AGOURA HILLS, Calif.,
Nov. 2, 2017 /PRNewswire/ -- 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 September 30, 2017.
Highlights
- Total revenues increased 4.6% to $246.8
million for the third quarter of 2017 from $236.1 million for the third quarter of
2016.
- Net income attributable to common shareholders totaled
$1.5 million, and a $0.00 loss per diluted share, for the third
quarter of 2017, compared to a net loss attributable to common
shareholders of $21.2 million, or a
$0.09 loss per diluted share, for the
third quarter of 2016.
- Hurricanes Harvey and Irma impacted certain properties in our
Houston, Florida and Southeast markets, resulting in
net hurricane-related charges of $10.1
million during the quarter, which have been excluded from
Core Funds from Operations attributable to common share and unit
holders, Adjusted Funds from Operations attributable to common
share and unit holders and our total and Same-Home operating
results (see Other Events).
- Core Funds from Operations attributable to common share and
unit holders for the third quarter of 2017 was $79.4 million, or $0.25 per FFO share and unit, compared to
$69.1 million, or $0.24 per FFO share and unit, for the same period
in 2016, which represents a 4.2% increase on a per share and unit
basis.
- Adjusted Funds from Operations attributable to common share and
unit holders for the third quarter of 2017 was $65.8 million, or $0.20 per FFO share and unit, compared to
$56.6 million, or $0.19 per FFO share and unit, for the same period
in 2016, which represents a 5.3% increase on a per share and unit
basis.
- Increased Core Net Operating Income ("Core NOI") margin on
Same-Home properties to 63.3% for the third quarter of 2017,
compared to 61.7% for the same period in 2016.
- Increased Core NOI after capital expenditures from Same-Home
properties by 5.5% year over year for the quarter ended
September 30, 2017.
- Maintained solid Same-Home portfolio leasing percentage of
95.2%, as of September 30, 2017.
- Achieved rental rate growth with 4.9% and 3.6% rental rate
increases on new and renewal leases, respectively, during the
quarter ended September 30,
2017.
- Issued 4,600,000 5.875% Series G perpetual preferred shares and
13,800,000 Class A common shares, raising gross proceeds of
$115.0 million and $312.0 million, respectively, before offering
costs.
- Converted the Series A and B participating preferred shares
into 12,398,276 Class A common shares in October 2017 (see Capital Activities and Balance
Sheet).
"Our strong third quarter results, including a 5.5% increase in
Core NOI after capital expenditures from our Same-Home properties,
while facing unprecedented back-to-back hurricanes, is a true
testament to the quality of our people, platform and systems,"
stated David Singelyn, American
Homes 4 Rent's Chief Executive Officer. "I am also pleased
with the progress we have made executing our strategic growth plan,
which exceeded our third quarter 2017 acquisition target. As
we approach the end of 2017, I remain bullish on the future of
American Homes 4 Rent and our unique opportunity to drive value for
our shareholders using our sector-leading investment grade balance
sheet."
Third Quarter 2017 Financial Results
Total revenues increased 4.6% to $246.8
million for the third quarter of 2017 from $236.1 million for the third quarter of 2016.
Revenue growth was primarily driven by continued strong acquisition
and leasing activity, as our average leased portfolio grew to
46,058 homes for the quarter ended September 30, 2017,
compared to 44,738 homes for the quarter ended September 30,
2016.
Net income attributable to common shareholders totaled
$1.5 million, and a $0.00 loss per diluted share, for the third
quarter of 2017, compared to a net loss attributable to common
shareholders of $21.2 million, or a
$0.09 loss per diluted share, for the
third quarter of 2016. This improvement was primarily attributable
to higher revenues and the remeasurement of our participating
preferred shares, partially offset by hurricane-related charges in
the third quarter of 2017, as well as a loss on early
extinguishment of debt in the third quarter of 2016.
Core NOI from Same-Home properties increased 5.0% to
$100.5 million for the third quarter
of 2017, compared to $95.7 million
for the third quarter of 2016. After capital expenditures, Core NOI
from Same-Home properties increased 5.5% to $91.5 million for the third quarter of 2017,
compared to $86.7 million for the
third quarter of 2016. These increases were primarily due to rental
rate growth and lower core property operating expenses.
Core NOI on our total portfolio increased 9.2% to $131.5 million for the third quarter of 2017,
compared to $120.4 million for the
third quarter of 2016. This increase was primarily due to 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 $79.4 million, or $0.25 per FFO share and unit, for the third
quarter of 2017, compared to $69.1
million, or $0.24 per FFO
share and unit, for the third 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 third
quarter of 2017 was $65.8 million, or
$0.20 per FFO share and unit,
compared to $56.6 million, or
$0.19 per FFO share and unit, for the
third quarter of 2016. This improvement was primarily attributable
to 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 10.2% to $717.6
million for the nine-month period ended September 30,
2017, from $651.3 million for the
nine-month period ended September 30, 2016. Revenue growth was
primarily driven by continued strong acquisition and leasing
activity, as our average leased portfolio grew to 45,550 homes for
the nine-month period ended September 30, 2017, compared to
42,583 homes for the nine-month period ended September 30,
2016.
Net loss attributable to common shareholders totaled
$0.1 million, or a $0.00 loss per diluted share, for the nine-month
period ended September 30, 2017, compared to a net loss
attributable to common shareholders of $35.9
million, or a $0.15 loss per
diluted share, for the nine-month period ended September 30,
2016. This improvement was primarily attributable to higher
revenues and lower interest expense, partially offset by increases
in property operating expenses and preferred dividends.
Core NOI from Same-Home properties increased 6.4% to
$306.0 million for the nine-month
period ended September 30, 2017, compared to $287.7 million for the nine-month period ended
September 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
7.3% to $284.9 million for the
nine-month period ended September 30, 2017, compared to
$265.5 million for the nine-month
period ended September 30, 2016. This additional improvement
was attributable to our operational enhancements, which resulted in
lower levels of capital expenditures.
Core NOI on our total portfolio increased 13.6% to $394.9 million for the nine-month period ended
September 30, 2017, compared to $347.5
million for the nine-month period ended September 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
$237.6 million, or $0.76 per FFO share and unit, for the nine-month
period ended September 30, 2017, compared to $206.2 million, or $0.72 per FFO share and unit, for the nine-month
period ended September 30, 2016. Adjusted FFO attributable to
common share and unit holders for the nine-month period ended
September 30, 2017, was $205.1
million, or $0.66 per FFO
share and unit, compared to $174.8
million, or $0.61 per FFO
share and unit, for the nine-month period ended September 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 September 30, 2017, the Company had 46,026 leased
properties, a decrease of 63 properties from June 30, 2017. As
of September 30, 2017, the leased percentage on Same-Home
properties was 95.2%, compared to 96.5% as of June 30,
2017.
Investments
As of September 30, 2017, the Company's total portfolio
consisted of 50,015 homes, including 469 homes held for sale,
compared to 48,982 homes as of June 30, 2017, including 582
homes held for sale, an increase of 1,033 homes, which included
1,143 homes acquired and 110 homes sold or rescinded (including 67
former ARPI properties).
Capital Activities and Balance Sheet
In the third quarter of 2017, the Company established a new
at-the-market common share offering program, which replaced the
original at-the-market program, under which the Company may issue
Class A common shares from time to time through various sales
agents up to an aggregate of $500.0
million. The Company may suspend or terminate the program at
any time.
In the third quarter of 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.
In the third quarter of 2017, the Company issued 13,800,000
Class A common shares of beneficial interest, $0.01 par value per share, in an underwritten
public offering, raising gross proceeds of $312.0 million before offering costs of
approximately $9.2 million.
As of September 30, 2017, the Company had cash and cash
equivalents of $243.5 million and had
total outstanding debt of $2.4
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 4.12% and a weighted-average term to
maturity of 15.3 years. The Company's $800.0
million revolving credit facility and $200.0 million term loan facility had outstanding
borrowings of zero and $200.0
million, respectively, at the end of the quarter.
On October 3, 2017, the Company
converted all 5,060,000 shares of the outstanding 5.0% Series A
participating preferred shares and all 4,400,000 shares of the
outstanding 5.0% Series B participating preferred shares into Class
A common shares, in accordance with the conversion terms in the
Articles Supplementary. This resulted in 12,398,276 total Class A
common shares issued from the conversion, based on a conversion
ratio of 1.3106 Class A common shares issued per Series A and B
participating preferred share.
Other Events
Hurricanes Harvey and Irma impacted certain properties in our
Houston, Florida and Southeast markets during the third
quarter of 2017. Approximately 140 homes sustained major damage and
nearly 3,400 homes incurred minor damage, consisting primarily of
downed trees and damaged roofs and fences. The Company's property
and casualty insurance policies provide coverage for wind and flood
damage, as well as business interruption costs, during the period
of remediation and repairs, subject to deductibles and limits.
During the third quarter of 2017, the Company recognized a
$12.6 million impairment charge on
impacted properties, of which we expect to recover $11.0 million through insurance claims, and
accrued $8.5 million of additional
repair, remediation and other costs. Of the $10.1 million of net hurricane-related charges
recorded in the quarter, which have been excluded from Core Funds
from Operations attributable to common share and unit holders,
Adjusted Funds from Operations attributable to common share and
unit holders and our total and Same-Home operating results,
$5.8 million related to nearly 2,400
homes in the current Same-Home portfolio. The previously reported
Same-Home portfolio has been revised to exclude approximately 100
homes that sustained major damages.
Additional Information
A copy of the Company's Third 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, November 3, 2017,
at 11:00 a.m. Eastern Time to discuss
the Company's financial results for the quarter ended
September 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, November 17, 2017, by calling (844)
512-2921 (U.S. and Canada) or
(412) 317-6671 (international), replay passcode number 13671946#,
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 September 30, 2017, we owned 50,015
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, the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, and in the Company's subsequent
filings with the SEC.
American Homes 4
Rent
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
thousands, except share data)
|
|
|
September 30,
2017
|
|
December 31,
2016
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Single-family
properties:
|
|
|
|
Land
|
$
|
1,600,906
|
|
|
$
|
1,512,183
|
|
Buildings and
improvements
|
7,020,774
|
|
|
6,614,953
|
|
Single-family
properties held for sale, net
|
50,370
|
|
|
87,430
|
|
|
8,672,050
|
|
|
8,214,566
|
|
Less: accumulated
depreciation
|
(869,551)
|
|
|
(666,710)
|
|
Single-family
properties, net
|
7,802,499
|
|
|
7,547,856
|
|
Cash and cash
equivalents
|
243,547
|
|
|
118,799
|
|
Restricted
cash
|
119,574
|
|
|
131,442
|
|
Rent and other
receivables, net
|
35,429
|
|
|
17,618
|
|
Escrow deposits,
prepaid expenses and other assets
|
149,366
|
|
|
133,594
|
|
Deferred costs and
other intangibles, net
|
13,516
|
|
|
11,956
|
|
Asset-backed
securitization certificates
|
25,666
|
|
|
25,666
|
|
Goodwill
|
120,279
|
|
|
120,279
|
|
Total
assets
|
$
|
8,509,876
|
|
|
$
|
8,107,210
|
|
|
|
|
|
Liabilities
|
|
|
|
Revolving credit
facility
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility,
net
|
197,913
|
|
|
321,735
|
|
Asset-backed
securitizations, net
|
1,981,444
|
|
|
2,442,863
|
|
Exchangeable senior
notes, net
|
110,771
|
|
|
108,148
|
|
Secured note
payable
|
49,107
|
|
|
49,828
|
|
Accounts payable and
accrued expenses
|
263,745
|
|
|
177,206
|
|
Participating
preferred shares derivative liability
|
68,469
|
|
|
69,810
|
|
Total
liabilities
|
2,671,449
|
|
|
3,169,590
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Shareholders'
equity:
|
|
|
|
Class A common
shares, $0.01 par value per share, 450,000,000 shares authorized,
273,605,703 and 242,740,482 shares issued and outstanding at
September 30, 2017, and December 31, 2016,
respectively
|
2,736
|
|
|
2,427
|
|
Class B common
shares, $0.01 par value per share, 50,000,000 shares authorized,
635,075 shares issued and outstanding at September 30, 2017, and
December 31, 2016
|
6
|
|
|
6
|
|
Preferred shares,
$0.01 par value per share, 100,000,000 shares authorized,
47,810,000 and 37,010,000 shares issued and outstanding at
September 30, 2017, and December 31, 2016,
respectively
|
478
|
|
|
370
|
|
Additional paid-in
capital
|
5,517,978
|
|
|
4,568,616
|
|
Accumulated
deficit
|
(417,609)
|
|
|
(378,578)
|
|
Accumulated other
comprehensive income
|
—
|
|
|
95
|
|
Total shareholders'
equity
|
5,103,589
|
|
|
4,192,936
|
|
|
|
|
|
Noncontrolling
interest
|
734,838
|
|
|
744,684
|
|
Total
equity
|
5,838,427
|
|
|
4,937,620
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
8,509,876
|
|
|
$
|
8,107,210
|
|
American Homes 4
Rent
|
Condensed
Consolidated Statements of Operations
|
(Amounts in
thousands, except share and per share data)
|
(Unaudited)
|
|
|
For the Three Months Ended September
30,
|
|
For the Nine Months Ended September
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
Rents from
single-family properties
|
$
|
207,490
|
|
|
$
|
197,137
|
|
|
$
|
613,245
|
|
|
$
|
558,623
|
|
Fees from
single-family properties
|
2,843
|
|
|
2,898
|
|
|
8,137
|
|
|
7,819
|
|
Tenant
charge-backs
|
36,094
|
|
|
30,808
|
|
|
91,849
|
|
|
72,077
|
|
Other
|
409
|
|
|
5,214
|
|
|
4,367
|
|
|
12,811
|
|
Total
revenues
|
246,836
|
|
|
236,057
|
|
|
717,598
|
|
|
651,330
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Property operating
expenses
|
97,944
|
|
|
92,488
|
|
|
267,203
|
|
|
238,987
|
|
Property management
expenses
|
17,447
|
|
|
18,335
|
|
|
52,367
|
|
|
53,177
|
|
General and
administrative expense
|
8,525
|
|
|
8,043
|
|
|
26,746
|
|
|
24,544
|
|
Interest
expense
|
26,592
|
|
|
32,851
|
|
|
86,873
|
|
|
99,309
|
|
Acquisition fees and
costs expensed
|
1,306
|
|
|
1,757
|
|
|
3,814
|
|
|
10,899
|
|
Depreciation and
amortization
|
74,790
|
|
|
75,392
|
|
|
221,459
|
|
|
224,513
|
|
Hurricane-related
charges, net
|
10,136
|
|
|
—
|
|
|
10,136
|
|
|
—
|
|
Other
|
1,285
|
|
|
3,142
|
|
|
4,202
|
|
|
6,482
|
|
Total
expenses
|
238,025
|
|
|
232,008
|
|
|
672,800
|
|
|
657,911
|
|
|
|
|
|
|
|
|
|
Gain on sale of
single-family properties and other, net
|
1,895
|
|
|
11,682
|
|
|
6,375
|
|
|
12,574
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
(13,408)
|
|
|
(6,555)
|
|
|
(13,408)
|
|
Gain on conversion of
Series E units
|
—
|
|
|
—
|
|
|
—
|
|
|
11,463
|
|
Remeasurement of
participating preferred shares
|
8,391
|
|
|
(2,490)
|
|
|
1,341
|
|
|
(2,940)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
19,097
|
|
|
(167)
|
|
|
45,959
|
|
|
1,108
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
309
|
|
|
7,316
|
|
|
(22)
|
|
|
10,391
|
|
Dividends on
preferred shares
|
17,253
|
|
|
13,669
|
|
|
46,122
|
|
|
26,650
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders
|
$
|
1,535
|
|
|
$
|
(21,152)
|
|
|
$
|
(141)
|
|
|
$
|
(35,933)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
266,767,313
|
|
|
238,401,343
|
|
|
256,768,343
|
|
|
232,036,802
|
|
Diluted
|
289,153,060
|
|
|
238,401,343
|
|
|
256,768,343
|
|
|
232,036,802
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders per share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.01
|
|
|
$
|
(0.09)
|
|
|
$
|
—
|
|
|
$
|
(0.15)
|
|
Diluted
|
$
|
—
|
|
|
$
|
(0.09)
|
|
|
$
|
—
|
|
|
$
|
(0.15)
|
|
Non-GAAP Financial Measures
This press release and the Third Quarter 2017 Earnings Release
and Supplemental Information Package include Funds from Operations
attributable to common share and unit holders ("FFO attributable to
common share and unit holders"), Core FFO attributable to common
share and unit holders, Adjusted FFO attributable to common share
and unit holders, Core NOI, Same-Home Core NOI and Same-Home Core
NOI After Capital Expenditures, which are non-GAAP financial
measures. We believe these measures are helpful in understanding
our financial performance and are widely used in the REIT industry.
Because other REITs may not compute these financial measures in the
same manner, they may not be comparable among REITs. In addition,
these metrics are not substitutes for net income / (loss) or net
cash flows from operating activities, as defined by GAAP, as
measures of our operating performance, liquidity or ability to pay
dividends. Reconciliations of these non-GAAP financial measures to
the most directly comparable GAAP measures are included in this
press release and in the Third Quarter 2017 Earnings Release and
Supplemental Information Package.
Funds from Operations attributable to common
share and unit holders
The following is a reconciliation of net income (loss)
attributable to common shareholders to FFO attributable to common
share and unit holders, Core FFO attributable to common share and
unit holders and Adjusted FFO attributable to common share and unit
holders for the three and nine months ended September 30, 2017
and 2016 (amounts in thousands, except share and per share
data):
|
For the Three
Months Ended September
30,
|
|
For the Nine
Months Ended September
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Net income (loss)
attributable to common shareholders
|
$
|
1,535
|
|
|
$
|
(21,152)
|
|
|
$
|
(141)
|
|
|
$
|
(35,933)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Noncontrolling
interests in the Operating Partnership
|
340
|
|
|
7,542
|
|
|
(30)
|
|
|
10,838
|
|
Net (gain) on sale /
impairment of single-family properties and other
|
(596)
|
|
|
(11,115)
|
|
|
(2,589)
|
|
|
(11,107)
|
|
Depreciation and
amortization of real estate assets
|
73,037
|
|
|
73,790
|
|
|
215,409
|
|
|
220,168
|
|
FFO attributable to
common share and unit holders
|
$
|
74,316
|
|
|
$
|
49,065
|
|
|
$
|
212,649
|
|
|
$
|
183,966
|
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition fees and
costs expensed
|
1,306
|
|
|
1,757
|
|
|
3,814
|
|
|
10,899
|
|
Noncash share-based
compensation - general and administrative
|
699
|
|
|
480
|
|
|
1,917
|
|
|
1,578
|
|
Noncash share-based
compensation - property management
|
417
|
|
|
411
|
|
|
1,258
|
|
|
1,166
|
|
Noncash interest
expense related to acquired debt
|
910
|
|
|
1,474
|
|
|
2,624
|
|
|
3,699
|
|
Hurricane-related
charges, net
|
10,136
|
|
|
—
|
|
|
10,136
|
|
|
—
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
13,408
|
|
|
6,555
|
|
|
13,408
|
|
Gain on conversion of
Series E units
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,463)
|
|
Remeasurement of
participating preferred shares
|
(8,391)
|
|
|
2,490
|
|
|
(1,341)
|
|
|
2,940
|
|
Core FFO attributable
to common share and unit holders
|
$
|
79,393
|
|
|
$
|
69,085
|
|
|
$
|
237,612
|
|
|
$
|
206,193
|
|
Recurring capital
expenditures (1)
|
(11,600)
|
|
|
(10,411)
|
|
|
(27,140)
|
|
|
(25,183)
|
|
Leasing
costs
|
(1,960)
|
|
|
(2,119)
|
|
|
(5,361)
|
|
|
(6,199)
|
|
Adjusted FFO
attributable to common share and unit holders
|
$
|
65,833
|
|
|
$
|
56,555
|
|
|
$
|
205,111
|
|
|
$
|
174,811
|
|
|
|
|
|
|
|
|
|
Per FFO share and
unit:
|
|
|
|
|
|
|
|
FFO attributable to
common share and unit holders
|
$
|
0.23
|
|
|
$
|
0.17
|
|
|
$
|
0.68
|
|
|
$
|
0.64
|
|
Core FFO attributable
to common share and unit holders
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
0.76
|
|
|
$
|
0.72
|
|
Adjusted FFO
attributable to common share and unit holders
|
$
|
0.20
|
|
|
$
|
0.19
|
|
|
$
|
0.66
|
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
Weighted-average FFO
shares and units:
|
|
|
|
|
|
|
|
Common shares
outstanding
|
266,767,313
|
|
|
238,401,343
|
|
|
256,768,343
|
|
|
232,036,802
|
|
Share-based
compensation plan (2)
|
736,456
|
|
|
—
|
|
|
746,643
|
|
|
—
|
|
Operating partnership
units
|
55,535,824
|
|
|
55,557,147
|
|
|
55,547,386
|
|
|
55,287,787
|
|
Total
weighted-average FFO shares and units
|
323,039,593
|
|
|
293,958,490
|
|
|
313,062,372
|
|
|
287,324,589
|
|
|
|
(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.
|
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) hurricane-related charges, net, (5)
gain or loss on early extinguishment of debt, (6) noncash gain or
loss on conversion of convertible units and (7) 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.
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.
Core Net Operating Income
Core NOI, which we also present separately for our Same-Home
portfolio, is a supplemental non-GAAP financial measure that we
define as core revenues, 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. Our Same-Home portfolio consists
of our single-family properties that have been stabilized longer
than 90 days prior to the beginning of the earliest period
presented, and that have not been classified as held for sale or
taken out of service as a result of a casualty loss.
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) hurricane-related charges, net, (5)
gain or loss on sales of single-family properties and other, (6)
depreciation and amortization, (7) acquisition fees and costs
expensed incurred with recent business combinations and the
acquisition of individual properties, (8) noncash share-based
compensation expense, (9) interest expense, (10) general and
administrative expense, (11) other expenses and (12) 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).
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 three and nine months ended September 30,
2017 and 2016 (amounts in thousands):
|
For the Three
Months Ended September
30,
|
|
For the Nine
Months Ended September
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Core
revenues
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
246,836
|
|
|
$
|
236,057
|
|
|
$
|
717,598
|
|
|
$
|
651,330
|
|
Tenant
charge-backs
|
(36,094)
|
|
|
(30,808)
|
|
|
(91,849)
|
|
|
(72,077)
|
|
Bad debt
expense
|
(2,299)
|
|
|
(2,609)
|
|
|
(5,142)
|
|
|
(5,092)
|
|
Other
revenues
|
(409)
|
|
|
(5,214)
|
|
|
(4,367)
|
|
|
(12,811)
|
|
Core
revenues
|
$
|
208,034
|
|
|
$
|
197,426
|
|
|
$
|
616,240
|
|
|
$
|
561,350
|
|
|
|
|
|
|
|
|
|
Core property
operating expenses
|
|
|
|
|
|
|
|
Property operating
expenses
|
$
|
97,944
|
|
|
$
|
92,488
|
|
|
$
|
267,203
|
|
|
$
|
238,987
|
|
Property management
expenses
|
17,447
|
|
|
18,335
|
|
|
52,367
|
|
|
53,177
|
|
Noncash share-based
compensation - property management
|
(417)
|
|
|
(411)
|
|
|
(1,258)
|
|
|
(1,166)
|
|
Expenses reimbursed
by tenant charge-backs
|
(36,094)
|
|
|
(30,808)
|
|
|
(91,849)
|
|
|
(72,077)
|
|
Bad debt
expense
|
(2,299)
|
|
|
(2,609)
|
|
|
(5,142)
|
|
|
(5,092)
|
|
Core property
operating expenses
|
$
|
76,581
|
|
|
$
|
76,995
|
|
|
$
|
221,321
|
|
|
$
|
213,829
|
|
|
|
For the Three
Months Ended September
30,
|
|
For the Nine
Months Ended September
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Core NOI,
Same-Home Core NOI and Same-Home Core NOI After Capital
Expenditures
|
Net income
(loss)
|
$
|
19,097
|
|
|
$
|
(167)
|
|
|
$
|
45,959
|
|
|
$
|
1,108
|
|
Remeasurement of
participating preferred shares
|
(8,391)
|
|
|
2,490
|
|
|
(1,341)
|
|
|
2,940
|
|
Gain on conversion of
Series E units
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,463)
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
13,408
|
|
|
6,555
|
|
|
13,408
|
|
Hurricane-related
charges, net
|
10,136
|
|
|
—
|
|
|
10,136
|
|
|
—
|
|
Gain on sale of
single-family properties and other, net
|
(1,895)
|
|
|
(11,682)
|
|
|
(6,375)
|
|
|
(12,574)
|
|
Depreciation and
amortization
|
74,790
|
|
|
75,392
|
|
|
221,459
|
|
|
224,513
|
|
Acquisition fees and
costs expensed
|
1,306
|
|
|
1,757
|
|
|
3,814
|
|
|
10,899
|
|
Noncash share-based
compensation - property management
|
417
|
|
|
411
|
|
|
1,258
|
|
|
1,166
|
|
Interest
expense
|
26,592
|
|
|
32,851
|
|
|
86,873
|
|
|
99,309
|
|
General and
administrative expense
|
8,525
|
|
|
8,043
|
|
|
26,746
|
|
|
24,544
|
|
Other
expenses
|
1,285
|
|
|
3,142
|
|
|
4,202
|
|
|
6,482
|
|
Other
revenues
|
(409)
|
|
|
(5,214)
|
|
|
(4,367)
|
|
|
(12,811)
|
|
Tenant
charge-backs
|
36,094
|
|
|
30,808
|
|
|
91,849
|
|
|
72,077
|
|
Expenses reimbursed
by tenant charge-backs
|
(36,094)
|
|
|
(30,808)
|
|
|
(91,849)
|
|
|
(72,077)
|
|
Bad debt expense
excluded from operating expenses
|
2,299
|
|
|
2,609
|
|
|
5,142
|
|
|
5,092
|
|
Bad debt expense
included in revenues
|
(2,299)
|
|
|
(2,609)
|
|
|
(5,142)
|
|
|
(5,092)
|
|
Core NOI
|
131,453
|
|
|
120,431
|
|
|
394,919
|
|
|
347,521
|
|
Less: Non-Same-Home
Core NOI
|
30,957
|
|
|
24,761
|
|
|
88,911
|
|
|
59,801
|
|
Same-Home Core
NOI
|
100,496
|
|
|
95,670
|
|
|
306,008
|
|
|
287,720
|
|
Less: Same-Home
capital expenditures
|
8,968
|
|
|
8,949
|
|
|
21,077
|
|
|
22,223
|
|
Same-Home Core NOI
After Capital Expenditures
|
$
|
91,528
|
|
|
$
|
86,721
|
|
|
$
|
284,931
|
|
|
$
|
265,497
|
|
Contact:
American Homes 4 Rent
Investor Relations
Phone: (855) 794-2447
Email: investors@ah4r.com
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SOURCE American Homes 4 Rent