What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-25 compared with 2021-02-26 · 34 added, 37 removed, 220 unchanged (24% of the section changed)

41 unchanged sentences

We believe we can achieve this objective by pursuing the following strategies:

• Maintain early-mover advantage and position us as a dominant owner/operator of single-family rental properties.

Historically, the single-family home rental market has been extremely fragmented, comprised primarily of private and individual property investors in local markets.

Until recently, there have been no large-scale, national market owners/operators primarily due to the challenge of efficiently scaling the development/acquisition and management of many individual homes.

With opportunities to cost-effectively develop homes and to continue acquiring homes at attractive prices, we intend to continue to leverage our expertise and experience in rapidly building an institutional-quality, professionally-managed business.

We believe that being one of the first in our industry to do so on a large scale has provided us the “early-mover” advantage to continue aggregating a large, geographically diversified portfolio of high-quality properties at prices that provide attractive potential yields and capital appreciation.

• Employ a disciplined property acquisition process.

5 unchanged sentences

(iv) a range of $250,000 estimated minimum valuation to $550,000 maximum bid price;

and (v) estimated renovation costs not in excess of 25% of estimated value.

and (v) estimated renovation costs in line with our targeted program parameters.

Our target areas have above average median household incomes, well-regarded school districts and access to desirable lifestyle amenities.

3 unchanged sentences

• Expand our one-of-a-kind internal development program.

We are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program, which we believe represents the best investment on a risk-adjusted return basis.

We are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program, which we believe represents one of the best available investments on a risk-adjusted return basis.

Our “built-for-rental” homes will leverage our existing property management platform and are built with the long-term renter in mind, including maintenance resilient features, as well as floor plans, finishes and other features known to be desirable to our residents.

3 unchanged sentences

We monitor and manage the diversification of our portfolio in order to reduce the risks associated with adverse developments affecting a particular market.

We currently are focusing on developing and acquiring single-family homes in selected sub-markets of MSAs, with an emphasis on achieving critical mass within each target market.

We currently are focusing on developing and acquiring single-family homes in selected sub-markets of MSAs.

We continually evaluate potential new markets where we may invest and establish operations as opportunities emerge.

We select our markets based on steady population growth and strong rental demand, providing for attractive potential yields and capital appreciation.

In addition, if we are unable to gain desired critical mass within a market to operate efficiently, then we may pursue ways to exit those markets in a manner designed to maximize shareholder value.

• Efficiently manage and operate properties.

4 unchanged sentences

These centralized services allow us to provide all markets with the benefits of these functions without the burden of staffing each function in every market.

In addition, by having a national property management operation, we have the

ability to negotiate favorable terms on services and products with many of our contractors and vendors, including national contractors and vendors.

In addition, by having a national property management operation, we have the ability to negotiate favorable terms on services and products with many of our contractors and vendors, including national contractors and vendors.

Our property management functions are 100% internalized, which we believe provides us with consistency of service, control and branding in the operation of our properties.

6 unchanged sentences

We may use leverage to increase potential returns to our shareholders, but we will seek to maintain a conservative and flexible balance sheet.

We believe that preferred shares provide an attractive source of permanent capital.

We have also obtained capital through the use of unsecured credit facilities, the issuance of unsecured senior notes, and through asset-backed securitization transactions completed during 2014 and 2015.

We have obtained capital through the use of unsecured credit

facilities, the issuance of unsecured senior notes, preferred shares, and through asset-backed securitization transactions completed during 2014 and 2015.

We also participate in investment vehicles with third-party investors as an alternative source of equity to grow our business.

9 unchanged sentences

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.

However, delivery of homes may be staggered to facilitate leasing absorption.

Our AMH Development 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.

9 unchanged sentences

In particular, we have an extensive network of real estate brokers that facilitate a large volume of acquisitions through broker sales.

Our team of dedicated personnel identifies opportunities for homes sold in bulk by institutions or competitors.

Acquisitions through these channels generally allow more time for underwriting to determine the expected rents, expenses and renovation costs, obtain title insurance and review local covenant conditions and restrictions.

Our team of dedicated personnel identifies opportunities for homes sold in bulk by institutions or competitors and perform underwriting to determine the expected rents, expenses and renovation costs and obtain title insurance and review local covenant conditions and restrictions for acquisitions through traditional channels.

• Property Renovation.

6 unchanged sentences

We have found that a rapid response to renovating our homes improves our relationship with the local communities and homeowners’ associations (“HOAs”), enhancing the “American Homes 4 Rent” brand recognition and loyalty.

In general, property renovations are completed within approximately 20 to 40 days and properties are typically leased approximately 20 to 40 days after completing the renovation process.

On average, it has taken approximately 20 to 90 days to complete the renovation process, which will fluctuate based on our overall acquisition volume as well as availability of construction labor and materials.

Properties are typically leased approximately 20 to 40 days after completing the renovation process.

If a home that is acquired remains occupied, the renovation process may be postponed.

1 unchanged sentence

• Property Management.

We have developed an extensive in-house property management infrastructure, with modern systems, dedicated personnel and local offices in certain of our markets.

In these markets, property managers employed by us execute all property management functions.

We have developed an extensive in-house property management infrastructure, with modern systems, dedicated personnel and local offices.

We directly manage all of our properties without the engagement of a third-party manager.

31 unchanged sentences

The system obtains credit information from a major credit bureau, which is used to evaluate prospective tenant rental applications.

We maintain property, liability and corporate level insurance coverage related to our business, including crime and fidelity, property management errors and omissions, trustees’ and officers’ errors and omissions, cyber liability, employment practice liability

and workers’ compensation.

We believe the policy specifications and insured limits under our insurance program are appropriate and adequate for our business and properties given the relative risk of loss, the cost of the coverage and industry practice.

However, our insurance coverage is subject to substantial deductibles and carve-outs, and we will be self-insured up to the amount of such deductibles and carve-outs.

In 2021, we formed a wholly owned captive insurance company, American Dream Insurance, LLC, which provides general liability insurance coverage for losses below the deductible under our third-party liability insurance policy.

We created American Dream Insurance, LLC as part of our overall risk management program and to stabilize our insurance costs, manage exposure and recoup expenses through the functions of the captive program.

See “Risk Factors—Risks Related to Our Business—We are self-insured against many potential losses, and uninsured or underinsured losses relating to properties may adversely affect our financial condition, operating results, cash flows and ability to make distributions” and “Risk Factors—Risks Related to the Real Estate Industry—Environmentally hazardous conditions may adversely affect our financial condition, cash flows and operating results.”

14 unchanged sentences

Department of Housing and Urban Development and various state agencies, prohibit discrimination in housing on the basis of race or color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women and people securing custody of children under the age of 18), handicap or, in some states, financial capability.

We believe that our properties are in substantial compliance with the FHA and other regulations.

Eviction Moratorium

In response to the COVID-19 pandemic, on September 4, 2020, the Centers for Disease Control and Prevention (the “CDC”) issued a federal eviction moratorium that temporarily halts residential evictions of qualifying tenants for nonpayment of rent during the period from September 4, 2020 to December 31, 2020.

On December 27, 2020, the CDC extended the moratorium through January 31, 2021 and on January 29, 2021, the CDC extended the moratorium through March 31, 2021.

We believe that we are in compliance with this moratorium.

We expect vigorous debate and discussion in a number of areas, including residential housing, fiscal policy, monetary policy and healthcare, to continue over the next few years.

However, we cannot be certain if or when any specific proposal or policy might be announced, emerge from committee or be approved by Congress, and, if so, what the effects on us may be.

Our properties are in substantial compliance with the FHA and other regulations.

Eviction Moratoria

In response to the COVID-19 pandemic, federal and state governmental authorities, including the Centers for Disease Control and Prevention implemented eviction moratoria that temporarily halted residential evictions of qualifying tenants for nonpayment of rent and restricted certain rent collection practices during parts of 2020 and 2021.

These restrictions have generally been lifted or expired and we believe that, while in effect, we were in compliance with all applicable restrictions.

However, similar restrictions may be imposed in the future in response to COVID-19, a different pandemic or for other reasons such as a natural disaster.

Environmental Matters

1 unchanged sentence

See “Risk Factors—Risks Related to Our Business—Contingent or unknown liabilities could adversely affect our financial condition, cash flows and operating results” and “Risk Factors—Risks Related to the Real Estate Industry—Environmentally hazardous conditions may adversely affect our financial condition, cash flows and operating results.”

Various legislative and regulatory bodies have been focused on the shortage of residential housing in the U.S.

and significant increases in the cost of housing.

We expect vigorous and continuing political debate and discussion, which we intend to participate in, with respect to residential housing laws and regulations.

We cannot be certain if or when any specific proposal or policy might be announced or adopted by governmental authorities, and, if so, what the effects on us may be.

REIT Qualification

5 unchanged sentences

federal, state and local income tax.

Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they generally distribute annually at least 90% of their REIT taxable income, computed without regard to the dividends paid deduction and any net capital gains to their shareholders.

Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they generally distribute annually at least 90% of their REIT taxable income, determined without regard to the dividends paid deduction and any net capital gains to their shareholders.

If AH4R fails to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, our income would be subject to U.S.

19 unchanged sentences

Another important part of engagement is compensating our employees competitively and providing an attractive benefits package.

All full-time employees are eligible for our benefits package including healthcare insurance, a 401(k) retirement plan, paid time off and our employee wellness programs.

All full-time employees are eligible for our benefits package including healthcare insurance, a 401(k) retirement plan, an employee stock purchase plan, a tuition reimbursement plan, paid time off and our employee wellness programs.

During the year ended December 31, 2021, employee turnover was 36.8%.

1 unchanged sentence

We champion inclusion and diversity and embrace Valuing Differences as one of our company’s core philosophies.

As of December 31, 2020, approximately 50% of our workforce had participated in our 2 Hour Values Differences Seminar.

All employees will have participated in this training by June 2021.

A two-part “Valuing Differences” training series is mandatory for all employees, the first part to be completed within an employee’s first 90 days of service.

In 2021, our employees participated in 2,500 hours of total diversity, equity and inclusion training.

Our Human Resources department routinely monitors diversity in all employment decisions, including but not limited to hiring and promotions.

2 unchanged sentences

Women Minorities (1)

Undeclared Race

Employees 45% 39% 15%

1 unchanged sentence

Senior leadership of VP or above 28% 27% 11%

(1) Minorities percentage is calculated as the number of employees that declared a minority race divided by total employees (which includes employees who did not declare any race) as of December 31, 2021.

Training and Development

7 unchanged sentences

We provide annual safety training for all employees and every employee in a safety-sensitive position is required to complete additional relevant training.

Our OSHA Recordable Incident Rate for 2020 was 1.56.

Our OSHA Recordable Incident Rate for 2021 was 2.58, which continues to be below the national average rate and in line with our historical average rate and demonstrates our commitment to maintaining a safe and healthy environment.

In response to the COVID-19 pandemic, we established protocols to keep our residents, employees and third-party contractors safe.

Our maintenance team instituted a process to ensure a property was safe to enter, and we also communicated with our employees to ensure they had appropriate personal protective equipment.

All field employees were outfitted with safety gloves, masks and sanitizer to ensure there was no cross-contamination between properties.

Our maintenance team has a process to ensure a property is safe to enter, and we also ensure our employees have appropriate personal protective equipment.

All field employees are outfitted with safety gloves, masks and sanitizer to ensure there is no cross-contamination between properties.

We believe that our business and related operating results will be impacted by seasonal factors throughout the year.

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.

Historically, we have experienced 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.

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.

8 unchanged sentences

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 1. Business