American Homes 4 Rent · NYSE:AMH
American Homes 4 Rent — Investor Presentation (June 2020)
35 slides from American Homes 4 Rent's investor presentation, Jun 2, 2020
Slide 1: Investor Highlights June 2020
Investor Highlights June 2020
Slide 2: Legal Disclosures: Forward-Looking Statements
Legal Disclosures Forward-Looking Statements Various statements contained in this presentation, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include p
Slide 3: AMH Today / Market Opportunity / Strategy / Governance
AMH Today The Market Opportunity AMH’s Strategy to Drive Shareholder Value AMH Strong Governance Practices 3
Slide 4: AMH Today
AMH Today ➢ Outsized COVID-19 Resiliency (1) • AMH provides nondiscretionary housing to high quality resident base (average AMH Quick Facts household incomes $100k+) 52,776 single-family properties, • AMH portfolio diversified across 35 markets = less susceptible to severely impacted located in 35 m
Slide 5: COVID-19 Response Plan
COVID-19 Response Plan ✓ AMH continues to monitor and follow guidelines from the CDC and other public health organizations to ensure the safety and wellbeing of our residents and employees. AMH Does ✓ Property Management teams have been in constant communication with our residents, Its Part: taking
Slide 6: COVID-19 Operational Update
COVID-19 Operational Update • Early trends emerge as households leave city centers and apartments with shift towards suburban, detached single-family homes • Increased volume of self-guided showings using proprietary AMH mobile leasing technology Social Distancing & Behavioral • 95.4% May 2020 Same-
Slide 7: AMH Resident Demographics
AMH Resident Demographics Our Residents Adults, Kids & Pets • 2 adults, at least 1 child and the majority have pets • $100,000+ Average Income • Average income to rent ratio of 5x • Majority of households are dual-earners • Two-thirds of our residents work in health care, education, real estate, tec
Slide 8: AMH Today / Market Opportunity / Strategy / Governance
AMH Today The Market Opportunity AMH’s Strategy to Drive Shareholder Value AMH Strong Governance Practices 8
Slide 9: Macro Landscape Drives Strong Long-term Demand
Macro Landscape Drives Strong Long-term Demand Macro long-term demand metrics remain intact with potential for further strengthening due to COVID-19 environment as household preferences shift towards suburban, detached single-family homes Fundamental Shifts Support Single-Family Rental Demand(1) Str
Slide 10: Home Inventory Remains Below Historical Averages
Home Inventory Remains Below Historical Averages Continued Strong Demand for Housing from 10+ Years of Housing Undersupply Relative to Household Formations Resale inventory fell 11% YoY to 1.5 million units in Mar-20 and remains below the historical average Existing Home Inventory for Sale(1) 3-mont
Slide 11: AMH Today / Market Opportunity / Strategy / Governance
AMH Today The Market Opportunity AMH’s Strategy to Drive Shareholder Value AMH Strong Governance Practices 11
Slide 12: AMH Has a Well-Defined Plan to Drive Shareholder Value
AMH Has a Well-Defined Plan to Drive Shareholder Value 1 • Continuous operational optimization expected to create long-term margin expansion profile Operational • Balance centralized control and oversight, with local office touch Optimization / Efficiencies • Enhance operating efficiencies with inno
Slide 13: How to Calculate the Operational Efficiency – Complete Margin Picture
How to Calculate the 1 Operational Efficiency – Complete Margin Picture Accounting and reporting differences between companies create noncomparable NOI and EBITDAre margins Operational efficiency is best measured using Adjusted EBITDAre after CapEx and Leasing Costs (“Fully Adjusted EBITDAre”), whic
Slide 14: AMH – Outperforming the Peer Set
1 AMH – Outperforming the Peer Set Core FFO per share Growth - YoY April YoY Job Loss Statistics(2) MAA CPT AMH INVH UDR AIV ESS EQR AVB 14.0% FY 2019 Core FFO/sh growth: AMH 7.0% 12.0% INVH 6.2% Multi-family Peer Set 5.7% -10.4% -10.5% 10.0% 8.0% -11.2% 6.0% -12.0% 4.0% -12.9% 2.0% -13.3% 0.0% -13.
Slide 15: Houston Case Study: Property Enhancing Capex
Houston Case Study 1 Operational Optimization – Property Enhancing Capex Property Enhancing Capex Case Study ROI (Average per home) Tremendous opportunity to optimize our existing properties Property enhancing capex $ 10,700 • Strong returns on incremental investment Annual rent premium ($155/mo) (1
Slide 16: AMH Development – Revolutionizing the Industry
2 AMH Development – Revolutionizing the Industry Data driven insights from AMH’s years of experience formulate blueprint for the optimal rental home – made possible by AMH’s unique full lifecycle development capabilities and management platform. The AMH Developed Home Desirable Durable Efficient • E
Slide 17: AMH Development – Premium Return & Margin Enhancement
2 AMH Development – Revolutionizing the Industry Premium Return & Margin Enhancement •Construction costs = significant discount to market retail value •Rental rate premium on higher quality home & finishes •More efficient expenditure profile Attractive Risk Profile •Zero “homebuilder like” sales pro
Slide 18: AMH Development – Case Study (Hoke O'Kelly)
2 AMH Development – Case Study (Hoke O’Kelly) Community Highlights Relative Demographic Trends • Hoke O’Kelly Community located in Atlanta • Average household income greater than broader (Loganville), GA Atlanta market and total AMH portfolio averages • 53 total units: • 2,250 average square feet •
Slide 19: AMH Development – Construction Sustainability
2 AMH Development – Construction Sustainability AMH Develops Homes That Are Environmentally Friendly Development & Construction Sustainability Aim to minimize our carbon footprint in our development: • We conserve natural resources and reduce waste while focusing on building new single-family homes
Slide 20: Balance Sheet Positioned to Drive Growth
3 Balance Sheet Positioned to Drive Growth Capital Structure (1) Debt Maturity Schedule (2) (3) Fixed Rate Debt $956 23.8% Liquidity(4) $881 Common Shares $728 & OP Units 68.0% $510 Floating Rate $410 Debt 0.9% $126 Preferred Shares $16 $21 $21 $10 $10 $10 7.3% Principal Amortization Unsecured Senio
Slide 21: Leveraging Technology to Enhance our Platform
Leveraging Technology to 4 Superior Customer Service – Enhance our Platform Resident Experience Technology Warm and Welcoming Renting a Home Just Got Easier Resident satisfaction is the key to consistent results and is Our best-in-class contact center and proprietary technology paramount to our long
Slide 22: AMH Today / Market Opportunity / Strategy / Governance
AMH Today The Market Opportunity AMH’s Strategy to Drive Shareholder Value AMH Strong Governance Practices 22
Slide 23: Corporate Governance Highlights
Corporate Governance Highlights • AMH is governed by an 11‐member board of trustees, 7 of whom are independent directors Independent & Accountable • Independent Chairman of the Board Stewardship • Annual election of directors • Majority voting standard (plurality carve‐out voting standard only in co
Slide 24: AMH Trustee Overview
AMH Trustee Overview Photo Name Years on Board Age Primary Occupation Key Skills & Public Board Experience Independent Independent Chairman of the Board of AMH • Diversified business investor with public REIT experience Ken Woolley 8 73 Founder, Executive Chairman, and Director at Extra Space Storag
Slide 25: ESG Principles That Guide Us
ESG Principles That Guide Us Our commitment to sound environmental, social responsibility and corporate governance practices is the foundation enabling us to provide a superior experience for our residents and employees and providing attractive returns for our shareholders. Contribute to the well-be
Slide 26: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations 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. This calculation excludes properties classified as held for sale. Core Net Operating I
Slide 27: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations The following are reconciliations of Core NOI and Core revenues to their respective GAAP metrics for the three months and trailing 12 months ended March 31, 2020 (amounts in thousands): For the Three For the Trailing Months Ended 12 Months Ended Core NOI Ma
Slide 28: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations Credit Ratios We present the following selected metrics because we believe they are helpful as supplemental measures in assessing the Company’s ability to service its financing obligations and in evaluating balance sheet leverage against that of other real
Slide 29: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations Fixed Charge Coverage For the Trailing 12 Months Ended Mar 31, 2020 Interest expense per income statement $ 124,914 Less: amortization of discount, loan costs and cash flow hedge (7,496) Add: capitalized interest 13,049 Cash interest 130,467 Dividends on pr
Slide 30: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations EBITDA / EBITDAre / Adjusted EBITDAre / Fully Adjusted EBITDAre / Fully Adjusted EBITDAre Margin EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP financial measure and is used by us and others as a su
Slide 31: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations The following is a reconciliation of net income, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre, Fully Adjusted EBITDAre and Fully Adjusted EBITDAre Margin (amounts in thousands, except percentages): For the Trailing 12 Months
Slide 32: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations FFO / Core FFO / Adjusted FFO attributable to common share and unit holders FFO attributable to common share and unit holders is a non-GAAP financial measure that we calculate in accordance with the definition approved by NAREIT, which defines FFO as net in
Slide 33: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations The following is a reconciliation of net income attributable to common shareholders, as determined in accordance with GAAP, to Core FFO attributable to common share and unit holders (amounts in thousands): For the Years Ended Dec 31, Dec 31, 2018 2019 Net i
Slide 34: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations The following is a reconciliation of net income (loss) attributable to common shareholders, as determined in accordance with GAAP, to Core FFO attributable to common share and unit holders (amounts in thousands): For the Three Months Ended Mar 31, Jun 30, S
Slide 35: Defined Terms and Non-GAAP Reconciliations
Defined Terms and Non-GAAP Reconciliations Property Enhancing Capex Includes elective capital expenditures to enhance the operating profile of a property, such as investments to increase future revenues or reduce maintenance expenditures. Recurring Capital Expenditures For our Same-Home portfolio, r
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