##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from                     to
 Commission file number: 001-32417
 Education Realty Trust, Inc.
 (Exact Name of Registrant as Specified in Its Charter)
 Maryland(State or other jurisdiction of 
incorporation or organization)
    
    20-1352180(I.R.S. Employer
Identification No.)530 Oak Court Drive, Suite 300, 
Memphis Tennessee(Address of principal executive offices)
    
    38117(Zip Code)
 Registrants telephone number, including area code:
(901) 259-2500
Securities registered pursuant to section 12(b) of the Act:
 Title of class
    
    Name of exchange on which registeredCommon Stock, $.01 par value per share
    
    New York Stock Exchange
 Securities registered pursuant to section 12(g) of the Act:
None
 o þ
 o þ
 o þ
 þ
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



EDUCATION REALTY TRUST, INC.
Form 10-K
Year Ended December 31, 2006
 PagePart IItem 1. Business
    
    
    2Item 1A. Risk Factors
    
    
    10Item 1B. Unresolved Staff Comments
    
    
    18Item 2. Properties
    
    
    18Item 3. Legal Proceedings
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Part IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    22Item 6. Selected Financial Data
    
    
    23Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    41Item 8. Financial Statements and Supplementary Data
    
    
    41Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    41Item 9A. Controls and Procedures
    
    
    42Item 9B. Other Information
    
    
    44Part IIIItem 10. Directors and Executive Officers of the Registrant
    
    
    44Item 11. Executive Compensation
    
    
    44Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    44Item 13. Certain Relationships and Related Transactions
    
    
    44Item 14. Principal Accountant Fees and Services
    
    
    44Part IVItem 15. Exhibits and Financial Statement Schedules
    
    
    44Signatures
    
    
    45EX-21.1 LIST OF SUBSIDIARIESEX-23.1 CONSENT OF DELOITTE & TOUCHE LLP.EX-23.2 CONSENT OF WINDHAM BRANNON, P.L.EX-31.1 SECTION 302, CERTIFICATION OF THE CEOEX-31.2 SECTION 302, CERTIFICATION OF THE CFOEX-32.1 SECTION 906, CERTIFICATION OF CEO AND CFO
  1




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##### Table of Contents



FORWARD-LOOKING STATEMENTS
   
 PART I
 
 Item 1. Business.
 (Dollars in thousands, except selected property information and share data)
 Our Company
  Initial Public Offering and Formation Transactions
   2




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##### Table of Contents



REIT Status and Taxable REIT Subsidiary
  Business and Growth Strategy
  Acquisition Strategy
  
    
    campus reputation;
    
    competitive admissions criteria;
    
    limited number of on-campus beds and limited plans for expansion;
    
    distance of property from campus;
    
    property unit mix;
    
    competition;
    
    significant out-of-state enrollment;
    
    operating performance;
    
    potential for improved management;
 3




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
    
    ownership and capital structure;
    
    presence of desired amenities;
    
    maintenance of the property;
    
    access to a university-sponsored or public transportation line; and
    
    parking availability.
   Operating Strategy
  Maximize property profitability.
 
    
    establishing internal controls and procedures for cost control consistently throughout our communities;
    
    operating with flat property-level management structures, minimizing multiple layers of management;
    
    negotiating utility and service-level pricing arrangements with national and regional vendors and
requiring corporate-level approval of service agreements for each community; and
    
    conducting an annual assessment of the costs and effectiveness of each of our marketing strategies in
order to place greater emphasis on lower cost/high-impact initiatives.
 Proactive marketing practices.
 Develop and retain personnel.
 4




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Maintain and develop strategic relationships.
 Third-Party Services
   Third-party management services
   Property
    
    University
    
    # of Beds
    
    
    # of UnitsOn-campus propertiesUniversity Park  Calhoun
Street Apartments
    
    University of Cincinnati
    
    
    747
    
    
    
    288Reinhard Villages
    
    Clarion University of Pennsylvania
    
    
    656
    
    
    
    180University Park
    
    Salisbury University (Maryland)
    
    
    576
    
    
    
    145Bettie Johnson Hall
    
    University of Louisville
    
    
    490
    
    
    
    224University Village
    
    California State University  San Marcos
    
    
    471
    
    
    
    126Normal Hills Apartments
    
    Alabama A&M University
    
    
    448
    
    
    
    240Herman & Heddy Kurz Hall
    
    University of Louisville
    
    
    402
    
    
    
    224Arlington Park Apartments
    
    University of Northern Colorado
    
    
    396
    
    
    
    180University Park  Phase II
    
    Salisbury University (Maryland)
    
    
    312
    
    
    
    108Billy Minardi Hall
    
    University of Louisville
    
    
    38
    
    
    
    20Blazer Hall
    
    University of Alabama  Birmingham
    
    
    753
    
    
    
    190Community Park
    
    University of Louisville
    
    
    358
    
    
    
    101Total on-campus
    
    
    
    
    5,647
    
    
    
    2,026Off-campus propertiesGranville Towers
    
    University of North Carolina at Chapel Hill
    
    
    1,321
    
    
    
    363Illini Tower
    
    University of Illinois at Champaign
    
    
    725
    
    
    
    206Honeysuckle Apartments
    
    Bloomsburg University of Pennsylvania
    
    
    407
    
    
    
    104Evergreen Commons
    
    Lock Haven University of Pennsylvania
    
    
    408
    
    
    
    108Campus Village
    
    University of Colorado  Denver
    
    
    685
    
    
    
    210Total off-campus
    
    
    
    
    3,546
    
    
    
    991Totals (for both on- and off-campus)
    
    
    
    
    9,193
    
    
    
    3,017
 5




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Third-party development consulting services
  
    
    market analysis and evaluation of housing needs and options;
    
    cooperation with university in architectural design;
    
    negotiation of ground lease, development agreement, construction contract, architectural contract and bond documents;
    
    oversight of architectural design process;
    
    coordination of governmental and university plan approvals;
    
    oversight of construction process;
    
    design, purchase and installation of furniture;
    
    pre-opening marketing to students; and
    
    obtaining final approvals of construction.
   Our Operations
   Residence Life and Student Development
  6




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
    
    community-building and social activities geared to university-related events, holidays, public safety and education;
    
    study and attention skills counseling;
    
    career development, resume writing and employment search skill training;
    
    sponsorship of intramural sport teams, academic clubs and alumni-based activities;
    
    parent and resident appreciation events;
    
    community service activities including recycling, blood drives, food drives and student volunteer committees;
    
    lectures focused on social issues, including effective communication, multi-cultural awareness and substance abuse;
    
    university outreach activities; and
    
    voter registration, enrollment and education.
  Marketing
    Leasing
   7




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Strategic Relationships
    Competition
 Competition from universities
   Competition from private owners
  8




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Employees
  
    
    990 on-site employees, including 453 Community Assistants;
    
    15 persons in our property management services department;
    
    11 persons in our development consulting services department; and
    
    49 executive, corporate administration and financial personnel.
   Key Employees
    
    Title
    
    Number of YearsPaul O. Bower
    
    Chairman, Chief Executive Officer and President
    
    
    37Craig L. Cardwell
    
    President of Allen & OHara Education Services, Inc.
    
    
    35Thomas J. Hickey
    
    Senior Vice President of Allen
& OHara Education Services, Inc.
    
    
    34Wallace L. Wilcox
    
    Vice President of Construction
    
    
    26William W. Harris
    
    Senior Vice President of Development
    
    
    24Thomas Trubiana
    
    Senior Vice President and Chief
Investment Officer
    
    
    18Susan B. Arrison
    
    Vice President of Human Resources
    
    
    16Randall H. Brown
    
    Executive Vice President and Chief
Financial Officer
    
    
    7
 NYSE Certifications
  Code of Business Conduct and Ethics
 www.educationrealty.com
 Available Information
   9




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Item 1A. Risk Factors
 Risks related to our properties and our business
 Our results of operations are subject to the following risks
inherent in the student housing industry: annual leasing cycle,
concentrated lease-up period, seasonal cash flows and increased risk
of student defaults during the summer months of a twelve-month lease.
  Our use of debt financing reduces cash available for
distribution and may expose us to the risk of default under our debt
obligations.
  
    
    we may be unable to borrow additional funds as needed or on favorable terms;
    
    we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less
favorable than the terms of our original indebtedness;
    
    we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms;
    
    we may default on our payment or other obligations as a result of insufficient cash flow or
otherwise, and the lenders or mortgagees may foreclose on our properties that secure their
loans and receive an assignment of rents and leases; and
    
    foreclosures could create taxable income without accompanying cash proceeds, a circumstance
that could hinder our ability to meet the REIT distribution requirements.
 We face significant competition from university-owned student
housing and from other private student housing communities located
within close proximity to universities.
  10




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We may not be able to recover our costs for our development consulting services.
  We may be unable to take advantage of certain disposition
opportunities because of additional costs we have agreed to pay if we
sell certain of our properties in taxable transactions for a period
of five years.
  We rely on our relationships with universities, and changes in
university personnel and/or policies could adversely affect our
operating results.
   Our growth will be dependent upon our ability to acquire and/or
develop, lease, integrate and manage additional student housing
communities successfully.
 11




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
    
    we may be unable to acquire a desired property at all or at a desired purchase price because of competition
from other purchasers of student housing;
    
    many of our future acquisitions are likely to be dependent on external financing, and we may be unable to
finance an acquisition on favorable terms or at all;
    
    we may be required to incur significant capital expenditures to improve or renovate acquired properties;
    
    we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of
portfolios of properties, into our existing operations;
    
    market conditions may result in higher than expected vacancy rates and lower than expected rental rates; and
    
    we may acquire properties subject to liabilities but without any recourse, or with only limited recourse,
to the sellers, or with liabilities that are unknown to us, such as liabilities for undisclosed
environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of
the properties and claims for indemnification by members, directors, officers and others indemnified by the
former owners of the properties.
  Risks related to the real estate industry
 Our performance and the value of our real estate assets are
subject to risks associated with real estate assets and with the real
estate industry.
   
    
    local oversupply of student housing units, increased competition or reduction in demand for student housing;
    
    inability to collect rent from tenants;
    
    vacancies or our inability to lease beds on favorable terms;
    
    increased operating costs, including insurance premiums, utilities, and real estate taxes;
    
    costs of complying with changes in governmental regulations;
    
    the relative illiquidity of real estate investments;
    
    changing student demographics;
    
    national, regional and local economic conditions; and
    
    rising interest rates.
 We have limited time to perform due diligence on many of our
acquired properties, which could subject us to significant unexpected
liabilities and under-performance of the acquired properties.
  12




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Certain losses may not be covered by insurance.
  Future terrorist attacks in the United States could harm the demand for and the value of our student housing communities.
   We could incur significant costs related to government regulation and private litigation over environmental matters.
   We could be exposed to liability and remedial costs related to environmental matters.
  13




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We may incur significant costs complying with the Americans with Disabilities Act and similar laws.
   We may incur significant costs complying with other regulations.
 14




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Our potential participation in joint ventures presents additional risks.
  Illiquidity of real estate investments could significantly
impede our ability to respond to adverse changes in the performance
of our properties.
   Risks related to our organization and structure
 To maintain our REIT status, we may be forced to limit the activities of our Management Company.
  We will depend heavily on the availability of equity and debt capital to fund our business.
  15




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##### Table of Contents




    
    general market conditions;
    
    our current debt levels and the number of properties subject to encumbrances;
    
    our current performance and the markets perception of our growth potential;
    
    our cash flow and cash distributions; and
    
    the market price per share of our common stock.
  Our charter contains restrictions on the ownership and transfer of our stock.
   Certain tax and anti-takeover provisions of our charter and bylaws may inhibit a change of our control.
  
    
    the REIT ownership limit described above;
    
    authorization of the issuance of our preferred shares with
powers, preferences or rights to be determined by our board
of directors;
    
    the right of our board of directors, without a stockholder
vote, to increase our authorized shares and classify or
reclassify unissued shares; and
    
    advance notice requirements for stockholder nomination of
directors and for other proposals to be presented at
stockholder meetings.
 The Maryland business statutes also impose potential restrictions on a change of control of our Company.
  16




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We have the right to change some of our policies that may be important to our stockholders without stockholder consent.
  The ability of our board of directors to revoke our REIT
election without stockholder approval may cause adverse consequences
to our stockholders.
  Our rights and the rights of our stockholders to take action against our directors and officers are limited.
  Our success depends on key personnel whose continued service is not guaranteed.
  Federal income tax risks
 Failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock.
  
    
    we would not be allowed a deduction for distributions to stockholders in computing our taxable income, and such
amounts would be subject to federal income tax at regular corporate rates;
    
    we also could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and
    
    unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT
for four taxable years following the year during which we were disqualified.
  17




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We may be subject to federal and state income taxes that would harm our financial condition.
  An investment in our common stock has various tax risks,
including the treatment of distributions in excess of earnings and
the inability to apply passive losses against distributions.
  Future distributions may include a significant portion as a return of capital.
  
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
 General
  18




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
    
    located in close proximity to university campuses (within two miles or less);
    
    average age of approximately 7 years;
    
    designed specifically for students with modern unit plans and amenities; and
    
    supported by our long-standing Community Assistant program and other
student-oriented activities and services that enhance the college
experience.
 Properties
  Year EndedDecember 31, 2006Average
    
    
    Monthly
    
    
    Revenue perYear
    
    
    Acquisition
    
    # of
    
    
    # of
    
    
    Occupancy
    
    
    Total
    
    
    AvailableName
    
    Primary University Served
    
    Built
    
    
    Date
    
    Beds
    
    
    Units
    
    
    Rate(1)
    
    
    Revenue
    
    
    Bed(2)(In thousands)Owned and OperatedNorthPointe
    
    University of Arizona
    
    
    1999
    
    
    Jan 05
    
    
    912
    
    
    
    300
    
    
    
    89.1
    %
    
    $
    294
    
    
    $
    323The Reserve at
Athens
    
    University of Georgia
    
    
    1999
    
    
    Jan 05
    
    
    612
    
    
    
    200
    
    
    
    99.4
    
    
    
    228
    
    
    
    373The Reserve at
Clemson
    
    Clemson University
    
    
    1999
    
    
    Jan 05
    
    
    590
    
    
    
    177
    
    
    
    92.7
    
    
    
    190
    
    
    
    322Players Club
    
    Florida State University
    
    
    1994
    
    
    Jan 05
    
    
    336
    
    
    
    84
    
    
    
    94.4
    
    
    
    128
    
    
    
    380The Gables
    
    Western Kentucky University
    
    
    1996
    
    
    Jan 05
    
    
    290
    
    
    
    73
    
    
    
    96.2
    
    
    
    86
    
    
    
    298College Station
    
    Augusta State University
    
    
    1989
    
    
    Jan 05
    
    
    203
    
    
    
    61
    
    
    
    63.1
    
    
    
    35
    
    
    
    174University Towers
    
    North Carolina State University
    
    
    1989
    
    
    Jan 05
    
    
    953
    
    
    
    251
    
    
    
    82.9
    
    
    
    432
    (4)
    
    
    453
    (4)The Pointe at South
Florida
    
    University of South Florida
    
    
    1999
    
    
    Jan 05
    
    
    1,002
    
    
    
    336
    
    
    
    97.0
    
    
    
    397
    
    
    
    397Commons at Knoxville
    
    University of Tennessee
    
    
    1999
    
    
    
    
    
    708
    
    
    
    211
    
    
    
    97.3
    
    
    
    291
    
    
    
    411The Commons
    
    Florida State University
    
    
    1997
    
    
    Jan 05
    
    
    732
    
    
    
    252
    
    
    
    93.4
    
    
    
    252
    
    
    
    345The Reserve on
Perkins
    
    Oklahoma State University
    
    
    1999
    
    
    Jan 05
    
    
    732
    
    
    
    234
    
    
    
    91.1
    
    
    
    210
    
    
    
    287The Reserve at Star
Pass
    
    University of Arizona
    
    
    2001
    
    
    Jan 05
    
    
    1,020
    
    
    
    336
    
    
    
    93.0
    
    
    
    333
    
    
    
    327The Pointe at
Western
    
    Western Michigan University
    
    
    2000
    
    
    Jan 05
    
    
    876
    
    
    
    324
    
    
    
    96.6
    
    
    
    331
    
    
    
    378College
Station at 
W. Lafayette
    
    Purdue University
    
    
    2000
    
    
    Jan 05
    
    
    960
    
    
    
    336
    
    
    
    91.0
    
    
    
    315
    
    
    
    328Commons on Kinnear
    
    The Ohio State University
    
    
    2000
    
    
    Jan 05
    
    
    502
    
    
    
    166
    
    
    
    95.6
    
    
    
    231
    
    
    
    460The Pointe
    
    Pennsylvania State University
    
    
    1999
    
    
    Jan 05
    
    
    984
    
    
    
    294
    
    
    
    96.7
    
    
    
    357
    
    
    
    363The Reserve at
Columbia
    
    University of Missouri
    
    
    2000
    
    
    Jan 05
    
    
    676
    
    
    
    260
    
    
    
    90.4
    
    
    
    243
    
    
    
    359The Reserve on
Frankford
    
    Texas Tech University
    
    
    1997
    
    
    Jan 05
    
    
    737
    
    
    
    243
    
    
    
    90.2
    
    
    
    246
    
    
    
    334
 19




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##### Table of Contents



Year EndedDecember 31, 2006Average
    
    
    Monthly
    
    
    Revenue perYear
    
    
    Acquisition
    
    # of
    
    
    # of
    
    
    Occupancy
    
    
    Total
    
    
    AvailableName
    
    Primary University Served
    
    Built
    
    
    Date
    
    Beds
    
    
    Units
    
    
    Rate(1)
    
    
    Revenue
    
    
    Bed(2)(In thousands)The Village on
Tharpe
    
    Florida State University
    
    
    1995
    
    
    Jan 05
    
    
    1,554
    
    
    
    486
    
    
    
    95.4
    
    
    
    520
    
    
    
    334The Lofts
    
    University of Central Florida
    
    
    2002
    
    
    Jan 05
    
    
    730
    
    
    
    254
    
    
    
    97.5
    
    
    
    407
    
    
    
    558The Reserve on West
31st
    
    University of Kansas
    
    
    1998
    
    
    Jan 05
    
    
    720
    
    
    
    192
    
    
    
    92.6
    
    
    
    216
    
    
    
    299Campus Creek
    
    University of Mississippi
    
    
    2004
    
    
    Feb 05
    
    
    636
    
    
    
    192
    
    
    
    92.9
    
    
    
    251
    
    
    
    394Pointe West
    
    University of South Carolina
    
    
    2003
    
    
    Mar 05
    
    
    480
    
    
    
    144
    
    
    
    99.2
    
    
    
    180
    
    
    
    375Campus Lodge
    
    University of Florida
    
    
    2001
    
    
    Jun 05
    
    
    1,116
    
    
    
    360
    
    
    
    95.8
    
    
    
    567
    
    
    
    508College Grove
    
    Middle Tennessee State University
    
    
    1998
    
    
    Apr 05
    
    
    864
    
    
    
    240
    
    
    
    96.8
    
    
    
    260
    
    
    
    301The Reserve on
South College
    
    Auburn University
    
    
    1999
    
    
    Jul 05
    
    
    576
    
    
    
    180
    
    
    
    95.0
    
    
    
    184
    
    
    
    319Players Club
    
    Georgia Southern University
    
    
    1993
    
    
    Jun 06
    
    
    624
    
    
    
    214
    
    
    
    79.6
    
    
    
    102
    
    
    
    281Sub-total owned and
operated
    
    
    
    
    1998
    (3)
    
    
    
    
    20,125
    
    
    
    6,400
    
    
    
    93.3%
    (3)
    
    
    7,286
    
    
    
    367
    (3)Owned
and Leased Properties(5)Troy Place
    
    Troy State University
    
    
    2000
    
    
    Jan 06
    
    
    408
    
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    Jacksonville Place
    
    Jacksonville State University
    
    
    2000
    
    
    Jan 06
    
    
    504
    
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    Macon Place
    
    Macon State College
    
    
    1999
    
    
    Jan 06
    
    
    336
    
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    Clayton Place
    
    Clayton College & State University
    
    
    1999
    
    
    Jan 06
    
    
    854
    
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    River Place
    
    State University of West Georgia
    
    
    2000
    
    
    Jan 06
    
    
    504
    
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    Murray Place
    
    Murray State University
    
    
    2000
    
    
    Jan 06
    
    
    408
    
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    Cape Place
    
    Southeast Missouri State University
    
    
    2000
    
    
    Jan 06
    
    
    360
    
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    Clemson Place
    
    Clemson  University
    
    
    1998
    
    
    Jan 06
    
    
    288
    
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    Martin Place
    
    University of Tennesse at Martin
    
    
    2000
    
    
    Jan 06
    
    
    384
    
    
    
    96
    
    
    
    
    
    
    
    
    
    
    
    Berkeley  Place
    
    Clemson University
    
    
    1999
    
    
    Jan 06
    
    
    480
    
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    Carrollton Place
    
    State University of West Georgia
    
    
    1998
    
    
    Jan 06
    
    
    336
    
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    Statesboro Place
    
    Georgia Southern University
    
    
    1999
    
    
    Jan 06
    
    
    528
    
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    Western Place
    
    Western Kentucky University
    
    
    2000
    
    
    Jan 06
    
    
    504
    
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    Sub-total owned and leased properties
    
    
    
    
    1999
    (3)
    
    
    
    
    5,894
    
    
    
    1,553
    
    
    
    
    
    
    
    
    
    
    
    Total owned properties
    
    
    
    
    1999
    (3)
    
    
    
    
    26,019
    
    
    
    7,953
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Average of the physical month-end occupancy rates.(2)
    
    Monthly revenue per available bed for 2006 is equal to total revenue for the year ended December 31, 2006
divided by the sum of the design beds (including staff and model beds) at the property each month. For
properties acquired during the year , monthly revenue per available bed equals total revenue for the
period subsequent to acquisition through December 31, 2006 divided by the sum of the design beds
(including staff and model beds) at the property each month.(3)
    
    Represents average for all properties in portfolio.(4)
    
    Revenues and revenue per available bed for University Towers excludes revenue from food service operations.(5)
    
    EDR does not operate the Place Portfolio, and therefore no
operating statistics are presented. Year EndedDecember 31, 2005Average
    
    
    Monthly
    
    
    Revenue perYear
    
    
    Acquisition
    
    # of
    
    
    # of
    
    
    Occupancy
    
    
    Total
    
    
    AvailableName
    
    Primary University Served
    
    Built
    
    
    Date
    
    Beds
    
    
    Units
    
    
    Rate(1)
    
    
    Revenue
    
    
    Bed(2)(In thousands)NorthPointe
    
    University of Arizona
    
    
    1999
    
    
    Jan 05
    
    
    912
    
    
    
    300
    
    
    
    89.7
    %
    
    $
    301
    
    
    $
    330The Reserve at
Athens
    
    University of Georgia
    
    
    1999
    
    
    Jan 05
    
    
    612
    
    
    
    200
    
    
    
    95.6
    
    
    
    214
    
    
    
    350The Reserve at
Clemson
    
    Clemson University
    
    
    1999
    
    
    Jan 05
    
    
    590
    
    
    
    177
    
    
    
    95.4
    
    
    
    186
    
    
    
    316Players Club
    
    Florida State University
    
    
    1994
    
    
    Jan 05
    
    
    336
    
    
    
    84
    
    
    
    96.1
    
    
    
    125
    
    
    
    372The Gables
    
    Western Kentucky University
    
    
    1996
    
    
    Jan 05
    
    
    290
    
    
    
    73
    
    
    
    89.2
    
    
    
    81
    
    
    
    278College Station
    
    Augusta State University
    
    
    1989
    
    
    Jan 05
    
    
    203
    
    
    
    61
    
    
    
    74.4
    
    
    
    42
    
    
    
    207University Towers
    
    North Carolina State University
    
    
    1989
    
    
    Jan 05
    
    
    953
    
    
    
    251
    
    
    
    73.9
    
    
    
    432
    (4)
    
    
    453
    (4)The Pointe at South
Florida
    
    University of South Florida
    
    
    1999
    
    
    Jan 05
    
    
    1,002
    
    
    
    336
    
    
    
    96.1
    
    
    
    411
    
    
    
    442Commons at Knoxville
    
    University of Tennessee
    
    
    1999
    
    
    Jan 05
    
    
    708
    
    
    
    211
    
    
    
    94.8
    
    
    
    281
    
    
    
    396The Commons
    
    Florida State University
    
    
    1997
    
    
    Jan 05
    
    
    732
    
    
    
    252
    
    
    
    95.1
    
    
    
    257
    
    
    
    351The Reserve on
Perkins
    
    Oklahoma State University
    
    
    1999
    
    
    Jan 05
    
    
    732
    
    
    
    234
    
    
    
    92.9
    
    
    
    216
    
    
    
    295The Reserve at Star
Pass
    
    University of Arizona
    
    
    2001
    
    
    Jan 05
    
    
    1,020
    
    
    
    336
    
    
    
    93.1
    
    
    
    325
    
    
    
    319The Pointe at
Western
    
    Western Michigan University
    
    
    2000
    
    
    Jan 05
    
    
    876
    
    
    
    324
    
    
    
    95.3
    
    
    
    342
    
    
    
    391College
Station at 
W. Lafayette
    
    Purdue University
    
    
    2000
    
    
    Jan 05
    
    
    960
    
    
    
    336
    
    
    
    91.8
    
    
    
    298
    
    
    
    311Commons on Kinnear
    
    The Ohio State University
    
    
    2000
    
    
    Jan 05
    
    
    502
    
    
    
    166
    
    
    
    95.8
    
    
    
    234
    
    
    
    465The Pointe
    
    Pennsylvania State University
    
    
    1999
    
    
    Jan 05
    
    
    984
    
    
    
    294
    
    
    
    93.2
    
    
    
    363
    
    
    
    369The Reserve at
Columbia
    
    University of Missouri
    
    
    2000
    
    
    Jan 05
    
    
    676
    
    
    
    260
    
    
    
    96.9
    
    
    
    275
    
    
    
    406The Reserve on
Frankford
    
    Texas Tech University
    
    
    1997
    
    
    Jan 05
    
    
    737
    
    
    
    243
    
    
    
    86.9
    
    
    
    252
    
    
    
    342The Village on
Tharpe
    
    Florida State University
    
    
    1995
    
    
    Jan 05
    
    
    1,554
    
    
    
    486
    
    
    
    94.7
    
    
    
    533
    
    
    
    343The Lofts
    
    University of Central Florida
    
    
    2002
    
    
    Jan 05
    
    
    730
    
    
    
    254
    
    
    
    96.3
    
    
    
    404
    
    
    
    553The Reserve on West
31st
    
    University of Kansas
    
    
    1998
    
    
    Jan 05
    
    
    720
    
    
    
    192
    
    
    
    89.8
    
    
    
    215
    
    
    
    299Campus Creek
    
    University of Mississippi
    
    
    2004
    
    
    Feb 05
    
    
    636
    
    
    
    192
    
    
    
    88.6
    
    
    
    218
    
    
    
    377
 20




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##### Table of Contents



Year EndedDecember 31, 2005Average
    
    
    Monthly
    
    
    Revenue perYear
    
    
    Acquisition
    
    # of
    
    
    # of
    
    
    Occupancy
    
    
    Total
    
    
    AvailableName
    
    Primary University Served
    
    Built
    
    
    Date
    
    Beds
    
    
    Units
    
    
    Rate(1)
    
    
    Revenue
    
    
    Bed(2)(In thousands)Pointe West
    
    University of South Carolina
    
    
    2003
    
    
    Mar 05
    
    
    480
    
    
    
    144
    
    
    
    96.2
    
    
    
    147
    
    
    
    337Campus Lodge
    
    University of Florida
    
    
    2001
    
    
    Jun 05
    
    
    1,116
    
    
    
    360
    
    
    
    92.8
    
    
    
    349
    
    
    
    491College Grove
    
    Middle Tennessee State University
    
    
    1998
    
    
    Apr 05
    
    
    864
    
    
    
    240
    
    
    
    94.7
    
    
    
    187
    
    
    
    297The Reserve on
South College
    
    Auburn University
    
    
    1999
    
    
    Jul 05
    
    
    576
    
    
    
    180
    
    
    
    92.4
    
    
    
    90
    
    
    
    287Total Owned
and Operated
    
    
    
    
    1998
    (3)
    
    
    
    
    19,501
    
    
    
    6,186
    
    
    
    92.2%
    (3)
    
    $
    6,778
    
    
    $
    366
    (3)
 
 (1)
    
    Average of the physical month-end occupancy rates for the period subsequent to acquisition through December 31, 2005.(2)
    
    Monthly revenue per available bed for 2005 is equal to total revenue for the period subsequent to acquisition
through December 31, 2005 divided by the sum of the design beds (including staff and model beds) at the property
each month.(3)
    
    Represents average for all properties in portfolio.(4)
    
    Revenues and revenue per available bed for University Towers excludes revenue from food service operations. Mortgage Indebtedness
  Outstanding
    
    
    ContractualDecember 31,
    
    
    Fixed
    
    
    MaturityProperty
    
    2006
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationUniversity Towers
    
    $
    23,563
    
    
    
    6.77
    %
    
    
    3/1/2008
    
    
    30 YearThe Reserve at Clemson
    
    
    11,651
    
    
    
    6.63
    %
    
    
    5/1/2007
    
    
    30 YearThe Gables
    
    
    4,433
    
    
    
    5.50
    %
    
    
    11/1/2013
    
    
    30 YearNorthPointe
    
    
    18,312
    
    
    
    6.63
    %
    
    
    5/1/2007
    
    
    30 YearThe Pointe at S. Florida
    
    
    23,779
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Western
    
    
    21,490
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Lofts
    
    
    26,500
    
    
    
    3.49
    %
    
    
    4/5/2007
    
    
    30 YearThe Reserve on Perkins/The Commons at Knoxville
    
    
    31,838
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Penn State/The Reserve at Star Pass
    
    
    50,482
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearCampus Lodge
    
    
    36,854
    
    
    
    6.97
    %
    
    
    5/1/2012
    
    
    30 YearPointe West
    
    
    10,986
    
    
    
    4.92
    %
    
    
    8/1/2014
    
    
    30 YearCollege Station at W. Lafayette
    
    
    14,725
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Commons on Kinnear
    
    
    14,625
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Frankford
    
    
    14,426
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Columbia
    
    
    19,301
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearTroy Place
    
    
    9,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearJacksonville Place
    
    
    11,120
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMacon Place
    
    
    7,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClayton Place
    
    
    24,540
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearRiver Place
    
    
    13,680
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMurray Place
    
    
    6,800
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearCape Place
    
    
    8,520
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClemson Place
    
    
    8,160
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMartin Place
    
    
    8,960
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearTotal debt /weighted average rate
    
    $
    421,625
    
    
    
    5.85
    %Unamortized premium
    
    
    2,308Total mortgage loans net of unamortized premium
    
    
    423,933Less current portion of long-term debt
    
    
    (60,158
    )Total long-term debt, net of current portion
    
    $
    363,775
  21




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##### Table of Contents



Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
 Market Information
  DistributionsHigh
    
    Low
    
    DeclaredPeriod from January 31, 2005 through March 31, 2005
    
    
    17.66
    
    
    
    16.00
    
    
    
    Three months ended June 30, 2005
    
    
    18.75
    
    
    
    15.57
    
    
    
    0.19Three months ended September 30, 2005
    
    
    20.34
    
    
    
    16.40
    
    
    
    0.30Three months ended December 31, 2005
    
    
    16.63
    
    
    
    12.17
    
    
    
    0.30Three months ended March 31, 2006
    
    
    15.83
    
    
    
    12.81
    
    
    
    0.30Three months ended June 30, 2006
    
    
    16.65
    
    
    
    14.02
    
    
    
    0.30Three months ended September 30, 2006
    
    
    16.85
    
    
    
    13.60
    
    
    
    0.30Three months ended December 31, 2006
    
    
    16.15
    
    
    
    14.41
    
    
    
    0.21
 Direct stock purchase and dividend reinvestment plan
  
    
    automatic reinvestment of some or all of the cash distributions paid on common stock, shares of other
classes of stock that we might issue in the future and units of limited partnership interest;
    
    an opportunity to make an initial purchase of our common stock and to acquire additional shares over time;
    
    safekeeping of shares and accounting for distributions received and reinvested at no cost
  22




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##### Table of Contents



COMPARISON
OF 23 MONTH CUMULATIVE TOTAL RETURN *
 
 
 
 *
 12/05
    
    
    
    12/06Education Realty Trust
    
    
    
    78.36
    
    
    
    
    89.79S & P 500
    
    
    
    104.91
    
    
    
    
    121.48MSCI US REIT
    
    
    
    112.13
    
    
    
    
    152.41
    Number of SecuritiesNumber of Securities to
    
    Weighted Average
    
    Remaining Available forbe Issued upon Exercise
    
    Exercise Price of
    
    Future Issuance underof Outstanding Options,
    
    Outstanding Options
    
    Equity CompensationWarrants and Rights(1)
    
    Warrants and Rights(1)
    
    PlansEquity
compensation plans
approved by
security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    688,000Equity compensation
plans not approved
by security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    N/A
    
    
    
    N/A
    
    
    
    688,000
 
 (1)
    
    Does not include 192,000 shares of restricted stock that are subject to vesting
requirements which were issued through EDRs 2004 Incentive Plan. Recent Sales of Unregistered Securities
  
 Item 6. Selected Financial Data.
  23




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##### Table of Contents




    
    the student housing operations of Education Properties Trust, LLC (including the properties
referred to as Northpointe, The Reserve at Athens, The Reserve at Clemson and Players Club)
    
    the student housing operations of the properties referred to as the Gables, College Station
and University Towers, and
    
    the third party management and development consulting service operations and real estate
operations of Allen & OHara Education Services, LLC
   STATEMENT OF OPERATIONS DATA
 Education Realty
    
    
    EDRTrust, Inc.
    
    
    PredecessorYear Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In thousands)Revenues:Student housing leasing revenue
    
    $
    87,438
    
    
    $
    75,877
    
    
    $
    17,896
    
    
    $
    17,095
    
    
    $
    19,139Student housing food service revenue
    
    
    3,634
    
    
    
    3,491
    
    
    
    3,137
    
    
    
    2,879
    
    
    
    Other leasing revenue
    
    
    14,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-party development consulting
services
    
    
    3,773
    
    
    
    1,759
    
    
    
    392
    
    
    
    691
    
    
    
    1,444Third-party management revenue
    
    
    2,796
    
    
    
    1,968
    
    
    
    1,326
    
    
    
    1,026
    
    
    
    784Operating expense reimbursements
    
    
    7,638
    
    
    
    6,694
    
    
    
    5,223
    
    
    
    4,438
    
    
    
    3,345Total revenues
    
    
    119,291
    
    
    
    89,789
    
    
    
    27,974
    
    
    
    26,129
    
    
    
    24,712Operating expenses:Student housing leasing operations
    
    
    42,669
    
    
    
    37,794
    
    
    
    7,645
    
    
    
    7,408
    
    
    
    9,212Student housing food service operations
    
    
    3,318
    
    
    
    3,275
    
    
    
    2,899
    
    
    
    2,645
    
    
    
    Reimbursable operating expenses
    
    
    7,638
    
    
    
    6,694
    
    
    
    5,223
    
    
    
    4,438
    
    
    
    3,345General and administrative
    
    
    12,331
    
    
    
    12,549
    
    
    
    3,545
    
    
    
    3,425
    
    
    
    3,242Depreciation and amortization
    
    
    36,083
    
    
    
    29,168
    
    
    
    3,120
    
    
    
    3,061
    
    
    
    3,324Total operating expenses
    
    
    102,039
    
    
    
    89,480
    
    
    
    22,432
    
    
    
    20,977
    
    
    
    19,123Operating income
    
    
    17,252
    
    
    
    309
    
    
    
    5,542
    
    
    
    5,152
    
    
    
    5,589Nonoperating expense
    
    
    29,933
    
    
    
    17,266
    
    
    
    5,786
    
    
    
    5,771
    
    
    
    5,715Loss before equity in earnings of unconsolidated entities
    
    
    (12,681
    )
    
    
    (16,957
    )
    
    
    (244
    )
    
    
    (619
    )
    
    
    (126
    )Equity in earnings of unconsolidated entities
    
    
    740
    
    
    
    880
    
    
    
    1,002
    
    
    
    629
    
    
    
    128Income (loss) before income taxes and minority interest
    
    
    (11,941
    )
    
    
    (16,077
    )
    
    
    758
    
    
    
    10
    
    
    
    2Taxes
    
    
    659
    
    
    
    497
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) before minority interest
    
    
    (12,600
    )
    
    
    (16,574
    )
    
    
    758
    
    
    
    10
    
    
    
    2Minority interest
    
    
    (355
    )
    
    
    (1,040
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (12,245
    )
    
    $
    (15,534
    )
    
    $
    758
    
    
    $
    10
    
    
    $
    2Earnings per share information:Loss per share  basic and diluted
    
    $
    (0.46
    )
    
    $
    (0.67
    )Weighted
average common shares outstanding  basic and diluted
    
    
    26,387,547
    
    
    
    23,063,110Distributions per common share
    
    $
    1.10
    
    
    $
    0.79
 24




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##### Table of Contents



BALANCE SHEET DATA
 As of December 31,Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In thousands)Assets:Student housing properties, net
    
    $
    804,759
    
    
    $
    620,305
    
    
    $
    83,785
    
    
    $
    86,388
    
    
    $
    88,900Other assets, net
    
    
    30,699
    
    
    
    83,744
    
    
    
    5,089
    
    
    
    5,536
    
    
    
    5,315Total assets
    
    $
    835,458
    
    
    $
    704,049
    
    
    $
    88,874
    
    
    $
    91,924
    
    
    $
    94,215Liabilities and equity:Mortgage notes payable
    
    $
    423,933
    
    
    $
    328,335
    
    
    $
    81,111
    
    
    $
    82,204
    
    
    $
    82,959Other Indebtedness
    
    
    69,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other liabilities
    
    
    19,837
    
    
    
    17,255
    
    
    
    5,974
    
    
    
    7,225
    
    
    
    5,798Total liabilities
    
    
    513,170
    
    
    
    345,590
    
    
    
    87,085
    
    
    
    89,429
    
    
    
    88,757Minority interest
    
    
    19,289
    
    
    
    27,926
    
    
    
    
    
    
    
    
    
    
    
    Equity (deficit)
    
    
    302,999
    
    
    
    330,533
    
    
    
    1,789
    
    
    
    2,495
    
    
    
    5,458Total liabilities and equity
    
    $
    835,458
    
    
    $
    704,049
    
    
    $
    88,874
    
    
    $
    91,924
    
    
    $
    94,215
 OTHER DATA (UNAUDITED)
 As of December 31,Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(In thousands, except per share and selected property information)Funds from operations (FFO) (1):Net income (loss)
    
    $
    (12,245
    )
    
    $
    (15,534
    )
    
    $
    758
    
    
    $
    10
    
    
    $
    2Plus student housing property depreciation and
amortization of lease intangibles
    
    
    35,728
    
    
    
    29,168
    
    
    
    3,120
    
    
    
    3,061
    
    
    
    3,324Equity portion of real estate depreciation and
amortization on equity investees
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minority interest benefit
    
    
    (355
    )
    
    
    (1,040
    )
    
    
    
    
    
    
    
    
    
    
    Funds from operations available to
all share and unitholders
    
    $
    23,182
    
    
    $
    12,594
    
    
    $
    3,878
    
    
    $
    3,071
    
    
    $
    3,326Cash flow information:Net cash provided by operations
    
    $
    25,187
    
    
    $
    18,373
    
    
    $
    3,068
    
    
    $
    4,309
    
    
    $
    3,392Net cash used in investing
    
    
    (120,830
    )
    
    
    (200,157
    )
    
    
    (181
    )
    
    
    (925
    )
    
    
    (42,982
    )Net cash provided by (used in) financing
    
    
    40,408
    
    
    
    243,445
    
    
    
    (2,480
    )
    
    
    (3,658
    )
    
    
    38,951Per share and distribution data:Net loss per share basic and diluted
    
    $
    (0.46
    )
    
    $
    (0.67
    )
    
    $
    (2,220
    )
    
    $
    
    
    
    $
    Cash distributions declared per share/unit
    
    
    1.10
    
    
    
    0.79
    
    
    
    
    
    
    
    
    
    
    
    Cash distributions declared
    
    
    29,114
    
    
    
    18,721
    
    
    
    
    
    
    
    
    
    
    
    Selected property information (2):Units
    
    
    6,400
    
    
    
    6,186
    
    
    
    1,146
    
    
    
    1,146
    
    
    
    1,146Beds
    
    
    20,125
    
    
    
    19,501
    
    
    
    3,896
    
    
    
    3,896
    
    
    
    3,896Occupancy (3)
    
    
    93.3
    %
    
    
    92.2
    %
    
    
    89.2
    %
    
    
    85.1
    %
    
    
    87.6
    %Revenue per available bed (4)
    
    $
    367
    
    
    $
    366
    
    
    $
    421
    
    
    $
    406
    
    
    $
    400
 25




---



##### Table of Contents



(1)
    
    As defined by the National Association of Real Estate Investment Trusts (NAREIT), FFO
represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from
sales of property, plus real estate-related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and
joint ventures will be calculated to reflect funds from operations on the same basis. We present
FFO available to all shareholders and unitholders because we consider it an important supplemental measure of our operating performance and
believe it is frequently used by securities analysts, investors and other interested parties in the
evaluation of REITs, many of which present FFO when reporting their results.
As such, we also exclude the impact of minority interest in our calculation. FFO is intended to
exclude GAAP historical cost depreciation and amortization of real estate and related assets, which
assumes that the value of real estate diminishes ratably over time. Historically, however, real
estate values have risen or fallen with market conditions. 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 rates, rental rates, operating costs, development activities
and interest costs, providing perspective not immediately apparent from net income.(2)
    
    The selected property information represents all 27 and 26 owned and operated properties for 2006
(excluding the Place Portfolio) and 2005, respectively. Previous to 2004 the data represents the
seven properties owned by the EDR Predecessor, which are NorthPointe, The Reserve at Athens, The
Reserve at Clemson, Players Club, The Gables, College Station and University Towers.(3)
    
    Average of the month-end occupancy rates for the period.(4)
    
    Revenue per available bed is equal to the total revenue divided by the sum
of the design beds (including staff and model beds) at the property each month. Revenue and
design beds for any acquired property is included prospectively from acquisition date. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 (Dollars in thousands, except selected property information and share data)
 The following discussion should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this report. Where appropriate, the following discussion includes
analysis of the effects of our initial public offering and the formation transactions. We make
statements in this section that are forward-looking statements, see the section of this Form 10-K
report entitled Forward-Looking Statements. Certain risk factors may cause our actual results,
performance or achievements to differ materially from those expressed or implied by the following
discussion. For a discussion of such risk factors, see the sections of this Form 10-K report
entitled Risk Factors and Forward-Looking Statements.
 Overview
     Our Business Segments
 26




---



##### Table of Contents



Student Housing Leasing
      Third-Party Management Services
  Third-Party Development Consulting Services
  27




---



##### Table of Contents



Trends and Outlook
 Rents and Occupancy
  General and Administrative Costs
  Critical Accounting Policies
  Student Housing Leasing Revenue Recognition
   28




---



##### Table of Contents



Student Housing Food Service Revenue Recognition
  Other Leasing Revenue Recognition
  Revenue and Cost Recognition of Third-Party Development Consulting Services
   Student Housing Property Acquisitions
  Business Combinations
 Repairs and Maintenance
  Long Lived Assets  Impairment
 29




---



##### Table of Contents



Results of Operations for the Years Ended December 31, 2006 and 2005
  Year Ended December 31, 2006
    
    
    Year Ended December 31, 2005Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total(In
thousands)Revenues:Student housing
leasing revenue
    
    $
    87,438
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    87,438
    
    
    $
    75,877
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    75,877Student housing food
service revenue
    
    
    3,634
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,634
    
    
    
    3,491
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,491Other leasing revenue
    
    
    14,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-party
development
consulting services
    
    
    
    
    
    
    3,773
    
    
    
    
    
    
    
    
    
    
    
    3,773
    
    
    
    
    
    
    
    1,759
    
    
    
    
    
    
    
    
    
    
    
    1,759Third-party
management services
    
    
    
    
    
    
    
    
    
    
    2,796
    
    
    
    
    
    
    
    2,796
    
    
    
    
    
    
    
    
    
    
    
    1,968
    
    
    
    
    
    
    
    1,968Intersegment revenues
    
    
    
    
    
    
    
    
    
    
    3,544
    
    
    
    (3,544
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,644
    
    
    
    (2,644
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,638
    
    
    
    7,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,694
    
    
    
    6,694Total revenues
    
    
    105,084
    
    
    
    3,773
    
    
    
    6,340
    
    
    
    4,094
    
    
    
    119,291
    
    
    
    79,368
    
    
    
    1,759
    
    
    
    4,612
    
    
    
    4,050
    
    
    
    89,789Operating expenses:Student housing
leasing operations
    
    
    42,669
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,669
    
    
    
    37,794
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,794Student housing food
service operations
    
    
    3,318
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,318
    
    
    
    3,275
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,275General and
administrative
    
    
    
    
    
    
    2,210
    
    
    
    5,004
    
    
    
    
    
    
    
    7,214
    
    
    
    
    
    
    
    2,245
    
    
    
    3,969
    
    
    
    
    
    
    
    6,214Intersegment expenses
    
    
    3,544
    
    
    
    
    
    
    
    
    
    
    
    (3,544
    )
    
    
    
    
    
    
    2,644
    
    
    
    
    
    
    
    
    
    
    
    (2,644
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,638
    
    
    
    7,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,694
    
    
    
    6,694Total operating expenses
    
    
    49,531
    
    
    
    2,210
    
    
    
    5,004
    
    
    
    4,094
    
    
    
    60,839
    
    
    
    43,713
    
    
    
    2,245
    
    
    
    3,969
    
    
    
    4,050
    
    
    
    53,977Net operating income (loss)
    
    
    55,553
    
    
    
    1,563
    
    
    
    1,336
    
    
    
    
    
    
    
    58,452
    
    
    
    35,655
    
    
    
    (486
    )
    
    
    643
    
    
    
    
    
    
    
    35,812Nonoperating expenses(1)
    
    
    64,708
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,708
    
    
    
    46,578
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    46,572Income (loss) before equity in
earnings of unconsolidated entities,
income taxes and minority interest
    
    
    (9,155
    )
    
    
    1,563
    
    
    
    1,336
    
    
    
    
    
    
    
    (6,256
    )
    
    
    (10,923
    )
    
    
    (480
    )
    
    
    643
    
    
    
    
    
    
    
    (10,760
    )Equity in earnings of unconsolidated
entities
    
    
    (74
    )
    
    
    814
    
    
    
    
    
    
    
    
    
    
    
    740
    
    
    
    
    
    
    
    880
    
    
    
    
    
    
    
    
    
    
    
    880Income (loss) before taxes and
minority interest(2)
    
    $
    (9,229
    )
    
    $
    2,377
    
    
    $
    1,336
    
    
    $
    
    
    
    $
    (5,516
    )
    
    $
    (10,923
    )
    
    $
    400
    
    
    $
    643
    
    
    $
    
    
    
    $
    (9,880
    )
 
 (1)
    
    Nonoperating expenses include interest expense, interest income, exit fees on early payment of debt, amortization of deferred financing costs,
depreciation, and amortization of intangibles.(2)
    
    The following is a reconciliation of the reportable segments net income
(loss) before income taxes and minority interest to EDRs consolidated net
income (loss) before income taxes and minority interest
determined under generally accepted accounting principles: 30




---



##### Table of Contents



2006
    
    
    2005Net income (loss) before taxes and minority interest for reportable segments
    
    $
    (5,516
    )
    
    $
    (9,880
    )Unallocated corporate amounts:Noncash compensation charge for PIUs and restricted stock
    
    
    (796
    )
    
    
    (4,679
    )Other corporate expenses
    
    
    (5,629
    )
    
    
    (1,518
    )Net income (loss) before income taxes and minority interest
    
    $
    (11,941
    )
    
    $
    (16,077
    )
 Student housing leasing
  Year ended
    
    Year endedDecember
    
    December31, 2006
    
    31, 2005
    
    DifferenceOccupancyPhysical (1)
    
    
    93.3
    %
    
    
    92.2
    %
    
    
    1.1
    %Economic (2)
    
    
    91.2
    %
    
    
    90.5
    %
    
    
    0.7
    %NarPAB (3)
    
    $
    343
    
    
    $
    340
    
    
    $
    3Other income per avail. bed (4)
    
    $
    24
    
    
    $
    26
    
    
    $
    (2
    )RevPAB (5)
    
    $
    367
    
    
    $
    366
    
    
    $
    1Operating expense per bed (6)
    
    $
    179
    
    
    $
    182
    
    
    $
    (3
    )Operating margin
    
    
    51.2
    %
    
    
    50.2
    %
    
    
    1
    %Design Beds (7)
    
    
    238,380
    
    
    
    207,355
    
    
    
    31,025
 
 (1)
    
    Physical occupancy represents a weighted average of the month end occupancies for the
respective period.(2)
    
    Economic occupancy represents the effective occupancy calculated by taking net apartment rent
accounted for on a GAAP basis for the respective period divided by market rent for the respective
period.(3)
    
    NarPAB represents GAAP net apartment rent for the respective period divided by the sum of the
design beds in the portfolio for each of the included months. Does not include food service revenue
or other leasing revenue.(4)
    
    Represents other GAAP-based income for the respective period divided by the sum of the design
beds in the portfolio for each of the included months. Other income includes service/app fees, late
fees, termination fees, parking fees, transfer fees, damage recovery, utility recovery, and other
misc.(5)
    
    Represents total revenue (net apartment rent plus other income) for the respective period
divided by the sum of the design beds in the portfolio for each of the included months.(6)
    
    Represents property-level operating expense excluding management fees, depreciation and
amortization divided by the sum of the design beds for each of the included months.(7)
    
    Represents the sum of the monthly design beds in the portfolio during the period, excluding
Place properties.    31




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##### Table of Contents



Third-party development consulting services
  Recognized EarningsProject
    
    Beds
    
    Fee Type
    
    2006
    
    2005
    
    DifferenceSlippery Rock University  Phase I
    
    
    1,390
    
    
    Development fee
    
    $
    1,787
    
    
    $
    887
    
    
    $
    900Indiana University of Pennsylvania
    
    
    734
    
    
    Development fee
    
    
    924
    
    
    
    
    
    
    
    924University of Michigan
    
    
    849
    
    
    Development fee
    
    
    567
    
    
    
    
    
    
    
    567Auraria Higher Education System
    
    
    685
    
    
    Development fee
    
    
    
    
    
    
    365
    
    
    
    (365
    )Calhoun Street
    
    
    
    
    
    Purchasing fee
    
    
    
    
    
    
    306
    
    
    
    (306
    )University of North Carolina  Greensboro
    
    
    600
    
    
    Construction  oversight fee
    
    
    105
    
    
    
    
    
    
    
    105University of Louisville  Phase III
    
    
    359
    
    
    Construction  oversight fee
    
    
    59
    
    
    
    41
    
    
    
    18University of Alabama  Birmingham
    
    
    753
    
    
    Construction  oversight fee
    
    
    61
    
    
    
    160
    
    
    
    (99
    )University of Alabama  Tuscaloosa
    
    
    631
    
    
    Development fee
    
    
    257
    
    
    
    
    
    
    
    257Other
    
    
    
    
    
    Consulting fee
    
    
    13
    
    
    
    
    
    
    
    13Third-party development consulting services
    
    
    
    
    
    
    
    $
    3,773
    
    
    $
    1,759
    
    
    $
    2,014California University of Pennsylvania  Phase IV
    
    
    447
    
    
    Development fee
    
    $
    173
    
    
    $
    156
    
    
    $
    17California University of Pennsylvania  Phase V
    
    
    354
    
    
    Development fee
    
    
    143
    
    
    
    
    
    
    
    143University of North Carolina  Greensboro
    
    
    600
    
    
    Development fee
    
    
    240
    
    
    
    
    
    
    
    240Bloomsburg University
    
    
    407
    
    
    Development fee
    
    
    
    
    
    
    239
    
    
    
    (239
    )University of Louisville  Phase III
    
    
    359
    
    
    Development fee
    
    
    126
    
    
    
    100
    
    
    
    26University of Alabama  Birmingham
    
    
    753
    
    
    Development fee
    
    
    132
    
    
    
    357
    
    
    
    (225
    )Other
    
    
    
    
    
    Development fee
    
    
    
    
    
    
    28
    
    
    
    (28
    )Equity in earnings of unconsolidated entities
    
    
    
    
    
    
    
    $
    814
    
    
    $
    880
    
    
    $
    (66
    )
    Third-party management services
  32




---



##### Table of Contents



Nonoperating expenses
  Other corporate expenses
   Results of Operations for the years ended December 31, 2005 and 2004
  33




---



##### Table of Contents



Year Ended December 31, 2005
    
    
    Year Ended December 31, 2004Third-Party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-PartyStudent
    
    
    Development
    
    
    Third-Party
    
    
    
    
    
    
    
    
    
    
    Student
    
    
    Development
    
    
    Third-PartyHousing
    
    
    Consulting
    
    
    Management
    
    
    
    
    
    
    
    
    
    
    Housing
    
    
    Consulting
    
    
    ManagementLeasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total
    
    
    Leasing
    
    
    Services
    
    
    Services
    
    
    Adjustments
    
    
    Total(In
thousands)Revenues:Student housing
leasing revenue
    
    $
    75,877
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    75,877
    
    
    $
    17,896
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    17,896Student housing food
service revenue
    
    
    3,491
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,491
    
    
    
    3,137
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,137Third-party
development
consulting services
    
    
    
    
    
    
    1,759
    
    
    
    
    
    
    
    
    
    
    
    1,759
    
    
    
    
    
    
    
    392
    
    
    
    
    
    
    
    
    
    
    
    392Third-party
management services
    
    
    
    
    
    
    
    
    
    
    1,968
    
    
    
    
    
    
    
    1,968
    
    
    
    
    
    
    
    
    
    
    
    1,326
    
    
    
    
    
    
    
    1,326Intersegment revenues
    
    
    
    
    
    
    
    
    
    
    2,644
    
    
    
    (2,644
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    973
    
    
    
    (973
    )
    
    
    Operating expense
reimbursements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,694
    
    
    
    6,694
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,223
    
    
    
    5,223Total revenues
    
    
    79,368
    
    
    
    1,759
    
    
    
    4,612
    
    
    
    4,050
    
    
    
    89,789
    
    
    
    21,033
    
    
    
    392
    
    
    
    2,299
    
    
    
    4,250
    
    
    
    27,974Operating expenses:Student housing
leasing operations
    
    
    37,794
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,794
    
    
    
    7,645
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,645Student housing food
service operations
    
    
    3,275
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,275
    
    
    
    2,899
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,899General and
administrative
    
    
    
    
    
    
    2,245
    
    
    
    3,969
    
    
    
    
    
    
    
    6,214
    
    
    
    
    
    
    
    1,329
    
    
    
    2,216
    
    
    
    
    
    
    
    3,545Intersegment expenses
    
    
    2,644
    
    
    
    
    
    
    
    
    
    
    
    (2,644
    )
    
    
    
    
    
    
    973
    
    
    
    
    
    
    
    
    
    
    
    (973
    )
    
    
    Reimbursable
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,694
    
    
    
    6,694
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,223
    
    
    
    5,223Total operating expenses
    
    
    43,713
    
    
    
    2,245
    
    
    
    3,969
    
    
    
    4,050
    
    
    
    53,977
    
    
    
    11,517
    
    
    
    1,329
    
    
    
    2,216
    
    
    
    4,250
    
    
    
    19,312Net operating income (loss)
    
    
    35,655
    
    
    
    (486
    )
    
    
    643
    
    
    
    
    
    
    
    35,812
    
    
    
    9,516
    
    
    
    (937
    )
    
    
    83
    
    
    
    
    
    
    
    8,662Nonoperating expenses(1)
    
    
    46,578
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    46,572
    
    
    
    8,906
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,906Income (loss) before equity in
earnings of unconsolidated entities,
income taxes and minority interest
    
    
    (10,923
    )
    
    
    (480
    )
    
    
    643
    
    
    
    
    
    
    
    (10,760
    )
    
    
    610
    
    
    
    (937
    )
    
    
    83
    
    
    
    
    
    
    
    (244
    )Equity in earnings of unconsolidated
entities
    
    
    
    
    
    
    880
    
    
    
    
    
    
    
    
    
    
    
    880
    
    
    
    
    
    
    
    1,002
    
    
    
    
    
    
    
    
    
    
    
    1,002Income (loss) before taxes and
minority interest(2)
    
    $
    (10,923
    )
    
    $
    400
    
    
    $
    643
    
    
    $
    
    
    
    $
    (9,880
    )
    
    $
    610
    
    
    $
    65
    
    
    $
    83
    
    
    $
    
    
    
    $
    758
 
 (1)
    
    Non operating expenses include interest expense, interest income
and exit fees on early payment of debt, amortization of deferred
financing costs, depreciation, and amortization of intangibles.(2)
    
    The following is a reconciliation of the reportable segments net
income (loss) before income taxes and minority interest to the
Trusts consolidated net income (loss) before income taxes and
minority interest determined under generally accepted accounting
principles: 2005
    
    
    2004Net income (loss) before taxes and minority interest for reportable segments
    
    $
    (9,880
    )
    
    $
    758Unallocated corporate amounts:Noncash compensation charge for PIUs and restricted stock
    
    
    (4,679
    )
    
    
    Other corporate expenses
    
    
    (1,518
    )
    
    
    Net income (loss) before income taxes and minority interest
    
    $
    (16,077
    )
    
    $
    758
 Student housing leasing
  34




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##### Table of Contents



Third-party development consulting services
    Third-party management services
   Nonoperating expenses
  Liquidity and Capital Resources
 Revolving
Credit Facility and Other Indebtedness
  35




---



##### Table of Contents



Liquidity outlook and capital requirements
    36




---



##### Table of Contents



Predevelopment expenditures
  Long-term liquidity requirements
   Capital expenditures
  As of and for the Years EndedDecember 31,2006
    
    2005
    
    2004Total units
    
    
    6,400
    
    
    
    5,935
    
    
    
    895Total beds
    
    
    20,125
    
    
    
    18,548
    
    
    
    2,943Total recurring capital expenditures
    
    $
    2,222
    
    
    $
    1,638
    
    
    $
    166Average per unit
    
    $
    347.25
    
    
    $
    275.96
    
    
    $
    185.88Average per bed
    
    $
    110.43
    
    
    $
    88.30
    
    
    $
    56.53
  37




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##### Table of Contents



Commitments
  Less than
    
    
    1-3
    
    
    3-5
    
    
    After 51 Year
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    Total(In thousands)Contractual Obligations:Long-Term Debt Obligations(1)
    
    $
    60,158
    
    
    $
    380,930
    
    
    $
    1,835
    
    
    $
    48,102
    
    
    $
    491,025Contractual Fixed Interest Obligations(2)
    
    
    23,322
    
    
    
    38,184
    
    
    
    9,839
    
    
    
    2,881
    
    
    
    74,226Operating Lease and Future Purchase Obligations(3)
    
    
    2,724
    
    
    
    4,282
    
    
    
    3,246
    
    
    
    908
    
    
    
    11,160Capital Reserve Obligations(4)
    
    
    1,573
    
    
    
    2,418
    
    
    
    421
    
    
    
    182
    
    
    
    4,594Total
    
    $
    87,777
    
    
    $
    425,814
    
    
    $
    15,341
    
    
    $
    52,073
    
    
    $
    581,005
 
 (1)
    
    Includes required monthly principal amortization and amounts due
at maturity on first mortgage debt secured by student housing
properties and amounts due under Amended Revolver and Term loan
agreements.(2)
    
    Includes contractual fixed rate interest payments.(3)
    
    Includes future minimum lease commitments under operating lease obligations and future purchase
obligations for advertising.(4)
    
    Includes future annual contributions to the capital reserve as required by certain mortgage debt. Long-Term Indebtedness
     Year2007
    
    $
    60,1582008
    
    
    26,4812009
    
    
    354,4492010
    
    
    8882011
    
    
    947Thereafter
    
    
    48,102Total
    
    $
    491,025Debt premium
    
    
    2,308Outstanding as of December 31, 2006, net of debt premium
    
    $
    493,333
  38




---



##### Table of Contents



Distributions
   Off-Balance Sheet Arrangements
  Funds From Operations
    39




---



##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004(In thousands)Net income (loss)
    
    $
    (12,245
    )
    
    $
    (15,534
    )
    
    $
    758Plus student housing property depreciation and amortization of
lease intangibles
    
    
    35,728
    
    
    
    29,168
    
    
    
    3,120Plus equity portion of real estate depreciation and amortization
on equity investees
    
    
    54
    
    
    
    
    
    
    
    Plus minority interest benefit
    
    
    (355
    )
    
    
    (1,040
    )
    
    
    Funds from operations available to all share and unit holders
    
    $
    23,182
    
    
    $
    12,594
    
    
    $
    3,878
 Inflation
  Recent accounting pronouncements
 Exchange of Nonmonetary Assets, Accounting for Nonmonetary Transactions
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees.
 Determining Whether a General Partner, or the
General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights
 Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB
 40




---



##### Table of Contents



Statement No. 109
  Fair Value Measurements.
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
     
 Item 8. Financial Statements and Supplementary Data.
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  41




---



##### Table of Contents



Item 9A. Controls and Procedures.
 Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  Managements Report on Internal Control Over Financial Reporting
 Internal Control  Integrated Framework
   42




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Managements Report on
Internal Control Over Financial Reporting Internal ControlIntegrated Framework
    Internal ControlIntegrated Framework Internal ControlIntegrated Framework
   
 43




---



##### Table of Contents



Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors and Executive Officers of the Registrant.
  
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
   
 Item 13. Certain Relationships and Related Transactions.
  
 Item 14. Principal Accounting Fees and Services.
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules.
  Financial Statements
  Financial Statement Schedules
  Exhibits
   44




---



##### Table of Contents



SIGNATURES
   By:
    

/s/ Paul O. BowerPaul O. BowerPresident, Chief Executive Officerand Chairman of the Board of Directors
   Signature
    
    Title
    
    Date/s/ Paul O. Bower

Paul O. Bower
    
    President, Chief Executive
Officer and Chairman of the
Board of Directors
(Principal Executive
Officer)
    
    March 12, 2007/s/ Randall H. Brown

Randall H. Brown
    
    Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
(Principal Financial
Officer)
    
    March 12, 2007/s/ J. Drew Koester

J. Drew Koester
    
    Vice President and Chief
Accounting Officer
(Principal Accounting
Officer)
    
    March 12, 2007/s/ Monte J. Barrow

Monte J. Barrow
    
    Director
    
    March 12, 2007/s/ William J. Cahill, III

William J. Cahill, III
    
    Director
    
    March 12, 2007/s/ Randall L. Churchey

Randall L. Churchey
    
    Director
    
    March 12, 2007/s/ John L. Ford

John L. Ford
    
    Director
    
    March 12, 2007
 45




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##### Table of Contents



INDEX TO FINANCIAL STATEMENTS
 PageEducation Realty Trust, Inc. and EDR PredecessorReport of independent registered public accounting firm
    
    
    F-3Consolidated balance sheets as of December 31, 2006 and 2005
    
    
    F-4Consolidated statements of operations for the Trust for the years ended December 31, 2006 and 2005
and the period July 12, 2004 (date of formation) through December 31, 2004 and combined statements
of operations for the EDR Predecessor for the period January 1, 2005 through January 30, 2005 and
the year ended December 31, 2004
    
    
    F-5Consolidated statement of changes in stockholders equity for the Trust for the years ended December
31, 2006 and 2005 and the period July 12, 2004 (date of formation) through December 31, 2004 and
combined statements of changes in predecessor owners equity for the EDR Predecessor for the period
January 1, 2005 through January 30, 2005 and the year ended December 31, 2004
    
    
    F-6Consolidated statements of cash flows for the Trust for the years ended December 31, 2006 and 2005
and the period July 12, 2004 (date of formation) through December 31, 2004 and combined statements
of cash flows for the EDR Predecessor for the period January 1, 2005 through January 30, 2005 and
the year ended December 31, 2004
    
    
    F-7Notes to consolidated and combined financial statements
    
    
    F-9National Development/ Allen & OHara CUPA, LLCReport of independent registered public accounting firm
    
    
    F-33Balance sheets as of December 31, 2006 (unaudited) and 2005 (unaudited)
    
    
    F-34Statements of operations for the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
    
    
    F-35Statements of changes in members equity (deficit) for the years ended December 31, 2006
(unaudited), 2005 (unaudited) and 2004
    
    
    F-36Statements of cash flows for the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
    
    
    F-37Notes to financial statements
    
    
    F-38National Development/ Allen & OHara Clarion, LLCReport of independent registered public accounting firm
    
    
    F-41Balance sheets as of December 31, 2006 (unaudited) and 2005 (unaudited)
    
    
    F-42Statements of operations for the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
    
    
    F-43Statements of changes in members equity (deficit) for the years ended December 31, 2006
(unaudited), 2005 (unaudited) and 2004
    
    
    F-44Statements of cash flows for the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
    
    
    F-45Notes to financial statements
    
    
    F-46National Development/ Allen & OHara Lock Haven, LLCReport of independent registered public accounting firm
    
    
    F-49
 F-1




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##### Table of Contents



PageBalance sheets as of December 31, 2006 (unaudited) and 2005 (unaudited)
    
    
    F-50Statements of operations for the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
    
    
    F-51Statements of changes in members equity (deficit) for the years ended December 31, 2006
(unaudited), 2005 (unaudited) and 2004
    
    
    F-52Statements of cash flows for the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
    
    
    F-53Notes to financial statements
    
    
    F-54Properties Subject to Net Lease - Place Portfolio Lessee, LLCReport of independent registered public accounting firm
    
    
    F-57Balance sheet as of December 31, 2006
    
    
    F-58Statement of operations for the year ended December 31, 2006
    
    
    F-59Statement of members equity for the year ended December 31, 2006
    
    
    F-60Statement of cash flows for the year ended December 31, 2006
    
    
    F-61Notes
to financial statements
    
    
    F-62
 F-2




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 F-3




---



##### Table of Contents



EDUCATION REALTY TRUST, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December 31, 2006 and 2005
 2006
    
    
    2005(Amounts in thousands, except shareand per share data)ASSETSStudent housing properties, net
    
    $
    804,759
    
    
    $
    620,305Corporate office furniture, net
    
    
    752
    
    
    
    991Cash and cash equivalents
    
    
    6,427
    
    
    
    61,662Restricted cash
    
    
    9,154
    
    
    
    6,738Student contracts receivable, net
    
    
    227
    
    
    
    470Receivable from affiliate
    
    
    369
    
    
    
    Management fee receivable from third parties
    
    
    669
    
    
    
    552Goodwill and other intangibles, net
    
    
    3,649
    
    
    
    3,546Other assets
    
    
    9,452
    
    
    
    9,785Total assets
    
    $
    835,458
    
    
    $
    704,049LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Mortgage loans, net of unamortized premium/discount
    
    $
    423,933
    
    
    $
    328,335Other long term debt
    
    
    47,000
    
    
    
    Revolving line of credit
    
    
    22,400
    
    
    
    Accounts payable
    
    
    696
    
    
    
    2,075Accrued expenses
    
    
    10,068
    
    
    
    7,295Accounts payable affiliate
    
    
    
    
    
    
    225Deferred revenue
    
    
    9,073
    
    
    
    7,660Total liabilities
    
    
    513,170
    
    
    
    345,590Minority interest
    
    
    19,289
    
    
    
    27,926Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Common stock, $.01 par value, 200,000,000 shares
authorized, 26,810,552 and 26,263,889 shares
issued and outstanding as of December 31, 2006 and
2005, respectively
    
    
    268
    
    
    
    263Preferred shares, $0.01 par value, 50,000,000
shares authorized, no shares issued and
outstanding
    
    
    
    
    
    
    Unearned deferred compensation
    
    
    
    
    
    
    (2,470
    )Additional paid in capital
    
    
    330,374
    
    
    
    354,134Loan to unitholder
    
    
    
    
    
    
    (5,996
    )Warrants
    
    
    375
    
    
    
    375Accumulated deficit
    
    
    (28,018
    )
    
    
    (15,773
    )Total stockholders equity
    
    
    302,999
    
    
    
    330,533Total liabilities and stockholders equity
    
    $
    835,458
    
    
    $
    704,049
  F-4




---



##### Table of Contents



EDUCATION REALTY TRUST, INC. AND
 SUBSIDIARIES AND EDR PREDECESSOR
 
 CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
 Education Realty Trust, Inc.
    
    
    EDR PredecessorConsolidated
    
    
    CombinedJuly 12
    
    
    January 1Year Ended
    
    
    Year Ended
    
    
    through
    
    
    through
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    January 30,
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004(Amounts in thousands, except share and per share data)Revenues:Student housing leasing revenue
    
    $
    87,438
    
    
    $
    74,374
    
    
    $
    
    
    
    $
    1,503
    
    
    $
    17,896Student housing food service revenue
    
    
    3,634
    
    
    
    3,222
    
    
    
    
    
    
    
    269
    
    
    
    3,137Other leasing revenue
    
    
    14,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Third-party development services
    
    
    3,773
    
    
    
    1,759
    
    
    
    
    
    
    
    
    
    
    
    392Third-party management services
    
    
    2,796
    
    
    
    1,865
    
    
    
    
    
    
    
    103
    
    
    
    1,326Operating expense reimbursements
    
    
    7,638
    
    
    
    6,023
    
    
    
    
    
    
    
    671
    
    
    
    5,223Total revenues
    
    
    119,291
    
    
    
    87,243
    
    
    
    
    
    
    
    2,546
    
    
    
    27,974Operating expenses:Student housing leasing operations
    
    
    42,669
    
    
    
    37,270
    
    
    
    
    
    
    
    524
    
    
    
    7,645Student housing food service operations
    
    
    3,318
    
    
    
    3,020
    
    
    
    
    
    
    
    255
    
    
    
    2,899General and administrative
    
    
    12,331
    
    
    
    12,182
    
    
    
    201
    
    
    
    367
    
    
    
    3,545Depreciation and amortization
    
    
    36,083
    
    
    
    28,908
    
    
    
    
    
    
    
    260
    
    
    
    3,120Reimbursable operating expenses
    
    
    7,638
    
    
    
    6,023
    
    
    
    
    
    
    
    671
    
    
    
    5,223Total operating expenses
    
    
    102,039
    
    
    
    87,403
    
    
    
    201
    
    
    
    2,077
    
    
    
    22,432Operating income (loss)
    
    
    17,252
    
    
    
    (160
    )
    
    
    (201
    )
    
    
    469
    
    
    
    5,542Nonoperating expenses:Interest expense
    
    
    29,353
    
    
    
    16,186
    
    
    
    21
    
    
    
    479
    
    
    
    5,623Exit fees on early repayment of
mortgages
    
    
    
    
    
    
    1,084
    
    
    
    
    
    
    
    
    
    
    
    Amortization of deferred financing costs
    
    
    1,114
    
    
    
    820
    
    
    
    
    
    
    
    
    
    
    
    163Interest income
    
    
    (534
    )
    
    
    (1,303
    )
    
    
    
    
    
    
    
    
    
    
    Total nonoperating expenses
    
    
    29,933
    
    
    
    16,787
    
    
    
    21
    
    
    
    479
    
    
    
    5,786Loss before equity in earnings of
unconsolidated entities, income taxes
and minority interest
    
    
    (12,681
    )
    
    
    (16,947
    )
    
    
    (222
    )
    
    
    (10
    )
    
    
    (244
    )Equity in earnings of unconsolidated
entities
    
    
    740
    
    
    
    853
    
    
    
    
    
    
    
    27
    
    
    
    1,002Income (loss) before income taxes and
minority interest
    
    
    (11,941
    )
    
    
    (16,094
    )
    
    
    (222
    )
    
    
    17
    
    
    
    758Taxes
    
    
    659
    
    
    
    497
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss) before minority
interest
    
    
    (12,600
    )
    
    
    (16,591
    )
    
    
    (222
    )
    
    
    17
    
    
    
    758Minority interest
    
    
    (355
    )
    
    
    (1,040
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (12,245
    )
    
    $
    (15,551
    )
    
    $
    (222
    )
    
    $
    17
    
    
    $
    758Earnings per share information:Loss per share  basic and diluted
    
    $
    (0.46
    )
    
    $
    (0.67
    )
    
    $
    (2,220
    )Weighted average common shares
outstanding  basic and diluted
    
    
    26,387,547
    
    
    
    23,063,110
    
    
    
    100Distributions per common share
    
    $
    1.10
    
    
    $
    0.79
  F-5




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##### Table of Contents



EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
 
 CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN
 STOCKHOLDERS AND OWNERS EQUITY
 Common Stock
    
    
    Additional
    
    
    Unearned
    
    
    
    
    
    
    Loan to
    
    
    
    
    
    
    EDRPaid-In
    
    
    Deferred
    
    
    
    
    
    
    Unit
    
    
    Accumulated
    
    
    PredecessorShares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Warrants
    
    
    Holder
    
    

deficit
    
    
    Equity
    
    
    Total(Amounts in thousands, except share and per share data)EDR Predecessor:Balance, December 31, 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,495
    
    
    
    2,495Equity contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    40Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,504
    )
    
    
    (1,504
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    758
    
    
    
    758Balance, December 31, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,789
    
    
    
    1,789Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    17Balance, January 30, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,806
    
    
    $
    1,806The Trust:Contributed capital, July
12, 2004
    
    
    100
    
    
    
    
    
    
    $
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (222
    )
    
    
    
    
    
    
    (222
    )Balance, December 31, 2004
    
    
    100
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (222
    )
    
    
    
    
    
    
    (221
    )Issuance and registration
of common shares  The Offering
    
    
    21,850,000
    
    
    $
    219
    
    
    
    320,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    320,419Redemption of Promoters common
shares simultaneous with The
Offering
    
    
    (100
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Issuance of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    375
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375Loan to unit holder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (5,996
    )
    
    
    
    
    
    
    
    
    
    
    (5,996
    )Excess of purchase price of EDR
Predecessor over fair value
related to Promoter carried
over at historical cost
    
    
    
    
    
    
    
    
    
    
    (17,382
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,382
    )Restricted shares issued to
officers and directors
    
    
    
    
    
    
    
    
    
    
    3,126
    
    
    $
    (3,126
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of restricted stock
    
    
    38,889
    
    
    
    
    
    
    
    
    
    
    
    656
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    656Issuance of common shares 
private placement
    
    
    4,375,000
    
    
    
    44
    
    
    
    66,911
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,955Cash dividends
    
    
    
    
    
    
    
    
    
    
    (18,721
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,721
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,551
    )
    
    
    
    
    
    
    (15,551
    )Balance, December 31, 2005
    
    
    26,263,889
    
    
    
    263
    
    
    
    354,134
    
    
    
    (2,470
    )
    
    
    375
    
    
    
    (5,996
    )
    
    
    (15,773
    )
    
    
    
    
    
    
    330,533Reclassification of unearned
compensation upon adoption of
SFAS 123R
    
    
    
    
    
    
    
    
    
    
    (2,470
    )
    
    
    2,470
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted shares issued to
officers and directors
    
    
    6,000
    
    
    
    
    
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88Amortization of restricted
stock
    
    
    36,000
    
    
    
    
    
    
    
    604
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    604Operating unit conversion to
common stock
    
    
    99,056
    
    
    
    1
    
    
    
    1,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,390Redemption of minority interest
to satisfy loan to unitholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,996
    
    
    
    
    
    
    
    
    
    
    
    5,996Net proceeds from issuance of
common shares -dividend
reinvestment plan
    
    
    405,607
    
    
    
    4
    
    
    
    5,743
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,747Cash dividends
    
    
    
    
    
    
    
    
    
    
    (29,114
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,114
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,245
    )
    
    
    
    
    
    
    (12,245
    )Balance, December 31, 2006
    
    
    26,810,552
    
    
    $
    268
    
    
    $
    330,374
    
    
    
    
    
    
    $
    375
    
    
    
    
    
    
    $
    (28,018
    )
    
    
    
    
    
    $
    302,999
  F-6




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##### Table of Contents



EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
 
 CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
 Education Realty Trust, Inc.
    
    
    EDR PredecessorConsolidated
    
    
    CombinedJuly 12
    
    
    January 1Year Ended
    
    
    Year Ended
    
    
    through
    
    
    through
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    January 30,
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Operating activities:Net income (loss)
    
    $
    (12,245
    )
    
    $
    (15,551
    )
    
    $
    (222
    )
    
    $
    17
    
    
    $
    758Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    36,083
    
    
    
    28,908
    
    
    
    
    
    
    
    246
    
    
    
    3,120Deferred tax benefit
    
    
    (48
    )
    
    
    (209
    )
    
    
    
    
    
    
    
    
    
    
    Loss on disposal of assets
    
    
    11
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    Amortization of deferred financing costs
    
    
    1,114
    
    
    
    820
    
    
    
    
    
    
    
    14
    
    
    
    163Amortization of unamortized debt
premiums/discounts
    
    
    (559
    )
    
    
    (364
    )
    
    
    
    
    
    
    
    
    
    
    Distributions from unconsolidated entities
    
    
    787
    
    
    
    879
    
    
    
    
    
    
    
    
    
    
    
    808Noncash compensation expense related to PIUs
and restricted stock
    
    
    796
    
    
    
    4,783
    
    
    
    
    
    
    
    
    
    
    
    Equity in earnings of unconsolidated entities
    
    
    (740
    )
    
    
    (853
    )
    
    
    
    
    
    
    (27
    )
    
    
    (1,002
    )Minority interest
    
    
    (355
    )
    
    
    (1,040
    )
    
    
    
    
    
    
    
    
    
    
    Change in operating assets and liabilities
(net of acquisitions):Student contracts receivable
    
    
    259
    
    
    
    (374
    )
    
    
    
    
    
    
    (5
    )
    
    
    76Management fees receivable
    
    
    (117
    )
    
    
    (284
    )
    
    
    
    
    
    
    63
    
    
    
    (52
    )Other assets
    
    
    (1,176
    )
    
    
    868
    
    
    
    
    
    
    
    (818
    )
    
    
    330Accounts payable and accrued expenses
    
    
    612
    
    
    
    3,069
    
    
    
    
    
    
    
    712
    
    
    
    (65
    )Accounts payable affiliate
    
    
    (594
    )
    
    
    (3,729
    )
    
    
    
    
    
    
    276
    
    
    
    (471
    )Deferred revenue
    
    
    1,359
    
    
    
    1,432
    
    
    
    
    
    
    
    (320
    )
    
    
    (597
    )Net cash provided by (used in) operating activities
    
    
    25,187
    
    
    
    18,373
    
    
    
    (222
    )
    
    
    158
    
    
    
    3,068Investing activitiesProperty acquisitions, net of cash acquired
    
    
    (112,717
    )
    
    
    (187,283
    )
    
    
    
    
    
    
    (25
    )
    
    
    Deferred acquisition costs and earnest money
deposits
    
    
    
    
    
    
    (4,718
    )
    
    
    
    
    
    
    
    
    
    
    Purchase of corporate furniture and fixtures
    
    
    (86
    )
    
    
    (1,093
    )
    
    
    
    
    
    
    
    
    
    
    Restricted cash
    
    
    (40
    )
    
    
    (1,725
    )
    
    
    
    
    
    
    (2,348
    )
    
    
    336Insurance proceeds on property loss
    
    
    184
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    Investment in student housing properties
    
    
    (4,858
    )
    
    
    (5,513
    )
    
    
    
    
    
    
    
    
    
    
    (517
    )Investments in joint ventures
    
    
    (3,313
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (120,830
    )
    
    
    (200,157
    )
    
    
    
    
    
    
    (2,373
    )
    
    
    (181
    )Financing activities:Payment of mortgage notes
    
    
    (2,503
    )
    
    
    (115,782
    )
    
    
    
    
    
    
    (98
    )
    
    
    (1,093
    )Borrowings of long-term debt
    
    
    50,000
    
    
    
    
    
    
    
    497
    
    
    
    
    
    
    
    Repayments of long-term debt
    
    
    (3,000
    )Debt issuance costs
    
    
    (1,352
    )
    
    
    (3,176
    )
    
    
    
    
    
    
    
    
    
    
    (3
    )Borrowing (repayment) of line of credit, net
    
    
    22,400
    
    
    
    (497
    )
    
    
    
    
    
    
    
    
    
    
    Loan to unit holder
    
    
    
    
    
    
    (5,996
    )
    
    
    
    
    
    
    
    
    
    
    Proceeds from Offering and private placement
    
    
    5,994
    
    
    
    419,600
    
    
    
    
    
    
    
    
    
    
    
    Payment of offering costs
    
    
    (248
    )
    
    
    (30,008
    )
    
    
    (3,790
    )
    
    
    
    
    
    
    Distributions paid
    
    
    (30,875
    )
    
    
    (20,213
    )
    
    
    
    
    
    
    
    
    
    
    (1,504
    )Borrowing/(repayment) of notes payable
affiliate
    
    
    
    
    
    
    (483
    )
    
    
    3,515
    
    
    
    
    
    
    
    80Redemption of minority interest
    
    
    (8
    )Equity contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40Net cash provided by (used in) financing activities
    
    
    40,408
    
    
    
    243,445
    
    
    
    222
    
    
    
    (98
    )
    
    
    (2,480
    )
 F-7




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##### Table of Contents



Education Realty Trust, Inc.
    
    
    EDR PredecessorConsolidated
    
    
    CombinedJuly 12
    
    
    January 1Year Ended
    
    
    Year Ended
    
    
    through
    
    
    through
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    January 30,
    
    
    December 31,2006
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Net increase (decrease) in cash and cash equivalents
    
    
    (55,235
    )
    
    
    61,661
    
    
    
    
    
    
    
    (2,313
    )
    
    
    407Cash and cash equivalents, beginning of period
    
    
    61,662
    
    
    
    1
    
    
    
    1
    
    
    
    2,883
    
    
    
    2,476Cash and cash equivalents, end of period
    
    $
    6,427
    
    
    $
    61,662
    
    
    $
    1
    
    
    $
    570
    
    
    $
    2,883Supplemental disclosure of cash flow information:Interest paid
    
    $
    29,180
    
    
    $
    9,778
    
    
    $
    21
    
    
    $
    471
    
    
    $
    5,629Income taxes paid
    
    $
    819
    
    
    $
    357Supplemental disclosure of noncash activities:Place acquisition costs paid in 2005
    
    $
    4,718
    
    
    $
    Redemption of minority interest to satisfy
loan to unitholder
    
    
    6,116
    
    
    
    Prepaid offering costs charged against equity
    
    
    
    
    
    
    2,218Units issued in the Formation Transactions
    
    
    
    
    
    
    26,340Warrants issued in the Formation Transactions
    
    
    
    
    
    
    375Debt assumed in property acquisitions net of
premium
    
    
    98,660
    
    
    
    444,964
  F-8




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##### Table of Contents



EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
 
 NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
 (Amounts in thousands, except share and per share data)
 1. Organization and description of business
   
    
    Allen & OHara Education Services, LLC (AOES) a Tennessee
limited liability company performing student housing
management activities.
    
    Allen & OHara Development Company, LLC (AODC), a limited
liability company and formerly a wholly owned subsidiary of
AOES, providing development consulting services for third
party student housing properties.
    
    Allen & OHara Educational Properties LLC, a limited
liability company, previously holding the ownership
interests in the student housing property referred to as
The Gables Apartments (The Gables).
    
    Education Properties Trust, LLC (EPT), a Delaware limited
liability company, owned and managed the following four
garden-style student housing properties through four
separate wholly-owned limited liability companies:
 
    
    Players Club Apartments, Tallahassee, Florida
    
    The Reserve at Athens, Athens, Georgia
    
    The Reserve at Clemson, Clemson, South Carolina
    
    NorthPointe Apartments, Tucson, Arizona
 
    
    C Station, LLC, a Tennessee limited liability company,
owned and operated one garden-style student housing
property referred to as College Station.
    
    University Towers Raleigh, LLC, a North Carolina limited
liability company, owned a student housing property
referred to as University Towers.
    F-9




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##### Table of Contents



EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
 2. The Offering, the formation transactions and the private placement
   
    
    The Promoter and certain members of management contributed
their interests in AOES in exchange for $12,400 of units
in the Operating Partnership. AOES converted to a
corporation and elected to be treated as the taxable REIT
subsidiary. AOES owns 100% of AODC.
    
    The Operating Partnership acquired all of the interests in
EPT from the previous owners for $26,661 in cash, $1,342
in units in the Operating Partnership and the assumption
of debt totaling $50,134. As a result EPT became a wholly
owned single member LLC subsidiary of the Operating
Partnership.
    
    The owners of The Gables contributed their interests in
the student housing property to a newly formed Delaware
limited partnership referred to as EDR BG, LP in exchange
for all the limited partnership interests of EDR BG LP.
The Operating Partnership acquired all of the ownership
interests in EDR BG LP for $1,043 in cash, $58 in units in
the Operating Partnership and the assumption of debt
totaling $4,552.
    
    C Station LLC merged into a newly formed Delaware LLC, EDR
C Station LLC, which is a wholly owned subsidiary of the
Operating Partnership. The interests were contributed in
exchange for the issuance of $229 in units in the
Operating Partnership and the assumption of debt and notes
payable to the Promoter totaling $2,477.
    
    The University Towers Partnership acquired a 100% interest
in University Towers and in turn was acquired for $8,813
in cash, $4,316 in units and the assumption of debt
totaling $24,371.
    
    The Operating Partnership also acquired 14 properties
referred to as the JPI portfolio simultaneous with the
Offering. The purchase price of $401,975 was paid in cash
of $82,105 the issuance of $7,995 of units in the
Operating Partnership, and the assumption of first
mortgage debt of $311,500, of which $93,360 was repaid
with the use of the net proceeds of the offering.
Additionally the Operating Partnership issued warrants to
JPI to purchase 250,000 shares of common stock at an
exercise price per share of 103% of the Offering price.
These warrants have a value approximating $375. The
warrants are exercisable beginning January 31, 2006 and
expire on February 28, 2007. In connection with the
acquisition, the Operating Partnership entered into an
agreement to provide to the seller a revolving loan
commitment secured by a pledge of the Operating
Partnership units (499,688 units) issued to the seller in
the purchase transaction. On April 10, 2006, the Trust
redeemed 400,632 Operating Partnership units (minority
interest) in full satisfaction of the $5,996 note
receivable and accrued interest of $120. The redemption of
minority interest was recorded in accordance with SFAS No.
141, Business Combinations, which resulted in additional
goodwill of $388. The seller was released from the pledge
of the remaining 99,056 Operating Partnership units. On
April 26, 2006, the seller converted the remaining units
to the Trusts common stock.
   F-10




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##### Table of Contents



EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
 3. Summary of significant accounting policies
 Basis of presentation and principles of consolidation and combination
     Use of estimates
  Cash and cash equivalents
  Restricted cash
  Distributions
  Student housing properties
 F-11
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Business
Combinations,
 Accounting for the Impairment and Disposal of Long-lived Assets.
 Deferred financing costs
   Offering costs
  Debt premiums/discounts
  Income taxes
  Accounting for Income Taxes,
 F-12
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Earnings per share
 Earnings Per Share.
 2006
    
    2005Operating Partnership units
    
    
    913,738
    
    
    
    1,376,471University Towers Operating Partnership units
    
    
    269,757
    
    
    
    269,757Restricted Stock (unvested shares)
    
    
    111,111
    
    
    
    147,111Profits Interest Units
    
    
    265,000
    
    
    
    245,000Total potentially dilutive securities
    
    
    1,559,606
    
    
    
    2,038,339
  Repairs, maintenance, and major improvements
  Goodwill and other intangible assets
 Goodwill
and Other Intangible Assets.
 Investment in unconsolidated joint ventures and limited liability companies
  
    
    Salisbury Student Apartment Developers Joint Venture, 33% owned by AOES
    
    Salisbury Student Apartment Developers LLC, a Maryland
limited liability company 33% owned by AOES
    
    University of Louisville Apartment Developers LLC, a Kentucky
limited liability company 50% owned by AOES
 F-13
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
 
    
    Hines/ AOES LLC, an Alabama limited liability company, 50% owned by AOES
    
    National Development/ Allen & OHara CUPA, LLC, a Pennsylvania limited liability company, 50% owned by Allen &
OHara Development Company, LLC (AODC)
    
    National Development/ Allen & OHara Lock Haven, LLC, a Pennsylvania limited liability company, 50% owned by AODC
    
    National Development/ Allen & OHara Clarion, LLC, a Pennsylvania limited liability company, 50% owned by AODC
    
    Allen & OHara National Development Bloomsburg LLC, a Pennsylvania limited liability company, 50% owned by AODC
    
    Allen & OHara/ Academic Privatization LLC, a Tennessee limited liability company, 50% owned by AODC
   
    
    University Village-Greensboro LLC, a Delaware limited liability company, 25% owned by EROP
    
    AODC/CPA, LLC, a Delaware limited liability company, 50% owned by AODC
    
    WEDR Riverside Investors V, LLC, a Delaware limited liability company, 10% owned by EROP
    
    APF EDR, LP, a Delaware limited partnership, 10% owned by EROP
    
    APF EDR Food Services, LP, a Delaware limited partnership, 10% owned by EROP
    
    WEDR Stinson Investors V, LLC, a Delaware limited liability company, 10% owned by EROP
 Revenue recognition
  Student housing leasing revenue
 Student housing food service revenue
 Other leasing revenue
 F-14
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
 Third-party development consulting revenue
 Third-party management revenue
 Operating expense reimbursement revenue Income Statement
Characterization of Reimbursements Received for Out of Pocket Expenses Incurred.
  Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004Balance, beginning of period
    
    $
    410
    
    
    $
    
    
    
    $
    114Provision for uncollectible accounts
    
    
    775
    
    
    
    2,306
    
    
    
    152Deductions
    
    
    (1,142
    )
    
    
    (1,896
    )
    
    
    (169
    )Balance, end of period
    
    $
    43
    
    
    $
    410
    
    
    $
    97
 Costs related to third party development consulting services
  Advertising expense
  Minority interests
  Segment information
 Disclosures about Segments of an Enterprise
and Related Information,
 F-15
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Stock-based compensation
 Share-Based Payment Accounting for Stock Issued to Employees,
 Fair value of financial instruments
 Disclosure about the Fair Value of
Financial Instruments,
 Recent accounting pronouncements
 Exchange of Nonmonetary Assets, Accounting for Nonmonetary Transactions
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees.
 Determining Whether a General Partner, or the
General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights
 F-16
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
   Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB Statement No. 109
 Fair Value Measurements.
 4. Income taxes
   2006
    
    
    2005Deferred tax assets:Deferred revenue
    
    $
    49
    
    
    $
    458Depreciation and amortization
    
    
    335
    
    
    
    39Accrued expenses
    
    
    132
    
    
    
    109Straight line rent
    
    
    30
    
    
    
    3Total deferred tax assets
    
    
    546
    
    
    
    609Deferred tax liability:Amortization of management contracts intangible
    
    
    (44
    )
    
    
    (59
    )Net deferred tax assets
    
    $
    502
    
    
    $
    550
 F-17
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  2006
    
    
    2005Deferred:Federal
    
    $
    40
    
    
    $
    (182
    )State
    
    
    8
    
    
    
    (27
    )Deferred expense
    
    
    48
    
    
    
    (209
    )Current:Federal
    
    
    498
    
    
    
    525State
    
    
    113
    
    
    
    181Current expense
    
    
    611
    
    
    
    706Total provision
    
    $
    659
    
    
    $
    497
  2006
    
    
    2005Tax provision at U.S. statutory rates on TRS income subject to tax
    
    $
    546
    
    
    $
    381State income tax, net of federal benefit
    
    
    108
    
    
    
    114Other
    
    
    5
    
    
    
    2Tax provision
    
    $
    659
    
    
    $
    497
 5. Student housing acquisitions
  AllocationPlace PortfolioCurrent assets and restricted cash
    
    $
    2,376Student housing properties
    
    
    202,250Other
    
    
    570Total assets acquired
    
    
    205,196Current liabilities
    
    
    (855
    )Mortgage debt assumed net of premium/discount
    
    
    (98,660
    )Acquisition costs
    
    
    (7,446
    )Purchase price
    
    $
    98,235
  Preliminary allocationStatesboroCurrent assets and restricted cash
    
    $
    77Student housing properties
    
    
    12,703Other
    
    
    159Total assets acquired
    
    
    12,939Current liabilities
    
    
    (115
    )Mortgage debt assumed net of premium/discount
    
    
    Acquisition costs
    
    
    (65
    )Purchase price
    
    $
    12,759
 F-18
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
   EDR Predecessor
    
    
    JPI PortfolioCurrent assets and restricted cash
    
    $
    6,175
    
    
    $
    3,093Student housing properties
    
    
    117,587
    
    
    
    403,380Goodwill and other intangibles
    
    
    4,225
    
    
    
    3,562Carryover basis at historical cost
    
    
    17,382
    
    
    
    Other
    
    
    352
    
    
    
    719Total assets acquired
    
    
    145,721
    
    
    
    410,754Current liabilities
    
    
    (6,625
    )
    
    
    (4,650
    )Mortgage debt assumed net of premium/discount
    
    
    (83,099
    )
    
    
    (310,448
    )Acquisition costs
    
    
    (1,272
    )
    
    
    (7,540
    )Purchase price
    
    $
    54,725
    
    
    $
    88,116
  Allocationstudent housingacquisitionsCurrent assets and restricted cash
    
    $
    791Student housing properties
    
    
    117,390Goodwill and other intangibles
    
    
    1,209Other
    
    
    443Total assets acquired
    
    
    119,833Current liabilities
    
    
    (1,668
    )Mortgage debt assumed net of premium/discount
    
    
    (51,408
    )Acquisition costs
    
    
    (1,231
    )Purchase price
    
    $
    65,526
 F-19
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
   2006
    
    2005Pro forma revenue
    
    $
    120,274
    
    
    $
    116,974Pro forma net loss
    
    
    (11,961
    )
    
    
    (15,337
    )Loss per share
    
    
    (0.45
    )
    
    
    (0.56
    )
  6. Student housing properties
  2006
    
    
    2005Land
    
    $
    65,260
    
    
    $
    50,818Land improvements
    
    
    54,825
    
    
    
    44,802Construction in progress
    
    
    88
    
    
    
    542Buildings
    
    
    697,631
    
    
    
    512,544Furniture, fixtures and equipment
    
    
    45,444
    
    
    
    34,809863,248
    
    
    
    643,515Less accumulated depreciation
    
    
    (58,489
    )
    
    
    (23,210
    )Student housing properties, net
    
    $
    804,759
    
    
    $
    620,305
 F-20
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Initial Cost
    
    
    
    
    
    
    Total CostsCostBuildings and
    
    
    
    
    
    
    Capitalized
    
    
    
    
    
    
    Buildings and
    
    
    
    
    
    
    Accumulated
    
    
    Date ofProperty(3)
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Subsequently
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Depreciation(4)
    
    
    AcquisitionUniversity Towers
    
    $
    23,996
    
    
    $
    2,195
    
    
    $
    31,035
    
    
    $
    33,230
    
    
    $
    587
    
    
    $
    2,195
    
    
    $
    31,622
    
    
    $
    33,817
    
    
    $
    2,920
    
    
    
    01/31/05The Gables
    
    
    4,499
    
    
    
    198
    
    
    
    5,099
    
    
    
    5,297
    
    
    
    77
    
    
    
    198
    
    
    
    5,176
    
    
    
    5,374
    
    
    
    525
    
    
    
    01/31/05The Reserve at Athens
    
    
    
    
    
    
    1,740
    
    
    
    17,985
    
    
    
    19,725
    
    
    
    161
    
    
    
    1,740
    
    
    
    18,146
    
    
    
    19,886
    
    
    
    1,524
    
    
    
    01/31/05Players Club
    
    
    
    
    
    
    727
    
    
    
    7,498
    
    
    
    8,225
    
    
    
    141
    
    
    
    727
    
    
    
    7,639
    
    
    
    8,366
    
    
    
    652
    
    
    
    01/31/05College Station
    
    
    
    
    
    
    244
    
    
    
    2,190
    
    
    
    2,434
    
    
    
    129
    
    
    
    244
    
    
    
    2,319
    
    
    
    2,563
    
    
    
    318
    
    
    
    01/31/05The Reserve at Clemson
    
    
    11,810
    
    
    
    625
    
    
    
    18,230
    
    
    
    18,855
    
    
    
    223
    
    
    
    625
    
    
    
    18,453
    
    
    
    19,078
    
    
    
    1,656
    
    
    
    01/31/05NorthPointe
    
    
    18,562
    
    
    
    2,498
    
    
    
    27,323
    
    
    
    29,821
    
    
    
    309
    
    
    
    2,498
    
    
    
    27,632
    
    
    
    30,130
    
    
    
    2,266
    
    
    
    01/31/05The Pointe at South
Florida
    
    
    23,900
    
    
    
    3,508
    
    
    
    30,510
    
    
    
    34,018
    
    
    
    632
    
    
    
    3,508
    
    
    
    31,142
    
    
    
    34,650
    
    
    
    2,848
    
    
    
    01/31/05The Reserve on
Perkins(1)
    
    
    
    
    
    
    913
    
    
    
    15,795
    
    
    
    16,708
    
    
    
    320
    
    
    
    913
    
    
    
    16,115
    
    
    
    17,028
    
    
    
    1,504
    
    
    
    01/31/05The Commons at
Knoxville
    
    
    32,000
    
    
    
    4,630
    
    
    
    18,386
    
    
    
    23,016
    
    
    
    244
    
    
    
    4,630
    
    
    
    18,630
    
    
    
    23,260
    
    
    
    1,672
    
    
    
    01/31/05The Reserve at
Tallahassee
    
    
    
    
    
    
    2,743
    
    
    
    21,176
    
    
    
    23,919
    
    
    
    325
    
    
    
    2,743
    
    
    
    21,501
    
    
    
    24,244
    
    
    
    1,863
    
    
    
    01/31/05The Pointe at Western
    
    
    21,600
    
    
    
    1,096
    
    
    
    30,647
    
    
    
    31,743
    
    
    
    212
    
    
    
    1,096
    
    
    
    30,859
    
    
    
    31,955
    
    
    
    2,678
    
    
    
    01/31/05College Station at W.
Lafayette
    
    
    14,800
    
    
    
    1,887
    
    
    
    19,528
    
    
    
    21,415
    
    
    
    192
    
    
    
    1,887
    
    
    
    19,720
    
    
    
    21,607
    
    
    
    1,957
    
    
    
    01/31/05The Commons on Kinnear
    
    
    14,700
    
    
    
    1,327
    
    
    
    20,803
    
    
    
    22,130
    
    
    
    162
    
    
    
    1,327
    
    
    
    20,965
    
    
    
    22,292
    
    
    
    1,619
    
    
    
    01/31/05The Pointe at Penn
State(2)
    
    
    
    
    
    
    2,151
    
    
    
    35,094
    
    
    
    37,245
    
    
    
    248
    
    
    
    2,151
    
    
    
    35,342
    
    
    
    37,493
    
    
    
    2,888
    
    
    
    01/31/05The Reserve at Star
Pass
    
    
    50,740
    
    
    
    1,584
    
    
    
    30,810
    
    
    
    32,394
    
    
    
    355
    
    
    
    1,584
    
    
    
    31,165
    
    
    
    32,749
    
    
    
    2,696
    
    
    
    01/31/05The Reserve at
Columbia
    
    
    19,400
    
    
    
    1,071
    
    
    
    26,134
    
    
    
    27,205
    
    
    
    187
    
    
    
    1,071
    
    
    
    26,321
    
    
    
    27,392
    
    
    
    2,051
    
    
    
    01/31/05The Reserve on
Frankford
    
    
    14,500
    
    
    
    1,181
    
    
    
    26,758
    
    
    
    27,939
    
    
    
    289
    
    
    
    1,181
    
    
    
    27,047
    
    
    
    28,228
    
    
    
    2,541
    
    
    
    01/31/05The Village on Tharpe
    
    
    
    
    
    
    5,410
    
    
    
    46,504
    
    
    
    51,914
    
    
    
    459
    
    
    
    5,410
    
    
    
    46,963
    
    
    
    52,373
    
    
    
    3,901
    
    
    
    01/31/05The Lofts
    
    
    26,500
    
    
    
    2,801
    
    
    
    34,117
    
    
    
    36,918
    
    
    
    152
    
    
    
    2,801
    
    
    
    34,269
    
    
    
    37,070
    
    
    
    2,512
    
    
    
    01/31/05The Reserve on West
31st
    
    
    
    
    
    
    1,896
    
    
    
    14,920
    
    
    
    16,816
    
    
    
    773
    
    
    
    1,896
    
    
    
    15,693
    
    
    
    17,589
    
    
    
    1,411
    
    
    
    01/31/05Campus Creek
    
    
    
    
    
    
    2,251
    
    
    
    21,604
    
    
    
    23,855
    
    
    
    427
    
    
    
    2,251
    
    
    
    22,031
    
    
    
    24,282
    
    
    
    1,751
    
    
    
    02/22/05Pointe West
    
    
    11,148
    
    
    
    2,318
    
    
    
    10,924
    
    
    
    13,242
    
    
    
    234
    
    
    
    2,318
    
    
    
    11,158
    
    
    
    13,476
    
    
    
    1,080
    
    
    
    03/17/05Campus Lodge
    
    
    37,313
    
    
    
    2,746
    
    
    
    44,415
    
    
    
    47,161
    
    
    
    300
    
    
    
    2,746
    
    
    
    44,715
    
    
    
    47,461
    
    
    
    3,075
    
    
    
    06/07/05College Grove
    
    
    
    
    
    
    1,334
    
    
    
    19,270
    
    
    
    20,604
    
    
    
    1,050
    
    
    
    1,334
    
    
    
    20,320
    
    
    
    21,654
    
    
    
    1,935
    
    
    
    04/27/05The Reserve on South
College
    
    
    
    
    
    
    1,744
    
    
    
    10,784
    
    
    
    12,528
    
    
    
    1,051
    
    
    
    1,744
    
    
    
    11,835
    
    
    
    13,579
    
    
    
    902
    
    
    
    07/06/05Statesboro Players
Club
    
    
    
    
    
    
    2,028
    
    
    
    10,675
    
    
    
    12,703
    
    
    
    323
    
    
    
    2,028
    
    
    
    10,998
    
    
    
    13,026
    
    
    
    234
    
    
    
    06/15/06Troy Place
    
    
    9,440
    
    
    
    523
    
    
    
    12,404
    
    
    
    12,927
    
    
    
    34
    
    
    
    523
    
    
    
    12,438
    
    
    
    12,961
    
    
    
    511
    
    
    
    01/01/06Jacksonville Place
    
    
    11,120
    
    
    
    628
    
    
    
    14,532
    
    
    
    15,160
    
    
    
    12
    
    
    
    628
    
    
    
    14,544
    
    
    
    15,172
    
    
    
    582
    
    
    
    01/01/06Statesboro Place
    
    
    
    
    
    
    1,180
    
    
    
    17,288
    
    
    
    18,468
    
    
    
    18
    
    
    
    1,180
    
    
    
    17,306
    
    
    
    18,486
    
    
    
    685
    
    
    
    01/01/06Macon Place
    
    
    7,440
    
    
    
    340
    
    
    
    9,856
    
    
    
    10,196
    
    
    
    1
    
    
    
    340
    
    
    
    9,857
    
    
    
    10,197
    
    
    
    405
    
    
    
    01/01/06Clayton Place
    
    
    24,540
    
    
    
    4,291
    
    
    
    28,843
    
    
    
    33,134
    
    
    
    24
    
    
    
    4,291
    
    
    
    28,867
    
    
    
    33,158
    
    
    
    1,076
    
    
    
    01/01/06Carrollton Place
    
    
    
    
    
    
    682
    
    
    
    12,166
    
    
    
    12,848
    
    
    
    21
    
    
    
    682
    
    
    
    12,187
    
    
    
    12,869
    
    
    
    441
    
    
    
    01/01/06
 F-21
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
 Initial Cost
    
    
    
    
    
    
    Total CostsCostBuildings and
    
    
    
    
    
    
    Capitalized
    
    
    
    
    
    
    Buildings and
    
    
    
    
    
    
    Accumulated
    
    
    Date ofProperty(3)
    
    Encumbrances
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Subsequently
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Depreciation(4)
    
    
    AcquisitionRiver Place
    
    
    13,680
    
    
    
    837
    
    
    
    17,746
    
    
    
    18,583
    
    
    
    21
    
    
    
    837
    
    
    
    17,767
    
    
    
    18,604
    
    
    
    708
    
    
    
    01/01/06Murray Place
    
    
    6,800
    
    
    
    550
    
    
    
    8,864
    
    
    
    9,414
    
    
    
    47
    
    
    
    550
    
    
    
    8,911
    
    
    
    9,461
    
    
    
    411
    
    
    
    01/01/06Western Place
    
    
    
    
    
    
    660
    
    
    
    16,332
    
    
    
    16,992
    
    
    
    24
    
    
    
    660
    
    
    
    16,356
    
    
    
    17,016
    
    
    
    641
    
    
    
    01/01/06Cape Place
    
    
    8,520
    
    
    
    445
    
    
    
    11,207
    
    
    
    11,652
    
    
    
    42
    
    
    
    445
    
    
    
    11,249
    
    
    
    11,694
    
    
    
    460
    
    
    
    01/01/06Clemson Place
    
    
    8,160
    
    
    
    759
    
    
    
    10,317
    
    
    
    11,076
    
    
    
    15
    
    
    
    759
    
    
    
    10,332
    
    
    
    11,091
    
    
    
    406
    
    
    
    01/01/06Berkeley Place
    
    
    
    
    
    
    1,048
    
    
    
    18,497
    
    
    
    19,545
    
    
    
    24
    
    
    
    1,048
    
    
    
    18,521
    
    
    
    19,569
    
    
    
    703
    
    
    
    01/01/06Martin Place
    
    
    8,960
    
    
    
    471
    
    
    
    11,784
    
    
    
    12,255
    
    
    
    93
    
    
    
    471
    
    
    
    11,877
    
    
    
    12,348
    
    
    
    481
    
    
    
    01/01/06Totals
    
    $
    424,128
    
    
    $
    65,260
    
    
    $
    788,050
    
    
    $
    853,310
    
    
    $
    9,938
    
    
    $
    65,260
    
    
    $
    797,988
    
    
    $
    863,248
    
    
    $
    58,489
 
 (1)
    
    The Reserve on Perkins is cross collateralized with The Commons at Knoxville against the $32,000 outstanding loan.(2)
    
    The Pointe at Penn State is cross collateralized with The Reserve at Star Pass against the $50,740 outstanding loan.(3)
    
    All properties are garden-style student housing communities except for University Towers which is a traditional
residence hall.(4)
    
    Assets have useful lives ranging from 3 to 40 years. F-22
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004Balance, beginning of period
    
    $
    643,515
    
    
    $
    
    
    
    $
    100,495Student housing acquisitions
    
    
    214,953
    
    
    
    638,357
    
    
    
    Additions
    
    
    4,860
    
    
    
    5,513
    
    
    
    517Disposals
    
    
    (80
    )
    
    
    (355
    )
    
    
    Balance, end of period
    
    $
    863,248
    
    
    $
    643,515
    
    
    $
    101,012
  Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004Balance, beginning of period
    
    $
    23,210
    
    
    $
    
    
    
    $
    14,107Depreciation
    
    
    35,320
    
    
    
    23,219
    
    
    
    3,120Disposals
    
    
    (41
    )
    
    
    (9
    )
    
    
    Balance, end of period
    
    $
    58,489
    
    
    $
    23,210
    
    
    $
    17,227
 7. Investments in unconsolidated entities
  2006
    
    
    2005Financial Position:Total assets
    
    $
    126,626
    
    
    $
    80Total liabilities
    
    
    92,528
    
    
    
    340Equity (deficit)
    
    
    34,098
    
    
    
    (260
    )Trusts and EDR Predecessors investment in unconsolidated entities
    
    $
    3,134
    
    
    $
    (130
    )
 Education Realty
    
    EDRTrust, Inc.
    
    Predecessor2006
    
    2005
    
    2004Results of Operations:Revenues
    
    $
    3,909
    

    $
    1,770
    

    $
    2,272Net income
    
    
    1,013
    

    
    1,720
    

    
    2,167Trusts and EDR
Predecessors equity
in earnings of
unconsolidated
entities
    
    $
    740
    

    $
    853
    

    $
    1,002
 F-23
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  8. Incentive plans
    Accounting for Stock Issued to Employees,
 F-24
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  RestrictedPIUs
    
    Stock
    
    TotalInitial issuance
    
    
    220,000
    
    
    
    174,000
    
    
    
    394,000Granted
    
    
    25,000
    
    
    
    12,000
    
    
    
    37,000Outstanding at December 31, 2005
    
    
    245,000
    
    
    
    186,000
    
    
    
    431,000Granted
    
    
    22,500
    
    
    
    6,000
    
    
    
    26,000Retired
    
    
    (2,500
    )
    
    
    
    
    
    
    Outstanding at December 31, 2006
    
    
    265,000
    
    
    
    192,000
    
    
    
    457,000Vested at December 31, 2006
    
    
    265,000
    
    
    
    80,889
    
    
    
    345,889
 9. Debt
 Notes payable and revolving credit facility
        F-25
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Mortgage debt
  Outstanding atDecember 31,
    
    
    Contractual Fixed
    
    
    MaturityProperty
    
    2006
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationUniversity Towers
    
    $
    23,563
    
    
    
    6.77
    %
    
    
    3/1/2008
    
    
    30 YearThe Reserve at Clemson
    
    
    11,651
    
    
    
    6.63
    %
    
    
    5/1/2007
    
    
    30 YearThe Gables
    
    
    4,433
    
    
    
    5.50
    %
    
    
    11/1/2013
    
    
    30 YearNorthPointe
    
    
    18,312
    
    
    
    6.63
    %
    
    
    5/1/2007
    
    
    30 YearThe Pointe at S. Florida
    
    
    23,779
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Western
    
    
    21,490
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Lofts
    
    
    26,500
    
    
    
    3.49
    %
    
    
    4/5/2007
    
    
    30 YearThe Reserve on Perkins/The Commons at Knoxville
    
    
    31,838
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Penn State/The Reserve at Star Pass
    
    
    50,482
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearCampus Lodge
    
    
    36,854
    
    
    
    6.97
    %
    
    
    5/1/2012
    
    
    30 YearPointe West
    
    
    10,986
    
    
    
    4.92
    %
    
    
    8/1/2014
    
    
    30 YearCollege Station at W. Lafayette
    
    
    14,725
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Commons on Kinnear
    
    
    14,625
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Frankford
    
    
    14,426
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Columbia
    
    
    19,301
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearTroy Place
    
    
    9,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearJacksonville Place
    
    
    11,120
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMacon Place
    
    
    7,440
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClayton Place
    
    
    24,540
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearRiver Place
    
    
    13,680
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMurray Place
    
    
    6,800
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearCape Place
    
    
    8,520
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearClemson Place
    
    
    8,160
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearMartin Place
    
    
    8,960
    
    
    
    6.44
    %
    
    
    12/9/2009
    
    
    30 YearTotal debt /weighted average rate
    
    
    421,625
    
    
    
    5.85
    %Unamortized premium
    
    
    2,308Total mortgage loans net of unamortized premium
    
    
    423,933Less current portion of mortgage debt
    
    
    (60,158
    )Total long-term debt, net of current portion
    
    $
    363,775
 F-26
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Outstanding atDecember 31,
    
    
    Contractual Fixed
    
    
    MaturityProperty
    
    2005
    
    
    Interest Rate
    
    
    Date
    
    
    AmortizationUniversity Towers
    
    $
    23,996
    
    
    
    6.77
    %
    
    
    3/1/2008
    
    
    30 YearThe Reserve at Clemson
    
    
    11,810
    
    
    
    6.63
    %
    
    
    5/1/2007
    
    
    30 YearThe Gables
    
    
    4,499
    
    
    
    5.50
    %
    
    
    11/1/2013
    
    
    30 YearNorthPointe
    
    
    18,562
    
    
    
    6.63
    %
    
    
    5/1/2007
    
    
    30 YearThe Pointe at S. Florida
    
    
    23,900
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Western
    
    
    21,600
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Lofts
    
    
    26,500
    
    
    
    3.49
    %
    
    
    4/5/2007
    
    
    30 YearThe Reserve on Perkins/The Commons at Knoxville
    
    
    32,000
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Pointe at Penn State/The Reserve at Star Pass
    
    
    50,740
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearCampus Lodge
    
    
    37,313
    
    
    
    6.97
    %
    
    
    5/1/2012
    
    
    30 YearPointe West
    
    
    11,148
    
    
    
    4.92
    %
    
    
    8/1/2014
    
    
    30 YearCollege Station at W. Lafayette
    
    
    14,800
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Commons on Kinnear
    
    
    14,700
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Frankford
    
    
    14,500
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearThe Reserve at Columbia
    
    
    19,400
    
    
    
    5.48
    %
    
    
    7/7/2009
    
    
    30 YearTotal debt /weighted average rate
    
    
    325,468
    
    
    
    5.67
    %Unamortized premium
    
    
    2,867Total mortgage loans net of unamortized premium
    
    
    328,335Less current portion of mortgage debt
    
    
    (2,932
    )Total long-term debt, net of current portion
    
    $
    325,403
  Year2007
    
    $
    60,1582008
    
    
    26,4812009
    
    
    354,4492010
    
    
    8882011
    
    
    947Thereafter
    
    
    48,102Total
    
    $
    491,025Debt premium
    
    
    2,308Outstanding as of December 31, 2006, net of debt premium
    
    $
    493,333
 F-27
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
  Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004Balance, beginning of period
    
    $
    328,335
    
    
    $
    
    
    
    $
    82,204Assumption of mortgage debt at fair value
    
    
    98,660
    
    
    
    444,964
    
    
    
    Additions
    
    
    
    
    
    
    6
    
    
    
    Repayments of principal
    
    
    (2,503
    )
    
    
    (116,271
    )
    
    
    (1,093
    )Amortization of premium
    
    
    (559
    )
    
    
    (364
    )
    
    
    Balance, end of period
    
    $
    423,933
    
    
    $
    328,335
    
    
    $
    81,111
 10. Segments
   Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004Student Housing LeasingRental revenues
    
    $
    87,438
    
    
    $
    75,877
    
    
    $
    16,353Food service revenue
    
    
    3,634
    
    
    
    3,491
    
    
    
    4,680Other leasing revenue
    
    
    14,012
    
    
    
    
    
    
    
    Total revenues from external customers
    
    
    105,084
    
    
    
    79,368
    
    
    
    21,033Rental expenses
    
    
    42,669
    
    
    
    37,794
    
    
    
    7,786Food service expenses
    
    
    3,318
    
    
    
    3,275
    
    
    
    2,758Intersegment expense
    
    
    3,544
    
    
    
    2,644
    
    
    
    973Net operating income
    
    $
    55,553
    
    
    $
    35,655
    
    
    $
    9,516Depreciation and amortization
    
    $
    36,215
    
    
    $
    30,271
    
    
    $
    3,283Interest expense
    
    $
    28,493
    
    
    $
    16,307
    
    
    $
    5,623Equity in earnings of unconsolidated entities
    
    $
    (74
    )
    
    $
    
    
    
    $
    Total segment assets, end of the period
    
    $
    818,832
    
    
    $
    638,312
    
    
    $
    88,166Student Housing Development Consulting ServicesDevelopment consulting fees
    
    $
    3,773
    
    
    $
    1,759
    
    
    $
    392Operating expense reimbursements
    
    
    607
    
    
    
    848
    
    
    
    311Total revenues from external customers
    
    
    4,380
    
    
    
    2,607
    
    
    
    703Development consulting expenses
    
    
    
    
    
    
    
    
    
    
    136General and administrative
    
    
    2,210
    
    
    
    1,339
    
    
    
    838Reimbursable operating expenses
    
    
    607
    
    
    
    848
    
    
    
    311Corporate overhead allocation
    
    
    
    
    
    
    906
    
    
    
    355Net operating income (loss)
    
    $
    1,563
    
    
    $
    (486
    )
    
    $
    (937
    )Interest income
    
    
    
    
    
    
    6
    
    
    
    Equity in earnings of unconsolidated entities
    
    $
    814
    
    
    $
    880
    
    
    $
    1,002Total segment assets, end of period
(includes goodwill of $921 at December 31,
2006 and 2005)
    
    $
    2,082
    
    
    $
    1,825
    
    
    $
    38
 F-28
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
 Education Realty
    
    
    EDRTrust, Inc.
    
    
    Predecessor2006
    
    
    2005
    
    
    2004Student Housing Management ServicesManagement fees from external customers
    
    $
    2,796
    
    
    $
    1,968
    
    
    $
    1,326Operating expense reimbursements
    
    
    7,031
    
    
    
    5,846
    
    
    
    4,912Total revenues from external customers
    
    
    9,827
    
    
    
    7,814
    
    
    
    6,238Intersegment revenues
    
    
    3,544
    
    
    
    2,644
    
    
    
    973Total revenues
    
    
    13,371
    
    
    
    10,458
    
    
    
    7,211General and administrative expenses
    
    
    5,004
    
    
    
    2,037
    
    
    
    1,556Reimbursable operating expenses
    
    
    7,031
    
    
    
    5,846
    
    
    
    4,912Corporate overhead allocation
    
    
    
    
    
    
    1,932
    
    
    
    660Net operating income
    
    $
    1,336
    
    
    $
    643
    
    
    $
    83Total segment assets, end of period (includes goodwill of
$2,149)
    
    $
    5,567
    
    
    $
    5,084
    
    
    $
    670Reconciliation of segment net operating income before taxes and minority interest to the
Trusts net operating income before taxes and minority interest:Total segment revenues
    
    $
    122,835
    
    
    $
    92,433
    
    
    $
    28,947Elimination of intersegment revenues
    
    
    (3,544
    )
    
    
    (2,644
    )
    
    
    (973
    )Total consolidated revenues
    
    $
    119,291
    
    
    $
    89,789
    
    
    $
    27,974Segment net operating income before taxes and minority
interest
    
    $
    58,452
    
    
    $
    35,812
    
    
    $
    8,662Depreciation and amortization
    
    
    36,215
    
    
    
    31,072
    
    
    
    3,283Interest
expense
    
    $
    28,760
    
    
    
    16,665
    
    
    
    5,623Interest income
    
    
    (267
    )
    
    
    (1,303
    )
    
    
    Equity in earnings of unconsolidated entities
    
    
    (740
    )
    
    
    (880
    )
    
    
    (1,002
    )Unallocated corporate amounts:Non cash compensation charge
for PIUs and restricted
stock
    
    
    796
    
    
    
    4,679
    
    
    
    Other corporate expenses
    
    $
    5,629
    
    
    
    1,656
    
    
    
    Net income (loss) before taxes and minority interest
    
    $
    (11,941
    )
    
    $
    (16,077
    )
    
    $
    758Reconciliation of segment assets at December 31, 2006 to the
Trusts total assets as of December 31, 2006:Total segment assets, end of period (includes goodwill of
$3,070)
    
    $
    826,481
    
    
    $
    645,221
    
    
    $
    88,874Unallocated corporate amounts:Cash
    
    
    2,752
    
    
    
    52,689
    
    
    
    Other assets
    
    
    4,801
    
    
    
    4,870
    
    
    
    Deferred financing costs, net
    
    
    1,424
    
    
    
    1,269
    
    
    
    Total assets, December 31, 2006
    
    $
    835,458
    
    
    $
    704,049
    
    
    $
    88,874
 11. Related party transactions
  F-29
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
   12. Lease commitments and unconditional purchase obligations
   2006
    
    2006Year Ending
    
    advertising
    
    leases2007
    
    $
    161
    
    
    $
    2,5632008
    
    
    67
    
    
    
    2,2452009
    
    
    
    
    
    
    1,9702010
    
    
    
    
    
    
    1,7272011
    
    
    
    
    
    
    1,519Thereafter
    
    
    
    
    
    
    908
 13. Employee savings plan
  14. Accrued expenses
  2006
    
    
    2005Payroll
    
    $
    1,715
    
    
    $
    1,331Real estate taxes
    
    
    3,022
    
    
    
    2,755Interest
    
    
    1,851
    
    
    
    1,435Utilities
    
    
    351
    
    
    
    419Other
    
    
    3,129
    
    
    
    1,355Total accrued expenses
    
    $
    10,068
    
    
    $
    7,295
 15. Commitments and contingencies
  F-30
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
       16. Quarterly financial information (unaudited)
  2006
    
    1st Quarter
    
    
    2nd Quarter
    
    
    3rd Quarter
    
    
    4th Quarter
    
    
    TotalRevenues
    
    $
    29,985
    
    
    $
    29,129
    
    
    $
    27,779
    
    
    $
    32,398
    
    
    $
    119,291Operating expenses
    
    
    24,076
    
    
    
    24,394
    
    
    
    28,489
    
    
    
    25,080
    
    
    
    102,039Nonoperating expenses
    
    
    6,935
    
    
    
    7,411
    
    
    
    7,731
    
    
    
    7,856
    
    
    
    29,933Equity in earnings of
unconsolidated entities
    
    
    283
    
    
    
    142
    
    
    
    148
    
    
    
    167
    
    
    
    740Income taxes (expense)/benefit
    
    
    104
    
    
    
    (186
    )
    
    
    (381
    )
    
    
    (196
    )
    
    
    (659
    )Minority interest
    
    
    (141
    )
    
    
    206
    
    
    
    485
    
    
    
    (195
    )
    
    
    355Net income (loss)
    
    $
    (780
    )
    
    $
    (2,514
    )
    
    $
    (8,189
    )
    
    $
    (762
    )
    
    $
    (12,245
    )Net income (loss) per
share-basic and diluted
    
    $
    (.03
    )
    
    $
    (.10
    )
    
    $
    (.31
    )
    
    $
    (.03
    )
    
    $
    (.46
    )
 2005
    
    1st Quarter
    
    
    2nd Quarter
    
    
    3rd Quarter
    
    
    4th Quarter
    
    
    TotalRevenues
    
    $
    13,660
    
    
    $
    21,855
    
    
    $
    23,814
    
    
    $
    27,914
    
    
    $
    87,243Operating expenses
    
    
    17,045
    
    
    
    22,275
    
    
    
    26,719
    
    
    
    21,364
    
    
    
    87,403Nonoperating expenses
    
    
    3,498
    
    
    
    4,237
    
    
    
    4,888
    
    
    
    4,164
    
    
    
    16,787Equity in earnings of
unconsolidated entities
    
    
    71
    
    
    
    158
    
    
    
    331
    
    
    
    293
    
    
    
    853Income taxes (expense)/benefit
    
    
    66
    
    
    
    104
    
    
    
    (340
    )
    
    
    (327
    )
    
    
    (497
    )Minority interest
    
    
    431
    
    
    
    335
    
    
    
    618
    
    
    
    (344
    )
    
    
    1,040Net income (loss)
    
    $
    (6,315
    )
    
    $
    (4,060
    )
    
    $
    (7,184
    )
    
    $
    2,008
    
    
    $
    (15,551
    )Net income (loss) per
share-basic and diluted
    
    $
    (.29
    )
    
    $
    (.19
    )
    
    $
    (.33
    )
    
    $
    .08
    
    
    $
    (.67
    )
 F-31
    Table of Contents  EDUCATION REALTY TRUST, INC. AND
SUBSIDIARIES AND EDR PREDECESSOR
NOTES TO THE CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
 17. Subsequent events
          F-32
    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-33
    Table of Contents  NATIONAL DEVELOPMENT/ALLEN & OHARA CUPA, LLC
 
 BALANCE SHEETS
 December 31, 2006 (unaudited) and 2005 (unaudited)
 2006
    
    2005(In thousands)ASSETSCurrent assets:Cash
    
    $
    6
    
    
    $
    1Receivables
    
    
    
    
    
    
    Total assets
    
    $
    6
    
    
    $
    1LIABILITIES & MEMBERS DEFICITCurrent liabilities:Accounts payable and accrued expenses
    
    $
    6
    
    
    $
    Deferred development revenue
    
    
    90
    
    
    
    146Total current liabilities
    
    
    96
    
    
    
    146Commitments and contingencies
    
    
    
    
    
    
    Members deficit
    
    
    (90
    )
    
    
    (145
    )Total liabilities and members deficit
    
    $
    6
    
    
    $
    1
 See accompanying notes to financial statements.
 F-34
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA, LLC
 
 STATEMENTS OF OPERATIONS
 For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 2006
    
    
    2005
    
    
    2004(In thousands)Third-party development consulting services
    
    $
    635
    
    
    $
    320
    
    
    $
    573Operating expenses
    
    
    1
    
    
    
    8
    
    
    
    39Net income
    
    $
    634
    
    
    $
    312
    
    
    $
    534
 See accompanying notes to financial statements.
 F-35
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA, LLC
 
 STATEMENTS OF CHANGES IN MEMBERS EQUITY (DEFICIT)
 For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 Members EquityAllen &OHara
    
    
    NationalDevelopment
    
    
    DevelopmentCompany, LLC
    
    
    Company, LLC
    
    
    Total(In thousands)Members Deficit, December 31, 2003 (unaudited)
    
    $
    (198
    )
    
    $
    (198
    )
    
    $
    (396
    )Distributions to members
    
    
    (64
    )
    
    
    (65
    )
    
    
    (129
    )Net income
    
    
    267
    
    
    
    267
    
    
    
    534Members Equity, December 31, 2004
    
    
    5
    
    
    
    4
    
    
    
    9Distributions to members (unaudited)
    
    
    (233
    )
    
    
    (233
    )
    
    
    (466
    )Net income (unaudited)
    
    
    156
    
    
    
    156
    
    
    
    312Members Deficit, December 31, 2005 (unaudited)
    
    
    (72
    )
    
    
    (73
    )
    
    
    (145
    )Distributions to members (unaudited)
    
    
    (290
    )
    
    
    (289
    )
    
    
    (579
    )Net income (unaudited)
    
    
    317
    
    
    
    317
    
    
    
    634Members Deficit, December 31, 2006 (unaudited)
    
    $
    (45
    )
    
    $
    (45
    )
    
    $
    (90
    )
 See accompanying notes to financial statements.
 F-36
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA, LLC
 
 STATEMENTS OF CASH FLOWS
 For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 2006
    
    
    2005
    
    
    2004Operating activities:Net income
    
    $
    634
    
    
    $
    312
    
    
    $
    534Adjustments to reconcile net income to net cash
provided by operating activities:Changes in assets and liabilitiesReceivables
    
    
    
    
    
    
    1
    
    
    
    203Accounts payable and accrued expenses
    
    
    6
    
    
    
    
    
    
    
    (227
    )Deferred development fee
    
    
    (56
    )
    
    
    146
    
    
    
    (428
    )Net cash provided by operating activities
    
    
    584
    
    
    
    459
    
    
    
    82Financing activities:Distributions to members
    
    
    (579
    )
    
    
    (466
    )
    
    
    (129
    )Net cash used in financing activities
    
    
    (579
    )
    
    
    (466
    )
    
    
    (129
    )Net increase (decrease) in cash and cash equivalents
    
    
    5
    
    
    
    (7
    )
    
    
    (47
    )Cash, beginning of period
    
    
    1
    
    
    
    8
    
    
    
    55Cash, end of period
    
    $
    6
    
    
    $
    1
    
    
    $
    8
 See accompanying notes to financial statements.
 F-37
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA, LLC
 
 NOTES TO FINANCIAL STATEMENTS
 Years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 (Dollars in thousands)
 1. Ownership and operation of the company-
    
    
    Each member of the Company receives a pro-rata share of profits, losses, and distributions based
on its proportional share of ownership in the Company as discussed above.
    
    Neither member is obligated to restore any amount of the Companys deficit capital balance.
    
    The managing member monitors the cash financial position and cash flow of the
Company. If the managing member determines additional funds are needed, it may require the members
to advance amounts to the Company up to $50 in the aggregate to fund working capital needs as
needed. If the members are called to advance funds, each member must contribute its pro-rata share
of the amounts required and the advances will bear interest at the Prime Rate plus 3%.
    
    Unanimous consent between the members is required to, among other things, dissolve,
liquidate, merge, or consolidate the Companys assets; assign membership interests to another
party; loan amounts to others; borrow funds; pledge Company assets as collateral; admit additional
members; and enter into agreements with the University.
    F-38
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA, LLC
 NOTES TO FINANCIAL STATEMENTS  (Continued)
Years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
 2. Summary of significant accounting policies
 Basis of presentation and accounting
  Balance sheet classification
  Use of estimates
  Revenue recognition
  Fair value of financial instruments
  Federal income taxes
  Unaudited financial information
  3. Related party transactions
  F-39
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CUPA, LLC
 NOTES TO FINANCIAL STATEMENTS  (Continued)
Years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
  4. Concentration of credit risk
  F-40
    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-41
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION, LLC
 
 BALANCE SHEETS
 December 31, 2006 (unaudited) and 2005 (unaudited)
 2006
    
    
    2005(In thousands)ASSETSCurrent assets:Cash
    
    $
    6
    
    
    $
    8Receivables
    
    
    
    
    
    
    Total assets
    
    $
    6
    
    
    $
    8LIABILITIES & MEMBERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    
    
    
    $
    Deferred development revenue
    
    
    
    
    
    
    Total current liabilities
    
    
    
    
    
    
    Commitments and contingencies
    
    
    
    
    
    
    Members equity
    
    
    6
    
    
    
    8Total liabilities and members equity
    
    $
    6
    
    
    $
    8
 See accompanying notes to financial statements.
 F-42
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION, LLC
 
 STATEMENTS OF OPERATIONS
 For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 2006
    
    
    2005
    
    
    2004(In thousands)Third-party development consulting services
    
    $
    
    
    
    $
    4
    
    
    $
    764Operating expenses
    
    
    1
    
    
    
    
    
    
    
    13Net income (loss)
    
    $
    (1
    )
    
    $
    4
    
    
    $
    751
 See accompanying notes to financial statements.
 F-43
    Table of Contents  NATIONAL DEVELOPMENT/ALLEN & OHARA CLARION, LLC
 
 STATEMENTS OF CHANGES IN MEMBERS EQUITY (DEFICIT)
 For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 Members EquityAllen & OHara
    
    
    NationalDevelopment
    
    
    DevelopmentCompany, LLC
    
    
    Company, LLC
    
    
    Total(In thousands)Members Deficit, December 31, 2003 (unaudited)
    
    $
    (66
    )
    
    $
    (65
    )
    
    $
    (131
    )Distributions to members
    
    
    (295
    )
    
    
    (295
    )
    
    
    (590
    )Net income
    
    
    376
    
    
    
    375
    
    
    
    751Members Equity, December 31, 2004
    
    
    15
    
    
    
    15
    
    
    
    30Distributions to members (unaudited)
    
    
    (13
    )
    
    
    (13
    )
    
    
    (26
    )Net income (unaudited)
    
    
    2
    
    
    
    2
    
    
    
    4Members Equity, December 31, 2005 (unaudited)
    
    
    4
    
    
    
    4
    
    
    
    8Distributions to members (unaudited)
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Net loss (unaudited)
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Members Equity, December 31, 2006 (unaudited)
    
    $
    3
    
    
    $
    3
    
    
    $
    6
 See accompanying notes to financial statements.
 F-44
    Table of Contents  NATIONAL DEVELOPMENT/ALLEN & OHARA CLARION, LLC
 
 STATEMENTS OF CASH FLOWS
 For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 2006
    
    
    2005
    
    
    2004Operating activities:Net income (loss)
    
    $
    (1
    )
    
    $
    4
    
    
    $
    751Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Changes in assets and liabilitiesReceivables
    
    
    
    
    
    
    27
    
    
    
    146Accounts payable and accrued expenses
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Deferred development fee
    
    
    
    
    
    
    
    
    
    
    (303
    )Net cash provided by (used in) operating activities
    
    
    (1
    )
    
    
    30
    
    
    
    593Financing activities:Distributions to members
    
    
    (1
    )
    
    
    (26
    )
    
    
    (590
    )Net cash used in financing activities
    
    
    (1
    )
    
    
    (26
    )
    
    
    (590
    )Net increase (decrease) in cash and cash equivalents
    
    
    (2
    )
    
    
    4
    
    
    
    3Cash, beginning of period
    
    
    8
    
    
    
    4
    
    
    
    1Cash, end of period
    
    $
    6
    
    
    $
    8
    
    
    $
    4
 See accompanying notes to financial statements.
 F-45
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION, LLC
 
 NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
 1. Ownership and operation of the company
    
    
    Each member of the Company receives a pro-rata share of profits, losses, and distributions
based on its proportional share of ownership in the Company as discussed above.
    
    Neither member is obligated to restore any amount of the Companys deficit capital balance.
    
    The managing member monitors the cash financial position and cash flow of the Company. If
the managing member determines additional funds are needed, it may require the members to
advance amounts to the Company up to $50 in the aggregate to fund working capital needs as
needed. If the members are called to advance funds, each member must contribute its
pro-rata share of the amounts required and the advances will bear interest at the Prime
Rate plus 3%.
    
    Unanimous consent between the members is required to, among other things, dissolve,
liquidate, merge, or consolidate the Companys assets; assign membership interests to
another party; loan amounts to others; borrow funds; pledge Company assets as collateral;
admit additional members; and enter into agreements with the University.
  2. Summary of significant accounting policies
 Basis of presentation and accounting
  Balance sheet classification
  F-46
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION, LLC
 NOTES TO FINANCIAL STATEMENTS  (Continued)
For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
 Unaudited financial information
  Use of estimates
  Revenue recognition
  Fair value of financial instruments
  Federal income taxes
  3. Related party transactions
   F-47
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA CLARION, LLC
 NOTES TO FINANCIAL STATEMENTS  (Continued)
For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
 4. Concentration of credit risk
  F-48
    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-49
    Table of Contents  NATIONAL DEVELOPMENT/ALLEN & OHARA LOCK HAVEN, LLC
 
 BALANCE SHEETS
December 31, 2006 (unaudited) and 2005 (unaudited)
 2006
    
    
    2005(In thousands)ASSETSCurrent assets:Cash
    
    $
    
    
    
    $
    1Total assets
    
    $
    
    
    
    $
    1LIABILITIES & MEMBERS DEFICITCurrent liabilities:Accounts payable and accrued expenses
    
    $
    1
    
    
    $
    1Deferred development revenue
    
    
    
    
    
    
    Total current liabilities
    
    
    1
    
    
    
    1Commitments and contingencies
    
    
    
    
    
    
    Members deficit
    
    
    (1
    )
    
    
    Total liabilities and members deficit
    
    $
    
    
    
    $
    1
 See accompanying notes to financial statements.
 F-50
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK HAVEN, LLC
 
 STATEMENTS OF OPERATIONS
For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 2006
    
    
    2005
    
    
    2004(In thousands)Third-party development consulting services
    
    $
    
    
    
    $
    6
    
    
    $
    351Operating expenses
    
    
    1
    
    
    
    2
    
    
    
    1Net income (loss)
    
    $
    (1
    )
    
    $
    4
    
    
    $
    350
 See accompanying notes to financial statements.
 F-51
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK HAVEN, LLC
 
 STATEMENTS OF CHANGES IN MEMBERS EQUITY (DEFICIT)
For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 Members EquityAllen & OHara
    
    
    NationalDevelopment
    
    
    DevelopmentCompany, LLC
    
    
    Company, LLC
    
    
    Total(In thousands)Members Deficit, December 31, 2003 (unaudited)
    
    $
    (99
    )
    
    $
    (99
    )
    
    $
    (198
    )Distributions to members
    
    
    (78
    )
    
    
    (78
    )
    
    
    (156
    )Net income
    
    
    175
    
    
    
    175
    
    
    
    350Members Deficit, December 31, 2004
    
    
    (2
    )
    
    
    (2
    )
    
    
    (4
    )Distributions to members (unaudited)
    
    
    
    
    
    
    
    
    
    
    Net income (unaudited)
    
    
    2
    
    
    
    2
    
    
    
    4Members Equity, December 31, 2005 (unaudited)
    
    
    
    
    
    
    
    
    
    
    Distributions to members (unaudited)
    
    
    
    
    
    
    
    
    
    
    Net loss (unaudited)
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Members Deficit, December 31, 2006 (unaudited)
    
    $
    (1
    )
    
    $
    
    
    
    $
    (1
    )
 See accompanying notes to financial statements.
 F-52
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK HAVEN, LLC
 
 STATEMENTS OF CASH FLOWS
For the years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
 2006
    
    
    2005
    
    
    2004Operating activities:Net income (loss)
    
    $
    (1
    )
    
    $
    4
    
    
    $
    350Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Changes in assets and liabilitiesReceivables
    
    
    
    
    
    
    
    
    
    
    14Accounts payable and accrued expenses
    
    
    
    
    
    
    
    
    
    
    (1
    )Deferred development fee
    
    
    
    
    
    
    (5
    )
    
    
    (209
    )Net cash provided by (used in) operating activities
    
    
    (1
    )
    
    
    (1
    )
    
    
    154Financing activities:Distributions to members
    
    
    
    
    
    
    
    
    
    
    (156
    )Net cash used in financing activities
    
    
    
    
    
    
    
    
    
    
    (156
    )Net decrease in cash and cash equivalents
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )Cash, beginning of period
    
    
    1
    
    
    
    2
    
    
    
    4Cash, end of period
    
    $
    
    
    
    $
    1
    
    
    $
    2
 See accompanying notes to financial statements.
 F-53
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK HAVEN, LLC
 
 NOTES TO FINANCIAL STATEMENTS
The years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
 1. Ownership and operation of the company
    
    
    Each member of the Company receives a pro-rata share of profits, losses, and distributions
based on its proportional share of ownership in the Company as discussed above.
    
    Neither member is obligated to restore any amount of the Companys deficit capital balance.
    
    The managing member monitors the cash financial position and cash flow of the Company. If
the managing member determines additional funds are needed, it may require the members to
advance amounts to the Company up to $50 in the aggregate to fund working capital needs as
needed. If the members are called to advance funds, each member must contribute its
pro-rata share of the amounts required and the advances will bear interest at the Prime
Rate plus 3%.
    
    Unanimous consent between the members is required to, among other things, dissolve,
liquidate, merge, or consolidate the Companys assets; assign membership interests to
another party; loan amounts to others; borrow funds; pledge Company assets as collateral;
admit additional members; and enter into agreements with the University.
  2. Summary of significant accounting policies
 Basis of presentation and accounting
  Unaudited financial information
  F-54
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK HAVEN, LLC
 NOTES TO FINANCIAL STATEMENTS
The years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
  Balance sheet classification
  Use of estimates
  Revenue recognition
  Fair value of financial instruments
  Federal income taxes
  3. Related party transactions
   F-55
    Table of Contents  NATIONAL DEVELOPMENT/ ALLEN & OHARA LOCK HAVEN, LLC
 NOTES TO FINANCIAL STATEMENTS
The years ended December 31, 2006 (unaudited), 2005 (unaudited) and 2004
(Dollars in thousands)
 4. Concentration of credit risk
  F-56
    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Place Portfolio Lessee, LLC
   
 
  F-57
    Table of Contents  PLACE
PORTFOLIO LESSEE, LLC
 
 BALANCE SHEETDecember 31, 2006
 ASSETSCash in bank
    
    $
    1,243,414Accounts receivable, net of reserve for doubtful accounts
    
    
    157,525Related party receivables
    
    
    387,606Property and equipment
    
    
    11,284Prepaid expenses and other assets
    
    
    134,796Escrow deposits
    
    
    451,779Investments in marketable securities
    
    
    5,000,000Total Assets
    
    $
    7,386,404LIABILITIES AND MEMBERS EQUITYLIABILITIES:Accounts payable and accrued expenses
    
    $
    1,003,066Security deposits
    
    
    21,218Prepaid rents
    
    
    1,006,415Real estate taxes payable
    
    
    307,718Total Liabilities
    
    
    2,338,417MEMBERS EQUITY:Members capital
    
    
    6,921,357Accumulated deficit
    
    
    (1,873,370
    )Total Members Equity
    
    
    5,047,987Total Liabilities and Members Equity
    
    $
    7,386,404
  F-58
    Table of Contents  PLACE PORTFOLIO LESSEE, LLC
 
 STATEMENT OF OPERATIONS
For The Year Ended December 31, 2006
 Operating Revenues:Student housing leasing revenue
    
    $
    22,265,592Student housing other leasing income
    
    
    1,771,333Other revenues
    
    
    156,353Total Operating Revenues
    
    
    24,193,278Operating Expenses:Student housing leasing expenses
    
    
    11,355,096Rent expense
    
    
    13,736,750Additional rent expense
    
    
    274,945Management fees
    
    
    699,857Total Operating Expenses
    
    
    26,066,648Net Loss
    
    $
    (1,873,370
    )
  F-59
    Table of Contents  PLACE
PORTFOLIO LESSEE, LLC
 
 STATEMENT OF MEMBERS EQUITY
For The Year Ended December 31, 2006
 TotalMembers
    
    
    Accumulated
    
    
    MembersCapital
    
    
    Deficit
    
    
    EquityBalance, January 1, 2006
    
    $
    
    
    
    $
    
    
    
    $
    Contributions
    
    
    6,921,357
    
    
    
    
    
    
    
    6,921,357Net loss
    
    
    
    
    
    
    (1,873,370
    )
    
    
    (1,873,370
    )Balance, December 31, 2006
    
    $
    6,921,357
    
    
    $
    (1,873,370
    )
    
    $
    5,047,987
  F-60
    Table of Contents  PLACE
PORTFOLIO LESSEE, LLC
 
 STATEMENT OF CASH FLOWS
For The Year Ended December 31, 2006
 CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (1,873,370
    )Adjustments to reconcile net loss to net cash
used by operating activities:Change in operating assets and liabilities:Accounts receivable
    
    
    (157,525
    )Related party receivables
    
    
    (387,606
    )Prepaid expenses and other assets
    
    
    (134,796
    )Escrow deposits
    
    
    (451,779
    )Accounts payable and accrued expenses
    
    
    1,310,784Security deposits payable
    
    
    21,218Prepaid rents
    
    
    1,006,415Net Cash Used By Operating Activities
    
    
    (666,659
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (11,284
    )Purchases of marketable securities
    
    
    (5,000,000
    )Net Cash Used By Investing Activities
    
    
    (5,011,284
    )CASH FLOWS FROM FINANCING ACTIVITIES:Members contributions
    
    
    6,921,357NET CHANGE IN CASH
    
    
    1,243,414CASH, Beginning
    
    
    CASH, Ending
    
    $
    1,243,414
 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
 NON-CASH TRANSACTIONS
   F-61
    Table of Contents  PLACE
PORTFOLIO LESSEE, LLC
 
 NOTES TO FINANCIAL STATEMENTS
December 31, 2006
 1. NATURE OF OPERATIONS
  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Sale-Leaseback of Properties
   Use of Estimates
  F-62
    Table of Contents  PLACE
PORTFOLIO LESSEE, LLC
 NOTES TO FINANCIAL STATEMENTS
December 31, 2006
 Revenue Recognition
   Cash in Bank
  Investments
  Escrow Deposits
  F-63
    Table of Contents  PLACE
PORTFOLIO LESSEE, LLC
 NOTES TO FINANCIAL STATEMENTS
December 31, 2006
 Property and Equipment
   Fair Value of Financial Instruments
  Income Taxes
  3. RELATED PARTY TRANSACTIONS
  F-64
    Table of Contents  PLACE
PORTFOLIO LESSEE, LLC
 NOTES TO FINANCIAL STATEMENTS
December 31, 2006
  4. OPERATING LEASE
    Year EndingDecember 31,2007
    
    $
    13,736,7502008
    
    
    13,736,7502009
    
    
    13,736,7502010
    
    
    13,736,750Total future minimum lease payments
    
    $
    54,947,000
 st st
 F-65
    Table of Contents  PLACE PORTFOLIO LESSEE,LLC
 NOTES TO FINANCIAL STATEMENTS
December 31, 2006
  Year EndingDecember 31,2007
    
    $
    23,716,4402008
    
    $
    23,953,6052009
    
    $
    24,193,1412010
    
    $
    24,435,072
 F-66
    Table of Contents  INDEX TO EXHIBITS
 ExhibitNumber
    
    Description3.1
    
    Second Articles of Amendment and
Restatement of Education Realty
Trust, Inc. (Incorporated by
reference to Exhibit 3.1 to the
Companys Amendment No. 2 to its
Registration Statement on Form
S-11 (File No. 333-1192364),
filed on December 10, 2004.)3.2
    
    Bylaws of Education Realty
Trust, Inc. (Incorporated by
reference to Exhibit 3.2 to the
Companys Registration Statement
on Form S-11 (File No.
333-119264), filed on September
24, 2004.)4.1
    
    Form of Certificate for Common
Stock of Education Realty Trust,
Inc. (Incorporated by reference
to Exhibit 4.1 to the Companys
Amendment No. 5 to its
Registration Statement on Form
S-11 (File No. 333-1192364),
filed on January 24, 2005.)4.2
    
    Form of Education Realty Trust,
Inc. Common Stock Purchase
Warrant dated January 31, 2005,
issued to JPI Investment
Company, L.P. (Incorporated by
reference to Exhibit 4.2 to the
Companys Registration Statement
on Form S-11 (File No.
333-119264), filed on September
24, 2004.)4.3
    
    Form of Registration Rights
Agreement dated January 31,
2005, by and among Education
Realty Trust, Inc., Education
Realty Operating Partnership,
LP, JPI Investment Company, L.P.
and the unit holders whose names
are set forth on the signature
pages thereto. (Incorporated by
reference to Exhibit 4.3 to the
Companys Registration Statement
on Form S-11 (File No.
333-119264), filed on September
24, 2004.)10.1
    
    Form of Amended and Restated
Agreement of Limited Partnership
of Education Realty Operating
Partnership, LP. (Incorporated
by reference to Exhibit 10.1 to
the Companys Registration
Statement on Form S-11 (File No.
333-119264), filed on September
24, 2004.)10.2
    
    Form of Amended and Restated
Agreement of Limited Partnership
of University Towers Operating
Partnership, LP. (Incorporated
by reference to Exhibit 10.2 to
the Companys Registration
Statement on Form S-11 (File No.
333-119264), filed on September
24, 2004.)10.3(1)
    
    Form of Education Realty Trust,
Inc. 2004 Incentive Plan.
(Incorporated by reference to
Exhibit 10.3 to the Companys
Amendment No. 4 to its
Registration Statement on Form
S-11 (File No. 333-1192364),
filed on January 11, 2005.)10.4
    
    Form of Indemnification
Agreement between Education
Realty Trust, Inc. and its
directors and officers.
(Incorporated by reference to
Exhibit 10.4 to the Companys
Amendment No. 1 to its
Registration Statement on Form
S-11 (File No. 333-1192364),
filed on November 4, 2004.)10.5(1)
    
    Employment Agreement between
Education Realty Trust, Inc. and
Paul O. Bower, dated as of
December 6, 2004. (Incorporated
by reference to Exhibit 10.5 to
the Companys Amendment No. 2 to
its Registration Statement on
Form S-11 (File No.
333-1192364), filed on December
10, 2004.)10.6(1)
    
    Employment Agreement between
Education Realty Trust, Inc. and
Randall H. Brown, dated as of
December 6, 2004. (Incorporated
by reference to Exhibit 10.6 to
the Companys Amendment No. 2 to
its Registration Statement on
Form S-11 (File No.
333-1192364), filed on December
10, 2004.)10.7(1)
    
    Employment Agreement between
Education Realty Trust, Inc. and
Craig L. Cardwell, dated as of
December 6, 2004. (Incorporated
by reference to Exhibit 10.7 to
the Companys Amendment No. 2 to
its Registration Statement on
Form S-11 (File No.
333-1192364), filed on December
10, 2004.)10.8
    
    Contribution Agreement dated as
of September 24, 2004, by and
among University Towers
Operating Partnership, LP, Allen
& OHara, Inc., Paul O. Bower,
Clyde C. Porter, Robert D. Bird,
Thomas J. Hickey, Barbara S.
Hays and Hays Enterprises III,
Ltd. (Incorporated by reference
to Exhibit 10.8 to the Companys
Amendment No. 2 to its
Registration Statement on Form
S-11 (File No. 333-1192364),
filed on December 10, 2004.)10.9
    
    Contribution Agreement dated as
of September 20, 2004, by and
between Melton E. Valentine, Jr.
and University Towers Operating
Partnership, LP. (Incorporated
by reference to Exhibit 10.9 to
the Companys Amendment No. 2 to
its Registration Statement on
Form S-11 (File No.
333-1192364), filed on December
10, 2004.)10.10
    
    Contribution Agreement dated
September 20, 2004, by and among
Allen & OHara Educational
Properties, LLC, Allen & OHara,
Inc., Thomas J. Hickey, Craig L.
Cardwell, Randall H. Brown,
William W. Harris, Wallace L.
Wilcox and Education Realty
Operating Partnership, LP.
(Incorporated by reference to
Exhibit 10.10 to the Companys
Registration Statement on Form
S-11 (File No. 333-119264),
filed on September 24, 2004.)
    Table of Contents  ExhibitNumber
    
    Description10.11
    
    Agreement and Plan of Merger dated September 20, 2004 by and among C Station,
L.L.C., Allen & OHara, Inc., Paul O. Bower, Craig L. Cardwell, Student
Management Associates, LLC, Thomas J. Hickey, Randall H. Brown, William W.
Harris, Wallace L. Wilcox, EDR C Station, LLC and Education Realty Operating
Partnership, LP. (Incorporated by reference to Exhibit 10.11 to the Companys
Amendment No. 2 to its Registration Statement on Form S-11 (File No.
333-1192364), filed on December 10, 2004.)10.12
    
    Agreement and Plan of Merger dated September 20, 2004, by and among Allen &
OHara Education Services, LLC, Allen & OHara, Inc., Student Management
Associates, LLC, Thomas J. Hickey, Craig L. Cardwell, Randall H. Brown, William
W. Harris, Wallace L. Wilcox, Allen & OHara Education Services, Inc., and
Education Realty Operating Partnership, LP. (Incorporated by reference to
Exhibit 10.12 to the Companys Amendment No. 2 to its Registration Statement on
Form S-11 (File No. 333-1192364), filed on December 10, 2004.)10.13
    
    Contract of Sale/Contribution made effective as of September 17, 2004, by and
among JPI-CG Mezz LLC, JPI-MC Mezz LLC, JPI Genpar Realty LLC, JPI Investment
Company, L.P. and Education Realty Operating Partnership, LP. (Incorporated by
reference to Exhibit 10.13 to the Companys Amendment No. 2 to its Registration
Statement on Form S-11 (File No. 333-1192364), filed on December 10, 2004.)10.14
    
    Contract of Sale made effective as of September 17, 2004, by and among
Jefferson Commons  Lawrence, L.P., Jefferson Commons  Wabash, L.P. and
Education Realty Operating Partnership, LP. (Incorporated by reference to
Exhibit 10.14 to the Companys Amendment No. 2 to its Registration Statement on
Form S-11 (File No. 333-1192364), filed on December 10, 2004.)10.15
    
    Contract of Sale/Contribution made effective as of September 17, 2004, by and
among Jefferson Commons  Tucson Phase II Limited Partnership, Jefferson
Commons  Columbia, L.P. and Education Realty Operating Partnership, LP.
(Incorporated by reference to Exhibit 10.15 to the Companys Amendment No. 2 to
its Registration Statement on Form S-11 (File No. 333-1192364), filed on
December 10, 2004.)10.16
    
    Contribution Agreement dated September 23, 2004 by and among Allen & OHara
Educational Properties, LLC, FSPP Education I, L.L.C., FSPP Education II,
L.L.C., Allen & OHara, Inc., Thomas J. Hickey, Craig L. Cardwell, Randall H.
Brown, William W. Harris, Wallace L. Wilcox and Education Realty Operating
Partnership, LP. (Incorporated by reference to Exhibit 10.16 to the Companys
Amendment No. 2 to its Registration Statement on Form S-11 (File No.
333-1192364), filed on December 10, 2004.)10.17
    
    Form of Revolving Loan Agreement dated January 31, 2005, between Education
Realty Operating Partnership, LP and JPI Multifamily Investments L.P.
(Incorporated by reference to Exhibit 10.17 to the Companys Registration
Statement on Form S-11 (File No. 333-119264), filed on September 24, 2004.)10.18
    
    Form of Collateral Assignment of
Partnership Interest and Pledge Agreement between Education Realty
Operating Partnership, LP and JPI Multifamily Investments L.P.
(Incorporated by reference to Exhibit 10.18 to the Companys
Registration Statement on Form S-11 (File No. 333-119264), filed on
September 24, 2004.)10.19
    
    Form of Secured Non-Recourse Revolving Note dated 2005, issued by JPI
Multifamily Investments L.P. to Education Realty Operating Partnership, LP.
(Incorporated by reference to Exhibit 10.19 to the Companys Registration
Statement on Form S-11 (File No. 333-119264), filed on September 24, 2004.)10.20
    
    Purchase and Sale Agreement dated August 27, 2004 by and between The Gables,
LLC and Education Realty Operating Partnership, LP. (Incorporated by reference
to Exhibit 10.20 to the Companys Registration Statement on Form S-11 (File No.
333-119264), filed on September 24, 2004.)10.21
    
    Assignment and Assumption Agreement dated November 2, 2004, between Education
Realty Operating Partnership, LP and Allen & OHara, Inc. related to Morgan
Keegan & Company, Inc. financial advisory services agreement dated March 18,
2004. (Incorporated by reference to Exhibit 10.21 to the Companys Amendment
No. 1 to its Registration Statement on Form S-11 (File No. 333-1192364), filed
on November 4, 2004.)10.22
    
    Commitment Letter for Revolving Credit Facility by and among JP Morgan Chase
Bank, UBS AG, Education Realty Operating Partnership, LP and the Registrant
dated December 22, 2004. (Incorporated by reference to Exhibit 10.22 to the
Companys Amendment No. 3 to its Registration Statement on Form S-11 (File No.
333-1192364), filed on January 3, 2005.)
    Table of Contents  ExhibitNumber
    
    Description10.32(1)
    
    Employment Agreement between Education Realty Trust, Inc. and
William W. Harris, dated as of December 6, 2004. (Incorporated by
reference to Exhibit 10.32 to the Companys Amendment No. 2 to its
Registration Statement on Form S-11 (File No. 333-1192364), filed on
December 10, 2004.)10.33(1)
    
    Employment Agreement between Education Realty Trust, Inc. and Thomas
J. Hickey, dated as of December 6, 2004. (Incorporated by reference
to Exhibit 10.33 to the Companys Amendment No. 2 to its
Registration Statement on Form S-11 (File No. 333-1192364), filed on
December 10, 2004.)10.35
    
    Credit Agreement, dated January 31, 2005, by and among Education
Realty Operating Partnership, LP and certain of its subsidiaries, as
Borrower, JPMorgan Chase Bank, N.A. and UBS Loan Finance LLC, as
Lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, and UBS
Securities LLC, as Syndication Agent. (Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K (File No.
001-32417), filed on February 2, 2005.)10.36(1)
    
    Form of Restricted Stock Award Agreement (filed as Exhibit 10.1
to the Companys Current Report on Form 8-K filed on August 17, 2006
and incorporated herein by reference).10.37
    
    Second Amendment to Contribution Agreement, dated January 6, 2006,
by and between Place Properties, L.P., Place Mezz Borrower, LLC and
Education Realty Operating Partnership, LP (Filed as Exhibit 10.1 to
the Companys Current Report on Form 8-K dated January 12, 2006 and
incorporated herein by reference).10.38
    
    Required Repair Escrow Agreement, dated as of January 1, 2006, by
and between Place Properties, L.P., Place Mezz Borrower, LLC,
Education Realty Operating Partnership, LP and Chicago Title
Insurance Company (Filed as Exhibit 10.2 to the Companys Current
Report on Form 8-K dated January 12, 2006 and incorporated herein by
reference).10.39
    
    Lease Agreement, dated as of January 1, 2006, by and between
Education Realty Operating Partnership, LP and Place Portfolio
Lessee, LLC (Filed as Exhibit 10.3 to the Companys Current Report
on Form 8-K dated January 12, 2006 and incorporated herein by
reference).10.40
    
    Consent, Ratification, Assumption and Release Agreement made
effective as of January 6, 2006, by and among Cape Place (DE), LLC,
Martin Place (DE), LLC, Clayton Place (DE), LLC, Macon Place (DE),
LLC, River Place (DE), LLC, Jacksonville Place (DE), LLC, Clemson
Place (DE), LLC, Troy Place (DE), LLC, Murray Place (DE), LLC, EDR
Lease Holdings, LLC, Cecil M. Philips, Place Properties, L.P.,
Education Realty Operating Partnership, LP, and LaSalle Bank,
National Association, as Trustee (Filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K/A dated January 25, 2006 and
incorporated herein by reference).10.41
    
    Loan and Security Agreement dated as of December 3, 2004, between
Cape Place (DE), LLC; Clayton Place (DE), LLC; Clemson Place (DE),
LLC; Jacksonville Place (DE), LLC; Macon Place (DE), LLC; Martin
Place (DE), LLC; Murray Place (DE), LLC; River Place (DE), LLC; and
Troy Place (DE), LLC, collectively, as Borrower and Greenwich
Capital Financial Products, Inc., as Lender (Filed as Exhibit 10.2
to the Companys Current Report on Form 8-K/A dated January 25, 2006
and incorporated herein by reference).10.42
    
    Promissory Note ($98,660,000), dated December 3, 2004, between Cape
Place (DE), LLC, Clayton Place (DE), LLC, Clemson Place (DE), LLC,
Jacksonville Place (DE), LLC, Macon Place (DE), LLC, Martin Place
(DE), LLC, Murray Place (DE), LLC, River Place (DE), LLC, Troy Place
(DE), LLC (collectively, the Borrower) and Greenwich Capital
Financial Products, Inc. (the Lender) (Filed as Exhibit 10.3 to
the Companys Current Report on Form 8-K/A dated January 25, 2006
and incorporated herein by reference).10.43
    
    Exceptions to Non-Recourse Guaranty (Multi State) entered into as of
January 6, 2006, by Education Realty Operating Partnership, LP for
the benefit of LaSalle Bank, National Association, as Trustee (Filed
as Exhibit 10.4 to the Companys Current Report on Form 8-K/A dated
January 25, 2006 and incorporated herein by reference).10.44
    
    Environmental Indemnity Agreement made as of January 6, 2006, by
Cape Place (DE), LLC, Clayton Place (DE), LLC, Clemson Place (DE),
LLC, Jacksonville Place (DE), LLC, Macon Place (DE), LLC, Martin
Place (DE), LLC, Murray Place (DE), LLC, River Place (DE), LLC, Troy
Place (DE), LLC, and EDR Lease Holdings, LLC and EDR Clemson Place
Limited Partnership and Education Realty Operating Partnership, LP
(collectively referred to as Indemnitor) in favor of LaSalle Bank,
National Association, as Trustee (Filed as Exhibit 10.5 to the
Companys Current Report on Form 8-K/A dated January 25, 2006 and
incorporated herein by reference).10.45
    
    Credit Agreement dated as of March 30, 2006 among Education Realty
Operating Partnership, L.P., as borrower, the lenders party thereto
and KeyBank, National Association as administrative agent (Filed as
Exhibit 10.1 to the Companys Current Report on Form 8-K dated April
6, 2006 and incorporated herein by reference).10.46
    
    Amended and Restated Credit Agreement dated as of March 30, 2006
among Education Realty Operating Partnership, L.P., and certain of
its subsidiaries as borrowers, the lenders party thereto and
KeyBank, National Association as administrative agent (Filed as
Exhibit 10.2 to the Companys Current Report on Form 8-K dated April
6, 2006 and incorporated herein by reference).10.47(1)
    
    Incentive Compensation Plan for Executive Officers (filed as
exhibit 10.1 to the Companys Current Report on Form 8-K dated May
30, 2006 and incorporated herein by reference).
    Table of Contents  ExhibitNumber
    
    Description10.48 (1)
    
    Employment Agreement between Education Realty Trust, Inc. and
Thomas Trubiana, dated as of March 1, 2005 (Filed as Exhibit 10.1 to
the Companys Current Report on Form 8-K dated January 4, 2007 and
incorporated herein by reference).11
    
    Statement Re: Computation of per share earnings (included within 10K)14
    
    Code of Ethics (Incorporated by reference to Exhibit 14 to the
Companys Annual Report on Form 10-K for the year ended December 31,
2005).
    Table of Contents  ExhibitNumber
    
    Description21.1
    
    List of Subsidiaries of the Registrant.23.1
    
    Consent of Independent Registered
Public Accounting Firm, Deloitte & Touche LLP.23.2
    
    Consent of Independent Registered
Public Accounting Firm, Windham Brannon, P.L.31.1
    
    Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certificate of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certificate of Chief Executive Officer and Chief Financial Officer.
 
 (1)
    
    Management contract or compensatory plan.