What changed in this filing

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Item 7. Management’s Discussion and Analysis

2021-02-26 compared with 2020-02-28 · 287 added, 209 removed, 307 unchanged (62% of the section changed)

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We commenced operations in November 2012.

As of December 31, 2019 , we owned 52,552 single-family properties in selected sub-markets of metropolitan statistical areas, or MSAs, in 22 states, including 1,187 properties held for sale, compared to 52,783 single-family properties in 22 states, including 1,945 properties held for sale, as of December 31, 2018 .

As of December 31, 2020, we owned 53,584 single-family properties in selected sub-markets of metropolitan statistical areas (“MSAs”) in 22 states, including 711 properties held for sale, compared to 52,552 single-family properties in 22 states, including 1,187 properties held for sale, as of December 31, 2019.

As of December 31, 2020, 51,271, or 97.0%, of our total properties (excluding properties held for sale) were occupied, compared to 48,767, or 94.9%, of our total properties (excluding properties held for sale) as of December 31, 2019.

Our portfolio of single-family properties is internally managed through our proprietary property management platform.

Our Properties and Key Operating Metrics

The following table provides a summary of our single-family properties as of December 31, 2019 :

Number of Single-Family Properties (1)

% of Total Single-Family Properties

Gross Book Value (millions)

% of Gross Book Value Total

Gross Book Value per Property

Property Age (years)

Also, as of December 31, 2020, the Company had an additional 1,293 properties held in unconsolidated joint ventures, compared to 808 properties held in unconsolidated joint ventures as of December 31, 2019.

Our portfolio of single-family properties, including those held in our unconsolidated joint ventures, is internally managed through our proprietary property management platform.

COVID-19 Business Update

The Company has maintained continuity in business operations since the beginning of the COVID-19 pandemic and produced strong operating results in the fourth quarter of 2020 demonstrating the flexibility of its technology enabled operating platform and the resiliency of its high-quality, diversified portfolio.

Comprehensive remote working policies remain in place for most corporate and field offices, and operational protocols have been tailored based on state and local mandates to ensure continuity of services, while protecting employees, residents and their families.

Driven by shifting housing preferences as households migrate away from city centers and apartments, the Company is experiencing record demand levels and reported its highest ever Same-Home portfolio Average Occupied Days Percentages for the fourth quarter of 2020 and January 2021.

Additionally, as the Company entered the fourth quarter of 2020, it continued its return to normal operating practices, including the assessment of late fees, in jurisdictions where allowable, and modest renewal increases on expiring leases.

Collections continue to remain resilient throughout the pandemic.

We have now received 96.7% of fourth quarter 2020 rental billings, which is consistent with pandemic payment histories within the same time frame.

Additionally, collections of January 2021 rental billings continue to remain consistent with pandemic payment histories within the same time frame.

Collections are reported without application of any existing resident security deposits or adjustment for deferred payment plans.

Although the Company has produced strong operating results to date during the COVID-19 pandemic, the extent to which the pandemic will ultimately impact us and our residents will depend on future developments which are highly uncertain.

These include the scope, severity and duration of the pandemic, including resurgences, impact of government regulations, the speed and effectiveness of vaccine distribution and the direct and indirect economic effects of the pandemic and containment measures, among others.

For more information on risks related to COVID-19, see Part I, “Item 1A.

Risk Factors—Risks Related to Our Business—We are subject to risks from the global pandemic associated with COVID-19 and we may in the future be subject to risks from other public health crises.”

Key Single-Family Property and Leasing Metrics

The following table summarizes certain key single-family properties metrics as of December 31, 2020:

Market Number of Single-Family Properties (1)

% of Total Single-Family Properties Gross Book Value (millions) % of Gross Book Value Total Avg.

Gross Book Value per Property Avg.

Property Age (years) Avg.

Purchased or Delivered

Atlanta, GA 4,977 9.4 % $ 922.2 9.2 % $ 185,301 2,165 17.4 2015

Dallas-Fort Worth, TX 4,313 8.2 % 720.6 7.3 % 167,085 2,117 16.7 2014

Charlotte, NC 3,811 7.2 % 756.6 7.6 % 198,541 2,100 16.2 2015

Indianapolis, IN

Phoenix, AZ 3,147 6.0 % 566.1 5.6 % 179,899 1,837 17.2 2015

Houston, TX 2,979 5.6 % 495.2 5.0 % 166,244 2,094 15.0 2014

Nashville, TN 2,907 5.5 % 634.2 6.3 % 218,157 2,109 15.1 2015

Indianapolis, IN 2,813 5.3 % 437.7 4.4 % 155,613 1,930 18.2 2013

Tampa, FL 2,464 4.7 % 501.8 5.0 % 203,648 1,945 14.5 2015

Jacksonville, FL 2,424 4.6 % 445.5 4.4 % 183,807 1,937 14.6 2015

Raleigh, NC 2,118 4.0 % 396.7 4.0 % 187,288 1,878 15.4 2015

Columbus, OH 2,062 3.9 % 361.8 3.6 % 175,438 1,870 18.9 2015

Cincinnati, OH 1,982 3.7 % 351.7 3.5 % 177,441 1,852 18.4 2013

Greater Chicago area, IL and IN 1,730 3.3 % 318.6 3.2 % 184,161 1,869 19.3 2013

Orlando, FL 1,743 3.3 % 324.5 3.3 % 186,200 1,903 18.4 2015

Salt Lake City, UT 1,595 3.0 % 416.2 4.0 % 260,946 2,182 16.9 2015

San Antonio, TX

Las Vegas, NV

Charleston, SC 1,238 2.3 % 252.9 2.6 % 204,280 1,971 12.3 2016

Las Vegas, NV 1,127 2.1 % 215.1 2.0 % 190,839 1,854 16.5 2013

San Antonio, TX 938 1.8 % 153.4 1.5 % 163,531 2,023 16.6 2014

Savannah/Hilton Head, SC 917 1.7 % 168.7 1.7 % 183,967 1,871 12.8 2016

Winston Salem, NC

Denver, CO 831 1.6 % 249.8 2.5 % 300,562 2,103 18.3 2015

All Other (2)

6,757 12.8 % 1,310.5 13.3 % 193,950 1,876 15.8 2015

Total/Average 52,873 100.0 % $ 9,999.8 100.0 % $ 189,129 1,987 16.4 2014

Excludes 1,187 properties held for sale as of December 31, 2019 .

(1) Excludes 711 single-family properties held for sale as of December 31, 2020.

(2) Represents 15 markets in 14 states.

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Blended Change in Rent (5)

Atlanta, GA 96.0 % $ 1,666 12.0 6.1 3.9 %

Dallas-Fort Worth, TX 95.8 % 1,796 12.2 6.4 2.8 %

Charlotte, NC 96.3 % 1,644 12.3 6.4 3.2 %

Indianapolis, IN

Phoenix, AZ 97.4 % 1,509 12.0 6.0 6.5 %

Houston, TX 95.2 % 1,681 12.4 6.3 2.4 %

Nashville, TN 94.5 % 1,778 12.0 6.1 3.2 %

Indianapolis, IN 96.3 % 1,471 12.0 6.0 3.7 %

Tampa, FL 95.6 % 1,743 12.0 6.3 3.2 %

Jacksonville, FL 95.6 % 1,626 12.0 6.4 3.4 %

Raleigh, NC 95.1 % 1,577 12.3 6.5 2.8 %

Columbus, OH 97.3 % 1,694 12.0 6.1 3.9 %

Cincinnati, OH 96.9 % 1,654 11.9 6.4 3.9 %

Greater Chicago area, IL and IN 96.8 % 1,907 12.3 6.5 3.0 %

Orlando, FL 95.6 % 1,727 12.1 6.4 3.2 %

Salt Lake City, UT 96.5 % 1,834 12.1 6.5 4.4 %

San Antonio, TX

Las Vegas, NV

Charleston, SC 95.0 % 1,753 12.0 6.5 3.3 %

Las Vegas, NV 95.9 % 1,632 12.0 6.8 4.7 %

San Antonio, TX 95.0 % 1,570 12.1 6.7 2.6 %

Savannah/Hilton Head, SC 95.5 % 1,603 12.0 6.5 3.1 %

Winston Salem, NC

Denver, CO 95.1 % 2,277 12.1 6.3 3.4 %

All Other (6)

96.3 % 1,659 12.1 6.4 3.8 %

Total/Average 96.0 % $ 1,683 12.1 6.3 3.6 %

Leasing information excludes 1,187 properties held for sale as of December 31, 2019 .

For the year ended December 31, 2019 , Average Occupied Days Percentage represents 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.

(1) Leasing information excludes 711 single-family properties held for sale as of December 31, 2020.

(2) For the year ended December 31, 2020, Average Occupied Days Percentage represents 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 after initially being placed in-service.

(3) For the year ended December 31, 2020, Average Monthly Realized Rent is calculated as the lease component of rents and other single-family property revenues (i.e., rents from single-family properties) divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months.

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(4) Average Original Lease Term and Average Remaining Lease Term are reflected as of period end.

Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the year ended December 31, 2019 , compared to the annual rent of the previously expired non-month-to-month lease for each property.

(5) Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the year ended December 31, 2020, compared to the annual rent of the previously expired non-month-to-month comparable long-term lease for each property.

(6) Represents 15 markets in 14 states.

We believe these key single-family property and leasing metrics provide useful information to investors because they allow investors to understand the composition and performance of our properties on a market by market basis.

Management also uses these metrics to understand the composition and performance of our properties at the market level.

Factors That Affect Our Results of Operations and Financial Condition

Our results of operations and financial condition are affected by numerous factors, many of which are beyond our control.

Key factors that impact our results of operations and financial condition include the pace at which we identify and acquire suitable properties, the time and cost required to renovate acquired properties, the pace and cost of our property developments, the time to lease newly acquired or developed properties at acceptable rental rates, occupancy levels, rates of tenant turnover, the length of vacancy in properties between tenant leases, our expense ratios, our ability to raise capital and our capital structure.

Currently, the most significant factor impacting our results of operations and financial condition is the effect of the COVID-19 pandemic, which is discussed above.

Other key factors that impact our results of operations and financial condition include the pace at which we identify and acquire suitable land and properties, the time and cost required to renovate the acquired properties, the pace and cost of our property developments, the time to lease newly acquired or developed properties at acceptable rental rates, occupancy levels, rates of tenant turnover, the length of vacancy in properties between tenant leases, our expense ratios, our ability to raise capital and our capital structure.

Property Acquisitions, Development and Dispositions

Since our formation, we have rapidly but systematically grown our portfolio of single-family homes.

Our ability to identify and acquire single-family homes that meet our investment criteria is impacted by home prices in our target markets, the inventory of properties available-for-sale through traditional acquisition channels, competition for our target assets and our available capital.

Since our formation, we have rapidly but systematically grown our portfolio of single-family properties.

Our ability to identify and acquire homes that meet our investment criteria is impacted by home prices in our target markets, the inventory of properties available-for-sale through traditional acquisition channels, competition for our target assets and our available capital.

We are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program and acquiring newly constructed homes from third-party developers through our National Builder Program.

Opportunities from these new construction channels are impacted by the availability of vacant developed lots, development land assets and inventory of homes currently under construction or newly developed.

Opportunities from these new construction channels are impacted by the availability of vacant developed lots, development land assets and inventory of homes

currently under construction or newly developed.

Our level of investment activity has fluctuated based on the number of suitable opportunities and the level of capital available to invest.

During the year ended December 31, 2019 , we sold 1,330 homes and acquired or developed 1,099 homes, including 813 homes acquired through new construction channels, of which 648 were developed through our internal AMH Development Program, and 286 homes acquired through broker acquisitions.

During the year ended December 31, 2020, we developed or acquired 2,103 homes, including 1,158 newly constructed properties delivered through our AMH Development Program and 945 homes acquired through our National Builder Program and traditional acquisition channel, partially offset by 1,047 homes sold and 24 homes contributed to unconsolidated joint ventures.

Our properties held for sale were identified based on sub-market analysis, as well as individual property-level operational review.

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Property Operations

Homes added to our portfolio through new construction channels include properties developed through our internal AMH Development Program and newly constructed properties acquired from third-party homebuilders through our National Builder Program.

Rental homes developed through these channels involve substantial up-front costs, time to acquire and develop land, time to build the rental home, and time to lease the rental home before the home generates income.

Rental homes developed through our AMH Development Program involve substantial up-front costs, time to acquire and develop land, time to build the rental home, and time to lease the rental home before the home generates income.

This process is dependent upon the nature of each lot acquired and the timeline varies primarily due to land development requirements.

Once land development requirements have been met, on average it takes approximately four to six months to complete the rental home vertical construction process.

However, delivery of homes may be staged to account for delays in demand.

Our internal construction program is managed by our team of development professionals that oversee the full rental home construction process including all land development and work performed by subcontractors.

We typically incur costs between $200,000 and $400,000 to acquire and develop land, and build a rental home.

Homes added from our new construction channels are available for lease immediately upon or shortly after receipt of a certificate of occupancy.

Homes added through our AMH Development Program are available for lease immediately upon or shortly after receipt of a certificate of occupancy.

Rental homes acquired from third-party developers through our National Builder Program are dependent on the inventory of newly constructed homes and homes currently under construction.

Homes added to our portfolio through traditional acquisition channels require expenditures in addition to payment of the purchase price, including property inspections, closing costs, liens, title insurance, transfer taxes, recording fees, broker commissions, property taxes and HOA fees, when applicable.

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Our ability to maintain and grow revenues from our existing portfolio of homes will be dependent on our ability to retain tenants and increase rental rates.

We believe that our platform will allow us to achieve strong tenant retention and rental rate increases.

Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 3.5% for the year ended December 31, 2019 and we experienced turnover rates of 36.9% and 38.5% for the year ended December 31, 2019 and 2018 , respectively.

Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 3.0% for the year ended December 31, 2020 and we experienced turnover rates of 33.1% and 36.9% for the years ended December 31, 2020 and 2019, respectively.

In response to the COVID-19 pandemic, we waived

month-to-month lease premiums and offered zero percent increases on newly signed renewal leases between April and July 2020 and then began to return to normal operating practices including modest renewal increases on expiring leases.

We monitor the following categories of expenses that we believe most significantly affect our results of operations.

Property Operating Expenses

Once a property is available for lease, which we refer to as “rent-ready,” we incur ongoing property-related expenses which may not be subject to our control.

Once a property is available for lease for the first time, which we refer to as “rent-ready,” we incur ongoing property-related expenses which may not be subject to our control.

These include primarily property taxes, repairs and maintenance (“R&M”), turnover costs, HOA fees (when applicable) and insurance.

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We experience higher levels of tenant move-outs and move-ins during the late spring and summer months, which impacts both our rental revenues and related turnover costs.

Further, our property operating costs are seasonally impacted in certain markets for expenses such as HVAC repairs, turn costs and landscaping expenses during the summer season.

Our property operating costs are seasonally impacted in certain markets for expenses such as HVAC repairs, turn costs and landscaping expenses during the summer season.

Additionally, our single-family properties are at greater risk in certain markets for adverse weather conditions such as hurricanes in the late summer months and extreme cold weather in the winter months.

General and Administrative Expense

General and administrative expense primarily consists of corporate payroll and personnel costs, state taxes, trustees’ and officers’ insurance expenses, audit and tax fees, trustee fees and other expenses associated with our corporate and administrative functions.

General and administrative expense primarily consists of corporate payroll and personnel costs, federal and state taxes, trustees’ and officers’ insurance expenses, audit and tax fees, trustee fees and other expenses associated with our corporate and administrative functions.

Also included in general and administrative expense is noncash share-based compensation expense related to corporate administrative employees.

Results of Operations

Net income totaled $156.3 million for the year ended December 31, 2019 , compared to net income of $112.4 million for the year ended December 31, 2018 .

This improvement was primarily attributable to higher revenues resulting from a larger number of occupied properties and higher rental rates, which were offset in part by higher property operating expenses, property management expenses, and general and administrative expense, as well as an increase in gain on sale of single-family properties and other, net and a noncash charge related to the redemption of the Series C participating preferred shares through a conversion into Class A common shares during the second quarter of 2018.

Net income totaled $154.8 million for the year ended December 31, 2020, compared to $156.3 million for the year ended December 31, 2019.

This decrease was primarily attributable to increased uncollectible rents and tenant utility reimbursements related to the COVID-19 pandemic, as well as a noncash write-down included in other expenses associated with the liquidation of legacy joint ventures, which were acquired as part of the American Residential Properties, Inc.

(“ARPI”) merger in February 2016.

This decrease was offset in part by growth in the Company’s portfolio and higher occupancy, as well as higher rental rates.

As we continue to grow our portfolio with a portion of our homes still recently developed, acquired and/or renovated, we distinguish our portfolio of homes between Same-Home properties and Non-Same-Home and Other properties in evaluating our operating performance.

We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the earliest period presented under comparison and if it has not been classified as held for sale, identified for future sale or taken out of service as a result of a casualty loss, which allows the performance of these properties to be compared between periods.

We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the earliest period presented under comparison and if it has not been classified as held for sale or taken out of service as a result of a casualty loss, which allows the performance of these properties to be compared between periods.

Single-family properties that we acquire individually (i.e., not through a bulk purchase) are classified as either stabilized or non-stabilized.

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Properties acquired through a bulk purchase are first considered non-stabilized, as an entire group, until (1) we have owned them for an adequate period of time to allow for complete on-boarding to our operating platform, and (2) a substantial portion of the properties have experienced tenant turnover at least once under our ownership, providing the opportunity for renovations and improvements to meet our property standards.

After such time has passed, properties acquired through a bulk purchase are then evaluated on an individual property basis under our standard stabilization criteria.

All other properties, including those classified as held for sale or identified for future sale, are classified as Non-Same-Home and Other.

After such time has passed, properties acquired through a bulk

purchase are then evaluated on an individual property basis under our standard stabilization criteria.

All other properties, including those classified as held for sale or taken out of service as a result of a casualty loss, are classified as Non-Same-Home and Other.

One of the primary financial measures we use in evaluating the operating performance of our single-family properties is Core Net Operating Income (“Core NOI”), which we also present separately for our Same-Home portfolio.

Core NOI is a supplemental non-GAAP financial measure that we define as core revenues, which is calculated as total revenues, excluding expenses reimbursed by tenant charge-backs and other revenues, less core property operating expenses, which is calculated as property operating and property management expenses, excluding noncash share-based compensation expense and expenses reimbursed by tenant charge-backs.

Core NOI also excludes (1) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value, (2) noncash gain or loss on conversion of shares or units, (3) gain or loss on early extinguishment of debt, (4) hurricane-related charges, net, which result in material charges to the impacted single-family properties, (5) gain or loss on sales of single-family properties and other, (6) depreciation and amortization, (7) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties, (8) noncash share-based compensation expense, (9) interest expense, (10) general and administrative expense, (11) other expenses and (12) other revenues.

Core NOI also excludes (1) gain or loss on early extinguishment of debt, (2) hurricane-related charges, net, which result in material charges to the impacted single-family properties, (3) gain or loss on sales of single-family properties and other, (4) depreciation and amortization, (5) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties as well as nonrecurring items unrelated to ongoing operations, (6) noncash share-based compensation expense, (7) interest expense, (8) general and administrative expense, (9) other expenses and (10) other revenues.

We believe Core NOI provides useful information to investors about the operating performance of our single-family properties without the impact of certain operating expenses that are reimbursed through tenant charge-backs.

Core NOI and Same-Home Core NOI should be considered only as supplements to net income or loss as a measure of our performance and should not be used as measures of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

Additionally, these metrics should not be used as substitutes for net income or loss or net cash flows from operating activities (as computed in accordance with GAAP).

Additionally, these metrics should not be used as substitutes for net income or loss or net cash flows from operating activities (as computed in accordance with accounting principles generally accepted in the United States of America (“GAAP”)).

Comparison of the Year Ended December 31, 2020 to the Year Ended December 31, 2019

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Properties (1)

Non-Same-Home and Other Properties

Core Revenue Non-Same-Home and Other Properties % of

Core Revenue Total

Properties % of

Rents from single-family properties (2)

$ 867,380 $ 150,442 $ 1,017,822

Fees from single-family properties (2)

Bad debt expense

13,350 3,001 16,351

(18,709) (3,757) (22,466)

Core revenues 862,021 149,686 1,011,707

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HOA fees, net (4)

16,264 1.9 % 3,390 2.3 % 19,654 1.9 %

R&M and turnover costs, net (4)(5)

69,429 8.0 % 13,707 9.2 % 83,136 8.2 %

Insurance 7,977 0.9 % 1,715 1.1 % 9,692 1.0 %

Property management expenses, net (6)

69,500 8.1 % 15,485 10.3 % 84,985 8.4 %

Core property operating expenses 315,873 36.6 % 61,734 41.2 % 377,607 37.3 %

Core NOI $ 546,148 63.4 % $ 87,952 58.8 % $ 634,100 62.7 %

For the Year Ended December 31, 2019

Properties (1)

Non-Same-Home and Other Properties

Core Revenue Non-Same-Home and Other Properties % of

Core Revenue Total

Properties % of

Rents from single-family properties $ 834,267 $ 133,142 $ 967,409

Fees from single-family properties 11,579 2,256 13,835

Bad debt expense

Bad debt (7,306) (1,652) (8,958)

Core revenues 838,540 133,746 972,286

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HOA fees, net (4)

17,232 2.0 % 3,236 2.4 % 20,468 2.1 %

R&M and turnover costs, net (4)

64,481 7.8 % 12,613 9.4 % 77,094 8.0 %

Insurance 7,576 0.9 % 1,447 1.1 % 9,023 0.9 %

Property management expenses, net (6)

67,707 8.1 % 12,495 9.3 % 80,202 8.2 %

Core property operating expenses 302,942 36.1 % 56,627 42.3 % 359,569 37.0 %

Core NOI $ 535,598 63.9 % $ 77,119 57.7 % $ 612,717 63.0 %

(1) Includes 44,663 properties that have been stabilized longer than 90 days prior to January 1, 2019.

(2) As a result of the COVID-19 pandemic, rents from single-family properties were impacted by the Company’s socially responsible decisions between April and July 2020 to waive month-to-month lease premiums and offer zero percent increases on newly signed renewal leases.

Fees from single-family properties were also impacted as the Company waived late fees between April and July 2020.

(3) Includes increased uncollectible rents related to the COVID-19 pandemic of $12.8 million and $11.1 million for the total portfolio and Same-Home portfolio, respectively, for the year ended December 31, 2020.

(4) Presented net of tenant charge-backs.

(5) Includes increased uncollectible tenant utility reimbursements of $2.8 million and $2.6 million and costs associated with enhanced cleaning and safety protocols related to the COVID-19 pandemic of $0.5 million and $0.4 million for the total portfolio and Same-Home portfolio, respectively, during the year ended December 31, 2020.

(6) Presented net of tenant charge-backs and excludes noncash share-based compensation expense related to centralized and field property management employees.

Property management expenses, net for the 2018 period also includes an adjustment for the portion of leasing costs that were previously capitalized that would be expensed under the new lease Accounting Standards Update (“ASU”) 2016-02, adopted by the Company on January 1, 2019.

The following are reconciliations of core revenues, Same-Home core revenues, core property operating expenses, Same-Home core property operating expenses, Core NOI and Same-Home Core NOI to their respective GAAP metrics for the years ended December 31, 2020 and 2019 (amounts in thousands):

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Other revenues (10,322) (11,241)

Bad debt expense

Core revenues 1,011,707 972,286

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Expenses reimbursed by tenant charge-backs (160,807) (159,851)

Bad debt expense

Internal leasing costs (1)

Core property operating expenses 377,607 359,569

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Core NOI and Same-Home Core NOI

Remeasurement of participating preferred shares

Net income $ 154,829 $ 156,260

Loss on early extinguishment of debt — 659

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Other revenues (10,322) (11,241)

Internal leasing costs (1)

Core NOI 634,100 612,717

Non-Same-Home Core NOI 87,952 77,119

Same-Home Core NOI $ 546,148 $ 535,598

Adjustment amount reflects the portion of leasing costs that were previously capitalized that would be expensed under the new lease accounting standard ASU 2016-02, adopted by the Company on January 1, 2019.

Total Revenues

Total revenues increased 3.5% to $1.18 billion for the year ended December 31, 2020 from $1.14 billion for the year ended December 31, 2019.

Revenue growth was primarily driven by continued strong leasing activity, as our average occupied portfolio grew to 48,687 homes for the year ended December 31, 2019 , compared to 47,368 homes for the year ended December 31, 2018 , as well as higher rental rates.

This was partially offset by a $9.0 million reclassification of bad debt expense during the year ended December 31, 2019 , which was included in total revenues as a result of the adoption of the new lease accounting standard on January 1, 2019.

Revenue growth was driven by an increase in our average occupied portfolio which grew to 50,065 homes for the year ended December 31, 2020, compared to 48,687 homes for the year ended December 31, 2019, as well as higher rental rates, partially offset by an increase in uncollectible rents and tenant utility reimbursements related to the COVID-19 pandemic.

Property Operating Expenses

Property operating expenses increased 3.8% to $450.3 million for the year ended December 31, 2020 from $433.9 million for the year ended December 31, 2019.

This increase is primarily attributable to higher property tax expense and increases in repairs and maintenance and turnover costs, partially offset by the $9.0 million reclassification of bad debt expense associated with the adoption of the new lease accounting standard.

This increase was primarily attributable to higher property tax expense and higher repairs and maintenance and turnover costs as a result of growth in our portfolio.

Property Management Expenses

Property management expenses for the years ended December 31, 2019 and 2018 were $86.9 million and $74.6 million , respectively, which included $1.3 million and $1.4 million , respectively, of noncash share-based compensation expense related to centralized and field property management employees.

The increase in property management expenses is primarily attributable to higher personnel costs and additional leasing costs recorded to property management expenses as a result of the new lease accounting standard.

Property management expenses for the years ended December 31, 2020 and 2019 were $89.9 million and $86.9 million, respectively, which included $1.7 million and $1.3 million, respectively, of noncash share-based compensation expense related to

centralized and field property management employees.

The increase in property management expenses was primarily attributable to higher personnel costs, partially offset by lower employee travel costs.

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties increased 2.8% to $862.0 million for the year ended December 31, 2020 from $838.5 million for the year ended December 31, 2019.

This increase is primarily attributable to higher Average Monthly Realized Rent per property, which increased 3.5% to $1,625 per month for the year ended December 31, 2019 compared to $1,570 per month for the year ended December 31, 2018 , a rise in the Average Occupied Days Percentage, which increased to 95.4% for the year ended December 31, 2019 compared to 95.0% for the year ended December 31, 2018 , and higher fees from single-family properties resulting from operational enhancements to our fee structure.

This increase is primarily attributable to higher Average Monthly Realized Rent per property, which increased 3.0% to $1,680 per month for the year ended December 31, 2020 compared to $1,631 per month for the year ended December 31, 2019, and a rise in the Average Occupied Days Percentage, which increased to 96.3% for the year ended December 31, 2020 compared to 95.4% for the year ended December 31, 2019, partially offset by an increase in uncollectible rents related to the COVID-19 pandemic.

Additionally, during the year ended December 31, 2020, core revenues from Same-Home properties were impacted by (i) the Company’s socially responsible decisions between April and July 2020 to waive month-to-month lease premiums and offer zero percent increases on newly signed renewal leases and (ii) waived late fees between April and July 2020.

Core Property Operating Expenses from Same-Home Properties

Core property operating expenses consists of direct property operating expenses, net of tenant charge-backs, and property management costs, net of tenant charge-backs, and excludes noncash share-based compensation expense.

Core property operating expenses from Same-Home properties increased 4.9% to $274.6 million for the year ended December 31, 2019 from $261.7 million for the year ended December 31, 2018 .

Same-Home core property operating expenses as a percentage of total Same-Home core revenues increased to 36.4% for the year ended December 31, 2019 from 36.2% for the year ended December 31, 2018 .

This increase in Same-Home core property operating expenses as a percentage of Same-Home core revenues was driven mostly by higher property tax expense related to 2019 valuation increases and higher repairs and maintenance and turnover costs, net.

Core property operating expenses from Same-Home properties consist of direct property operating expenses, net of tenant charge-backs, and property management costs, net of tenant charge-backs, and excludes noncash share-based compensation expense.

Core property operating expenses from Same-Home properties increased 4.3% to $315.9 million for the year ended December 31, 2020 from $302.9 million for the year ended December 31, 2019, primarily driven by annual growth in property tax expense and higher R&M and turnover costs, net, which includes $3.0 million of incremental costs related to the COVID-19 pandemic including increased uncollectible tenant utility reimbursements and enhanced cleaning costs during the year ended December 31, 2020.

General and Administrative Expense

General and administrative expense primarily consists of corporate payroll and personnel costs, state taxes, trustees’ and officers’ insurance expense, audit and tax fees, trustee fees and other expenses associated with our corporate and administrative functions.

General and administrative expense primarily consists of corporate payroll and personnel costs, federal and state taxes, trustees’ and officers’ insurance expense, audit and tax fees, trustee fees and other expenses associated with our corporate and administrative functions.

General and administrative expense for the years ended December 31, 2020 and 2019 was $48.5 million and $43.2 million, respectively, which included $6.6 million and $3.5 million, respectively, of noncash share-based compensation expense related to corporate administrative employees.

The increase in general and administrative expense is primarily related to the new executive compensation program and an increase in noncash share-based compensation expense, partially offset by lower legal expenses.

The increase in general and administrative expense was primarily related to higher noncash share-based compensation expense as well as higher personnel costs to support growth in our business and an increase in state taxes.

Interest Expense

Interest expense increased 3.4% to $127.1 million for the year ended December 31, 2019 from $122.9 million for the year ended December 31, 2018 .

This increase is primarily due to the unsecured senior notes issued in February 2018 and January 2019, partially offset by the payoff of the secured note payable in May 2018, the paydown and payoff of the term loan facility in June 2018 and June 2019, respectively, the payoff of the exchangeable senior notes in November 2018 and an increase in capitalized interest.

Interest expense decreased 7.9% to $117.0 million for the year ended December 31, 2020 from $127.1 million for the year ended December 31, 2019.

This decrease was primarily related to additional capitalized interest during the year ended December 31, 2020 and the payoff of the term loan facility in June 2019, partially offset by the unsecured senior notes issued in late January 2019.

Acquisition and Other Transaction Costs

Acquisition and other transaction costs were $3.2 million and $5.2 million for the years ended December 31, 2019 and 2018 , respectively, which primarily related to costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, as well as costs associated with the disposal of certain properties or portfolios of properties.

Acquisition and other transaction costs were $9.3 million and $3.2 million for the years ended December 31, 2020 and 2019, respectively, which primarily related to overhead and other indirect costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, as well as costs associated with the disposal of certain properties or portfolios of properties.

Our efforts to grow our acquisition program, including an increase in personnel, was the primary driver for the year-over-year increase.

Depreciation and Amortization

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Other Revenues

Other revenues were $11.2 million and $6.2 million for the years ended December 31, 2019 and 2018 , respectively, which primarily related to interest income on short-term investments, insurance recoveries, fees from unconsolidated joint ventures and equity in earnings/(losses) from unconsolidated joint ventures.

Other revenues were $10.3 million and $11.2 million for the years ended December 31, 2020 and 2019, respectively, which primarily related to interest income, fees from unconsolidated joint ventures, and equity in earnings from unconsolidated joint ventures.

Other Expenses

Other expenses were $6.7 million and $7.3 million for the years ended December 31, 2019 and 2018 , respectively, which primarily related to impairments on properties held for sale and expenses related to joint ventures.

Liquidity and Capital Resources

Our liquidity and capital resources as of December 31, 2019 included cash and cash equivalents of $37.6 million .

Additionally, as of December 31, 2019 , we had no outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of up to $800.0 million, of which $6.2 million was committed to outstanding letters of credit.

Liquidity is a measure of our ability to meet potential cash requirements, maintain our assets, fund our operations, make distributions to our shareholders and OP unitholders, including AH4R, and meet other general requirements of our business.

Our liquidity, to a certain extent, is subject to general economic, financial, competitive and other factors beyond our control.

Our liquidity requirements consist primarily of funds necessary to pay for the acquisition, development, renovation and maintenance of our properties, HOA fees (as applicable), real estate taxes, non-recurring capital expenditures, interest and principal payments on our indebtedness, general and administrative expenses, payment of quarterly dividends on our preferred shares and units, and payment of distributions to our common shareholders and unitholders.

We seek to satisfy our liquidity needs through cash provided by operations, long-term secured and unsecured borrowings, issuances of debt and equity securities (including OP units), asset-backed securitizations, property dispositions and joint venture transactions.

We have financed our operations, acquisitions and development expenditures to date through the issuance of equity securities, borrowings under our credit facilities, asset-backed securitizations and unsecured senior notes, and proceeds from the sale of single-family properties.

Going forward, we expect to meet our operating liquidity requirements generally through cash on hand and cash provided by operations.

We believe our rental income, net of operating expenses and recurring capital expenditures, will generally provide cash flow sufficient to fund our operations and dividend distributions.

However, our real estate assets are illiquid in nature.

A timely liquidation of assets might not be a viable source of short-term liquidity should a cash flow shortfall arise, and we may need to source liquidity from other financing alternatives including drawing on our revolving credit facility.

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the years ended December 31, 2019 and 2018 :

For the Years Ended December 31,

Net cash provided by operating activities

Net cash used for investing activities

Net cash (used for) provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Operating Activities

Our cash flows provided by operating activities, which is our principal source of cash flows, depend on numerous factors, including the occupancy level of our properties, the rental rates achieved on our leases, the collection of rent from our tenants and the level of property operating expenses, property management expenses and general and administrative expenses.

Net cash provided by operating activities increased $47.0 million , or 11.4% , from $410.9 million in 2018 to $457.9 million in 2019 primarily as a result of increased cash flows generated from a larger number of occupied properties and increases in rental rates on lease renewals and re-leasing of our single-family properties.

Investing Activities

For the Years Ended December 31,

Sources of cash from investing activities:

Net proceeds received from sales of single-family properties and other

Distributions from joint ventures

Proceeds received from hurricane-related insurance claims

Uses of cash for investing activities:

Cash paid for development activity

Cash paid for single-family properties

Change in escrow deposits for purchase of single-family properties

Recurring and other capital expenditures for single-family properties

Renovations to single-family properties

Investment in unconsolidated joint ventures

Other purchases of productive assets

Net cash used for investing activities

Net cash used for investing activities decreased $297.5 million , or 44.1% , from $674.4 million in 2018 to $376.9 million in 2019 driven by a strategic transition from systematic, rapid growth of our portfolio through the acquisition of homes through traditional channels (using cash generated from both operating and financing activities) to a growth plan focused on development of homes through our internal AMH Development Program and by working with third-party developers through our National Builder Program (using cash primarily generated from operating activities).

This also resulted in lower cash outflows for renovations to single-family properties.

Additionally, net proceeds received from sales of single-family properties and other increased, which was offset by an increase in recurring and other capital expenditures for single-family properties as a result of investments in properties to increase future revenues or reduce maintenance expenditures.

The development of “built-for-rental” homes and our property-enhancing capital expenditures may reduce recurring and other capital expenditures on an average per home basis in the future.

Further, as we continue to expand our internal AMH Development Program as well as focus on external portfolio growth, we expect to have increased cash outflows for development activities and acquisitions of single-family properties in the future, which we may fund through operating cash flows, debt or equity financings or net proceeds received from sales of single-family properties.

Financing Activities

Net cash related to financing activities changed from an inflow of $255.9 million in 2018 to an outflow of $92.1 million in 2019 primarily as a result of our debt and equity activity described below.

As of December 31, 2019 , the Company had outstanding asset-backed securitizations with varying maturities for an aggregate principal amount of $2.0 billion and outstanding unsecured senior notes maturing in 2028 and 2029 for an aggregate principal amount of $900.0 million .

During the year ended December 31, 2019 , the Company issued $400.0 million of unsecured senior notes and received $397.9 million in proceeds, net of a discount, paid off the outstanding amounts on the term loan facility and revolving credit facility for $100.0 million and $250.0 million , respectively, and paid $21.5 million in principal for its asset-backed securitizations.

During the year ended December 31, 2018 , the Company issued $500.0 million of unsecured senior notes and received $497.2 million in proceeds, net of a discount, drew $110.0 million of net borrowings on the revolving credit facility, paid down $100.0 million on the term loan facility and $20.8 million in principal for its asset-backed securitizations, and paid off the outstanding amounts of $135.1 million on the exchangeable senior notes and $49.4 million for the secured note payable.

For additional information regarding the Company’s debt issuances, see Note 7 .

Debt to our consolidated financial statements included as a separate section in Part IV, “Item 15.

Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.

Share/Unit Issuances and Redemptions

During the third quarter of 2018, the Company issued 4,600,000 6.25% Series H cumulative redeemable perpetual preferred shares in an underwritten public offering, raising gross proceeds of $115.0 million before offering costs of approximately $4.4 million , with a liquidation preference of $25.00 per share.

The Operating Partnership issued an equivalent number of the same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.

During the second quarter of 2018 , the Company redeemed all 7,600,000 shares of the outstanding 5.5% Series C participating preferred shares through a conversion of those participating preferred shares into Class A common shares of beneficial interest, $0.01 par value, in accordance with the conversion terms in the Articles Supplementary.

This resulted in 10,848,827 Class A common shares issued from the conversion, based on a conversion ratio of 1.4275 Class A common shares issued per Series C participating preferred share.

The Operating Partnership also redeemed its corresponding Series C participating preferred units through a conversion into Class A units on April 5, 2018 .

The conversion ratio was calculated by dividing (i) the initial liquidation preference on the Series C participating preferred shares, as adjusted by an amount equal to 50% of the cumulative change in value of an index based on the purchase prices of single-family properties located in our top 20 markets (adjusted for a maximum 9.0% internal rate of return), plus unaccrued dividends by (ii) the one-day volume weighted-average price of the Company’s Class A common shares on March 29, 2018, the date the Company delivered the required notice of redemption.

As a result of the redemption, the Company recorded a $32.2 million allocation of income to the Series C participating preferred shareholders in the second quarter of 2018, which represents the initial liquidation value of the Series C participating preferred shares in excess of the original equity carrying value of the Series C participating preferred shares as of the redemption date.

The original equity carrying value of the Series C participating preferred shares was net of the initial bifurcated home price appreciation derivative liability and offering costs.

At-the-Market Common Share Offering Program

The Company established an at-the-market common share offering program under which we were able to issue Class A common shares from time to time through various sales agents up to an aggregate of $500.0 million (the “At-the-Market Program”).

The program was established in order to use the net proceeds from share issuances to repay borrowings against the Company’s revolving credit and term loan facilities, to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy, and for working capital and general corporate purposes.

The program may be suspended or terminated by the Company at any time.

As of December 31, 2019 , no shares have been issued under the At-the-Market Program and $500.0 million remained available for future share issuances.

Share Repurchase Program

During the first quarter of 2018, the Company’s board of trustees re-authorized our existing share repurchase program, authorizing the repurchase of up to $300.0 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares from time to time in the open market or in privately negotiated transactions.

The program does not have an expiration date, but may be suspended or discontinued at any time without notice.

All repurchased shares are constructively retired

and returned to an authorized and unissued status.

The Operating Partnership funds the repurchases and constructively retires an equivalent number of corresponding Class A units.

During the year ended December 31, 2019 , we did no t repurchase and retire any of our shares.

During the year ended December 31, 2018 , the Company repurchased and retired 1.8 million of our Class A common shares on a settlement date basis, in accordance with the program, at a weighted-average price of $19.36 per share and a total price of $34.9 million .

As of December 31, 2019 , we had a remaining repurchase authorization of up to $265.1 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares under the program .

Distributions

As a REIT, we are required to distribute annually to our shareholders at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our REIT taxable income.

The Operating Partnership funds the payment of distributions.

We expect to use our NOL to reduce our REIT taxable income in future years.

AH4R had an NOL for U.S.

federal income tax purposes of an estimated $188.8 million as of December 31, 2019 and approximately $275.0 million as of December 31, 2018 .

Once our NOL is fully used, we may be required to increase AH4R’s distributions to comply with REIT distribution requirements and our current policy of distributing approximately all of our REIT taxable income (determined without regard to the deduction for dividends paid).

During the years ended December 31, 2019 and 2018 , the Company distributed an aggregate $125.7 million and $136.6 million , respectively, to common shareholders, preferred shareholders and noncontrolling interests.

Off-Balance Sheet Arrangements

We have no material obligations, assets or liabilities that would be considered off-balance sheet arrangements.

Contractual Obligations

Contractual obligations as of December 31, 2019 consisted of the following (in thousands):

Payments by Period

Less than 1 year

After 5 years

Revolving credit facility (1)

Asset-backed securitizations (2)

Unsecured senior notes (2)

Interest on debt obligations (3)

Operating lease obligations

Purchase obligations (4)

Includes the 0.25% annual commitment fee on the principal amount of the commitments of $800.0 million .

Amounts represent principal amounts due and exclude unamortized discounts and deferred financing costs.

Represents estimated future interest payments on our debt instruments based on applicable interest rates as of December 31, 2019 and assumes the repayment of the AMH 2015-1 and 2015-2 securitizations on their anticipated repayment dates in 2025.

The fully extended maturity dates for the AMH 2015-1 and 2015-2 securitizations are in 2045 and the interest rates increase on the anticipated repayment dates in 2025.

If the AMH 2015-1 and 2015-2 securitizations are not repaid on the anticipated repayment dates in 2025, our interest on debt obligations above would increase.

Represents commitments to acquire 289 single-family properties for an aggregate purchase price of $75.1 million , as well as $44.3 million in land purchase commitments.

As a condition for entering into some of its development contracts, the Company had $14.5 million in outstanding surety bonds and $6.2 million in letters of credit as of December 31, 2019 and $5.1 million in outstanding surety bonds and $1.1 million in letters of credit as of December 31, 2018 .

Other expenses were $14.0 million and $6.7 million for the years ended December 31, 2020 and 2019, respectively, which primarily related to impairments on properties held for sale and expenses related to unconsolidated joint ventures.

Also included in other expenses for the year ended December 31, 2020 was a $4.9 million noncash write-down associated with the liquidation of legacy joint ventures, which were acquired as part of the ARPI merger in February 2016, and a net expense of $2.9 million related to a legal matter involving a former employee.

Critical Accounting Policies and Estimates

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The ownership interest in a consolidated subsidiary of the Company held by outside parties, which was liquidated during the second quarter of 2018, is included in noncontrolling interest within the consolidated financial statements.

The Company consolidates VIEs in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation, if it is the primary beneficiary of the VIE as determined by its power to direct the VIE’s activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE.

The Company consolidates VIEs in accordance with Accounting Standards Codification (“ASC”) No.

810, Consolidation, if it is the primary beneficiary of the VIE as determined by its power to direct the VIE’s activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE.

Entities for which the Company owns an interest, but does not consolidate, are accounted for under the equity method of accounting as an investment in unconsolidated entity, such as our investments in unconsolidated joint ventures.

Investments in unconsolidated joint ventures are recorded initially at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions.

Under the equity method of accounting, our net equity investment is included in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets, and our share of net income or loss from the joint ventures is included within other revenues in the consolidated statements of operations.

Under the equity method of accounting, our net equity investment is included in investments in unconsolidated joint ventures within the consolidated balance sheets, and our share of net income or loss from the joint ventures is included within other revenues in the consolidated statements of operations.

Our recognition of joint venture income or loss is generally based on ownership percentages, which may change upon the achievement of certain investment return thresholds.

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Our investments in unconsolidated joint ventures are reviewed for impairment periodically and we will record an impairment charge when events or circumstances change indicating that a decline in the fair values below the carrying values has occurred and such decline is other-than-temporary.

During the year ended December 31, 2020, the Company recognized a $4.9 million impairment charge in other expenses within the consolidated statements of operations associated with the liquidation of legacy joint ventures, which were acquired as part of the ARPI merger in February 2016.

Investments in Real Estate

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Fair value is determined in accordance with ASC 820, Fair Value Measurements and Disclosures , and is primarily based on unobservable data inputs.

In making estimates of fair values for purposes of allocating the purchase price of individually acquired properties subject to an existing lease, the Company utilizes its own market knowledge obtained from historical transactions, its internal construction program and published market data.

In this regard, the Company also utilizes information obtained from county tax assessment records to assist in the determination of the fair value of the land and building.

For the year ended December 31, 2019 , the Company completed the acquisition of 451 single-family properties for a total purchase price of $118.5 million , which was included in cash paid for single-family properties within the consolidated statement of cash flows.

The value of acquired lease-related intangibles is estimated based upon the costs we would have incurred to lease the property under similar terms.

Such costs are capitalized and amortized over the remaining life of the lease.

Acquired leases are generally short-term in nature (less than one year ).

In this regard, the Company also utilizes information obtained from county tax assessment

records to assist in the determination of the fair value of the land and building.

The allocation of the consideration to the various components of properties acquired during the year can have an effect on our net income due to the useful depreciable and amortizable lives applicable to each component and the recognition of the related depreciation and amortization expense.

For the year ended December 31, 2020, the Company purchased 1,019 single-family properties treated as asset acquisitions for accounting purposes for a total purchase price of $266.4 million, which was included in cash paid for single-family properties within the consolidated statement of cash flows.

The nature of our business requires that in certain circumstances we acquire single-family properties subject to existing liens.

Liens that we expect to be extinguished in cash are estimated and accrued for on the date of acquisition and recorded as a cost of the property.

We incur costs to prepare our acquired properties for rental.

We incur costs to prepare properties acquired through our traditional acquisition channels for rental.

These costs, along with related holding costs, are capitalized to the cost of the property during the period the property is undergoing activities to prepare it for its intended use.

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Single-Family Properties Under Development and Development Land

Land and construction in progress related to our internal construction program (AMH Development Program) are presented separately in single-family properties under development and development land within the consolidated balance sheets.

Land and construction in progress for our AMH Development Program are presented separately in single-family properties under development and development land within the consolidated balance sheets.

Our capitalization policy on development properties follows the guidance in ASC 835-20, Capitalization of Interest , and ASC 970, Real Estate-General .

Costs directly related to the development of properties are capitalized and the costs of land and buildings under development include specifically identifiable costs.

We also capitalize interest, real estate taxes, insurance, utilities, and payroll costs

for land and construction in progress under active development once the applicable GAAP criteria have been met.

We also capitalize interest, real estate taxes, insurance, utilities, and payroll costs for land and construction in progress under active development once the applicable GAAP criteria have been met.

Determination of when a development project commences and capitalization begins, and when a development project is substantially complete and held available for occupancy and capitalization must cease, involves a degree of judgment.

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Because cash flows on properties considered to be long-lived assets to be held and used are considered on an undiscounted basis to determine whether an asset has been impaired, our established strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss.

No material impairments on operating properties have been recorded since the inception of the Company, except for certain properties in our Houston, Florida and Southeast markets that were impacted by the hurricanes in the third quarter of 2017.

No significant impairments on operating properties were recorded during the years ended December 31, 2020, 2019 and 2018.

We use the held for sale impairment model for our properties classified as held for sale.

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Because of these two different models, it is possible for a long-lived asset previously classified as held and used to require the recognition of an impairment charge upon classification as held for sale.

As of December 31, 2020 and 2019, the Company had 711 and 1,187 single-family properties, respectively, classified as held for sale, and recorded $2.0 million, $3.7 million and $5.9 million of impairment on single-family properties held for sale for the years ended December 31, 2020, 2019 and 2018, respectively, which was included in other expenses within the consolidated statements of operations.

Goodwill represents the fair value in excess of the tangible and separately identifiable intangible assets that were acquired in connection with the internalization of the Company’s management function in June 2013, including all administrative, financial, property management, marketing and leasing personnel, including executive management.

Goodwill has an indefinite life and is therefore not amortized.

The Company analyzes goodwill for impairment on an annual basis pursuant to ASC 350, Intangibles—Goodwill and Other , which permits us to assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount as a basis to determine whether an impairment test is necessary.

the reporting unit is less than the carrying amount as a basis to determine whether an impairment test is necessary.

Under the provision of ASC 280, Segment Reporting , the Company has determined that it has one reportable segment with activities related to acquiring, renovating, developing, leasing and operating single-family homes as rental properties.

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2016-02, Leases (Topic 842) (“ASC 842”) on January 1, 2019, the Company classifies our single-family property leases as operating leases and elects to not separate the lease component, comprised of rents from single-family properties, from the associated non-lease component, comprised of fees from single-family properties and tenant charge-backs.

The combined component is accounted for under the new lease accounting standard while certain tenant charge-backs are accounted for as variable payments under the revenue accounting guidance.

Rental revenue, net of any concessions, is recognized on a straight-line basis over the term of the lease, which is not materially different than if it were recorded when due from tenants and recognized monthly as it is earned.

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When collectability is not deemed probable, we write-off the tenant’s receivables and limit lease income to cash received.

Prior to January 1, 2019, we maintained an allowance for doubtful accounts for estimated losses that may have resulted from the inability of tenants to make required rent or other

Prior to January 1, 2019, we maintained an allowance for doubtful accounts for estimated losses that may have resulted from the inability of tenants to make required rent or other payments.

This allowance was estimated based on, among other considerations, payment histories, overall delinquencies and available security deposits.

The Company’s allowance for doubtful accounts was $8.6 million as of December 31, 2018 and was included in rent and other receivables, net within the consolidated balance sheets.

We accrue for property taxes and HOA assessments based on amounts billed, and, in some circumstances, estimates and historical trends when bills or assessments are not available.

The actual assessment may differ from the estimates, resulting in a change in estimate in a subsequent period.

Gains on sales of properties are recognized pursuant to the provisions included in ASC 610-20, Other Income .

Gains or losses on sales of properties and upon contributions to our unconsolidated joint ventures are recognized pursuant to the provisions included in ASC 610-20, Other Income .

Under ASC 610-20, we must first determine whether the transaction is a sale to a customer or non-customer.

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If we determine that we do not have a controlling financial interest in the real estate, we evaluate whether a contract exists under ASC 606, Revenue from Contracts with Customers , and whether the buyer has obtained control of the asset that was sold.

We recognize a full gain on sale, which is presented in gain on sale of single-family properties and other, net within the consolidated statements of operations, when the derecognition criteria under ASC 610-20 have been met.

We recognize a full gain or loss on sale, which is presented in gain on sale of single-family properties and other, net within the consolidated statements of operations, when the derecognition criteria under ASC 610-20 have been met.

AH4R has elected to be taxed as a REIT for U.S.

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We believe that we have operated, and continue to operate, in such a manner as to satisfy the requirements for qualification as a REIT.

Provided that we qualify as a REIT and our distributions to our shareholders equal or exceed our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains), we generally will not be subject to U.S.

Provided that we qualify as a REIT and our distributions to our shareholders equal or exceed our REIT taxable income (determined without regard to the deduction for dividends paid and including any net capital gains), we generally will not be subject to U.S.

federal income tax.

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If we fail to qualify as a REIT in any taxable year and do not qualify for certain statutory relief provisions, we would be subject to U.S.

federal income tax and state income tax on our taxable income at regular corporate tax rates, and we would likely be precluded from qualifying for treatment as a REIT until the fifth calendar year following the year in which we fail to qualify.

federal income tax and state income tax on our taxable income at regular corporate tax

rates, and we would likely be precluded from qualifying for treatment as a REIT until the fifth calendar year following the year in which we fail to qualify.

Even if we qualify as a REIT, we may be subject to certain state or local income and capital taxes and U.S.

federal income and excise taxes on our undistributed REIT taxable income, if any.

Our TRS will be subject to U.S.

Certain of our subsidiaries are subject to taxation by U.S.

federal, state and local authorities for the periods presented.

We made joint elections to treat certain subsidiaries as TRS which are subject to U.S.

federal, state and local taxes on their income at regular corporate rates.

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Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

We recognize tax benefits of uncertain tax positions only if it is more likely than not that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full authority of all relevant information.

The measurement of a tax benefit for an uncertain tax position that meets the more likely than not threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority having full knowledge of all the relevant information.

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Significant Accounting Policies to our consolidated financial statements included as a separate section in Part IV, “Item 15.

Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K for a discussion of the adoption and potential impact of recently issued accounting standards.

Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K for a discussion of the adoption and potential impact of recently issued accounting standards.

Liquidity and Capital Resources

Our liquidity and capital resources as of December 31, 2020 included cash and cash equivalents of $137.1 million.

Additionally, as of December 31, 2020, we had no outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of up to $800.0 million, of which $1.5 million was committed to outstanding letters of credit.

We have no debt maturities, other than recurring principal amortization, until 2024.

Our liquidity, to a certain extent, is subject to general economic, financial, competitive and other factors beyond our control.

Going forward, we expect to meet our operating liquidity requirements generally through cash on hand and cash provided by operations.

We believe our rental income, net of operating expenses and recurring capital expenditures, will generally provide cash flow sufficient to fund our operations and dividend distributions.

However, our real estate assets are illiquid in nature.

As discussed above under “COVID-19 Business Update,” the COVID-19 pandemic has had an adverse impact on the economy and our operating cash flows.

Since we do not know the ultimate severity and length of the COVID-19 pandemic, and thus

cannot predict the impact it will have on our tenants and on the debt and equity capital markets, we cannot estimate the ultimate impact it will have on our liquidity and capital resources.

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the years ended December 31, 2020 and 2019:

For the Years Ended December 31,

2020 2019 Change

Net cash provided by operating activities $ 474,100 $ 457,887 $ 16,213

Net cash used for investing activities (642,925) (376,866) (266,059)

Net cash provided by (used for) financing activities 269,783 (92,116) 361,899

Net increase (decrease) in cash, cash equivalents and restricted cash $ 100,958 $ (11,095) $ 112,053

Operating Activities

Net cash provided by operating activities increased $16.2 million, or 3.5%, from $457.9 million during the year ended December 31, 2019 to $474.1 million during the year ended December 31, 2020 primarily as a result of increased cash flows generated from a larger number of occupied properties and increases in rental rates on lease renewals and re-leasing of our single-family properties, partially offset by a decrease in collections on rent and tenant utility reimbursements associated with the COVID-19 pandemic.

Investing Activities

For the Years Ended December 31, Change

Sources of cash from investing activities:

Net proceeds received from sales of single-family properties and other $ 228,566 $ 221,930 $ 6,636

Distributions from joint ventures 129,007 22,561 106,446

Proceeds received from hurricane-related insurance claims 3,705 2,171 1,534

$ 361,278 $ 246,662 $ 114,616

Uses of cash for investing activities:

Cash paid for development activity $ (564,241) $ (383,271) $ (180,970)

Cash paid for single-family properties (269,273) (120,487) (148,786)

Recurring and other capital expenditures for single-family properties (104,819) (71,481) (33,338)

Investment in unconsolidated joint ventures (29,834) (13,114) (16,720)

Renovations to single-family properties (16,968) (21,883) 4,915

Other purchases of productive assets (18,694) (6,121) (12,573)

Change in escrow deposits for purchase of single-family properties (374) (7,171) 6,797

$ (1,004,203) $ (623,528) $ (380,675)

Net cash used for investing activities $ (642,925) $ (376,866) $ (266,059)

Net cash used for investing activities increased $266.1 million, or 70.6%, from $376.9 million during the year ended December 31, 2019 to $642.9 million during the year ended December 31, 2020, primarily driven by the strategic expansion of our portfolio through traditional acquisition channels, the development of “built-for-rental” homes through our AMH Development Program, and acquiring newly built properties through our National Builder Program.

We use cash generated from operating and financing activities and by recycling capital through the sale of single-family properties to invest in this strategic expansion.

The Company has continued construction activity, while in compliance with state and local mandates related to COVID-19, on its existing pipeline of “built-for-rental” homes through our AMH Development Program.

Recurring and other capital expenditures for single-family properties increased as a result of investments in properties to increase future revenues or reduce maintenance expenditures.

The development of “built-for-rental” homes and our property-enhancing capital expenditures may reduce recurring and other capital expenditures on an average per home basis in the future.

These increased cash outflows were offset by additional distributions from unconsolidated joint ventures in respect of contributions of land and in-process development projects and additional net proceeds from sales of single-family properties and other.

Financing Activities

Net cash provided by or used for financing activities increased $361.9 million from $92.1 million of net cash outflows during the year ended December 31, 2019 to $269.8 million of net cash inflows during the year ended December 31, 2020 primarily due to the debt and equity activity described below.

As of December 31, 2020, the Company had outstanding asset-backed securitizations with varying maturities starting in 2024 with an aggregate principal amount of $1.9 billion and outstanding unsecured senior notes maturing in 2028 and 2029 with an aggregate principal amount of $900.0 million.

During the year ended December 31, 2020, the Company borrowed and fully repaid $130.0 million on its revolving credit facility and repaid $22.5 million on its asset-backed securitizations.

During the year ended December 31, 2019, the Company issued $400.0 million of unsecured senior notes and received $397.9 million in proceeds, net of a discount, paid off the outstanding amounts on the term loan facility and revolving credit facility of $100.0 million and $250.0 million, respectively, and repaid $21.5 million on its asset-backed securitizations.

For additional information regarding the Company’s debt issuances, see Note 7.

Debt to our consolidated financial statements included as a separate section in Part IV, “Item 15.

Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K.

Class A Common Share Offering

During the third quarter of 2020, the Company issued 14,950,000 Class A common shares of beneficial interest, $0.01 par value per share, in an underwritten public offering, raising net proceeds of $411.7 million after deducting underwriting discounts and before offering costs of approximately $0.2 million.

The Company used the net proceeds from this offering (i) to repay indebtedness the Company had incurred under its revolving credit facility (ii) to develop new single-family properties and communities, (iii) to acquire and renovate single-family properties and for related activities in accordance with its business strategy and (iv) for general corporate purposes.

The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance.

At-the-Market Common Share Offering Program

During the second quarter of 2020, the Company extended its at-the-market common share offering program under which we can issue Class A common shares from time to time through various sales agents up to an aggregate gross sales offering price of $500.0 million (the “At-the-Market Program”).

The At-the-Market Program also provides that we may enter into forward contracts for our Class A common shares with forward sellers and forward purchasers.

The Company intends to use any net proceeds from the At-the-Market Program (i) to repay indebtedness the Company has incurred or expects to incur under its revolving credit facility, (ii) to develop new single-family properties and communities, (iii) to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy and (iv) for working capital and general corporate purposes, including repurchases of the Company’s securities, acquisitions of additional properties, capital expenditures and the expansion, redevelopment and/or improvement of properties in the Company’s portfolio.

The Company may suspend or terminate the At-the-Market Program at any time.

During the year ended December 31, 2020, the Company issued 86,130 Class A common shares under the At-the-Market Program, raising $2.4 million in gross proceeds before commissions and other expenses of approximately $0.4 million.

As of December 31, 2020, 86,130 shares have been issued under the At-the-Market Program and $497.6 million remained available for future share issuances.

Share Repurchase Program

The Company’s board of trustees authorized the establishment of our share repurchase program, authorizing the repurchase of up to $300.0 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares from time to time in the open market or in privately negotiated transactions.

The program does not have an expiration date, but may be suspended or discontinued at any time without notice.

All repurchased shares are constructively retired and returned to an authorized and unissued status.

The Operating Partnership funds the repurchases and constructively retires an equivalent number of corresponding Class A units.

During the years ended December 31, 2020 and 2019, we did not repurchase and retire any of our shares.

As of December 31, 2020, we had a remaining repurchase authorization of up to $265.1 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares under the program.

Distributions

As a REIT, we generally are required to distribute annually to our shareholders at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and any net capital gains) and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our REIT taxable income (determined without regard to the deduction for dividends paid and including any net capital gains).

The Operating Partnership funds the payment of distributions.

AH4R had an NOL for U.S.

federal income tax purposes of an estimated $60.2 million as of December 31, 2020 and approximately $189.1 million as of December 31, 2019.

We intend to use our NOL (to the extent available) to reduce our REIT taxable income and will distribute approximately all of our remaining REIT taxable income (determined without regard to the deduction for dividends paid and including any net capital gains).

During the years ended December 31, 2020 and 2019, the Company distributed an aggregate $126.6 million and $125.7 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.

Off-Balance Sheet Arrangements

During the third quarter of 2020, one of our unconsolidated joint ventures entered into a loan agreement to borrow up to a $201.0 million aggregate commitment.

During the initial two-year term, the loan bears interest at LIBOR plus a 3.50% margin and matures on August 11, 2022.

The loan agreement provides for three one-year extension options that include additional fees and interest.

As of December 31, 2020, the joint venture’s loan had an $85.2 million outstanding principal balance.

The Company provided a customary non-recourse guarantee that may become a liability for us upon a voluntary bankruptcy filing by the joint venture or occurrence of other actions such as fraud or a material misrepresentation by us or the joint venture.

To date, the guarantee has not been invoked and we believe that the actions that would trigger a guarantee would generally be disadvantageous to the joint venture and us, and therefore are unlikely to occur.

However, there can be no assurances that actions that could trigger the guarantee will not occur.

We have no other material obligations, assets or liabilities that would be considered off-balance sheet arrangements.

Contractual Obligations

Contractual obligations as of December 31, 2020 consisted of the following (in thousands):

Payments by Period

Total Less than 1 year 1-3 years 3-5 years After 5 years

Revolving credit facility (1)

$ 3,000 $ 2,000 $ 1,000 $ — $ —

Asset-backed securitizations (2)

1,948,492 20,714 41,428 964,741 921,609

Unsecured senior notes (2)

900,000 — — — 900,000

Interest on debt obligations (3)

662,489 125,718 249,095 181,270 106,406

Operating lease obligations 21,940 2,104 5,395 4,552 9,889

Purchase obligations (4)

153,982 153,982 — — —

Total $ 3,689,903 $ 304,518 $ 296,918 $ 1,150,563 $ 1,937,904

(1) Includes the 0.25% annual commitment fee on the principal amount of the commitments of $800.0 million.

(2) Amounts represent principal amounts due and exclude unamortized discounts and deferred financing costs.

(3) Represents estimated future interest payments on our debt instruments based on applicable interest rates as of December 31, 2020 and assumes the repayment of the AMH 2015-1 and 2015-2 securitizations on their anticipated repayment dates in 2025.

The fully extended maturity dates for the AMH 2015-1 and 2015-2 securitizations are in 2045 and the interest rates increase on the anticipated repayment dates in 2025.

If the AMH 2015-1 and 2015-2 securitizations are not repaid on the anticipated repayment dates in 2025, our interest on debt obligations above would increase.

(4) Represents commitments to acquire 323 single-family properties for an aggregate purchase price of $81.7 million, as well as $72.3 million in land purchase commitments that relate to both third-party developer agreements and land for our AMH Development Program.

As a condition for entering into some of its development contracts, the Company had $36.7 million in outstanding surety bonds and $1.5 million in letters of credit as of December 31, 2020 and $14.5 million in outstanding surety bonds and $6.2 million in letters of credit as of December 31, 2019.

Additional Non-GAAP Measures

Funds from Operations (“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 the National Association of Real Estate Investment Trusts (“NAREIT”) , which defines FFO as net income or loss calculated in accordance with GAAP, excluding gains and losses from sales or impairment of real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.

depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.

Core FFO attributable to common share and unit holders is a non-GAAP financial measure that we use as a supplemental measure of our performance.

We compute this metric by adjusting FFO attributable to common share and unit holders for (1) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties, (2) noncash share-based compensation expense, (3) noncash interest expense related to acquired debt, (4) hurricane-related charges, net, which result in material charges to the impacted single-family properties, (5) gain or loss on early extinguishment of debt, (6) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value, and (7) the allocation of income to our participating preferred shares in connection with their redemption.

We compute this metric by adjusting FFO attributable to common share and unit holders for (1) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties as well as nonrecurring items unrelated to ongoing operations, (2) noncash share-based compensation expense, (3) hurricane-related charges, net, which result in material charges to the impacted single-family properties, and (4) gain or loss on early extinguishment of debt.

Adjusted FFO attributable to common share and unit holders is a non-GAAP financial measure that we use as a supplemental measure of our performance.

17 unchanged sentences

FFO attributable to common share and unit holders $ 397,083 $ 384,079

Internal leasing costs (1)

Acquisition and other transaction costs

Acquisition, other transaction costs and other (1)

Noncash share-based compensation - general and administrative 6,573 3,466

Noncash share-based compensation - property management 1,745 1,342

Noncash interest expense related to acquired debt

Loss on early extinguishment of debt — 659

Remeasurement of participating preferred shares

Redemption of participating preferred shares

Core FFO attributable to common share and unit holders (2)

$ 417,624 $ 392,770

Recurring capital expenditures (3)

(46,048) (39,997)

Leasing costs (4,070) (4,095)

Internal leasing costs (1)

Adjusted FFO attributable to common share and unit holders (2)

Adjustment amount reflects the portion of leasing costs that were previously capitalized and treated as a reduction to Adjusted FFO attributable to common share and unit holders that would be expensed under the new lease accounting standard ASU 2016-02, adopted by the Company on January 1, 2019.

$ 367,506 $ 348,678

(1) Included in acquisition, other transaction costs and other is a net $2.9 million nonrecurring expense related to a legal matter involving a former employee during the year ended December 31, 2020 .

(2) Core FFO and Adjusted FFO attributable to common share and unit holders include negative financial impacts associated with the COVID-19 pandemic that relate to (i) the Company’s socially responsible decisions between April and July 2020 to waive month-to-month lease premiums and offer zero percent increases on newly signed renewal leases, (ii) waived late fees between April and July 2020, and (iii) $16.1 million of other negative financial impacts from the COVID-19 pandemic including $12.8 million of increased uncollectible rents, $2.8 million of increased uncollectible tenant utility reimbursements and $0.5 million of increased costs associated with enhanced cleaning and safety protocols during the year ended December 31, 2020.

Additionally, due primarily to abnormally high home system usage during stay-at-home orders, we incurred approximately $3.4 million of incremental capital expenditures within Adjusted FFO attributable to common share and unit holders that primarily related to HVAC and home system replacements during the year ended December 31, 2020.

(3) As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.

EBITDA / EBITDAre / Adjusted EBITDAre / Adjusted EBITDAre after Capex and Leasing Costs

EBITDA / EBITDAre / Adjusted EBITDAre / Fully Adjusted EBITDAre

EBITDA is defined as earnings before interest, taxes, depreciation and amortization.

1 unchanged sentence

EBITDAre is a supplemental non-GAAP financial measure, which we calculate in accordance with the definition approved by NAREIT by adjusting EBITDA for the net gain or loss on sales / impairment of single-family properties and other and adjusting for unconsolidated partnerships and joint ventures on the same basis.

Adjusted EBITDAre is a supplemental non-GAAP financial measure calculated by adjusting EBITDAre for (1) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties, (2) noncash share-based compensation expense, (3) hurricane-related charges, net, which result in material charges to the impacted single-family properties, (4) gain or loss on early extinguishment of debt, (5) gain or loss on conversion of shares and units and (6) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value.

Adjusted EBITDAre after Capex and Leasing Costs is a supplemental non-GAAP financial measure calculated by adjusting Adjusted EBITDAre for (1) recurring capital expenditures and (2) leasing costs.

Adjusted EBITDAre is a supplemental non-GAAP financial measure calculated by adjusting EBITDAre for (1) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties as well as nonrecurring items unrelated to ongoing operations, (2) noncash share-based compensation expense, (3) hurricane-related charges, net, which result in material charges to the impacted single-family properties, and (4) gain or loss on early extinguishment of debt.

Fully Adjusted EBITDAre (formerly known as Adjusted EBITDAre after Capex and Leasing Costs) is a supplemental non-GAAP financial measure calculated by adjusting Adjusted EBITDAre for (1) Recurring Capital Expenditures and (2) leasing costs.

We believe these metrics provide useful information to investors because they exclude the impact of various income and expense items that are not indicative of operating performance.

The following is a reconciliation of net income or loss, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted EBITDAre after Capex and Leasing Costs for the years ended December 31, 2019 and 2018 (in thousands):

The following is a reconciliation of net income, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre and Fully Adjusted EBITDAre for the years ended December 31, 2020 and 2019 (in thousands):

For the Years Ended December 31,

Net income $ 154,829 $ 156,260

Interest expense 117,038 127,114

Depreciation and amortization 343,153 329,293

EBITDA $ 615,020 $ 612,667

Net (gain) on sale / impairment of single-family properties and other (38,107) (40,210)

Adjustments for unconsolidated joint ventures 1,352 1,797

EBITDAre $ 578,265 $ 574,254

Noncash share-based compensation - general and administrative 6,573 3,466

Noncash share-based compensation - property management 1,745 1,342

Acquisition and other transaction costs

Acquisition, other transaction costs and other (1)

Loss on early extinguishment of debt — 659

Remeasurement of participating preferred shares

Adjusted EBITDAre $ 598,806 $ 582,945

Recurring capital expenditures (2)

(46,048) (39,997)

Leasing costs (4,070) (4,095)

Adjusted EBITDAre after Capex and Leasing Costs

Fully Adjusted EBITDAre $ 548,688 $ 538,853

(2) As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis