14 unchanged sentences
Our portfolio of single-family properties, including those held in our unconsolidated joint ventures, is internally managed through our proprietary property management platform.
−Removed: COVID-19 Business Update
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Collections continue to remain resilient throughout the pandemic.
−Removed: We have now received 96.7% of fourth quarter 2020 rental billings, which is consistent with pandemic payment histories within the same time frame.
−Removed: Additionally, collections of January 2021 rental billings continue to remain consistent with pandemic payment histories within the same time frame.
−Removed: Collections are reported without application of any existing resident security deposits or adjustment for deferred payment plans.
−Removed: 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.
−Removed: 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.
−Removed: For more information on risks related to COVID-19, see Part I, “Item 1A.
−Removed: 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
17 unchanged sentences
Cincinnati, OH 2,104 3.7 % 393.3 3.5 % 186,948 1,851 19.1 2014
−Removed: Greater Chicago area, IL and IN 1,730 3.3 % 318.6 3.2 % 184,161 1,869 19.3 2013
Orlando, FL 1,824 3.2 % 355.6 3.1 % 194,952 1,901 18.8 2015
+Added: Greater Chicago area, IL and IN 1,700 3.0 % 317.2 2.8 % 186,612 1,870 20.3 2013
Salt Lake City, UT 1,762 3.1 % 492.7 4.4 % 279,643 2,212 16.6 2015
1 unchanged sentence
Las Vegas, NV 1,515 2.7 % 351.5 3.1 % 232,029 1,875 14.6 2015
+Added: Austin, TX (3)
+Added: 794 1.4 % 160.3 1.4 % 201,922 1,965 13.0 2015
San Antonio, TX (3)
+Added: 1,292 2.3 % 238.1 2.1 % 184,267 1,946 13.8 2015
Savannah/Hilton Head, SC 974 1.7 % 187.3 1.7 % 192,293 1,884 13.5 2016
−Removed: Denver, CO 831 1.6 % 249.8 2.5 % 300,562 2,103 18.3 2015
All Other (2)
3 unchanged sentences
(2) Represents 15 markets in 13 states.
+Added: (3) 286 properties were reclassified from Austin, TX to San Antonio, TX during the year ended December 31, 2021 as a result of property reassignments between district offices.
The following table summarizes certain key leasing metrics as of December 31, 2021:
17 unchanged sentences
Cincinnati, OH 92.0 % 1,793 12.0 6.3 8.0 %
−Removed: Greater Chicago area, IL and IN 96.8 % 1,907 12.3 6.5 3.0 %
Orlando, FL 95.0 % 1,857 12.0 5.6 7.1 %
+Added: Greater Chicago area, IL and IN 97.8 % 2,005 12.3 6.2 7.5 %
Salt Lake City, UT 89.8 % 2,069 12.1 6.4 8.9 %
1 unchanged sentence
Las Vegas, NV 77.7 % 2,085 11.9 6.2 9.9 %
+Added: Austin, TX 91.7 % 1,853 12.2 6.3 7.3 %
San Antonio, TX 88.7 % 1,701 12.1 5.9 6.9 %
Savannah/Hilton Head, SC 92.4 % 1,740 12.0 6.7 8.6 %
−Removed: Denver, CO 95.1 % 2,277 12.1 6.3 3.4 %
All Other (6)
14 unchanged sentences
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.
+Added: Additionally, recent supply chain disruptions, inflationary increases in labor and material costs and labor shortages have impacted and may continue to impact certain aspects of our business, including our AMH Development Program, our renovation program associated with recently acquired properties and our maintenance program.
Property Acquisitions, Development and Dispositions
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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.
−Removed: 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.
−Removed: Opportunities from these new construction channels are impacted by the availability of vacant developed lots, development land assets and inventory of homes
−Removed: currently under construction or newly developed.
+Added: We are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program.
+Added: In addition, we
+Added: also acquire newly constructed homes from third-party developers through our National Builder Program.
+Added: 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.
−Removed: 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.
+Added: During the year ended December 31, 2021, we developed or acquired 3,921 homes for our consolidated portfolio, including 1,368 newly constructed properties delivered through our AMH Development Program and 2,553 homes acquired through our National Builder Program and traditional acquisition channel, partially offset by 481 homes sold.
+Added: During the year ended December 31, 2021, we also developed an additional 686 newly constructed properties which were delivered to our unconsolidated joint ventures, aggregating to 2,054 total program deliveries through our AMH Development Program.
Our properties held for sale were identified based on sub-market analysis, as well as individual property-level operational review.
5 unchanged sentences
This process is dependent upon the nature of each lot acquired and the timeline varies primarily due to land development requirements.
−Removed: Once land development requirements have been met, on average it takes approximately four to six months to complete the rental home vertical construction process.
−Removed: However, delivery of homes may be staged to account for delays in demand.
+Added: Once land development requirements have been met, historically it has taken approximately four to six months to complete the rental home vertical construction process.
+Added: However, delivery of homes may be staggered to facilitate leasing absorption.
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.
6 unchanged sentences
The time and cost involved to prepare our homes for rental can impact our financial performance and varies among properties based on several factors, including the source of acquisition channel and age and condition of the property.
−Removed: On average, it takes approximately 20 to 40 days to complete the renovation process.
+Added: 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.
Our operating results are also impacted by the amount of time it takes to market and lease a property, which can vary greatly among properties, and is impacted by local demand, our marketing techniques and the size of our available inventory.
−Removed: On average, it takes approximately 20 to 40 days to lease a property after acquiring or developing a new property through our new construction channels or after completing the renovation process for a traditionally acquired property.
+Added: On average, it takes approximately 10 to 30 days to lease a property after acquiring or developing a new property through our new construction channels and 20 to 40 days after completing the renovation process for a traditionally acquired property.
Lastly, our operating results are impacted by the length of stay of our tenants and the amount of time it takes to prepare and re-lease a property after a tenant vacates.
4 unchanged sentences
Additionally, our ability to collect revenues and related operating results are impacted by the credit worthiness and quality of our tenants.
−Removed: On average, our tenants have household incomes ranging from $70,000 to $110,000 and primarily consist of families with approximately two adults and one or more children.
+Added: Typically, our tenants have household incomes ranging from $70,000 to $120,000 and primarily consist of families with approximately two adults and one or more children.
Our rents and other single-family property revenues are comprised of rental revenue from single-family properties, fees from our single-family property rentals and “tenant charge-backs,” which are primarily related to cost recoveries on utilities.
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.
−Removed: 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.
−Removed: In response to the COVID-19 pandemic, we waived
−Removed: 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.
+Added: Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 5.3% for the year ended December 31, 2021 and we experienced turnover rates, which represents the number of tenant move-outs during the period divided by the total number of properties, of 29.8% and 33.4% for the years ended December 31, 2021 and 2020, respectively.
We monitor the following categories of expenses that we believe most significantly affect our results of operations.
8 unchanged sentences
We believe that our business and related operating results will be impacted by seasonal factors throughout the year.
−Removed: 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.
+Added: 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.
5 unchanged sentences
Net income totaled $210.6 million for the year ended December 31, 2021, compared to $154.8 million for the year ended December 31, 2020.
−Removed: 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.
−Removed: (“ARPI”) merger in February 2016.
−Removed: This decrease was offset in part by growth in the Company’s portfolio and higher occupancy, as well as higher rental rates.
+Added: This increase was primarily due to a larger number of occupied properties resulting from growth in the Company’s portfolio and higher rental rates and fees, as well as an increase in gain on sale and impairment of single-family properties and other, net.
+Added: During the year ended December 31, 2021, the Company reclassified certain impairment charges related to homes classified as held for sale from other expenses to gain on sale and impairment of single-family properties and other, net within the consolidated statements of operations.
+Added: The Company also reclassified other revenues and the remaining other expenses to other income and expense, net within the consolidated statements of operations.
+Added: The reclassification had no impact to net income, core revenues, core property operating expenses, Core NOI, Core FFO and Adjusted FFO attributable to common share and unit holders, Adjusted EBITDAre or Fully Adjusted EBITDAre.
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.
−Removed: 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.
+Added: We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the
+Added: 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.
1 unchanged sentence
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.
−Removed: After such time has passed, properties acquired through a bulk
−Removed: purchase are then evaluated on an individual property basis under our standard stabilization criteria.
+Added: 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.
−Removed: 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.
−Removed: 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.
+Added: Core NOI is a supplemental non-GAAP financial measure that we define as core revenues, which is calculated as rents and other single-family property revenues, excluding expenses reimbursed by tenant charge-backs, 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.
+Added: 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) gains and losses from sales or impairments 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, and (9) other income and expense, net.
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.
9 unchanged sentences
Rents from single-family properties $ 964,193 $ 162,215 $ 1,126,408
−Removed: $ 867,380 $ 150,442 $ 1,017,822
Fees from single-family properties 18,609 3,951 22,560
−Removed: 13,350 3,001 16,351
−Removed: (18,709) (3,757) (22,466)
+Added: Bad debt (18,524) (4,866) (23,390)
Core revenues 964,278 161,300 1,125,578
29 unchanged sentences
(1) Includes 46,461 properties that have been stabilized longer than 90 days prior to January 1, 2020.
−Removed: (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.
−Removed: Fees from single-family properties were also impacted as the Company waived late fees between April and July 2020.
−Removed: (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.
(2) Presented net of tenant charge-backs.
−Removed: (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.
(3) Presented net of tenant charge-backs and excludes noncash share-based compensation expense related to centralized and field property management employees.
2 unchanged sentences
Core revenues and Same-Home core revenues
−Removed: Total revenues $ 1,182,836 $ 1,143,378
+Added: Rents and other single-family property revenues $ 1,303,882 $ 1,172,514
Tenant charge-backs (178,304) (160,807)
−Removed: Other revenues (10,322) (11,241)
Core revenues 1,125,578 1,011,707
11 unchanged sentences
Net income $ 210,559 $ 154,829
−Removed: Loss on early extinguishment of debt — 659
−Removed: Gain on sale of single-family properties and other, net (44,194) (43,873)
+Added: Gain on sale and impairment of single-family properties and other, net (49,696) (38,773)
Depreciation and amortization 372,848 343,153
3 unchanged sentences
General and administrative expense 56,444 48,517
−Removed: Other expenses 14,036 6,733
−Removed: Other revenues (10,322) (11,241)
+Added: Other income and expense, net (3,985) (1,707)
Core NOI 719,816 634,100
1 unchanged sentence
Same-Home Core NOI $ 621,377 $ 571,543
−Removed: Total Revenues
−Removed: 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.
−Removed: 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.
+Added: Rents and Other Single-Family Property Revenues
+Added: Rents and other single-family property revenues increased 11.2% to $1.30 billion for the year ended December 31, 2021, compared to $1.17 billion for the year ended December 31, 2020.
+Added: Revenue growth was driven by an increase in our average occupied portfolio which grew to 52,542 homes for the year ended December 31, 2021, compared to 50,065 homes for the year ended December 31, 2020, as well as higher rental rates and fees.
Property Operating Expenses
Property operating expenses increased 8.9% to $490.2 million for the year ended December 31, 2021 from $450.3 million for the year ended December 31, 2020.
−Removed: 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.
+Added: This increase was primarily a result of inflationary increases and growth in our portfolio.
Property Management Expenses
−Removed: 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
−Removed: centralized and field property management employees.
−Removed: The increase in property management expenses was primarily attributable to higher personnel costs, partially offset by lower employee travel costs.
+Added: Property management expenses for the years ended December 31, 2021 and 2020 were $96.9 million and $89.9 million, respectively, which included $3.0 million and $1.7 million, respectively, of noncash share-based compensation expense related to centralized and field property management employees.
+Added: The increase in property management expenses was primarily attributable to higher personnel costs as a result of inflationary increases and growth in our portfolio as well as higher noncash share-based compensation expense.
Core Revenues from Same-Home Properties
Core revenues from Same-Home properties increased 7.3% to $964.3 million for the year ended December 31, 2021 from $899.0 million for the year ended December 31, 2020.
−Removed: 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.
−Removed: 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.
+Added: This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 5.3% to $1,773 per month for the year ended December 31, 2021 compared to $1,684 per month for the year ended December 31, 2020, a rise in the Average Occupied Days Percentage, which increased to 97.6% for the year ended December 31, 2021 compared to 96.3% for the year ended December 31, 2020, and higher fees.
Core Property Operating Expenses from Same-Home Properties
−Removed: 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.
−Removed: 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.
+Added: Core property operating expenses 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.
+Added: Core property operating expenses from Same-Home properties increased 4.7% to $342.9 million for the year ended December 31, 2021 from $327.4 million for the year ended December 31, 2020, primarily driven by annual growth in property tax expense and other inflationary increases.
General and Administrative Expense
1 unchanged sentence
General and administrative expense for the years ended December 31, 2021 and 2020 was $56.4 million and $48.5 million, respectively, which included $9.4 million and $6.6 million, respectively, of noncash share-based compensation expense related to corporate administrative employees.
−Removed: 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.
+Added: The increase in general and administrative expense was primarily related to higher personnel costs to support growth in our business as well as outsized performance-based bonuses during the year ended December 31, 2021, and higher noncash share-based compensation expense.
Interest Expense
Interest expense decreased 1.8% to $114.9 million for the year ended December 31, 2021 from $117.0 million for the year ended December 31, 2020.
−Removed: 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.
+Added: This decrease was primarily due to additional capitalized interest during the year ended December 31, 2021 related to an increase in our development activities under our AMH Development Program and an increase in acquired properties that underwent initial renovation, partially offset by additional interest from the issuance of the 2031 and 2051 unsecured senior notes during July 2021 and increased borrowings under the revolving credit facility.
Acquisition and Other Transaction Costs
−Removed: 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.
−Removed: Our efforts to grow our acquisition program, including an increase in personnel, was the primary driver for the year-over-year increase.
+Added: Acquisition and other transaction costs consists primarily of costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, the development of single-family properties, or the disposal of certain properties or portfolios of properties which do not qualify for capitalization.
+Added: Acquisition and other transaction costs for the years ended December 31, 2021 and 2020 were $15.7 million and $9.3 million, respectively, which included $5.4 million and $1.5 million, respectively, of noncash share-based compensation expense related to employees in these functions.
+Added: The increase in acquisition and other transaction costs was primarily related to higher noncash share-based compensation expense as well as higher acquisition costs associated with the growth of our portfolio.
Depreciation and Amortization
Depreciation and amortization expense consists primarily of depreciation of buildings and improvements.
−Removed: Depreciation of our assets is calculated over their useful lives on a straight-line basis over three to thirty years.
+Added: Depreciation of our assets is calculated over their useful lives on a straight-line basis over three to 30 years.
Our intangible assets are amortized on a straight-line basis over the asset’s estimated economic useful life.
Depreciation and amortization expense increased 8.7% to $372.8 million for the year ended December 31, 2021 from $343.2 million for the year ended December 31, 2020 primarily due to growth in our average number of depreciable properties.
−Removed: Other Revenues
−Removed: 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.
−Removed: Other Expenses
−Removed: 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.
−Removed: 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.
−Removed: Critical Accounting Policies and Estimates
+Added: Gain on Sale and Impairment of Single-Family Properties and Other, net
+Added: Gain on sale and impairment of single-family properties and other, net was $49.7 million and $38.8 million for the years ended December 31, 2021 and 2020, respectively, which included $0.2 million and $2.0 million of impairment charges, respectively, related to homes classified as held for sale.
+Added: The increase was primarily due to higher net gains on property sales and lower impairment charges.
+Added: Also included in gain on sale and impairment of single-family properties, net during the year ended December 31, 2020 was a
+Added: $3.5 million noncash write-down associated with the liquidation of legacy joint ventures, which were acquired as part of the American Residential Properties, Inc.
+Added: merger in February 2016.
+Added: Other Income and Expense, net
+Added: Other income and expense, net was $4.0 million and $1.7 million for the years ended December 31, 2021 and 2020, respectively, which primarily related to interest income, fees from unconsolidated joint ventures and equity in income (losses) from unconsolidated joint ventures, partially offset by expenses related to unconsolidated joint ventures and other nonrecurring expenses.
+Added: Also included in other income and expense, net for the year ended December 31, 2020 was a net expense of $2.9 million related to a legal matter involving a former employee.
+Added: Critical Accounting Estimates
Our discussion and analysis of our historical financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
1 unchanged sentence
Actual results could ultimately differ from these estimates.
−Removed: Listed below are those policies that management believes are critical and require the use of judgment in their application.
+Added: Listed below are those policies that management believes involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or our results of operations.
There are other items within the financial statements that require estimation, but they are not considered critical as they do not require significant judgment or are immaterial.
−Removed: Consolidation and Investments in Unconsolidated Joint Ventures
−Removed: The consolidated financial statements of the Company include the accounts of AH4R, the Operating Partnership and their consolidated subsidiaries.
−Removed: The consolidated financial statements of the Operating Partnership include the accounts of the Operating Partnership and its consolidated subsidiaries.
−Removed: Intercompany accounts and transactions have been eliminated.
−Removed: The Company consolidates real estate partnerships and other entities that are not variable interest entities (“VIEs”) when it owns, directly or indirectly, a majority interest in the entity or is otherwise able to control the entity.
−Removed: 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.
−Removed: The Company consolidates VIEs in accordance with Accounting Standards Codification (“ASC”) No.
−Removed: 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.
−Removed: 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.
−Removed: Investments in unconsolidated joint ventures are recorded initially at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions.
−Removed: 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.
−Removed: 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.
−Removed: The ultimate realization of the investment in unconsolidated joint ventures is dependent on a number of factors, including the performance of each investment and market conditions.
−Removed: 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.
−Removed: 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.
−Removed: Investments in Real Estate
+Added: Investments in Real Estate - Estimating Purchase Price Allocation
Purchases of single-family properties are treated as asset acquisitions and, as such, are recorded at their purchase price, including acquisition costs, which is allocated to land and building based upon their relative fair values at the date of acquisition.
1 unchanged sentence
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 AMH Development Program and published market data.
−Removed: In this regard, the Company also utilizes information obtained from county tax assessment
−Removed: records to assist in the determination of the fair value of the land and building.
+Added: 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.
−Removed: 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.
−Removed: The nature of our business requires that in certain circumstances we acquire single-family properties subject to existing liens.
−Removed: 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.
−Removed: We incur costs to prepare properties acquired through our traditional acquisition channels for rental.
−Removed: 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.
−Removed: We capitalize interest costs as a cost of the property only during the period for which activities necessary to prepare an asset for its intended use are ongoing, provided that expenditures for the asset have been made and interest costs have been incurred.
−Removed: Upon completion of the renovation of our properties, all costs of operations, including repairs and maintenance, are expensed as incurred.
−Removed: Single-Family Properties Under Development and Development Land
−Removed: 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.
−Removed: Our capitalization policy on development properties follows the guidance in ASC 835-20, Capitalization of Interest , and ASC 970, Real Estate-General .
−Removed: Costs directly related to the development of properties are capitalized and the costs of land and buildings under development include specifically identifiable costs.
−Removed: 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.
−Removed: 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.
−Removed: Impairment of Long-Lived Assets
+Added: For example, if a greater portion of the fair value is allocated to land, which does not depreciate, our net income would be higher.
+Added: Typically, we allocate between 15% to 30% of the purchase price of properties to land.
+Added: For the year ended December 31, 2021, the Company purchased 2,638 single-family properties treated as asset acquisitions for accounting purposes for a total purchase price of $840.0 million, net of holding costs, which was included in cash paid for single-family properties within the consolidated statement of cash flows.
+Added: Impairment of Long-Lived Assets - Estimating Future Cash Flows
We evaluate our long-lived assets for impairment periodically or whenever events or circumstances indicate that their carrying amount may not be recoverable.
5 unchanged sentences
No significant impairments on operating properties were recorded during the years ended December 31, 2021, 2020 and 2019.
−Removed: We use the held for sale impairment model for our properties classified as held for sale.
−Removed: The held for sale impairment model is different from the held and used impairment model.
−Removed: Under the held for sale impairment model, an impairment loss is recognized if the carrying amount of the long-lived asset classified as held for sale exceeds its fair value less cost to sell.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Goodwill has an indefinite life and is therefore not amortized.
−Removed: 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
−Removed: the reporting unit is less than the carrying amount as a basis to determine whether an impairment test is necessary.
−Removed: 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.
−Removed: The qualitative assessment requires judgment to be applied in evaluating the effects of multiple factors, including macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other relevant entity-specific events, events affecting the reporting unit, and whether or not there has been a sustained decrease in the Company’s stock price.
−Removed: We also have the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the goodwill impairment test.
−Removed: The impairment test compares the fair value of the reporting unit with its carrying amount.
−Removed: If the carrying amount exceeds the fair value, the impairment loss is determined as the excess of the carrying amount of the goodwill reporting unit over the fair value of that goodwill, not to exceed the carrying amount.
−Removed: Impairment charges, if any, are recognized in operating results.
−Removed: Based on our assessment of qualitative factors on December 31, 2020, we concluded it was more likely than not that the Company’s recorded goodwill balance of $120.3 million was not impaired and did not perform the quantitative test.
−Removed: No goodwill impairment was recorded during the years ended December 31, 2020, 2019 and 2018.
−Removed: Revenue and Expense Recognition
−Removed: We lease single-family properties that we own directly to tenants who occupy the properties under operating leases, generally, with a term of one year.
−Removed: As a result of the adoption of ASU No.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Tenant charge-backs, which are primarily related to cost recoveries on utilities, are recognized as revenue on a gross basis in the period during which the expenses are incurred.
−Removed: Upon adoption of ASC 842, we no longer have an allowance for doubtful accounts.
−Removed: When collectability is not deemed probable, we write-off the tenant’s receivables and limit lease income to cash received.
−Removed: 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.
−Removed: This allowance was estimated based on, among other considerations, payment histories, overall delinquencies and available security deposits.
−Removed: 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.
−Removed: The actual assessment may differ from the estimates, resulting in a change in estimate in a subsequent period.
−Removed: 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 .
−Removed: Under ASC 610-20, we must first determine whether the transaction is a sale to a customer or non-customer.
−Removed: We typically sell properties on a selective basis and not within the ordinary course of our operating business and therefore expect that our sale transactions will not be contracts with customers.
−Removed: We next determine whether we have a controlling financial interest in the property after the sale, consistent with the consolidation model in ASC 810, Consolidation .
−Removed: 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.
−Removed: 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.
−Removed: AH4R has elected to be taxed as a REIT for U.S.
−Removed: federal income tax purposes under Sections 856 to 860 of the Code, commencing with our taxable year ended December 31, 2012.
−Removed: We believe that we have operated, and continue to operate, in such a manner as to satisfy the requirements for qualification as a REIT.
−Removed: 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.
−Removed: federal income tax.
−Removed: Qualification and taxation as a REIT depend upon our ability to meet the various qualification tests imposed under the Code, including tests related to the percentage of income that we earn from specified sources and the percentage of our earnings that we distribute to our shareholders.
−Removed: Accordingly, no assurance can be given that we will continue to be organized or be able to operate in a manner so as to remain qualified as a REIT.
−Removed: 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.
−Removed: federal income tax and state income tax on our taxable income at regular corporate tax
−Removed: 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.
−Removed: Even if we qualify as a REIT, we may be subject to certain state or local income and capital taxes and U.S.
−Removed: federal income and excise taxes on our undistributed REIT taxable income, if any.
−Removed: Certain of our subsidiaries are subject to taxation by U.S.
−Removed: federal, state and local authorities for the periods presented.
−Removed: We made joint elections to treat certain subsidiaries as TRS which are subject to U.S.
−Removed: federal, state and local taxes on their income at regular corporate rates.
−Removed: The tax years from 2016 to present generally remain open to examination by the taxing jurisdictions to which the Company is subject.
−Removed: We believe that our Operating Partnership is properly treated as a partnership for U.S.
−Removed: federal income tax purposes.
−Removed: As a partnership, the Operating Partnership is not subject to U.S.
−Removed: federal income tax on our income.
−Removed: Instead, each of the Operating Partnership’s partners, including AH4R, is allocated, and may be required to pay tax with respect to, its share of the Operating Partnership’s income.
−Removed: As such, no provision for U.S.
−Removed: federal income taxes has been included for the Operating Partnership.
−Removed: ASC 740-10, Income Taxes, requires recognition of deferred tax assets for the expected future tax consequences of events that have been included in the financial statements or tax returns.
−Removed: 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.
−Removed: 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 knowledge of all relevant information.
−Removed: 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.
−Removed: As of December 31, 2020, there were no deferred tax assets and liabilities or unrecognized tax benefits recorded by the Company.
−Removed: We do not anticipate a significant change in unrecognized tax benefits within the next 12 months.
Recent Accounting Pronouncements
Significant Accounting Policies to our consolidated financial statements included as a separate section in Part IV, “Item 15.
−Removed: 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.
+Added: 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, if any.
Liquidity and Capital Resources
−Removed: Our liquidity and capital resources as of December 31, 2020 included cash and cash equivalents of $137.1 million.
−Removed: 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.
−Removed: We have no debt maturities, other than recurring principal amortization, until 2024.
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.
−Removed: 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.
−Removed: 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.
+Added: Sources of Capital
+Added: We expect to satisfy our cash requirements 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.
3 unchanged sentences
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.
−Removed: 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.
−Removed: Since we do not know the ultimate severity and length of the COVID-19 pandemic, and thus
−Removed: 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.
+Added: Our liquidity and capital resources as of December 31, 2021 included cash and cash equivalents of $48.2 million.
+Added: Additionally, as of December 31, 2021, we had $350.0 million of outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of up to $1.25 billion, of which $1.6 million was committed to outstanding letters of credit.
+Added: We maintain an investment grade credit rating which provides for greater availability of and lower cost of debt financing.
+Added: Uses of Capital
+Added: Our expected material cash requirements for the twelve months ended December 31, 2022 and thereafter consist of (i) contractually obligated expenditures, including payments of principal and interest, (ii) other essential expenditures, including property operating expenses, HOA fees (as applicable), real estate taxes, maintenance capital expenditures, general and administrative expenses and dividends on our equity securities including those paid in accordance with REIT distribution requirements, and (iii) opportunistic expenditures, including to pay for the acquisition, development and renovation of our properties and repurchases of our securities.
+Added: With respect to our contractually obligated expenditures, our cash requirements within the next twelve months include accounts payable and accrued expenses, interest payments on debt obligations, principal amortization on our asset-backed securitizations, operating lease obligations and purchase commitments to acquire single-family properties and land for our AMH Development Program.
+Added: Debt, Note 8.
+Added: Accounts Payable and Accrued Expenses and Note 14.
+Added: Commitments and Contingencies to our consolidated financial statements included as a separate section in Part IV, “Item 15.
+Added: Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K for a discussion of our material short-term and long-term cash requirements.
+Added: A summary of our contractual obligations as of December 31, 2021 is presented below (in thousands):
+Added: Payments by Period
+Added: Total Less than 1 year Thereafter
+Added: Debt maturities (1)
+Added: $ 3,924,181 $ 20,714 $ 3,903,467
+Added: Interest on debt obligations (2)
+Added: 951,121 148,763 802,358
+Added: Operating lease obligations 20,998 3,140 17,858
+Added: Purchase obligations (3)
+Added: 569,333 490,234 79,099
+Added: Total $ 5,465,633 $ 662,851 $ 4,802,782
+Added: (1) Amounts represent principal amounts due and exclude unamortized discounts and deferred financing costs.
+Added: (2) Represents estimated future interest payments on our debt instruments based on applicable interest rates as of December 31, 2021 and assumes the repayment of the AMH 2015-1 and 2015-2 securitizations on their anticipated repayment dates in 2025.
+Added: 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.
+Added: 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.
+Added: Future interest payments on debt obligations would also be impacted by the level of borrowing on our revolving credit facility in the future.
+Added: (3) Represents commitments to acquire 482 single-family properties for an aggregate purchase price of $160.4 million, as well as $409.0 million in purchase commitments for land relating to our AMH Development Program.
The following table summarizes the Company’s and the Operating Partnership’s cash flows for the years ended December 31, 2021 and 2020:
3 unchanged sentences
Net cash used for investing activities (1,733,465) (642,925) (1,090,540)
−Removed: Net cash provided by (used for) financing activities 269,783 (92,116) 361,899
−Removed: Net increase (decrease) in cash, cash equivalents and restricted cash $ 100,958 $ (11,095) $ 112,053
+Added: Net cash provided by financing activities 1,064,955 269,783 795,172
+Added: Net (decrease) increase in cash, cash equivalents and restricted cash $ (73,310) $ 100,958 $ (174,268)
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.
−Removed: 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.
+Added: Net cash provided by operating activities increased $121.1 million, or 25.5%, from $474.1 million during the year ended December 31, 2020 to $595.2 million during the year ended December 31, 2021, 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 as well as higher fees, partially offset by higher cash outflows for property taxes and other property related expenses associated with the growth in our portfolio.
Investing Activities
4 unchanged sentences
Proceeds received from hurricane-related insurance claims 4,842 3,705 1,137
+Added: Payments received on notes for sale of properties 1,253 — 1,253
$ 195,717 $ 361,278 $ (165,561)
Uses of cash for investing activities:
−Removed: Cash paid for development activity $ (564,241) $ (383,271) $ (180,970)
Cash paid for single-family properties $ (850,071) $ (269,273) $ (580,798)
+Added: Cash paid for development activity (824,247) (564,241) (260,006)
Recurring and other capital expenditures for single-family properties (122,551) (104,819) (17,732)
−Removed: Investment in unconsolidated joint ventures (29,834) (13,114) (16,720)
Renovations to single-family properties (47,681) (16,968) (30,713)
−Removed: Other purchases of productive assets (18,694) (6,121) (12,573)
Change in escrow deposits for purchase of single-family properties (33,005) (374) (32,631)
+Added: Investment in unconsolidated joint ventures (29,260) (29,834) 574
+Added: Other purchases of productive assets (22,367) (18,694) (3,673)
$ (1,929,182) $ (1,004,203) $ (924,979)
Net cash used for investing activities $ (1,733,465) $ (642,925) $ (1,090,540)
−Removed: 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.
+Added: Net cash used for investing activities increased $1.09 billion, or 169.6%, from $642.9 million during the year ended December 31, 2020 to $1.73 billion during the year ended December 31, 2021.
+Added: Our investing activities are most significantly impacted by the strategic expansion of our portfolio through traditional acquisition channels, the development of “built-for-rental” homes through our AMH Development Program and the acquisition of newly built properties through our National Builder Program.
+Added: Cash outflows for the addition of single-family properties to our portfolio through these channels increased $873.4 million during the year ended December 31, 2021.
+Added: Renovations to single-family properties increased as a result of an increased volume in purchases of homes through our traditional acquisition channel.
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.
−Removed: 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.
+Added: Net proceeds received from sales of single-family properties and other decreased as a result of a decrease in homes sold.
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.
−Removed: 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.
+Added: Net cash used for investing activities also increased as a result of a reduction in distributions, net of investments, from our unconsolidated joint ventures and an increase in purchases of other productive assets
+Added: during the year ended December 31, 2021.
+Added: These increased cash outflows were partly offset by increased proceeds received from hurricane-related insurance claims and payments received on notes for sale of properties.
Financing Activities
−Removed: 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.
−Removed: 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.
+Added: Net cash provided by financing activities increased $795.2 million from $269.8 million during the year ended December 31, 2020 to $1.06 billion during the year ended December 31, 2021 primarily due to the debt and equity activity described below.
+Added: As of December 31, 2021, the Company had outstanding asset-backed securitizations with varying maturities starting in 2024 with an aggregate principal amount of $1.92 billion and outstanding unsecured senior notes with varying maturities starting in 2028 with an aggregate principal amount of $1.65 billion.
+Added: The Company also amended its existing revolving credit facility during the year ended December 31, 2021 to provide for maximum borrowings of up to $1.25 billion and extend its maturity date to 2025 with two six-month extension options at the Company’s election if certain conditions are met.
+Added: As of December 31, 2021, the Company had $350.0 million of outstanding borrowings under its revolving credit facility.
+Added: During the year ended December 31, 2021, the Company issued $750.0 million of unsecured senior notes, receiving $737.2 million in proceeds, net of a discount, and paid $18.0 million in deferred financing costs and $4.0 million for the settlement of a treasury lock (see Note 12.
+Added: Fair Value) in connection with the issuances.
+Added: The Company also borrowed $1.41 billion and repaid $1.06 billion on its revolving credit facility and repaid $24.3 million on its asset-backed securitizations.
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.
−Removed: 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.
2 unchanged sentences
Class A Common Share Offering
−Removed: 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.
−Removed: 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.
+Added: During the second quarter of 2021, the Company completed an underwritten public offering for 18,745,000 of its Class A common shares of beneficial interest, $0.01 par value per share, of which 5,500,000 shares were issued directly by the Company and 13,245,000 shares were offered on a forward basis at the request of the Company by the forward sellers.
+Added: In connection with this offering, the Company entered into forward sale agreements with the forward purchasers (the “2021 Forward Sale Agreements”) for these 13,245,000 shares which are accounted for in equity.
+Added: The Company received net proceeds of $194.0 million from the 5,500,000 Class A common shares issued directly by the Company after deducting underwriting fees and before offering costs of approximately $0.2 million.
The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance.
+Added: The Company used the net proceeds to repay indebtedness under its revolving credit facility, to partially fund the redemption of its Series D and Series E perpetual preferred shares discussed below and for general corporate purposes.
+Added: The Company did not initially receive proceeds from the sale of the Class A common shares offered on a forward basis.
+Added: During the third and fourth quarters of 2021, the Company issued and physically settled all 13,245,000 Class A common shares under the 2021 Forward Sale Agreements, receiving net proceeds of $463.5 million.
+Added: The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance.
+Added: The Company used these net proceeds for general corporate purposes including property acquisitions and developments.
+Added: Redemptions of Perpetual Preferred Shares
+Added: During the second quarter of 2021, the Company redeemed all 10,750,000 shares of the outstanding 6.500% Series D perpetual preferred shares, $0.01 par value per share, for cash at a liquidation preference of $25.00 per share plus any accrued and unpaid dividends in accordance with the terms of such shares.
+Added: The Operating Partnership also redeemed its corresponding Series D perpetual preferred units.
+Added: As a result of the redemption, the Company recorded an $8.5 million allocation of income to the Series D perpetual preferred shareholders within the consolidated statements of operations during the year ended December 31, 2021, which represents the initial liquidation value of the Series D perpetual preferred shares in excess of their carrying value as of the redemption date.
+Added: During the second quarter of 2021, the Company redeemed all 9,200,000 shares of the outstanding 6.350% Series E perpetual preferred shares, $0.01 par value per share, for cash at a liquidation preference of $25.00 per share plus accrued and unpaid dividends in accordance with the terms of such shares.
+Added: The Operating Partnership also redeemed its corresponding Series E perpetual preferred units.
+Added: As a result of the redemption, the Company recorded a $7.4 million allocation of income to the Series E perpetual preferred
+Added: shareholders within the consolidated statements of operations during the year ended December 31, 2021, which represents the initial liquidation value of the Series E perpetual preferred shares in excess of their carrying value as of the redemption date.
At-the-Market Common Share Offering Program
2 unchanged sentences
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.
−Removed: The Company may suspend or terminate the At-the-Market Program at any time.
+Added: The At-the-Market Program may be suspended or terminated by the Company at any time.
During the year ended December 31, 2021, the Company issued 1,749,286 Class A common shares under the At-the-Market Program, raising $72.3 million in gross proceeds before commissions and other expenses of approximately $1.1 million.
+Added: 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, 2021, 1,835,416 shares have been issued under the At-the-Market Program and $425.2 million remained available for future share issuances.
Share Repurchase Program
−Removed: 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.
+Added: The Company’s board of trustees authorized the establishment of our share repurchase program for 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.
1 unchanged sentence
The Operating Partnership funds the repurchases and constructively retires an equivalent number of corresponding Class A units.
−Removed: During the years ended December 31, 2020 and 2019, we did not repurchase and retire any of our shares.
+Added: During the years ended December 31, 2021 and 2020, we did not repurchase and retire any of our Class A common shares or preferred shares.
As of December 31, 2021, 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.
3 unchanged sentences
AH4R had an NOL for U.S.
−Removed: 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.
−Removed: 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).
+Added: federal income tax purposes of an estimated $25.4 million as of December 31, 2021 and $68.6 million as of December 31, 2020.
+Added: We intend to use our NOL (to the extent available) to reduce our REIT taxable income to the extent that REIT taxable income is not reduced by our deduction for dividends paid.
During the years ended December 31, 2021 and 2020, the Company distributed an aggregate $207.3 million and $126.6 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.
Off-Balance Sheet Arrangements
−Removed: 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.
−Removed: During the initial two-year term, the loan bears interest at LIBOR plus a 3.50% margin and matures on August 11, 2022.
−Removed: The loan agreement provides for three one-year extension options that include additional fees and interest.
−Removed: As of December 31, 2020, the joint venture’s loan had an $85.2 million outstanding principal balance.
−Removed: 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.
−Removed: 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.
−Removed: However, there can be no assurances that actions that could trigger the guarantee will not occur.
−Removed: We have no other material obligations, assets or liabilities that would be considered off-balance sheet arrangements.
−Removed: Contractual Obligations
−Removed: Contractual obligations as of December 31, 2020 consisted of the following (in thousands):
−Removed: Payments by Period
−Removed: Total Less than 1 year 1-3 years 3-5 years After 5 years
−Removed: Revolving credit facility (1)
−Removed: $ 3,000 $ 2,000 $ 1,000 $ — $ —
−Removed: Asset-backed securitizations (2)
−Removed: 1,948,492 20,714 41,428 964,741 921,609
−Removed: Unsecured senior notes (2)
−Removed: 900,000 — — — 900,000
−Removed: Interest on debt obligations (3)
−Removed: 662,489 125,718 249,095 181,270 106,406
−Removed: Operating lease obligations 21,940 2,104 5,395 4,552 9,889
−Removed: Purchase obligations (4)
−Removed: 153,982 153,982 — — —
−Removed: Total $ 3,689,903 $ 304,518 $ 296,918 $ 1,150,563 $ 1,937,904
−Removed: (1) Includes the 0.25% annual commitment fee on the principal amount of the commitments of $800.0 million.
−Removed: (2) Amounts represent principal amounts due and exclude unamortized discounts and deferred financing costs.
−Removed: (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.
−Removed: 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.
−Removed: 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.
−Removed: (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.
−Removed: 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.
+Added: We have no off-balance sheet arrangements that we believe are reasonably likely to have a material impact on our financial condition.
Additional Non-GAAP Measures
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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.
−Removed: 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.
+Added: 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, (4) gain or loss on early extinguishment of debt and (5) the allocation of income to our perpetual preferred shares in connection with their redemption.
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.
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Because other REITs may not compute these measures in the same manner, they may not be comparable among REITs.
−Removed: The following is a reconciliation of the Company’s net income or loss attributable to common shareholders, determined in accordance with GAAP, to FFO attributable to common share and unit holders, Core FFO attributable to common share and unit holders and Adjusted FFO attributable to common share and unit holders for the years ended December 31, 2020 and 2019 (in thousands):
+Added: The following is a reconciliation of the Company’s net income attributable to common shareholders, determined in accordance with GAAP, to FFO attributable to common share and unit holders, Core FFO attributable to common share and unit holders and Adjusted FFO attributable to common share and unit holders for the years ended December 31, 2021 and 2020 (in thousands):
For the Years Ended December 31,
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Noncontrolling interests in the Operating Partnership 21,467 14,455
−Removed: Net (gain) on sale / impairment of single-family properties and other (38,107) (40,210)
+Added: Gain on sale and impairment of single-family properties and other, net (49,696) (38,773)
Adjustments for unconsolidated joint ventures 1,873 1,352
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Acquisition, other transaction costs and other (1)
+Added: 15,749 12,889
Noncash share-based compensation - general and administrative 9,361 6,573
Noncash share-based compensation - property management 3,004 1,745
−Removed: Loss on early extinguishment of debt — 659
+Added: Redemption of perpetual preferred shares 15,879 —
Core FFO attributable to common share and unit holders $ 514,624 $ 417,624
−Removed: $ 417,624 $ 392,770
Recurring Capital Expenditures (52,134) (46,048)
−Removed: (46,048) (39,997)
Leasing costs (3,422) (4,070)
Adjusted FFO attributable to common share and unit holders $ 459,068 $ 367,506
−Removed: $ 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.
−Removed: (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.
−Removed: 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.
−Removed: (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 / Fully Adjusted EBITDAre
1 unchanged sentence
EBITDA is a non-GAAP financial measure and is used by us and others as a supplemental measure of performance.
−Removed: 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.
+Added: EBITDAre is a supplemental non-GAAP financial measure, which we calculate in accordance with the definition approved by NAREIT by adjusting EBITDA for gains and losses from sales or impairments of single-family properties 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 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.
−Removed: 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.
+Added: Fully Adjusted EBITDAre is a supplemental non-GAAP financial measure calculated by adjusting Adjusted EBITDAre for (1) Recurring Capital Expenditures and (2) leasing costs.
+Added: 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.
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.
5 unchanged sentences
EBITDA $ 698,300 $ 615,020
−Removed: Net (gain) on sale / impairment of single-family properties and other (38,107) (40,210)
+Added: Gain on sale and impairment of single-family properties and other, net (49,696) (38,773)
Adjustments for unconsolidated joint ventures 1,873 1,352
3 unchanged sentences
Acquisition, other transaction costs and other (1)
−Removed: Loss on early extinguishment of debt — 659
+Added: 15,749 12,889
Adjusted EBITDAre $ 678,591 $ 598,806
Recurring Capital Expenditures (52,134) (46,048)
−Removed: (46,048) (39,997)
Leasing costs (3,422) (4,070)
1 unchanged sentence
(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.
−Removed: (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.