EX-99.3 4 amh0630178kexhibit993.htm EXHIBIT 99.3 Exhibit
a2q17suppreportcoverfina001.jpg


American Homes 4 Rent


Table of Contents
Summary
 
Earnings Press Release
Fact Sheet
 
 
Financial Information
 
Condensed Consolidated Statements of Operations
Funds from Operations
Core Net Operating Income—Total Portfolio
Same-Home Results—Quarterly and Year-to-Date Comparisons
Same-Home Results—Operating Metrics by Market
Condensed Consolidated Balance Sheets
Debt Summary, Maturity Schedule and Interest Expense Reconciliation
Capital Structure
 
 
Property Information
 
Top 20 Markets Summary
Leasing Performance
Scheduled Lease Expirations
Top 20 Markets Home Price Appreciation Trends
 
 
Other Information
 
Disposition Summary
ATM Share Issuance History
Defined Terms and Non-GAAP Reconciliations


 
 
 
2

American Homes 4 Rent


Earnings Press Release

American Homes 4 Rent Reports Second Quarter 2017 Financial and Operating Results
AGOURA HILLS, Calif., August 3, 2017—American Homes 4 Rent (NYSE: AMH) (the “Company”), a leading provider of high quality single-family homes for rent, today announced its financial and operating results for the quarter ended June 30, 2017.
Highlights
•
Total revenues increased 7.6% to $237.0 million for the second quarter of 2017 from $220.3 million for the second quarter of 2016.
•
Net loss attributable to common shareholders totaled $0.2 million, or a $0.00 loss per basic and diluted share, for the second quarter of 2017, compared to a net loss attributable to common shareholders of $10.4 million, or a $0.04 loss per basic and diluted share, for the second quarter of 2016.
•
Core Funds from Operations attributable to common share and unit holders for the second quarter of 2017 was $81.5 million, or $0.26 per FFO share and unit, compared to $73.5 million, or $0.25 per FFO share and unit, for the same period in 2016, which represents a 4.0% increase on a per share and unit basis.
•
Adjusted Funds from Operations attributable to common share and unit holders for the second quarter of 2017 was $70.4 million, or $0.22 per FFO share and unit, compared to $62.6 million, or $0.21 per FFO share and unit, for the same period in 2016, which represents a 4.8% increase on a per share and unit basis.
•
Increased Core Net Operating Income ("Core NOI") margin on Same-Home properties to 64.3% for the second quarter of 2017, compared to 62.6% for the same period in 2016.
•
Increased Core NOI after capital expenditures from Same-Home properties by 7.4% year over year for the quarter ended June 30, 2017.
•
Maintained solid leasing performance with total and Same-Home portfolio leasing percentages of 95.2% and 96.5%, respectively, as of June 30, 2017.
•
Achieved rental rate growth with 6.1% and 3.2% rental rate increases on new and renewal leases, respectively, during the quarter ended June 30, 2017.
•
Entered into a $1.0 billion credit agreement amendment, which lowers our cost of borrowing and provides a more flexible borrowing structure (see terms under "Capital Activities and Balance Sheet").
•
In April and July 2017, the Company issued 6,200,000 5.875% Series F perpetual preferred shares and 4,600,000 5.875% Series G perpetual preferred shares, raising gross proceeds of $155.0 million and $115.0 million, respectively, before offering costs.
“We are pleased with our strong operational and financial results for the second quarter, including a 7.4% increase in Core NOI after capital expenditures from our Same-Home properties that demonstrates the strength of our portfolio and operational excellence of our platform,” stated David Singelyn, American Homes 4 Rent’s Chief Executive Officer. “Our recently expanded acquisition program and new homebuilding initiative mark the beginning of the next growth phase in the history of American Homes 4 Rent.  Coupling the strength of our balance sheet and robust access to investment grade forms of capital, we believe our accelerated external growth will leverage the scalability of our best-in-class operating platform, driving further margin expansion and creating long-term value for our shareholders.”
Second Quarter 2017 Financial Results
Total revenues increased 7.6% to $237.0 million for the second quarter of 2017 from $220.3 million for the second quarter of 2016. Revenue growth was primarily driven by continued strong leasing activity, as our average leased portfolio grew to 45,687 homes for the quarter ended June 30, 2017, compared to 44,592 homes for the quarter ended June 30, 2016.

 
 
 
3

American Homes 4 Rent


Earnings Press Release (continued)

Net loss attributable to common shareholders totaled $0.2 million, or a $0.00 loss per basic and diluted share, for the second quarter of 2017, compared to a net loss attributable to common shareholders of $10.4 million, or a $0.04 loss per basic and diluted share, for the second quarter of 2016. This improvement was primarily attributable to higher revenues, lower interest expense and a reduction in depreciation and amortization expense, partially offset by increases in property operating expenses and preferred dividends, as well as by a loss on early extinguishment of debt.
Core NOI from Same-Home properties increased 6.5% to $102.7 million for the second quarter of 2017, compared to $96.5 million for the second quarter of 2016. This increase was primarily due to rental rate growth and lower core property operating expenses. After capital expenditures, Core NOI from Same-Home properties increased 7.4% to $95.6 million for the second quarter of 2017, compared to $89.0 million for the second quarter of 2016. This additional improvement was attributable to our operational enhancements, which also resulted in lower levels of capital expenditures.
Core NOI on our total portfolio increased 9.0% to $131.7 million for the second quarter of 2017, compared to $120.9 million for the second quarter of 2016. This increase was primarily due to substantial growth in rental income resulting from a larger number of leased properties.
Core Funds from Operations attributable to common share and unit holders ("Core FFO attributable to common share and unit holders") was $81.5 million, or $0.26 per FFO share and unit, for the second quarter of 2017, compared to $73.5 million, or $0.25 per FFO share and unit, for the second quarter of 2016. Adjusted Funds from Operations attributable to common share and unit holders ("Adjusted FFO attributable to common share and unit holders") for the second quarter of 2017 was $70.4 million, or $0.22 per FFO share and unit, compared to $62.6 million, or $0.21 per FFO share and unit, for the second quarter of 2016. This improvement was primarily attributable to significant increases in rental revenue driven by a larger number of leased properties and higher rental rates.
Year-to-Date 2017 Financial Results
Total revenues increased 13.4% to $470.8 million for the six-month period ended June 30, 2017, from $415.3 million for the six-month period ended June 30, 2016. Revenue growth was primarily driven by continued strong leasing activity, as our average leased portfolio grew to 45,391 homes for the six-month period ended June 30, 2017, compared to 41,862 homes for the six-month period ended June 30, 2016.
Net loss attributable to common shareholders totaled $1.7 million, or a $0.01 loss per basic and diluted share, for the six-month period ended June 30, 2017, compared to a net loss attributable to common shareholders of $14.8 million, or a $0.06 loss per basic and diluted share, for the six-month period ended June 30, 2016. This improvement was primarily attributable to higher revenues and lower acquisition fees and costs expensed, partially offset by increases in property operating expenses and preferred dividends, as well as a gain on the conversion of Series E convertible units into Series D convertible units in the first quarter of 2016.
Core NOI from Same-Home properties increased 7.0% to $206.0 million for the six-month period ended June 30, 2017, compared to $192.5 million for the six-month period ended June 30, 2016. This increase was primarily due to rental rate growth and lower core property operating expenses. After capital expenditures, Core NOI from Same-Home properties increased 8.2% to $193.9 million for the six-month period ended June 30, 2017, compared to $179.2 million for the six-month period ended June 30, 2016. This additional improvement was attributable to our operational enhancements, which also resulted in lower levels of capital expenditures.

 
 
 
4

American Homes 4 Rent


Earnings Press Release (continued)

Core NOI on our total portfolio increased 16.0% to $263.5 million for the six-month period ended June 30, 2017, compared to $227.1 million for the six-month period ended June 30, 2016. This increase was primarily due to substantial growth in rental income resulting from a larger number of leased properties.
Core FFO attributable to common share and unit holders was $158.2 million, or $0.51 per FFO share and unit, for the six-month period ended June 30, 2017, compared to $137.1 million, or $0.48 per FFO share and unit, for the six-month period ended June 30, 2016. Adjusted FFO attributable to common share and unit holders for the six-month period ended June 30, 2017, was $139.3 million, or $0.45 per FFO share and unit, compared to $118.3 million, or $0.42 per FFO share and unit, for the six-month period ended June 30, 2016. This improvement was primarily attributable to significant increases in rental revenue driven by a larger number of leased properties and higher rental rates.
Portfolio
As of June 30, 2017, the Company had 46,089 leased properties, an increase of 804 properties from March 31, 2017. As of June 30, 2017, the leased percentage on Same-Home properties was 96.5%, compared to 96.0% as of March 31, 2017.
Investments
As of June 30, 2017, the Company’s total portfolio consisted of 48,982 homes, including 582 homes held for sale, compared to 48,336 homes as of March 31, 2017, including 704 homes held for sale, an increase of 646 homes, which included 773 homes acquired and 127 homes sold (including 89 former ARPI properties).
Capital Activities and Balance Sheet
In the second quarter of 2017, the Company entered into a $1.0 billion credit agreement amendment, which lowers our cost of borrowing and provides a more flexible borrowing structure. The amended terms expanded the borrowing capacity of the revolving credit facility to $800.0 million and reduced the borrowing capacity of the term loan facility to $200.0 million. The interest rates were amended to accrue interest at either a LIBOR rate plus a margin ranging from 0.825% to 1.55% or a base rate plus a margin ranging from 0.00% to 0.55% for the revolving credit facility and at either a LIBOR rate plus a margin ranging from 0.90% to 1.75% or a base rate plus a margin ranging from 0.00% to 0.75% for the term loan facility. The revolving credit facility matures on June 30, 2021, with two six-month extension options at the Company's election, and the term loan facility matures on June 30, 2022.
In the second quarter of 2017, the Company paid off the outstanding principal on the AH4R 2014-SFR1 asset-backed securitization of approximately $455.4 million using proceeds from the Class A common share offering in March 2017 and available cash.
In the second quarter of 2017, the Company issued 6,200,000 5.875% Series F cumulative redeemable perpetual preferred shares in an underwritten public offering, raising gross proceeds of $155.0 million before offering costs of approximately $5.2 million, with a liquidation preference of $25.00 per share.
In July 2017, the Company issued 4,600,000 5.875% Series G cumulative redeemable perpetual preferred shares in an underwritten public offering, raising gross proceeds of $115.0 million before offering costs of approximately $4.1 million, with a liquidation preference of $25.00 per share.
As of June 30, 2017, the Company had cash and cash equivalents of $67.3 million and had total outstanding debt of $2.5 billion, excluding an unamortized discount on acquired debt, the value of exchangeable senior notes classified within equity and unamortized deferred financing costs, with a weighted-average stated interest rate of 4.06% and a weighted-average term to maturity of 15.1 years. The Company’s $800.0 million revolving credit facility and $200.0 million term loan facility had

 
 
 
5

American Homes 4 Rent


Earnings Press Release (continued)

outstanding borrowings of $92.0 million and $200.0 million, respectively, at the end of the quarter. Subsequent to quarter-end, the Company paid down all outstanding borrowings under the revolving credit facility using proceeds from the 5.875% Series G cumulative redeemable perpetual preferred offering, leaving the Company's $800.0 million revolving credit facility fully undrawn.
Additional Information
A copy of the Company’s Second Quarter 2017 Earnings Release and 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 Friday, August 4, 2017, at 11:00 a.m. Eastern Time to discuss the Company’s financial results for the quarter ended June 30, 2017, and to provide an update on its business. The domestic dial-in number is (877) 451-6152 (for U.S. and Canada) and the international dial-in number is (201) 389-0879 (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 Friday, August 18, 2017, by calling (844) 512-2921 (U.S. and Canada) or (412) 317-6671 (international), replay passcode number 13665821#, 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, 2017, we owned 48,982 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 our acquisition and homebuilding programs will result in continued growth and that we will continue to expand margins. 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, 2016, and in the Company’s subsequent filings with the SEC.

 
 
 
6

American Homes 4 Rent


Fact Sheet
(Amounts in thousands, except per share and property data)
(Unaudited)
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
Operating Data
 
 
 
 
 
 
 
Net loss attributable to common shareholders
$
(186
)
 
$
(10,404
)
 
$
(1,676
)
 
$
(14,781
)
Core revenues from single-family properties
$
206,005

 
$
194,801

 
$
408,206

 
$
363,924

Core Net Operating Income
$
131,748

 
$
120,883

 
$
263,466

 
$
227,090

Core Net Operating Income margin
64.0
%
 
62.1
%
 
64.5
%
 
62.4
%
Platform Efficiency Percentage
12.6
%
 
13.3
%
 
12.6
%
 
13.9
%
Adjusted EBITDA after Capex and Leasing Costs
$
114,991

 
$
105,116

 
$
231,050

 
$
197,992

Adjusted EBITDA after Capex and Leasing Costs Margin
54.9
%
 
52.5
%
 
55.7
%
 
52.9
%
Per FFO share and unit:
 
 
 
 
 
 
 
FFO attributable to common share and unit holders
$
0.22

 
$
0.23

 
$
0.45

 
$
0.48

Core FFO attributable to common share and unit holders
$
0.26

 
$
0.25

 
$
0.51

 
$
0.48

Adjusted FFO attributable to common share and unit holders
$
0.22

 
$
0.21

 
$
0.45

 
$
0.42

 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
Selected Balance Sheet Information - end of period
 
 
 
 
 
 
 
 
 
Single-family properties, net
$
7,633,784

 
$
7,542,196

 
$
7,547,856

 
$
7,545,398

 
$
7,521,659

Total assets
$
8,146,307

 
$
8,490,605

 
$
8,107,210

 
$
8,086,499

 
$
8,252,400

Outstanding borrowings under credit facilities, net
$
289,648

 
$
346,909

 
$
321,735

 
$
321,575

 
$
142,000

Total Debt
$
2,480,787

 
$
2,999,587

 
$
2,981,062

 
$
2,988,383

 
$
3,166,858

Total Market Capitalization
$
10,716,768

 
$
11,194,693

 
$
10,227,619

 
$
10,319,885

 
$
10,145,385

Total Debt to Total Market Capitalization
23.1
%
 
26.8
%
 
29.1
%
 
29.0
%
 
31.2
%
Net Debt to Adjusted EBITDA
4.8 x

 
5.1 x

 
6.1 x

 
6.6 x

 
7.3 x

NYSE AMH Class A common share closing price
$
22.57

 
$
22.96

 
$
20.98

 
$
21.64

 
$
20.48

Portfolio Data - end of period
 
 
 
 
 
 
 
 
 
Leased single-family properties
46,089

 
45,285

 
44,798

 
44,746

 
44,729

Occupied single-family properties
45,495

 
44,941

 
44,559

 
44,267

 
44,021

Single-family properties newly acquired and being renovated
508

 
367

 
312

 
406

 
183

Single-family properties being prepared for re-lease
161

 
121

 
91

 
90

 
177

Vacant single-family properties available for re-lease
1,521

 
1,796

 
1,985

 
1,625

 
1,333

Vacant single-family properties available for initial lease
121

 
63

 
117

 
48

 
34

Total single-family properties, excluding held for sale
48,400

 
47,632

 
47,303

 
46,915

 
46,456

Single-family properties held for sale
582

 
704

 
1,119

 
1,238

 
1,582

Total single-family properties
48,982

 
48,336

 
48,422

 
48,153

 
48,038

Total leased percentage (1)
95.2
%
 
95.1
%
 
94.7
%
 
95.4
%
 
96.3
%
Total occupancy percentage (1)
94.0
%
 
94.4
%
 
94.2
%
 
94.4
%
 
94.8
%
Same-Home leased percentage (36,790 properties)
96.5
%
 
96.0
%
 
95.7
%
 
96.1
%
 
96.8
%
Same-Home occupancy percentage (36,790 properties)
95.3
%
 
95.3
%
 
95.3
%
 
95.1
%
 
95.2
%
Other Data
 
 
 
 
 
 
 
 
 
Distributions declared per common share
$
0.05

 
$
0.05

 
$
0.05

 
$
0.05

 
$
0.05

Distributions declared per Series A participating preferred share
$
0.31

 
$
0.31

 
$
0.31

 
$
0.31

 
$
0.31

Distributions declared per Series B participating preferred share
$
0.31

 
$
0.31

 
$
0.31

 
$
0.31

 
$
0.31

Distributions declared per Series C participating preferred share
$
0.34

 
$
0.34

 
$
0.34

 
$
0.34

 
$
0.34

Distributions declared per Series D perpetual preferred share
$
0.41

 
$
0.41

 
$
0.41

 
$
0.41

 
$
0.17

Distributions declared per Series E perpetual preferred share
$
0.40

 
$
0.40

 
$
0.40

 
$
0.41

 
$
—

Distributions declared per Series F perpetual preferred share (2)
$
0.27

 
$
—

 
$
—

 
$
—

 
$
—

(1)
Leased and occupancy percentages are calculated based on total single-family properties, excluding held for sale properties.
(2)
Series F perpetual preferred shares offering close date and initial dividend start date is April 24, 2017.

 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
7


American Homes 4 Rent


Condensed Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(Unaudited)
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
Rents from single-family properties
$
204,648

 
$
193,491

 
$
405,755

 
$
361,486

Fees from single-family properties
2,690

 
2,724

 
5,294

 
4,921

Tenant charge-backs
27,382

 
20,253

 
55,755

 
41,269

Other
2,288

 
3,846

 
3,958

 
7,597

Total revenues
237,008

 
220,314

 
470,762

 
415,273

 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
Property operating expenses
85,954

 
77,887

 
169,259

 
146,499

Property management expenses
17,442

 
18,096

 
34,920

 
34,842

General and administrative expense
8,926

 
7,931

 
18,221

 
16,501

Interest expense
28,392

 
35,481

 
60,281

 
66,458

Acquisition fees and costs expensed
1,412

 
3,489

 
2,508

 
9,142

Depreciation and amortization
72,716

 
79,604

 
146,669

 
149,121

Other
1,359

 
2,087

 
2,917

 
3,340

Total expenses
216,201

 
224,575

 
434,775

 
425,903

 
 
 
 
 
 
 
 
Gain on sale of single-family properties and other, net
2,454

 
658

 
4,480

 
892

Loss on early extinguishment of debt
(6,555
)
 
—

 
(6,555
)
 
—

Gain on conversion of Series E units
—

 
—

 
—

 
11,463

Remeasurement of participating preferred shares
(1,640
)
 
(150
)
 
(7,050
)
 
(450
)
 
 
 
 
 
 
 
 
Net income (loss)
15,066

 
(3,753
)
 
26,862

 
1,275

 
 
 
 
 
 
 
 
Noncontrolling interest
(30
)
 
(761
)
 
(331
)
 
3,075

Dividends on preferred shares
15,282

 
7,412

 
28,869

 
12,981

 
 
 
 
 
 
 
 
Net loss attributable to common shareholders
$
(186
)
 
$
(10,404
)
 
$
(1,676
)
 
$
(14,781
)
 
 
 
 
 
 
 
 
Weighted-average shares outstanding—basic and diluted
258,900,456

 
238,481,265

 
251,685,993

 
228,819,566

 
 
 
 
 
 
 
 
Net loss attributable to common shareholders per share—basic and diluted
$
—

 
$
(0.04
)
 
$
(0.01
)
 
$
(0.06
)


 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
8


American Homes 4 Rent


Funds from Operations
(Amounts in thousands, except share and per share data)
(Unaudited)
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
Net loss attributable to common shareholders
$
(186
)
 
$
(10,404
)
 
$
(1,676
)
 
$
(14,781
)
Adjustments:
 
 
 
 
 
 
 
Noncontrolling interests in the Operating Partnership
(31
)
 
(616
)
 
(370
)
 
3,296

Net (gain) loss on sale / impairment of single-family properties and other
(896
)
 
68

 
(1,993
)
 
8

Depreciation and amortization
72,716

 
79,604

 
146,669

 
149,121

Less: depreciation and amortization of non-real estate assets
(1,748
)
 
(1,388
)
 
(4,297
)
 
(2,743
)
FFO attributable to common share and unit holders
$
69,855

 
$
67,264

 
$
138,333

 
$
134,901

Adjustments:
 
 
 
 
 
 
 
Acquisition fees and costs expensed
1,412

 
3,489

 
2,508

 
9,142

Noncash share-based compensation - general and administrative
697

 
585

 
1,218

 
1,098

Noncash share-based compensation - property management
424

 
398

 
841

 
755

Noncash interest expense related to acquired debt
874

 
1,649

 
1,714

 
2,225

Loss on early extinguishment of debt
6,555

 
—

 
6,555

 
—

Gain on conversion of Series E units
—

 
—

 
—

 
(11,463
)
Remeasurement of participating preferred shares
1,640

 
150

 
7,050

 
450

Core FFO attributable to common share and unit holders
$
81,457

 
$
73,535

 
$
158,219

 
$
137,108

Recurring capital expenditures (1)
(9,096
)
 
(8,755
)
 
(15,540
)
 
(14,772
)
Leasing costs
(1,919
)
 
(2,151
)
 
(3,401
)
 
(4,080
)
Adjusted FFO attributable to common share and unit holders
$
70,442

 
$
62,629

 
$
139,278

 
$
118,256

 
 
 
 
 
 
 
 
Per FFO share and unit:
 
 
 
 
 
 
 
FFO attributable to common share and unit holders
$
0.22

 
$
0.23

 
$
0.45

 
$
0.48

Core FFO attributable to common share and unit holders
$
0.26

 
$
0.25

 
$
0.51

 
$
0.48

Adjusted FFO attributable to common share and unit holders
$
0.22

 
$
0.21

 
$
0.45

 
$
0.42

 
 
 
 
 
 
 
 
Weighted-average FFO shares and units:
 
 
 
 
 
 
 
Common shares outstanding
258,900,456

 
238,481,265

 
251,685,993

 
228,819,566

Share-based compensation plan (2)
756,166

 
—

 
746,895

 
—

Operating partnership units
55,550,593

 
55,562,904

 
55,553,262

 
55,146,394

Total weighted-average FFO shares and units
315,207,215

 
294,044,169

 
307,986,150

 
283,965,960

(1)
As a portion of our homes are recently acquired and / or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual capital expenditures per Same-Home Property by (b) our total number of properties, excluding non-stabilized and held for sale properties.
(2)
Reflects the effect of potentially dilutive securities issuable upon the assumed vesting / exercise of restricted stock units and stock options.


 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
9


American Homes 4 Rent


Core Net Operating Income - Total Portfolio
(Amounts in thousands)
(Unaudited)
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
Rents from single-family properties
$
204,648

 
$
193,491

 
$
405,755

 
$
361,486

Fees from single-family properties
2,690

 
2,724

 
5,294

 
4,921

Bad debt expense
(1,333
)
 
(1,414
)
 
(2,843
)
 
(2,483
)
Core revenues
206,005

 
194,801

 
408,206

 
363,924

 
 
 
 
 
 
 
 
Property tax expense
36,672

 
36,164

 
73,434

 
66,438

HOA fees, net (1)
4,099

 
3,823

 
7,985

 
7,246

R&M and turnover costs, net (1)
15,687

 
15,077

 
27,982

 
27,256

Insurance
1,924

 
2,261

 
3,864

 
4,364

Property management expenses, net (2)
15,875

 
16,593

 
31,475

 
31,530

Core property operating expenses
74,257

 
73,918

 
144,740

 
136,834

 
 
 
 
 
 
 
 
Core Net Operating Income
$
131,748

 
$
120,883

 
$
263,466

 
$
227,090

Core Net Operating Income margin
64.0
%
 
62.1
%
 
64.5
%
 
62.4
%

 
For the Three Months Ended
Jun 30, 2017
 
Same-Home Properties
 
Stabilized,
Non-Same-Home
Properties
 
Former
ARPI
Properties
 
Subtotal Same-Home, Stabilized and ARPI
 
Other &
Held for Sale
Properties (3)
 
Total
Single-Family
Properties
Property count
36,790
 
2,873
 
7,469
 
47,132
 
1,850
 
48,982
 
 
 
 
 
 
 
 
 
 
 
 
Rents from single-family properties
$
158,760

 
$
12,392

 
$
30,517

 
$
201,669

 
$
2,979

 
$
204,648

Fees from single-family properties
1,969

 
120

 
420

 
2,509

 
181

 
2,690

Bad debt expense
(1,022
)
 
(87
)
 
(166
)
 
(1,275
)
 
(58
)
 
(1,333
)
Core revenues
159,707

 
12,425

 
30,771

 
202,903

 
3,102

 
206,005

 
 
 
 
 
 
 
 
 
 
 
 
Property tax expense
28,031

 
2,017

 
5,640

 
35,688

 
984

 
36,672

HOA fees, net (1)
3,043

 
217

 
746

 
4,006

 
93

 
4,099

R&M and turnover costs, net (1)
12,163

 
666

 
2,263

 
15,092

 
595

 
15,687

Insurance
1,441

 
138

 
300

 
1,879

 
45

 
1,924

Property management expenses, net (2)
12,308

 
958

 
2,371

 
15,637

 
238

 
15,875

Core property operating expenses
56,986

 
3,996

 
11,320

 
72,302

 
1,955

 
74,257

 
 
 
 
 
 
 
 
 
 
 
 
Core Net Operating Income
$
102,721

 
$
8,429

 
$
19,451

 
$
130,601

 
$
1,147

 
$
131,748

Core Net Operating Income margin
64.3
%
 
67.8
%
 
63.2
%
 
64.4
%
 
37.0
%
 
64.0
%
(1)
Presented net of tenant charge-backs. In-house maintenance costs, which were previously presented separately, are included in R&M and turnover costs, net.
(2)
Presented net of tenant charge-backs and excludes noncash share-based compensation expense related to centralized and field property management employees.
(3)
Includes 1,268 non-stabilized properties and 582 properties classified as held for sale.



 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
10


American Homes 4 Rent


Same-Home Results – Quarterly and Year-to-Date Comparisons
(Amounts in thousands, except property and per property data)
(Unaudited)
 
For the Three Months Ended
Jun 30,
 
 
 
For the Six Months Ended
Jun 30,
 
 
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Number of Same-Home properties
36,790
 
36,790
 
 
 
36,790
 
36,790
 
 
Leased percentage as of period end
96.5
%
 
96.8
%
 
(0.3
)%
 
96.5
%
 
96.8
%
 
(0.3
)%
Occupancy percentage as of period end
95.3
%
 
95.2
%
 
0.1
 %
 
95.3
%
 
95.2
%
 
0.1
 %
Average occupancy percentage
95.2
%
 
95.2
%
 
—
 %
 
95.2
%
 
95.2
%
 
—
 %
Average contractual monthly rent as of period end
$
1,522

 
$
1,476

 
3.1
 %
 
$
1,522

 
$
1,476

 
3.1
 %
Turnover Rate
11.5
%
 
12.5
%
 
(1.0
)%
 
20.6
%
 
21.3
%
 
(0.7
)%
Turnover Rate - TTM
40.3
%
 
N/A

 

 
N/A

 
N/A

 

 
 
 
 
 
 
 
 
 
 
 
 
Core Net Operating Income:
 
 
 
 
 
 
 
 
 
 
Rents from single-family properties
$
158,760

 
$
153,175

 
3.6
 %
 
$
315,951

 
$
304,600

 
3.7
 %
Fees from single-family properties
1,969

 
2,054

 
(4.1
)%
 
3,857

 
3,939

 
(2.1
)%
Bad debt expense
(1,022
)
 
(1,124
)
 
(9.1
)%
 
(2,210
)
 
(2,111
)
 
4.7
 %
Core revenues
159,707

 
154,105

 
3.6
 %
 
317,598

 
306,428

 
3.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
Property tax expense
28,031

 
28,422

 
(1.4
)%
 
56,504

 
55,768

 
1.3
 %
HOA fees, net (1)
3,043

 
2,937

 
3.6
 %
 
5,979

 
5,935

 
0.7
 %
R&M and turnover costs, net (1)
12,163

 
11,443

 
6.3
 %
 
21,602

 
22,104

 
(2.3
)%
Insurance
1,441

 
1,699

 
(15.2
)%
 
2,987

 
3,534

 
(15.5
)%
Property management expenses, net (2)
12,308

 
13,126

 
(6.2
)%
 
24,490

 
26,579

 
(7.9
)%
Core property operating expenses
56,986

 
57,627

 
(1.1
)%
 
111,562

 
113,920

 
(2.1
)%
 
 
 
 
 
 
 
 
 
 
 
 
Core Net Operating Income
$
102,721

 
$
96,478

 
6.5
 %
 
$
206,036

 
$
192,508

 
7.0
 %
Core Net Operating Income margin
64.3
%
 
62.6
%
 
 
 
64.9
%
 
62.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
7,118

 
7,465

 
(4.6
)%
 
12,160

 
13,345

 
(8.9
)%
Core Net Operating Income After Capital Expenditures
$
95,603

 
$
89,013

 
7.4
 %
 
$
193,876

 
$
179,163

 
8.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
Per property:
 
 
 
 
 
 
 
 
 
 
 
Average capital expenditures
$
193

 
$
203

 
(4.6
)%
 
$
330

 
$
363

 
(8.9
)%
Average R&M and turnover costs, net, plus capital expenditures
$
524

 
$
514

 
1.9
 %
 
$
917

 
$
964

 
(4.9
)%

Same-Home Results – Sequential Quarterly History
 
For the Three Months Ended
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
Core Net Operating Income:
 
 
 
 
 
 
 
 
 
Rents from single-family properties
$
158,760

 
$
157,191

 
$
156,424

 
$
155,110

 
$
153,175

Fees from single-family properties
1,969

 
1,888

 
1,795

 
2,234

 
2,054

Bad debt expense
(1,022
)
 
(1,188
)
 
(1,386
)
 
(1,812
)
 
(1,124
)
Core revenues
159,707

 
157,891

 
156,833

 
155,532

 
154,105

 
 
 
 
 
 
 
 
 
 
Property tax expense
28,031

 
28,473

 
27,033

 
27,884

 
28,422

HOA fees, net (1)
3,043

 
2,936

 
3,001

 
3,058

 
2,937

R&M and turnover costs, net (1)
12,163

 
9,439

 
10,563

 
14,004

 
11,443

Insurance
1,441

 
1,546

 
1,666

 
1,675

 
1,699

Property management expenses, net (2)
12,308

 
12,182

 
12,343

 
12,989

 
13,126

Core property operating expenses
56,986

 
54,576

 
54,606

 
59,610

 
57,627

 
 
 
 
 
 
 
 
 
 
Core Net Operating Income
$
102,721

 
$
103,315

 
$
102,227

 
$
95,922

 
$
96,478

Core Net Operating Income margin
64.3
%
 
65.4
%
 
65.2
%
 
61.7
%
 
62.6
%
 
 
 
 
 
 
 
 
 
 
Capital expenditures
7,118

 
5,042

 
5,401

 
8,967

 
7,465

Core Net Operating Income After Capital Expenditures
$
95,603

 
$
98,273

 
$
96,826

 
$
86,955

 
$
89,013

 
 
 
 
 
 
 
 
 
 
Per property:
 
 
 
 
 
 
 
 
 
Average capital expenditures
$
193

 
$
137

 
$
147

 
$
244

 
$
203

Average R&M and turnover costs, net, plus capital expenditures
$
524

 
$
393

 
$
435

 
$
625

 
$
514

(1)
Presented net of tenant charge-backs. In-house maintenance costs, which were previously presented separately, are included in R&M and turnover costs, net.
(2)
Presented net of tenant charge-backs and excludes noncash share-based compensation expense related to centralized and field property management employees.

 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
11


American Homes 4 Rent


Same-Home Results – Operating Metrics by Market

Market
 
Number of Properties
 
Gross Book Value
per Property
 
% of 2Q17 NOI
 
Average Contractual Monthly Rent (1)
Dallas-Fort Worth, TX
 
3,051
 
$
161,884

 
7.0
%
 
$
1,651

Indianapolis, IN
 
2,718
 
153,251

 
6.3
%
 
1,346

Atlanta, GA
 
2,433
 
165,351

 
6.7
%
 
1,467

Charlotte, NC
 
2,193
 
175,256

 
6.5
%
 
1,491

Greater Chicago area, IL and IN
 
1,997
 
180,275

 
5.7
%
 
1,767

Houston, TX
 
1,950
 
174,986

 
4.3
%
 
1,648

Cincinnati, OH
 
1,820
 
173,659

 
5.0
%
 
1,512

Phoenix, AZ
 
1,575
 
163,735

 
3.9
%
 
1,240

Tampa, FL
 
1,514
 
190,107

 
4.3
%
 
1,641

Raleigh, NC
 
1,473
 
181,596

 
4.3
%
 
1,464

Jacksonville, FL
 
1,465
 
153,020

 
3.6
%
 
1,415

Nashville, TN
 
1,440
 
209,806

 
5.2
%
 
1,693

Columbus, OH
 
1,374
 
154,713

 
4.0
%
 
1,514

Orlando, FL
 
1,076
 
169,904

 
2.8
%
 
1,539

Salt Lake City, UT
 
1,047
 
220,529

 
3.7
%
 
1,584

Las Vegas, NV
 
950
 
176,110

 
2.8
%
 
1,428

San Antonio, TX
 
833
 
155,563

 
2.0
%
 
1,472

Austin, TX
 
664
 
151,380

 
1.4
%
 
1,464

Denver, CO
 
634
 
274,582

 
2.8
%
 
2,062

Charleston, SC
 
604
 
179,720

 
1.7
%
 
1,590

All Other (2)
 
5,979
 
173,950

 
16.0
%
 
1,453

Total / Average
 
36,790
 
$
173,967

 
100.0
%
 
$
1,522


 
 
Average Occupancy Percentage
 
Avg. Change in Rent for Renewals
 
Avg. Change in Rent for Re-Leases
 
Avg. Blended Change in Rent
Market
 
2Q17 QTD
 
2Q16 QTD
 
Change
 
 
 
Dallas-Fort Worth, TX
 
94.6
%
 
95.7
%
 
(1.1
)%
 
3.5
%
 
7.4
 %
 
5.1
%
Indianapolis, IN
 
95.0
%
 
94.8
%
 
0.2
 %
 
2.4
%
 
6.2
 %
 
4.1
%
Atlanta, GA
 
96.4
%
 
96.2
%
 
0.2
 %
 
3.9
%
 
9.2
 %
 
5.9
%
Charlotte, NC
 
94.8
%
 
96.0
%
 
(1.2
)%
 
3.5
%
 
5.7
 %
 
4.5
%
Greater Chicago area, IL and IN
 
96.1
%
 
95.9
%
 
0.2
 %
 
2.7
%
 
5.6
 %
 
3.7
%
Houston, TX
 
92.4
%
 
93.4
%
 
(1.0
)%
 
2.2
%
 
(0.2
)%
 
1.2
%
Cincinnati, OH
 
94.8
%
 
95.2
%
 
(0.4
)%
 
2.9
%
 
4.9
 %
 
3.8
%
Phoenix, AZ
 
97.5
%
 
97.2
%
 
0.3
 %
 
3.3
%
 
11.1
 %
 
6.3
%
Tampa, FL
 
94.7
%
 
95.2
%
 
(0.5
)%
 
3.3
%
 
5.2
 %
 
4.2
%
Raleigh, NC
 
94.9
%
 
94.5
%
 
0.4
 %
 
3.2
%
 
4.9
 %
 
3.9
%
Jacksonville, FL
 
95.7
%
 
94.1
%
 
1.6
 %
 
3.3
%
 
7.5
 %
 
5.0
%
Nashville, TN
 
94.5
%
 
95.5
%
 
(1.0
)%
 
3.1
%
 
6.2
 %
 
4.3
%
Columbus, OH
 
96.4
%
 
96.3
%
 
0.1
 %
 
3.5
%
 
7.4
 %
 
5.1
%
Orlando, FL
 
95.3
%
 
95.3
%
 
—
 %
 
3.9
%
 
9.0
 %
 
6.1
%
Salt Lake City, UT
 
96.9
%
 
95.8
%
 
1.1
 %
 
3.4
%
 
7.7
 %
 
5.4
%
Las Vegas, NV
 
97.0
%
 
97.1
%
 
(0.1
)%
 
3.0
%
 
7.8
 %
 
4.7
%
San Antonio, TX
 
95.0
%
 
93.7
%
 
1.3
 %
 
2.8
%
 
5.3
 %
 
3.7
%
Austin, TX
 
94.4
%
 
95.3
%
 
(0.9
)%
 
3.9
%
 
4.9
 %
 
4.4
%
Denver, CO
 
96.1
%
 
96.4
%
 
(0.3
)%
 
3.5
%
 
6.5
 %
 
4.9
%
Charleston, SC
 
93.6
%
 
95.3
%
 
(1.7
)%
 
3.0
%
 
4.7
 %
 
3.8
%
All Other (2)
 
94.8
%
 
94.0
%
 
0.8
 %
 
3.0
%
 
4.7
 %
 
3.8
%
Total / Average
 
95.2
%
 
95.2
%
 
—
 %
 
3.2
%
 
6.0
 %
 
4.3
%
(1)
Average contractual monthly rent as of June 30, 2017.
(2)
Represents 21 markets in 15 states.

 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
12


American Homes 4 Rent


Condensed Consolidated Balance Sheets
(Amounts in thousands)
 
Jun 30, 2017
 
Dec 31, 2016
 
(Unaudited)
 
 
Assets
 
 
 
Single-family properties:
 
 
 
Land
$
1,553,214

 
$
1,512,183

Buildings and improvements
6,815,409

 
6,614,953

Single-family properties held for sale, net
65,237

 
87,430

 
8,433,860

 
8,214,566

Less: accumulated depreciation
(800,076
)
 
(666,710
)
Single-family properties, net
7,633,784

 
7,547,856

Cash and cash equivalents
67,325

 
118,799

Restricted cash
128,524

 
131,442

Rent and other receivables, net
19,262

 
17,618

Escrow deposits, prepaid expenses and other assets
137,496

 
133,594

Deferred costs and other intangibles, net
13,971

 
11,956

Asset-backed securitization certificates
25,666

 
25,666

Goodwill
120,279

 
120,279

Total assets
$
8,146,307

 
$
8,107,210

 
 
 
 
Liabilities
 
 
 
Revolving credit facility
$
92,000

 
$
—

Term loan facility, net
197,648

 
321,735

Asset-backed securitizations, net
1,985,847

 
2,442,863

Exchangeable senior notes, net
109,862

 
108,148

Secured note payable
49,346

 
49,828

Accounts payable and accrued expenses
222,990

 
177,206

Participating preferred shares derivative liability
76,860

 
69,810

Total liabilities
2,734,553

 
3,169,590

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity
 
 
 
Shareholders’ equity:
 
 
 
Class A common shares
2,585

 
2,427

Class B common shares
6

 
6

Preferred shares
432

 
370

Additional paid-in capital
5,075,460

 
4,568,616

Accumulated deficit
(405,426
)
 
(378,578
)
Accumulated other comprehensive income
—

 
95

Total shareholders’ equity
4,673,057

 
4,192,936

 
 
 
 
Noncontrolling interest
738,697

 
744,684

Total equity
5,411,754

 
4,937,620

 
 
 
 
Total liabilities and equity
$
8,146,307

 
$
8,107,210


 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
13


American Homes 4 Rent


Debt Summary and Maturity Schedule as of June 30, 2017
(Amounts in thousands)
 
Secured
 
Unsecured
 
Total Balance
 
 % of Total
 
 Interest
Rate (1)
 
 Years to Maturity (2)
Floating rate debt:
 
 
 
 
 
 
 
 
 
 
 
Revolving credit facility (3)
$
—

 
$
92,000

 
$
92,000

 
3.7
%
 
2.42
%
 
5.0
Term loan facility (3)
—

 
200,000

 
200,000

 
8.1
%
 
2.57
%
 
5.0
Total floating rate debt
—

 
292,000

 
292,000

 
11.8
%
 
2.52
%
 
5.0
 
 
 
 
 
 
 
 
 
 
 
 
Fixed rate debt:
 
 
 
 
 
 
 
 
 
 
 
AH4R 2014-SFR2
499,245

 
—

 
499,245

 
20.1
%
 
4.42
%
 
7.3
AH4R 2014-SFR3
514,824

 
—

 
514,824

 
20.8
%
 
4.40
%
 
7.4
AH4R 2015-SFR1
540,717

 
—

 
540,717

 
21.8
%
 
4.14
%
 
27.8
AH4R 2015-SFR2
469,655

 
—

 
469,655

 
18.9
%
 
4.36
%
 
28.3
Exchangeable senior notes
—

 
115,000

 
115,000

 
4.6
%
 
3.25
%
 
1.4
Secured note payable
49,346

 
—

 
49,346

 
2.0
%
 
4.06
%
 
2.0
Total fixed rate debt
2,073,787

 
115,000

 
2,188,787

 
88.2
%
 
4.26
%
 
16.5
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
$
2,073,787

 
$
407,000

 
$
2,480,787

 
100.0
%
 
4.06
%
 
15.1
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized discounts and loan costs
 
 
 
 
(46,084
)
 
 
 
 
 
 
Total debt per balance sheet
 
 
 
 
$
2,434,703

 
 
 
 
 
 
Year (2)
 
 Floating Rate
 
Fixed Rate
 
Total
 
% of Total
Remaining 2017
 
$
—

 
$
10,845

 
$
10,845

 
0.4
%
2018
 
—

 
136,723

 
136,723

 
5.5
%
2019
 
—

 
68,564

 
68,564

 
2.8
%
2020
 
—

 
20,714

 
20,714

 
0.8
%
2021
 
—

 
20,714

 
20,714

 
0.8
%
2022
 
292,000

 
20,714

 
312,714

 
12.6
%
2023
 
—

 
20,714

 
20,714

 
0.8
%
2024
 
—

 
956,692

 
956,692

 
38.6
%
2025
 
—

 
10,302

 
10,302

 
0.4
%
2026
 
—

 
10,302

 
10,302

 
0.4
%
Thereafter
 
—

 
912,503

 
912,503

 
36.9
%
Total
 
$
292,000

 
$
2,188,787

 
$
2,480,787

 
100.0
%
(1)     Interest rates on floating rate debt reflect stated rates as of period end.
(2)
Years to maturity and maturity schedule reflect all debt on a fully extended basis.
(3)
The interest rates shown above reflect the Company's LIBOR-based borrowing rates, based on 1-month LIBOR and applicable margin as of period end. Balances reflect borrowings outstanding as of June 30, 2017.


Interest Expense Reconciliation
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
Interest expense per income statement
$
28,392

 
$
35,481

 
$
60,281

 
$
66,458

Less: noncash interest expense related to acquired debt
(874
)
 
(1,649
)
 
(1,714
)
 
(2,225
)
Interest expense included in Core FFO attributable to common share and unit holders
27,518

 
33,832

 
58,567

 
64,233

Less: amortization of deferred financing costs
(1,848
)
 
(2,762
)
 
(4,410
)
 
(5,438
)
Add: capitalized interest
1,035

 
359

 
1,638

 
995

Cash interest
$
26,705

 
$
31,429

 
$
55,795

 
$
59,790



 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
14


American Homes 4 Rent


Capital Structure as of June 30, 2017
(Amounts in thousands, except share and per share data)

Total Capitalization
Total Debt
 
 
 
$
2,480,787

 
23.1
%
 
 
 
 
 
 
 
Total preferred shares at liquidation value
 
 
 
1,133,781

 
10.6
%
 
 
 
 
 
 
 
Common equity at market value:
 
 
 
 
 
 
Common shares outstanding
 
259,125,568

 
 
 
 
Operating partnership units
 
55,548,778

 
 
 
 
Total shares and units
 
314,674,346

 
 
 
 
NYSE AMH Class A common share closing price at June 30, 2017
 
$
22.57

 
 
 
 
Market value of common shares and operating partnership units
 
 
 
7,102,200

 
66.3
%
 
 
 
 
 
 
 
Total Market Capitalization
 
 
 
$
10,716,768

 
100.0
%

Preferred Shares
 
 
Earliest Redemption Date
 
Outstanding Shares
 
Liquidation Value (1)
 
Annual Dividend
Per Share
 
Annual Dividend
Amount
Series
 
 
 
Per Share
 
Total
 
 
5.000% Series A Participating Preferred Shares
 
9/30/2017
 
5,060,000

 
$
28.32

 
$
143,317

 
$
1.250

 
$
6,325

5.000% Series B Participating Preferred Shares
 
9/30/2017
 
4,400,000

 
$
28.32

 
124,623

 
$
1.250

 
5,500

5.500% Series C Participating Preferred Shares
 
3/31/2018
 
7,600,000

 
$
27.91

 
212,091

 
$
1.375

 
10,450

6.500% Series D Perpetual Preferred Shares
 
5/24/2021
 
10,750,000

 
$
25.00

 
268,750

 
$
1.625

 
17,469

6.350% Series E Perpetual Preferred Shares
 
6/29/2021
 
9,200,000

 
$
25.00

 
230,000

 
$
1.588

 
14,605

5.875% Series F Perpetual Preferred Shares
 
4/24/2022
 
6,200,000

 
$
25.00

 
155,000

 
$
1.469

 
9,106

Total preferred shares at liquidation value
 
 
 
43,210,000

 
 
 
$
1,133,781

 
 
 
$
63,455

(1)
Liquidation value for all Participating Preferred Shares reflects initial liquidation value of $25.00 per share, adjusted by most recent quarterly HPA adjustment calculation, which is made available under the “For Investors” page of the Company’s website.

Credit Ratios
 
 
Credit Ratings
 
 
 
 
 
 
 
 
 
 
 
 
Net Debt to Adjusted EBITDA
4.8 x

 
Rating Agency
 
Rating
 
Outlook
Debt and Preferred Shares to Adjusted EBITDA
7.4 x

 
Moody's Investor Service
 
Baa3
 
Stable
Fixed Charge Coverage
2.9 x

 
S&P Global Ratings
 
BBB-
 
Stable
Unencumbered Core NOI percentage
61.5
%
 
 
 
 
 
 


 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
15


American Homes 4 Rent


Top 20 Markets Summary as of June 30, 2017
Property Information (1)
Market
 
Number of
Properties
 
Percentage
of Total
Properties
 
Gross Book
Value per
Property
 
Avg.
Sq. Ft.
 
Avg. Age
(years)
Dallas-Fort Worth, TX
 
4,341
 
9.0
%
 
$
162,003

 
2,121

 
13.6
Atlanta, GA
 
4,191
 
8.7
%
 
164,411

 
2,107

 
16.2
Houston, TX
 
3,151
 
6.5
%
 
162,836

 
2,114

 
11.6
Charlotte, NC
 
3,056
 
6.3
%
 
178,639

 
2,049

 
13.9
Indianapolis, IN
 
2,897
 
6.0
%
 
151,247

 
1,934

 
14.8
Phoenix, AZ
 
2,770
 
5.7
%
 
162,023

 
1,815

 
14.7
Nashville, TN
 
2,506
 
5.2
%
 
200,576

 
2,103

 
13.1
Greater Chicago area, IL and IN
 
2,033
 
4.2
%
 
180,530

 
1,896

 
15.8
Cincinnati, OH
 
1,975
 
4.1
%
 
172,482

 
1,849

 
15.1
Raleigh, NC
 
1,919
 
4.0
%
 
177,592

 
1,850

 
12.7
Tampa, FL
 
1,850
 
3.8
%
 
186,815

 
1,938

 
13.8
Jacksonville, FL
 
1,797
 
3.7
%
 
156,836

 
1,910

 
13.3
Columbus, OH
 
1,658
 
3.4
%
 
158,394

 
1,837

 
15.8
Orlando, FL
 
1,575
 
3.3
%
 
170,097

 
1,872

 
16.1
Salt Lake City, UT
 
1,048
 
2.2
%
 
220,462

 
2,131

 
16.1
Las Vegas, NV
 
1,023
 
2.1
%
 
174,757

 
1,841

 
14.4
San Antonio, TX
 
1,004
 
2.1
%
 
156,048

 
2,014

 
14.1
Charleston, SC
 
858
 
1.8
%
 
184,292

 
1,916

 
11.3
Winston Salem, NC
 
761
 
1.6
%
 
149,576

 
1,730

 
13.5
Austin, TX
 
701
 
1.3
%
 
152,846

 
1,860

 
12.9
All Other (3)
 
7,286
 
15.0
%
 
188,811

 
1,881

 
14.0
Total / Average
 
48,400
 
100.0
%
 
$
172,905

 
1,963

 
14.2
Leasing Information (1)
Market
 
Leased
Percentage (2)
 
Occupancy
Percentage (2)
 
Avg. Contractual
Monthly Rent
Per Property (2)
 
Avg. Change in Rent for Renewals
 
Avg. Change in Rent for Re-Leases
 
Avg. Blended Change in Rent
Dallas-Fort Worth, TX
 
95.6
%
 
94.4
%
 
$
1,649

 
3.6
%
 
7.4
%
 
5.1
%
Atlanta, GA
 
95.7
%
 
94.8
%
 
1,448

 
4.0
%
 
9.2
%
 
6.0
%
Houston, TX
 
93.7
%
 
91.7
%
 
1,592

 
2.3
%
 
0.2
%
 
1.4
%
Charlotte, NC
 
92.8
%
 
91.3
%
 
1,490

 
3.6
%
 
6.5
%
 
4.8
%
Indianapolis, IN
 
97.1
%
 
95.6
%
 
1,340

 
2.5
%
 
6.5
%
 
4.2
%
Phoenix, AZ
 
98.2
%
 
97.6
%
 
1,221

 
3.2
%
 
12.1
%
 
6.7
%
Nashville, TN
 
93.4
%
 
92.2
%
 
1,642

 
3.1
%
 
6.5
%
 
4.4
%
Greater Chicago area, IL and IN
 
96.7
%
 
95.7
%
 
1,768

 
2.7
%
 
5.6
%
 
3.7
%
Cincinnati, OH
 
96.5
%
 
95.1
%
 
1,511

 
2.9
%
 
4.9
%
 
3.8
%
Raleigh, NC
 
95.8
%
 
94.2
%
 
1,439

 
3.2
%
 
5.3
%
 
4.0
%
Tampa, FL
 
94.1
%
 
92.8
%
 
1,612

 
3.4
%
 
5.4
%
 
4.3
%
Jacksonville, FL
 
91.0
%
 
90.0
%
 
1,420

 
3.2
%
 
7.5
%
 
5.0
%
Columbus, OH
 
94.8
%
 
94.1
%
 
1,516

 
3.5
%
 
7.3
%
 
5.1
%
Orlando, FL
 
96.6
%
 
95.0
%
 
1,515

 
4.0
%
 
9.1
%
 
6.2
%
Salt Lake City, UT
 
98.4
%
 
97.9
%
 
1,584

 
3.4
%
 
7.7
%
 
5.4
%
Las Vegas, NV
 
98.4
%
 
97.5
%
 
1,416

 
3.0
%
 
7.9
%
 
4.7
%
San Antonio, TX
 
95.1
%
 
93.4
%
 
1,471

 
2.8
%
 
5.8
%
 
3.9
%
Charleston, SC
 
88.3
%
 
87.4
%
 
1,596

 
3.1
%
 
4.7
%
 
3.9
%
Winston Salem, NC
 
96.3
%
 
95.0
%
 
1,254

 
2.7
%
 
4.2
%
 
3.3
%
Austin, TX
 
95.9
%
 
95.0
%
 
1,470

 
4.0
%
 
4.8
%
 
4.4
%
All Other (3)
 
95.1
%
 
93.9
%
 
1,542

 
3.1
%
 
4.5
%
 
3.8
%
Total / Average
 
95.2
%
 
94.0
%
 
$
1,510

 
3.2
%
 
6.1
%
 
4.4
%
(1)
Property and leasing information excludes held for sale properties.
(2)
Leased percentage, occupancy percentage and average contractual monthly rent per property are reflected as of period end.
(3)
Represents 22 markets in 16 states.

 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
16


American Homes 4 Rent


Leasing Performance
 
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q16
Average Change in Rent for Renewals
 
3.2
%
 
3.1
%
 
3.3
%
 
3.4
%
 
4.1
%
Average Change in Rent for Re-leases
 
6.1
%
 
4.0
%
 
2.7
%
 
5.0
%
 
7.5
%
Average Blended Change in Rent
 
4.4
%
 
3.5
%
 
3.0
%
 
4.1
%
 
5.6
%

Scheduled Lease Expirations
 
 
MTM
 
3Q17
 
4Q17
 
1Q18
 
2Q18
 
Thereafter
Lease expirations
 
2,093
 
11,684
 
7,511
 
11,509
 
12,227
 
1,065

Top 20 Markets Home Price Appreciation Trends

The table below summarizes historic changes in the House Price Index of the Federal Housing Finance Agency (“FHFA”), known as the Quarterly Purchase-Only Index, specifically the non-seasonally adjusted “Purchase-Only Index” for the “100 Largest Metropolitan Statistical Areas”, which is used for purposes of computing the “HPA Factor” for our 5% Series A participating preferred shares, 5% Series B participating preferred shares and 5.5% Series C participating preferred shares as described in the prospectuses for those securities.
 
 
HPA Index (1)
 
HPA Index Change
Market
 
Dec 31,
2012
 
Dec 31,
2013
 
Dec 31,
2014
 
Dec 31,
2015
 
Dec 31,
2016
 
Mar 31,
2017
 
Dallas-Fort Worth, TX (2)
 
100.0

 
108.4

 
115.2

 
127.6

 
140.1

 
143.4

 
43.4
%
Indianapolis, IN
 
100.0

 
106.4

 
112.3

 
117.8

 
124.5

 
123.4

 
23.4
%
Atlanta, GA
 
100.0

 
114.2

 
122.3

 
132.0

 
143.0

 
144.4

 
44.4
%
Charlotte, NC
 
100.0

 
113.4

 
118.8

 
126.8

 
136.6

 
142.4

 
42.4
%
Greater Chicago area, IL and IN
 
100.0

 
111.0

 
115.1

 
118.8

 
126.3

 
125.9

 
25.9
%
Houston, TX
 
100.0

 
110.8

 
123.1

 
130.1

 
133.0

 
132.7

 
32.7
%
Cincinnati, OH
 
100.0

 
104.9

 
111.2

 
115.7

 
121.4

 
121.0

 
21.0
%
Tampa, FL
 
100.0

 
113.0

 
121.1

 
132.3

 
149.1

 
149.9

 
49.9
%
Jacksonville, FL
 
100.0

 
114.2

 
121.7

 
127.7

 
142.3

 
147.8

 
47.8
%
Nashville, TN
 
100.0

 
111.0

 
117.4

 
131.1

 
141.1

 
145.9

 
45.9
%
Raleigh, NC
 
100.0

 
106.7

 
111.6

 
120.0

 
130.8

 
132.1

 
32.1
%
Phoenix, AZ
 
100.0

 
118.0

 
123.3

 
135.9

 
146.1

 
147.6

 
47.6
%
Columbus, OH
 
100.0

 
108.9

 
114.5

 
120.8

 
131.5

 
127.5

 
27.5
%
Salt Lake City, UT
 
100.0

 
109.4

 
114.5

 
123.2

 
133.0

 
138.3

 
38.3
%
Orlando, FL
 
100.0

 
110.3

 
123.5

 
135.4

 
144.9

 
149.8

 
49.8
%
Las Vegas, NV
 
100.0

 
125.1

 
141.3

 
149.0

 
161.5

 
164.3

 
64.3
%
San Antonio, TX
 
100.0

 
101.1

 
108.0

 
113.9

 
124.7

 
127.2

 
27.2
%
Denver, CO
 
100.0

 
111.0

 
121.5

 
136.5

 
149.9

 
156.7

 
56.7
%
Austin, TX
 
100.0

 
110.1

 
122.2

 
133.9

 
145.7

 
145.8

 
45.8
%
Greenville, SC
 
100.0

 
104.1

 
110.8

 
117.8

 
127.6

 
126.9

 
26.9
%
Average
 
 
 
 
 
 
 
 
 
 
 
 
 
39.7
%
(1)
Updates to the Quarterly Purchase-Only Index are released by the FHFA on approximately the 20th day of the second month following quarter-end. Accordingly, information in the above table has been presented through March 31, 2017. For the illustrative purposes of this table, the HPA Index has been indexed as of December 31, 2012, and, as such, HPA Index values presented are relative measures calculated in relation to the baseline index value of 100.0 as of December 31, 2012.
(2)
Our Dallas-Fort Worth, TX market is comprised of the Dallas-Plano-Irving and Fort Worth-Arlington Metropolitan Divisions.


 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
17


American Homes 4 Rent


Disposition Summary
(Amounts in thousands, except property data)
 
 
Single-Family Properties Held for Sale (1)
 
Single-Family Properties
Sold 2Q17
Market
 
Vacant
 
Leased
 
Total
 
Number
of Properties
 
Net Proceeds
Greater Chicago area, IL and IN
 
101

 
249

 
350

 
57

 
$
3,933

Inland Empire, CA
 
5

 
43

 
48

 
5

 
1,596

Miami, FL
 
28

 
19

 
47

 
6

 
1,829

Central Valley, CA
 
15

 
26

 
41

 
4

 
936

Atlanta, GA
 
8

 
8

 
16

 
11

 
1,104

Dallas-Fort Worth, TX
 
4

 
10

 
14

 
2

 
417

San Antonio, TX
 
7

 
5

 
12

 
2

 
284

Nashville, TN
 
2

 
5

 
7

 
1

 
117

Memphis, TN
 
3

 
4

 
7

 
3

 
304

Oklahoma City, OK
 
1

 
5

 
6

 
2

 
292

Raleigh, NC
 
5

 
—

 
5

 
7

 
685

Phoenix, AZ
 
2

 
2

 
4

 
4

 
466

Houston, TX
 
1

 
3

 
4

 
—

 
—

Tucson, AZ
 
1

 
2

 
3

 
4

 
406

Fort Myers, FL
 
3

 
—

 
3

 
—

 
—

Denver, CO
 
1

 
2

 
3

 
5

 
1,422

Tampa, FL
 
2

 
—

 
2

 
—

 
—

Austin, TX
 
2

 
—

 
2

 
—

 
—

Indianapolis, IN
 
1

 
1

 
2

 
2

 
261

Charleston, SC
 
1

 
—

 
1

 
2

 
139

Winston Salem, NC
 
1

 
—

 
1

 
—

 
—

Orlando, FL
 
1

 
—

 
1

 
3

 
665

Columbus, OH
 
—

 
1

 
1

 
1

 
134

Cincinnati, OH
 
—

 
1

 
1

 
1

 
168

Charlotte, NC
 
1

 
—

 
1

 
3

 
354

Knoxville, TN
 
—

 
—

 
—

 
1

 
115

Greenville, SC
 
—

 
—

 
—

 
1

 
112

Total
 
196

 
386

 
582

 
127

 
$
15,739

(1)
Reflects single-family properties held for sale as of June 30, 2017.


ATM Share Issuance History
(Amounts in thousands, except share and per share data)
Board authorization announced on 11/10/16
 
 
$
400,000

 
 
 
 
 
 
 
 
 
Quarterly Period
 
Common Shares Issued
 
Gross Proceeds
 
Average Issuance Price Per Share
4Q16
 
4,919,948

 
$
103,983

 
$
21.13

1Q17
 
629,532

 
14,304

 
22.72

2Q17
 
222,073

 
5,066

 
22.81

Total
 
5,771,553

 
$
123,353

 
$
21.37

 
 
 
 
 
 
 
 
 
 Remaining authorization:

 
$
276,647

 
 



 
 
 
Refer to "Defined Terms and Non-GAAP Reconciliations" for definitions of metrics and reconciliations to GAAP.
 
18


American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations
Average Change in Rent for Re-Leases
The percentage change in annual rent on properties re-leased during the period, compared to annual rent of the previous expired lease for each individual property.

Average Change in Rent for Renewals
The percentage change in rent on non-month-to-month lease renewals during the period.

Average Blended Change in Rent
The percentage change in rent on all non-month-to-month lease renewals and re-leases during the period, compared to the annual rent of the previous expired non-month-to-month lease for each individual property.

Core Net Operating Income ("Core NOI") and Same-Home Core NOI After Capital Expenditures
Core NOI, which we also present separately for our Same-Home, unencumbered and encumbered portfolios, is a supplemental non-GAAP financial measure that we define as core revenues from single-family properties, which is calculated as rents and fees from single-family properties, net of bad debt expense, less core property operating expenses, which is calculated as property operating and property management expenses, excluding noncash share-based compensation expense, expenses reimbursed by tenant charge-backs and bad debt expense.

Core NOI also excludes (1) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value, (2) noncash gain or loss on conversion of convertible units, (3) gain or loss on early extinguishment of debt, (4) gain or loss on sales of single-family properties and other, (5) depreciation and amortization, (6) acquisition fees and costs expensed incurred with recent business combinations and the acquisition of individual properties, (7) noncash share-based compensation expense, (8) interest expense, (9) general and administrative expense, (10) other expenses and (11) other revenues. We consider Core NOI to be a meaningful financial measure because we believe it is helpful to investors in understanding the operating performance of our single-family properties without the impact of certain operating expenses that are reimbursed through tenant charge-backs. We further adjust Core NOI for our Same-Home portfolio by subtracting capital expenditures to calculate Same-Home Core NOI After Capital Expenditures, which we believe is a meaningful supplemental non-GAAP financial measure because it more fully reflects our operating performance after the impact of all property-level expenditures, regardless of whether they are capitalized or expensed.

Core NOI and Same-Home Core NOI After Capital Expenditures should be considered only as supplements to net income or loss as a measure of our performance and should not be used as measures of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. Additionally, these metrics should not be used as substitutes for net income (loss) or net cash flows from operating activities (as computed in accordance with GAAP).


 
 
 
19

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)
The following are reconciliations of core revenues, core property operating expenses, Core NOI, Same-Home Core NOI, Same-Home Core NOI After Capital Expenditures, Unencumbered Core NOI and Encumbered Core NOI to their respective GAAP metrics for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Core revenues
 
 
 
 
 
 
 
Total revenues
$
237,008

 
$
220,314

 
$
470,762

 
$
415,273

Tenant charge-backs
(27,382
)
 
(20,253
)
 
(55,755
)
 
(41,269
)
Bad debt expense
(1,333
)
 
(1,414
)
 
(2,843
)
 
(2,483
)
Other revenues
(2,288
)
 
(3,846
)
 
(3,958
)
 
(7,597
)
Core revenues
$
206,005

 
$
194,801

 
$
408,206

 
$
363,924

Core property operating expenses
 
 
 
 
 
 
 
Property operating expenses
$
85,954

 
$
77,887

 
$
169,259

 
$
146,499

Property management expenses
17,442

 
18,096

 
34,920

 
34,842

Noncash share-based compensation - property management
(424
)
 
(398
)
 
(841
)
 
(755
)
Expenses reimbursed by tenant charge-backs
(27,382
)
 
(20,253
)
 
(55,755
)
 
(41,269
)
Bad debt expense
(1,333
)
 
(1,414
)
 
(2,843
)
 
(2,483
)
Core property operating expenses
$
74,257

 
$
73,918

 
$
144,740

 
$
136,834

Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures
Net loss attributable to common shareholders
$
(186
)
 
$
(10,404
)
 
$
(1,676
)
 
$
(14,781
)
Dividends on preferred shares
15,282

 
7,412

 
28,869

 
12,981

Noncontrolling interest
(30
)
 
(761
)
 
(331
)
 
3,075

Net income (loss)
15,066

 
(3,753
)
 
26,862

 
1,275

Remeasurement of participating preferred shares
1,640

 
150

 
7,050

 
450

Gain on conversion of Series E units
—

 
—

 
—

 
(11,463
)
Loss on early extinguishment of debt
6,555

 
—

 
6,555

 
—

Gain on sale of single-family properties and other, net
(2,454
)
 
(658
)
 
(4,480
)
 
(892
)
Depreciation and amortization
72,716

 
79,604

 
146,669

 
149,121

Acquisition fees and costs expensed
1,412

 
3,489

 
2,508

 
9,142

Noncash share-based compensation - property management
424

 
398

 
841

 
755

Interest expense
28,392

 
35,481

 
60,281

 
66,458

General and administrative expense
8,926

 
7,931

 
18,221

 
16,501

Other expenses
1,359

 
2,087

 
2,917

 
3,340

Other revenues
(2,288
)
 
(3,846
)
 
(3,958
)
 
(7,597
)
Tenant charge-backs
27,382

 
20,253

 
55,755

 
41,269

Expenses reimbursed by tenant charge-backs
(27,382
)
 
(20,253
)
 
(55,755
)
 
(41,269
)
Bad debt expense excluded from operating expenses
1,333

 
1,414

 
2,843

 
2,483

Bad debt expense included in revenues
(1,333
)
 
(1,414
)
 
(2,843
)
 
(2,483
)
Core Net Operating Income
131,748

 
120,883

 
263,466

 
227,090

Less: Non-Same-Home Core Net Operating Income
29,027

 
24,405

 
57,430

 
34,582

Same-Home Core Net Operating Income
102,721

 
96,478

 
206,036

 
192,508

Less: Same-Home capital expenditures
7,118

 
7,465

 
12,160

 
13,345

Same-Home Core Net Operating Income After Capital Expenditures
$
95,603

 
$
89,013

 
$
193,876

 
$
179,163

Unencumbered Core NOI and Encumbered Core NOI
 
 
 
 
 
 
 
Core Net Operating Income
$
131,748

 
$
120,883

 
$
263,466

 
$
227,090

Less: Encumbered Core Net Operating Income
50,737

 
47,997

 
101,754

 
95,497

Unencumbered Core Net Operating Income
$
81,011

 
$
72,886

 
$
161,712

 
$
131,593


 
 
 
20

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)
The following are reconciliations of core revenues, core property operating expenses, Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures to their respective GAAP metrics for the trailing five quarters (amounts in thousands):
 
For the Three Months Ended
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Core revenues
 
 
 
 
 
 
 
 
 
Total revenues
$
237,008

 
$
233,754

 
$
227,559

 
$
236,057

 
$
220,314

Tenant charge-backs
(27,382
)
 
(28,373
)
 
(23,177
)
 
(30,808
)
 
(20,253
)
Bad debt expense
(1,333
)
 
(1,510
)
 
(1,877
)
 
(2,609
)
 
(1,414
)
Other revenues
(2,288
)
 
(1,670
)
 
(2,987
)
 
(5,214
)
 
(3,846
)
Core revenues
$
206,005

 
$
202,201

 
$
199,518

 
$
197,426

 
$
194,801

Core property operating expenses
 
 
 
 
 
 
 
 
 
Property operating expenses
$
85,954

 
$
83,305

 
$
78,323

 
$
92,488

 
$
77,887

Property management expenses
17,442

 
17,478

 
17,547

 
18,335

 
18,096

Noncash share-based compensation - property management
(424
)
 
(417
)
 
(394
)
 
(411
)
 
(398
)
Expenses reimbursed by tenant charge-backs
(27,382
)
 
(28,373
)
 
(23,177
)
 
(30,808
)
 
(20,253
)
Bad debt expense
(1,333
)
 
(1,510
)
 
(1,877
)
 
(2,609
)
 
(1,414
)
Core property operating expenses
$
74,257

 
$
70,483

 
$
70,422

 
$
76,995

 
$
73,918

Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures
Net loss attributable to common shareholders
$
(186
)
 
$
(1,490
)
 
$
2,391

 
$
(21,152
)
 
$
(10,404
)
Dividends on preferred shares
15,282

 
13,587

 
13,587

 
13,669

 
7,412

Noncontrolling interest
(30
)
 
(301
)
 
(6,640
)
 
7,316

 
(761
)
Net income (loss)
15,066

 
11,796

 
9,338

 
(167
)
 
(3,753
)
Remeasurement of participating preferred shares
1,640

 
5,410

 
4,080

 
2,490

 
150

Loss on early extinguishment of debt
6,555

 
—

 
—

 
13,408

 
—

Gain on sale of single-family properties and other, net
(2,454
)
 
(2,026
)
 
(1,995
)
 
(11,682
)
 
(658
)
Depreciation and amortization
72,716

 
73,953

 
74,164

 
75,392

 
79,604

Acquisition fees and costs expensed
1,412

 
1,096

 
544

 
1,757

 
3,489

Noncash share-based compensation - property management
424

 
417

 
394

 
411

 
398

Interest expense
28,392

 
31,889

 
31,538

 
32,851

 
35,481

General and administrative expense
8,926

 
9,295

 
8,524

 
8,043

 
7,931

Other expenses
1,359

 
1,558

 
5,496

 
3,142

 
2,087

Other revenues
(2,288
)
 
(1,670
)
 
(2,987
)
 
(5,214
)
 
(3,846
)
Tenant charge-backs
27,382

 
28,373

 
23,177

 
30,808

 
20,253

Expenses reimbursed by tenant charge-backs
(27,382
)
 
(28,373
)
 
(23,177
)
 
(30,808
)
 
(20,253
)
Bad debt expense excluded from operating expenses
1,333

 
1,510

 
1,877

 
2,609

 
1,414

Bad debt expense included in revenues
(1,333
)
 
(1,510
)
 
(1,877
)
 
(2,609
)
 
(1,414
)
Core Net Operating Income
131,748

 
131,718

 
129,096

 
120,431

 
120,883

Less: Non-Same-Home Core Net Operating Income
29,027

 
28,403

 
26,869

 
24,509

 
24,405

Same-Home Core Net Operating Income
102,721

 
103,315

 
102,227

 
95,922

 
96,478

Less: Same-Home capital expenditures
7,118

 
5,042

 
5,401

 
8,967

 
7,465

Same-Home Core Net Operating Income After Capital Expenditures
$
95,603

 
$
98,273

 
$
96,826

 
$
86,955

 
$
89,013



 
 
 
21

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)

Credit Ratios
We present the following selected metrics because we believe they are helpful as supplemental measures in assessing the Company’s ability to service its financing obligations and in evaluating balance sheet leverage against that of other real estate companies. The tables below reconcile these metrics, which are calculated in part based on several non-GAAP financial measures.

Debt and Preferred Shares to Adjusted EBITDA
 
 
Jun 30,
2017
 
 
(Unaudited)
Total Debt
 
$
2,480,787

Preferred shares at liquidation value
 
1,133,781

Total Debt and preferred shares
 
3,614,568

 
 
 
Adjusted EBITDA - TTM
 
$
487,562

 
 
 
Debt and Preferred Shares to Adjusted EBITDA
 
7.4 x


Fixed Charge Coverage
 
 
For the Trailing Twelve Months Ended
Jun 30, 2017
 
 
(Unaudited)
Interest expense per income statement
 
$
124,670

Less: noncash interest expense related to acquired debt
 
(4,054
)
Less: amortization of deferred financing costs
 
(9,739
)
Add: capitalized interest
 
2,933

Cash interest
 
113,810

Dividends on preferred shares
 
56,125

Fixed charges
 
169,935

 
 
 
Adjusted EBITDA
 
$
487,562

 
 
 
Fixed Charge Coverage
 
2.9 x


Net Debt to Adjusted EBITDA
 
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Total Debt
 
$
2,480,787

 
$
2,999,587

 
$
2,981,062

 
$
2,988,383

 
$
3,166,858

Less: cash and cash equivalents
 
(67,325
)
 
(495,802
)
 
(118,799
)
 
(106,308
)
 
(270,369
)
Less: asset-backed securitization certificates
 
(25,666
)
 
(25,666
)
 
(25,666
)
 
(25,666
)
 
(25,666
)
Less: restricted cash related to securitizations
 
(56,058
)
 
(63,147
)
 
(62,062
)
 
(61,434
)
 
(63,729
)
Net debt
 
$
2,331,738

 
$
2,414,972

 
$
2,774,535

 
$
2,794,975

 
$
2,807,094

 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA - TTM
 
$
487,562

 
$
477,578

 
$
454,415

 
$
420,989

 
$
385,801

 
 
 
 
 
 
 
 
 
 
 
Net Debt to Adjusted EBITDA
 
4.8 x

 
5.1 x

 
6.1 x

 
6.6 x

 
7.3 x


 
 
 
22

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)
Unencumbered Core NOI %
 
For the Three Months Ended
Jun 30, 2017
 
(Unaudited)
Unencumbered Core Net Operating Income
$
81,011

Core Net Operating Income
$
131,748

Unencumbered Core Net Operating Income %
61.5
%

EBITDA / Adjusted EBITDA / Adjusted EBITDA after Capex and Leasing Costs / Adjusted EBITDA Margin / Adjusted EBITDA after Capex and Leasing Costs Margin
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP financial measure and is used by us and others as a supplemental measure of performance. Adjusted EBITDA is a supplemental non-GAAP financial measure calculated by adjusting EBITDA for (1) acquisition fees and costs expensed incurred with recent business combinations and the acquisition of individual properties, (2) net gain or loss on sales / impairment of single-family properties and other, (3) noncash share-based compensation expense, (4) gain or loss on early extinguishment of debt, (5) gain or loss on conversion of convertible units and (6) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value. Adjusted EBITDA after Capex and Leasing Costs is a supplemental non-GAAP financial measure calculated by adjusting Adjusted EBITDA for (1) recurring capital expenditures and (2) leasing costs. Adjusted EBITDA Margin is a supplemental non-GAAP financial measure calculated as Adjusted EBITDA divided by total revenues, net of tenant charge-backs. Adjusted EBITDA after Capex and Leasing Costs Margin is a supplemental non-GAAP financial measure calculated as Adjusted EBITDA after Capex and Leasing costs divided by total revenues, net of tenant charge-backs. We consider these metrics to be meaningful financial measures of operating performance because they exclude the impact of various income and expense items that are not indicative of operating performance.


 
 
 
23

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)
The following is a reconciliation of net loss attributable to common shareholders, determined in accordance with GAAP, to EBITDA, Adjusted EBITDA, Adjusted EBITDA after Capex and Leasing Costs, Adjusted EBITDA Margin and Adjusted EBITDA after Capex and Leasing Costs Margin for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Net loss attributable to common shareholders
$
(186
)
 
$
(10,404
)
 
$
(1,676
)
 
$
(14,781
)
Dividends on preferred shares
15,282

 
7,412

 
28,869

 
12,981

Noncontrolling interest
(30
)
 
(761
)
 
(331
)
 
3,075

Net income (loss)
15,066

 
(3,753
)
 
26,862

 
1,275

Interest expense
28,392

 
35,481

 
60,281

 
66,458

Depreciation and amortization
72,716

 
79,604

 
146,669

 
149,121

EBITDA
$
116,174

 
$
111,332

 
$
233,812

 
$
216,854

 
 
 
 
 
 
 
 
Noncash share-based compensation - general and administrative
697

 
585

 
1,218

 
1,098

Noncash share-based compensation - property management
424

 
398

 
841

 
755

Acquisition fees and costs expensed
1,412

 
3,489

 
2,508

 
9,142

Net (gain) loss on sale / impairment of single-family properties and other
(896
)
 
68

 
(1,993
)
 
8

Loss on early extinguishment of debt
6,555

 
—

 
6,555

 
—

Gain on conversion of Series E units
—

 
—

 
—

 
(11,463
)
Remeasurement of participating preferred shares
1,640

 
150

 
7,050

 
450

Adjusted EBITDA
$
126,006

 
$
116,022

 
$
249,991

 
$
216,844

 
 
 
 
 
 
 
 
Recurring capital expenditures (1)
(9,096
)
 
(8,755
)
 
(15,540
)
 
(14,772
)
Leasing costs
(1,919
)
 
(2,151
)
 
(3,401
)
 
(4,080
)
Adjusted EBITDA after Capex and Leasing Costs
$
114,991

 
$
105,116

 
$
231,050

 
$
197,992

 
 
 
 
 
 
 
 
Total revenues
$
237,008

 
$
220,314

 
$
470,762

 
$
415,273

Less: tenant charge-backs
(27,382
)
 
(20,253
)
 
(55,755
)
 
(41,269
)
Total revenues, net of tenant charge-backs
$
209,626

 
$
200,061

 
$
415,007

 
$
374,004

 
 
 
 
 
 
 
 
Adjusted EBITDA Margin
60.1
%
 
58.0
%
 
60.2
%
 
58.0
%
 
 
 
 
 
 
 
 
Adjusted EBITDA after Capex and Leasing Costs Margin
54.9
%
 
52.5
%
 
55.7
%
 
52.9
%
(1)
As a portion of our homes are recently acquired and / or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual capital expenditures per Same-Home Property by (b) our total number of properties, excluding non-stabilized and held for sale properties.



 
 
 
24

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)
The following is a reconciliation of net loss attributable to common shareholders, determined in accordance with GAAP, to EBITDA and Adjusted EBITDA for the following trailing twelve-month periods (amounts in thousands):
 
 
For the Trailing Twelve Months Ended
 
 
Jun 30,
2017
 
Mar 31,
2017
 
Dec 31,
2016
 
Sep 30,
2016
 
Jun 30,
2016
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Net loss attributable to common shareholders
 
$
(20,437
)
 
$
(30,655
)
 
$
(33,542
)
 
$
(56,407
)
 
$
(63,871
)
Dividends on preferred shares
 
56,125

 
48,255

 
40,237

 
32,219

 
24,119

Noncontrolling interest
 
345

 
(386
)
 
3,751

 
13,949

 
9,742

Net income (loss)
 
36,033

 
17,214

 
10,446

 
(10,239
)
 
(30,010
)
Interest expense
 
124,670

 
131,759

 
130,847

 
127,183

 
118,198

Depreciation and amortization
 
296,225

 
303,113

 
298,677

 
286,676

 
279,084

EBITDA
 
456,928

 
452,086

 
439,970

 
403,620

 
367,272

 
 
 
 
 
 
 
 
 
 
 
Noncash share-based compensation - general and administrative
 
2,196

 
2,084

 
2,076

 
2,051

 
2,173

Noncash share-based compensation - property management
 
1,646

 
1,620

 
1,560

 
1,475

 
1,375

Acquisition fees and costs expensed
 
4,809

 
6,886

 
11,443

 
16,179

 
18,575

Net (gain) loss on sale / impairment of single-family properties and other
 
(11,600
)
 
(10,636
)
 
(9,599
)
 
(11,107
)
 
8

Loss on early extinguishment of debt
 
19,963

 
13,408

 
13,408

 
13,408

 
—

Gain on conversion of Series E units
 
—

 
—

 
(11,463
)
 
(11,463
)
 
(11,463
)
Remeasurement of Series E units
 
—

 
—

 
—

 
1,356

 
1,881

Remeasurement of participating preferred shares
 
13,620

 
12,130

 
7,020

 
5,470

 
5,980

Adjusted EBITDA
 
$
487,562

 
$
477,578

 
$
454,415

 
$
420,989

 
$
385,801


FFO / Core FFO / Adjusted FFO attributable to common share and unit holders
FFO attributable to common share and unit holders is a non-GAAP financial 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 or impairment of 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 attributable to common share and unit holders is a non-GAAP financial measure that we use as a supplemental measure of our performance. We compute this metric by adjusting FFO attributable to common share and unit holders for (1) acquisition fees and costs expensed incurred with recent business combinations and the acquisition of individual properties, (2) noncash share-based compensation expense, (3) noncash interest expense related to acquired debt, (4) gain or loss on early extinguishment of debt, (5) noncash gain or loss on conversion of convertible units and (6) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value.

Adjusted FFO attributable to common share and unit holders is a non-GAAP financial measure that we use as a supplemental measure of our performance. We compute this metric by adjusting Core FFO attributable to common share and unit holders for (1) recurring capital expenditures that are necessary to help preserve the value and maintain functionality of our properties and (2) actual leasing costs incurred during the period. As a portion of our homes are recently acquired and / or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual capital expenditures per Same-Home Property by (b) our total number of properties, excluding non-stabilized and held for sale properties.


 
 
 
25

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)
We present FFO attributable to common share and unit holders, as well as on a per FFO share and unit basis, because we consider this metric to be an important measure of the performance of real estate companies, as do many analysts in evaluating the Company. We believe that FFO attributable to common share and unit holders is a helpful measure of a REIT’s performance
since this metric 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.

We also believe that Core FFO and Adjusted FFO attributable to common share and unit holders, as well as on a per FFO share and unit basis, are helpful to investors as supplemental measures of the operating performance of the 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, Core FFO and Adjusted FFO attributable to common share and unit holders are not a substitute for net income (loss) per share or net cash flow provided by operating activities, as determined in accordance with GAAP, as a measure of our operating performance, liquidity or ability to pay dividends. These metrics also are not necessarily indicative of cash available to fund future cash needs. Because other REITs may not compute these measures in the same manner, they may not be comparable among REITs.

Refer to Funds from Operations for a reconciliation of these metrics to net income or loss attributable to common shareholders, determined in accordance with GAAP.

FFO Shares and Units
Includes weighted-average common shares and operating partnership units outstanding, as well as potentially dilutive securities.

Leased Property
A property is classified as leased upon the execution (i.e., signature) of a lease agreement.

Occupied Property
A property is classified as occupied upon commencement (i.e., start date) of a lease agreement, which can occur contemporaneously with or subsequent to execution (i.e., signature).


 
 
 
26

American Homes 4 Rent


Defined Terms and Non-GAAP Reconciliations (continued)
Platform Efficiency Percentage
Management costs, including (1) property management expenses, net of tenant charge-backs and excluding noncash share-based compensation expense, (2) general and administrative expense, excluding noncash share-based compensation expense and (3) leasing costs, as a percentage of total portfolio rents and fees.
 
For the Three Months Ended
Jun 30,
 
For the Six Months Ended
Jun 30,
 
2017
 
2016
 
2017
 
2016
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
Property management expenses
$
17,442

 
$
18,096

 
$
34,920

 
$
34,842

Less: tenant charge-backs
(1,143
)
 
(1,105
)
 
(2,604
)
 
(2,557
)
Less: noncash share-based compensation - property management
(424
)
 
(398
)
 
(841
)
 
(755
)
Property management expenses, net
15,875

 
16,593

 
31,475

 
31,530

 
 
 
 
 
 
 
 
General and administrative expense
8,926

 
7,931

 
18,221

 
16,501

Less: noncash share-based compensation - general and administrative
(697
)
 
(585
)
 
(1,218
)
 
(1,098
)
General and administrative expense, net
8,229

 
7,346

 
17,003

 
15,403

 
 
 
 
 
 
 
 
Leasing costs
1,919

 
2,151

 
3,401

 
4,080

Platform costs
$
26,023

 
$
26,090

 
$
51,879

 
$
51,013

 
 
 
 
 
 
 
 
Rents from single-family properties
$
204,648

 
$
193,491

 
$
405,755

 
$
361,486

Fees from single-family properties
2,690

 
2,724

 
5,294

 
4,921

Total portfolio rents and fees
$
207,338

 
$
196,215

 
$
411,049

 
$
366,407

 
 
 
 
 
 
 
 
Platform Efficiency Percentage
12.6
%
 
13.3
%
 
12.6
%
 
13.9
%

Same-Home Property
A property is classified as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the earliest period presented under comparison. A property is removed from Same-Home if it has been classified as held for sale or has been taken out of service as a result of a casualty loss.

Stabilized Property
A property acquired individually (i.e., not through a bulk purchase) is classified as stabilized once it has been renovated or newly constructed and then initially leased or available for rent for a period greater than 90 days. Properties acquired through a bulk purchase are considered stabilized, as an entire group, provided (1) we have owned them for an adequate period of time to allow for complete on-boarding to our operating platform, and (2) a substantial portion of the properties have experienced tenant turnover at least once under our ownership, providing the opportunity for renovations and improvements to meet our property standards.

Total Debt
Includes principal balances on asset-backed securitizations, exchangeable senior notes, secured notes payable and borrowings outstanding under our revolving credit facility and term loan facility as of period end, and excludes unamortized discounts on acquired debt, the value of exchangeable senior notes classified within equity and unamortized deferred financing costs.

Total Market Capitalization
Includes the market value of all outstanding common shares and operating partnership units (based on the NYSE AMH Class A common share closing price as of period end), the current liquidation value of preferred shares as of period end and Total Debt.

Turnover Rate
The number of tenant move-outs during the period, divided by the total number of properties.

 
 
 
27

Executive Management
 
 
 
David P. Singelyn
 
Jack Corrigan
Chief Executive Officer
 
Chief Operating Officer
 
 
 
Diana M. Laing
 
Sara H. Vogt-Lowell
Chief Financial Officer
 
Chief Legal Officer
 
 
 
David Goldberg
 
Stephanie Heim
Executive Vice President
 
Executive Vice President - Counsel & Assistant Secretary
 
 
 
Christopher C. Lau
 
Bryan Smith
Executive Vice President - Finance
 
Executive Vice President - President of Property Management
 
 
 
Corporate Information
 
Investor Relations
 
 
 
American Homes 4 Rent
 
(855) 794-AH4R (2447)
30601 Agoura Road, Suite 200
 
investors@ah4r.com
Agoura Hills, CA 91301
 
 
(805) 413-5300
 
 
www.americanhomes4rent.com
 
 
mapwwinstonsalemnca01.jpg

Analyst Coverage (1)
 
 
 
 
 
 
 
Bank of America Merrill Lynch
Credit Suisse
Evercore ISI
FBR Capital Markets & Co
Juan Sanabria
Douglas Harter
Steve Sakwa
David Corak
juan.sanabria@baml.com
douglas.harter@credit-suisse.com
steve.sakwa@evercoreisi.com
dcorak@fbr.com
 
 
 
 
Green Street Advisors
GS Global Investment Research
JMP Securities
JP Morgan Securities
John Pawlowski
Andrew Rosivach
Aaron Hecht
Anthony Paolone
jpawlowski@greenst.com
andrew.rosivach@gs.com
ahecht@jmpsecurities.com
anthony.paolone@jpmorgan.com
 
 
 
 
Keefe, Bruyette & Woods, Inc.
Mizuho Securities USA Inc.
Morgan Stanley
Raymond James & Associates, Inc.
Jade Rahmani
Haendel St. Juste
Richard Hill
Buck Horne
jrahmani@kbw.com
haendel.st.juste@mizuho-sc.com
richard.hill1@morganstanley.com
buck.horne@raymondjames.com
 
 
 
 
Wells Fargo Securities
Zelman & Associates
 
 
Jeff Donnelly
Dennis McGill
 
 
jeff.donnelly@wellsfargo.com
dennis@zelmanassociates.com
 
 

(1)
The sell-side analysts listed above follow American Homes 4 Rent ("AMH"). Any opinions, estimates or forecasts regarding AMH's performance made by these analysts are theirs alone and do not represent the opinions, forecasts or predictions of AMH or its management. AMH does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions, or recommendations. The above list may not be complete and is subject to change as firms add or discontinue coverage.