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Item 2. Management’s Discussion and Analysis

2023-05-05 compared with 2022-11-04 · 97 added, 253 removed, 314 unchanged (53% of the section changed)

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The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.

We are a Maryland REIT focused on acquiring, developing, renovating, leasing and operating single-family homes as rental properties.

We are a Maryland REIT focused on acquiring, developing, renovating, leasing and managing single-family homes as rental properties.

The Operating Partnership is the entity through which we conduct substantially all of our business and own, directly or through subsidiaries, substantially all of our assets.

We commenced operations in November 2012.

As of September 30, 2022, we owned 58,961 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) in 21 states, including 1,057 properties held for sale, compared to 57,024 single-family properties in 22 states, including 659 properties held for sale, as of December 31, 2021, and 56,077 single-family properties in 22 states, including 604 properties held for sale as of September 30, 2021.

As of September 30, 2022, 55,421 of our total properties (excluding properties held for sale) were occupied, compared to 53,637 of our total properties (excluding properties held for sale) as of December 31, 2021 and 53,133 of our total properties (excluding properties held for sale) as of September 30, 2021.

Also, as of September 30, 2022, the Company had an additional 2,271 properties held in unconsolidated joint ventures, compared to 1,942 properties held in unconsolidated joint ventures as of December 31, 2021, and 1,729 properties held in unconsolidated joint ventures as of September 30, 2021.

We commenced operations in November 2012 and we have elected to be taxed as a REIT.

As of March 31, 2023, we owned 58,639 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) in 21 states, including 903 properties held for sale, compared to 58,993 single-family properties in 21 states, including 1,115 properties held for sale, as of December 31, 2022, and 57,984 single-family properties in 22 states, including 855 properties held for sale as of March 31, 2022.

As of March 31, 2023, 56,049 of our total properties (excluding properties held for sale) were occupied, compared to 55,605 of our total properties (excluding properties held for sale) as of December 31, 2022 and 54,352 of our total properties (excluding properties held for sale) as of March 31, 2022.

Also, as of March 31, 2023, the Company had an additional 2,688 properties held in unconsolidated joint ventures, compared to 2,540 properties held in unconsolidated joint ventures as of December 31, 2022, and 1,849 properties held in unconsolidated joint ventures as of March 31, 2022.

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

Key Single-Family Property and Leasing Metrics

The following table summarizes certain key single-family properties metrics as of September 30, 2022:

The following table summarizes certain key single-family properties metrics as of March 31, 2023:

Total Single-Family Properties (1)

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Nashville, TN 3,240 5.6 % 780.3 6.3 % 240,824 2,112 15.8 2016

Indianapolis, IN 2,942 5.1 % 503.0 4.1 % 170,977 1,929 19.7 2014

Houston, TX 2,770 4.8 % 485.5 4.0 % 175,281 2,098 16.7 2014

Jacksonville, FL 2,923 5.1 % 614.2 5.0 % 210,110 1,930 14.5 2016

Indianapolis, IN 2,880 5.0 % 495.9 4.0 % 172,196 1,928 20.2 2014

Tampa, FL 2,746 4.8 % 610.7 4.9 % 222,399 1,939 15.5 2016

Houston, TX 2,548 4.4 % 449.5 3.6 % 176,401 2,090 17.3 2014

Raleigh, NC 2,183 3.8 % 431.9 3.5 % 197,846 1,889 17.1 2015

Columbus, OH 2,123 3.7 % 398.4 3.3 % 187,673 1,867 20.3 2015

Cincinnati, OH 2,126 3.7 % 414.0 3.3 % 194,752 1,843 20.2 2014

Orlando, FL 1,855 3.2 % 372.4 3.0 % 200,753 1,895 19.3 2015

Columbus, OH 2,108 3.7 % 398.0 3.2 % 188,816 1,869 20.8 2015

Las Vegas, NV 1,927 3.3 % 522.9 4.2 % 271,349 1,917 12.7 2016

Salt Lake City, UT 1,904 3.3 % 575.5 4.6 % 302,233 2,243 16.5 2016

Orlando, FL 1,887 3.3 % 388.8 3.1 % 206,036 1,901 19.1 2015

Greater Chicago area, IL and IN 1,586 2.7 % 299.9 2.4 % 189,106 1,867 21.6 2013

Las Vegas, NV 1,751 3.0 % 451.1 3.7 % 257,617 1,893 13.7 2016

Charleston, SC 1,521 2.6 % 345.6 2.8 % 227,221 1,963 12.4 2017

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Total/Average 57,736 100.0 % $ 12,380.4 100.0 % $ 214,430 1,989 17.2 2015

(1) Excludes 1,057 single-family properties held for sale as of September 30, 2022.

(1) Excludes 903 single-family properties held for sale as of March 31, 2023.

(2) Represents 15 markets in 13 states.

The following table summarizes certain key leasing metrics as of September 30, 2022:

The following table summarizes certain key leasing metrics as of March 31, 2023:

Total Single-Family Properties (1)

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Nashville, TN 95.7 % 2,133 12.0 6.0 8.5 %

Indianapolis, IN 95.1 % 1,683 12.1 6.7 7.5 %

Houston, TX 93.9 % 1,855 12.0 6.5 6.7 %

Jacksonville, FL 97.0 % 2,006 12.0 6.3 6.2 %

Indianapolis, IN 96.3 % 1,722 12.1 6.1 4.8 %

Tampa, FL 97.6 % 2,170 12.0 6.2 8.8 %

Houston, TX 97.4 % 1,906 12.0 5.6 4.9 %

Raleigh, NC 95.5 % 1,860 12.0 6.1 7.4 %

Columbus, OH 96.3 % 1,930 12.0 6.6 7.6 %

Cincinnati, OH 96.9 % 1,941 12.0 5.9 6.2 %

Orlando, FL 97.5 % 2,010 12.0 6.8 11.6 %

Columbus, OH 96.5 % 1,978 12.0 6.0 6.5 %

Las Vegas, NV 92.2 % 2,094 12.0 6.4 5.8 %

Salt Lake City, UT 96.5 % 2,275 12.0 5.9 5.8 %

Orlando, FL 96.3 % 2,104 12.0 6.3 9.3 %

Greater Chicago area, IL and IN 97.7 % 2,218 12.1 5.9 6.1 %

Las Vegas, NV 92.5 % 2,023 11.9 6.3 10.2 %

Charleston, SC 97.2 % 2,090 12.0 5.6 7.5 %

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Total/Average 96.3 % $ 2,027 12.0 6.0 7.1 %

(1) Excludes 1,057 single-family properties held for sale as of September 30, 2022.

(2) For the three months ended September 30, 2022, Average Occupied Days Percentage represents the number of days a property is occupied in the period divided by the total number of days the property is owned during the same period after initially being placed in-service.

(3) For the three months ended September 30, 2022, Average Monthly Realized Rent is calculated as the lease component of rents and other single-family property revenues (i.e., rents from single-family properties) divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months.

(1) Excludes 903 single-family properties held for sale as of March 31, 2023.

(2) For the three months ended March 31, 2023, Average Occupied Days Percentage represents the number of days a property is occupied in the period divided by the total number of days the property is owned during the same period after initially being placed in-service.

(3) For the three months ended March 31, 2023, Average Monthly Realized Rent is calculated as the lease component of rents and other single-family property revenues (i.e., rents from single-family properties) divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months.

For properties partially owned during the period, this is adjusted to reflect the number of days of ownership.

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

(5) Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the three months ended September 30, 2022, compared to the annual rent of the previously expired non-month-to-month comparable long-term lease for each property.

(5) Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the three months ended March 31, 2023, compared to the annual rent of the previously expired non-month-to-month comparable long-term lease for each property.

(6) Represents 15 markets in 13 states.

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We anticipate beginning to grow in these acquisition channels when the housing and capital markets stabilize.

During the three months ended September 30, 2022, we developed or acquired 410 homes, including 265 newly constructed homes delivered through our AMH Development Program and 145 homes acquired through our National Builder Program and traditional acquisition channel, partially offset by 164 homes sold to third parties.

During the three months ended September 30, 2022, we also developed an additional 236 newly constructed properties which were delivered to our unconsolidated joint ventures, aggregating to 501 total program deliveries through our AMH Development Program.

During the three months ended March 31, 2023, we developed or acquired 312 homes, including 299 newly constructed homes delivered through our AMH Development Program and 13 homes acquired through our National Builder Program, offset by 666 homes sold to third parties.

During the three months ended March 31, 2023, we also developed an additional 167 newly constructed properties which were delivered to our unconsolidated joint ventures, aggregating to 466 total program deliveries through our AMH Development Program.

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

As of September 30, 2022 and December 31, 2021, there were 1,057 and 659 properties, respectively, classified as held for sale.

As of March 31, 2023 and December 31, 2022, there were 903 and 1,115 properties, respectively, classified as held for sale.

We will continue to evaluate our properties for potential disposition going forward as a normal course of business.

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

Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 8.1% for the three months ended September 30, 2022, and we experienced turnover rates of 8.3% and 8.8% during the three months ended September 30, 2022 and 2021, respectively.

Based on our Same-Home population of properties, the year-over-year increase in Average Monthly Realized Rent per property was 7.9% for the nine months ended September 30, 2022, and we experienced turnover rates of 21.8% and 23.8% during the nine months ended September 30, 2022 and 2021, respectively.

Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 8.0% for the three months ended March 31, 2023, and we experienced turnover rates, which represents the number of tenant move-outs during the period divided by the total number of properties, of 6.4% and 6.2% during the three months ended March 31, 2023 and 2022, respectively.

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

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Property Management Expenses

As we internally manage our portfolio of single-family properties through our proprietary property management platform, we incur costs such as salary expenses for property management personnel, lease expenses and operating costs for property management offices and technology expenses for maintaining our property management platform.

As part of developing our property management platform, we have made significant investments in our infrastructure, systems and technology.

As part of developing our property management platform, we continue to make significant investments in our personnel, infrastructure, systems and technology that will impact expenses based on investment programs during the year.

We believe that these investments will enable our property management platform to become more efficient over time, especially as our portfolio grows.

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

In addition, we also continue to make corporate level investments to support certain initiatives which will impact expenses based on given investment programs during the year.

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

Results of Operations

Net income totaled $61.7 million for the three months ended September 30, 2022, compared to $48.5 million for the three months ended September 30, 2021.

This increase was primarily due to a larger number of occupied properties associated with growth in the Company’s portfolio, higher rental rates and lower uncollectible rents, as well as higher net gains on property sales, partially offset by $6.1 million of hurricane-related charges, net in the three months ended September 30, 2022.

Net income totaled $206.2 million for the nine months ended September 30, 2022, compared to $149.2 million for the nine months ended September 30, 2021.

Net income totaled $137.7 million for the three months ended March 31, 2023, compared to $70.0 million for the three months ended March 31, 2022.

This increase was primarily due to higher net gains on property sales as well as a larger number of occupied properties resulting from growth in the Company’s portfolio and higher rental rates.

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

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

Comparison of the Three Months Ended September 30, 2022 to the Three Months Ended September 30, 2021

The following tables present a summary of Core NOI for our Same-Home properties, Non-Same-Home and Other properties and total properties for the three months ended September 30, 2022 and 2021 (amounts in thousands):

For the Three Months Ended September 30, 2022

Comparison of the Three Months Ended March 31, 2023 to the Three Months Ended March 31, 2022

The following tables present a summary of Core NOI for our Same-Home properties, Non-Same-Home and Other properties and total properties for the three months ended March 31, 2023 and 2022 (amounts in thousands):

For the Three Months Ended March 31, 2023

Properties (1)

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Core NOI $ 194,524 65.2 % $ 26,377 59.7 % $ 220,901 64.5 %

For the Three Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Properties (1)

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

The following are reconciliations of core revenues, Same-Home core revenues, core property operating expenses, Same-Home core property operating expenses, Core NOI and Same-Home Core NOI to their respective GAAP metrics for the three months ended September 30, 2022 and 2021 (amounts in thousands):

For the Three Months Ended

September 30,

Core revenues and Same-Home core revenues

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Net income $ 137,699 $ 70,014

Hurricane-related charges, net 6,133 —

Gain on sale and impairment of single-family properties and other, net (84,659) (22,044)

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Rents and Other Single-Family Property Revenues

Rents and other single-family property revenues increased 15.3% to $391.6 million for the three months ended September 30, 2022 from $339.6 million for the three months ended September 30, 2021.

Revenue growth was driven by an increase in our average occupied portfolio which grew to 55,321 homes for the three months ended September 30, 2022, compared to 52,889 homes for the three months ended September 30, 2021, as well as higher rental rates and lower uncollectible rents.

Property Operating Expenses

Property operating expenses increased 12.9% to $152.1 million for the three months ended September 30, 2022 from $134.7 million for the three months ended September 30, 2021.

This increase was primarily attributable to inflationary increases in R&M and turnover costs, annual growth in property tax expense and growth in our portfolio.

Property Management Expenses

Property management expenses for the three months ended September 30, 2022 and 2021 were $29.7 million and $24.6 million, respectively, which included $1.0 million and $0.7 million, respectively, of noncash share-based compensation expense in each period related to centralized and field property management employees.

The increase in property management expenses was primarily attributable to higher personnel costs due to increased headcount to support growth in our portfolio.

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties increased 8.1% to $271.5 million for the three months ended September 30, 2022 from $251.1 million for the three months ended September 30, 2021.

This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 8.1% to $1,943 per month for the three months ended September 30, 2022 compared to $1,798 per month for the three months ended September 30, 2021, and lower uncollectible rents, partially offset by a decrease in Average Occupied Days Percentage, which was 97.1% for the three months ended September 30, 2022 compared to 97.4% for the three months ended September 30, 2021.

Core Property Operating Expenses from Same-Home Properties

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

Core property operating expenses from Same-Home properties increased 6.1% to $96.4 million for the three months ended September 30, 2022 from $90.8 million for the three months ended September 30, 2021 primarily driven by annual growth in property tax expense, higher property management personnel costs due to increased headcount to support growth in our portfolio, and other inflationary increases.

General and Administrative Expense

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

General and administrative expense for the three months ended September 30, 2022 and 2021 was $17.0 million and $12.6 million, respectively, which included $3.4 million and $1.6 million, respectively, of noncash share-based compensation expense in each period related to corporate administrative employees.

The increase in general and administrative expense was primarily related to increased personnel and information technology costs to support growth in our business, as well as an increase in noncash share-based compensation expense driven by retirement provisions that resulted in accelerated expense recognition for retirement eligible employees during the three months ended September 30, 2022.

Interest Expense

Interest expense increased 16.6% to $36.3 million for the three months ended September 30, 2022 from $31.1 million for the three months ended September 30, 2021.

This increase was primarily due to additional interest from the issuances of the 2032 and 2052 unsecured senior notes in April 2022, partially offset by additional capitalized interest during the three months ended September 30, 2022 related to an increase in development activities under our AMH Development Program during the three months ended September 30, 2022.

Acquisition and Other Transaction Costs

Acquisition and other transaction costs consist 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.

Acquisition and other transaction costs for the three months ended September 30, 2022 and 2021 were $4.5 million and $3.3 million, respectively, which included $1.3 million and $0.8 million, respectively, of noncash share-based compensation expense in each period related to employees in these functions.

The increase in acquisition and other transaction costs was primarily related to higher personnel costs associated with the growth of our portfolio and higher noncash share-based compensation expense.

Depreciation and Amortization

Depreciation and amortization expense consists primarily of depreciation of buildings and improvements.

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 15.7% to $109.3 million for the three months ended September 30, 2022 from $94.5 million for the three months ended September 30, 2021 primarily due to growth in our average number of depreciable properties.

Hurricane-Related Charges, net

Hurricane Ian impacted certain properties primarily located in Florida, South Carolina and North Carolina, resulting in $6.1 million of hurricane-related charges, net during the three months ended September 30, 2022.

The Company’s property and casualty insurance

policies provide coverage for wind and flood damage, as well as business interruption costs, during the period of remediation and repairs, subject to deductibles and limits.

During the three months ended September 30, 2022, the Company recognized $8.4 million in gross charges primarily related to an estimated accrual for minor repair and remediation costs, partially offset by an estimated $2.3 million of related insurance claims that we believe is probable we will recover.

Gain on Sale and Impairment of Single-Family Properties and Other, net

Gain on sale and impairment of single-family properties and other, net for the three months ended September 30, 2022 and 2021 was $24.2 million and $9.6 million, respectively, which included $0.2 million and zero of impairment charges, respectively, related to homes classified as held for sale during each period.

The increase was primarily related to an increase in properties sold as well as higher net gains from property sales.

Other Income and Expense, net

Other income and expense, net for the three months ended September 30, 2022 and 2021 was $0.8 million and $0.1 million, 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.

Comparison of the Nine Months Ended September 30, 2022 to the Nine Months Ended September 30, 2021

The following tables present a summary of Core NOI for our Same-Home properties, Non-Same-Home and Other properties and total properties for the nine months ended September 30, 2022 and 2021 (amounts in thousands):

For the Nine Months Ended September 30, 2022

Properties (1)

Revenue Non-Same-

Home and Other

Properties % of Core

Revenue Total

Properties % of Core

Rents from single-family properties $ 790,567 $ 152,623 $ 943,190

Fees from single-family properties 15,895 4,113 20,008

Bad debt (7,875) (3,138) (11,013)

Core revenues 798,587 153,598 952,185

Property tax expense 131,612 16.5 % 25,679 16.6 % 157,291 16.5 %

HOA fees, net (2)

14,705 1.8 % 3,184 2.1 % 17,889 1.9 %

R&M and turnover costs, net (2)

61,641 7.7 % 14,695 9.6 % 76,336 8.0 %

Insurance 8,714 1.1 % 1,775 1.2 % 10,489 1.1 %

Property management expenses, net (3)

60,676 7.6 % 16,269 10.6 % 76,945 8.1 %

Core property operating expenses 277,348 34.7 % 61,602 40.1 % 338,950 35.6 %

Core NOI $ 521,239 65.3 % $ 91,996 59.9 % $ 613,235 64.4 %

For the Nine Months Ended September 30, 2021

Properties (1)

Revenue Non-Same-

Home and Other

Properties % of Core

Revenue Total

Properties % of Core

Rents from single-family properties $ 734,230 $ 97,650 $ 831,880

Fees from single-family properties 14,135 2,521 16,656

Bad debt (14,922) (4,356) (19,278)

Core revenues 733,443 95,815 829,258

Property tax expense 125,503 17.0 % 17,709 18.5 % 143,212 17.2 %

HOA fees, net (2)

13,707 1.9 % 2,116 2.2 % 15,823 1.9 %

R&M and turnover costs, net (2)

57,712 7.9 % 10,202 10.6 % 67,914 8.2 %

Insurance 7,583 1.0 % 1,134 1.2 % 8,717 1.1 %

Property management expenses, net (3)

56,127 7.7 % 10,040 10.5 % 66,167 8.0 %

Core property operating expenses 260,632 35.5 % 41,201 43.0 % 301,833 36.4 %

Core NOI $ 472,811 64.5 % $ 54,614 57.0 % $ 527,425 63.6 %

(1) Includes 47,503 properties that have been stabilized longer than 90 days prior to January 1, 2021.

(2) Presented net of tenant charge-backs.

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

The following are reconciliations of core revenues, Same-Home core revenues, core property operating expenses, Same-Home core property operating expenses, Core NOI and Same-Home Core NOI to their respective GAAP metrics for the nine months ended September 30, 2022 and 2021 (amounts in thousands):

For the Nine Months Ended

September 30,

Core revenues and Same-Home core revenues

Rents and other single-family property revenues $ 1,109,608 $ 965,790

Tenant charge-backs (157,423) (136,532)

Core revenues 952,185 829,258

Non-Same-Home core revenues 153,598 95,815

Same-Home core revenues $ 798,587 $ 733,443

Core property operating expenses and Same-Home core property operating expenses

Property operating expenses $ 414,978 $ 369,966

Property management expenses 84,541 70,677

Noncash share-based compensation - property management (3,146) (2,278)

Expenses reimbursed by tenant charge-backs (157,423) (136,532)

Core property operating expenses 338,950 301,833

Non-Same-Home core property operating expenses 61,602 41,201

Same-Home core property operating expenses $ 277,348 $ 260,632

Core NOI and Same-Home Core NOI

Net income $ 206,234 $ 149,236

Hurricane-related charges, net 6,133 —

Gain on sale and impairment of single-family properties and other, net (79,052) (36,401)

Depreciation and amortization 313,688 275,682

Acquisition and other transaction costs 18,114 11,093

Noncash share-based compensation - property management 3,146 2,278

Interest expense 98,622 86,630

General and administrative expense 53,115 40,645

Other income and expense, net (6,765) (1,738)

Core NOI 613,235 527,425

Non-Same-Home Core NOI 91,996 54,614

Same-Home Core NOI $ 521,239 $ 472,811

Rents and Other Single-Family Property Revenues

Rents and other single-family property revenues increased 14.9% to $1.1 billion for the nine months ended September 30, 2022 from $965.8 million for the nine months ended September 30, 2021.

Revenue growth was driven by an increase in our average occupied portfolio which grew to 54,658 homes for the nine months ended September 30, 2022, compared to 52,269 homes for the nine months ended September 30, 2021, as well as higher rental rates and lower uncollectible rents.

Rents and other single-family property revenues increased 11.7% to $397.7 million for the three months ended March 31, 2023 from $356.1 million for the three months ended March 31, 2022.

Revenue growth was driven by an increase in our average occupied portfolio which grew to 55,827 homes for the three months ended March 31, 2023, compared to 53,995 homes for the three months ended March 31, 2022, as well as higher rental rates.

Property Operating Expenses

Property operating expenses increased 12.2% to $415.0 million for the nine months ended September 30, 2022 from $370.0 million for the nine months ended September 30, 2021.

This increase was primarily attributable to inflationary increases in R&M and turnover costs, annual growth in property tax expense and growth in our portfolio.

Property operating expenses increased 10.0% to $147.1 million for the three months ended March 31, 2023 from $133.6 million for the three months ended March 31, 2022.

This increase was primarily attributable to increased property tax expense from anticipated 2023 property tax assessments and timing of prior year property tax accruals as well as inflationary increases in R&M and turnover costs.

Property Management Expenses

Property management expenses for the nine months ended September 30, 2022 and 2021 were $84.5 million and $70.7 million, respectively, which included $3.1 million and $2.3 million, respectively, of noncash share-based compensation expense in each period related to centralized and field property management employees.

The increase in property management expenses was primarily attributable to higher personnel costs from (i) the timing of increased compensation in the second half of 2021 as a result of the inflationary environment and (ii) increased headcount to support growth in our portfolio, as well as an increase in other miscellaneous property management expenses.

Property management expenses for the three months ended March 31, 2023 and 2022 were $30.8 million and $26.0 million, respectively, which included $1.1 million and $1.0 million, respectively, of noncash share-based compensation expense related to centralized and field property management employees.

The increase in property management expenses was primarily attributable to

lower than normal staffing levels in the three months ended March 31, 2022 leading to a subsequent increase in personnel in the three months ended June 30, 2022 to a more stabilized level, as well as inflationary increases in supplies and materials expense.

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties increased 8.9% to $798.6 million for the nine months ended September 30, 2022 from $733.4 million for the nine months ended September 30, 2021.

This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 7.9% to $1,899 per month for the nine months ended September 30, 2022 compared to $1,760 per month for the nine months ended September 30, 2021, and lower uncollectible rents, partially offset by a decrease in Average Occupied Days Percentage, which was 97.4% for the nine months ended September 30, 2022 compared to 97.6% for the nine months ended September 30, 2021.

Core revenues from Same-Home properties increased 7.7% to $298.1 million for the three months ended March 31, 2023 from $276.9 million for the three months ended March 31, 2022.

This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 8.0% to $2,014 per month for the three months ended March 31, 2023 compared to $1,865 per month for the three months ended March 31, 2022, partially offset by a decrease in Average Occupied Days Percentage, which was 97.2% for the three months ended March 31, 2023 compared to 97.4% for the three months ended March 31, 2022.

Core Property Operating Expenses from Same-Home Properties

Core property operating expenses from Same-Home properties increased 6.4% to $277.3 million for the nine months ended September 30, 2022 from $260.6 million for the nine months ended September 30, 2021 primarily driven by annual growth in property tax expense, higher property management personnel costs from (i) the timing of increased compensation in the second half of 2021 as a result of the inflationary environment and (ii) increased headcount to support growth in our portfolio, and other inflationary increases.

Core property operating expenses from Same-Home properties increased 12.2% to $103.6 million for the three months ended March 31, 2023 from $92.4 million for the three months ended March 31, 2022 primarily driven by (i) increased property tax expense from anticipated 2023 property tax assessments and timing of prior year property tax accruals and (ii) increased property management expenses primarily attributable to lower than normal staffing levels in the three months ended March 31, 2022 leading to a subsequent increase in personnel in the three months ended June 30, 2022 to a more stabilized level.

General and Administrative Expense

General and administrative expense for the nine months ended September 30, 2022 and 2021 was $53.1 million and $40.6 million, respectively, which included $13.4 million and $7.7 million, respectively, of noncash share-based compensation expense in each period related to corporate administrative employees.

The increase in general and administrative expense was primarily related to an increase in noncash share-based compensation expense, as well as the timing of increased personnel and information technology costs to support growth in our business.

General and administrative expense for the three months ended March 31, 2023 and 2022 was $17.9 million and $17.3 million, respectively, which included $3.7 million and $4.0 million, respectively, of noncash share-based compensation expense in each period related to corporate administrative employees.

The increase in general and administrative expense was primarily related to the timing of increased personnel and information technology costs to support growth in our business during the three months ended March 31, 2023, partially offset by lower noncash share-based compensation expense.

Interest Expense

Interest expense increased 13.8% to $98.6 million for the nine months ended September 30, 2022 from $86.6 million for the nine months ended September 30, 2021.

This increase was primarily due to additional interest from the issuances of the 2031 and 2051 unsecured senior notes in July 2021 and the 2032 and 2052 unsecured senior notes in April 2022, partially offset by additional capitalized interest during the nine months ended September 30, 2022 related to an increase in development activities under our AMH Development Program and an increase in acquired properties that underwent initial renovation during the nine months ended September 30, 2022.

Interest expense increased 30.2% to $35.9 million for the three months ended March 31, 2023 from $27.6 million for the three months ended March 31, 2022.

This increase was primarily due to additional interest expense from the issuances of the 2032 and 2052 unsecured senior notes in April 2022.

Acquisition and Other Transaction Costs

Acquisition and other transaction costs for the nine months ended September 30, 2022 and 2021 were $18.1 million and $11.1 million, respectively, which included $7.2 million and $4.3 million, respectively, of noncash share-based compensation expense in each period related to employees in these functions.

Acquisition and other transaction costs consist primarily of personnel and platform 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.

Acquisition and other transaction costs for the three months ended March 31, 2023 and 2022 were $5.1 million and $6.0 million, respectively, which included $1.0 million and $2.4 million, respectively, of noncash share-based compensation expense related to employees in these functions.

The decrease in acquisition and other transaction costs was primarily due to lower noncash share-based compensation expense.

Depreciation and Amortization

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Our intangible assets are amortized on a straight-line basis over the asset’s estimated economic useful life.

Depreciation and amortization expense increased 13.8% to $313.7 million for the nine months ended September 30, 2022 from $275.7 million for the nine months ended September 30, 2021 primarily due to growth in our average number of depreciable properties.

Hurricane-Related Charges, net

The Company’s property and casualty insurance

policies provide coverage for wind and flood damage, as well as business interruption costs, during the period of remediation and repairs, subject to deductibles and limits.

During the nine months ended September 30, 2022, the Company recognized $8.4 million in gross charges primarily related to an estimated accrual for minor repair and remediation costs, partially offset by an estimated $2.3 million of related insurance claims that we believe is probable we will recover.

Depreciation and amortization expense increased 12.8% to $112.7 million for the three months ended March 31, 2023 from $100.0 million for the three months ended March 31, 2022 primarily due to growth in our average number of depreciable properties.

Gain on Sale and Impairment of Single-Family Properties and Other, net

Gain on sale and impairment of single-family properties and other, net for the nine months ended September 30, 2022 and 2021 was $79.1 million and $36.4 million, respectively, which included $1.3 million and $0.2 million of impairment charges, respectively, related to homes classified as held for sale during each period.

The increase was primarily related to an increase in properties sold as well as higher net gains from property sales, partially offset by higher impairment charges.

Gain on sale and impairment of single-family properties and other, net for the three months ended March 31, 2023 and 2022 was $84.7 million and $22.0 million, respectively, which included $0.4 million and $1.1 million, respectively, of impairment charges related to homes classified as held for sale during each period.

The increase was primarily related to higher net gains on property sales resulting from an increase in properties sold.

Other Income and Expense, net

Other income and expense, net for the nine months ended September 30, 2022 and 2021 was $6.8 million and $1.7 million, 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.

Other income and expense, net for the three months ended March 31, 2023 and 2022 was $4.7 million and $2.3 million, 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.

Critical Accounting Estimates

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Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2022 Annual Report.

There have been no material changes to these estimates during the nine months ended September 30, 2022.

There have been no material changes to these estimates during the three months ended March 31, 2023.

Recent Accounting Pronouncements

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Liquidity and Capital Resources

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.

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 AMH, 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.

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We expect to meet our operating liquidity requirements and our dividend distributions generally through cash on hand and cash provided by operations.

For our acquisition and development expenditures, we expect to supplement these sources through the issuance of equity securities, including under our At-the-Market Program described below, borrowings under our credit facilities, issuances of unsecured senior notes, and proceeds from sales of single-family properties.

For our acquisition and development expenditures, we expect to supplement these sources through the issuance of equity securities, including under our At-the-Market Program described below, borrowings under our credit facility, issuances of unsecured senior notes, and proceeds from sales of single-family properties.

However, our real estate assets are illiquid in nature.

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

Our liquidity and capital resources as of September 30, 2022 included cash and cash equivalents of $97.2 million.

Additionally, as of September 30, 2022, we had no outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of up to $1.25 billion, of which $2.7 million was committed to outstanding letters of credit.

As described below, we also have estimated net proceeds of $297.1 million available from future settlement of the January 2022 Forward Sale Agreements.

Our liquidity and capital resources as of March 31, 2023 included cash and cash equivalents of $255.6 million.

Additionally, as of March 31, 2023, we had no outstanding borrowings and $4.0 million committed to outstanding letters of credit under our $1.25 billion revolving credit facility, leaving $1.25 billion of remaining borrowing capacity.

We maintain an investment grade credit rating which provides for greater availability of and lower cost of debt financing.

Uses of Capital

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.

Our expected material cash requirements over the next twelve months 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.

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.

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Commitments and Contingencies and Note 16.

Subsequent Events to our condensed consolidated financial statements in this report, there have been no other material changes outside the ordinary course of business to our other known contractual obligations described in “Liquidity and Capital Resources” in Part II, “Item 7.

Subsequent Events to our condensed consolidated financial statements in this report, there have been no

other material changes outside the ordinary course of business to our other known contractual obligations described in “Liquidity and Capital Resources” in Part II, “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2022 Annual Report.

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the nine months ended September 30, 2022 and 2021 (amounts in thousands):

For the Nine Months Ended

September 30,

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the three months ended March 31, 2023 and 2022 (amounts in thousands):

For the Three Months Ended

2023 2022 Change

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Net cash provided by financing activities 63,300 369,235 (305,935)

Net increase (decrease) in cash, cash equivalents and restricted cash $ 65,953 $ (63,083) $ 129,036

Net increase in cash, cash equivalents and restricted cash $ 190,855 $ 15,213 $ 175,642

Operating Activities

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

Net cash provided by operating activities increased $98.6 million, or 19.8%, from $498.2 million for the nine months ended September 30, 2021 to $596.8 million for the nine months ended September 30, 2022, primarily as a result of increased cash flows generated from a larger number of occupied properties, higher rental rates and lower uncollectible rents, partially offset by higher cash outflows for property related expenses as a result of inflationary increases and growth in our portfolio.

Net cash provided by operating activities increased $41.7 million, or 26.3%, from $158.7 million for the three months ended March 31, 2022 to $200.5 million for the three months ended March 31, 2023, primarily due to increased cash inflows generated from a larger number of occupied properties resulting from growth in our portfolio and higher rental rates, partially offset by higher cash outflows for property related expenses as a result of inflationary increases.

Investing Activities

Net cash used for investing activities increased $76.2 million, or 6.4%, from $1.2 billion for the nine months ended September 30, 2021 to $1.3 billion for the nine months ended September 30, 2022.

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.

Cash outflows for the addition of single-family properties to our portfolio through these channels increased $96.2 million during the nine months ended September 30, 2022.

Homes acquired through our traditional acquisition channel require additional expenditures to prepare them for rental, and cash outflows for renovations to single-family properties increased $52.4 million primarily as a result of an increased volume of properties that underwent initial or property-enhancing renovations during the nine months ended September 30, 2022.

Recurring and other capital expenditures for single-family properties increased $8.4 million primarily due to growth in our portfolio.

Net cash used for investing activities decreased $439.9 million, or 85.8%, from $512.8 million for the three months ended March 31, 2022 to $72.9 million for the three months ended March 31, 2023.

Our investing activities are most significantly impacted by the level of investment activity 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.

Cash outflows for the addition of single-family properties to our portfolio through these channels decreased $311.6 million during the three months ended March 31, 2023 primarily due to a strategic scale back in the acquisition of single-family properties through our National Builder Program and traditional acquisition channel during the three months ended March 31, 2023 as the housing market adjusts to the current macroeconomic environment.

Homes acquired through our traditional acquisition channel require additional expenditures to prepare them for rental, and cash outflows for renovations to single-family properties decreased $13.0 million primarily as a result of a decreased volume of properties that underwent initial or property-enhancing renovations during the three months ended March 31, 2023.

Recurring and other capital expenditures for single-family properties increased $7.5 million primarily due to growth in our portfolio and inflationary increases in costs.

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.

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

Net proceeds received from the sale of single-family properties and other increased $61.9 million as a result of an increased volume of properties sold and a higher average realized sales price per property during the nine months ended September 30, 2022, and we collected $34.0 million during the nine months ended September 30, 2022 from notes receivables related to property sales.

Net cash inflows from unconsolidated joint ventures increased $14.7 million during the nine months ended September 30, 2022 due to the timing of contributions and distributions to and from our unconsolidated joint ventures.

Cash outflows for other investing activities increased $19.1 million primarily due to investments in venture capital funds focused on proptech and decarbonization in the real estate industry during the nine months ended September 30, 2022 and a year-over-year increase in cash outflows for information technology projects.

Cash outflows for deposits on land option contracts increased $10.7 million as a result of deposits made during the nine months ended September 30, 2022.

Net proceeds received from the sale of single-family properties and other increased $133.1 million as a result of an increased volume of properties sold during the three months ended March 31, 2023.

The decrease in cash outflows was partially offset by a $6.4 million decrease in net cash inflows from unconsolidated joint ventures during the three months ended March 31, 2023 due to the timing of contributions and distributions to and from our unconsolidated joint ventures.

Financing Activities

Net cash provided by financing activities increased $106.6 million, from $630.2 million for the nine months ended September 30, 2021 to $736.8 million for the nine months ended September 30, 2022 primarily due to (i) a $343.8 million reduction in cash paid for the redemptions of perpetual preferred shares as well as an $18.6 million reduction in distributions to preferred shareholders as a result of the redemptions of our Series F perpetual preferred shares during the nine months ended September 30, 2022 and Series D and Series E perpetual preferred shares during the nine months ended September 30, 2021, (ii) a $139.6 million year-over-year increase in proceeds from unsecured senior notes, net of discount, (iii) $60.2 million of proceeds from liabilities related to consolidated land not owned during the nine months ended September 30, 2022, and (iv) a $9.8 million year-over-year decrease in financing costs paid.

This increase was partially offset by (i) activity under our revolving credit facility, which resulted in $350.0 million of net cash outflows during the nine months ended September 30, 2022 compared to zero net activity during the nine months ended September 30, 2021, (ii) an $86.0 million increase in distributions paid to common share and unit holders resulting from an 80% increase in distributions paid per common share and unit, and (iii) a $31.6 million year-over-year decrease in proceeds from the issuance of Class A common shares, net of offering costs.

Unsecured Senior Notes

During the second quarter of 2022, the Operating Partnership issued $600.0 million of 3.625% unsecured senior notes with a maturity date of April 15, 2032 (the “2032 Notes”) and $300.0 million of 4.300% unsecured senior notes with a maturity date of April 15, 2052 (the “2052 Notes” and, together with the 2032 Notes, the “Notes”).

Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, commencing on October 15, 2022.

The Operating Partnership received aggregate net proceeds of $870.3 million from these issuances, after underwriting fees of approximately $6.5 million and a $23.2 million discount, and before offering costs of approximately $1.7 million.

The Operating Partnership used net proceeds from this offering to repay amounts outstanding on its revolving credit facility, for the redemption of its Series F perpetual preferred shares and for general corporate purposes.

The Notes are the Operating Partnership’s unsecured and unsubordinated obligations and rank equally in right of payment with all of the Operating Partnership’s existing and future unsecured and unsubordinated indebtedness.

The indentures require that we maintain certain financial covenants.

The Operating Partnership may redeem the Notes in whole at any time or in part from time to time at the applicable redemption price specified in the indentures with respect to the Notes.

If the 2032 Notes are redeemed on or after January 15, 2032 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

If the 2052 Notes are redeemed on or after October 15, 2051 (six months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

Net cash provided by financing activities decreased $305.9 million, or 82.9%, from $369.2 million for the three months ended March 31, 2022 to $63.3 million for the three months ended March 31, 2023 primarily due to (i) a $77.3 million year-over-year decrease in proceeds from the issuance of Class A common shares, net of offering costs, (ii) activity under our revolving credit facility, which resulted in $130.0 million of net cash outflows during the three months ended March 31, 2023 compared to $60.0 million of net cash inflows during the three months ended March 31, 2022, (iii) a $19.1 million increase in distributions paid to common share and unit holders resulting from a 22% increase in distributions paid per common share and unit, and (iv) a $19.8 million decrease in proceeds from liabilities related to consolidated land not owned.

These decreases in net cash provided by financing activities were partially offset by a $2.3 million reduction in distributions to preferred shareholders as a result of the redemptions of our Series F perpetual preferred shares during the three months ended June 30, 2022.

Class A Common Share Offering

During the first quarter of 2022, the Company completed an underwritten public offering for 23,000,000 of its Class A common shares of beneficial interest, $0.01 par value per share, of which 10,000,000 shares were issued directly by the Company and 13,000,000 shares were offered on a forward basis at the request of the Company by the forward sellers.

In connection with this offering, the Company entered into forward sale agreements with the forward purchasers (the “January 2022 Forward Sale Agreements”) for these 13,000,000 shares which are accounted for in equity.

The Company received net proceeds of $375.8 million from the 10,000,000 Class A common shares issued directly by the Company after deducting underwriting fees and before offering costs of approximately $0.2 million.

The Company did not initially receive proceeds from the sale of the Class A common shares offered on a forward basis.

In September 2022, the Company issued and physically settled 5,000,000 Class A common shares under the January 2022 Forward Sale Agreements, receiving net proceeds of $185.6 million.

The Company used these net proceeds to repay indebtedness under its revolving credit facility and for general corporate purposes.

As of September 30, 2022, 8,000,000 Class A common shares remained available for future settlement under the January 2022 Forward Sale Agreements.

The Company expects to physically settle the remaining shares by January 20, 2023 through the delivery of the Class A common shares and expects that net proceeds will be approximately $297.1 million.

The Company expects to use these net proceeds (i) to repay indebtedness it 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 its business strategy and (iv) for general corporate purposes.

Although the Company expects to physically settle, the January 2022 Forward Sale Agreements allow the Company to cash or net-share settle all or a portion of its obligations.

If the Company elects to cash or net share settle the January 2022 Forward Sale Agreements, the Company may not receive any proceeds, and may owe cash or Class A common shares to the forward purchasers in certain circumstances.

The January 2022 Forward Sale Agreements are subject to early termination or settlement under certain circumstances.

When the Company issues common shares, the Operating Partnership issues an equivalent number of units of partnership interest of a corresponding class to AH4R, with the Operating Partnership receiving the net proceeds from the share issuances.

During the third quarter of 2022, the Company issued and physically settled 5,000,000 Class A common shares under the January 2022 Forward Sale Agreements, receiving net proceeds of $185.6 million.

In January 2023, the Company issued and physically settled the remaining 8,000,000 Class A common shares under the January 2022 Forward Sale Agreements, receiving net proceeds of $298.4 million, which it used to repay indebtedness under its revolving credit facility and for general corporate purposes.

When the Company issues common shares, the Operating Partnership issues an equivalent number of units of partnership interest of a corresponding class to AMH, with the Operating Partnership receiving the net proceeds from the share issuances.

At-the-Market Common Share Offering Program

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The At-the-Market Program may be suspended or terminated by the Company at any time.

During the nine months ended September 30, 2022 and 2021, no shares were issued under the At-the-Market Program.

As of September 30, 2022, 1,835,416 shares have been issued under the At-the-Market Program and $425.2 million remained available for future share issuances.

During the three months ended March 31, 2023 and 2022, no shares were issued under the At-the-Market Program.

As of March 31, 2023, 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

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

During the nine months ended September 30, 2022 and 2021, we did not repurchase and retire any of our Class A common shares or preferred shares.

As of September 30, 2022, 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.

Redemption of Perpetual Preferred Shares

During the second quarter of 2022, the Company redeemed all 6,200,000 shares of the outstanding 5.875% Series F perpetual preferred shares, $0.01 par value per share, for cash at the liquidation preference of $25.00 per share plus any accrued and unpaid dividends in accordance with the terms of such shares.

The Operating Partnership also redeemed its corresponding Series F perpetual preferred units.

As a result of the redemption, the Company recorded a $5.3 million allocation of income to the Series F perpetual preferred shareholders within the condensed consolidated statements of operations during the nine months ended September 30, 2022, which represents the initial liquidation value of the Series F perpetual preferred shares in excess of its carrying value as of the redemption date.

During the three months ended March 31, 2023 and 2022, we did not repurchase and retire any of our Class A common shares or preferred shares.

As of March 31, 2023, we had a remaining repurchase authorization of up to $265.1 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares under the program.

Distributions

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The Operating Partnership funds the payment of distributions.

As of December 31, 2021, AH4R had a net operating loss (“NOL”) for U.S.

federal income tax purposes of $25.4 million.

As of December 31, 2022, AMH had a net operating loss (“NOL”) for U.S.

federal income tax purposes of an estimated $11.8 million.

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 nine months ended September 30, 2022 and 2021, the Company distributed an aggregate $229.9 million and $162.5 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.

During the three months ended March 31, 2023 and 2022, the Company distributed an aggregate $94.6 million and $77.7 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.

Additional Non-GAAP Measures

Funds from Operations (“FFO”) / Core FFO / Adjusted FFO attributable to common share and unit holders

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

FFO attributable to common share and unit holders is a non-GAAP financial measure that we calculate in accordance with the definition approved by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income or loss calculated in accordance with GAAP, excluding gains and losses from sales or impairment of real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.

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.

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Because other REITs may not compute these measures in the same manner, they may not be comparable among REITs.

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 three and nine months ended September 30, 2022 and 2021 (amounts in thousands):

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 three months ended March 31, 2023 and 2022 (amounts in thousands):

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

Net income attributable to common shareholders $ 117,465 $ 55,939

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FFO attributable to common share and unit holders (1)

$ 158,604 $ 138,798

Acquisition, other transaction costs and other 5,076 5,974

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Noncash share-based compensation - property management 1,066 999

Hurricane-related charges, net 6,133 — 6,133 —

Redemption of perpetual preferred shares — — 5,276 15,879

Core FFO attributable to common share and unit holders (1)

$ 168,489 $ 149,801

Recurring Capital Expenditures (14,193) (11,178)

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Adjusted FFO attributable to common share and unit holders (1)

$ 153,488 $ 138,088

(1) Unit holders include former AH LLC members and other non-affiliates that own Class A units in the Operating Partnership and their OP units are reflected as noncontrolling interests in the Company’s condensed consolidated financial statements.

Shareholders’ Equity / Partners’ Capital to our condensed consolidated financial statements included in this report.

EBITDA / EBITDAre / Adjusted EBITDAre / Fully Adjusted EBITDAre

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

The following is a reconciliation of net income, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre and Fully Adjusted EBITDAre for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands):

The following is a reconciliation of net income, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre and Fully Adjusted EBITDAre for the three months ended March 31, 2023 and 2022 (amounts in thousands):

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 137,699 $ 70,014

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Acquisition, other transaction costs and other 5,076 5,974

Hurricane-related charges, net 6,133 — 6,133 —

Adjusted EBITDAre $ 212,034 $ 186,123

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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-Q

Item 2. Management’s Discussion and Analysis