American Homes 4 Rent Reports First Quarter 2019 Financial and Operating Results – Wire Real Estate

American Homes 4 Rent Reports First Quarter 2019 Financial and Operating Results




May 3, 2019

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AGOURA HILLS, Calif.— 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 March 31, 2019.

Highlights

  • Total revenues increased 8.2% to $279.2 million for the first quarter of 2019 from $258.0 million for the first quarter of 2018.
  • Net income attributable to common shareholders totaled $16.3 million, or $0.05 per diluted share, for the first quarter of 2019, compared to net income attributable to common shareholders of $5.8 million, or $0.02 per diluted share, for the first quarter of 2018.
  • Core Funds from Operations attributable to common share and unit holders for the first quarter of 2019 was $95.7 million, or $0.27 per FFO share and unit, compared to $83.2 million, or $0.24 per FFO share and unit, for the same period in 2018, which represents an 11.6% increase on a per share and unit basis.
  • Adjusted Funds from Operations attributable to common share and unit holders for the first quarter of 2019 was $86.9 million, or $0.25 per FFO share and unit, compared to $74.7 million, or $0.22 per FFO share and unit, for the same period in 2018.
  • Core Net Operating Income (“Core NOI”) margin on Same-Home properties was 64.5% for the first quarter of 2019, compared to 63.8% for the same period in 2018.
  • Core NOI after capital expenditures from Same-Home properties increased by 5.3% year-over-year for the first quarter of 2019.
  • Same-Home portfolio Average Occupied Days Percentage increased to 95.5% for the first quarter of 2019, compared to 94.8% for the first quarter of 2018, while achieving 3.2% growth in Average Monthly Realized Rent per property for the same comparable periods.
  • In January 2019 we issued $400.0 million of 4.90% unsecured senior notes due 2029 (see “Capital Activities and Balance Sheet”).

“American Homes 4 Rent is off to a great start for 2019 with strong operational execution driving a nearly 12% year-over-year increase in Core FFO per share,” stated David Singelyn, American Homes 4 Rent’s Chief Executive Officer. “I am proud of our team’s hard work and dedication, which is evident in our robust 5.3% year-over-year growth in quarterly Core NOI after capital expenditures from Same-Home properties. With the strength of our best-in-class operating platform and solid start to the year, we are ideally positioned to capture the upcoming wave of spring leasing season demand and are confident in our ability to continue delivering consistent operating results for our shareholders.”

First Quarter 2019 Financial Results

On January 1, 2019, the Company adopted the new lease accounting standard, ASU No. 2016-2, which prospectively results in a larger portion of internal leasing costs being expensed that were previously capitalized. For purposes of comparability, applicable prior period non-GAAP financial metrics have been conformed to reflect the new lease accounting standard. Refer to non-GAAP Financial Measures for further information.

Net income attributable to common shareholders totaled $16.3 million, or $0.05 per diluted share, for the first quarter of 2019, compared to net income attributable to common shareholders of $5.8 million, or $0.02 per diluted share, for the first quarter of 2018. This increase was primarily attributable to higher revenues resulting from a larger number of occupied properties and higher rental rates, partially offset by increases in property operating and depreciation expense resulting from growth in our property count and higher interest expense.

Total revenues increased 8.2% to $279.2 million for the first quarter of 2019 from $258.0 million for the first quarter of 2018. Revenue growth was primarily driven by continued strong acquisition and leasing activity, as our average occupied portfolio grew to 48,345 homes for the quarter ended March 31, 2019, compared to 46,855 homes for the quarter ended March 31, 2018, as well as higher rental rates.   

Core NOI on our total portfolio increased 11.2% to $150.6 million for the first quarter of 2019, compared to $135.5 millionfor the first quarter of 2018. This increase was primarily due to growth in rental income resulting from a larger number of occupied properties, partially offset by higher property tax expense.

Core revenues from Same-Home properties increased 4.2% to $187.8 million for the first quarter of 2019, compared to $180.2 million for the first quarter of 2018. This growth was primarily driven by a 3.2% increase in Average Monthly Realized Rent and an increase in Average Occupied Days Percentage to 95.5% from 94.8%. Core property operating expenses from Same-Home properties increased 2.1% from $65.3 million for the first quarter of 2018 to $66.7 million for the first quarter of 2019, which was primarily attributable to annual increases in property tax expense and higher HOA fees, net. These increases were offset partially by year-over-year savings in repairs and maintenance and turnover costs, net and property management expenses, net due to lower turnover costs on improved tenant retention and above average levels of expenditures in the first quarter of 2018. As a result, Core NOI from Same-Home properties increased 5.4% to $121.1 million for the first quarter of 2019, compared to $114.9 million for the first quarter of 2018. After capital expenditures, which reflect the expansion of our strategic preventative maintenance program, Core NOI from Same-Home properties increased 5.3% to $114.7 million for the first quarter of 2019, compared to $108.9 million for the first quarter of 2018.

Core Funds from Operations attributable to common share and unit holders (“Core FFO attributable to common share and unit holders”) was $95.7 million, or $0.27 per FFO share and unit, for the first quarter of 2019, compared to $83.2 million, or $0.24 per FFO share and unit, for the first quarter of 2018. Adjusted Funds from Operations attributable to common share and unit holders (“Adjusted FFO attributable to common share and unit holders”) for the first quarter of 2019 was $86.9 million, or $0.25 per FFO share and unit, compared to $74.7 million, or $0.22 per FFO share and unit, for the first quarter of 2018. This improvement was primarily attributable to increases in rental revenue driven by a larger number of leased properties and higher rental rates, partially offset by higher property tax expense.

Portfolio

As of March 31, 2019, the Company had an occupancy percentage of 95.6%, compared to 94.1% as of December 31, 2018. The occupancy percentage on Same-Home properties was 96.7% as of March 31, 2019, compared to 95.8% as of December 31, 2018.

Investments

As of March 31, 2019, the Company’s total portfolio consisted of 52,923 homes, including 1,793 properties held for sale, compared to 52,783 homes as of December 31, 2018, including 1,945 properties held for sale, an increase of 140 homes, which included 219 properties acquired through traditional acquisition channels and 101 newly constructed properties delivered through our AMH Development and National Builder Programs, offset by 180 homes sold or rescinded.

Capital Activities and Balance Sheet

In January 2019, the Operating Partnership issued $400.0 million of 4.9% unsecured senior notes with a maturity date of  February 15, 2029. Interest on the notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2019. The Operating Partnership received net proceeds of $395.3 million from this offering, after underwriting fees of approximately $2.6 million and a $2.1 million discount, and before estimated offering costs of $1.0 million. The Operating Partnership used the net proceeds from this issuance to repay amounts outstanding on our revolving credit facility and intends to use the remaining net proceeds for general corporate purposes, including, without limitation, acquisition of additional properties, the repayment of outstanding indebtedness, capital expenditures, the expansion, redevelopment and/or improvement of our properties in our portfolio, working capital and other general purposes, including repurchases of securities.

As of March 31, 2019, the Company had cash and cash equivalents of $154.6 million and had total outstanding debt of $3.0 billion, excluding unamortized discounts and unamortized deferred financing costs, with a weighted-average interest rate of 4.3% and a weighted-average term to maturity of 13.5 years. The Company had no outstanding borrowings on our $800.0 million revolving credit facility and had $100.0 million of outstanding borrowings on our term loan facility at the end of the quarter.

2019 Guidance

Guidance Summary

As the Company’s heaviest leasing and tenant turnover seasons are still ahead, no changes have been made to previous Full Year 2019 guidance ranges.

 

Full Year 2019

Core FFO attributable to common share and unit holders

$1.06 – $1.14

   

Same-Home

 

Core revenues growth

3.2% – 4.2%

Core property operating expenses growth

3.5% – 4.5%

Core NOI growth

3.0% – 4.0%

Core NOI After Capital Expenditures growth

2.6% – 3.6%

Reconciliation of Core FFO attributable to common share and unit holders from 2018 to 2019 Guidance Midpoint

   

Per FFO Share and Unit

2018 Core FFO attributable to common share and unit holders, as previously reported

 

$

1.06

 

Internal leasing costs (1)

 

(0.02)

 

2018 Core FFO attributable to common share and unit holders, as conformed for internal leasing costs

 

$

1.04

 
     

Same-Home Core NOI growth

 

0.05

 

Non-Same-Home Core NOI growth (2)

 

0.05

 

General and administrative expense growth

 

(0.01)

 

Interest expense and preferred dividends increase

 

(0.02)

 

Share count increase

 

(0.01)

 
     

2019 Core FFO attributable to common share and unit holders – Guidance Midpoint

 

$

1.10

 
   

(1)

Adjustment amount reflects the portion of leasing costs that were previously capitalized and treated as a reduction to Adjusted FFO attributable to common share and unit holders, that would be expensed under the new lease accounting standard ASU 2016-02, adopted by the Company on January 1, 2019.

(2)

Reflects NOI from Non-Same-Home properties including contribution from 2018 and projected 2019 net acquisitions and dispositions. For 2019, we expect to add between $300.0 million and $500.0 million of properties to our portfolio, the timing of which is expected to be more heavily weighted towards the second half of the year.

Note: The Company does not provide guidance for the most comparable GAAP financial measures of net income or loss, total revenues and property operating expenses, or a reconciliation of the above-listed forward-looking non-GAAP financial measures to the comparable GAAP financial measures because we are unable to reasonably predict certain items contained in the GAAP measures, including non-recurring and infrequent items that are not indicative of the Company’s ongoing operations. Such items include, but are not limited to, net gain or loss on sales and impairment of single-family properties, casualty loss, Non-Same-Home revenues and Non-Same-Home property operating expenses. These items are uncertain, depend on various factors and could have a material impact on our GAAP results for the guidance period.  

Additional Information

A copy of the Company’s First Quarter 2019 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, May 3, 2019, at 11:00 a.m. Eastern Time to discuss the Company’s financial results for the quarter ended March 31, 2019, 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, May 17, 2019, by calling (844) 512-2921 (U.S. and Canada) or (412) 317-6671 (international), replay passcode number 13689541#, 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, developing, renovating, leasing, and operating attractive, single-family homes as rental properties. As of March 31, 2019, we owned 52,923 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,” “outlook,” “guidance” 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 2019 Guidance and our belief that there will be continued strong demand for single-family rentals and our ability to continue to deliver consistent operating results. 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, 2018, and in the Company’s subsequent filings with the SEC.

American Homes 4 Rent

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share data)

 
 

March 31, 2019

 

December 31, 2018

 

(Unaudited)

   

Assets

     

Single-family properties:

     

Land

$

1,729,528

   

$

1,713,496

 

Buildings and improvements

7,561,372

   

7,483,600

 
 

9,290,900

   

9,197,096

 

Less: accumulated depreciation

(1,250,323)

   

(1,176,499)

 

Single-family properties in operation, net

8,040,577

   

8,020,597

 

Single-family properties under development and development land

205,046

   

153,651

 

Single-family properties held for sale, net

297,317

   

318,327

 

Total real estate assets, net

8,542,940

   

8,492,575

 

Cash and cash equivalents

154,584

   

30,284

 

Restricted cash

158,163

   

144,930

 

Rent and other receivables, net

32,813

   

29,027

 

Escrow deposits, prepaid expenses and other assets

145,940

   

146,034

 

Deferred costs and other intangibles, net

10,653

   

12,686

 

Asset-backed securitization certificates

25,666

   

25,666

 

Goodwill

120,279

   

120,279

 

Total assets

$

9,191,038

   

$

9,001,481

 
       

Liabilities

     

Revolving credit facility

$

   

$

250,000

 

Term loan facility, net

99,286

   

99,232

 

Asset-backed securitizations, net

1,957,200

   

1,961,511

 

Unsecured senior notes, net

887,439

   

492,800

 

Accounts payable and accrued expenses

266,797

   

219,229

 

Amounts payable to affiliates

4,944

   

4,967

 

Total liabilities

3,215,666

   

3,027,739

 
       

Commitments and contingencies

     
       

Equity

     

Shareholders’ equity:

     

Class A common shares, $0.01 par value per share, 450,000,000 shares authorized, 296,592,376 and 296,014,546 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively

2,966

   

2,960

 

Class B common shares, $0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at March 31, 2019 and December 31, 2018

6

   

6

 

Preferred shares, $0.01 par value per share, 100,000,000 shares authorized, 35,350,000 shares issued and outstanding at March 31, 2019 and December 31, 2018

354

   

354

 

Additional paid-in capital

5,739,162

   

5,732,466

 

Accumulated deficit

(489,820)

   

(491,214)

 

Accumulated other comprehensive income

7,202

   

7,393

 

Total shareholders’ equity

5,259,870

   

5,251,965

 

Noncontrolling interest

715,502

   

721,777

 

Total equity

5,975,372

   

5,973,742

 
       

Total liabilities and equity

$

9,191,038

   

$

9,001,481

 

American Homes 4 Rent

Condensed Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

(Unaudited)

   
 

For the Three Months Ended March 31,

 

2019

 

2018

Revenues:

     

Rents and other single-family property revenues

$

277,694

   

$

256,663

 

Other

1,510

   

1,341

 

Total revenues

279,204

   

258,004

 
       

Expenses:

     

Property operating expenses

106,684

   

100,987

 

Property management expenses

20,709

   

18,987

 

General and administrative expense

9,435

   

9,231

 

Interest expense

31,915

   

29,301

 

Acquisition fees and costs expensed

834

   

1,311

 

Depreciation and amortization

81,161

   

79,303

 

Other

1,024

   

827

 

Total expenses

251,762

   

239,947

 
       

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

5,649

   

2,256

 

Remeasurement of participating preferred shares

   

1,212

 
       

Net income

33,091

   

21,525

 
       

Noncontrolling interest

3,026

   

1,114

 

Dividends on preferred shares

13,782

   

14,597

 
       

Net income attributable to common shareholders

$

16,283

   

$

5,814

 
       

Weighted-average shares outstanding:

     

Basic

296,833,755

   

286,183,429

 

Diluted

297,444,941

   

286,727,863

 
       

Net income attributable to common shareholders per share:

     

Basic

$

0.05

   

$

0.02

 

Diluted

$

0.05

   

$

0.02

 

Non-GAAP Financial Measures

This press release and the First Quarter 2019 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 or 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 First Quarter 2019 Earnings Release and Supplemental Information Package.

Funds from Operations attributable to common share and unit holders

The following is a reconciliation of net income or 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 months ended March 31, 2019 and 2018 (amounts in thousands, except share data):

 

For the Three Months Ended March 31,

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

Net income attributable to common shareholders

$

16,283

   

$

5,814

 

Adjustments:

     

Noncontrolling interests in the Operating Partnership

3,026

   

1,125

 

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

(5,145)

   

(1,556)

 

Adjustments for unconsolidated joint ventures

554

   

 

Depreciation and amortization

81,161

   

79,303

 

Less: depreciation and amortization of non-real estate assets

(1,940)

   

(1,830)

 

FFO attributable to common share and unit holders

$

93,939

   

$

82,856

 

Adjustments:

     

Internal leasing costs (1)

   

(1,589)

 

Acquisition fees and costs expensed

834

   

1,311

 

Noncash share-based compensation – general and administrative

659

   

598

 

Noncash share-based compensation – property management

293

   

377

 

Noncash interest expense related to acquired debt

   

900

 

Remeasurement of participating preferred shares

   

(1,212)

 

Core FFO attributable to common share and unit holders

$

95,725

   

$

83,241

 

Recurring capital expenditures (2)

(7,860)

   

(7,386)

 

Leasing costs

(999)

   

(2,723)

 

Internal leasing costs (1)

   

1,589

 

Adjusted FFO attributable to common share and unit holders

$

86,866

   

$

74,721

 
       

Per FFO share and unit:

     

FFO attributable to common share and unit holders

$

0.27

   

$

0.24

 

Core FFO attributable to common share and unit holders

$

0.27

   

$

0.24

 

Adjusted FFO attributable to common share and unit holders

$

0.25

   

$

0.22

 
       

Weighted-average FFO shares and units:

     

Common shares outstanding

296,833,755

   

286,183,429

 

Share-based compensation plan (3)

611,186

   

544,434

 

Operating partnership units

55,166,826

   

55,350,153

 

Total weighted-average FFO shares and units

352,611,767

   

342,078,016

 
   

(1)

Adjustment amount reflects the portion of leasing costs that were previously capitalized and treated as a reduction to Adjusted FFO attributable to common share and unit holders, that would be expensed under the new lease accounting standard ASU 2016-02, adopted by the Company on January 1, 2019.

(2)

As a portion of our homes are recently developed, acquired and / or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.

(3)

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 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 adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis. 

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 business combinations and the acquisition of 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 fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value, and (7) the allocation of income to our participating preferred shares in connection with their redemption.

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) capitalized leasing costs incurred during the period. As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.

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 investors and analysts in evaluating the Company. We believe that FFO attributable to common share and unit holders provides useful information to investors because 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, provide useful information to investors because 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 or net cash provided by operating activities, each 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 total revenues, excluding expenses reimbursed by tenant charge-backs and other revenues, less core property operating expenses, which is calculated as property operating and property management expenses, excluding noncash share-based compensation expense and expenses reimbursed by tenant charge-backs. 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, identified for future 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 shares or 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 business combinations and the acquisition of properties, (8) noncash share-based compensation expense, (9) interest expense, (10) general and administrative expense, (11) other expenses and (12) other revenues. We believe Core NOI provides useful information to investors about 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 recurring capital expenditures to calculate Same-Home Core NOI After Capital Expenditures, which we believe provides useful information to investors 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 or 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 months ended March 31, 2019 and 2018 (amounts in thousands):

 

For the Three Months Ended March 31,

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

Core revenues

     

Total revenues

$

279,204

   

$

258,004

 

Tenant charge-backs

(39,952)

   

(35,807)

 

Bad debt expense

   

(2,000)

 

Other revenues

(1,510)

   

(1,341)

 

Core revenues

$

237,742

   

$

218,856

 
       

Core property operating expenses

     

Property operating expenses

$

106,684

   

$

100,987

 

Property management expenses

20,709

   

18,987

 

Noncash share-based compensation – property management

(293)

   

(377)

 

Expenses reimbursed by tenant charge-backs

(39,952)

   

(35,807)

 

Bad debt expense

   

(2,000)

 

Internal leasing costs (1)

   

1,589

 

Core property operating expenses

$

87,148

   

$

83,379

 
 

Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures

             

Net income

$

33,091

   

$

21,525

 

Remeasurement of participating preferred shares

   

(1,212)

 

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

(5,649)

   

(2,256)

 

Depreciation and amortization

81,161

   

79,303

 

Acquisition fees and costs expensed

834

   

1,311

 

Noncash share-based compensation – property management

293

   

377

 

Interest expense

31,915

   

29,301

 

General and administrative expense

9,435

   

9,231

 

Other expenses

1,024

   

827

 

Other revenues

(1,510)

   

(1,341)

 

Internal leasing costs (1)

   

(1,589)

 

Core NOI

150,594

   

135,477

 

Less: Non-Same-Home Core NOI

29,482

   

20,545

 

Same-Home Core NOI

121,112

   

114,932

 

Less: Same-Home recurring capital expenditures

6,402

   

5,991

 

Same-Home Core NOI After Capital Expenditures

$

114,710

   

$

108,941

 
   

(1)

Adjustment amount reflects the portion of leasing costs that were previously capitalized, that would be expensed under the new lease accounting standard ASU 2016-02, adopted by the Company on January 1, 2019.

See Website: https://www.americanhomes4rent.com
Contact Information:
American Homes 4 Rent Investor Relations Phone: (855) 794-2447 Email: investors@ah4r.com

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