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American Homes 4 Rent Reports Third Quarter 2013 Financial Results



      American Homes 4 Rent Reports Third Quarter 2013 Financial Results

Funds from operations of $0.09 per FFO share

Declaration of initial quarterly distribution on Class A common shares

Continued growth in number of owned and leased homes

Closing of initial public offering

Increase of credit facility and extension of term

Closing of offering of Series A participating preferred shares

PR Newswire

AGOURA HILLS, Calif., Nov. 7, 2013

AGOURA HILLS, Calif., Nov. 7, 2013 /PRNewswire/ -- American Homes 4 Rent
(NYSE: AMH) ("AMH", "we" or "us") today announced its financial and operating
results for the quarter ended September 30, 2013.

Highlights

  o Funds from operations ("FFO") for the third quarter was $19.6 million or
    $0.09 per FFO share
  o Revenues were $49.5 million for the three months ended September 30, 2013,
    a 173% increase from the $18.1 million reported for the three months ended
    June 30, 2013
  o Net operating income from leased properties ("NOI") for the three months
    ended September 30, 2013 was $31.2 million, a 191% increase from the $10.7
    million reported for the three months ended June 30, 2013
  o Declared initial quarterly distribution of $0.05 per Class A common share
    and $0.229167 per Series A participating preferred share
  o Grew portfolio to 21,267 single-family properties as of September 30, 2013
    from 18,326 as of June 30, 2013
  o Continued strong occupancy with 96.2% of properties leased that have been
    rent-ready for more than 90 days and total portfolio occupancy of 67.6%
  o 4,602 properties leased during the three months ended September 30, 2013,
    for a total of 14,384 leased properties as of the end of the third quarter
  o Completed initial public offering and concurrent private placements
    together with full exercise of the underwriters' option to purchase
    additional Class A common shares

"We are very pleased to complete our first year as a company in the single
family homes rental space and our first quarter as a public company.  During
the quarter, we continued to execute on our core strategic initiatives to
acquire and renovate rental homes in select markets and lease them at
attractive yields, resulting in triple digit percentage increases in revenues
and net operating income.  We are excited about our tremendous progress for
the quarter resulting in $0.09 per FFO share of funds from operations for our
investors.  As a result, our Board of Trustees has declared the Company's
first quarterly distribution in the amount of $0.05 per share.  In addition,
our public platform now allows us to evaluate and access additional sources of
capital to fuel our growth," said David P. Singelyn, AMH's Chief Executive
Officer.

Third Quarter 2013 Financial Results

AMH had total revenues of $49.5 million for the third quarter of 2013, an
increase of 173% over the $18.1 million in total revenues for the second
quarter of 2013.  The growth in revenues resulted from strong leasing activity
during the third quarter with 4,602 new leases signed during the period.  AMH
reported a net loss of $3.9 million for the third quarter of 2013.

AMH had NOI of $31.2 million for the third quarter of 2013, an increase of
191% over the $10.7 million reported for the second quarter of 2013.  This
increase is primarily due to the significant growth in rental income resulting
from a substantially larger number of leased properties.  NOI is a
supplemental non-GAAP financial measure that we define as rents from
single-family properties less property operating expenses for leased
single-family properties.  A reconciliation from net income / (loss) to NOI is
included in a schedule accompanying this press release.

"We are pleased with the continued execution of our business strategy during
the quarter, especially with signing 4,602 new leases and maintaining high
occupancy levels across the select markets in which we operate," said Jack
Corrigan, AMH's Chief Operating Officer.

Properties

AMH had 21,267 properties as of September 30, 2013, compared to 18,326
properties as of June 30, 2013, a 16% increase in our portfolio during the
third quarter.  From October 1, 2013 through October 31, 2013, we acquired
approximately 600 additional properties, bringing our total portfolio to
approximately 21,900 single-family properties.    

The following table provides a summary of properties in which AMH had an
interest as of September 30, 2013:

                                                              Averages per
                                                              Property
                   Properties (1)  Net Book Value                     Property
                           % of    $         % of   Avg. per  Square  Age
Market             Units   Total   millions  Total
                                                    Property  Footage (years)
Dallas-Fort        1,861   8.8%    $         8.1%   $         2,200   10.2
Worth, TX                            288             154,462
Indianapolis, IN   1,845   8.7%    267       7.6%   144,937   1,879   11.6
Greater Chicago    1,443   6.8%    211       6.0%   146,525   1,855   12.3
area, IL and IN
Atlanta, GA        1,341   6.3%    217       6.1%   161,604   2,163   13.0
Houston, TX        1,094   5.1%    189       5.4%   173,135   2,303   9.6
Cincinnati, OH     1,075   5.1%    183       5.2%   170,564   1,845   11.9
Phoenix, AZ        962     4.5%    144       4.1%   149,210   1,811   11.3
Charlotte, NC      961     4.5%    163       4.6%   169,379   1,947   10.7
Nashville, TN      905     4.3%    181       5.1%   200,107   2,190   9.5
Jacksonville, FL   893     4.2%    129       3.7%   144,870   1,926   9.6
All Other (2)      8,887   41.7%   1,558     44.1%  175,312   1,904   10.9
Total / Average    21,267  100.0%  $         100.0% $         1,969   11.0
                                   3,530             165,985

(1) Includes 377 properties in which we hold an approximate one-third
    interest.
(2) Represents 32 markets in 19 states.

Leasing Experience

The following table summarizes our leasing experience through September 30,
2013:

                         Available Available                         Average
                         for       for        30+ Days   90+ Days    Annual

Market            Leased  Rent     Rent       Occupancy   Occupancy  Scheduled
                  (1)                         %          %           Rent
                         30+ Days  90+ Days
                         (2)       (3)         (4)       (5)         Per
                                                                     Property
Dallas-Fort                                                          $        
Worth, TX         1,144  1,206     1,178      94.9%      97.1%                
                                                                     17,521
Indianapolis, IN  1,238  1,413     1,250      87.6%      99.0%       14,669
Greater Chicago   574    671       602        85.5%      95.3%       19,171
area, IL and IN
Atlanta, GA       973    1,021     1,011      95.3%      96.2%       15,930
Houston, TX       613    639       622        95.9%      98.6%       18,193
Cincinnati, OH    664    717       676        92.6%      98.2%       16,760
Phoenix, AZ       756    832       809        90.9%      93.4%       13,219
Charlotte, NC     680    758       691        89.7%      98.4%       15,470
Nashville, TN     721    762       738        94.6%      97.7%       17,787
Jacksonville, FL  636    649       644        98.0%      98.8%       15,663
All Other (6)     5,152  6,003     5,445      85.8%      94.6%       16,615
                                                                     $        
Total / Average   13,151 14,671    13,666     89.6%      96.2%              
                                                                     16,417

    Includes leases on properties for which we have completed renovations and
(1) excludes leases with tenants existing at the date of acquisition
    ("Stabilized Properties").  
    Available for Rent 30+ Days represents the number of properties that have
(2) been leased after we have completed renovations or are available for rent
    (i.e., "rent-ready") for a period of greater than 30 days.
    Available for Rent 90+ Days represents the number of properties that have
(3) been leased after we have completed renovations or are available for rent
    (i.e., "rent-ready") for a period of greater than 90 days.
(4) Occupancy percentage is computed by dividing the number of leased
    properties by the number of properties available for rent 30+ days.
(5) Occupancy percentage is computed by dividing the number of leased
    properties by the number of properties available for rent 90+ days.
(6) Represents 32 markets in 19 states.

 

Capital activities and recent announcements

As previously announced, AMH completed its IPO in August 2013 and the
underwriters exercised in full their option to purchase additional shares. 
The IPO, together with the proceeds from the concurrent private placements of
Class A common shares to American Homes 4 Rent, LLC and the Alaska Permanent
Fund Corporation, provided AMH with gross proceeds of $886.8 million, before
underwriters' discounts and offering costs.

Also as recently announced, in September 2013, AMH increased the borrowing
capacity under its credit facility to $800 million and extended the date when
amounts borrowed need to be repaid to September 2018.  Maximum borrowings
under the credit facility are generally based on a borrowing base as
calculated in accordance with the agreement.  Borrowings are available until
March 2015, which may be extended for an additional year subject to the
satisfaction of certain financial covenant tests.  The credit facility bears
interest at 30 day LIBOR plus 2.75% (3.125% beginning in March 2017) and had
total outstanding borrowings of $135 million as of October 25, 2013.

In October 2013, AMH closed on a public offering of 4,400,000 of its 5% Series
A Participating Preferred Shares for gross proceeds of approximately $110
million.  The Series A Participating Preferred Shares have an initial
liquidation preference of $25 per share that may be increased by an additional
amount based on home price appreciation in AMH's top 20 markets as determined
by the Federal Housing Finance Agency's House Price Index, as described in the
prospectus for the securities.  On November 5, 2013, the underwriters advised
AMH of their intention to exercise their full over-allotment option to
purchase an additional 660,000 5% Series A Participating Preferred Shares. 
The transaction is expected to close on November 8, 2013 and would result in
additional gross proceeds of approximately $16.5 million to the Company.  The
Series A Participating Preferred Shares are traded on the New York Stock
Exchange under the symbol "AMHPRA."

AMH announced during the quarter that its common shares had been added to the
Russell 1000 and Russell 3000 indexes effective October 1, 2013.

Declarations of distributions

On November 7, 2013, the Board of Trustees declared the initial quarterly
distribution of $0.05 per Class A common share payable on January 10, 2014 to
shareholders of record on December 15, 2013. The Board of Trustees also
declared the initial pro-rated quarterly dividend of $0.229167 per share on
the Company's 5% Series A Participating Preferred Shares payable on December
31, 2013 to shareholders of record on December 15, 2013.  "We are pleased with
the declaration of these initial dividends, providing a measure of liquidity
to our shareholders," said Peter J. Nelson, Chief Financial Officer.

Additional information

A copy of AMH's Third Quarter 2013 Supplemental Information Package and this
press release are available on our website at www.americanhomes4rent.com. This
information has also been furnished to the SEC in a current report on Form
8-K.

A registration statement relating to the 5% Series A Participating Preferred
Shares was declared effective by the Securities and Exchange Commission on
October 18, 2013. This press release shall not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of these
securities in any state or jurisdiction in which such an offer, solicitation
or sale would be unlawful before registration or qualification thereof under
the securities laws of any such state or jurisdiction.

Conference Call

A conference call is scheduled on Friday, November 8, 2013, at 12:00 p.m.
Eastern Time to discuss AMH's financial results for the quarter ended
September 30, 2013 and to provide an update on its business.  The domestic
dial-in number is (800) 434-1335 (for U.S. and Canada) and the international
dial-in number is (404) 920-6442 (conference ID number for both domestic or
international is 555521#). A simultaneous audio webcast may be accessed by
using the link at www.americanhomes4rent.com, under "For Investors."  A replay
of the conference call may be accessed through November 22, 2013 by calling
(800) 920-7487 (U.S. and Canada) or (404) 920-1710 (international) or by using
the link at www.americanhomes4rent.com, under "For Investors."  All forms of
replay utilize conference ID number 555521#.

About American Homes 4 Rent

American Homes 4 Rent is an internally managed Maryland real estate investment
trust, or REIT, focused on acquiring, renovating, leasing, and operating
high-quality single-family homes as rental properties. As of September 30,
2013, we owned 21,267 single-family properties in selected submarkets in 22
states.  The Company is a member of the Russell 1000 and Russell 3000 indexes.
For more information, visit americanhomes4rent.com.

Forward-Looking Statements

This press release contains "forward-looking statements." These
forward-looking statements relate to beliefs, expectations or intentions and
similar statements concerning matters that are not of historical fact and are
generally accompanied by words such as "estimate," "project," "predict,"
"believe," "expect," "anticipate," "intend," "potential," "plan," "goal" or
other words that convey the uncertainty of future events or outcomes. Examples
of forward-looking statements contained in this press release include, among
others, our belief that our self-managed platform will provide an efficient
structure for both current operations and future growth, our ability to
continue growing our single-family home portfolio and expanding our business
across many fronts and our continuing opportunity to acquire quality homes. 
AMH has based these forward-looking statements on its current expectations and
assumptions about future events. While AMH's management considers these
expectations to be reasonable, they are inherently subject to risks,
contingencies and uncertainties, most of which are difficult to predict and
many of which are beyond AMH's control and could cause actual results to
differ materially from any future results, performance or achievements
expressed or implied by these forward-looking statements. Investors should not
place undue reliance on these forward-looking statements, which speak only as
of the date of this press release.  AMH undertakes no obligation to update any
forward-looking statements to conform to actual results or changes in its
expectations, unless required by applicable law.  For a further description of
the risks and uncertainties that could cause actual results to differ from
those expressed in these forward-looking statements, as well as risks relating
to the business of AMH in general, see AMH's prospectus dated October 18,
2013, included in Amendment No. 2 to our Registration Statement on Form S-11
(File No. 333-191015) filed with the Securities and Exchange Commission on
October 18, 2013.

Non-GAAP Financial Measures

This press release and the Third Quarter Supplemental Information Package
include FFO and NOI, which are non-GAAP financial measures. We believe these
are helpful to understanding our financial performance and are widely used in
the REIT industry. Because other REITs may not compute these financial
measures in the same way we do, FFO and NOI may not be comparable among REITs.
In addition, FFO and NOI are not substitutes for net income / (loss) or cash
flow from operations, as defined by GAAP, as measures of our liquidity,
operating performance or our ability to pay dividends. Reconciliations of
these non-GAAP financial measures to the most directly comparable GAAP
measures are included in this press release and in the Supplemental
Information Package.

Contact: Peter J. Nelson
Tel: (310) 774-5394
American Homes 4 Rent

 

American Homes 4 Rent

 

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share information)
                                          September 30, 2013   December 31,
                                                               2012
                                          (Unaudited)
Assets
Single-family properties:
 Land                                     $                    $              
                                            668,336                   96,139
 Buildings and improvements               2,896,559            411,706
                                          3,564,895            507,845
 Less: accumulated depreciation           (34,773)             (2,132)
Single-family properties, net             3,530,122            505,713
Cash and cash equivalents                 158,065              397,198
Restricted cash for resident security     21,282               -
deposits
Rent and other receivables                6,758                6,586
Escrow deposits, prepaid expenses and     23,861               11,961
other assets
Deferred costs and other intangibles,     24,518               -
net
Goodwill                                  120,655              -
Total assets                              $                    $              
                                           3,885,261                921,458
Liabilities
                                          $                    $              
Credit facility                             238,000                           
                                                               -
Accounts payable and accrued expenses     91,637               11,282
Amounts payable to affiliates             1,012                5,012
Contingently convertible Series E units   65,319               -
liability
Total liabilities                         395,968              16,294
Commitments and contingencies
Equity
 Shareholders' equity:
    Class A common shares, $0.01 par
 value per share, 450,000,000 shares
 authorized, 184,856,219 and 38,663,998   1,848                387
 shares issued and outstanding at
 September 30, 2013 and December 31,
 2012, respectively
    Class B common shares, $0.01 par
 value per share, 50,000,000 shares
 authorized, 635,075 and 667 shares       6                    -
 issued and outstanding at September 30,
 2013 and December 31, 2012,
 respectively
 Additional paid-in capital               2,809,829            914,565
 Accumulated deficit                      (39,686)             (10,278)
 Total shareholders' equity               2,771,997            904,674
 Noncontrolling interest                  717,296              490
             Total equity                 3,489,293            905,164
Total liabilities and equity              $                    $              
                                           3,885,261                921,458

 

American Homes 4 Rent

 

Condensed Consolidated Statements of Operations

(Amounts in thousands, except share information)

(Unaudited)
                          For the Three Months        For the Nine Months 
                          Ended September 30,         Ended September 30,
                          2013           2012         2013           2012
Revenues:
   Rents from             $              $            $              $        
   single-family           48,743          983         72,887         1,263
   properties
   Other                  720            -            1,255          -
Total revenues            49,463         983          74,142         1,263
Expenses:
   Property operating
   expenses
         Leased
   single-family          17,579         360          26,941         493
   properties
         Vacant
   single-family          7,873          517          13,993         635
   properties and other
   General and
   administrative         2,742          2,291        5,178          3,948
   expense
   Advisory fees          -              -            6,352          -
   Interest expense       -              -            370            -
   Noncash share-based    153            -            606            -
   compensation expense
   Acquisition fees and   496            -            3,985          -
   costs expensed
   Depreciation and       24,043         490          37,827         592
   amortization
Total expenses            52,886         3,658        95,252         5,668
Gain on remeasurement of  -              -            10,945         -
equity method investment
Remeasurement of Series   (438)          -            (438)          -
E units
Loss from continuing      (3,861)        (2,675)      (10,603)       (4,405)
operations
Discontinued operations
   Gain on disposition    -              -            904            -
   of assets
   Income from
   discontinued           -              -            104            -
   operations
Total income from         -              -            1,008          -
discontinued operations
Net loss                  (3,861)        (2,675)      (9,595)        (4,405)
Noncontrolling interest   3,798          -            9,357          -
Conversion of preferred   -              -            10,456         -
units
Net loss attributable to  $              $            $              $      
common shareholders       (7,659)         (2,675)     (29,408)        (4,405)
Weighted average shares
outstanding - basic and   162,725,150    3,301,667    102,729,661    3,301,667
diluted
Net loss per share -
basic and diluted (1):
   Loss from continuing   $              $            $              $        
   operations               (0.05)        (0.81)        (0.30)        (1.33)
   Discontinued           -              -            0.01           -
   operations
Net loss attributable to
common shareholders
   per share - basic and  $              $            $              $        
   diluted (1)              (0.05)        (0.81)        (0.29)        (1.33)

    Due to inherent complexity of the above condensed consolidated financial
(1) statements as a result of the transactions completed between entities
    under common control, AMH does not consider the historical net loss per
    share computations as meaningful.  

 

American Homes 4 Rent

 

Condensed Consolidated Statements of Equity

(Amounts in thousands, except share information)

(Unaudited)
                     Class A common       Class B common
                     shares               shares
                                                           Additional
                     Number               Number           paid-in     Accumulated  Shareholders'  Noncontrolling  Total
                     of shares    Amount  of       Amount  capital     deficit      equity         interest        equity
                                          shares
Balances at
     December 31,    38,663,998   $ 387   667      $       $ 914,565   $ (10,278)   $ 904,674      $ 490           $ 905,164
2012                                               -
Issuances of Class A
     common shares,
net
     of offering
costs
     of $85,984      102,141,544  1,021   -        -       1,547,259   -            1,548,280      -               1,548,280
2,770 Property
     Contribution    -            -       634,408  6       (356,453)   -            (356,447)      391,701         35,254
Settlement of
     subscription    434,783      4       -        -       (4)         -            -              -               -
agreement
Management
     Internalization -            -       -        -       -           -            -              65,188          65,188
Alaska Joint Venture
     Acquisition     43,609,394   436     -        -       703,856     -            704,292        200,195         904,487
RJ Joint Ventures
     Acquisition     -            -       -        -       -           -            -              61,060          61,060
Share-based
     compensation    6,500        -       -        -       606         -            606            -               606
Distributions to
     noncontrolling
     interests       -            -       -        -       -           -            -              (11,195)        (11,195)
Formation of consolidated
     joint venture   -            -       -        -       -           -            -              500             500
Conversion of
     preferred units -            -       -        -       -           (10,456)     (10,456)       -               (10,456)
Net loss             -            -       -        -       -           (18,952)     (18,952)       9,357           (9,595)
Balances at
     September 30,   184,856,219  $       635,075  $    6  $           $ (39,686)   $ 2,771,997    $ 717,296       $
2013                              1,848                    2,809,829                                               3,489,293

 

Non-GAAP Financial Measures

Funds from Operations

The following is a reconciliation of net loss attributable to common
shareholders to FFO for the three months ended September 30, 2013 (amounts in
thousands, except share and per share information):

                                                  For the Three
                                                  Months Ended
                                                  September 30, 2013
Net loss attributable to common shareholders      $                    (7,659)
Adjustments:
 Noncontrolling interests in the Operating        4,028
 Partnership
 Depreciation and amortization of real estate     23,211
 assets
Funds from operations                             $                   19,580
Weighted average number of FFO shares (1)         216,348,416
FFO per weighted average FFO share                $                       0.09

    Includes 162,725,150 weighted average Class A common shares and Class B
    common shares outstanding for the three months ended September 30, 2013
(1) and assumes full conversion of all Operating Partnership units
    outstanding, including 13,787,292 Class A units, 31,085,974 Series C
    units, 4,375,000 Series D units and 4,375,000 Series E units.  

 

We calculate FFO in accordance with the White Paper on FFO approved by the
Board of Governors of the National Association of Real Estate Investment
Trusts ("NAREIT"), which defines FFO as net income or loss calculated in
accordance with Generally Accepted Accounting Principles ("GAAP"), excluding
extraordinary items, as defined by GAAP, gains and losses from sales of
depreciable real estate and impairment write-downs associated with depreciable
real estate, plus real estate-related depreciation and amortization (excluding
amortization of deferred financing costs and depreciation of non-real estate
assets), and after adjustment for unconsolidated partnerships and joint
ventures.

We present FFO and FFO per FFO share because we consider FFO to be an
important measure of the performance of real estate companies, as do many
analysts in evaluating our Company.  We believe that FFO is a helpful measure
of a REIT's performance since FFO excludes depreciation, which is included in
computing net income and assumes the value of real estate diminishes
predictably over time.  We believe that real estate values fluctuate due to
market conditions and in response to inflation.  FFO and FFO per FFO share are
not a substitute for our cash flow or net loss per share as a measure of our
liquidity or operating performance or our ability to pay dividends.  Because
other REITs may not compute FFO in the same manner, FFO may not be comparable
among REITs.

Reconciliation of Net Operating Income to Net Income / (Loss)

NOI is a supplemental non-GAAP financial measure that AMH defines as rents
from single-family properties, less property operating expenses for leased
single-family properties.  NOI excludes income from discontinued operations,
gain on remeasurement of equity method investment, remeasurement of Series E
units, depreciation and amortization, acquisition fees and costs expensed,
noncash share-based compensation expense, interest expense, advisory fees,
general and administrative expense, property operating expenses for vacant
single-family properties and other and other revenues. 

AMH considers NOI to be a meaningful financial measure because we believe it
is helpful to investors in understanding the operating performance of our
leased single-family properties. It should be considered only as a supplement
to net income / (loss) as a measure of our performance. NOI should not be used
as a measure of AMH's liquidity, nor is it indicative of funds available to
fund AMH's cash needs, including its ability to pay dividends or make
distributions. NOI also should not be used as a substitute for net income /
(loss) or net cash flows from operating activities (as computed in accordance
with GAAP).

The following is a reconciliation of NOI to net income / (loss) as determined
in accordance with GAAP (amounts in thousands):

                                          Three Months Ended
                                          September 30, 2013     June 30, 2013
Net income / (loss)                       $                      $            
                                           (3,861)               1,123
Income from discontinued operations       -                      (986)
Gain on remeasurement of equity method    -                      (10,945)
investment
Remeasurement of Series E units           438                    -
Depreciation and amortization             24,043                 10,879
Acquisitions fees and costs expensed      496                    2,099
Noncash share-based compensation expense  153                    279
Interest expense                          -                      -
Advisory fees                             -                      3,610
General and administrative expense        2,742                  811
Property operating expenses for vacant    7,873                  4,391
single-family properties and other
Other revenues                            (720)                  (535)
Net operating income                      $                      $          
                                           31,164                10,726

SOURCE American Homes 4 Rent

Website: http://www.americanhomes4rent.com
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