2014

American Homes 4 Rent Reports Second Quarter 2013 Financial Results Significant increases in number of owned and leased homes

Closing of internalization transaction

Closing of initial public offering

AGOURA HILLS, Calif., Aug. 20, 2013 /PRNewswire/ -- American Homes 4 Rent (NYSE: AMH) ("AMH", "we" or "us") today announced its financial and operating results for the quarter ended June 30, 2013 and certain updated portfolio information through July 31, 2013.

Highlights

  • Increase in properties to 19,825 as of July 31, 2013 from 18,326 as of June 30, 2013
  • Maintained high occupancy level with 97% of properties leased that have been rent ready for more than 90 days
  • 1,773 properties leased during July 2013, for a total of 11,753 leased properties as of month-end, with an additional 2,176 properties rent ready as of July 31, 2013
  • Closed internalization transaction on June 10, 2013
  • Closed transaction to acquire 4,778 properties held by joint venture with Alaska Permanent Fund Corporation on June 11, 2013 (the "Alaska Portfolio")
  • Completion of initial public offering and concurrent private placements, and recent exercise in full of the underwriters' option to purchase additional shares.

"We are pleased with our recent accomplishments of internalizing our management platform and completing our initial public offering.  We believe that our new public platform will provide us opportunities for the continued expansion of our business across many fronts.  We are also excited about our continuing opportunity to acquire quality homes," said David P. Singelyn, AMH's Chief Executive Officer.

Recent Transactions

As previously disclosed, on June 10, 2013, AMH closed an important transaction to internalize certain operations previously provided to AMH by American Homes 4 Rent, LLC ("AH LLC"), a company formed by our founder and board chairman B. Wayne Hughes.  AMH is now self-managed with respect to corporate and property management operations, which we believe provides an efficient structure for both current operations and future growth. 

On June 11, 2013, AMH completed the acquisition of 4,778 properties from a joint venture with the Alaska Permanent Fund Corporation, substantially increasing the size of its portfolio.

As previously announced, AMH completed its IPO in August 2013 and the underwriters exercised in full their option to purchase additional shares.  Assuming that the underwriters' option closes as expected on August 21, 2013, the sale of the IPO shares together with the shares sold in the concurrent private placements to American Homes 4 Rent, LLC and the Alaska Permanent Fund Corporation, will provide us with gross proceeds of $886.8 million, before underwriters' discounts and offering costs.

Second Quarter 2013 Financial Results

AMH had total revenues of $18.1 million for the second quarter of 2013, a 176% increase over revenues reported for the first quarter of 2013.  This increase was largely due to the acquisition of the Alaska Portfolio, which was 75% leased as of the date of acquisition, and revenue from leases commencing throughout the first and second quarters.  

AMH reported net loss attributable to common shareholders of $14.0 million for the second quarter of 2013 and $21.7 million for the six months ended June 30, 2013.

AMH had net operating income ("NOI") from leased properties of $10.7 million for the second quarter of 2013, an increase of 164% over the first quarter of 2013.  NOI from leased properties 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.    

Properties

AMH had 19,825 properties as of July 31, 2013 compared to 18,326 properties as of June 30, 2013. 

"We are pleased that we have been able to continue to successfully grow our portfolio and lease our properties across a broad and diverse base of markets, while maintaining our strict underwriting standards with respect to the quality of the product and expected financial returns," said Jack Corrigan, AMH's Chief Operating Officer.

The following tables provide a summary of properties in which AMH has an interest as of July 31, 2013 and June 30, 2013.

Properties as of July 31, 2013 (1)






Estimated Total Book Value (3)





Properties


Estimated Total Investment (2)



Average per



Property



Units


% of Total


$ millions


Avg. per Property


$ millions


Avg. per Property


Square Footage


Property Age (years)

Indianapolis, IN

1,718


8.7%


$252.1


$146,731


$246.1


$143,234


1,870


11.6

Dallas-Fort Worth, TX

1,660


8.4%


269.9


162,603


262.2


157,927


2,209


10.2

Greater Chicago area,   IL and IN

1,361


6.9%


218.0


160,165


206.7


151,845


1,855


12.4

Atlanta, GA

1,216


6.1%


214.2


176,147


195.3


160,584


2,168


13.2

Houston, TX

1,027


5.2%


179.2


174,472


179.2


174,472


2,295


9.6

Phoenix, AZ

1,005


5.1%


173.7


172,834


169.4


168,545


1,848


11.9

Cincinnati, OH

960


4.8%


149.6


155,883


139.4


145,196


1,812


11.3

Jacksonville, FL

892


4.5%


135.6


151,974


131.7


147,635


1,924


9.8

Charlotte, NC

877


4.4%


152.0


173,271


146.8


167,376


1,948


10.6

Nashville, TN

869


4.4%


181.4


208,743


173.9


200,155


2,193


9.5

All Other (4)

8,240


41.6%


1,474.7


178,973


1,435.1


174,166


1,913


10.9

Total / Average

19,825


100.0%


$3,400.4


$171,519


$3,285.7


$165,733


1,972


11.0


















 

 

Properties as of June 30, 2013 (1)






Estimated Total Book Value (3)






Properties


Estimated Total Investment (2)



Average per


Property


Units


% of Total


$ millions


Avg. per Property


$ millions


Avg. per Property


Square Footage


Property Age (years)

Dallas-Fort Worth, TX

1,515


8.3%


$248.6


$164,094


$240.8


$158,967


2,206


10.3

Indianapolis, IN

1,533


8.4%


225.7


147,228


219.7


143,309


1,871


11.6

Greater Chicago area, IL and IN

1,244


6.8%


201.4


161,868


190.0


152,765


1,865


12.4

Atlanta, GA

1,185


6.5%


209.5


176,790


190.6


160,820


2,171


13.2

Houston, TX

1,000


5.5%


174.7


174,650


174.7


174,650


2,289


9.7

Phoenix, AZ

941


5.1%


146.4


155,563


136.1


144,661


1,817


11.3

Cincinnati, OH

840


4.6%


145.9


173,745


141.6


168,613


1,848


11.9

Jacksonville, FL

840


4.6%


128.7


153,256


124.9


148,648


1,935


9.9

Nashville, TN

821


4.5%


171.9


209,320


164.4


200,199


2,192


9.5

Charlotte, NC

787


4.3%


136.5


173,470


131.3


166,899


1,939


10.6

All Other (4)

7,620


41.6%


1,373.4


180,240


1,333.6


175,015


1,920


10.9

Total / Average

18,326


100.0%


$3,162.7


$172,579


$3,047.7


$166,307


1,977


11.0



































(1)

Includes 377 properties in which we hold an approximate one-third interest.

(2)

For properties that we acquired directly, Estimated Total Investment represents our actual purchase price (including closing costs) and estimated renovation costs plus a 5% acquisition and renovation fee, if applicable. Estimated renovation costs represent the total costs we have incurred or expect to renovate a property to prepare it for rental. These costs typically include paint, flooring, appliances, blinds and landscaping. Estimated Total Investment differs from Estimated Total Book Value only with respect to the properties contributed by AH LLC. For properties contributed by AH LLC, Estimated Total Book Value is an estimate of the properties' GAAP book value, which includes estimates for renovation costs we expect to incur. These properties were recorded at the net book value of AH LLC as of the date of contribution. See note 3 below.

(3)

Estimated Total Book Value represents the estimated book value on a GAAP basis of all properties. In the case of AH LLC's contribution of properties to us, for GAAP purposes these transactions are considered to be transactions between entities under common control under the provisions of ASC 805, Business Combinations. As a result, these properties have been reflected at the net carrying cost of AH LLC. For the properties acquired from the Alaska Joint Venture, the $904.5 million purchase price has been allocated among the properties in accordance with GAAP. For all other properties, Estimated Total Book Value represents the actual purchase price (including closing costs) and estimated renovation costs plus a 5% acquisition and renovation fee, if any.

(4)

Represents 34 markets in 18 states.

 

Leasing and Renewal Experience

The following tables summarize our leasing experience on Stabilized Properties (1) through July 31, 2013 and June 30, 2013.

Leasing Experience as of July 31, 2013
















Number of Properties






Average Annual  Scheduled Rent Per Property



Leased  (1)


Available for Rent 30+ Days (2)


Available for Rent 90+ Days (3)


30+ Days Occupancy % (4)


90+ Days Occupancy % (5)









Dallas-Fort Worth, TX


966


995


972


97%


99%


$17,444

Indianapolis, IN


938


996


954


94%


98%


14,600

Greater Chicago area, IL and IN


428


473


449


90%


95%


19,140

Atlanta, GA


904


942


926


96%


98%


15,919

Houston, TX


482


528


495


91%


97%


17,923

Phoenix, AZ


691


745


731


93%


95%


13,142

Cincinnati, OH


511


548


533


93%


96%


16,868

Jacksonville, FL


539


552


542


98%


99%


15,386

Nashville, TN


594


615


605


97%


98%


17,848

Charlotte, NC


428


516


433


83%


99%


15,371

All Other (6)


3,842


4,604


4,040


83%


95%


16,679

Total / Average


10,323


11,514


10,680


90%


97%


$16,374

 

Leasing Experience as of June 30, 2013
















Number of Properties






Average Annual  Scheduled Rent Per Property



Leased  (1)


Available for Rent 30+ Days (2)


Available for Rent 90+ Days (3)


30+ Days Occupancy % (4)


90+ Days Occupancy % (5)









Dallas-Fort Worth, TX


817


840


824


97%


99%


$17,179

Indianapolis, IN


744


783


756


95%


98%


14,549

Greater Chicago area, IL and IN


359


402


375


89%


96%


19,136

Atlanta, GA


848


883


869


96%


98%


15,875

Houston, TX


366


396


370


92%


99%


17,536

Phoenix, AZ


654


711


704


92%


93%


12,984

Cincinnati, OH


404


473


437


85%


92%


16,859

Jacksonville, FL


499


512


502


97%


99%


15,372

Nashville, TN


518


540


529


96%


98%


17,892

Charlotte, NC


367


404


371


91%


99%


15,296

All Other (7)


3,262


3,893


3,404


84%


96%


16,616

Total / Average


8,838


9,837


9,141


90%


97%


$16,249

 

(1)

Includes leases on properties for which we have completed renovations and excludes leases with tenants existing at the date of acquisition ("Stabilized Properties").

(2)

Available for Rent 30+ Days represents the number of properties that have been leased after we have completed renovations or are available for rent (i.e., "rent-ready") for a period of greater than 30 days.

(3)

Available for Rent 90+ Days represents the number of properties that have 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 30 markets in 18 states.

(7)

Represents 29 markets in 17 states.

As previously disclosed, based on our experience with 471 leases that matured before June 30, 2013, 65% of the tenants renewed their leases at an average increase in rental rate of 2.4%.

Capital Activities and Liquidity

As of June 30, 2013, AMH had cash and cash equivalents of $251.4 million and $670.0 million was outstanding on its credit facility. The initial closing of AMH's IPO and concurrent private placements on August 6, 2013 provided us with $747.4 million of proceeds, net of underwriters' discounts before other offering costs.  Proceeds from the IPO and concurrent private placements were immediately used to pay down the outstanding balance of the credit facility.  The credit facility now provides for aggregate borrowings up to $500 million.

As previously reported, the underwriters have exercised in full their option to purchase an additional 6,617,647 of our Class A common shares at the IPO price of $16.00 per share, less underwriters' discounts.  This transaction, which is expected to close on August 21, 2013, will provide AMH with an additional $100.9 million of proceeds, net of underwriters' discounts.

Conference Call

A conference call is scheduled on Wednesday, August 21, 2013, at 11:00 a.m. Eastern Time to discuss AMH's financial results for the second quarter ended June 30, 2013 and to provide a portfolio update. 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 either domestic or international is 979119#). 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 September 4, 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 979119#.

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 single-family homes as rental properties. As of July 31, 2013, we owned 19,825 single-family properties in selected submarkets in 22 states and we continually evaluate potential target markets that meet our underwriting criteria and are located where we believe we can achieve sufficient scale for internalized property management. We are 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. 

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, the expected timing of the closing of the underwriters' option to purchase additional shares, 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. Investors should not place undue reliance on these forward-looking statements.  All information in this press release is current as of the date of the release.  AMH undertakes no obligation to update any forward-looking statements to conform to actual results or changes in its expectations.  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 filed with the Securities and Exchange Commission on August 2, 2013. 

         

American Homes 4 Rent


Condensed Consolidated Balance Sheets
(Amounts in thousands, except share information)










June 30, 2013


December 31, 2012




(Unaudited)



Assets





Single-family properties:






Land


$                    580,433


$                      96,139


Buildings and improvements


2,472,921


411,706




3,053,354


507,845


Less: accumulated depreciation


(13,850)


(2,132)

Single-family properties, net


3,039,504


505,713

Cash and cash equivalents


251,406


397,198

Restricted cash for resident security deposits


13,572


-

Rent and other receivables


7,644


6,586

Escrow deposits, prepaid expenses and other assets


27,936


11,961

Deferred costs and other intangibles, net


21,978


-

Goodwill


120,655


-

Total assets


$                 3,482,695


$                    921,458







Liabilities





Credit facility


$                    670,000


$                                -

Accounts payable and accrued expenses


75,318


11,282

Amounts payable to affiliates


21,160


5,012

Contingently convertible Series E units liability


64,881


-

Total liabilities


831,359


16,294







Commitments and contingencies











Equity






Shareholders' equity:






   Class A common shares, $0.01 par value






      per share, 450,000,000 shares authorized,






      129,433,425 and 38,663,998 shares issued and






      outstanding at June 30, 2013 and






      December 31, 2012, respectively


1,294


387


   Class B common shares, $0.01 par value






      per share, 50,000,000 shares authorized,






      635,075 and 667 shares issued and






      outstanding at June 30, 2013 and






      December 31, 2012, respectively


6


-


Additional paid-in capital


1,965,413


914,565


Accumulated deficit


(32,027)


(10,278)


Total shareholders' equity


1,934,686


904,674








Noncontrolling interest


716,650


490


            Total equity


2,651,336


905,164







Total liabilities and equity


$                 3,482,695


$                    921,458













 

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,




2013


2012


2013


2012

Revenues:










Rents from single-family properties


$          17,585


$               184


$          24,144


$               280


Other


535


-


535


-

Total revenues


18,120


184


24,679


280











Expenses:










Property operating expenses










      Leased single-family properties


6,859


90


9,362


133


      Vacant single-family properties


4,391


96


6,120


118


General and administrative expense


811


1,487


2,436


1,657


Advisory fees


3,610


-


6,352


-


Interest expense


-


-


370


-


Noncash share-based compensation expense


279


-


453


-


Acquisition fees and costs expensed


2,099


-


3,489


-


Depreciation and amortization


10,879


77


13,784


102

Total expenses


28,928


1,750


42,366


2,010











Gain on remeasurement of equity method investment


10,945


-


10,945


-











Income / (loss) from continuing operations


137


(1,566)


(6,742)


(1,730)











Discontinued operations










Gain on disposition of assets


904


-


904


-


Income from discontinued operations


82


-


104


-

Total income from discontinued operations


986


-


1,008


-











Net income / (loss)


1,123


(1,566)


(5,734)


(1,730)











Noncontrolling interest


4,664


-


5,559


-

Conversion of preferred units


10,456


-


10,456


-











Net loss attributable to common shareholders


$         (13,997)


$           (1,566)


$         (21,749)


$           (1,730)











Weighted average shares outstanding - basic and diluted


95,971,706


3,301,667


72,234,717


3,301,667











Net loss per share - basic and diluted (1):










Loss from continuing operations


$             (0.16)


$             (0.47)


$             (0.31)


$             (0.52)


Discontinued operations


0.01


-


0.01


-

Net loss attributable to common shareholders










per share - basic and diluted (1)


$             (0.15)


$             (0.47)


$             (0.30)


$             (0.52)



(1)

Due to inherent complexity of the above condensed consolidated financial statements as a result of the transaction 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 shares


Class B common shares




















Additional










Number




Number




paid-in


Accumulated


Shareholders'


Noncontrolling


Total


of shares


Amount


of shares


Amount


capital


deficit


equity


interest


equity

Balances at 


















   December 31, 2012

38,663,998


$    387


667


$        -


$    914,565


$ (10,278)


$   904,674


$             490


$   905,164



















Issuance of Class A 


















   common shares, net 


















   of offering costs 


















   of $44,003

46,718,750


467


-


-


703,030


-


703,497


-


703,497



















2,770 Property 


















   Contribution

-


-


634,408


6


(356,487)


-


(356,481)


390,016


33,535



















Settlement of 


















   subscription agreement

434,783


4


-


-


(4)


-


-


-


-



















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


-


-


-


453


-


453


-


453



















Distributions to


















  noncontrolling 


















   interests

-


-


-


-


-


-


-


(5,858)


(5,858)



















Conversion of 


















   preferred units

-


-


-


-


-


(10,456)


(10,456)


-


(10,456)



















Net loss

-


-


-


-


-


(11,293)


(11,293)


5,559


(5,734)



















Balances at 


















   June 30, 2013

129,433,425


$ 1,294


635,075


$       6


$ 1,965,413


$ (32,027)


$1,934,686


$      716,650


$2,651,336


(Photo: http://photos.prnewswire.com/prnh/20130820/LA67031)

Non-GAAP Financial Measures

Reconciliation of Net Operating Income to Net Income (Loss)

Net operating income, or NOI, from leased properties 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, 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 revenues. 

AMH considers NOI from leased properties 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 from leased properties 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 from leased properties also should not be used as a supplement to or 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:








Three Months Ended



June 30, 2013


March 31, 2013


Net income / (loss)

$             1,123


$                (6,857)


Income from discontinued operations

(986)


(22)


Gain on remeasurement of equity method investment

(10,945)


-


Depreciation and amortization

10,879


2,905


Acquisitions fees and costs expensed

2,099


1,390


Noncash share-based compensation expense

279


174


Interest expense

-


370


Advisory fees

3,610


2,742


General and administrative expense

811


1,625


Property operating expenses for vacant single-family properties

4,391


1,729


Other revenues

(535)


-


Net operating income

$           10,726


$                 4,056

 

Contact: Peter J. Nelson
American Homes 4 Rent
Tel: (855) 794-2447

SOURCE American Homes 4 Rent



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