American Homes 4 Rent

and welcome to the American Homes for Rent third quarter 2019 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. It is now my pleasure to introduce your host, Stephanie Heim. Please go ahead.

Good morning. Thank you for joining us for our third quarter 2019 earnings conference call. I'm here today with David Singlin, Chief Executive Officer, Jack Corrigan, Chief Investment Officer, Brian Smith, 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 facts 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 these 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, November 8, 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 third quarter 2019 earnings conference call. We had another excellent quarter with 5.4% growth in core FFO per share from the third quarter of last year, driven by strong demand and consistent execution. Single-family rental industry fundamentals remain strong. fueled by the housing shortage over the past 10 years and the behavioral changes of individuals desiring the advantages of renting over home ownership. Our portfolio of high-quality rental homes offers an attractive opportunity for residents who want to live in a single-family home in a highly desirable community. As we approach the end of 2019 and look forward to 2020, we plan to accelerate our development program in a meaningful way. We have spent the past few years making various investments that now position us to capture significant benefits that we believe are unique to American Homes for Rent. These investments start with the building out of our development platform. The process of hiring experienced home building personnel and sourcing land opportunities has taken us the better part of the past three years. Our development commitment needs to be long-term focused, as it takes time to acquire land build out the horizontal infrastructure, and finally construct the homes. The key to our development initiative is to ensure that we have ready access to sufficient capital to make this long-term commitment. This began with reducing our leverage from the higher levels utilized when we were building the company. Today, our investment grade profile, combined with significant retained cash flow and recycled capital from asset sales, provides us attractively priced capital to invest up to $750 million per year into new assets. However, the long-term growth opportunity from our development program is far greater than this, and I believe it's important that we have access to multiple permanent capital sources. As a reminder, we have already entered into one development joint venture and continue to have constructive discussions with other interested institutional investors. A few facts about our development program. First, our homes are designed with rental wear and tear and future maintenance needs in mind. Second, the clustering of homes in a single neighborhood will enable us to offer unique amenities to our residents. And third, the economics of these homes are better than other acquisition opportunities afford us. To this last point, two major components of the price of a new home is marketing cost and developer profit. When we build for our own inventory, we do not incur these costs. Although we do put some higher cost materials into our houses, our total investment in new homes through our development program is significantly less than acquiring a comparable home through other channels. This year, we expect to deliver into operating inventory approximately 800 homes from the AMH development program. Next year, I expect we will deliver three times this year's production with further increases in future years. Another change as we go into 2020 is that we promoted Brian Smith to the role of Chief Operating Officer. Many of you have had the opportunity to meet Brian. He has been part of our team for eight years, working side by side with Jack, and has been instrumental in building our acquisition and property management platforms. His breadth and depth of experience in multiple aspects of our business and his keen focus on leveraging technology to enhance our platform uniquely positions him to lead our operating platform for long-term success. We have been preparing for this transition for a long time and believe now is the right time to make this change as our teams focus on their 2020 plans. This change will enable Jack to focus more directly on our important growth initiatives, specifically our development programs. He will continue to serve as a trustee and chief investment officer. As I look to the balance of the year and into 2020, I am excited about the long term fundamentals of our industry. We are in position to capitalize on the opportunity to provide much needed new quality housing inventory, which will drive strong top line and cash flow growth for our company. And now I'll turn the call over to Jack.