AMH - Earnings call transcript Q4 2018

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Operator

Greetings and welcome to the American Homes 4 Rent Fourth Quarter and Full Year 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Stephanie Heim. ahead. go Please

Stephanie Heim

factors any those are and forward-looking projected only February filings you subject advise statements I that that XXXX Thank We Dave us future this our Rent. Operating in obligation for business Chief of All as in affect of the of Financial described a Good statements otherwise. Homes with than other fact American are GAAP forward-looking release. in risks assume you today, update in and conference for results to no our call. is that to events, reconciliation and quarter X call Officer; Chief our Corrigan, included earnings Officer; call financial statements. the and are materially with Lau, the to could those adversely results A I'm earnings forward-looking or measures of fourth statements. conference this in other speak press information, this statements statements Chief future Executive number of of Officer outset, providing morning. At are new Jack cause joining Chris need call statements and here Singelyn, to to we may non-GAAP a include could that releases included or from historical result uncertainties forward-looking differ our All our XXXX. SEC. These as whether on XXnd, press risks actual revise today

supplemental in non-GAAP financial our GAAP detailed measures, fully our information note, As operating and and including package. a earnings release and are results,

call webcast this call over well at these reports as find that, and to I conference the documents the replay audio our SEC CEO, our Singelyn. turn With www.americanhomesXrent.com. You David webcast will as of on can

Dave Singelyn

while the goal fourth We than of started factors with years ago, to earnings strong one-third this quality outlook morning, the within our Stephanie. residents. unique changed, quarter and overall welcome remaining the and with many Today, The positive. seven a a faster to national our our remains markets are combination healthy, a platform for single-family we job premier consistent has Global than growth focus supportive. much demand grow our you, operational portfolio, sectors, average. the our best with operating underlying increasing Thank more business. for deliver saw remain business drivers uncertainties Good of housing national national or XXXX institute time, At about building economy accretively is concern and the business, our conference call. to the but practices, rental

we demand Additionally, in housing most preferred excellence, world-class to environment, improve to this service. continues growth, our housing support for Within continued new of the and consistent macro families. and on renting and many and customer refine platform superior operating option operational based supply cornerstones; financial markets flexibility, outpace remains four accretive

Homes be cost, most at is of to X Let platform. me we the not our which which of American of each regarding best but industry, the the the efficient just lowest operate, our to principles optimization Rent these platform continue touch on economies cornerstones, service due firstly, in providing the the ongoing on operating Today, scale.

designed maximize and operational have standardize and efficiencies. We implemented processes, and to practices best management

created a culture trained success. innovation have We a and of and best-in-class team

customer the learn including maintenance expand internalizing we're Most from handling own maintenance service. efficiencies real-time. in these we technology and and request but asset with functions to the Today fundamentally in experiences business preventative deal way to capital enhancements engage leasing constantly not to our Let efforts, the do have marketing as investment. changes and as that importantly, In with to We and and the in still, sitting programs. personnel, continue the maintenance and Similar long-term we our view, have of process technology, refinements to interaction, our invested prior Yourself resident management from managers improving impact we

and compared in it expenditures, a program, over expenditures maintenance moments. while reduces this on program in While today, Jack resident maintenance the a a satisfaction. long to capital also elaborate preventative improving maintenance-related will results this higher few robust without more term

a on grow Second, portfolio advantage channels, the taking our we prudent listings, these homes we've our formation, while auctions, have mergers. and opportunities Since investment grown risk-adjusted and will time; average strengthen management. at continue as and acquisitions, available builder investment home. best asset of age of the in-house market and and portfolio focused per market portfolio recently, best further metrics development expenditures and through through our in accretive programs, strengthening variety we to are capital national our the on REO start terms believe of More we opportunity,

we maintained which to average of great solutions. and feel facilitated investment-grade Our of connection third debt home residents ensure homes and lower homes emphasize proud residents. community. earlier capital take structure our a to expand Today, flexible steadily to delivering sources and capital our of ever, our on And resident greater execution. cornerstone arise. to any cost on for of all that experience their and to fact focus balance we conservative comfort capacity customer at rating, that or capital. The in finally, superior our our their of sense and a focus formation, have I continue raise is a Since and with long-term year to to of we is our will advantage excellence In our balance convenience and are our unsecured opportunities of our and this our positioned our worked than sheet sheet. our enjoy successful am flexibility we of need has $XXX work interactions, million

strategies and are and responsive service. training to deliver Our operational designed efficient

know we Our can always we our but ratings providing demonstrate customer surveys and service, improvement superior do in external better. continued customer

place be legacy largely like call of the with which it Board a Chris we replaced that our of I with time G&A revised of call. Before review, impact equity details The Trustees At on and our over mention in and and On need thorough to the turn with to plan. structure After related recently compensation of sales. our the executive will in provide made trigger I full loans the prior later repaid by year, connection the certain program filed on the to new in acquired updated performance-based incentives. company would which IPO. may the management on be plan, Chris, compensation Jack point, the proxy March Board was when details more stock of felt expect forward-looking stock maturation note, this to Board executives affiliates rewarded important is comp the the implement by a our given company, this the a related will IPO will to available of the

However, leasing as shareholders remain forward. of highly interest season. accomplishments we In committed are management ownership closing, is portfolio retain our and stake strong robust of remains believe move to continued are to occupied and we our going we and into alignment expects proud well with success. Fundamentals our for a substantial positioned

driver key Our are initiatives a going development maturing accretive forward. of and are growth

shareholders. is to to we are Jack. the Finally, we And strengthened, I'll experienced, team our believe our call create over well-positioned to platform now has continue for long-term and been turn our value

Jack Corrigan

Thank begin revenue you, good everyone. with I'll morning growth. Dave and

quarter-over-quarter in year. realized am the were to the X.X% rents of occupancy revenues same-home in points XXXX during quarter, a up occupied basis XXXX. was was We the monthly from up and For of and increasing same-home average Full pleased percentage than rent the XX better XX% sustained year XX.X% basis each X.X%. rate that the Average year, days same-home demand increased growth say realized days during leasing same maintains saw some challenges XXXX, our portfolio, XX core resulting quarter quarter the up X.X%, quarter and I an rental we during strong the revenues that average X.X%. fourth blended of achieved monthly XXXX points despite XXXX in up percentage, of fourth we from average core faced prior

As do to growth. material shift our will ahead sustain expect details ability there Chris our modest still XXXX, And current more based for is on we we not rate to lift. provide levels our later the guidance in any on we occupancy demand, call. rental look believe room of on

to of Cost year of the XX.X% of XXXX operating repairs reassessments same-home of X.X% the our year, property home full of the continued Across turnover cost we experienced expenses up categories, and assessed in full over maintenance, repair were primarily expenses, reflecting deals X.X%. operating expenditures, and XXXX. increase total Property XXXX, were timing XX% for successful consisting expense higher to values. up offset values, cost, by and property core up nearly in consisting Turning operating which X.X% represents homes, for management were partially prior maintenance, and the of year. an the rest of our maintain taxes,

As previously discussed, by coming program. our available of the into year, were and including the of the variety a weather-related increases preventative year some inventory the we've rollout driven for inflation, higher factors, maintenance costs,

asset focus provide Now, AMH additional ensure program. quality maintenance to Preventative and customer maintenance I always been has maximized will on satisfaction. for a color our preventative

on completed portfolio more Historically, third-party preventative of and However, a efficiency ensure the we long-term program as using of age, recognize we for our maintenance portions predictability to need robust expenditures. vendors. maintenance turns preventative

efficiencies, This and preventative improve in scheduling maintenance in to which portion pattern in-house orderly manner. terms to exterior most the the both of more Following to a on allows during exterior internalize of process of focused the our functions technicians are cost initiatives, we cataloging our for homes. residents, disruption internalizing of maintenance XXXX, hired conditions additional and exterior operating a of of new

be on to can of be more homes. up one the efficiently work occupied times, that benefits expect exterior We performed turn the will as speed

of favorable between total we the home XXXX higher expanded of X.X% Looking range. ahead the year to to cost weather-related prior to prior to for benefit approximately cost maintenance in by and X.X%, resulting we maintain comps. to the along X% unknown cost $X,XXX to average consideration overall preventative to by our offset an Incorporating maintenance program. a $X,XXX wage, reflects inflation expanded the impact of labor, events, with increase impact This increase maintain maintain XXXX, in to preventative programs, our our to material X% and expect expect

near-term, the right the a adds we program and long-term in in this costs proactive incremental result decision is approach will savings. believe ultimately While

team available incurred turnover may at front, of levels experienced our discussed, On the as be last turnover platform, Further, normal. teams, year higher mobile leasing and staffing or field the turnover back in we while given to teams we have by including continue our suddenly to to platform. assignment, teams hit operating to confront the training us, staffing these disruptions. we we believe markets assist And provide best-in-class the our teams our and other across in not depth will our members. Today, some across ready to when are on support

increasing in Turning demand provides as initiative built-for-rent long-term the opportunity growth, focus best Dave near mentioned, are adds we that newer more are our programs for assets on as to accretive This and economics. growth. risk-adjusted and better our

fourth including quarter XXX renovations, the homes, were an million. of $XXX our homes totaling through investment, added we total XXXX, programs. During added these estimated for $XX of built-for-rent million, XXX

For were year, homes investment Phoenix. Austin, Atlanta, programs. X,XXX total including million We added built-for-rent in of $XXX through an and $XXX our active homes million, for the for estimated Charlotte, full we most XXX

expected into other to inventory, $XXX $XXX our pipeline homes channels. be of XXXX, from rest to take our from the target For XX% our million is with built-for-rent about to and million

we the back inventory invest the toward half to into an first the these $XXX development that additional pipeline expect half million slowest, of be activity will For expect additions with deliver of future to years. the we the we Further, expect additions, year. weighted in million our majority $XXX to

it prune where strategically Turning operational reasons. sense for makes dispositions, to continue to we our portfolio

fourth the of XXXX for net full quarter, sold the for During proceeds million, homes $XXX of total homes we XXX million. year net $XX dispositions bringing proceeds XXX to

when the X,XXX both bulk approximately on intend we are a to vacant. single-asset XXXX, identified homes homes, have basis and sell, For we which in

the and anticipate a occupancy year. approximately last XXX we with majority to did intend we lifting next sales operational to complete XXXX million than and investments. months into we $XXX higher year-end position to the which recycle XX enter is points of our heavy XXXX in In strong summary, in we a objective Our over these in generating up new execute proceeds, of basis lot

strengthen and to for We superior continue our deliver to residents. customer our service platform efficiency improve

So turnover. positive far, we in same-home seen absorption lower the XXXX, pool have in than and anticipated

XX were basis For January, average up points XX.X%, from days XXXX. occupied

Chris. to over turn the will I Now, call

Chris Lau

Thanks operating balance my some on the of introduction Starting and comments then operating our the our additional color our XXXX of our I'll guidance. results, Jack. you sheet, results. In fourth today, on provide quarter update with briefly touch summary off on

On over contribution net of of quarter acquisition activity and in to FFO for of $X.XX last quarter quarter For $XX.X quarter compared share quarter is to $XX.X XX share million $XX.X in the loss $XX quarter and diluted FFO of was same-home core attributable FFO million increase unit XXXX, our flow common X.X% fourth of to FFO as net share growth XXXX loss and as for FFO per the This XXXX. the net fourth quarter share. the fourth share fourth million of unit XXXX, from primarily or of months. in as properties or per share of Adjusted up of $XX.X shareholders fourth as XXXX, for the $X.XX adjusted was per compared $X.XX basis, was $X.XX million our and $X.XX FFO income our fourth of core million The share million same both per the fourth the FFO unit or income a development XXXX. per diluted well a unit we Also, last from cash compares for year. for $XX.X from $X.XX the the and or for continued operating FFO to XXXX. pool generated per attributable per quarter to

update quick and we In repayment sheet announced of a the November, our years. capital balance of $X.X with senior for average of a cash Next, debt exchangeable consideration total $XXX recent our previously I'll XX.X term million rate of average X.X% had billion activity. maturity we of a weighted on year-end markets $XXX.X provide million. maturity at completed to weighted At XXXX, and total interest notes

X.X% this revolving discuss off At in I'll paid Our EBITDA was credit January adjusted $XXX year, balance, million X.X $XXX million debt due plus X.X completed million January, minute. end, net debt in preferred in a our Subsequent had offering, end, XXXX. our second of facility $XXX and unsecured subsequently of times was senior which which raising adjusted year shares was to to we notes, bond are EBITDA in times. year to which

credit fund the $XXX were outstanding a our our million as As used in general net to part to the facility, $XXX I corporate remaining balance mentioned, proceeds portion just on net of million and repay XXXX of revolving purposes. development leaving approximately well proceeds acquisitions program as

any our principal we and three which debt growing grow Going have portfolio. our with and strong solid program, forward, have for flow routine next very capital of regular $XXX we maturities cash on our other the recycling to combined amortization annual million approximately platform foundation which and don't a than years,

within new If costs would being place approximately of included property same-home which capitalized. the management have expensed $X methodology had $X the internal XXXX, adopted results our now to in the proportion leasing accounting lease approximately Consistent Before been would beginning a I have of real in included with like XXXX, for make in XXXX. of which note expensed larger into all costs leasing million been get more than in have million of guidance, the industry, estate rather about we I'd we new costs, operations. quick of rest one standard, and

by unit. XXX per range this reduced share would reference, nearly NOI approximately to lowered have our XXXX to FFO our by the $X.XX FFO same-home XXXX margins points and XX% core and For basis $X.XX

actual items a As line to has change cash accounting merely no financial impact and impact this expenditures, a in AFFO. importantly, reminder, on represents and no statement

accounting provided the forma XX however, on preference, on looked of of with we metrics supplemental, page XXXX what table have pro showing For a lease our would reconciliation the basis have FFO ease like a standard. new

and metrics. you For comparable FFO, core with the impact XXXX and to provide similar continue conformed and we accounting year be XXXX to NOI we'll standard to prior margins lease expect

range $X.XX the to core on. unit, to XXXX $X.XX $X.XX sure FFO assumptions which from now for over expect have I are and metric growth unit. includes guidance, I'm FFO, to XXXX share more Finally, you At you the provide noticed range represents all FFO would like which we conformed full per our guidance share I'll Supporting several this a of new for our and color midpoint per XXXX accounting lease X.X% that with comparable standard. our introduce

occupied revenues range based be our X.X% similar monthly average to pool, about in our uptick our growth XXXX, include realized is core Jack in growth same-home rent. in expectation year-over-year in already properties covered For which is the for average year-over-year will X.X%, of to which on days a as expected slight now and XX,XXX

property pool a is X% all expected X% to growth in for operating X.X% X.X% increase by in to and core the the X% property to expense Additionally, to driven range, taxes in be items. line XXXX the same-home X% increase

on a revaluation XXXX, have expecting property year, proportion property As this Colorado. taxes, quick a South North resetting slightly increase higher of and Carolina, multi-year we larger states we as note a Carolina, notably tax values are in

core and in the Jack preventative expense the X.X% Tying outlook, expectations the NOI expectation always, less maintenance to capital on of actively after our appeal range of update growth at throughout As our need an range, expenditures in plan tax year. translates property will into this things conservative same-home X.X%. point level our that taken values as you this visibility program we capital and assumed discussed, and success expenditures to where together, we progress perfect a revenue with front possible than have including for to but guidance have

million representing of million inventory of $XXX both year development Additionally, take to of pipeline $XXX with half million total continues our the balance program be more from as into its investment $XXX Jack ramp-up. as this Also, and deployment invest homes. of acquisitions much important heavily a second into homes between the year's additions inventory expected are programs, perspective, mentioned, note it's Development that from of between AMH capital AMH-developed $XXX to our capital to we and our and and million this XXXX the expect year's this towards timing weighted year

remaining range And to million of reflecting this that Dave facility our of through offering, executive $XX.X and revolving and remarks $XX.X flow, We and new X% January's XXXX usage X% cash the of along fully of other go to general the all retained capital million, from recycled in credit year's proceeds the program, disposition a that our impact combination as modest a compensation expenses call expect expect administrative concludes be our prepared necessary. to questions. reinvestment bond of this we'll that, available fund And to of finally, we G&A. increase program your modest now the with our to discussed, with on Operator? components from open

Operator

be a one In Please with will line to Our we session. of question. Richard question-and-answer Morgan first follow-up. of with this comes question proceed and Hill At question time, the from time, conducting please Stanley. your yourself one limit Instructions] interest [Operator

Ronald Kamdem

Kamdem Hill. Ron for is this on Hey Richard

was have on just I the question First cost to maintain.

you've transparency. think I and some good color provided

Just try a higher some so and costs, said were higher you forth. more, bit digging little into the wages, drivers that material of

should opportunities And down? to down Is are there start much trying item is post that? flatten or number that to one? about see go that Just the And that line understand line we number a two, XXXX then potentially think how how is to thing?

Jack Corrigan

demand not And inflation economy I -- it's in cost range, but and would more. having to up and then pay XXXX the in same around us where a is general, for the been X%. I of With X%. as are. also at another going where think the the are much to down, they're XXXX, their X% think. goes labor, probably depend people for in be it'll material extraordinary labors that charge And the unemployment the more as thing -- down in whether future, wages people And actual expect really rate right goes in and unemployment on it's is XXXX, is It's

Ronald Kamdem

follow-up was back my to going to Great. just be going And the then margin.

accounting lease for change should the that basis points headwind to we What's XXXX XXXX. think XXX -- mentioned how you was think margins and I about that beyond?

Chris Lau

this question. Ron, Good is Chris. Yes.

accounting for XX% Adjusted that Your basis range. would spot number is on XX% reported lease comparable the be margin we XXXX the our standard, for in a on. range

do the the of see we're math and the XXXX, expense kind purposes range context on in ranges margins XX% so. on and For or thinking revenue in our thinking about flattish a you about that of of can XXXX basis

Ronald Kamdem

you. Thank Helpful.

Chris Lau

Thanks Sure. Ron.

Operator

from Citi. comes Joseph of with question question. at your line next Please Our the Nick proceed

Nick Joseph

Thanks.

you you're for are start of any the to homes, delivery the there building? homes implementing newly lessons wave take for or learned changes to specs that As constructive next you're

Dave Singelyn

-- bottom Yes. washer We are Not make and have lot, but reduce dryers that again we this a floor. doing the to on things sure maintenance. the

closets And caused floor, And so the so stairways of. regular the sliding move wrong are maintained easier to -- and with water out on damage in the not they're doors sliding of a instead any make to we of a they're that same be is having hookup constantly to bottom walk-in doors because we things wider, maintained. And heaters. doors, by water little lot little the a put

all it's the little So, just houses. things over

Nick Joseph

have all? in What's then driving your that? for leasing bad And changed XXXX. was at And standards the higher Thanks. underwriting debt quarter

Jack Corrigan

No, standards the underwriting haven't changed.

and but where the X%, I is year, full just little the which sometimes we around year gets under it we've -- think for a been. right lumpy, it of for were historically full kind

Chris Lau

you at I and fourth rent when debt as a on The to what expecting. on quarter-to-quarter of And quarter its a And basis. move look about the we us, Nick, percent X% fees, kind we're it Jack's bit in we're it to of -- right think point, does of around a little But is, Yes, the right. X%. range less that's think that is exactly way bad about or Chris. that

Nick Joseph

Thanks.

Chris Lau

Nick. Thanks Sure.

Operator

of line Our next the from your comes Gilbert question. question proceed with Ryan with BTIG. Please

Ryan Gilbert

guys. thanks Hi,

that FFO to be Is well? would number clarify, per to as than change range the for the core fair standard in or XXXX it XXXX impact think $X.XX $X.XX. XXXX share greater Or guidance use you just -- impacted impacted the do could have the accounting by So, that?

Chris Lau

Chris. it's Ryan, No,

the As is or contemplates XXXX I on accounting pretty new for is standard mind, And XXXX. our impact keep expectation range expecting that our what lease of the representative in is guidance we're basis. mentioned,

in a just And this dollars is economics just as accounting actual AFFO. the impact So, and reminder, going no to, cash there. item no There really factored out line that's already or change geography. door is obviously, to

as we've So, sure few always leasing taken a costs just lease for us, a an you're from a FFO as moving those aware, from I'm accounting dollars deduct it's line to And perspective. essentially AFFO. standpoint, change items up

no So, to now core be be in it's bottom to going AFFO. line reflected and But there's the line of ultimate in FFO. again, the above NOI change

Ryan Gilbert

Okay, as reflected same-store to be expense are numbers? restating well understood. guidance the is you expense the in And the XXXX same-store change or going

Chris Lau

year-over-year. everyone comparing contemplated conformed percentage providing we prior and XXXX, range. metrics, mentioned in we'll is sure basis, specifically, setting XXXX, that prepared it's you're No, basis. growth our percentage be dollars make much and long all impact not keep of have and so from terms in XXXX reflected But And a on as margin. it can penny of it difference as a as kind apples-to-apples And But move it's in on so guidance will in throughout an remarks, I things -- my growth of both in to there. year mind, comparable apples-to-apples going we're

Ryan Gilbert

to all? you to by a on in basis. great. hurricanes surprised it And -- I turnover, that Or fall the a year-over-year had Was that homeownership? increase saw an were we number little then at the flat that's there move-outs Okay, in any see on impacted markets where is was

Jack Corrigan

terms the think, down in year, But quarter-over-quarter, That of were turn. we I for were flat. we

so in we're turns. XXXX, And as far as far down

just exactly So, the flattened it again but think was I I'm why not in -- that will out I -- expect down don't XXXX. for I be it quarter, sure

Ryan Gilbert

Okay. Thank you.

Chris Lau

Ryan. Thanks

Operator

from line with of comes Green Jason Please question. the question with your proceed Evercore. next Our

Jason Green

Good morning.

to the well front one-time to you the half cosmetic year some year, last onetime to expenses related of in weather. as push inclement had occupancy So, expenses expenses as related

included for dollar And remind us value guidance XXXX? what's each spends So, then I expense guess, XXXX? in can the separate of those you what the of was in

Chris Lau

of Jason, the start or beginning year numbers slightly it's there a of the Chris. I'll at part non-recurring again into it, coming of taking Ballpark for towards may expected items. and hurricanes half Yes, that fulsome non-recurring here, was total, look $X kind of so, thinking a We all then weather probably again. level. of year throughout two had last likelihood keep this we this type of expenditures what type year, or we're just rounded and a in the of events that comprehensive kind And higher of But probably related had year, mind, good it trying occur year, at so back at we're as of million year, total was kind freeze of keep is on the last of about, the and including thinking call some element guidance the of kind we're to we year. to last as type were mentioning about events.

weather-type contemplated the additional potentially unforeseen fact have we kind of have this could ranges, guidance our we events in that So, year.

of for related a turn calm view our the weather, a we outlook favorable kind of In progress weather from say we year unforeseen love piece that to I but So, I mild the have comp minimize year. discussion end again, to then don't we comprehensive that we'd want great a to into comp, to on necessary event last it. that a of that would will the year. XXXX actuals the And and the year of the at having terms to that's And year, be number wouldn't in XXXX the that's from as the to count be in events favorable objective really throughout as is a guidance. here

Jason Green

your real tax experience year I -- B, be? the is portfolio there dramatic is any? guess, and for better increases estate A, percentage taxes of the next that a states, what how can how multi-year on those then us the is guess, sense And what give percentage increase And that? if in can Okay. And experiencing I you

Chris Lau

Yes, question. sure. Good

are out the So, a will flattish higher X.X% to of that year. type Carolina, kind my are remarks, as there Colorado. we reevaluation reminder, of there's in increases South Last and this pointed are year. relief expecting multi-year a Also we again, Houston just midpoint. this X% are taxes on than a Houston of states In the to on property this prepared those expecting measure, expecting for essentially we X% normal year, year there North Carolina the stayed that mentioned and Harvey, primary drivers slightly catch-up back be I

can some be be And up are have where increases people not XX%-plus, those revalued dramatic. There are Carolina pretty going of several I been can in for values that know because North they years. many aware places of

think in revalued they've particular one don't think county, I eight been I for years.

a years of with constant multi-year is they So, year now, XXXX, decides of not then catch-up. next which Thinking too rate, going that about will to on do and unless jurisdictions kind resets common. year kind stay large the something in this for multi-year have the jurisdiction there is will right reset those off-cycle

in increases meaningful mentioned. some specific areas So, there that are I've those pretty

in normalized X.X%, ballpark. be so X.X% and and X.X%, the represent exact X.X% an it That not for of which Xs, number, like Colorado, Carolina the that more to that were then level here. Carolina, -- upper Houston, this just that portfolio some context, you For you something XX% normalize context give for South some of would North but in is or if to X.X%,

conservative guidance. But level active our knows, So, year. to combat going the can revaluations and again, And we've meaningful just I opportunity. where there on throughout pretty I kind front as in to previously, would reiterate of everyone that of to we we're progress do everything And very is the considered to we're estimate some appeal the that year. we have that there will then as everyone as mentioned keep impact on front very, this posted

Dave Singelyn

Jason, Dave. this is

know, the property throughout Just get on that taxes last point, as assessments year. the we way you work;

through year, today the And to in X.X% come first very, best appeals to as on our with overall. came refined very half And believe But worked for last sure. is the have go going on of been we consultants so year that we've get estimates. and number I we about we increases successful to the

assess, not we've linear covered guidance it's the the most it way comfortable sure. for jurisdictions got but of pretty again, that So, all our just of with functions the we're because

Jason Green

And then Got the it. same-store front. me last on question from revenue

You're coming higher year. than into year this with last occupancy

potentially during about the occupancy talking increasing year. You're

hit You're the the guess, of maybe realized thinking then, range? possibility the I I average flat, you uptick. could in And that probably the that you being really could having about guess, what's what's range? talking bottom in about that context, above likelihood rent possibly range some monthly the come

Dave Singelyn

in over all think have coming quarter, Where it's is the weighted. We prior -- occupancy there's the lower over or that lot expect, that blended a this bit -- can of XXXX will little and are higher the happen continue. a XXXX. a are again. being about lot equal it's -- rate over of very But XX we've were in even midpoint. definition, outperform quarter of outs rental months. of Well, encouraged can sit Dave we move with than higher that Each the we trend, probably rates trajectory to the I today, And the the By reasons it's seen what we next increases year. the we whether trends, things

because lot is put a encouragement beat we could that of unknowns. would numbers, there the I those of equal weighting but So, just

Jason Green

very Thanks it. much. Got

Chris Lau

Thanks Jason.

Operator

comes St. the question next from Our of Haendel line

question. your with proceed Please Mizuho. with Juste

Haendel St. Juste

morning out Hey good there.

Chris Lau

morning. Good

Haendel St. Juste

earlier to question with a want an I on different ask maybe but slightly So, twist. margins,

flattish growth and for forward? I'm life year-over-year, ever thinking the you expenses company. And public in looking the maybe preventative also with like revenue margins growth, sector on again and or what last year curious support margins decelerating a and And your history perhaps are page going this first in its going revenue Looking annualized forward? at entering new then seven-year if measures a maintenance time brief enhance stage basis last beyond same-store you your to they an considering expense your year looking as outpaced cycle the margins

Jack Corrigan

or that that down. that for X% to Jack, we've couple years a consistently of think had unemployment. the or of the year several the two X% years. have gone our -- range expenses, we hired wouldn't to have of up had estimate the up, Haendel. is -- I Yes, X.X% And year that it's expenses an down. plus has goes just has a this people we Well, The internally of the I our in caused last a revenues whether either and been do We third-party where -- labor that work years flat before were

kind So taxes. at that's in And economy the point where it's the property be property and continued increase values to so to going just some is. have the of reflected

Chris Lau

would And I say quick Yes. that. on note a just

a range, expansion X.X%, would property by to flip some ago, to minute mentioned X% you taxes alone numbers the itself If into margins position down the to X.X% actually slight of would that I for just normalize a year-over-year. higher

Haendel St. Juste

measures margins that about? you're you've support the Any on considering maintenance Okay. additional talked perhaps to beyond color preventive

Jack Corrigan

that Well, We expenses functions. of better get the or we And result each to of currently X continue expansion will being hopefully, any an X Phase maintenance. in-house plan expect to at improved. don't our Phase of in

Haendel St. Juste

a then here. And Okay. follow-up

In outlined needs are I chunky or that more an to to disposition there deals the you you bulk? it on X,XXX expect over bidding million -- versus part pricing serving perhaps more Are smaller, some of to this, biased buyers? when them differential you tactically, addition there also in maybe to Or next today? between maybe development? guess, type of maybe on $XXX -- XX expect in And open portfolio? your the the more ATM you out as to range. portfolio arise, as are homes of as chunky what's comment bite-sized months, fund you sorts are selling selling you to receive fill seeing them What

Dave Singelyn

there. generate cash. have don't significant the Yes, markets to a and plan selling to a we're we not presence don't we dynamic less kind We're ever in selling where grow of

out on properties really talks certain is and So, maintain that of comes about company going to them And us cost our highly. or of to we lease -- those management and other property selectively markets, the we the we're areas that to one to to have we're a tend enough maintain the It's significantly sell out have room our just don't good it on higher not tanks. or -- comps septic than to ones those manage the sewer. system in -- of and are cost place to hard either the are we

Haendel St. Juste

arise, Should to bid sooner did want than there be to clear. perhaps just selling a be a bit open you are you-- But that

Dave Singelyn

average bulk three We're quarter. selling small fourth XX% MLS. up and the Yes, deals XX% them they done vacate on on probably in have we as bulk about then we and put the

Chris Lau

And its that's good Chris. Haendel, a actually point.

$XXX this Just have of of it about for from of difficult number. a don't And it than of predict be year. that lumpy. as throughout just out, on pointed year. evenly better off be million guidance the sales We assumption But the is perspective, we're and kind to the timing Jack in purposes, could an ballpark it we modeling expecting could

year. unpredictability be you on But of timing So, kind that one again, out, point where just the we'll area will keep throughout updated front. is to certainly there that

Haendel St. Juste

it. Got

Thank you. Okay.

Operator

your Jade next Our proceed Rahmani question. question line Please from with the with of comes KBW.

Jade Rahmani

least, which of In number is to, I sequentially, think at Thanks seasonality. a of very down accounted quite expectation was markets, my much. occupancy

included markets Nashville. Atlanta, those of Chicago, Charlotte, Indianapolis, Some

that? what's driving So, can on touch you just

Jack Corrigan

Well, troublesome one ones been a Nashville I is think more of that little lately. has the

still supply space occupancy and happen once from right players competition and I other the resolved, institutional they to the back we goes these in pretty high occupancy. XXXX. saw in We issues see up. Atlanta think is related are XXXX Nashville, temporary in late before an increase absorption entering

players one slowdown So, discussed, last getting that the in that Indianapolis. and we've of a our seen happen to we where teams was we caused Indy basically in rent. think ready markets one had the turn by coached I Phoenix, Tampa, quarter, homes of whole other institutional

the we have would occupancy was than lower consequently, so liked. And

Jade Rahmani

How mean, But basis dropped and basis housing Orlando, dropped in strong has about that really in Jacksonville two. there? XXX those market, I the XXX going I especially almost like and occupancy on Florida What's looks been Jacksonville Orlando? think points. I points it almost mean,

Jack Corrigan

looking I it I'm guess, little might be what different. a at,

Chris Lau

entire in And the Jacksonville-- You're looking at, Jade, portfolio.

Jade Rahmani

sequentially at slide result, metrics, looking occupancy. -- I'm quarterly XX, same-home sequential average

Jack Corrigan

Yes.

Chris Lau

Same numbers?

Jack Corrigan

that's something keep it going hard XX.X%. I a month the in look come and Orlando, XX.X%; It's a switch really of nothing temporary I is on range two. and move It's January strong. that back just, up. one XX% XX% Yes. to you end guess, negative. at you're to a of XX% down I It's There just for Again, or a XX.X%. that's you outs not have the -- to XX% acceleration I asked, in Jacksonville. little in at It's cooling off. back mean, mean, And XXXX will the we're other If thing. was going reflection and Jacksonville, market is and up

So, up. it's already starting creep to

Dave Singelyn

total are XX% Florida the in markets the range. in all

have concerned occupancy of the markets small have demand impact. you or move-outs end ability are these the we or the are operation. going or to If markets about a few a month, at the that of it's None

markets are going but performing there's here be to these couple of and there, So, things well. timing a

Jade Rahmani

Okay, that's great to hear.

seems drivers? increase Just a the XX% calculations are something on the like And the CapEx implied your in home? CapEx, per It what same-home guidance our for is increase. what implied

Chris Lau

capitalized, of that life it's our little as also. on say exterior Jack that kind of kind items kind in majority are, because preventative our they mean, kind really currently, or bit that. likelihood the was it's useful incremental the the preventative program focused prepared of CapEx call kind less I a than remarks. or the bigger the of maintenance of And homes. the homes kind to two of that's will expense is reason our his the Kind X% preventative of in a range of And for is of, kind the of drivers X% in, of increase that X% are betterments -- and in is have it range. think underlying program would I cost the in a increase whether maintenance extending Yes, maintain, ticket to in I mentioned ballpark. higher expanded of to it really capitalization then

Jade Rahmani

several theme your than, you of years Do younger others that peers, ongoing where be kind are? normalizes homes that the as for nature to this of an come in to your given CapEx age industry expect the will the of say, being

Jack Corrigan

doing No, is homes. major they're the paving of the one things that exterior

area I XX is don't always is, And theirs. increase think, we're may think -- roofing. our average hit years adding midpoint of think thing, the possibly see should we because one I we one and where than average we're homes be home yet XX or that's age I there new haven't I constantly Our and old. useful life But -- an the newer

Dave Singelyn

is But doing been less One better it a attempting to day Jade, of turns So, efficient everything now. preventative customer one. a we are doing can service. that Dave. than you doing third-party, on like with we've internalize, and the do else done, little and This it been is what from efficiencies we've things. We've couple better maintenance when get you

maintenance. we that We In it. do That if in long-term, you'll do, we doing today. maintenance. that will believe a cost higher the are proactive are than that maintenance of see the as doing mean we will it, we result didn't be do That the doesn't much decline fact a means be in lower it

little of on years. a next couple this. We the it looked could at bit do think We have increase

going maintenance. maintenance So, today, increases higher on spend our couple next -- But basis. is see well, the than years in getting of even annual I don't in competitors us may about inflation goes lower are to preventative ever be our But X% comparable will. on, an where as expenditures significantly be we with our

Jade Rahmani

And When, is would the I the dividend. just rules, there? you How about lastly, to flexibility the wanted stockholders? under dividend to start common to increasing ask need much REIT

Dave Singelyn

Yes.

years to is get that were available do might will that we be you'll But Those guidance, years. useful years losses generated burn that in no, give dividend reduce are some financials from operating information there tax. time. on that over if So, and off on in you don't information our net this in think is the obviously income the I the you have footnotes, some the taxable We future for that. but look in

of an basis. or dividend does immediate on next the couple the we're at policy not in -- any we look the And at have future. time, projecting Board a increase quarters quarterly Our this for time

Chris Lau

later that XX-K Chris. a it's footnote little Dave is Jade filed And be is in The today. will referring bit that our

Jade Rahmani

Thanks very much.

Chris Lau

Jade. Thanks

Operator

question Please next the Spector with of from line with proceed Our your question. of America. comes Bank Jeff

Jeffrey Spector

build of about Thank focus you. for it Good the morning. talked We've number years. I program. a wanted on to

homes, laid You've gained the benefits standpoint. year? not course, experience much an you but of can a call standpoint lot out next aggressive more on great just there, sheet. of that and owning younger program, Clearly, many How of the you've get with program experience from balance from this that year, of a the maintenance

Jack Corrigan

but to XXXX, X,XXX to home We early in right we up be homes a X,XXX able homes the do X,XXX it hang to schedule We range to is of now. year which what believe we're kind of on in deliver in kind Yes, XXXX, in staffed XXXX. did targeting is to X,XXX are that. substantially than somewhere to we're X,XXX to really hat higher your

Dave Singelyn

Developments, a Dave. year, on do through and smaller Jeff nurtured buying on out. We it this going scale last year. bit MLS. a late test to than longer things started it the little lifecycle out little We bit program its

will staffing be more up have But the investment year. results deliveries been is are from in additional that markets. back year. importantly, We an there next end as the to the you Chris, weighted excited and year into And very our this back heard about of are also properties delivered

normalized will as property. on deliveries from And so program in and bit XXXX the properties work -- a the of lifecycle way to matures little through completed we will year their cadence land the the next more get the

Jeffrey Spector

turnover And Great. to program go program. the pertains just to compensation the How and deep new company? personnel try into the retain your second discussion my question then does on personnel Thanks. to at talent that the

Dave Singelyn

Yes.

Dave So, this is again.

in see really think what the I were more So, comments senior my you will personnel. on proxy

a at you others. piece A new thorough that done other referring The couple compensation. more than look is demand a This positions were industry. to, we are high have did

had more, inflationary It's property in would We a higher significant, for it's our adjustments -- have in going adjustments. not our -- that or we to couple It's to say, significant year adjustments compensation. tiers management. made made guidance It's I the than some only to next of not make but significant.

field. fully We are of all staffed the across today

I in better think we have. are we than shape today ever

that the around acting they of not, moved We necessary. certain markets. people trainers and many are additional have our as roles in be control can when quality in And if

So, And I are reflected good that think in place of impacts we're guidance. in the a all very of our today. very,

Jeffrey Spector

you. Thank Great.

Chris Lau

Jeff. Thanks

Operator

with proceed of comes question Pawlowski with Street Green Please John next Our your line Advisers. question. from the

John Pawlowski

sales you you more to stock details C suite provide if alluded Dave, the XXXX? the on from that you in could can

Dave Singelyn

that. be -- it couple of that here coming be out think lot filed that a I documents be of will a will would there'll highlight

As of C you not know, compensation been traditional. has the suite program the

that We are due year are some year rightsizing of this throughout have that. sell the loans XXXX. to It coming us require may that

it's or in At confidence so continue it's -- weeks primarily and significant will the to me million day, say the will each. I, And Jack the end documents individuals, -- thing, which there's position excess the that X of that. not The one of so shares are defer probably be of It's John. to filed I'd the a very let a next on thing. own over -- at end day,

John Pawlowski

cities dispositions, the of Oklahoma the plan, if and on disposition across of Augusta, the in couple for these that. has world? major the prices home there And Thanks you in Yes. trended of constitute that planned markets look how lot months last Georgias a

Dave Singelyn

buying out you the in if we're we markets fourth rent dynamic But so for -- rate. better accurate pretty is they lot answer what have for after been little those is a the generally looking of see appreciation. what that. very buying or I'd not quarter terms flatter price for And is of appreciation a you quarter have one I of houses, would spring it of home Well, that's a seen. growth get through say and not there is the out a people usually reasons selling season where home we've

return overall been hasn't good. that the So,

so and March up And I'm to April. a in expecting huge not see coming appreciation

Jack Corrigan

as does and consistently lagged said, nothing Jack the stronger that in with But had we appreciation the as last or changed indicate properties, lag two, some have two John, data. months to our a seen of they it's price the that. other month home

John Pawlowski

Okay. absolute home on pricing basis of these markets? seasonally basis, declining On in are adjusted an any pockets a disposition

Chris Lau

I Not from see. what

Dave Singelyn

potential. same the have don't just They

John Pawlowski

Okay. Thank you.

Chris Lau

John. Thanks

Operator

Harter comes line question of next Please with with the your Credit Our question. Douglas from proceed Suisse.

Douglas Harter

underlying the Thanks. vacant vacant? talk on how demand, of kind the number of And Can long staying you applicants kind trend are properties per about of property? specifically

Jack Corrigan

is half Yes. Again, the the and really, first quarter typically not of high January demand fourth our months.

I for And May, to substantially of so those applicants and that. will are July, I months the of those with want really of we've a pick expect But big June, for start up our months. April, March, seen lot products leasing. number demand

Chris Lau

thing that XXXX, the mean, for months, one overall add. see Doug, XXXX move better of our to out other throughout than if you I you in majority will is look the activity XXXX.

was is is coming stronger. The the January are if and in seasonality year every you Jack The issue remarks, very the blended prepared was basis, in. Our over increases does quarter new indicated demand rental better in the as rate quarters, But XXXX play his on a leases, that we into strong. better. compare XXXX and renewals leasing, sequential

demand the there. And so is

Florida. short-term if Jade are at just will may of And -- see not But the impact market. there move we impact as you end out on be Florida indicative quarter, it's that little we about so a with people concerned people talked more one the

Douglas Harter

Thank you.

Operator

Zelman Our Associates. Please your next with with Hardik Goel from & proceed question. the of question comes line

Hardik Goel

prepared just the to guys. taking to were doing in back Hey while question. wanted my for refer exterior occupied. they about on your I Thanks homes had Dave, something remarks you work

color really just other place turn that of If guys you If could what just you you terms you're that go? more will could and reduce that times how us that far could quantify days initiatives have give on in saving. in

Jack Corrigan

of may of do it can that area home. two it exterior from sufficient can a know done it the What condition area do most of more even a home cataloging, you Jack, until was to us it we that And really in sub that bulk do in-house. had in-house one-off, we to But is from to do now and because choice, way be and see if a I'll it it a you call. in it weeks occupied. personnel, don't have within the to it cases, that that's the work this or we historically get years have of that system six -- now, schedule painting time the bulk an really we We two see time out go home it do expensive need buy external up it you and we We need We it's has then really -- the And Yes, year it emergency while that we'd takes is it together. may first and -- obviously, take where or a of months. on of don't kind the that is contractor got if the turn, week to that there. have now, needs time. done to to

scheduled trying in that delaying interior The really the house get on do or So, you it's to turn. need of really the tenant's the efficient there. easily turn work, can work not more while and be to the

Hardik Goel

all-in Got XXXX, be what lease you in you it. will of a going the lease XXXX? forward? and And us think it turn give new Could start times,

Chris Lau

then XX-day XXs, XX in in turn so Jack XXXX, But and I'll days. -- going was then cash were a the kind range. expectations XXXX. like XX, times. you to we lower give And let his years think, and are to XX, forward. both And XXXX all-inclusive can cash, keep mind, I in totally XXXX in the XXXX, I of speak these more in

Jack Corrigan

I'm we've not that promising days, to think So, I down incremental we get improvement, XXXX. in XX can but -- it

Hardik Goel

guys. Thanks That's it. Got great color.

Chris Lau

Hardik. Thanks

Operator

with James. Our the from with question. your Buck Raymond Horne line question next Please of comes proceed

Buck Horne

on with home I looking Hey follow-up build-to-rent housing the we slowdown last just -- do little to in the want thanks. particularly a in had with questions. the new general, bit sales market steep But at a year.

You out new of with wondering caught builders to if new homes spec much increased any product. I'm who maybe got you if any had more there inventory a had spec is builders in opportunities And there. about some bulk? there with their conversations too any lot buy out

Jack Corrigan

Yes, had to brought some lots land, getting lot Even to raw into if it definitely get have their easier the leads addition, smaller builders easier. us, that of And some and hard have selling national have producing so land. lots to are it's to the that developed and then you buy discussions -- to that's ones. some to you was builders we makes -- getting and in builders buy from investment a vacant -- of the don't then going income. develop shorter and It the the trying

Buck Horne

thinking Okay, more hypothetically. of And great. kind just

pull downturn? see about we or you talk economy how market keep do you just a do you back, more pronounced off self-development and/or programs -- straight do a -- the shut through? if building the experience you the housing it a downturn think through So, can about or managing Do you

Jack Corrigan

straight any can we outpaced seen haven't of building think the What where we've anywhere is through production proven household because I I houses keep new you degree in formation. houses. large has rent

that think don't don't happening in -- I even as future, I see it slight. projected So, the

that think I in a will during more possibly product be and downturn. our demand even demand in

Dave Singelyn

is Dave. this Buck,

don't differences homebuilder. I know is have large for different. Therefore, a and builder. very us less think you're than profile new highlighting one indicated the very that housing starts household of we're formation. the traditional selling. cost selling a of as risk all our a We retail Jack between as of the is the We where very, builder homebuilder a

States. we have a even that, we still in the shortage to Before United housing get

cycle cycle, adding not in the and the a housing a benefit in homebuilding downturn housing will a And for And be to providing detriment. so us, we rentals in stock. is the demand

I have very, So, well and prior still Overlay think calls. talked on we we about that very the that we changes are democratic positioned. that have historically

So, to the will rental one buy decline know. a going said, it very, of the is be is and to the strong. housing changes of going demand homes people economic lot in move by just -- should looking it that. favorable. for very number about We've that to our move-out get is the as homeownership. to more A which well talked you And With make thing percentage, is driven for be stronger if very difficult in that decline out for housing

So, of couple those are a our facts. additional

Buck Horne

just helpful. That's right really, now. can really And one I last one if

have stuff. differences Just on kind been there you achieving developed new-build a the of bit kind whether of cost? premiums rent achieving on is third-party what recent little versus assets, yield on economics you internally you're And or the major in the any the economics quantify the can

Jack Corrigan

on developments, develop. XX% houses stuff a better that months. XX Premium, think about probably we on in we're putting of It's we're premium in charging a the up that the some XXX of or because XX don't average much yield I

So, we fill look renewals. premium the up. want really to the on them We'll for

Buck Horne

All guys. right. Thanks

Chris Lau

Thanks Buck.

Operator

proceed Our next comes question. question from the Please Joseph your Nick Citi. with with line of

Michael Bilerman

Dave Bilerman could G&A some just of changes go with the Nick. you Chris, year-to-year. over maybe Michael here Hey or it's

management, $X.XX in So, like to proxy XXXX. XXXX, $XX is in based It aggregate only $XX.X on aggregate, million least at million you give rise running from probably or sounds that, about G&A. that the for the Senior take. were should $X in just disclosed variance total million

XXXX? a you what little So, are the jump a to big big how bit changes about cause talk such that maybe can and evolves into

Dave Singelyn

Yes, this is Dave.

others is comp of indicated, program, are for the we with There proxy. -- sure two the In a of really move us to unwinding more the are is management comps comp market-based we're pre-IPO. the that in we As to a of comp. comped executive in outlined was equity that the that number structure going

we you will filed in John these that indicated. so to year-over-year, will total increase. be to it's a expect items with recurring wholesomely indicated and X% the If you shortly here see increase to more those our I and amount thing. And about X% is that at to proxy that details. X% Pawlowski, look defer be described filings The for is G&A in will and I all get that we information materials balance as the other

Michael Bilerman

Right.

in the the from million we $X somewhere to total in go five should comp will million to top expect $X that it? about $X.X range. individuals that million to Is think the So, way

Dave Singelyn

right Yes. You're the in cove. fit

Michael Bilerman

so Jack -- think terms stock, I you then, your shares mentioned in for And million loans. units also X.X and and pledged both in you of have the

just said about shares so you X million And you post. it own like sounds

right. that make to those million in math So, I about then loan does to liquidating assume be sure X repayments? got you'll fund shares each Just the units

Dave Singelyn

used documents Yes. defer And clarification number to the X -- we own the what No, million shares think to will were our I the was. Mike, giving more the at as than without words again, that I was file. will

Michael Bilerman

what -- but much? you holdings, the And how shares, loan You've outstanding that's it's a of of I each pledge? get of the $XX yes, so the loan pledge million to the guess your relative is to -- pledged

Dave Singelyn

-- all proxy that's Mike, Yes, detail so that coming in is the that filings are the out. in

those out. I we are until wait think should probably

Michael Bilerman

pledged the loan you've band. wondering what to just gets X.X XXXX you so trying the how million to just I'm figure previous, Yes, in just just big saying; was right, not I'm that I'm free pledged. shares understand trying loan is have asking shares units. the proxy that the I'm out I'm against That's states what all. that was.

Dave Singelyn

Yes. each It's for us. different of

aggregate, something -- million maybe in range, the aggregate. you're the see think million to I probably in in $XX going $XX in

Michael Bilerman

Great.

Thank Okay. you.

Operator

the Ladies conference. we gentlemen, does the reached today's And end of question-and-answer conclude session. and have this

disconnect your your lines may you You time. Thank at this for participation.

American Homes 4 Rent (AMH) 22 Feb 192018 Q4 Earnings call transcript