American Homes 4 Rent

Greetings and welcome to the American Homes for Rent second quarter 2020 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. At this time, I'd like to turn the call over to Anne McGinnis, manager of investor relations. Please go ahead.

Good morning. Thank you for joining us for our second quarter 2020 earnings conference call. I am here today with David Singlin, Chief Executive Officer, Brian Smith, Chief Operating Officer, Jack Corrigan, Chief Investment 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 our 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. The current and expected future economic impacts of the COVID-19 pandemic, including extraordinary increases in national unemployment, may pose headwinds to our future results. All forward-looking statements speak only as of today, August 7, 2020. 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, Anne, and good morning, everyone. I hope that everyone joining us today is staying well. Let me begin by saying that it is hard to believe that 10 years have passed since Wayne Hughes suggested we buy homes in Las Vegas and rent them out. In just under a decade, American Homes for Rent has transformed the rental home industry by providing housing options tailored to the modern lifestyle. Today, American Homes for Rent is the leader in the single family rental industry for three reasons. One, Our strong second-quarter operating performance during these COVID pandemic times demonstrate the strength and resiliency of our platform. Two, the pandemic has also highlighted the strong demand for our single-family housing, and particularly our well-located rental homes that provide residents with an environment where they can live and work safely. And third and finally, Our strong balance sheet and consistent investments in our one-of-a-kind development platform give us the ability and capacity to grow during these difficult economic times. Our second quarter highlights the strength and resiliency of our platform. While many economic concerns do exist, our leasing and occupancy reached all-time highs. During June, we executed a record number of new leases And combined with our excellent retention, it resulted in June's occupancy reaching all time levels, only to be surpassed by July's results. And the accomplishments do not stop on the leasing side. Our collection levels for the second quarter were strong at approximately 98% of normal operating levels, and July's results tracked the second quarter. Our maintenance program also delivered, proudly continuing to serve our residents during this time and ending the quarter with no backlog in maintenance work orders. Brian will provide more details on our second quarter operations. But let me say that I am so proud of our performance in these unprecedented times. It's a reflection of the dedication and focus of our entire team. Moving on to rental demand, the demand for our homes, which was already high, has never been stronger. Our internal applicant data confirms an acceleration of the strong shift in consumer preferences towards renting a single family home over an apartment. This shift of consumer demand that was already present before the pandemic is likely to remain in place after the pandemic is over. The COVID crisis has shined a bright light on the attractive value proposition of our well-located, professionally managed homes. Today, people are moving to less dense areas with diverse economies in high growth markets. Now, more than ever, people value high quality accommodations and desirable amenities. Like a yard with privacy, or an extra bedroom that can be converted into an office to facilitate their working from home. We are providing the benefits of single family living to people who appreciate flexibility and convenience. We are taking advantage of the strong rental demand trends we are experiencing today in a number of ways. First, it starts with our diverse portfolio. We strategically assemble the portfolio across 35 markets in areas characterized by strong population and job growth, low cost of living, and low income taxes. These areas are likely to see increasing household formations as people continue to move in the COVID era. Importantly, no single market in this diverse portfolio percent of our footprint. And 35 markets provides us numerous opportunities for growth. Also, our diverse portfolio combined with the higher income levels of our residents and the fact that many households have two incomes provide a natural risk management hedge for our business. The second factor positioning us to capitalize on the significant rental demand is our strong financial profile. Today, we have the only investment grade balance sheet in the sector. This is another risk management hedge, and our conservative balance sheet enables growth in all economic cycles, which is a major differentiator for us in the capital markets. Our balance sheet, combined with our significant retained cash flow, provides the capital to fund our growth initiatives. And the third factor is our growth programs. We are the only company that has teams in place to grow across three channels for additional acquisitions, acquisitions from national builders, and our one-of-a-kind development program. Our ability to expand our portfolio while compounding the benefits of scale remains significant and allow us the opportunity to grow in this and all economic cycles. As the leading national developer of purpose-built single-family rentals, American Homes for Rent is revolutionizing the industry with our prime location, new home communities. Our unique ability to add new purpose-built homes designed for rentals generates better returns and drives consistent growth through economic cycles. Jack will discuss the highlights and the progress of this exciting growth channel a little later. Before I turn the call over to Brian, I have a couple of announcements. First, a statement about our guidance. While the COVID crisis has accelerated demand for single-family rentals and American Homes for Rent has produced strong operating results to date, the extent to which the pandemic will ultimately impact us and our residents will depend on future developments that remain uncertain. In light of such uncertainty, we continue not to be in a position to provide future earnings guidance at this time. That said, Long-term drivers, like the shift from multifamily to the suburbs and the resiliency and benefits of single-family living, are all favorable to us. Also this morning, we announced that Lynn Swan was appointed to the Board of Trustees. Lynn previously served as an AH4R trustee from 2012 to 2016, and I am pleased to have him rejoin the Board and bring his significant public a company board experience, business expertise, and vast connections in the business world to our boardroom. Lynn currently serves on the board of Evoqua Water Technologies, and he previously served on the boards of Floor Corporation, Caesars Entertainment, Hershey Entertainment and Resort, H.J. Hines, and the PGA of America. Lynn's appointment is part of our ongoing board refreshment process. which has included the appointment of four independent trustees since the beginning of 2019. This year, Matt Zaist, a home building industry veteran, was appointed to the board in February, and Ken Woolley was named our independent chairman in May. In addition to Lynn's appointment, we also announced that we continue the selection process to appoint later this year another trustee who enhances the diversity and independence of the board. Board refreshment is an ongoing commitment for us. The board continues to advance this effort to ensure the board has the right experience, diversity, and independent perspectives to oversee the continued successful execution of the company's strategy to drive growth and value creation. We have always been well capitalized, and today our strong balance sheet has never been more important as we continue to deliver greater shareholder value. This financial flexibility, combined with our operating and development platforms, allows us to grow in all economic cycles and enables us to innovate and execute where others cannot. And now I'll turn the call over to Brian to provide greater operational details.