American Homes 4 Rent

Greetings and welcome to the American Homes for 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Stephanie Heim. Please go ahead.

Good morning. Thank you for joining us for our fourth quarter 2018 earnings conference call. I'm here today with Dave Singlen, Chief Executive Officer, Jack Corrigan, Chief Operating Officer, and Chris Lau, Chief Financial Officer of American Homes for Rent. At the outset, I need to advise you that this call may include forward-looking statements. All statements other than statements of historical fact included in this conference call are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in those statements. These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the SEC. All forward-looking statements speak only as of today, February 22, 2019. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. A reconciliation to GAAP of the non-GAAP financial measures we are providing on this call is included in our earnings press release. As a note, our operating and financial results, including GAAP and non-GAAP measures, are fully detailed in our earnings release and supplemental information package. You can find these documents as well as SEC reports and the audio webcast replay of this conference call on our website at www.americanhomesforrent.com. With that, I will turn the call over to our CEO, David Singlin.

Thank you, Stephanie. Good morning and welcome to our fourth quarter 2018 earnings conference call. We started this business more than seven years ago with the goal of building the premier national operating platform for the single family rental business. At the time, we saw a unique combination of factors to accretively grow a national portfolio, institute operational best practices, and deliver quality housing to our residents. Today, while much has changed, our focus remains consistent with our outlook remaining positive. Global uncertainties are a concern for many sectors, but for our business, the demand drivers remain strong and supportive. The overall economy is healthy, with underlying job growth within our markets increasing about one-third faster than the national average. Additionally, housing demand continues to outpace new supply in most markets. and renting remains the preferred housing option for many families. Within this supportive macro environment, we continue to refine and improve our world-class operating platform based on four cornerstones, operational excellence, consistent and accretive growth, financial flexibility, and superior customer service. Let me touch on each of these cornerstones, which continue to be the principles on which we operate. First, regarding our ongoing optimization of the American Homes for Rent operating platform. Today, our platform is the most efficient in the industry, providing the best service at the lowest cost, but not just due to economies of scale. We have designed and implemented management and operational best practices to standardize processes and maximize efficiencies. We have trained a best-in-class team and created a culture of innovation and success. We have invested in technology that fundamentally changes the way we do business, from marketing and leasing, to resident interaction, to maintenance, and to capital investment. Most importantly, we're not sitting still, but engage constantly in the refinements and enhancements as we learn from our experiences in real time. Similar to prior efforts, including let yourself in technology, internalizing the field management process, and handling maintenance requests with our own personnel, These functions have the impact of improving efficiencies and customer service. Today, as asset managers with a long-term view, we continue to expand our preventative maintenance programs. While this results in higher maintenance and capital expenditures today, it reduces maintenance-related expenditures over the long term compared to a program without a robust preventative maintenance program while also improving resident satisfaction. Jack will elaborate more on this in a few moments. Second, we will continue to grow and strengthen our portfolio through accretive investment and prudent asset management. Since our formation, we have grown through a variety of channels, taking advantage of the best market opportunities available at the time, REO and market listings, auctions, portfolio acquisitions, and mergers. More recently, we have focused our capital on our national builder and in-house development programs, as we believe these homes are the best risk-adjusted investment opportunity, while further strengthening our portfolio metrics in terms of age and average expenditures per home. Our third cornerstone for excellence is our conservative and flexible balance sheet. Since our formation, we have maintained a long-term focus on our capital structure and steadily work to expand our sources of capital and lower our average cost of capital. I am proud of our investment grade rating which earlier this year facilitated our raise of $400 million of unsecured debt with great execution. Today, our balance sheet has greater capacity and flexibility than ever, and we are positioned to take advantage of any opportunities that arise. And finally, we will continue to focus on delivering a superior customer experience to our residents. The fact is that our homes are their homes, and our residents need to feel at home to enjoy a sense of comfort and connection in their community. In all of our resident interactions, we emphasize convenience and work to ensure successful solutions. Our training and operational strategies are designed to deliver responsive and efficient service. Our customer surveys and external ratings demonstrate our continued improvement in providing superior customer service, but we know we can always do better. Before I turn the call over to Jack and Chris, I would like to mention that our Board of Trustees recently revised and updated our Executive Compensation Plan. After a thorough review, the Board replaced our Legacy Comp Plan, which largely rewarded management with equity in place at the time of the IPO. At this point, given the maturation of the company, the Board felt it was important to implement a more forward-looking structure with performance-based incentives. The full details of the new compensation program will be available when our proxy is filed in March, and Chris will provide details on the impact on G&A later on the call. On a related note, we expect loans made by affiliates of the company in connection with stock acquired by certain executives prior to the IPO will need to be repaid this year, which may trigger related stock sales. However, management remains committed to alignment of interest with shareholders and expects to retain a substantial ownership state going forward. In closing, we are proud of our accomplishments and believe we are well-positioned for continued success. Fundamentals remain robust, and our portfolio is highly occupied as we move into our strong leasing season. Our development initiatives are maturing and are a key driver of accretive growth going forward. Finally, our platform has been strengthened, our team is experienced, and we believe we are well positioned to continue to create long-term value for our shareholders. And now I'll turn over the call to Jack.