American Homes 4 Rent Reports Second Quarter 2014 Financial and Operating Results

  American Homes 4 Rent Reports Second Quarter 2014 Financial and Operating
                                   Results

PR Newswire

AGOURA HILLS, Calif., Aug. 4, 2014

AGOURA HILLS, Calif., Aug. 4, 2014 /PRNewswire/ -- American Homes 4 Rent
(NYSE: AMH), a leading provider of high quality single-family rental homes
("AMH," "the Company," "we" or "us"), today announced its financial and
operating results for the quarter ended June 30, 2014.

Highlights

  oCore funds from operations ("Core FFO") (as defined) for the second
    quarter of 2014 were $35.3 million or $0.15 per FFO share.
  oNet operating income from leased properties ("NOI") for the quarter ended
    June 30, 2014 was $57.1 million, a 19.7% increase from the $47.7 million
    reported for the first quarter ended March 31, 2014.
  oTotal portfolio increased by 1,668 homes to 27,173 as of June 30, 2014
    from 25,505 as of March 31, 2014. As of June 30, 2014, the Company had
    23,364 leased properties, an increase of 2,698 properties from March 31,
    2014.
  oContinued strong occupancy with 94.7% of properties leased that have been
    previously leased or rent-ready for more than 90 days and total portfolio
    occupancy of 86.0%.
  oCompleted securitization transaction in May 2014, raising gross proceeds
    of $481 million, with a duration-weighted blended interest rate of LIBOR
    plus 154 basis points.
  oSubsequent to quarter-end, the Company completed the acquisition of Beazer
    Pre-Owned Rental Homes, Inc. ("Beazer Rental Homes"). The acquisition
    added more than 1,300 homes located in markets in Arizona, California,
    Florida and Nevada to the Company's portfolio. Including the homes
    acquired from Beazer Rental Homes, the Company acquired over 2,000 single
    family properties in July 2014, increasing the total portfolio to over
    29,200. Leased properties increased by over 2,000 in July, including the
    leased homes from Beazer Rental Homes, increasing the number of leased
    homes to nearly 25,500 or approximately 87.0% of the total portfolio.

"We posted another strong quarter and continue to deliver solid operating
performance," stated David Singelyn, American Homes 4 Rent's Chief Executive
Officer. "Our fully internalized operating platform is bearing fruit as
evidenced by our strong increase in leased properties of nearly 2,700 homes, a
portfolio occupancy of 86% and a strong and consistent stabilized portfolio
occupancy, defined as homes that have been either initially leased or
rent-ready for at least 90 days, of nearly 95%. In addition, we continued to
put our capital to work, acquiring 1,668 homes in 31 of our target markets
during the quarter and we continue to see robust opportunities to make high
quality acquisitions in our markets."

Second Quarter 2014 Financial Results

The Company had total revenues of $94.3 million for the second quarter of
2014, an increase of 22.0% over the $77.3 million in total revenues for the
first quarter of 2014. Revenue growth was driven by continued strong leasing
activity, as our total leased portfolio grew by 2,698 homes during the second
quarter of 2014.

The Company had NOI from leased properties of $57.1 million for the second
quarter of 2014, an increase of 19.7% over the $47.7 million reported for the
first quarter of 2014. This increase is primarily due to the growth in the
number of leased properties.

The Company reported Core FFO of $35.3 million, or $0.15 per FFO share for the
second quarter of 2014, compared to Core FFO of $28.1 million, or $0.12 per
FFO share, for the first quarter of 2014. Growth in Core FFO was primarily
driven by higher property NOI, as described above.

The Company reported a net loss of $3.4 million for the second quarter of
2014.

Year-to-Date 2014 Financial Results

The Company had total revenues of $171.6 million for the six month period
ended June 30, 2014. Revenue growth was driven by continued strong leasing
activity, as our total leased portfolio grew by 6,036 homes during the six
months ended June 30, 2014.

The Company had NOI from leased properties of $104.9 million for six month
period ended June 30, 2014. This increase is primarily due to the growth in
rental income resulting from a larger number of leased properties.

The Company reported Core FFO of $63.4 million, or $0.26 per FFO share for the
six month period ended June 30, 2014. Growth in Core FFO was primarily driven
by higher property NOI, as described above.

The Company reported a net loss of $10.3 million for the six month period
ended June 30, 2014.

NOI, FFO and Core FFO are supplemental non-GAAP financial measures.
Reconciliations to GAAP measures are provided in a schedule accompanying this
press release.

Portfolio

As of June 30, 2014, the Company had 23,364 leased properties, an increase of
2,698 properties from March 31, 2014. At June 30, 2014, the leased percentage
for properties that have been initially leased or rent-ready for more than 90
days was 94.7%, compared to 95.1% at March 31, 2014. Subsequent to
quarter-end, our total leased portfolio increased by more than an additional
2,000 properties, including the leased homes from the Beazer Rental Homes
acquisition, increasing our total portfolio occupancy to approximately 87.0%
at July 31, 2014, from 86.0% at June 30, 2014. 

Investments

In the second quarter of 2014, the company acquired 1,668 homes, increasing
our total portfolio to 27,173 homes as of June 30, 2014, representing 6.5%
increase over our portfolio of 25,505 homes as of March 31, 2014. Subsequent
to quarter-end, we acquired over 2,000 single family properties in July 2014,
including the homes acquired through our acquisition of Beazer Rental Homes,
increasing the total portfolio to over 29,200. 

Capital activities and recent announcements

In May 2014, the Company raised $481 million in gross proceeds through the
issuance and sale of single-family rental pass-through certificates that
represent beneficial ownership interests in a loan secured by 3,852 homes sold
to an affiliate from the Company's portfolio of single-family properties. The
loan has a duration-weighted blended interest rate of LIBOR plus 154 basis
points.

In June 2014, the Company entered into a joint venture arrangement with the
Alaska Permanent Fund Corporation. The purpose of the joint venture is to
acquire, renovate and lease higher-end residential properties that are outside
the Company's ordinary parameters for its acquisition of homes.

In July 2014, the Company entered into its second non-performing loan fund,
Residential Credit Opportunities, LLC ("RCO") which is being managed by its
joint venture, AMIP Management, LLC. RCO is focused on the acquisition and
resolution of distressed residential mortgage assets in the United States.

In July 2014, the Company completed a merger with Beazer Pre-Owned Rental
Homes, Inc., resulting in the addition of 1,372 homes in markets in Arizona,
California, Florida and Nevada to the Company's portfolio.

The Company is working on its next securitization loan transaction, which the
Company expects to close in late third quarter or early fourth quarter.

Additional information

A copy of AMH's Second Quarter 2014 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.

Conference Call

A conference call is scheduled on Tuesday, August 5, 2014, at 12:00 p.m.
Eastern Time to discuss AMH's financial results for the quarter ended June 30,
2014 and to provide an update on its business. The domestic dial-in number is
(877) 705-6003 (for U.S. and Canada) and the international dial-in number is
(201) 493-6725 (passcode not required). 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 August 19,
2014 by calling (877) 870-5176 (U.S. and Canada) or (858) 384-5517
(international), replay pin number 13580256#, or by using the link at
www.americanhomes4rent.com, under "For Investors."

About American Homes 4 Rent

American Homes 4 Rent (NYSE: AMH) is a leader in the single-family home rental
industry and "American Homes 4 Rent" is fast becoming a nationally recognized
brand for rental homes, known for high quality, good value and tenant
satisfaction. We are an internally managed Maryland real estate investment
trust, or REIT, focused on acquiring, renovating, leasing, and operating
attractive, single-family homes as rental properties. As of June 30, 2014, we
owned 27,173 single-family properties in selected submarkets in 22 states.

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 we have a continuing significant opportunity to
acquire quality single family homes and our ability to improve our operating
results to drive increased cash flow and value creation. The Company has based
these forward-looking statements on its current expectations and assumptions
about future events. While the Company'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 the Company'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. The Company 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 the Company in general, see the "Risk
Factors" disclosed in the Company's Annual Report on Form 10-K for the year
ended December 31, 2013 and in the Company's subsequent filings with the
Securities and Exchange Commission.

Non-GAAP Financial Measures

This press release and the Second Quarter 2014 Supplemental Information
Package include FFO, Core 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, Core FFO and NOI may not
be comparable among REITs. In addition, FFO, Core 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.



American Homes 4 Rent



Condensed Consolidated Balance Sheets

(Amounts in thousands, except share information)
                                      June 30, 2014        December 31, 2013
                                      (Unaudited)
Assets
Single-family properties:
  Land                                $           $         
                                      847,564             728,362
  Buildings and improvements          3,758,122            3,188,693
  Single-family properties held for   5,012                6,569
  sale
                                      4,610,698            3,923,624
  Less: accumulated depreciation      (126,904)            (62,202)
Single-family properties, net         4,483,794            3,861,422
Cash and cash equivalents             239,075              148,989
Restricted cash                      46,912               26,430
Rent and other receivables, net       5,646                6,863
Escrow deposits, prepaid expenses     56,110               39,212
and other assets
Deferred costs and other              30,365               20,573
intangibles, net
Goodwill                              120,655              120,655
Total assets                          $            $        
                                      4,982,557            4,224,144
Liabilities
Credit facility                       $           $         
                                      481,000             375,000
Asset-backed securitization           480,970              -
Accounts payable and accrued          117,486              103,397
expenses
Amounts payable to affiliates         6,598                -
Contingently convertible Series E     74,638               66,938
units liability
Preferred shares derivative           55,670               28,150
liability
Total liabilities                     1,216,362            573,485
Commitments and contingencies
Equity
  Shareholders' equity:
   Class A common shares, $0.01
  par value
   per share, 450,000,000
  shares authorized,
   184,897,969 and 184,869,219
  shares issued and outstanding
   at June 30, 2014 and          1,848                1,848
  December 31, 2013, respectively
   Class B common shares, $0.01
  par value
   per share, 50,000,000 shares
  authorized,
   635,075 shares issued and
  outstanding
   at June 30, 2014 and          6                    6
  December 31, 2013
   Preferred shares, $0.01 par
  value per share,
   100,000,000 shares
  authorized, 17,060,000 and
   9,060,000 issued and
  outstanding at June 30, 2014
   and December 31, 2013,        171                  91
  respectively
  Additional paid-in capital          3,160,486            2,996,478
  Accumulated deficit                 (107,956)            (63,479)
  Accumulated other comprehensive     (212)                -
  loss
  Total shareholders' equity          3,054,343            2,934,944
  Noncontrolling interest             711,852              715,715
   Total equity            3,766,195            3,650,659
Total liabilities and equity          $            $        
                                      4,982,557            4,224,144



American Homes 4 Rent



Condensed Consolidated Statements of Operations

(Amounts in thousands, except share information)

(Unaudited)
                        For the Three Months       For the Six Months
                        Ended June 30,              Ended June 30,
                        2014           2013         2014           2013
Revenues:
   Rents from           $        $       $        $     
   single-family                                        
   properties           88,871         17,020       162,632       23,515
   Fees from
   single-family        1,889          690          3,247          754
   properties
   Tenant charge-backs  3,138          47           5,028          47
   Other                406            363          675            363
Total revenues          94,304         18,120       171,582        24,679
Expenses:
   Property operating
   expenses
    Leased
   single-family        36,790         6,859        66,056         9,362
   properties
    Vacant
   single-family        6,351          4,391        15,394         6,120
   properties and
   other
   General and
   administrative       5,703          811          10,777         2,436
   expense
   Advisory fees        -              3,610        -              6,352
   Interest expense     3,888          -            5,390          370
   Noncash share-based
   compensation         612            279          1,144          453
   expense
   Acquisition fees     919            2,099        1,371          3,489
   and costs expensed
   Depreciation and     38,325         10,879       73,456         13,784
   amortization
Total expenses          92,588         28,928       173,588        42,366
Gain on remeasurement
of equity method        -              10,945       -              10,945
investment
Remeasurement of        (4,944)        -            (7,700)        -
Series E units
Remeasurement of        (141)          -            (598)          -
Preferred shares
Income (loss) from      (3,369)        137          (10,304)       (6,742)
continuing operations
Discontinued
operations
   Gain on disposition
   of single-family     -              904          -              904
   properties
   Income from
   discontinued         -              82           -              104
   operations
Total income from
discontinued            -              986          -              1,008
operations
Net income (loss)       (3,369)        1,123        (10,304)       (5,734)
Noncontrolling          4,212          4,664        7,832          5,559
interest
Dividends on preferred  4,669          -            7,790          -
shares
Conversion of           -              10,456       -              10,456
preferred units
Net loss attributable   $        $       $        $     
to common shareholders                                  
                        (12,250)      (13,997)    (25,926)       (21,749)
Weighted average
shares outstanding -    185,515,651    95,971,706   185,510,004    72,234,717
basic and diluted
Net loss per share -
basic and diluted:
   Loss from            $        $       $        $     
   continuing                                        
   operations           (0.07)         (0.16)    (0.14)         (0.31)
   Income from
   discontinued         -              0.01         -              0.01
   operations
Net loss attributable
to common shareholders
   per share - basic    $        $       $        $     
   and diluted                                       
                        (0.07)         (0.15)    (0.14)         (0.30)

Non-GAAP Financial Measures

Funds from Operations and Core Funds from Operations

The following is a reconciliation of net loss attributable to common
shareholders to FFO and Core FFO for the three months ended June 30, 2014 and
March 31, 2014, and the six months ended June 30, 2014 (amounts in thousands,
except share and per share information):

                          Three Months Ended                  Six Months Ended
                          June 30, 2014      March 31, 2014   June 30, 2014
Net loss attributable to  $          $         $       
common shareholders         (12,250)         (13,676)     (25,926)
Adjustments:
  Noncontrolling
  interests in the        4,140              3,715            7,855
  Operating Partnership
  Depreciation and
  amortization of real    36,793             33,827           70,620
  estate assets
Funds from operations     $          $         $       
                             28,683          23,866      52,549
Adjustments:
  Acquisition fees and    919                452              1,371
  costs expensed
  Noncash share-based     612                532              1,144
  compensation expense
  Remeasurement of        4,944              2,756            7,700
  Series E units
  Remeasurement of        141                457              598
  Preferred shares
Core funds from           $          $         $       
operations                   35,299          28,063      63,362
Weighted average number   239,138,917        239,127,560      239,133,270
of FFO shares (1)
FFO per weighted average  $          $         $       
FFO share                      0.12                    
                                             0.10            0.22
Core FFO per weighted     $          $         $       
average FFO share              0.15                    
                                             0.12            0.26

    Includes quarterly weighted average common shares outstanding and assumes
(1) 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.

FFO is a non-GAAP measure that we calculate 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 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.

Core FFO is a non-GAAP financial measure that we use as a supplemental measure
of our performance. We compute Core FFO by adjusting FFO for (1) acquisition
fees and costs expensed incurred with business combinations and the
acquisition of properties with existing leases, (2) noncash share-based
compensation expense and (3) noncash fair value adjustments associated with
remeasuring our Series E units liability and Preferred shares derivative
liability to fair value.

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 that 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.

We also believe that Core FFO and Core FFO per FFO share are helpful to
investors as supplemental measures of the operating performance of our Company
as they allow investors to compare our operating performance to prior
reporting periods without the effect of certain items that, by nature, are not
comparable from period to period.

FFO and Core FFO are not a substitute for net cash flow provided by operating
activities or net loss per share, as determined in accordance with GAAP, as a
measure of our liquidity, operating performance or ability to pay dividends.
FFO and Core FFO also are not necessarily indicative of cash available to fund
future cash needs. Because other REITs may not compute FFO and Core FFO in
the same manner, FFO and Core FFO may not be comparable among REITs.

Reconciliation of Net Operating Income to Net Loss

NOI is a supplemental non-GAAP financial measure that AMH defines as rents and
fees from single-family properties and tenant charge-backs, less property
operating expenses for leased single-family properties. NOI excludes
remeasurement of preferred shares, remeasurement of Series E units,
depreciation and amortization, acquisition fees and costs expensed, noncash
share-based compensation expense, interest expense, 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 loss as determined in
accordance with GAAP (amounts in thousands):

                             Three Months Ended                Six Months
                                                               Ended
                             June 30, 2014    March 31, 2014   June 30, 2014
Net loss                     $         $         $       
                              (3,369)       (6,935)         (10,304)
Remeasurement of Preferred   141              457              598
Shares
Remeasurement of Series E    4,944            2,756            7,700
units
Depreciation and             38,325           35,131           73,456
amortization
Acquisition fees and costs   919              452              1,371
expensed
Noncash share-based          612              532              1,144
compensation expense
Interest expense             3,888            1,502            5,390
General and administrative   5,703            5,074            10,777
expense
Property operating expenses
for vacant single-family     6,351            9,043            15,394
properties and other
Other revenues               (406)            (269)            (675)
Net operating income        $         $         $       
                              57,108        47,743          104,851

Contact:

American Homes 4 Rent
Investor Relations
Phone: (855) 794-2447
Email: investors@ah4r.com

SOURCE American Homes 4 Rent

Website: http://www.americanhomes4rent.com
 
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