 2007. At September 30, 2007, the property was 100% leased and had a waiting list. As of this date, Phase I of the Company's construction of a student community, The Reserve at Saluki Point, at Southern Illinois University in Carbondale, Illinois, is progressing and continues to be on track to open at the start of the 2008-2009 academic year.

Management Services Activity

Seven new management contracts were added in the first nine months of 2007, including five properties in Michigan, one property in South Carolina, and one property in California.

Capital Structure

The Company continues to possess solid balance sheet capacity to fund its growth plans. The Company had $97.8 million available under its $100 million line of credit and cash and cash equivalents totaled $3.2 million at September 30, 2007. Additionally, 14 of the Company's properties were unencumbered. Total debt outstanding at September 30, 2007 was $422.4 million with nearly 100% of the Company's current debt at fixed rates. At the end of the quarter, the Company's outstanding common stock and partnership units were a combined 30.0 million.

Dividend

During the third quarter of 2007, the Company declared and paid a cash dividend on its common stock of $0.205 per share.

Guidance

The Company is updating the range of its earnings guidance for the full-year ended December 31, 2007 given its performance for the nine-months ended September 30, 2007 and its outlook for the remainder of the year. The Company now believes its FFO per share for the full year ended December 31, 2007 will range from $0.88 to $0.89 per weighted average share/unit. This updated range is consistent with the lower end of the Company's previous earnings guidance.

Conference Call

The Company will host a conference call for investors and other interested parties beginning at 8:30 a.m. (Eastern Time) tomorrow, Thursday, November 1, 2007. The call will be hosted by Paul O. Bower, Chairman, President and Chief Executive Officer, and Randall H. Brown, Executive Vice President and Chief Financial Officer.

The conference call will be accessible by telephone and the Internet. To access the call, participants from within the U.S. may dial (866) 249-5225, and participants from outside the U.S. may dial (303) 262-2125. The passcode for this call is 11098786. Participants may also access the call via the Company's investor relations Web site at www.educationrealty.com.

The replay of the call will be available at approximately 10:30 a.m. (Eastern Time) on November 1, through midnight November 9, 2007. To access the replay, the domestic dial-in number is (800) 405-2236, the international dial-in number is (303) 590-3000, and the passcode is 11098786.

Investors and other interested parties can listen to the presentation via live webcast from the Company's Web site www.educationrealty.com under the "Presentations" page. The archive of the webcast will be available on the Company's Web site for a limited time.

Safe Harbor' Statement under the Private Securities Litigation Reform Act of 1995

Statements about the Company's business that are not historical facts are "forward-looking statements." Forward-looking statements are based on current expectations. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks and uncertainties that could cause the company's future results, performance, or achievements to differ significantly from the results, performance, or achievements expressed or implied by such statements. Such risks are set forth under the captions "Item 1A. Risk Factors" and "Forward-Looking Statements" in our annual report on Form 10-K and under the caption "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" (or similar captions) in our quarterly reports on Form 10-Q, and as described in our other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and EDR undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.

About Education Realty Trust

Education Realty Trust, Inc. (NYSE:EDR) is a self-administered, self-managed real estate investment trust that owns, develops and manages high-quality student housing communities throughout the United States. Led by a team with over 200 years of shared industry experience, EDR is one of America's largest owners and operators of collegiate student housing. Its portfolio includes 66 communities in 21 states with 39,860 owned and managed beds. For more information please visit the company's Web site at www.educationrealty.com.



             EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS
             (Amounts in thousands, except per share data)

                                           September 30,  December 31,
                                               2007          2006
                                           -------------  ------------
                                            (Unaudited)
 Assets
  Student housing properties, net            $ 738,788      $ 804,759
  Assets under development                       2,457             --
  Corporate office furniture, net                1,782            752
  Cash and cash equivalents                      3,171          6,427
  Restricted cash                                9,534          9,154
  Student contracts receivable, net                185            227
  Receivable from affiliates                       428            369
  Management fee receivable from third
   parties                                         630            669
  Goodwill and other intangibles, net            3,540          3,649
 Other assets                                   10,127          9,452
                                             ---------      ---------

 Total assets                                $ 770,642      $ 835,458
                                             =========      =========

 Liabilities and stockholders' equity
 Liabilities:
  Mortgage loans, net of unamortized
   premium/discount                          $ 422,071      $ 423,933
  Other long-term debt                              --         47,000
  Revolving line of credit                       2,200         22,400
  Accounts payable and accrued expenses         14,423         10,764
  Deferred revenue                              10,997          9,073
                                             ---------      ---------

 Total liabilities                             449,691        513,170
                                             ---------      ---------

 Minority interest                              18,108         19,289
                                             ---------      ---------

 Commitments and contingencies                      --             --

 Stockholders' equity:
  Common stock, $.01 par value, 200,000,000
   shares authorized, 28,422,849 and
   26,810,552 shares issued and outstanding
   at September 30, 2007 and December 31,
   2006, respectively                              284            268
  Preferred  shares, $0.01 par value,
   50,000,000 shares authorized, no shares
   issued and outstanding                           --             --
  Additional paid-in capital                   336,676        330,374
  Warrants                                          --            375
  Accumulated deficit                          (34,117)       (28,018)
                                             ---------      ---------

 Total stockholders' equity                    302,843        302,999
                                             ---------      ---------

 Total liabilities and stockholders' equity  $ 770,642      $ 835,458
                                             =========      =========


             EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (Amounts in thousands, except per share data)
                               Unaudited

                                          Three months   Three months
                                             ended          ended
                                          September 30,  September 30,
                                              2007           2006
                                          -------------  -------------
 Revenues:
   Student housing leasing revenue         $   19,378     $   18,166
   Student housing food service revenue           642            895
   Other leasing revenue                        3,509          3,709
   Third-party development services             1,287            856
   Third-party management services                844            653
   Operating expense reimbursements             2,672          2,146
                                           ----------     ----------

 Total revenues                                28,332         26,425
                                           ----------     ----------

 Operating expenses:
   Student housing leasing operations          12,803         12,344
   Student housing food service operations        611            844
   General and administrative                   3,739          2,872
   Depreciation and amortization                8,005          8,680
   Reimbursable operating expenses              2,672          2,146
                                           ----------     ----------
 Total operating expenses                      27,830         26,886
                                           ----------     ----------

 Operating income (loss)                          502           (461)
                                           ----------     ----------
 Nonoperating expenses:
   Interest expense                             6,290          7,551
   Amortization of deferred financing costs       244            281
   Interest income                               (102)          (101)
                                           ----------     ----------

 Total nonoperating expenses                    6,432          7,731
                                           ----------     ----------

 Loss before equity in earnings of
  unconsolidated entities, income taxes,
  minority interest, and discontinued
  operations                                   (5,930)        (8,192)

 Equity in earnings of unconsolidated
  entities                                       (247)           148
                                           ----------     ----------

 Loss before income taxes, minority
  interest, and discontinued operations        (6,177)        (8,044)
 Income tax expense (benefit)                     (54)           381
                                           ----------     ----------
 Net loss before minority interest and
  discontinued operations                      (6,123)        (8,425)

 Minority interest                               (337)          (471)
                                           ----------     ----------

 Loss from continuing operations               (5,786)        (7,954)
                                           ----------     ----------

 Discontinued operations: (1)
   Loss from discontinued operations,
    net of minority interest                      (16)          (235)

   Gain on sale of student housing
    property, net of minority interest             --             --
                                           ----------     ----------

 Loss from discontinued operations                (16)          (235)
                                           ----------     ----------

 Net loss                                  $   (5,802)    $   (8,189)
                                           ==========     ==========

 Earnings per share information:
  Loss per share - basic  and diluted
   Continuing operations                   $    (0.20)    $    (0.30)
   Discontinued operations                       0.00          (0.01)
                                           ----------     ----------
 Net loss per share                        $    (0.20)    $    (0.31)
                                           ==========     ==========

 Weighted-average common shares
  outstanding -
   Basic and Diluted                       28,418,349     26,390,417
                                           ==========     ==========

 (1) Student housing properties that are designated as held for sale
     and/or sold during a period are included in discontinued
     operations.  For the three and nine months ended September 30,
     2007 and 2006 the operating results of The Village on Tharpe are
     included in discontinued operations as well as the subsequent
     gain on the sale of this property.  Both are net of minority
     interest.


             EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (Amounts in thousands, except per share data)
                               Unaudited

                                          Nine months    Nine months 
                                             ended          ended 
                                          September 30,  September 30,
                                              2007           2006
                                          -------------  --------------
 Revenues:
   Student housing leasing revenue         $   62,381     $   58,723
   Student housing food service revenue         1,744          2,670
   Other leasing revenue                       10,377         10,577
   Third-party development services             3,354          2,283
   Third-party management services              2,447          2,051
   Operating expense reimbursements             7,055          5,891
                                           ----------     ----------
 Total revenues                                87,358         82,195
                                           ----------     ----------

 Operating expenses:
    Student housing leasing operations         31,227         29,706
    Student housing food service operations     1,683          2,427
    General and administrative                 10,789          9,037
    Depreciation and amortization              24,009         25,904
    Reimbursable operating expenses             7,055          5,891
                                           ----------     ----------
 Total operating expenses                      74,763         72,965
                                           ----------     ----------

 Operating income                              12,595          9,230
                                           ----------     ----------

 Nonoperating expenses:
   Interest expense                            20,676         21,682
   Amortization of deferred financing costs       792            834
   Loss on early repayment of debt                174             --

   Interest income                               (353)          (439)
                                           ----------     ----------
 Total nonoperating expenses                   21,289         22,077
                                           ----------     ----------

 Loss before equity in earnings of
  unconsolidated  entities, income taxes,
  minority interest, and discontinued
  operations                                   (8,694)       (12,847)

 Equity in earnings of unconsolidated
  entities                                       (245)           573
                                           ----------     ----------

 Loss before income taxes, minority
  interest, and discontinued operations        (8,939)       (12,274)

 Income tax expense (benefit)                    (103)           463
                                           ----------     ----------
 Net loss before minority interest             (8,836)       (12,737)


 Minority interest                               (341)          (585)
                                           ----------     ----------
 Loss from continuing operations               (8,495)       (12,152)
                                           ----------     ----------

 Discontinued operations: (1)
   Income from discontinued operations,
    net of minority interest                      817            669
   Gain on sale of  student  housing
    property,  net of  minority interest        1,579             --
                                           ----------     ----------

 Income from discontinued operations            2,396            669
                                           ----------     ----------
 Net loss                                  $   (6,099)    $  (11,483)
                                           ==========     ==========

 Earnings per share information:
  Income (loss) per share - basic and
   diluted
   Continuing operations                   $    (0.30)    $    (0.46)
   Discontinued operations                       0.08           0.02
                                           ----------     ----------
 Net loss per share                        $    (0.22)    $    (0.44)
                                           ==========     ==========

 Weighted-average common shares
  outstanding -
   Basic and Diluted                       27,869,054     26,336,343
                                           ==========     ==========

 (1) Student housing properties that are designated as held for sale 
     and/or sold during a period are included in discontinued 
     operations.  For the three and nine months ended September 30, 
     2007 and 2006 the operating results of The Village on Tharpe are 
     included in discontinued operations as well as the subsequent 
     gain on the sale of this property.  Both are net of minority 
     interest.


             EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
                          CALCULATION OF FFO
        (Amounts in thousands, except share and per share data)
                               Unaudited

                         Three months ended       Nine months ended  
                            September 30,           September 30,
                          2007        2006        2007        2006
                       ----------  ----------  ----------  ----------

 Net loss                $ (5,802)   $ (8,189)   $ (6,099)  $ (11,483)
 Gain on sale of 
  student housing 
  property                     --          --      (1,579)         --
 Real estate related 
  depreciation and 
  amortization              7,824       8,585      23,633      25,638
 Equity portion of real 
  estate depreciation 
  and amortization on 
  equity investees            149           5         340           5
 Depreciation and 
  amortization of 
  discontinued 
  operations                   --         526         711       1,541
 Minority interest           (337)       (485)       (306)       (550)
                       ----------  ----------  ----------  ---------- 
 Funds from operations 
  ("FFO")                   1,834         442      16,700      15,151
                       ==========  ==========  ==========  ==========

 FFO per weighted 
  average share/unit(1)  $   0.06    $  0.02     $   0.57   $    0.54
                       ==========  ==========  ==========  ==========

 Weighted average 
  shares/units(1)      29,875,927  27,833,022  29,323,766  27,961,155
                       ==========  ==========  ==========  ==========

 Notes:

 (1) - Funds from operations (FFO) per weighted average shares/units
       was computed using the weighted average of all shares and
       partnership units outstanding, regardless of their dilutive
       impact.

FFO is an important supplemental measure of operating performance for EDR. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that when compared year over year, reflects the impact to operations from trends in occupancy rate, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.

For a definition of FFO and a statement by management regarding the reasons for and significance of reporting FFO as a measure of performance, see Management's Discussion and Analysis of Financial Condition and Results of Operations in the EDR annual report on Form 10-K for the year ended December 31, 2006.



             EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
                 2007 GUIDANCE - RECONCILIATION OF FFO
        (Amounts in thousands, except share and per share data)
                               Unaudited

 The following is a reconciliation of the Company's 2007 FFO guidance
 to net loss:

                                                Twelve Months Ending 
                                                 December 31, 2007
                                              -----------------------
                                                Low End     High End
                                                 Range       Range
                                              -----------------------

 Net loss                                     $   (5,400)  $   (5,100)

 Add (subtract):
  (Gain) loss on sale of student housing 
   property                                       (1,579)      (1,579)
   Real estate related depreciation and 
    amortization                                  32,950       32,950
   Minority interest                                (100)        (100)

                                              -----------------------

 Funds from operations ("FFO")                $   25,871   $   26,171
                                              =======================

 FFO per weighted average shares/units        $     0.88   $     0.89
                                              =======================

 Weighted average shares/units                29,466,000   29,466,000
                                              ==========   ==========

FFO is an important supplemental measure of operating performance for EDR. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that when compared year over year, reflects the impact to operations from trends in occupancy rate, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.

For a definition of FFO and a statement by management regarding the reasons for and significance of reporting FFO as a measure of performance, see Management's Discussion and Analysis of Financial Condition and Results of Operations in the EDR annual report on Form 10-K for the year ended December 31, 2006.



            

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