GMH Communities Trust Announces 2007 Fourth Quarter and Year End Results

NEWTOWN SQUARE, Pa., Feb. 28 /PRNewswire-FirstCall/ -- GMH Communities Trust (NYSE:GCT), one of the leading providers of housing, lifestyle and community solutions for college students and members of the U.S. military and their families, today reported results for the 2007 fourth quarter and year ended December 31, 2007.

Results of Operations

The Company reported net income of $2.8 million for the fourth quarter of 2007, or $0.07 per diluted share, as compared to a net loss of $1.3 million, or ($0.03) per diluted share, for the same period the prior year. Funds from operations (FFO) for the fourth quarter of 2007 were $15.6 million, or $0.22 per diluted share, compared to $9.8 million, or $0.13 per diluted share, for the fourth quarter of 2006. The Company had 71,208,439 weighted-average diluted common shares and units of limited partnership interests outstanding for the 2007 fourth quarter.

For the year ended December 31, 2007, the Company reported net income of $31.4 million, or $0.76 per diluted share, as compared to a net loss of $5.0 million, or ($0.12) per diluted share, for the year ended December 31, 2006. FFO for the year ended December 31, 2007 was $48.5 million, or $0.67 per diluted share, compared with $34.1 million, or $0.47 per diluted share, for the full year 2006. The Company had 72,508,608 weighted-average diluted common shares and units of limited partnership interest outstanding for the year ended December 31, 2007.

Net income and FFO for the three months and year ended December 31, 2007 included a gain of approximately $1.5 million, or $0.02 per diluted share, relating to the sale of development land, and $383,000, or $0.01 per diluted share, relating to insurance recoveries from the Company's class action/securities litigation. Net income and FFO for the year ended December 31, 2007 were impacted by charges totaling $1.8 million, or $(0.03) per diluted share, relating to the Company's settlement of its class action/securities litigation.

Net income from continuing operations for the three months ended December 31, 2007 was $2.9 million, or $0.07 per diluted share, as compared to a net loss of $1.7 million, or $(0.04) per diluted share, for the comparable quarter in the prior year. Net income from our continuing operations for the year ended December 31, 2007 was $13.5 million, or $0.33 per diluted share, as compared to a net loss of $6.0 million, or $(0.14) per diluted share, for the year ended December 31, 2006. Net income from continuing operations for the three months and year ended December 31, 2007 included insurance recoveries relating to class action/securities litigation and gain on the sale of development land referred to in the preceding paragraph.

Adjusted net income and adjusted net income from continuing operations for the fourth quarter was approximately $2.0 million, or $0.05 per diluted share, and $2.1 million, or $0.05 per diluted share, respectively, representing net income before approximately $1.5 million ($0.8 million, net of minority interest) in gain resulting from the sale of development land during the three months ended December 31, 2007. Adjusted EBITDA, representing net income (loss) from continuing operations before minority interest, interest expense, income taxes, depreciation and amortization, gain on sale of development land, insurance recoveries relating to securities litigation and Audit/Special Committee expenses, totaled $30.9 million for the fourth quarter of 2007, as compared to $29.2 million for the comparable quarter last year, representing an increase of $1.7 million or 5.8%.

Adjusted net income for the year ended December 31, 2007 was $0.9 million, or $0.02 per diluted share, representing net income before $53.7 million ($30.5 million, net of minority interest) in gain resulting from the sale of development land and student housing properties to third parties and the sale of student housing properties to joint ventures during the year ended December 31, 2007. Adjusted net loss from continuing operations for the year ended December 31, 2007 was $300,000, or $(0.01) per diluted share, representing net loss before gain from the sales of student housing properties to joint ventures and development land. Adjusted EBITDA, representing net income (loss) from continuing operations before minority interest, interest expense, income taxes, depreciation and amortization, gain on sales to joint ventures and the sale of land, insurance recoveries relating to securities litigation and Audit/Special Committee expenses, totaled $115.4 million for the twelve months ended December 31, 2007, as compared to $93.9 million for the year ended December 31, 2006, representing an increase of $21.5 million or 22.9%.

The financial tables and schedules accompanying this press release contain reconciliations of each of (i) FFO, adjusted net income (loss), adjusted net income (loss) from continuing operations, and adjusted EBITDA to net income (loss) from continuing operations, the most directly comparable GAAP measure, and (ii) FFO per diluted share and adjusted net income (loss) per diluted share to earnings (loss) per diluted share, the most directly comparable GAAP measure.

Business Segment Review for 2007 Fourth Quarter and Year End

Student Housing Owned Properties Segment

-- Net income from continuing operations relating to the Company's student
housing owned properties segment was $317,000, based on total revenue
from continuing operations of $47.1 million during the fourth quarter
of 2007, as compared with a net loss from continuing operations during
the comparable quarter last year of $(321,000), based on total revenues
from continuing operations of $50.7 million.

-- Total revenues for same store properties, representing 52 properties
owned during the three months ended December 31, 2007 and 2006,
remained constant at $33.0 million as compared with the prior year
period; while total property operating expenses increased $232,000, or
1.5%, to $16.2 million.

-- Total revenues for same store properties, representing 43 properties
owned during the year ended December 31, 2007 and 2006, remained
constant at $132.0 million, as compared with the prior year; while
total property operating expenses increased by $735,000, or 1.1%, to
$66.3 million.

-- During the fourth quarter of 2007, the Company acquired 13 parcels of
land located in Amherst, NY, aggregating 22-acres for development of a
student housing property, for a purchase price of approximately $6.8
million. Also during the quarter, the Company sold these land parcels
to American Campus Communities, Inc., resulting in a net gain on the
sale of approximately $1.5 million.

-- As of February 26, 2008, pre-lease occupancy for the Company's
portfolio for the Fall 2008 academic year was approximately 41%
compared to approximately 40% at the same time last year.

At year end, the Company owned, or had ownership interests in, 72 student housing properties containing a total of 13,232 units and 42,670 beds and seven undeveloped or partially developed parcels of land held for development as student housing properties. This portfolio included eight properties containing a total of 1,140 units and 4,160 beds in which the Company held a 10% interest through joint ventures with third parties, and for which the Company provides management services. In addition to properties held through joint ventures, the Company currently manages a total of 12 student housing properties owned by others, containing a total of 2,239 units and 7,156 beds, including 48 units and 262 beds under construction.

Military Housing Segment

-- On October 1, 2007, the military housing division commenced operations
for its Navy Southeast Region project. Project financing was completed
in November 2007, at which time development, construction and
renovation of family housing for the project commenced. The project has
initial development period (IDP) costs of approximately $690 million,
making this project one of the largest public-private venture housing
initiatives to date and covering approximately 5,269 end-state housing
units.

-- On November 1, 2007, the military housing division finalized agreements
for its Vandenberg Air Force Base project located in Lompoc, CA. The
50-year term of the project commences with a five-year IDP that
includes the design, construction and/or renovation, as well as the
overall management, maintenance and operational responsibilities for
867 end-state housing units, with IDP costs of approximately $163
million.

-- During the fourth quarter of 2007 the Company announced that it had
been selected as the Highest Ranked Offeror (HRO) by the Department of
the Air Force for its AMC West project, with estimated IDP costs in
excess of $400 million and covering an estimated 2,435 end-state
housing units.

-- As of December 31, 2007, the Company earned fees for providing
development, construction, renovation and management services on 12
military housing projects, encompassing 37 military bases with an
aggregate of 25,288 end-state housing units.

-- Net income relating to the military housing segment for the three
months ended December 31, 2007 was $9.2 million, based on total revenue
of $13.4 million (net of $33.8 million of expense reimbursements), as
compared with net income of $5.5 million for the same quarter last
year, based on total revenue of $8.0 million (net of $15.7 million in
expense reimbursements). Net income relating to the military housing
segment for the year ended December 31, 2007 was $28.6 million, based
on total revenue of $41.1 million (net of $85.1 million of expense
reimbursements), as compared with net income of $21.7 million for the
year ended December 31, 2006, based on total revenue of $30.1 million
(net of $63.6 million in expense reimbursements).

During the first quarter of 2008, the Company also announced that it had finalized agreements with the Army to be the private sector developer for the unaccompanied personnel housing (UPH) at Fort Stewart located in Hinesville, Georgia. The project is coterminous with the existing 50-year ground lease relating to the Company's Fort Stewart/Hunter family housing project and commences with a two-year IDP that includes design, construction, management, maintenance and operational responsibilities for an estimated 334 end-state housing units with project costs of approximately $37.0 million.

The Company also is in active negotiations to finalize the acquisition of its interest in the Fort Jackson and West Point projects with the Army, and the AMC West project with the Air Force. The Fort Jackson and AMC West projects are expected to commence operations during the second quarter, and the West Point project during the third quarter of 2008.

Announcement of Sale of Company

As reported on February 12, 2008, GMH Communities Trust has entered into a securities purchase agreement with a U.S. subsidiary of Balfour Beatty plc for the sale of the Company's military housing division, and a merger agreement with American Campus Communities, Inc. relating to the acquisition of the student housing division. The Company expects the transactions contemplated under these agreements to be completed during the second quarter of 2008.

Conference Call

Management will not be conducting its conference call previously scheduled for February 29, 2008 due to the recently announced pending sale of the Company.

Supplemental Information

The Company will produce a supplemental information package that provides details regarding its operating performance, investing activities and overall financial position for the 2007 fourth quarter and year end. A copy of this supplemental information package will be available on the Company's website at www.gmhcommunities.com under the Investor Relations section.

Non-GAAP Financial Measures

This press release contains non-GAAP ("Generally Accepted Accounting Principles") information that is generally provided by most publicly traded REITs and that we believe may be of interest to the investment community. Reconciliations of all non-GAAP financial measures to GAAP financial measures are included in a schedule accompanying this press release.

About GMH Communities Trust

GMH Communities Trust ("GMH") (www.gmhcommunities.com) is a publicly- traded Maryland real estate investment trust (REIT). We are a self-advised, self- managed, specialty housing company focused on providing housing to college and university students residing off-campus and to members of the U.S. military and their families residing on or near bases throughout the United States. GMH also provides property management services to third- party owners of student housing properties, including colleges, universities, and other private owners. The Company, based in Newtown Square, PA, employs more than 2,200 people throughout the United States.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release that are based on our current expectations, estimates and projections about future events and financial trends affecting us are "forward-looking statements." Forward- looking statements can be identified by the use of words such as "may," "will," "should," "expect," "estimate" or other comparable terminology. These statements are inherently subject to risks and uncertainties, including the risks relating to our business presented in our filings with the Securities and Exchange Commission. Forward-looking statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Additional Information and Where to Find It

This press release does not constitute an offer of any securities for sale. In connection with the merger, American Campus Communities, Inc. ("ACC") intends to file with the SEC a registration statement on Form S-4, which will include a proxy statement/prospectus of GMH and ACC and other relevant materials in connection with the proposed transactions. Investors and security holders of GMH are urged to read the proxy statement/prospectus and the other relevant material when they become available because they will contain important information about GMH, ACC and the proposed transactions. The proxy statement/prospectus and other relevant materials (when they become available), and any and all documents filed by GMH or ACC with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by GMH by directing a written request to GMH Communities Trust, 10 Campus Boulevard, Newtown Square, Pennsylvania 19073, Attention: Investor Relations. Investors and security holders may obtain free copies of the documents filed with the SEC by ACC by directing a written request to American Campus Communities, Inc., 805 Las Cimas Parkway, Suite 400, Austin, Texas 78746 Attention: Investor Relations. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTIONS.

ACC, GMH and their respective executive officers, directors and trustees may be deemed to be participants in the solicitation of proxies from the security holders of GMH in connection with the merger. Information about those executive officers and directors of ACC and their ownership of ACC common stock is set forth in the proxy statement for ACC's 2007 Annual Meeting of Stockholders, which was filed with the SEC on March 29, 2007. Information about the executive officers and trustees of GMH and their ownership of GMH common shares is set forth in the proxy statement for GMH's 2007 Annual Meeting of Shareholders, which was filed with the SEC on May 8, 2007. Investors and security holders may obtain additional information regarding the direct and indirect interests of ACC, GMH and their respective executive officers, directors and trustees in the Merger by reading the proxy statement and prospectus regarding the Merger when they become available.

*******Financial Tables Follow *******

See Supplemental Information Package for Additional Financial Information

GMH COMMUNITIES TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and number of shares)

December 31, December 31,
2007 2006

ASSETS
Real estate investments:
Student housing properties $1,419,894 $1,659,422
Accumulated depreciation (95,830) 66,855
1,324,064 1,592,567
Corporate assets:
Corporate assets 10,142 9,427
Accumulated depreciation (1,582) 1,002
8,560 8,425

Cash and cash equivalents 15,727 22,539
Restricted cash 20,816 16,955
Accounts and other receivables, net:
Related party 23,288 17,131
Third party 4,824 2,762
Investments in joint ventures
Military housing projects 70,264 37,987
Student housing properties 1,284 - Deferred contract costs 1,883 2,344
Deferred financing costs, net 4,338 5,103
Lease intangibles, net 40 2,468
Deposits 629 907
Other assets 13,129 4,802
Total assets $1,488,846 $1,713,990

LIABILITIES AND BENEFICIARIES' EQUITY
Notes payable $961,531 $1,028,290
Note facility and line of credit 53,605 199,435
Accounts payable 10,263 3,213
Accrued expenses 30,448 27,257
Dividends and distributions payable 11,759 12,077
Liabilities related to assets held for sale - - Other liabilities 17,738 28,446
Total liabilities 1,085,344 1,298,718

Minority interest 136,422 157,972
Commitments and contingencies - - Beneficiaries' equity:
Common shares of beneficial interest,
$0.001 par value; 500,000,000
shares authorized, 41,621,594 and
41,567,146 issued and outstanding at
December 31, 2007, and December 31, 2006,
respectively 42 42
Preferred shares-100,000,000 shares authorized,
no shares issued or outstanding - - Additional paid-in capital 331,155 325,347
Cumulative earnings 32,755 1,324
Cumulative dividends (96,872) (69,413)
Total beneficiaries' equity 267,080 257,300
Total liabilities and beneficiaries' equity $1,488,846 $1,713,990

GMH COMMUNITIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share information)

Three months Three months Year Year
ended ended ended ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
(unaudited) (unaudited) (audited) (audited)

REVENUE:
Rent and other
property income $ 47,061 $ 50,623 $ 188,889 $ 169,166
Expense reimbursements:
Related party 34,536 15,866 86,860 64,230
Third party 1,971 811 8,942 7,668
Management fees:
Related party 3,526 2,210 11,429 8,481
Third party 714 746 2,877 3,167
Other fee income- related party 10,015 5,758 32,790 21,635
Other income 134 296 735 546
Total revenue 97,957 76,310 332,522 274,893

OPERATING EXPENSES:
Property operating expenses 22,632 22,016 90,684 78,878
Reimbursed expenses 36,507 16,677 95,802 71,898
Real estate taxes 4,449 4,521 17,773 16,050
Administrative expenses 4,800 4,548 17,410 17,682
Securities litigation and
Audit/Special Committee
expenses (383) 1,123 1,844 7,821
Depreciation and amortization 10,768 11,451 44,679 40,207
Interest 14,524 18,481 61,816 51,752
Total operating expenses 93,297 78,817 330,008 284,288

Income (loss) before equity in
earnings of unconsolidated entities,
income taxes, gain on sale to
joint venture and minority interest
from continuing operations 4,660 (2,507) 2,514 (9,395)
Equity in earnings of
unconsolidated entities 1,375 673 4,524 3,523
Income (loss) from continuing
operations before income taxes,
gain on sale to joint venture
and minority interest 6,035 (1,834) 7,038 (5,872)
Income tax expense 2,425 1,239 7,616 4,733
Income (loss) before gain on sale
to joint venture and minority
interest from continuing
operations 3,610 (3,073) (578) (10,605)
Gain on sale to joint venture 1,473 - 24,341 - Minority interest (income) loss
attributable to continuing
operations (2,170) 1,340 (10,252) 4,625
Net income (loss) from continuing
operations 2,913 (1,733) 13,511 (5,980)

Discontinued Operations:
Income from discontinued
operations before minority
interest (99) 752 2,125 1,762
Gain on sale of student housing
properties (16) - 29,339 - Minority interest (income) loss
attributable to discontinued
operations 49 (312) (13,544) (768)
Income from discontinued operations (66) 440 17,920 994
Net income (loss) $ 2,847 $ (1,293) $ 31,431 $ (4,986)

PER SHARE INFORMATION:
Basic earnings (loss) per
common share:
Continuing operations $ 0.07 $ (0.04) $ 0.33 $ (0.14)
Discontinued operations (0.00) 0.01 0.43 0.02
$ 0.07 $ (0.03) $ 0.76 $ (0.12)
Basic weighted-average shares
outstanding 41,564,104 41,494,521 41,533,616 40,889,508

Diluted earnings (loss) per
common share:
Continuing operations $ 0.07 $ (0.04) $ 0.33 $ (0.14)
Discontinued operations (0.00) 0.01 0.43 0.02
$ 0.07 $ (0.03) $ 0.76 $ (0.12)
Diluted weighted-average
shares/units outstanding 71,208,439 73,129,171 72,508,608 73,344,995

GMH COMMUNITIES TRUST
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands, except share and per share information)

2007 2006
Cash flows from operating activities:
Net (loss) income $31,431 $(4,986)
Adjustments to reconcile net (loss) income
to net cash provided by (used in) operating
activities from continuing operations:

Minority interest 23,796 (3,857)
Gain on sale of properties to joint venture
and land sale (24,341) - Gain on sale of student housing properties (29,339) - Depreciation 41,832 35,072
Amortization:
Lease intangibles 2,267 5,342
Amortization of debt premium (2,267) (1,958)
Deferred loan costs 3,087 3,982
Other amortization 929 643
Bad debt expense 1,284 2,403
Equity in earnings of unconsolidated entities
in excess of distributions received (1,800) (904)
Changes in operating assets and liabilities:
Restricted cash (3,861) (5,259)
Accounts and other receivables (9,533) (879)
Deferred contract costs 462 (1,412)
Deposits and other assets (8,586) 1,496
Accounts payable 7,202 1,687
Accrued expenses and other liabilities (746) 11,862
Net cash provided by discontinued operations (513) 3,377
Net cash provided by operating activities 29,763 46,609

Cash flows from investing activities:
Acquisition of real estate (12,804) (367,308)
Disposition of properties 143,145 - Capitalized expenditures (16,308) (18,547)
Distributions received from unconsolidated
entities in excess of earnings 940 412
Contributions to unconsolidated entities (30,425) - Discontinued operations (9) (1,343)
Net cash provided by (used in) investing
activities 84,539 (386,786)

Cash flows from financing activities:
Owner distributions (47,989) (65,748)
Redemption of unit holders (19,674) (45)
Proceeds from mortgage notes payable 144,297 256,339
Repayment of mortgage notes payable (49,161) (4,187)
Line of credit borrowings 157,105 327,435
Line of credit payments (302,933) (164,000)
Payment of financing costs (2,571) (5,011)
Discontinued operations (186) 15,693
Net cash provided by (used in) financing
activities (121,114) 360,476
Net increase (decrease) in cash and cash
equivalents (6,812) 20,299
Cash and cash equivalents, beginning of period 22,539 2,240
Cash and cash equivalents, end of period $15,727 $22,539

Supplemental information
Real estate acquired by assuming debt including
debt premium $- $47,388
Interest paid $62,828 $51,318
Income taxes paid $6,615 $4,683

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES

Funds From Operations

Funds from operations, or FFO, is a widely recognized measure of REIT performance. Although While FFO is not a GAAP financial measure, we believe that information regarding FFO is helpful to shareholders and potential investors. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do. NAREIT defines FFO as net income (loss) before minority interest of unitholders, excluding gains (losses) on sales of depreciable operating property and extraordinary items (computed in accordance with GAAP), plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after adjustment for unconsolidated partnerships and joint ventures. The GAAP measure that we believe to be most directly comparable to FFO, net income (loss), includes depreciation and amortization expenses, gains or losses on property sales and minority interest. In computing FFO, we eliminate these items because, in our view, they are not indicative of the results from our property operations. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial tables included in the financial statements that we file with the Securities and Exchange Commission. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.

Diluted funds from operations per share ("Diluted FFO per share")

Diluted FFO per share, or sometimes referenced as FFO per diluted share, is (1) FFO adjusted to add back any convertible preferred share dividends and any other changes in FFO that would result from the assumed conversion of securities that are convertible or exchangeable into common shares divided by (2) the sum of the (a) weighted average common shares outstanding during a period, (b) weighted average common units outstanding during a period and (c) weighted average number of potential additional common shares that would have been outstanding during a period if other securities that are convertible or exchangeable into common shares were converted or exchanged. However, the computation of Diluted FFO per share does not assume conversion of securities that are convertible into common shares if the conversion of those securities would increase Diluted FFO per share in a given period. The Company believes that Diluted FFO per share is useful to investors because it provides investors with a further context for evaluating its FFO results in the same manner that investors use earnings per share in evaluating net income available to common shareholders. In addition, since most equity REITs provide Diluted FFO per share information to the investment community, the Company believes Diluted FFO per share is a useful supplemental measure for comparing the Company to other equity REITs. The Company believes that diluted EPS is the most directly comparable GAAP measure to Diluted FFO per share. Diluted FFO per share, as it is based on FFO, has most of the same limitations as FFO (described above); management compensates for these limitations by using the measure simply as a supplemental measure that is weighed in the balance with other GAAP and non-GAAP measures.

The following table presents a reconciliation of FFO to net income (loss), and FFO per diluted share to earnings (loss) per diluted share, for the three and twelve months ended December 31, 2007 and December 31, 2006 (in thousands, except for per share data):

Three months Three months Twelve months Twelve months
ended ended ended ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006

FUNDS FROM
OPERATIONS (FFO)

Net income (loss) $2,847 $(1,293) $31,431 $(4,986)

Add:
Minority interest
attributable to
continuing
operations 2,170 (1,340) 10,252 (4,625)
Minority interest
attributable to
discontinued
operations (49) 312 13,544 768
Depreciation on real
property 10,462 11,062 42,189 37,816
Depreciation on
unconsolidated joint
ventures 147 - 407 - Amortization of lease
intangibles 10 1,055 2,488 5,167
Gain on sale of
properties to
joint ventures - - (22,491) - Gain on sale of student
housing properties 16 - (29,339) - FFO $ 15,603 $ 9,796 $48,481 $34,140

FFO per share/unit - basic $0.22 $ 0.13 $ 0.67 $0.47
Weighted-average
shares/units
outstanding - basic 71,208,439 73,119,138 72,508,608 72,512,791

FFO per share/unit - fully diluted $0.22 $0.13 $0.67 $0.47
Weighted-average
shares outstanding - fully diluted 71,208,439 73,129,171 72,508,608 73,344,995

EPS - basic $0.07 $(0.03) $0.76 $(0.12)
Weighted-average
shares outstanding - basic 41,564,104 41,494,521 41,533,616 40,889,508

EPS - fully diluted $0.07 $(0.03) $0.76 $(0.12)
Weighted-average
shares outstanding - fully diluted 71,208,439 73,129,171 72,508,608 73,344,995

Adjusted Net Income (Loss), Adjusted Net Income (Loss) From Continuing Operations and Adjusted EBITDA

This press release includes references to adjusted net income, adjusted net income (loss) from continuing operations and adjusted EBITDA.

Adjusted net income (loss) represents net income (loss) as adjusted for gain from sales of student housing properties to third parties and joint ventures during the second and third quarters of 2007, and gain on the sale of land held for development during the fourth quarter of 2007. Adjusted net income (loss) from continuing operations represents net income from continuing operations as adjusted for gain on sales to joint ventures and the sale of land. We believe adjusted net income (loss) and adjusted net income (loss) from continuing operations are useful measures of our operating performance, as they provide us with a measure of our profitability, by removing the gains from non-operating activities, enabling us to analyze our operating performance on a comparable basis to our competitors, regardless of capital structure. Adjusted net income (loss) and adjusted net income (loss) from continuing operations, as calculated by us, may not be comparable to these measures as reported by other companies that do not define them exactly as we define the term. Adjusted net income (loss) and adjusted net income (loss) from continuing operations do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of liquidity.

Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss) from continuing operations before minority interest, interest, income taxes, depreciation and amortization, gain on sales to joint ventures and the sale of land, recoveries relating to class action/securities litigation and Audit/Special Committee expenses. Adjusted EBITDA is a useful measure of our operating performance, as it provides us with a measure of our profitability, by removing the impact of our asset base (primarily depreciation and amortization), non-operating gains (losses), and the leverage from our operating results, enabling us to analyze our operating performance on a comparable basis to our competitors, regardless of capital structure. Adjusted EBITDA, as calculated by us, may not be comparable to adjusted EBITDA reported by other companies that do not define adjusted EBITDA exactly as we define the term. Adjusted EBITDA does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of liquidity.

The following tables present reconciliations of net income (loss) and net income (loss) from continuing operations as adjusted to add back the items described above for the three months and twelve months ended December 31, 2007 and December 31, 2006 (in thousands):

Adjusted Net Income (Loss)

Three months Twelve months
ended ended
December 31, Diluted December 31, Diluted
2007 EPS 2007 EPS

Net income (loss) $2,847 $0.07 $31,431 $0.76
(Gain) on sale of properties
to joint venture and
development land, net of
minority interest (a) (844) (0.02) (13,850) (0.34)
(Gain)/loss on sale of student
housing properties,
net of minority interest (b) 9 -- (16,694) (0.40)
$2,012 $0.05 $887 $0.02

(a) Gain on sale to joint venture and development land is $1,473 less $629
of minority interest for three months ended Dec 31, 2007, and $24,341
less $10,491 of minority interest for the twelve months ended Dec 31,
2007.
(b) Loss on sale of student housing properties is ($16) less ($7) of
minority interest for the three months ended Dec 31, 2007, and $29,339
less $12,645 of minority interest for the twelve months ended Dec 31,
2007.

Adjusted Net Income (Loss) From Continuing Operations

Three months Twelve months
ended ended
December 31, Diluted December 31, Diluted
2007 EPS 2007 EPS

Net income (loss) from
continuing operations $ 2,913 $0.07 $13,511 $0.33
Gain on sale of properties
to joint venture and
development land, net of
minority interest (a) (844) (0.02) (13,850) (0.34)
$ 2,069 $0.05 $(339) $(0.01)

(a) Gain on sale to joint venture and development land is $1,473 less $629
of minority interest for three months ended Dec 31, 2007, and $24,341
less $10,491 of minority interest for the twelve months ended Dec 31,
2007.

Adjusted EBITDA

Three months ended Twelve months ended
December 31, December 31,
2007 2006 2007 2006

Net income (loss) from
continuing operations $2,913 $(1,733) $13,511 $(5,980)

Adjustments:
Minority interest from
continuing operations 2,170 (1,340) 10,252 (4,625)
Gain on sale to joint ventures
and development land (1,473) - (24,341) - Interest expense 14,524 18,481 61,816 51,752
Income taxes 2,425 1,239 7,616 4,733
Depreciation and amortization 10,768 11,451 44,679 40,207
Class action/securities
litigation and Audit/Special
Committee expenses (383) 1,123 1,844 7,821

Adjusted EBITDA $30,944 $29,221 $115,377 $93,908

First Call Analyst:
FCMN Contact:

Source: GMH Communities Trust

CONTACT: Joe Calabrese, Financial Relations Board, +1-212-827-3772, for
GMH Communities Trust

Web site: http://www.gmhcommunities.com/

2008-02-28 19:17:47 0301360 PRNEWSWIRE