Prompt:
Human: As detailed in yesterday's release, ABM generated strong third quarter results featuring double-digit growth in revenue, continued solid cash generation, and a 20% gain in adjusted earnings per share.
Revenue growth was broad-based as each of our five business segments achieved year-over-year gains in revenue, aided by an improving business environment and the gradual reopening of the economy.
Our team members once again executed well and continue to provide exceptional service to our clients.
Overall, demand for ABM's higher margin virus protection services remained elevated in the quarter, underscoring ongoing client concerns regarding cleaning and disinfection of their facilities.
As anticipated, demand for virus protection eased slightly in the third quarter compared to the second quarter of fiscal 2021, but remain well above pre-pandemic levels.
The emergence of the Delta variant and rising COVID-19 cases nationally have gains heightened interest in the need for disinfection prevention measures, particularly in high traffic areas.
As we look forward to 2022 and beyond, we believe that virus protection services will remain a contributor to our overall revenue as disinfection becomes a standard service protocol and facility maintenance programs.
During the third quarter, we continued to benefit from efficient management of labor as office occupancy levels remain relatively low nationwide and began to trend downward slightly as the third quarter progressed due to the spread of the Delta variant.
In this evolving environment, our flexible labor model enabled us to capitalize on staffing efficiencies and the associated benefit to our margins.
In light of the current pause in the return to the office trend, we anticipate a more gradual ramp in office occupancy levels during 2022, providing an opportunity for a longer tailwind of rising from labor efficiencies.
At the same time, we are proactively addressing current dynamics in the labor market, which include heightened competition for available talent.
As I noted in last quarter's conference call, ABM has developed a task force model that leverages our substantial internal resources and cross-functional expertise to identify and implement solutions rapidly and effectively.
Earlier this year, we established a human resources task force with a specific focus on recruiting and retention, and this task force has been instrumental in helping us to manage our staffing needs and ensure our resources are allocated efficiently and cost effectively.
As a reminder, roughly half of our revenue is generated from union labor accounts, which mitigates concerns around labor inflation and availability.
Revenue growth in the third quarter was led by performance of our Aviation segment, where revenues increased 51% compared to the prior year period and the segment operated profitably.
Our strong performance in aviation reflected a seasonal improvement in air travel as well as our strategic shift toward securing high margin and more stable service contracts with airports and related facilities.
While revenue in our Aviation segment remains below pre-pandemic levels, we expect to see continued growth, driven in part by new airport transportation and janitorial contracts.
Our Technical Solutions segment continued to perform strongly, generating nearly 23% revenue growth in the third quarter as our broad capabilities address key client needs for energy efficiency, productivity and mechanical performance throughout their facilities.
Revenue growth benefited from improved access to client sites, enabling us to execute on a large number of projects Technical Solutions ended the third quarter with a record backlog level and the long-term outlook for this segment is particularly favorable given our position as a leading provider of electrical vehicle charging infrastructure.
Although EV charging infrastructure services currently represent a limited portion of Technical Solutions revenue, electrical vehicle adoption continues to rise, aided by the current administration's target to make half of all vehicle sold in 2030 zero emissions vehicles.
As a result, we see a long runway of growth for our e-mobility EV charging infrastructure business as we look out over the next several years.
Turning to Education segment.
School districts have accelerated the return to in-person learning, as we estimate that 95% plus of K-12 and higher education institutions will resume in-school classes this fall.
With the reopening of schools and educational facilities, Education segment revenue grew solidly from the prior year period, driven by increased demand for our services.
We believe the heightened concerns amid the prevalence of the Delta variant may lead to incremental opportunities for disinfecting services in the fourth quarter and into 2022.
But we do expect our labor savings from hybrid environment will wane quickly with a return to full-time in-person learning this fall.
Overall, our scale and market diversity and breadth of service keep us well positioned for growth in the fourth quarter and beyond.
Given the strength of our year-to-date performance and our positive outlook for the fourth quarter, we are increasing our full year adjusted earnings per share guidance to $3.45 to $3.55, up from $3.30 to $3.50 previously.
On the acquisition front, a few weeks ago we announced a definitive agreement to acquire Able Services in a strategic transaction that we believe will create significant value for all of our stakeholders.
We're excited to join with Able's talented team and we look forward to working together to better serve our clients with a broader array of services and solutions that address their evolving needs.
The combination of ABM and Able expands our core engineering and janitorial capabilities in attractive geographies.
This acquisition is expected to be accretive to adjusted earnings per share from day one, aided by an estimated $30 million to $40 million and cost saving synergies.
As a larger company with enhanced scale, we will be better positioned to provide our clients with service offerings that will not only enhance our growth and margins, but will add significant value for our clients.
We also see the potential for revenue synergies over time as we deepen our client relationships and realize cross-selling opportunities.
We are progressing on the close of this acquisition, which we expect will occur by the end of September.
As a reminder, we have not included any contribution from Able in our updated guidance forecast.
In closing, the past nine months have been exciting, productive and successful for ABM.
We have executed well on our strategic growth objectives, while generating strong financial results, and we are very much looking forward to the addition of Able Services to ABM.
In the next few months, We plan to share with you our strategic plan for the next five years, which I am extremely excited about.
Third quarter revenue was $1.54 billion, an increase of 10.7% from last year.
This improvement was driven by revenue growth in each of our five business segments, reflecting an improving business environment and continued demand for our virus protection services.
On a GAAP basis, the loss from continuing operations was $13.7 million or $0.20 per diluted share compared to $56 million or $0.83 per diluted share in last year's third quarter.
The GAAP loss from continuing operations in this year's third quarter is attributable to a reserve of $112.9 million, equivalent to $1.24 per diluted share.
The fully resolved previously announced outstanding litigation, you will find additional information related to the legal settlement in our Form 10-Q, which will be filed later today.
Excluding the impact of reserve taken in the third quarter as well as other one-time factors including a favorable prior year self-insurance adjustment of $26.1 million, our adjusted income from continuing operations was $61.3 million or $0.90 per diluted share in the third quarter of fiscal 2021, compared to $50.1 million or $0.75 per diluted share in the third quarter of last year.
The increase in adjusted income from continuing operations was primarily the result of strong operational performance, including growth in our higher margin services.
Additionally, our results benefited from several other factors, including efficient labor management, one less workday compared to the third quarter of fiscal 2020, and lower bad debt expense.
Corporate expense for the third quarter increased by $27.5 million year-over-year.
The majority of this increase reflects a more normalized expense level in this year's third quarter as furloughs and other cost saving measures taken at the beginning of the pandemic reduced corporate expenses in the same period a year ago.
The increase in corporate expense this quarter also reflects planned investments of approximately $9 million, as we continue to execute on our technology transformation initiative.
On a year-to-date basis, we have invested $29 million in information technology and other strategic initiatives relative to our previously disclosed target of $40 million for the full fiscal 2021 year.
Now turning to our segment results.
Revenue in our largest segment, Business & Industry, grew 6.7% year-over-year to $807.7 million, benefiting from increased office occupancy in the quarter as well as continued elevated demand for virus protection services.
In addition, we saw improved demand for sports venues, as spectator attendance levels increased significantly from the prior year period.
Operating profit in this segment grew 18.2% year-over-year to $84.7 million, reflecting efficient labor management, reduced bad debt expense and ongoing client demand for higher margin virus protection services.
Our Technology & Manufacturing segment generated revenue growth of 1.2% year-over-year to $246.1 million, and operating profit margin improved to 10.4%, up from 10.1% last year.
Since most of our clients in the T&M segment are considered essential service provider, this segment has been least impacted by COVID-19 disruption.
As a result, segment revenue grew modestly on a year-over-year basis.
However, the segment operating profit margin increased 30 basis points from the prior year period, reflecting lower bad debt expense.
Education revenue grew 10.5% year-over-year to $208.4 million, driven by the reopening of schools and other educational institution amid a return to in-person learning.
Education operating profit totaled $17.7 million, down 3.3% from the same period last year.
Although the return to school trend increased demand for virus protection services, the resumption of more normalized staffing levels reduced overall margins compared to the prior year, which benefited from minimal staffing requirement.
Aviation revenue increased 51% in the third quarter to $175.7 million, marking the first period of year-over-year revenue growth in the Aviation segment since the third quarter of fiscal 2019.
Revenue growth was fueled by a rebound in U.S. passenger levels amid significantly busier summer travel season compared to the same period last year, as well as our increased focus on securing more business with airport and related facilities.
Aviation operating profit improved to $10.3 million compared to an operating loss of $8.2 million last year.
Aviation segment margins continued to improve on a sequential basis, rising to 5.9% in the third quarter from 3.9% in the second quarter of fiscal 2021.
The improvement in operating margin is attributable to a favorable shift in business mix as we emphasize higher margin airport facility contracts and from stronger client demand for virus protection services compared to the prior year period.
Technical Solutions revenue increased 22.7% year-over-year to $146.1 million, highlighting continued strong market demand for our energy efficiency solutions as well as improved access to client sites.
Segment operating margin was 9.9% in the third quarter compared to 11.1% in last year's third quarter, reflecting a higher personnel costs compared to last year's third quarter, which benefited from pandemic-related cost saving actions.
I'll now discuss our cash and liquidity.
We ended the third quarter with $505.4 million in cash and cash equivalents compared to $394.2 million at the end of fiscal 2020, with total debt of $811.6 million as of July 31, 2021.
Our total debt to pro forma adjusted EBITDA, including standby letters of credit was 1.4 times at the end of the third quarter of fiscal 2021.
In June, we announced an expansion of our credit agreement to $1.95 billion.
The benefits of this revised and expanded credit facility include enhanced financial flexibility as well as increased liquidity to fund strategic growth initiatives.
Additionally, the revised agreement has more favorable credit term on both the revolving credit facility and the term loan.
As you know, we recently announced the pending acquisition of Able Services for $830 million, which we plan to pay using a mix of cash on hand and borrowings from our credit facility.
Following the close, we expect to have very manageable bank leverage ratio of approximately 3 times.
Supported by strong cash flow of the combined company, we intend to reduce this leverage ratio in a timely manner.
Third quarter operating cash flow from continuing operations was $87.6 million compared to $130.9 million in the third quarter of last year.
The decrease in cash flow from continuing operations during the third quarter was primarily due to a deferral in payroll taxes last year under the CARES Act.
For the nine-month period ending July 31, 2021, operating cash flow from continuing operations totaled $258.8 million, unchanged from the same period last year.
Free cash flow from continuing operations was $79.2 million in the third quarter of fiscal 2021, down from $121.1 million in the third quarter of fiscal 2020.
The decrease in free cash flow reflected the CARES Act payroll tax deferral I mentioned.
During the third quarter, we were pleased to pay our 221st consecutive quarterly dividend of $0.19 per common share, returning an additional $12.8 million to our shareholders.
Our Board also declared our 222nd consecutive quarterly dividend, which will be payable November 1, 2021 to shareholders of record on October 7, 2021.
Now, I'll discuss our outlook.
As Scott mentioned, our increased guidance for full year fiscal 2021 adjusted income from continuing operations is now a range of $3.45 to $3.55 per diluted share, compared to $3.30 to $3.50 per diluted share previously.
The increase in our adjusted earnings forecast is due to our strong financial performance over the first nine months of fiscal 2021, as well as our favorable outlook for the fourth quarter of the year.
Please note that this guidance excludes any impact from our pending acquisition of Able Services.
At this time, we are not providing guidance for full year 2021 GAAP income from continuing operations since we are unable to provide an accurate estimate and timing of the items impacting comparability relating to the Able Services acquisition, such as acquisition-related contingency advisory fees and integration costs.
We continue to expect a 30% tax rate for fiscal 2021 excluding discrete items such as the Work Opportunity Tax Credits and the tax impact of stock-based compensation awards.
 Assistant:

Chosen response:
abm industries q3 adjusted earnings per share $0.90.
q3 gaap loss per share $0.20 from continuing operations.
q3 adjusted earnings per share $0.90.
raises adjusted earnings per share guidance for full year fiscal 2021.
q3 revenue rose 10.7 percent to $1.54 billion.
increasing guidance for full year 2021 adjusted income from continuing operations to $3.45 to $3.55 per share.


Prompt:
Human: Bill Bayless, Chief Executive Officer; Jim Hopke, President; Jennifer Beese, Chief Operating Officer; William Talbot, Chief Investment Officer; Daniel Perry, Chief Financial Officer; Kim Voss, Chief Accounting Officer; and Jamie Wilhelm, our EVP of Public-Private Partnerships.
As you know, Q3 encompasses the completion of the prior academic year, which was substantially impacted by the onset of the COVID pandemic and the commencement of the new academic year.
Let me start by saying that we are pleased with the start of the 2020-2021 academic year.
As Jennifer, William, and Daniel will discuss, the resiliency of the modern student housing industry, operationally, financially, and from an industry fundamentals perspective, is once again being demonstrated as we transition into the new academic year amid the COVID pandemic.
While our business has not fully normalized at this time, we believe we are on the road to recovery as exemplified in many areas.
Our lease-up occupancy exceeded 90%, a level many believe to be a best-case scenario in the early days of this pandemic.
Our rent collection rate improved to 97% in September, the first full month of the new academic year in most of our markets, from approximately 94% in Q2.
This improvement taking place, while many other sectors continue to experience decreasing trends at this time.
We're also receiving significantly fewer resident hardship rent abatement request.
Several hundred currently versus several thousand per month in the prior academic year.
We have also definitively witnessed the strong consumer sentiment regarding students' desires to be in the college environment with their peers regardless of University's curriculum delivery methodology, whether it being online, in-person, or a hybrid combination.
And our university partners have planned and implemented prudent strategies.
It appears to have provided stability and ongoing on-campus occupancies.
As we are not currently holding any discussions for on-campus rental refunds beyond one university partner, which we expect to total only $1 million -- approximately $1 million in the fourth quarter versus the $15 million we contributed in the second quarter of the prior academic year.
Also, as William will discuss, in ACC's Tier one university markets, there appears to be enrollment stability amid the pandemic.
Even amid this black swan event, the resounding value of a college degree and abundant demand for higher education at Power five and Carnegie R1 research institutions continues underpinning the stability and consistent growth opportunity in our sector.
Finally, as part of our ongoing commitment to the Hi, How Are You Project, whose mission is to remove the stigma associated with mental illness and to encourage discussion regarding mental health and well-being.
We jointly conducted a mental health survey at our communities in conjunction with the commencement of the new academic year to better understand the mindsets during COVID-19.
The survey received responses from over 12,000 of our residents.
This is one of the largest surveys of its kind, specifically examining college student's perspectives about COVID and how it has impacted their mental health.
Not surprising, according to the survey, 85% of respondents are more stressed as a result of the global pandemic.
Also worth noting, the top three items students are missing most are: one, socializing with their friends; two, participating in in-class instruction; and three, attending events both on and off-campus.
Encouragingly, the results also reveal students believe that their mental health is just as important as their physical health, and they're open to having dialogue to help themselves and others.
We'll continue to promote the mission of the Hi, How Are You Project, and promote discussion around mental well-being among our student residents through our Residence Life programs, as we hope to have a meaningful impact in this very important endeavor.
We are excited to get the 2020-2021 academic year under way with September representing its first full month.
Based on our leasing activity, it is now evident that the vast majority of our students desire to be with their peers in their college environment regardless of the curriculum delivery method at their universities.
Our modern, well-located, fully amenitized apartment communities offer students the ability to continue to thrive despite the current COVID environment.
Turning to Page S6 of the supplemental.
As usual, our third quarter includes a mix of two academic years, with prior academic year leases expiring mid-quarter and new academic year leases commencing in August and September.
While the prior year academic year results were heavily influenced by COVID, in the new academic year we are seeing an improving financial trajectory.
During the quarter, we provided $2.1 million in rent refunds to on-campus residents at one ACE Partnership University, which we expect to decrease to $1.2 million in the fourth quarter.
This is in comparison to the $15 million provided to residents that are primarily on-campus residence halls in the second quarter.
As noted in our release, no additional refunds are in discussion at this time.
With regard to students and parents being impacted by COVID-19, we instituted our Resident Hardship Program during the second quarter where we provided over $8 million of financial assistance.
During the current quarter, the amount totaled $4.7 million, with the majority of this amount relating to our prior academic year leases.
In September, based on significantly lower levels of requests within the program, we gave approximately $175,000 in direct rent relief during the month.
In regards to collections, we had a 97% collection rate on our rent charge for September, a significant improvement from the 93.7% seen during the second quarter.
As expected, our third quarter other income was impacted by $8.4 million due to the loss of summer camp conference business, the continued waiver of online transaction fees and late payment fees, and higher levels of bad debt.
Going into the fourth quarter, we will continue to be impacted to some degree as we work on reinstituting leasing and payment fees.
With regard to same-store opex, we were able to partially offset lost revenue with savings and operating expenses of 5.2%, led by savings in all of our controllable categories.
We continue to have lower G&A costs due to the cancellation of nonessential travel, savings, and maintenance as we were able to turn more of our units in-house, lower marketing expenses due to substantially fewer in-person promotional and marketing events, and lower payroll costs associated with adjusted staffing and less overtime during the pandemic.
After executing successful touchless, digital, and physically distant move-ins at our properties across the country, our sanitization plan procedures continues.
Throughout the pandemic, at our owned properties, our resident's physical health has been minimally impacted by the COVID virus.
In the current academic year, residents have reported a total of approximately 1,500 positive COVID-19 cases or 1.7% of our occupied beds.
At this time, we are tracking only 110 active cases or 0.1% of our occupied beds.
It is also worth noting that both the CDC and Dr. Fauci have urged universities to not send students back home to their primary residents if at all possible, to eliminate the risk of scattering students throughout the country and putting them in contact with parents and family that may be in a higher risk category.
We are pleased to see that universities have successfully implemented their operational protocols.
Work through the initial spikes in cases, seeing cases decline, and several have recently announced plans for expanded in-person activities in the spring.
Turning to our leasing results on Page S9 of the supplemental.
As of September 30, our 2020-2021 same-store portfolio was 90.3% leased, with in-place rents growing 1.1% over prior year.
However, as you will see in the chart, we gained approximately 300 additional leases at our properties that primarily serve sophomores and above, which offsets the decreasing at our properties, primarily serving first year students as our university partners finalize their move-in in assignment processes.
We continue to see fall leasing activity at our off-campus communities, primarily serving sophomores and above.
The largest opportunity for occupancy gains in the spring is our on-campus ACE property serving first year students, a process which again is administered by university partners.
Turning first to development.
We are pleased to have completed construction and delivered two owned ACE developments on the campuses of the University of Southern California Health Sciences in San Francisco State University.
The developments were completed on time and on budget despite the challenging environment.
However, initial occupancy at the communities were impacted primarily due to state and university policies in response to COVID-19.
We still anticipate the projects will stabilize at development yields of 6.25 upon a return to normalcy on each campus.
In addition, we completed the second phase of our Flamingo Crossings Village project at Walt Disney World.
With the continued temporary suspension of the Disney College Program, both delivered phases, which totaled 406 units and 1,624 beds remain unoccupied at the current time.
Given our strong relationship, Disney has agreed to abate all ground rent until the project becomes occupied, and we are actively working with Disney to market and lease the community to the broader rental market, including Walt Disney World cast members.
The original design of the community and ground lease contemplated the potential leasing of units beyond the DCP program with configurable furniture, attractive individual lease liability options, and an unmatched amenity package in the market.
Based on recently updated projections provided by Disney, we now do not expect occupancy from DCP participants until the second half of 2021.
While leasing of the currently available beds to the open market has just commenced and will continue through 2021, based on traditional conventional multifamily absorption versus immediate DCP stabilization as units are brought online, coupled with discount pricing due to the interim nature of these non-DCP leases, we expect short-term diminished economics from the original DCP pro forma projections.
We anticipate housing both open market renters and DCP participants through at least 2022.
We continue the construction of the remaining phases of the project to be delivered through May 2023, in anticipation of the full return of the Disney College Program along with leasing to the broader rental market until the DCP program returns to levels that fully occupy the community.
In our on-campus third-party development business, during the quarter, we commenced construction on a 476-bed development on the campus of Georgetown University in Washington, D.C. The project is located on the University's capital campus, just north of the Georgetown Law School, and is expected to be delivered in fall of 2022.
We expect to earn a total of $3 million in development fees, and we'll manage the project upon completion.
We continue to make progress on predevelopment efforts at the University of California, Berkeley, University of California, Irvine, MIT, Princeton University, West Virginia University, Concordia University, and Virginia Commonwealth University.
The ultimate timing, finance structure, and project feasibility for these predevelopments have not been finalized at this time.
With regard to the overall on-campus development environment, we still anticipate the continued increase in on-campus P3 opportunities across the country.
The occupancy of antiquity communities on-campus have been impacted to a much greater extent, the more modern accommodations offered both on and off-campus.
And universities will look to modernize their on-campus housing to meet consumer preferences and mitigate against future losses.
In addition, we anticipate more universities return to off-balance sheet financing structures, including our ACE program, to finance the development of new housing as universities will be focused on conserving their balance sheets and debt capacity in the wake of the effects of COVID-19.
We are currently tracking a deep pipeline of on-campus opportunities, and American Campus remains in a strong position to capitalize on those opportunities.
Turning to university enrollment.
We have been actively tracking fall 2020 enrollment and the potential impact of COVID-19.
Of the 68 owned markets where ACC currently operates, 85% of universities have reported statistics for the fall.
Overall, we've seen only a 0.3% decline in enrollment across those 58 markets.
50% of our universities experienced increased enrollment in fall 2020, with an average increase in students of 2.5%.
Of the half of our universities that had decreases in enrollment, they only averaged a 3.1% decline for fall 2020.
First year student enrollment is only down 1.1% for fall.
As Jennifer discussed, our properties that primarily serve first year students are currently 77% occupied.
And given there has only been a slight decline in first year student enrollment, we believe there is opportunity to improve occupancies in those projects as first year students may decide to return to the university for the spring semester.
University enrollment has remained stable despite reduced international students for fall 2020.
As international students typically constitute less than 10% of enrollment in our portfolio, while demand from domestic students remains deep to replace any loss from international students.
With 51% of our universities having released fall 2020 international data, there has been a 14% decline in international students.
Yet those same universities have grown the much larger segment of domestic enrollment by 1.2%.
Overall, this demonstrates the demand from domestic students at the Tier one universities we serve offset the negative impact from reduced international enrollment.
The resilient, stable enrollment figures during the pandemic places the Tier one colleges and universities we serve in a strong position for academic year 2021 and beyond.
Finally, the new supply landscape for next academic year continues to remain favorable.
Within ACC's 68 markets, we are now tracking 21,150 beds currently under construction for 2021, of a potential additional 400 beds planned, but not yet under construction, reflecting a decline of 2% to 4% in new supply off the current year's decline in new supply of 20%.
Limited available land close to campus, construction costs, and lack of available construction financing will continue to put downward pressure on future supply in our markets for the next few years.
As we reported last night, total FFOM for the third quarter of 2020 was $45.2 million or $0.32 per fully diluted share.
As Jennifer said, despite the unprecedented and ongoing response to the virus, we have all experienced in 2020 and its direct effect on the operating environment of the colleges and universities we serve, we have been pleased with the resiliency the student housing sector has exhibited.
While the company's near-term earnings will, of course, be affected by the governmental and university actions taken in response to the pandemic, we believe that we are on a path to return to a relative level of normalcy both operationally and financially after achieving over 90% for this fall despite the amount of ongoing online instruction as well as seeing significant reductions in delinquencies, refunds, and resident hardships as we have started the new academic year.
Like last quarter, we cannot completely isolate every item related to the pandemic, but we believe FFOM was negatively impacted by approximately $19 million versus our original expectations for the quarter.
And year-to-date, FFOM has been negatively impacted by approximately $42 million to $43 million.
Total property revenue was approximately $27 million impacted for the quarter, with $15 million due to COVID-related rent relief, lost summer camp revenue, increased bad debt, and wave fees.
And $12 million due to lower opening occupancy for the fall semester relative to our original expectations.
Partially offsetting the loss revenue, property operating expenses were $7.5 million than -- lower than originally budgeted, as Jennifer discussed.
Also as a result of the lower originally budgeted property NOI, joint venture partners' noncontrolling interest and earnings was approximately $700,000 lower, and ground lease expense was approximately $1.4 million less due to a reduction in outperformance rent being paid to our university ground lessor partners as well as Disney's agreement to waive ground rent on the Disney College Program housing until occupancy resumes.
Additionally, third-party management fee income was approximately $1.2 million lower than expected.
And FFOM contributed from our on-campus participating properties was almost $500,000 lower, due to University's refunding a portion of rents and lower fall occupancies at properties in both of these business segments.
Lastly, we benefited from approximately $700,000 in G&A and third-party overhead expense savings relative to our original plan due to both reduced travel and payroll costs.
Due to the continued uncertainty surrounding the pandemic, we will not be reissuing earnings guidance for 2020.
If the current environment remains stable, though, we are hopeful that the reduction in revenue through the remainder of the year should be limited to the impact of the 90.3% occupancy we achieved for the opening of the fall semester, and the $1.2 million in rent refunds that we have agreed to for the fourth quarter at one of our ACE partnership universities.
Also, while delinquencies and resident hardships have improved significantly in September, we still expect to run at an elevated level of bad debt relative to the 1% level we typically operated at prior to the pandemic.
With regards to operating expenses, we will, of course, strive to be as efficient as possible and create savings that can help offset the lower revenue levels in the near-term.
However, with the new academic year physical occupancy levels above 90% and approximately $2.5 million to $3 million in expected additional annual costs for COVID-related cleaning supplies and procedures, we do not expect to be able to create expense savings at the same levels we did in the second and third quarters.
And finally, as discussed last quarter, we continue to believe the three third-party development projects at the University of California, Irvine, Cal Berkeley, and Concordia University, originally scheduled to commence in 2020 will be delayed until 2021.
These projects were expected to contribute a combined $4 million in development fee income in the fourth quarter of 2020.
Again, while there will be some continued financial impacts of the pandemic into the immediate future, the progress that has been made gives us confidence that longer term, our operating results will return to normalized levels.
In the meantime, we continue to have a strong and healthy balance sheet and substantial liquidity to allow us to absorb the disruption.
As of September 30, we had $44 million in cash on hand and over $720 million of availability on our corporate revolver, with no remaining debt maturities in 2020, and a manageable $167 million in secured mortgage debt maturing in 2021.
Also, as detailed on Page S16 of our earnings supplemental, the remaining phases of the Walt Disney World project represent our only ongoing development with phases spanning through 2023 and only $201 million in remaining development capital needs.
As of September 30, the company's debt to total asset value was 41.3%, and net debt-to-EBITDA was 8.1 times.
It's worth noting that excluding the impacts of COVID on operating results this year, net debt-to-EBITDA would be in the range of seven to 7.1 times.
Although our leverage levels are temporarily elevated relative to the targets we have historically communicated, we feel confident that with the three-year capital plan we layout on Page S16 as well as the expected normalization of the EBITDA, the company's debt to total assets will return to the mid-30% range and net debt-to-EBITDA to the high five to low six times range.
 Assistant:

Chosen response:
q3 ffo per share $0.32.
q3 adjusted ffo per share $0.32.


Prompt:
Human: In addition, we discuss non-GAAP financial measures including core funds from operations or core FFO, adjusted funds from operations or AFFO and net debt to recurring EBITDA.
I'm very pleased to report that we achieved record investment volume of approximately $1.1 billion for the first 9 months of 2021 with continued momentum heading into the 4th quarter of this year.
While replicating these investment volume is the testament to the efforts of our talented team, I am most pleased with the exceptional quality of the investments that we've made in a challenging environment.
While our investment activities further strengthen our best-in-class retail portfolio we have also fortified our robust balance sheet with $1.5 billion of capital markets transactions year-to-date positioning our company for dynamic growth in the quarters ahead.
Notably, we completed our inaugural preferred equity offering during the 3rd quarter, raising $175 million at a 4.25% coupon.
This represents the lowest non-PSA REIT preferred equity coupon in history and provides a new source of perpetual capital for our rapidly growing company.
During the 3rd quarter, we invested approximately $343 million in 83 high quality retail net lease properties across our 3 external growth platforms, 80 of these properties were sourced through our acquisition platform representing acquisition volume of over $340 million.
The 80 properties acquired during the 3rd quarter are leased to 49 tenants operating in 20 distinct retail sectors including best in class operators and off-price retail, convenience stores, tire and auto service, home improvement, auto parts, grocery, and general merchandise.
The acquired properties at a weighted average cap rate of 6.2% and a weighted average lease term of 10.7 years.
As mentioned, through the first 9 months of the year, we've invested a record $1.1 billion in 226 retail net lease properties spanning 40 states across the country and 26 retail sectors.
While raising the lower end of our acquisition guidance for the year to $1.3 billion our thoughtful and disciplined approach is evidenced by the nearly one-third of annualized base rents acquired year-to-date derived from ground lease assets and roughly 70% of annualized base rents acquired derived from leading investment grade retailers.
During this past quarter, we executed on several unique transactions, including our 3rd Amazon Fresh store in Illinois.
We're excited about the opportunity to add yet another Amazon Fresh store to the portfolio located in a prominent Chicago suburb with median household incomes of 110,000 and a daytime population of roughly 225,000 within a 5-mile radius.
Our acquisition team also continues to uncover compelling ground lease opportunities.
During the quarter, we completed the acquisition of a 9-property portfolio of Thorntons Convenience Stores for approximately $21 million.
The stores which are paying an average annual rent of only $120,000 per year and had a weighted average lease term of close to 20 years are all well located in the Nashville and Chicago MSAs.
Shortly after executing a letter of intent to purchase this portfolio, BP announced they're taking full ownership of Thorntons convenience store chain after 2.5 years as part of a joint venture established in 2019.
This transaction makes BP, which is an A minus rated company by S&P, one of the leading convenience store operators in the Midwest with more than 200 stores across 6 states.
Other notable ground lease acquisitions during the quarter, including are Walmart and Sam's Club in Lansing, Michigan, two Lowe's Stores located in Wallingford, Connecticut and Abington, Massachusetts, and a CVS in Springfield, Massachusetts.
We have acquired 73 ground leases year-to-date for total investment spend of nearly $350 million representing nearly 31% of acquisition spent for the entire year.
This includes 28 ground leases during the 3rd quarter representing investment volume of over $108 million.
As of September 30, our ground lease exposure reached a record of nearly 14% of annualized base rents.
The ground lease portfolio now derives roughly 87% from investment grade tenants and has a weighted average lease term of 12.1 years, with an average rent of less than 10 dollars per square foot.
This portfolio continues to represent an extremely attractive risk-adjusted investment for our shareholders.
On recent earnings calls and discussions, there had been considerable dialog regarding our ground lease portfolio and its valuation.
This is a very compelling comparison when thinking about the value of our ground lease portfolio, which is a weighted average credit rating of BBB plus over 2 years of additional term in comparison to the Bloomberg BBB index and internal growth of nearly 1%.
As of September 30, our portfolio's total investment grade exposure was approximately 67% representing close to 100 basis point year-over-year increase.
On a 2-year stacked basis, our investment grade exposure has improved by roughly a 1,000 basis points.
Moving on to our Development and Partner Capital Solutions program, we continue to uncover compelling opportunities with our retail partners.
We had 7 development in PCS projects either completed or under construction during the first 9 months of the year that represent total committed capital of approximately $40 million.
I'm pleased to announce we commenced construction during the quarter on our 3rd development with Gerber Collision in New Port Richey, Florida.
Gerber will be subject to a new 15-year lease upon completion and we anticipate rent will commence in the second quarter of 2022.
Construction continued during the 3rd quarter on 2 development in PCS projects with anticipated cost of just over $5 million.
The projects consists of our first 7-Eleven development in Saginaw Michigan and a Gerber Collision in Pooler, Georgia.
We remain focused on leveraging our three external growth platforms and our differentiated asset management capabilities to expand our relationships with best-in-class retailers providing comprehensive solutions that facilitate the real estate strategies and growth plans.
While we continue to strengthen our best-in-class retail portfolio through record investment activity, we remain active on the disposition front during the 3rd quarter.
We continue to reduce exposure to franchise restaurants and non-core tenants through the disposition of 3 properties for total gross proceeds of approximately $11.8 million with a weighted average cap rate of 6.3%.
As of September 30, we've disposed of 13 properties for gross proceeds of just over $48 million and are maintaining our disposition guidance of $50 million to $75 million for the year.
Bolstered by the recent addition of David Darling as our Vice President of Real Estate, the asset management team continues to diligently address upcoming lease maturities.
Their efforts have reduced our 2021 maturities to just 4 leases, representing 10 basis points of annualized base rents.
During the 3rd quarter, we executed new leases, extensions or options in approximately 72,000 square feet of gross leasable area.
Through the first 9 months of the year, we executed new leases, extensions, or options on approximately 347,000 square feet of gross leasable space.
Our 2022 lease maturities are de minimis with only 19 leases maturing representing less than 1% of annualized base rents expiring over the course of the next year.
As of September 30, our expanding retail portfolio consisted of 1338 properties across 47 states, including 162 ground leases and remains effectively fully occupied at 99.6%.
For those that have been following our company over the years, this reduction in Walgreens exposure is a true milestone given our historical exposure which once approached 40% of our portfolio.
We have made a concerted effort to approach to tailor our pharmacy exposure given the high per square foot rental rates of many vintage pharmacy leases and then virgin approaches of CVS and Walgreens to a quickly changing landscape.
Many of you are familiar with Mike as he most recently served as Chairman of the US Real Estate, Gaming and Lodging Investment Banking Practice at Jefferies.
Over the course of his career, Mike has raised in excess of $50 billion of capital through numerous transactions.
Having had the opportunity to work with Mike for many years, I am extremely excited to leverage his unique perspectives and experiences as our company continues to dynamically grow and evolve.
With that, I'll hand the call over to Peter to discuss our financial results for the quarter.
Core funds from operations for the 3rd quarter was $0.92 per share, representing a 13% year-over-year increase.
Adjusted funds from operations per share for the quarter increased 11.5% year-over-year to $0.89.
As a reminder, treasury stock is included within our diluted share count prior to settlement if and when ADC stock trades above the deal price of our outstanding forward equity offerings.
The aggregate dilutive impact related to these offerings was roughly half a penny in the 3rd quarter.
As mentioned on the last 2 calls, we expect to achieve high single-digit earnings growth for full year AFFO per share.
Building upon our 6% AFFO per share growth in 2020, this implies 2 year stack growth in the mid teens.
We view this level per share growth is very compelling when combined with the strength of our portfolio and our fortress like balance sheet.
This consistent and reliable earnings growth continues to support a growing and well covered dividend.
During the 3rd quarter, we declared monthly cash dividends of [Phonetic] $0.217 per common share for July, August and September.
On an annualized basis, the monthly dividends represent an 8.5% increase over the annualized dividend from the 3rd quarter of last year.
While meaningfully increasing the common dividend over the past year, we maintained conservative payout ratios for the 3rd quarter of 71% of core FFO per share and 70% of AFFO per share respectively.
Subsequent to quarter end, we again increased the monthly cash dividend by 4.6% to $0.227 per common share for October.
The monthly dividend reflects an annualized dividend amount of $2.72 per share or 9.8% increase over the annualized dividend amount of $2.48 per share from the 4th quarter of 2020.
On a 2-year stack basis, this reflects annualized dividend growth of more than 15%.
General and administrative expenses for the 3rd quarter which were impacted by recent changes to the company's executive officers totaled $5.7 million.
G&A expense was 6.5% of total revenue or 6% excluding the noncash amortization of above and below-market lease intangibles.
While we continue to invest in people and systems to support our dynamic and growing business, we still anticipate that G&A as a percentage of total revenue will be roughly 7% for full year 2021.
This excludes the impact of lease intangible amortization on total revenues.
As mentioned last quarter, G&A expense for our acquisitions team fluctuates based on acquisition volume for the year and our current anticipation for G&A expense reflects acquisition volume within our new guidance range of $1.3 billion to $1.4 billion.
Total income tax expense for the 3rd quarter was approximately $390,000, which was slightly lower than our expectation.
Due to a one-time refund.
We continue to anticipate total income tax expense for 2021 to be close to $2.5 million.
Moving onto our capital markets activities for the quarter, as Joey mentioned, in September, we completed our inaugural preferred equity offering raising $175 million of gross proceeds at a record low coupon of 4.25.
This attractive offering demonstrates our ability to opportunistically access yet another source of capital to support the continued growth of our company.
During the 3rd quarter, we entered into forward sale agreements in connection with our ATM program to sell an aggregate of approximately 367,000 shares of common stock for anticipated net proceeds of roughly $27 million.
During the quarter, we also settled close to 886,000 shares under forward ATM sale agreements and received net proceeds of approximately $56 million.
At quarter end, we had approximately 3.4 million shares remaining to be settled under existing forward sale agreements which are anticipated to raise net proceeds of more than $226 million upon settlement.
Inclusive of the settlement of our outstanding forward equity, our fortified balance sheet stood at approximately 3.7 times net debt to recurring EBITDA.
Excluding the impact of our unsettled forward equity, our net debt to recurring EBITDA was approximately 4.4 times.
If you include our recent preferred equity offering and net debt, this adds roughly half a turn of leverage to our net debt to recurring EBITDA metrics.
At September 30, total debt to enterprise value is just under 25%, while our fixed charge coverage increased to a record 5.1 times.
With full availability under our revolving credit facility and nearly $830 million in total liquidity, we have tremendous flexibility to execute on our growth plans.
 Assistant:

Chosen response:
q3 adjusted ffo per share $0.89.
qtrly core funds from operations (core ffo) per share increased 13.0% to $0.92.
qtrly adjusted funds from operations (affo) per share increased 11.5% to $0.89.


Prompt:
Human: Our Chief Financial Officer, Ray Young, will review the drivers of our performance as well as corporate results and financial highlights.
We reported first quarter adjusted earnings per share of $1.39, more than double the year ago period.
Adjusted segment operating profit was $1.2 billion, 86% higher than the first quarter of 2020 and our sixth consecutive quarter of year-over-year adjusted OP growth.
Our trailing fourth quarter average adjusted ROIC was 9%, 375 basis points higher than our 2021 annual WACC and significantly higher than the 7.6% in the year ago period.
And our trailing fourth quarter adjusted EBITDA was about $4.2 billion, 19% higher than the prior year period.
I'm proud of our team, and they continue to deliver sustained strong growth, powered by their continued advancement of the strategic transformation of our business, outstanding execution and excellent risk management and commitment to serving the evolving needs of our customers in new and innovative ways.
I'd like to take a moment now to highlight some of the trends, developments and accomplishments from the first quarter.
First, we are encouraged by many of the demand indicators we are seeing.
From a geographic perspective, China was one of the first countries to emerge from COVID-related restrictions, and we are continuing to see significant export demand driven by its economic recovery.
In the U.S. meat production is strong as exports and retail sales remain robust and restaurant dining expands.
Vaccine rollout has been slower in EMEA but is accelerating now.
And so we're optimistic that demand will recover there as the year progresses.
Of course, some countries like Brazil and India are still in the midst of the pandemic and demand there may be slower to come back.
From a product perspective, expectation of a progressive recovery in global foodservice will support demand for sweeteners, flower and other ingredients in 2021.
And we are seeing a strong demand for beverages, alternative proteins and nutritional supplements, including expected sales growth of 12% for plant protein ingredients this year.
In summary, recovery from COVID and demand improvements are occurring at varying paces depending on geography and products.
Complete recovery will extend over multiple years, but we are seeing clear trends that are favorable for our broad portfolio.
Another area in which we are seeing positive demand indications is ethanol in the U.S. About a year ago, we made the difficult decision to idle ethanol production at our dry mills in Cedar Rapids, Iowa and Columbus, Nebraska.
We committed that we will not restart those facilities until we saw economic and market factors that would point to a sustainable recovery.
As we move through the winter and into spring, we saw industry inventories falling almost 10% during the quarter, ending almost 20% lower year-over-year on March 31.
Mobility and driving miles increasing as COVID-related restrictions eased with recent gasoline consumption getting closer to pre-pandemic levels.
Support from the EPA for the renewable fuel standard.
And China resuming purchases of U.S. ethanol in the first half of 2021.
With all of these factors supporting demand growth and improving industry margins, we decided to restart production.
At the same time, we are continuing to work with interested parties to complete the monetization of our dry mill ethanol assets.
From a portfolio management perspective, we're still committed to reducing our exposure to vehicle fuel ethanol.
And as demand continues to grow for the wide range of innovative alternative products that can come from natural sources like corn, we expect to see additional interest from other parties in both in biomaterials and sustainable aviation fuel.
One of the ways we are meeting growing and evolving demand is by introducing new technologies and innovations across our value chain.
In Q1, Our Covantis joint venture celebrated the commercial launch of its revolutionary blockchain platform to modernize the global agriculture ocean shipping industry.
Similarly, in the U.S. we've led an effort with industry partners to launch the barge digital transformation project, which uses new technologies to replace outdated, inefficient processes on our in-line water ways.
We're also innovating to meet the demand for sustainable solutions.
Over the last year, as growth of e-commerce drove demand for packaging, our biosolutions team worked proactively with customers to apply our corn-based native and modified starches to help increase the number of times cardboard boxes can be recycled.
In Europe, our animal nutrition teams are using life cycle analysis of the complete supply chain from crops and ingredients to final animal products like milk, eggs and meat to help develop new feed supplements that improve animal health and reduce environmental impact, including greenhouse gas emissions.
We're also continuing to innovate to improve the customer experience.
Last year, as travel was restricted, we launched new technologies designed to take our customers on collaborative virtual journeys that allowed us to share consumer insights, emerging trends and product solution opportunities, including real-time tasting.
Now as parts of the world reopen, we are continuing to expand our innovating customer capabilities.
In March, we opened our completely renovated customer innovation center in Beijing, expanding our ability to support technical innovation and creation.
And earlier this month, we were proud to celebrate the opening of the new cutting-edge, plant-based customer innovation lab at our research hub in Singapore.
These new facilities will propel our abilities to work with customers to create tailor-made solutions to meet evolving and growing consumer needs in the region.
Finally, I want to speak about the very important issue of sustainability.
Our commitment to sustainability expands our value chain.
It includes our work with growers to implement responsible farming practices, including the 13 million acres we've enrolled in sustainable farming programs globally in recent years.
It encompasses our Strive 35 goals to reduce the environmental impact of our processing operations, exemplified by the recent announcement of our partnership to help advance the proposed revolutionary zero emission power facility, utilizing our carbon capture and storage facility adjacent to our operations in Decatur, Illinois.
Sustainability is a key driver of our expanding portfolio of environmentally responsible plan-derived products and our efforts to reduce hunger and support the communities in which we live and work.
One critical pillar of our sustainability work for us and our customers is increasing the traceability of our supply chain.
We joined the Brazilian soy moratorium in 2006.
And in 2015, we introduced our first comprehensive no deforestation policy.
Since then, we made impressive progress, including achieving 99% traceability to mill in our farms around supply chain and full traceability to farm for direct suppliers in 25 key municipalities in the Brazilian Cerrado.
Now we are taking our efforts to a new level.
Last month, we announced our new policy to protect forests, biodiversity and communities.
As part of this ambitious plan, we aim to achieve full traceability throughout our direct and indirect South American soy supply chains by 2022 and have deforestation-free supply chains around the world by 2030.
I'm proud of the work our team is doing to deliver on our sustainability commitments and capabilities.
We know they are a key driver of consumer decisions and business success.
But more importantly, they are one of the ways in which we are living up to our purpose and enriching the quality of life around the world.
I'll come back later to talk about the next steps in our journey and our strategy.
The Ag Services and Oilseeds team delivered an outstanding quarter with operating profit of $777 million, representing a record for a first quarter.
Ag Services results were substantially higher year-over-year.
Results were driven by a record Q1 for our North American origination team, which executed extremely well to capitalize on strong Chinese demand.
As expected, results in South America were significantly lower versus the prior year period.
Farmer selling was lower versus the extremely aggressive pace in the year ago quarter.
Lower margins, including the impacts from the slightly delayed harvest and higher freight costs also affected South American results.
Results for the quarter were affected by about $75 million in negative timing related to ocean freight positions.
Those impacts will reverse as contracts execute in the coming quarters.
Crushing delivered its best quarter ever as the business leverage its global footprint and diversified capabilities to capture strong execution margins in both soybean and softseed crushing, driven by robust vegetable oil demand and tight soybean stocks.
Net timing impacts for the quarter in crush were minimal.
Refined products and other results were higher year-over-year.
While overall volumes were down due to pandemic impacts, margins were stronger in both North America and EMEA, refined oils.
Global biodiesel results were lower year-over-year.
Equity earnings from Wilmar were lower versus the prior year period.
Looking ahead, we now expect full year calendar year results for Ag Services and Oilseeds to be higher than the record 2020, with a particularly strong fourth quarter, driven by potentially record global demand for North American agricultural products.
For the second quarter, we expect results to be slightly stronger than the second quarter of 2020, but significantly lower than the record first quarter of 2021 with stronger Crushing and RPO expectations compared to the second quarter of 2020, offsetting seasonably lower Ag Service results.
The Carbohydrate Solutions team again delivered significant year-over-year profit growth.
Our Starches and Sweeteners subsegment, which includes the wet mill ethanol production, achieved significantly higher results versus the first quarter of 2020.
The business managed risks exceptionally well, capitalizing on rising prices in the ethanol complex and favorable coal product values in an industry environment of improving margins and falling inventories.
Corn oil results were significantly higher than the previous year, which have been impacted by substantial mark-to-market effects.
In general, though demand for sweeteners and flour by the foodservice sector remained below the prior year, there were signs of acceleration in the month of March.
Starch sales volumes remained solid on demand from industrial applications like packaging materials.
Vantage Corn Processor results were substantially higher, driven by improved margins on the distribution of fuel ethanol and strong performance in USP-grade industrial alcohol.
Looking ahead, second quarter results for Carbohydrate Solutions are expected to be in line with this first quarter of 2021, which would represent a significant year-over-year profit growth driven by the improved ethanol market environment, including the restart of our two VCP dry mills and the recovery of the foodservice segment.
The Nutrition team delivered 5% revenue growth on a constant currency basis and solid year-over-year operating profit growth.
Human Nutrition results were significantly higher than the prior year quarter.
Flavors had an exceptional quarter, driven by strong sales across various market segments, especially beverages.
Favorable product mix in North America, improved margins in EMEA and accelerated income from a customer agreement also contributed results, partially offset by certain specific expenses.
Specialty Ingredients results were lower, primarily driven by demand factors, including the effect of pantry loading in the previous year quarter and shifts in demand for texturants.
Health and Wellness had a strong start to the year, with robust demand for nutritional products, driving higher results in probiotics and fibers.
Animal Nutrition results were lower versus the first quarter of 2020, driven primarily by lower demand and higher input costs as a result of pandemic effects, primarily in South America.
This was partially offset by favorable results in amino acids, driven by improved product mix.
Looking ahead, we expect continued strong demand for flavors and proteins and improving demand for our animal nutrition products as restrictions ease to drive second quarter results that will be significantly higher than the prior year quarter, supporting the 15% per annum trend growth rate for the calendar year.
Let me finish up with a few observations from the Other segment as well as some of the corporate line items.
Other business results were lower than the prior year quarter, driven by lower captive insurance underwriting results, partially offset by more favorable ADM investor services earnings.
For the quarter, there were about $0.17 per share of adjusted items for earnings per share purposes, which are referenced in slide 24 in the appendix.
These adjustment items included: One, the settlement of the class action lawsuit against Golden Peanut to avoid the rising cost of a prolonged litigation, in a case in which we did not believe we violate any laws; two, impairments and restructuring costs related to the exit of certain noncore product lines and inefficient assets in nutrition; and three, mark-to-market on the embedded option in the Wilmar exchangeable bond.
In the corporate lines, unallocated corporate costs of about $200 million were slightly higher year-over-year, due primarily to our continued investments in IT and business transformation and transfers of costs from the business segments into the centralized centers of expertise in supply chain and operations.
We are still on track for calendar year corporate unallocated costs to be overall similar to 2020.
As expected, net interest expense for the quarter decreased from the year-over-year period on lower interest rates and the favorable liability management actions taken in the prior year.
The effective tax rate for the first quarter of 2020 was -- first quarter of 2021 was approximately 16% compared to the benefit of 4% in the prior year.
We still anticipate our calendar year effective tax rate to be in the range of 14% to 16%.
Our balance sheet remains solid despite the higher commodity price environment with a net debt-to-total capital ratio of about 33% and available liquidity of $7.7 billion.
As part of our active management for pension liabilities, we did close on another U.S. pension liability transfer transaction on April one with about $0.7 billion of liabilities transferred to the U.S. insurance market.
This effectively reduces our U.S. pension liabilities by close to 40% and will result in the U.S. pension plans more or less fully funded from a projected benefit obligation perspective.
I'm proud of the team for our great start to 2021.
And I'm even more proud of the strategic work we have done to transform our company and enable our growing success.
We began in 2011 by committing to specific strategic goals and financial metrics focused on what we call the three Cs: capital discipline, cost reduction and cash generation.
We launched new initiatives like our $1 billion challenge with prioritized operational excellence, and we focused on returns as our primary financial metric.
We call that getting fit for the journey.
Once we were fit, we launch the next part of our strategy, focusing on three core pillars to enhance returns, deliver more predictable growth and strengthen our ability to control our results.
During this time, our team has done a great job optimizing business performance, realigning our portfolio and building a global leader in nutrition, driving efficiencies through our operational excellence initiatives and expanding through organic growth investments, M&A and the broadening of our customer base and product offerings.
Now we're moving into the next phase of our strategic transformation by sharpening our focus on two strategic pillars: productivity and innovation.
Our productivity efforts will take many actions that were part of our optimized and drive focuses and boost them to the next level.
The productivity pillar will include: advancing the roles of our centers of excellence or COEs in procurement, supply chain and operations to deliver additional efficiencies across the enterprise; the continued rollout of our One ADM business transformation program and implementation of improved standardized business processes; and increasing our use of technology, analytics and automation at our production facilities in our offices and with our customers.
Our innovation activities will help us accelerate growth and profitability, not just for the near term, but importantly, for the long term.
We'll expand and invest in improving the customer experience, including leveraging our producer relationships and enhancing our use of state-of-the-art digital technology to help our customers grow; sustainability-driven innovation, which encompasses the full range of our products, solutions, capabilities and commitments to serve our customers' needs; and growth initiatives, including organic growth to support additional capacity and meet growing demand, opportunistic M&A and increased leveraging of our very successful venture capital portfolio.
We'll support both pillars with investments in technology, which include expanding our digital capabilities and investing further in product research and development.
And of course, all of our efforts will continue to be strengthened by our ongoing commitment to revenues.
As I look at our long-term plans and this evolution of our strategy, I'm very excited about the value creation opportunities ahead of us.
Our teams are continuing to perform at the high level and doing a great job serving our customers.
The demand outlook for our products is strong, driven by the pre and during global trends of food security, health and well-being and sustainability.
And we are delivering on our potential and our promise.
That is why we are even more optimistic in our 2021 outlook today than we were three months ago, with expectations for significantly higher full year operating profit and earnings per share versus our record 2020.
And as we look beyond 2021, we expect that our sharpened focus on productivity and innovation, combined with continuing demand expansion driven by the fundamental needs and evolving demands of our global customers and the multiyear COVID recovery, will deliver sustained growth in earnings in the years to come.
 Assistant:

Chosen response:
compname reports first quarter earnings of $1.22 per share, $1.39 per share on an adjusted basis.
q1 adjusted earnings per share $1.39.
calendar year outlook for 2021 substantially improved; expect significant earnings per share growth and another record year.
qtrly ag services and oilseeds adjusted operating profit of $777 million versus $422 million.
seeing clear, favorable demand trends for many of co's products.
expect demand pattern to continue as vaccine rollouts accelerate and restrictions ease.
expect significant year-over-year growth in earnings across all three businesses in 2021.


Prompt:
Human: Our actual results could significantly differ due to many risks, including the risk factors in our SEC filings.
An audio replay will be made available on our website shortly after today's call.
It is now my pleasure to introduce Anant Bhalla.
Before we speak about third-quarter results, I want to share with you about the progress made in each element of our AEL 2.0 strategy that was first unveiled around this time, last year.
We outlined the building blocks in order to execute the strategy, improve returns, and migrate to the capital-efficient business model we envisioned.
We introduced the virtuous flywheel of the due [Phonetic] AEL business model going forward.
The virtuous flywheel starts with an industry-leading, at-scale annuity origination platform.
We delivered a complete refresh of our general account product suite, regained relevance and growth in our IMO distribution channel, and built additional distribution with Eagle Life while adding talent to improve productivity and product economics.
Our fundraising abilities through our liability origination platforms allow us to be an investment manager with expertise in both liability-driven asset allocation and to manage an open-architecture investment platform that can source a wide variety of differentiated investments.
Over the course of this year, we have established our investment management pillar capabilities necessary to be fully invested in core fixed-income assets managed by BlackRock and Corning, and private assets managed by American Equity or its strategically aligned investment managers.
We now have six sleeves [Phonetics] to seven sleeves private asset sectors in which we have conviction, specifically commercial real estate, residential real estate, including mortgages, and single-family rental homes as a landlord.
Infrastructure debt and infrastructure equity, middle-market loans to private companies, and lending to recurring revenue, technology or software with an acronym called STARR, with two Rs, sector companies, all of which would allow AEL to deploy an additional couple of billion dollars each year in private assets, demonstrably moving us toward a goal of 30% to 40% in private assets.
We now have access to the necessary investment capabilities and scaling to target allocation will allow AEL shareholders to realize the full potential of differentiated asset management with a potentially lower-risk profiles than other alternate business models.
Finally, we've got the capital structuring and reinsurance capabilities to then attract third-party risk-bearing capital to this business, either for accessing AEL's at-scale liability origination or for access to both our differentiated asset allocations and our attractive cost of funding liabilities through reinsurance.
The former is visible with our first such arrangement being the Brookfield Reinsurance transaction completed this quarter, with attractive fee-like revenues that will drive an evolution of AEL to a higher return on equity or ROE business through building a capital-efficient return on assets or ROA earnings model, thereby both diversifying and improving the quality of earnings.
The latter will be our focus with our AEL Bermuda Reinsurance entity that we expect to go live around the end of this year with plans progressing well for it.
On the Brookfield Reinsurance transaction, we executed both in-force and new business flow reinsurance, effective July 1.
We believe this is a good deal for both parties.
For us the weighted average fee of the first $5 billion seeded [Phonetic] to Brookfield, including $4 billion of in-force that was seeded effective July 1 was 97 basis points better than the 90 basis points originally described last October.
The forward flow reinsurance fees at 170 basis points for six years to seven years is a meaningfully positive signal on the quality of our liability origination and the strength of our franchise.
In summary, late last year, we outlined the building blocks for AEL 2.0, and in 2021, we have executed all proof points for the fundamental building blocks.
Going forward, we expect to reap the financial benefits from scaling, retained, spread earning assets in private assets' investments, as well as through reinsuring liabilities into fee-like ROE earnings from future reinsurance transactions or asset management allocation in both public and private assets.
The Board and I are proud of the pace of execution.
In some cases, like Investment Management, we have accelerated execution from 2022 into 2021 to be able to exit 2021 with all the fundamental capabilities in place to restock our capital return.
We have $236 million in share repurchase authorization remaining and we expect to target the return of $250 million [Phonetic] of capital to common shareholders for 2021 starting immediately with our next regularly scheduled dividend after Board approval, later this quarter, and then, share repurchases after approval of Brookfield for May to increase its ownership in AEL from 9.9% to as high as 19.9%.
The Brookfield Form-A regulatory hearing in Iowa is now scheduled for November 30.
Once approval is granted to Brookfield, we intend to start repurchasing shares in the open market.
In terms of other capital initiatives, we expect the refinancing of redundant statutory reserves on our lifetime income benefit riders with an explicit fee to be completed this quarter with a transaction closing retroactive to October 1.
With the closing of the refinancing, we will realize the capital savings, including but not only limited to, the capital savings we intended to achieve with a potential reinsurance of $5 billion of in-force only block of business to Varde Agam [Phonetic].
We are no longer pursuing the reinsurance business partnership with them, but expect to continue an ongoing dialog around asset management.
Additionally, the new redundant reserve financing will save approximately $9 million pre-tax per quarter in financing costs once the transaction is closed relative to the prior facility.
Third-quarter operating costs already reflected $2 million of savings from the recapture of finance reserves that were then seeded to Brookfield.
Therefore, we expect the refinancing of the remaining redundant reserves currently being financed to result in an additional $7 million of quarterly savings going forward.
We have a strong excess capital position, generated by our reinsurance strategies and our business model evolution, thereby fueling the growth in both our new business sales or liability origination and further scaling our allocation into higher returning private assets, while returning capital to shareholders.
We made major strides in the investment strategy pillar.
I'll let Jim speak to this before touching on business results for the quarter.
With the number of recent announcements, we finished the last 12 months with a revitalized and reorganized investment department and the asset management relationships we need to respond with resilience to changing markets.
Our promise to you was to develop the relationships necessary to transform our investment portfolio toward a 30% to 40% allocation to privately sourced assets.
We made good on this promise and have substantially completed the necessary build-out of our asset management partner relationships.
The biggest news was our announcement of the agreement to move our core investment portfolio management to BlackRock and Conning.
In a time when it's become difficult to source good yields in core public investments, it is extremely important to maximize effectiveness.
Even with $45 billion in core public assets, American Equity can't match both the breadth and depth of expertise of the large public fixed income asset managers.
Migrating our core public fixed income portfolio to BlackRock and Conning will help us obtain better net yields in core fixed income, while allowing us to focus in areas where we can have an industry-leading expertise like private assets, derivative trading, differentiated strategic asset allocation, and asset-liability management.
BlackRock took over management of $45 billion of assets in October and has already invested over $1.8 billion of company cash into long-term securities on our behalf.
With regards to privately sourced assets, we recently announced a strategic investment with Monroe Capital to scale a dedicated platform, focused on software, technology, and recurring revenue or STARR-based -- the STARR acronym, middle-market businesses.
As part of this agreement, we have committed to initially invest $1 billion from our general account in such loans.
This strategy will focus on companies that offer mission-critical, high return on investment, software or technology solutions, resulting in recession-resistant revenue streams and lower default rates.
Along with expected to generate returns higher than investments with a similar risk-reward profile, our hope is to grow the STARR platform with third-party investors including other insurance companies through structured products based on STARR platform's loan origination.
We have also provided financing to our residential real estate partner Pretium to help support its purchase of Anchor Loans, a specialist in short-term mortgage loans in the single-family housing market.
In addition, we purchased over $1 billion of mortgage loans related to this transaction that are a particularly good asset-liability match for further duration liabilities that we may issue.
In addition, we have initiated a partnership in the infrastructure debt, and are exploring opportunities and infrastructure equity.
All of this is an addition to our existing relationships with Pretium and Adam Street.
To date, we've done $327 million dollars with Adam Street in middle-market loans.
Since beginning our partnership with Pretium, we've invested $779 million in residential mortgages, and since this summer, $301 million in single-family rental homes.
Including residential mortgage loans, single-family rental homes, commercial mortgage and agricultural loans, and middle-market loans, to date, we've invested approximately $2.5 billion dollars in privately sourced assets during 2021, exceeding our promise of investing $1 billion to $2 billion in privately sourced assets this year.
Privately sourced assets currently account for approximately 15% of invested assets.
Looking at the state of the current -- the current state of the portfolio, the overall credit quality remained strong with an overall rating of single A-minus for long-term investments.
The net unrealized gain position at quarter-end was $4.5 billion, down $327 million from the three months earlier as interest rates moved higher.
There were minimal credit losses in the quarter and the performance of our commercial and agricultural mortgage loan portfolio remained strong with no new delinquencies or forbearances granted.
From a liquidity standpoint, we continue to hold cash in excess of our current target level of 2% of invested assets.
At September 30, we had $7.6 billion of cash and equivalents and the investment company portfolios, compared to $10 billion at June 30.
The level of cash has since come down further with investments in private assets and as BlackRock has begun to redeploy cash into core publicly traded securities.
Currently, we have approximately $3 billion of uncommitted cash to deploy between now and early 2022 to be fully invested.
For the quarter, new investment asset purchases totaled approximately $400 million, almost entirely in privately sourced assets.
The expected return on new money investments in the quarter was approximately 4.6%, net of fees.
The current point in time yield on the portfolio, was roughly in [Phonetic] investment activities through October 31, was approximately 3.7%.
So some pressure on investments spread will continue into the fourth quarter.
After the redeployment of remaining cash that is an excess of our target, we continue to estimate the yield on our investment portfolio will be approximately 4%.
With regards to redeployments, we expect to substantially redeploy the excess cash by year-end, and as previously indicated, reach our cash target in early 2022.
Moving on to sales results for the third quarter, total sales of $1.3 billion were up 11% versus the second quarter of this year.
For the third quarter, FIA or fixed index annuity sales increased 3%, sequentially, to $915 million.
We believe this result will be generally in line with the overall market.
Year-to-date, total sales of $4.9 billion positions us to end the year firmly toward the upper end of our 2021 sales goal of $5 billion to $6 billion outlined at the start of the year.
This is a good indication of our ability to pivot in our business mix as and [Phonetic] when we see asset side or capital optimization opportunities.
At American Equity Life, total sales through the IMO channel was $760 million.
Of this, fixed index annuity sales increased 4% to $728 million from $703 million sequentially, as the refreshed AssetShield series continues with its momentum and got a nice lift from the introduction of the state sheet [Phonetic].
FIA sales at Eagle Life of $188 million represents a 2% increase versus the second quarter of 2021 and 210% increase compared to the year-ago quarter.
Within FIA sales at Eagle Life, the early signs of a mix shift toward income product sales albeit off a small base is visible as income product sales were up 80% [Phonetic] over the second quarter of this year.
Multiyear fixed-rate annuity sales were up 37% over the second quarter as we entered one of the largest banks in the country as part of our distribution footprint expansion and expect to shift mix to fixed index annuities in this bank in 2022.
Excluding one notable item, we reported non-GAAP operating income of $136 million or $1.46 per share.
As expected, results benefited from the completion of the in-force reinsurance transaction with Brookfield.
In addition, we recorded historically high levels of income from partnerships and other investment account -- investments accounted for at fair value, prepayments and other bond fees, and hedge gains.
With that, I'm happy to give my short-lived role as Interim CFO to our new CFO, Axel Andre.
We are very pleased that Axel joined the American Equity team.
And over to him to go deeper into the quarter's numbers.
For the third quarter of 2021, we reported non-GAAP operating income of $79.5 million or $0.85 per diluted common share compared to a loss of $249.8 million or $2.72 per diluted common share for the third quarter of 2020.
Excluding actuarial assumption updates, which was the first notable item this year and the single notable item for this quarter, operating income for the third quarter of 2021 was $136.3 million or $1.46 per diluted common share, compared with $91.1 million or $0.98 per diluted common share in the year-ago quarter.
The third quarter 2021 non-GAAP operating results were negatively affected by $56.8 million or $0.61 per diluted common share from updates to actuarial assumptions.
Third-quarter 2020 non-GAAP operating results were negatively affected by $340.9 million or $3.70 [Phonetic] per diluted common share from such updates.
On a pre-tax basis, the effect of the third quarter 2021 updates before the change to earnings pattern resulting from these updates decreased amortization of deferred policy acquisition costs and deferred sales inducements by $161 million and increased the liability for future payments under Lifetime Income Benefit Riders by $233 million for a total decrease in pre-tax operating income of $72 million.
The actuarial adjustments to amortization of deferred policy acquisition costs and deferred sales inducements as well as the increase in the liability for future payments under Lifetime Income Benefit Riders primarily reflected changes in our assumptions regarding future interest margins, lapsation, mortality, and Lifetime Income Benefit Rider utilization.
We have updated or assumptions for aggregate spread at American Equity Life to increase from 2.25% in the fourth quarter of 2021 to 2.4% by year-end 2022, and then move modestly higher to 2.5% at the end of the eight-year reversion period, with a near term discount rate through 2023 of 155 basis points, and eventually grading to 210 basis points by the end of the eight-year reversion period.
Last year, we had several assumptions for aggregate spread to increase from 2.4% in the near term to 2.6% at the end of the eight-year reversion period, with a discount rate of 1.6%, grading fairly linearly to an ultimate discount rate of 2.1%.
The effect of this change was to increase back in DSI amortization by $67 million pre-tax while increasing the liability for guaranteed lifetime income benefit payments by $77 million pre-tax as experience continues to emerge with slightly lowered lapsation, mortality, and Lifetime Income Benefit Rider utilization assumptions.
The combined net effect was a decrease in DAC and DSI amortization by $234 million pre-tax while increasing the reserve for guaranteed Lifetime Income Benefit payments by $159 million pre-tax.
The quarter included $7.6 million of additional revenues from reinsurance stemming from our Brookfield Reinsurance transaction.
Included in revenues is $3.7 million [Phonetic] of asset-liability management fees and $4.9 million reflecting amortization of deferred gain on a GAAP basis.
These are recurring type revenues which are expected to grow over time as we migrate liabilities to the ROA business model.
Average yield on invested assets was 3.91% in the third quarter of 2021 compared to 3.51% in this year's second quarter.
The increase was attributable to an 18 basis points benefit from lower cash relative to invested assets, a 22 basis point increase from returns on partnerships and other investments accounted for at fair value, and 2 basis point increase from prepayments and other bulk [Phonetic] fee income.
Reflecting the in-force reinsurance transaction with Brookfield, cash and equivalents in the investment portfolio averaged $7 billion over the third quarter, down from $10 billion in this year's second quarter.
The aggregate cost of money for annuity liabilities was 151 basis points, down from 156 basis in the second quarter of this year.
The cost of money in the third quarter benefited from 8 basis points of hedging gains compared to 4 basis points of gains in the second quarter.
The slight decrease in the cost [Phonetic] of money reflects the still relatively high cost of option purchases made in the second quarter of 2020 prior to renewal rate changes that became effective in late June and July of that year.
Brookfield in-force reinsurance transaction lowered the absolute cost of money for deferred annuities [Phonetic] in dollars by $12.9 million.
Investment spread in the third quarter was 240 basis points, up from 195 basis points from the second quarter.
Excluding prepayment income and hedging gains, adjusted spread in the third quarter was 220 basis points compared to 181 basis points for the second quarter.
Should the yields available to us decrease or the cost of money rise, we have the flexibility to reduce our rates, if necessary, and could decrease our cost of money by roughly 58 basis points if we reduced current rates to guaranteed minimums, unchanged from our second quarter call.
Excluding the effect of assumption revisions, the liability for Guaranteed Lifetime Income Benefit payments increased $43 million this quarter after a net positive experience and adjustments of $15 million relative to our modeled expectations.
The better than expected result primarily reflected the benefit from continued high-index credits in the quarter, offset in part by lower lapsation in certain policy blocks and higher than modeled deliver election on Lifetime Income Benefit Rider election in certain cohorts.
The in-force reinsurance transaction with Brookfield lowered the expected accretion by $7 million while assumption revisions increased expected accretion by $2 million for a net of $5 million.
Deferred acquisition cost and deferred sales inducement amortization totaled $93 million for the quarter, $12 million less than modeled expectations due to strong index credits in the quarter, offset partly by higher than modeled interest margins.
The in-force reinsurance transaction with Brookfield lowered the expected level of amortization expense by $7 million, while assumption revisions lower expected amortization by an additional $21 million.
Other operating costs and expenses decreased to $57 million from $65 million in the second quarter.
Operating costs in the second quarter included $5 million of expenses associated with tenants' transition while third-quarter operating costs reflected $2 million of savings from the recapture of finance reserves that were then seeded to Brookfield.
We expect the refinancing of the remaining redundant reserves to be effective as of October 1, resulting in an additional $7 million of quarterly savings going forward.
At September 30, cash and equivalents at the holding company were in excess of target by approximately $300 million.
We expect to take an ordinary dividend from American Equity Life Insurance company, the operating company, this quarter, given the excess capital position in the life companies, further growing holding company cash by year-end 2021 to be able to largely support both our 2021 and 2022 capital return plans.
This is a solid sign of the progress made just in the past 12 months in becoming AEL 2.0.
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Chosen response:
compname says funds under management at quarter-end increase 1.1% from june 30, on $1.3 billion of sales.
american equity - funds under management at quarter-end increase 1.1% from june 30, on $1.3 billion of sales .
q3 non-gaap operating earnings per share $1.46 excluding items.