Announces Second Joint Venture with
Institutional Investors Advised by J.P. Morgan Asset
Management
Raises Full Year 2023 Core FFO per Share and
Unit Guidance
LAS
VEGAS, July 27, 2023 /PRNewswire/ -- AMH
(NYSE: AMH) (the "Company"), a leading owner, operator and
developer of single-family rental homes, today announced its
financial and operating results for the quarter ended June 30, 2023.
Highlights
- Rents and other single-family property revenues increased 9.3%
year-over-year to $395.5 million for
the second quarter of 2023.
- Net income attributable to common shareholders totaled
$98.0 million, or $0.27 per diluted share, for the second quarter
of 2023, compared to $56.6 million,
or $0.16 per diluted share, for the
second quarter of 2022.
- Core Funds from Operations ("Core FFO") attributable to common
share and unit holders increased 7.6% year-over-year to
$0.41 per FFO share and unit for the
second quarter of 2023 and Adjusted Funds from Operations
("Adjusted FFO") attributable to common share and unit holders
increased 5.3% year-over-year to $0.36 per FFO share and unit for the second
quarter of 2023.
- Core Net Operating Income ("Core NOI") from Same-Home
properties increased by 4.8% year-over-year for the second quarter
of 2023.
- Achieved Same-Home Average Occupied Days Percentage of 97.0% in
the second quarter of 2023, while generating 9.4% rate growth on
new leases.
- Delivered a total of 634 high-quality and energy-efficient
newly constructed homes from our AMH Development Program to our
wholly-owned portfolio and unconsolidated joint ventures in the
second quarter of 2023.
- In July 2023, entered into a
$625 million second strategic joint
venture with institutional investors advised by J.P. Morgan Asset
Management focused on constructing and operating newly built rental
homes, providing additional scale, opportunity for economic upside
and continued institutional endorsement of the Company's industry
leading built-for-rental strategy.
- Raised Full Year 2023 Core FFO attributable to common share and
unit holders guidance midpoint by $0.03 per share and unit to $1.64, representing anticipated full year growth
of 6.5% over prior year.
"Continued robust demand and superior execution from our teams
drove strong second quarter results and an increase in our full
year Core FFO per share guidance by three
cents at the midpoint," said David
Singelyn, AMH's Chief Executive Officer. "We remain
committed to responsible and accretive growth through our
differentiated internal development program. With the addition of
our new joint venture capital, we look forward to further expanding
our development pipeline to create consistent and predictable
shareholder value over time."
Second Quarter 2023 Financial Results
Net income attributable to common shareholders totaled
$98.0 million, or $0.27 per diluted share, for the second quarter
of 2023, compared to $56.6 million,
or $0.16 per diluted share, for the
second quarter of 2022. This increase was primarily due to higher
net gains on property sales, a larger number of occupied
properties, higher rental rates and a nonrecurring noncash charge
resulting from the redemption of our Series F perpetual preferred
shares in the second quarter of 2022.
Rents and other single-family property revenues increased 9.3%
to $395.5 million for the second
quarter of 2023, compared to $361.9
million for the second quarter of 2022. Revenue growth was
driven by an increase in our average occupied portfolio which grew
to 56,025 homes for the second quarter of 2023, compared to 54,786
homes for the second quarter of 2022, as well as higher rental
rates.
Core NOI from our total portfolio increased 9.0% to $223.5 million for the second quarter of 2023,
compared to $205.0 million for the
second quarter of 2022. This growth was driven by a 9.7% increase
in core revenues resulting from a larger number of occupied
properties and higher rental rates, partially offset by an 11.0%
increase in core property operating expenses.
For the Company's Same-Home portfolio, core revenues increased
6.5% to $301.1 million for the second
quarter of 2023, compared to $282.6
million for the second quarter of 2022, which was driven by
a 7.2% increase in Average Monthly Realized Rent per property,
partially offset by a 30 basis point decrease in Average Occupied
Days Percentage. Core property operating expenses from Same-Home
properties increased 9.9% to $108.1
million for the second quarter of 2023, compared to
$98.3 million for the second quarter
of 2022, primarily driven by increased property tax expense from
anticipated 2023 property tax assessments and timing of prior year
property tax accruals. As a result, Core NOI from Same-Home
properties increased 4.8% to $193.0
million for the second quarter of 2023, compared to
$184.2 million for the second quarter
of 2022.
Core FFO attributable to common share and unit holders was
$170.5 million, or $0.41 per FFO share and unit, for the second
quarter of 2023, compared to $153.2
million, or $0.38 per FFO
share and unit, for the second quarter of 2022. Adjusted FFO
attributable to common share and unit holders was $148.8 million, or $0.36 per FFO share and unit, for the second
quarter of 2023, compared to $136.6
million, or $0.34 per FFO
share and unit, for the second quarter of 2022. These improvements
were primarily attributable to a larger number of occupied
properties and higher rental rates.
Year-to-Date 2023 Financial Results
Net income attributable to common shareholders totaled
$215.5 million, or $0.59 per diluted share, for the six-month period
ended June 30, 2023, compared to
$112.5 million, or $0.32 per diluted share, for the six-month period
ended June 30, 2022. This increase was primarily due to higher
net gains on property sales, a larger number of occupied
properties, higher rental rates and a nonrecurring noncash charge
resulting from the redemption of our Series F perpetual preferred
shares in the second quarter of 2022.
Rents and other single-family property revenues increased 10.5%
to $793.3 million for the six-month
period ended June 30, 2023, compared
to $718.0 million for the six-month
period ended June 30, 2022. Revenue growth was driven by an
increase in our average occupied portfolio which grew to 55,885
homes for the six-month period ended June
30, 2023, compared to 54,403 homes for the six-month period
ended June 30, 2022, as well as higher rental rates.
Core NOI from our total portfolio increased 10.4% to
$444.4 million for the six-month
period ended June 30, 2023, compared
to $402.4 million for the six-month
period ended June 30, 2022. This growth was driven by an 11.2%
increase in core revenues resulting from a larger number of
occupied properties and higher rental rates, partially offset by a
12.5% increase in core property operating expenses.
For the Company's Same-Home portfolio, core revenues increased
7.2% to $597.5 million for the
six-month period ended June 30, 2023,
compared to $557.6 million for the
six-month period ended June 30, 2022, which was driven by a
7.6% increase in Average Monthly Realized Rent per property,
partially offset by a 20 basis point decrease in Average Occupied
Days Percentage. Core property operating expenses from Same-Home
properties increased 11.0% to $210.8
million for the six-month period ended June 30, 2023, compared to $190.0 million for the six-month period ended
June 30, 2022, primarily driven by (i) increased property tax
expense from anticipated 2023 property tax assessments and timing
of prior year property tax accruals and (ii) increased property
management expenses primarily attributable to lower than normal
staffing levels in the first quarter of 2022 leading to a
subsequent increase in personnel in the second quarter of 2022 to a
more stabilized level. As a result, Core NOI from Same-Home
properties increased 5.2% to $386.7
million for the six-month period ended June 30, 2023, compared to $367.6 million for the six-month period ended
June 30, 2022.
Core FFO attributable to common share and unit holders was
$339.0 million, or $0.82 per FFO share and unit, for the six-month
period ended June 30, 2023, compared
to $303.0 million, or $0.76 per FFO share and unit, for the six-month
period ended June 30, 2022. Adjusted FFO attributable to
common share and unit holders was $302.3
million, or $0.73 per FFO
share and unit, for the six-month period ended June 30, 2023, compared to $274.7 million, or $0.69 per FFO share and unit, for the six-month
period ended June 30, 2022. These improvements were primarily
attributable to a larger number of occupied properties and higher
rental rates.
Portfolio
Average Occupied Days Percentage was 96.2% for the second
quarter of 2023, compared to 96.3% for the first quarter of
2023.
Investments
As of June 30, 2023, the Company's
wholly-owned portfolio consisted of 58,693 homes, compared to
58,639 homes as of March 31, 2023, an
increase of 54 homes during the second quarter of 2023, which
included 468 newly constructed homes delivered through our AMH
Development Program and one home acquired through our National
Builder Program, offset by 415 homes sold to third parties. During
the second quarter of 2023, we also developed an additional 166
newly constructed properties which were delivered to our
unconsolidated joint ventures, aggregating to 634 total program
deliveries through our AMH Development Program. As of June 30, 2023, the Company had 648 properties
held for sale and 2,846 properties held in unconsolidated joint
ventures.
Capital Activities, Balance Sheet and Liquidity
In May 2023, Moody's Investor
Service upgraded all the ratings for the Company, including the
senior unsecured rating to Baa2 from Baa3 with a stable
outlook.
As of June 30, 2023, the Company
had cash and cash equivalents of $199.6
million and had total outstanding debt of $4.4 billion, excluding unamortized discounts and
unamortized deferred financing costs, with a weighted-average
interest rate of 4.0% and a weighted-average term to maturity of
11.9 years. The Company had no outstanding borrowings on its
$1.25 billion revolving credit
facility. Additionally, the Company has no debt maturities, other
than recurring principal amortization, until the fourth quarter of
2024. During the second quarter of 2023, the Company generated
$57.3 million of Retained Cash Flow
(defined below) and sold 415 properties generating $127.5 million of net proceeds.
In July 2023, the Company entered
into a $625 million second strategic joint venture with
institutional investors advised by J.P. Morgan Asset Management
focused on constructing and operating newly built rental homes,
providing additional scale, opportunity for economic upside and
continued institutional endorsement of the Company's industry
leading built-for-rental strategy. The Company holds a 20%
ownership interest in the joint venture, which has an evergreen
term. Additionally, the Company will earn fees for development and
management services provided to the joint venture and have an
opportunity to earn a promoted interest after construction and
initial operation of the joint venture's properties.
Sustainability Update
The Company was recently recognized as the July 2023 RESNET HERS® Index Builder of the
Month. AMH is committed to building energy efficient single-family
rental homes and uses RESNET Home Energy Rating System (HERS)
scores to evaluate the anticipated energy efficiency and savings of
our developments. For our homes built in 2022, on average they are
designed to use less than half the energy of a typical home in this
country.
2023 Guidance
Set forth below are the Company's current expectations with
respect to full year 2023 Core FFO attributable to common share and
unit holders and our underlying assumptions. In reliance on the
exception provided by applicable SEC rules, the Company does not
provide guidance for GAAP net income, the most comparable GAAP
financial measure, or a reconciliation of 2023 Core FFO guidance to
GAAP net income because we are unable to reasonably predict the
following items which are included in GAAP net income: (i) gain on
sale and impairment of single-family properties and other, net for
consolidated properties and unconsolidated joint ventures, (ii)
acquisition and other transaction costs and (iii) hurricane-related
charges, net. The actual amounts for any and all of these items
could significantly impact our 2023 GAAP net income and, as
disclosed in our historical financial results, have significantly
impacted GAAP net income in prior periods.
Guidance Summary
|
Full Year
2023
|
|
Previous
Guidance
|
|
Current
Guidance
|
Core FFO
attributable to common share and unit holders
|
$1.58 -
$1.64
|
|
$1.62 -
$1.66
|
Core FFO attributable
to common share and unit holders growth
|
2.5% - 6.5%
|
|
5.2% - 7.8%
|
|
|
|
|
Same-Home
|
|
|
|
Core revenues
growth
|
5.00% -
7.00%
|
|
5.75% -
7.25%
|
Core property operating
expenses growth
|
8.75% -
10.75%
|
|
8.75% -
10.75%
|
Core NOI
growth
|
3.00% -
5.00%
|
|
4.00% -
5.50%
|
|
|
|
Full Year
2023
(Unchanged)
|
Investment
Program
|
Properties
|
|
Investment
|
Wholly owned
acquisitions
|
—
|
|
—
|
Wholly owned
development deliveries
|
1,775 -
1,925
|
|
$600 - $700
million
|
Wholly owned land and
development pipeline
|
—
|
|
$100 - $150
million
|
Pro rata share of JV
and Property Enhancing Capex
|
—
|
|
$100 - $150
million
|
Total capital
investment (wholly owned and pro rata JV)
|
1,775 -
1,925
|
|
$0.8 - $1.0
billion
|
Total gross capital
investment (JVs at 100%)
|
2,200 -
2,400
|
|
$1.0 - $1.2
billion
|
Changes to Full Year 2023 guidance:
- $0.03 incremental Core FFO
per share primarily related to increased Core NOI growth from both
the Same-Home and Non-Same-Home portfolios driven by strong spring
leasing results and continued demand trends into the third quarter
as well as modestly favorable updates to Other income and expense,
net, notably interest income on cash generated from our better than
expected dispositions activity.
Additional Information
A copy of the Company's Second Quarter 2023 Earnings Release and
Supplemental Information Package and this press release are
available on our website at www.amh.com, under "Investor
relations." 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,
July 28, 2023 at 12:00 p.m. Eastern
Time to discuss the Company's financial results for the
quarter ended June 30, 2023 and to
provide an update on its business. The domestic dial-in number is
(877) 451-6152 (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.amh.com, under "Investor relations." A replay
of the conference call may be accessed through Friday, August 11, 2023 by calling (844) 512-2921
(U.S. and Canada) or (412)
317-6671 (international), replay passcode number 13739083#, or by
using the link at www.amh.com, under "Investor relations."
About AMH
American Homes 4 Rent (NYSE: AMH), which does business as AMH,
is a leading owner, operator and developer of single-family rental
homes. We're an internally managed Maryland real estate investment trust (REIT)
focused on acquiring, developing, renovating, leasing and managing
homes as rental properties. Our goal is to simplify the experience
of leasing a home and deliver peace of mind to households across
the country.
In recent years, we've been named one of Fortune's 2022 Best
Workplaces in Real Estate™, a 2023 Great Place to Work®, a 2023 Top
U.S. Homebuilder by Builder100, one of America's Most Responsible
Companies 2023 and America's Most Trustworthy Companies 2023 by
Newsweek and Statista Inc., and a Top ESG Regional Performer by
Sustainalytics. As of June 30, 2023,
we owned nearly 59,000 single-family properties in the Southeast,
Midwest, Southwest and Mountain West regions of the United States. Additional information
about AMH is available on our website at www.amh.com.
AMH refers to one or more of American Homes 4 Rent, American
Homes 4 Rent, L.P. and their subsidiaries and joint ventures. In
certain states, we operate under AMH Living or American Homes 4
Rent. Please see www.amh.com/dba to learn more.
Forward-Looking Statements
This press release and the accompanying Supplemental Information
Package contain "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 2023 Guidance, our belief that our
acquisition and homebuilding programs will result in continued
growth and the estimated timing of our development deliveries set
forth in the Supplemental Information Package. 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 and assumptions to be reasonable, they
are inherently subject to significant business, economic,
competitive, regulatory and other 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, 2022 and in the Company's subsequent
filings with the SEC.
AMH
Condensed
Consolidated Balance Sheets
(Amounts in
thousands, except share data)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Single-family
properties:
|
|
|
|
Land
|
$
2,208,667
|
|
$
2,197,233
|
Buildings and
improvements
|
10,351,621
|
|
10,127,891
|
Single-family
properties in operation
|
12,560,288
|
|
12,325,124
|
Less: accumulated
depreciation
|
(2,552,998)
|
|
(2,386,452)
|
Single-family
properties in operation, net
|
10,007,290
|
|
9,938,672
|
Single-family
properties under development and development land
|
1,339,508
|
|
1,187,221
|
Single-family
properties and land held for sale, net
|
154,190
|
|
198,716
|
Total real estate
assets, net
|
11,500,988
|
|
11,324,609
|
Cash and cash
equivalents
|
199,601
|
|
69,155
|
Restricted
cash
|
162,169
|
|
148,805
|
Rent and other
receivables
|
45,911
|
|
47,752
|
Escrow deposits,
prepaid expenses and other assets
|
359,473
|
|
331,446
|
Investments in
unconsolidated joint ventures
|
108,351
|
|
107,347
|
Asset-backed
securitization certificates
|
25,666
|
|
25,666
|
Goodwill
|
120,279
|
|
120,279
|
Total assets
|
$
12,522,438
|
|
$
12,175,059
|
|
|
|
|
Liabilities
|
|
|
|
Revolving credit
facility
|
$
—
|
|
$
130,000
|
Asset-backed
securitizations, net
|
1,880,348
|
|
1,890,842
|
Unsecured senior notes,
net
|
2,497,691
|
|
2,495,156
|
Accounts payable and
accrued expenses
|
594,154
|
|
484,403
|
Total
liabilities
|
4,972,193
|
|
5,000,401
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Shareholders'
equity:
|
|
|
|
Class A common shares
($0.01 par value per share, 450,000,000 shares authorized,
361,365,692 and 352,881,826 shares issued and outstanding at June
30, 2023 and December 31, 2022, respectively)
|
3,614
|
|
3,529
|
Class B common shares
($0.01 par value per share, 50,000,000 shares authorized, 635,075
shares issued and outstanding at June 30, 2023 and
December 31, 2022)
|
6
|
|
6
|
Preferred shares
($0.01 par value per share, 100,000,000 shares authorized,
9,200,000 shares issued and outstanding at June 30, 2023 and
December 31, 2022)
|
92
|
|
92
|
Additional paid-in
capital
|
7,244,204
|
|
6,931,819
|
Accumulated
deficit
|
(385,434)
|
|
(440,791)
|
Accumulated other
comprehensive income
|
1,090
|
|
1,332
|
Total shareholders'
equity
|
6,863,572
|
|
6,495,987
|
Noncontrolling
interest
|
686,673
|
|
678,671
|
Total equity
|
7,550,245
|
|
7,174,658
|
|
|
|
|
Total liabilities and
equity
|
$
12,522,438
|
|
$
12,175,059
|
AMH
Condensed
Consolidated Statements of Operations
(Amounts in
thousands, except share and per share data)
(Unaudited)
|
|
|
For the Three Months
Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Rents and other
single-family property revenues
|
$
395,548
|
|
$
361,876
|
|
$
793,251
|
|
$
717,981
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Property operating
expenses
|
142,553
|
|
129,270
|
|
289,621
|
|
262,913
|
Property management
expenses
|
30,666
|
|
28,768
|
|
61,466
|
|
54,802
|
General and
administrative expense
|
19,937
|
|
18,847
|
|
37,792
|
|
36,129
|
Interest
expense
|
34,844
|
|
34,801
|
|
70,726
|
|
62,368
|
Acquisition and other
transaction costs
|
4,175
|
|
7,658
|
|
9,251
|
|
13,632
|
Depreciation and
amortization
|
113,199
|
|
104,415
|
|
225,916
|
|
204,369
|
Total
expenses
|
345,374
|
|
323,759
|
|
694,772
|
|
634,213
|
|
|
|
|
|
|
|
|
Gain on sale and
impairment of single-family properties and other, net
|
62,758
|
|
32,811
|
|
147,417
|
|
54,855
|
Other income and
expense, net
|
2,482
|
|
3,627
|
|
7,217
|
|
5,946
|
|
|
|
|
|
|
|
|
Net income
|
115,414
|
|
74,555
|
|
253,113
|
|
144,569
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
13,899
|
|
8,343
|
|
30,647
|
|
16,655
|
Dividends on preferred
shares
|
3,486
|
|
4,346
|
|
6,972
|
|
10,109
|
Redemption of perpetual
preferred shares
|
—
|
|
5,276
|
|
—
|
|
5,276
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders
|
$
98,029
|
|
$
56,590
|
|
$
215,494
|
|
$
112,529
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
362,148,911
|
|
348,484,158
|
|
361,267,035
|
|
347,123,576
|
Diluted
|
362,479,942
|
|
349,002,624
|
|
361,593,174
|
|
347,751,958
|
|
|
|
|
|
|
|
|
Net income attributable
to common shareholders per share:
|
|
|
|
|
|
|
|
Basic
|
$
0.27
|
|
$
0.16
|
|
$
0.59
|
|
$
0.32
|
Diluted
|
$
0.27
|
|
$
0.16
|
|
$
0.59
|
|
$
0.32
|
Defined Terms
Average Monthly Realized Rent
For the related period,
Average Monthly Realized Rent is calculated as the lease component
of rents and other single-family property revenues (i.e., rents
from single-family properties) divided by the product of (a) number
of properties and (b) Average Occupied Days Percentage, divided by
the number of months. For properties partially owned during the
period, this calculation is adjusted to reflect the number of days
of ownership.
Average Occupied Days Percentage
The number of days a
property is occupied in the period divided by the total number of
days the property is owned during the same period after initially
being placed in-service. This calculation excludes properties
classified as held for sale.
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).
Recurring Capital Expenditures
For our Same-Home
portfolio, Recurring Capital Expenditures includes replacement
costs and other capital expenditures recorded during the period
that are necessary to help preserve the value and maintain
functionality of our properties. For our total portfolio, we
calculate Recurring Capital Expenditures 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.
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 experienced 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 by the Company 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 first
considered non-stabilized, as an entire group, until (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. After such time
has passed, properties acquired through a bulk purchase are then
evaluated on an individual property basis under our standard
stabilization criteria.
Non-GAAP Financial Measures
This press release and the Second Quarter 2023 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, Retained Cash Flow, Core NOI and Same-Home Core
NOI, 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 Second Quarter 2023 Earnings Release and Supplemental
Information Package.
Funds from Operations attributable to common
share and unit holders and Retained Cash Flow
FFO attributable to common share and unit holders is a non-GAAP
financial measure that we calculate in accordance with the
definition approved by the National Association of Real Estate
Investment Trusts, 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
and other transaction costs incurred with business combinations and
the acquisition or disposition of properties as well as
nonrecurring items unrelated to ongoing operations, (2) noncash
share-based compensation expense, (3) hurricane-related charges,
net, which result in material charges to our single-family property
portfolio, (4) gain or loss on early extinguishment of debt and (5)
the allocation of income to our perpetual 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 shares and units include weighted-average common shares and
operating partnership units outstanding, as well as potentially
dilutive securities.
Retained Cash Flow is a non-GAAP financial measure that we
believe is helpful as a supplemental measure in assessing the
Company's liquidity. This metric is computed by reducing Adjusted
FFO attributable to common share and unit holders by common
distributions.
FFO, Core FFO and Adjusted FFO attributable to common share and
unit holders and Retained Cash Flow are not substitutes 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.
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, Adjusted FFO attributable to common share
and unit holders and Retained Cash Flow for the three and six
months ended June 30, 2023 and 2022
(amounts in thousands, except share and per share data):
|
For the Three Months
Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Net income attributable
to common shareholders
|
$
98,029
|
|
$
56,590
|
|
$
215,494
|
|
$
112,529
|
Adjustments:
|
|
|
|
|
|
|
|
Noncontrolling
interests in the Operating Partnership
|
13,899
|
|
8,343
|
|
30,647
|
|
16,655
|
Gain on sale and
impairment of single-family properties and other, net
|
(62,758)
|
|
(32,811)
|
|
(147,417)
|
|
(54,855)
|
Adjustments for
unconsolidated joint ventures
|
1,058
|
|
(199)
|
|
1,568
|
|
(570)
|
Depreciation and
amortization
|
113,199
|
|
104,415
|
|
225,916
|
|
204,369
|
Less: depreciation and
amortization of non-real estate assets
|
(4,249)
|
|
(3,113)
|
|
(8,426)
|
|
(6,105)
|
FFO attributable to
common share and unit holders
|
$
159,178
|
|
$
133,225
|
|
$
317,782
|
|
$
272,023
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition, other
transaction costs and other
|
4,175
|
|
7,658
|
|
9,251
|
|
13,632
|
Noncash share-based
compensation - general and administrative
|
5,982
|
|
5,932
|
|
9,725
|
|
9,962
|
Noncash share-based
compensation - property management
|
1,132
|
|
1,132
|
|
2,198
|
|
2,131
|
Redemption of
perpetual preferred shares
|
—
|
|
5,276
|
|
—
|
|
5,276
|
Core FFO attributable
to common share and unit holders
|
$
170,467
|
|
$
153,223
|
|
$
338,956
|
|
$
303,024
|
Recurring Capital
Expenditures
|
(20,913)
|
|
(15,959)
|
|
(35,106)
|
|
(27,137)
|
Leasing
costs
|
(768)
|
|
(644)
|
|
(1,576)
|
|
(1,179)
|
Adjusted FFO
attributable to common share and unit holders
|
$
148,786
|
|
$
136,620
|
|
$
302,274
|
|
$
274,708
|
Common
distributions
|
(91,463)
|
|
(72,284)
|
|
(182,743)
|
|
(144,470)
|
Retained Cash
Flow
|
$
57,323
|
|
$
64,336
|
|
$
119,531
|
|
$
130,238
|
|
|
|
|
|
|
|
|
Per FFO share and
unit:
|
|
|
|
|
|
|
|
FFO attributable to
common share and unit holders
|
$
0.38
|
|
$
0.33
|
|
$
0.77
|
|
$
0.68
|
Core FFO attributable
to common share and unit holders
|
$
0.41
|
|
$
0.38
|
|
$
0.82
|
|
$
0.76
|
Adjusted FFO
attributable to common share and unit holders
|
$
0.36
|
|
$
0.34
|
|
$
0.73
|
|
$
0.69
|
|
|
|
|
|
|
|
|
Weighted-average FFO
shares and units:
|
|
|
|
|
|
|
|
Common shares
outstanding
|
362,148,911
|
|
348,484,158
|
|
361,267,035
|
|
347,123,576
|
Share-based
compensation plan and forward sale equity contracts
(1)
|
800,106
|
|
950,033
|
|
744,772
|
|
1,056,319
|
Operating partnership
units
|
51,376,980
|
|
51,376,980
|
|
51,376,980
|
|
51,376,980
|
Total weighted-average
FFO shares and units
|
414,325,997
|
|
400,811,171
|
|
413,388,787
|
|
399,556,875
|
|
|
(1)
|
Reflects the effect of
potentially dilutive securities issuable upon the assumed
vesting/exercise of restricted stock units and stock options and
the dilutive effect of forward sale equity contracts under the
treasury stock method.
|
The following is a reconciliation of net income per common
share–diluted 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 on a per
share and unit basis for the three and six months ended
June 30, 2023 and 2022:
|
For the Three Months
Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Net income per common
share–diluted
|
$
0.27
|
|
$
0.16
|
|
$
0.59
|
|
$
0.32
|
Adjustments:
|
|
|
|
|
|
|
|
Conversion from GAAP
share count
|
(0.03)
|
|
(0.02)
|
|
(0.07)
|
|
(0.04)
|
Noncontrolling
interests in the Operating Partnership
|
0.03
|
|
0.02
|
|
0.07
|
|
0.04
|
Gain on sale and
impairment of single-family properties and other, net
|
(0.15)
|
|
(0.08)
|
|
(0.36)
|
|
(0.14)
|
Depreciation and
amortization
|
0.27
|
|
0.26
|
|
0.56
|
|
0.52
|
Less: depreciation and
amortization of non-real estate assets
|
(0.01)
|
|
(0.01)
|
|
(0.02)
|
|
(0.02)
|
FFO attributable to
common share and unit holders
|
$
0.38
|
|
$
0.33
|
|
$
0.77
|
|
$
0.68
|
Adjustments:
|
|
|
|
|
|
|
|
Acquisition, other
transaction costs and other
|
0.01
|
|
0.02
|
|
0.02
|
|
0.03
|
Noncash share-based
compensation - general and administrative
|
0.02
|
|
0.02
|
|
0.02
|
|
0.03
|
Noncash share-based
compensation - property management
|
—
|
|
—
|
|
0.01
|
|
0.01
|
Redemption of
perpetual preferred shares
|
—
|
|
0.01
|
|
—
|
|
0.01
|
Core FFO attributable
to common share and unit holders
|
$
0.41
|
|
$
0.38
|
|
$
0.82
|
|
$
0.76
|
Recurring Capital
Expenditures
|
(0.05)
|
|
(0.04)
|
|
(0.09)
|
|
(0.07)
|
Adjusted FFO
attributable to common share and unit holders
|
$
0.36
|
|
$
0.34
|
|
$
0.73
|
|
$
0.69
|
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 other
single-family property revenues, excluding expenses reimbursed by
tenant charge-backs, 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.
Core NOI also excludes (1) gain or loss on early extinguishment
of debt, (2) hurricane-related charges, net, which result in
material charges to our single-family property portfolio, (3) gains
and losses from sales or impairments of single-family properties
and other, (4) depreciation and amortization, (5) acquisition and
other transaction costs incurred with business combinations and the
acquisition or disposition of properties as well as
nonrecurring items unrelated to ongoing operations, (6) noncash
share-based compensation expense, (7) interest expense, (8) general
and administrative expense, and (9) other income and expense, net.
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.
Core NOI and Same-Home Core NOI 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, Same-Home
core revenues, core property operating expenses, Same-Home core
property operating expenses, Core NOI and Same-Home Core NOI to
their respective GAAP metrics for the three and six months ended
June 30, 2023 and 2022 (amounts in
thousands):
|
For the Three Months
Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Core revenues and
Same-Home core revenues
|
|
|
|
|
|
|
|
Rents and other
single-family property revenues
|
$
395,548
|
|
$
361,876
|
|
$
793,251
|
|
$
717,981
|
Tenant
charge-backs
|
(45,814)
|
|
(43,137)
|
|
(101,209)
|
|
(95,409)
|
Core
revenues
|
349,734
|
|
318,739
|
|
692,042
|
|
622,572
|
Less: Non-Same-Home
core revenues
|
48,672
|
|
36,165
|
|
94,550
|
|
64,996
|
Same-Home core
revenues
|
$
301,062
|
|
$
282,574
|
|
$
597,492
|
|
$
557,576
|
|
|
|
|
|
Core property
operating expenses and Same-Home core property operating
expenses
|
|
|
|
|
Property operating
expenses
|
$
142,553
|
|
$
129,270
|
|
$
289,621
|
|
$
262,913
|
Property management
expenses
|
30,666
|
|
28,768
|
|
61,466
|
|
54,802
|
Noncash share-based
compensation - property management
|
(1,132)
|
|
(1,132)
|
|
(2,198)
|
|
(2,131)
|
Expenses reimbursed by
tenant charge-backs
|
(45,814)
|
|
(43,137)
|
|
(101,209)
|
|
(95,409)
|
Core property
operating expenses
|
126,273
|
|
113,769
|
|
247,680
|
|
220,175
|
Less: Non-Same-Home
core property operating expenses
|
18,216
|
|
15,432
|
|
36,869
|
|
30,176
|
Same-Home core
property operating expenses
|
$
108,057
|
|
$
98,337
|
|
$
210,811
|
|
$
189,999
|
|
|
|
|
|
Core NOI and
Same-Home Core NOI
|
|
|
|
|
Net income
|
$
115,414
|
|
$
74,555
|
|
$
253,113
|
|
$
144,569
|
Gain on sale and
impairment of single-family properties and other, net
|
(62,758)
|
|
(32,811)
|
|
(147,417)
|
|
(54,855)
|
Depreciation and
amortization
|
113,199
|
|
104,415
|
|
225,916
|
|
204,369
|
Acquisition and other
transaction costs
|
4,175
|
|
7,658
|
|
9,251
|
|
13,632
|
Noncash share-based
compensation - property management
|
1,132
|
|
1,132
|
|
2,198
|
|
2,131
|
Interest
expense
|
34,844
|
|
34,801
|
|
70,726
|
|
62,368
|
General and
administrative expense
|
19,937
|
|
18,847
|
|
37,792
|
|
36,129
|
Other income and
expense, net
|
(2,482)
|
|
(3,627)
|
|
(7,217)
|
|
(5,946)
|
Core NOI
|
223,461
|
|
204,970
|
|
444,362
|
|
402,397
|
Less: Non-Same-Home
Core NOI
|
30,456
|
|
20,733
|
|
57,681
|
|
34,820
|
Same-Home Core
NOI
|
$
193,005
|
|
$
184,237
|
|
$
386,681
|
|
$
367,577
|
Contact:
AMH Investor Relations
Phone: (855) 794-2447
Email: investors@amh.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/amh-reports-second-quarter-2023-financial-and-operating-results-301887787.html
SOURCE AMH