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Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-03 · 216 added, 90 removed, 350 unchanged (47% of the section changed)

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

As of March 31, 2024, we owned 59,343 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) in 21 states, including 728 properties held for sale, compared to 59,332 single-family properties in 21 states, including 862 properties held for sale, as of December 31, 2023 and 58,639 single-family properties in 21 states, including 903 properties held for sale, as of March 31, 2023.

As of March 31, 2024, 56,362 of our total properties (excluding properties held for sale) were occupied, compared to 55,768 of our total properties (excluding properties held for sale) as of December 31, 2023 and 56,049 of our total properties (excluding properties held for sale) as of March 31, 2023.

Also, as of March 31, 2024, the Company had an additional 3,004 properties held in unconsolidated joint ventures, compared to 2,978 properties held in unconsolidated joint ventures as of December 31, 2023 and 2,688 properties held in unconsolidated joint ventures as of March 31, 2023.

As of June 30, 2024, we owned 59,493 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) in 21 states, including 633 properties held for sale, compared to 59,332 single-family properties in 21 states, including 862 properties held for sale, as of December 31, 2023 and 58,693 single-family properties in 21 states, including 648 properties held for sale, as of June 30, 2023.

As of June 30, 2024, 56,669 of our total properties (excluding properties held for sale) were occupied, compared to 55,768 of our total properties (excluding properties held for sale) as of December 31, 2023 and 56,000 of our total properties (excluding properties held for sale) as of June 30, 2023.

Also, as of June 30, 2024, the Company had an additional 3,167 properties held in unconsolidated joint ventures, compared to 2,978 properties held in unconsolidated joint ventures as of December 31, 2023 and 2,846 properties held in unconsolidated joint ventures as of June 30, 2023.

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 March 31, 2024:

The following table summarizes certain key single-family properties metrics as of June 30, 2024:

Total Single-Family Properties (1)

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Seattle, WA 1,013 1.7 % 338.0 2.6 % 333,672 2,006 14.4 2017

1,034 1.8 % 344.7 2.6 % 333,388 2,009 13.9 2017

All Other (2)

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Total/Average 58,860 100.0 % $ 13,191.7 100.0 % $ 224,120 1,993 17.6 2015

(1) Excludes 728 single-family properties held for sale as of March 31, 2024.

(2) Reflects 139 properties reclassed from the Seattle, WA market to the Portland, OR market which is presented in the All Other grouping.

(1) Excludes 633 single-family properties held for sale as of June 30, 2024.

(2) Represents 15 markets in 13 states.

The following table summarizes certain key leasing metrics as of March 31, 2024:

The following table summarizes certain key leasing metrics as of June 30, 2024:

Total Single-Family Properties (1)

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Seattle, WA 94.8 % 2,737 11.5 6.4 6.8 %

94.6 % 2,362 11.6 5.8 6.2 %

All Other (6)

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Total/Average 95.8 % $ 2,190 12.0 6.3 5.4 %

(1) Excludes 728 single-family properties held for sale as of March 31, 2024.

(2) For the three months ended March 31, 2024, 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, 2024, 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 633 single-family properties held for sale as of June 30, 2024.

(2) For the three months ended June 30, 2024, 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 June 30, 2024, 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 March 31, 2024, compared to the annual rent of the previously expired non-month-to-month comparable long-term lease for each property.

(6) Reflects 139 properties reclassed from the Seattle, WA market to the Portland, OR market which is presented in the All Other grouping.

(5) Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the three months ended June 30, 2024, 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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Since our formation, we have rapidly but systematically grown our portfolio of single-family properties.

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

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, availability of bulk portfolio acquisition opportunities, competition for our target assets and our available capital.

We are also focused on developing “built-for-rental” homes through our internal AMH Development Program.

In addition, we acquire newly

constructed homes from third-party developers through our National Builder Program.

In addition, we acquire newly constructed homes from third-party developers through our National Builder

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.

We have strategically scaled back acquisitions of single-family properties through our National Builder Program and traditional acquisition channel as the housing market adjusts to the current macroeconomic environment.

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

During the three months ended March 31, 2024, we developed or acquired 482 homes, including 441 newly constructed homes delivered to our operating portfolio through our AMH Development Program, 22 newly constructed homes to be disposed and 19 homes acquired through our National Builder Program, partially offset by 471 homes sold to third parties.

During the three months ended March 31, 2024, we also developed an additional 28 newly constructed homes which were delivered to our unconsolidated joint ventures, aggregating to 469 total program deliveries through our AMH Development Program.

Our properties and land held for sale were identified based on submarket analysis, as well as individual asset-level review.

As of March 31, 2024 and December 31, 2023, there were 728 and 862 properties, respectively, as well as certain land lots classified as held for sale.

We have strategically scaled back acquisitions of single-family properties through our National Builder Program and traditional acquisition channels as the housing market adjusts to the current macroeconomic environment.

We will continue to evaluate all of our growth channels and grow accordingly, if and when, acquisition opportunities are attractive relative to the condition of capital markets.

During the three months ended June 30, 2024, we developed or acquired 590 homes, including 580 newly constructed homes delivered to our operating portfolio through our AMH Development Program and 10 homes acquired through our National Builder Program and traditional acquisition channel, partially offset by 345 homes identified for sale or contributed to unconsolidated joint ventures.

During the three months ended June 30, 2024, we also developed an additional 91 newly constructed homes which were delivered to our unconsolidated joint ventures, aggregating to 671 total program deliveries through our AMH Development Program.

During the six months ended June 30, 2024, we developed or acquired 1,050 homes, including 1,021 newly constructed homes delivered to our operating portfolio through our AMH Development Program and 29 homes acquired through our National Builder Program and traditional acquisition channel, partially offset by 660 homes identified for sale or contributed to unconsolidated joint ventures.

During the six months ended June 30, 2024, we also developed an additional 119 newly constructed homes which were delivered to our unconsolidated joint ventures, aggregating to 1,140 total program deliveries through our AMH Development Program.

Our properties and land held for sale were identified based on individual asset-level review, as well as submarket analysis.

As of June 30, 2024 and December 31, 2023, there were 633 and 862 properties, respectively, as well as certain land lots, classified as held for sale.

We will continue to evaluate our properties and land 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 5.9% for the three months ended March 31, 2024, and we experienced turnover rates, which represents the number of tenant move-outs during the period divided by the total number of properties, of 6.6% and 6.4% during the three months ended March 31, 2024 and 2023, respectively.

Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 5.6% for the three months ended June 30, 2024, and we experienced turnover rates, which represents the number of tenant move-outs during the period divided by the total number of properties, of 7.8% and 8.5% during the three months ended June 30, 2024 and 2023, respectively.

Based on our Same-Home population of properties, the year-over-year increase in Average Monthly Realized Rent per property was 5.7% for the six months ended June 30, 2024, and we experienced turnover rates of 14.2% and 14.9% during the six months ended June 30, 2024 and 2023, respectively.

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

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Results of Operations

Net income totaled $128.1 million for the three months ended March 31, 2024, compared to $137.7 million for the three months ended March 31, 2023.

The decrease was primarily due to lower net gains on property sales, partially offset by higher rental rates.

Net income totaled $108.5 million for the three months ended June 30, 2024, compared to $115.4 million for the three months ended June 30, 2023.

The decrease was primarily due to lower net gains on property sales, partially offset by increases in rents and other single-family property revenues exceeding increases in total expenses.

Net income totaled $236.6 million for the six months ended June 30, 2024, compared to $253.1 million for the six months ended June 30, 2023.

The decrease was primarily due to lower net gains on property sales, partially offset by increases in rents and other single-family property revenues exceeding increases in total expenses.

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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A property is classified as stabilized once it has been renovated by the Company or newly constructed and then initially leased or available for rent for a period greater than 90 days.

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.

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

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

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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 March 31, 2024 to the Three Months Ended March 31, 2023

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 March 31, 2024 and 2023 (amounts in thousands):

Comparison of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

For the Three Months Ended

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Same-Home Core NOI $ 219,930 $ 207,674

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, 2024 and 2023 (amounts in thousands):

For the Three Months Ended March 31, 2024

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 June 30, 2024 and 2023 (amounts in thousands):

For the Three Months Ended June 30, 2024

Properties (1)

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Core NOI $ 219,930 64.9 % $ 23,052 61.7 % $ 242,982 64.6 %

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Properties (1)

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Rents and Other Single-Family Property Revenues

Rents and other single-family property revenues increased 6.5% to $423.6 million for the three months ended March 31, 2024 from $397.7 million for the three months ended March 31, 2023.

Rents and other single-family property revenues increased 7.1% to $423.5 million for the three months ended June 30, 2024 from $395.5 million for the three months ended June 30, 2023.

Revenue growth was primarily driven by higher rental rates.

Property Operating Expenses

Property operating expenses increased 6.0% to $155.9 million for the three months ended March 31, 2024 from $147.1 million for the three months ended March 31, 2023.

This increase was primarily attributable to increased property tax expense from anticipated 2024 property tax assessments and inflationary increases in R&M and turnover costs and insurance costs.

Property operating expenses increased 4.9% to $149.5 million for the three months ended June 30, 2024 from $142.6 million for the three months ended June 30, 2023.

This increase was primarily driven by annual increases in property tax expense and inflationary increases in all other expenses.

Property Management Expenses

Property management expenses for the three months ended March 31, 2024 and 2023 were $31.4 million and $30.8 million, respectively, which included $1.4 million and $1.1 million, respectively, of noncash share-based compensation expense in each period

Property management expenses for the three months ended June 30, 2024 and 2023 were $32.4 million and $30.7 million, respectively, which included $1.3 million and $1.1 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 an increase in noncash share-based compensation expense and other inflationary increases.

The increase in property management expenses was primarily attributable to an increase in personnel related expenses and noncash share-based compensation expense.

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties increased 5.3% to $334.1 million for the three months ended March 31, 2024 from $317.4 million for the three months ended March 31, 2023.

This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 5.9% to $2,147 per month for the three months ended March 31, 2024 compared to $2,027 per month for the three months ended March 31, 2023, partially offset by a decrease in Average Occupied Days Percentage, which was 96.2% for the three months ended March 31, 2024 compared to 97.2% for the three months ended March 31, 2023.

Core revenues from Same-Home properties increased 5.5% to $338.8 million for the three months ended June 30, 2024 from $321.1 million for the three months ended June 30, 2023.

This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 5.6% to $2,178 per month for the three months ended June 30, 2024 compared to $2,063 per month for the three months ended June 30, 2023, as well as higher fees from single-family properties and lower uncollectible rents, partially offset by a decrease in Average Occupied Days Percentage, which was 96.6% for the three months ended June 30, 2024 compared to 97.0% for the three months ended June 30, 2023.

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 5.9% to $114.8 million for the three months ended March 31, 2024 from $108.4 million for the three months ended March 31, 2023 primarily driven by increased property tax expense from anticipated 2024 property tax assessments and inflationary increases in R&M and turnover costs, net and insurance costs.

Core property operating expenses from Same-Home properties increased 4.8% to $118.8 million for the three months ended June 30, 2024 from $113.4 million for the three months ended June 30, 2023 primarily driven by annual increases in property tax expense and inflationary increases in all other expenses.

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 March 31, 2024 and 2023 was $21.9 million and $17.9 million, respectively, which included $6.8 million and $3.7 million, respectively, of noncash share-based compensation expense in each period related to corporate administrative employees.

General and administrative expense for the three months ended June 30, 2024 and 2023 was $21.7 million and $19.9 million, respectively, which included $7.6 million and $6.0 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 an increase in noncash share-based compensation expense as well as an increase in personnel related expenses.

Interest Expense

Interest expense increased 7.5% to $38.6 million for the three months ended March 31, 2024 from $35.9 million for the three months ended March 31, 2023.

The increase was primarily due to additional interest from the issuance of the 2034 Notes (defined below), partially offset by lower interest expense resulting from the payoff of the AMH 2014-SFR2 securitization in February 2024 and additional capitalized interest from development activities under our AMH Development Program during the three months ended March 31, 2024.

Interest expense increased 11.0% to $38.7 million for the three months ended June 30, 2024 from $34.8 million for the three months ended June 30, 2023.

The increase was primarily due to additional interest from the issuance of unsecured senior notes in January 2024, partially offset by lower interest expense resulting from the payoff of the AMH 2014-SFR2 securitization in February 2024.

Acquisition and Other Transaction Costs

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, 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, 2024 and 2023 were $3.3 million and $5.1 million, respectively, which included $1.6 million and $1.0 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 a decrease in personnel costs as a result of fewer planned transactions through our traditional acquisition channel during the three months ended March 31, 2024.

Acquisition and other transaction costs for the three months ended June 30, 2024 and 2023 were $2.9 million and $4.2 million, respectively, which included $1.6 million and $1.4 million, respectively, of noncash share-based compensation expense in each period related to employees in these functions.

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 2.7% to $115.7 million for the three months ended March 31, 2024 from $112.7 million for the three months ended March 31, 2023 primarily due to growth in the average number and cost of depreciable properties as well as ongoing capital investments into existing properties.

Depreciation and amortization expense increased 3.9% to $117.6 million for the three months ended June 30, 2024 from $113.2 million for the three months ended June 30, 2023 primarily due to growth in the average number and cost of depreciable properties as well as ongoing capital investments into existing 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 three months ended March 31, 2024 and 2023 was $68.9 million and $84.7 million, respectively, which included $0.9 million and $0.4 million, respectively, of impairment charges related to

homes classified as held for sale during each period.

Gain on sale and impairment of single-family properties and other, net for the three months ended June 30, 2024 and 2023 was $43.9 million and $62.8 million, respectively, which included $2.4 million and $0.4 million, respectively, of impairment charges in each

period related to homes classified as held for sale during each period.

The decrease was primarily related to lower net gains on property sales resulting from fewer properties sold.

Loss on Early Extinguishment of Debt

Loss on early extinguishment of debt for the three months ended March 31, 2024 was $1.0 million as a result of the payoff of the AMH 2014-SFR2 securitization in February 2024, compared to zero for the three months ended March 31, 2023.

Loss on early extinguishment of debt was $0.1 million for the three months ended June 30, 2024, compared to zero for the three months ended June 30, 2023, as a result of legal and administrative fees associated with the payoff of the AMH 2014-SFR2 securitization in February 2024.

Other Income and Expense, net

Other income and expense, net for the three months ended March 31, 2024 and 2023 was $3.4 million and $4.7 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 June 30, 2024 and 2023 was $4.0 million and $2.5 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 Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

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 six months ended June 30, 2024 and 2023 (amounts in thousands):

For the Six Months Ended

Core revenues and Same-Home core revenues

Rents and other single-family property revenues $ 847,049 $ 793,251

Tenant charge-backs (104,708) (101,209)

Core revenues 742,341 692,042

Non-Same-Home core revenues (70,659) (55,121)

Same-Home core revenues $ 671,682 $ 636,921

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

Property operating expenses $ 305,397 $ 289,621

Property management expenses 63,784 61,466

Noncash share-based compensation - property management (2,784) (2,198)

Expenses reimbursed by tenant charge-backs (104,708) (101,209)

Core property operating expenses 261,689 247,680

Non-Same-Home core property operating expenses (28,912) (26,528)

Same-Home core property operating expenses $ 232,777 $ 221,152

Core NOI and Same-Home Core NOI

Net income $ 236,629 $ 253,113

Loss on early extinguishment of debt 1,017 —

Gain on sale and impairment of single-family properties and other, net (112,793) (147,417)

Depreciation and amortization 233,329 225,916

Acquisition and other transaction costs 6,261 9,251

Noncash share-based compensation - property management 2,784 2,198

Interest expense 77,255 70,726

General and administrative expense 43,578 37,792

Other income and expense, net (7,408) (7,217)

Core NOI 480,652 444,362

Non-Same-Home Core NOI (41,747) (28,593)

Same-Home Core NOI $ 438,905 $ 415,769

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 six months ended June 30, 2024 and 2023 (amounts in thousands):

For the Six Months Ended June 30, 2024

Properties (1)

Revenue Non-Same-

Home and Other

Properties % of Core

Revenue Total

Properties % of Core

Rents from single-family properties $ 663,124 $ 70,339 $ 733,463

Fees from single-family properties 14,376 1,769 16,145

Bad debt (5,818) (1,449) (7,267)

Core revenues 671,682 70,659 742,341

Property tax expense 116,021 17.3 % 12,593 17.8 % 128,614 17.3 %

HOA fees, net (2)

11,868 1.8 % 1,184 1.7 % 13,052 1.8 %

R&M and turnover costs, net (2)

46,797 7.0 % 6,312 8.9 % 53,109 7.2 %

Insurance 8,545 1.3 % 1,180 1.7 % 9,725 1.3 %

Property management expenses, net (3)

49,546 7.3 % 7,643 10.8 % 57,189 7.7 %

Core property operating expenses 232,777 34.7 % 28,912 40.9 % 261,689 35.3 %

Core NOI $ 438,905 65.3 % $ 41,747 59.1 % $ 480,652 64.7 %

For the Six Months Ended June 30, 2023

Properties (1)

Revenue Non-Same-

Home and Other

Properties % of Core

Revenue Total

Properties % of Core

Rents from single-family properties $ 631,256 $ 55,830 $ 687,086

Fees from single-family properties 13,312 1,528 14,840

Bad debt (7,647) (2,237) (9,884)

Core revenues 636,921 55,121 692,042

Property tax expense 109,114 17.1 % 11,513 20.9 % 120,627 17.5 %

HOA fees, net (2)

11,247 1.8 % 1,026 1.9 % 12,273 1.8 %

R&M and turnover costs, net (2)

44,262 6.9 % 6,308 11.4 % 50,570 7.3 %

Insurance 7,731 1.2 % 801 1.5 % 8,532 1.2 %

Property management expenses, net (3)

48,798 7.7 % 6,880 12.4 % 55,678 8.0 %

Core property operating expenses 221,152 34.7 % 26,528 48.1 % 247,680 35.8 %

Core NOI $ 415,769 65.3 % $ 28,593 51.9 % $ 444,362 64.2 %

(1) Includes 52,987 properties that have been stabilized longer than 90 days prior to January 1, 2023.

(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.

Rents and Other Single-Family Property Revenues

Rents and other single-family property revenues increased 6.8% to $847.0 million for the six months ended June 30, 2024 from $793.3 million for the six months ended June 30, 2023.

Revenue growth was primarily driven by higher rental rates.

Property Operating Expenses

Property operating expenses increased 5.4% to $305.4 million for the six months ended June 30, 2024 from $289.6 million for the six months ended June 30, 2023.

This increase was primarily driven by annual increases in property tax expense and inflationary increases in all other expenses.

Property Management Expenses

Property management expenses for the six months ended June 30, 2024 and 2023 were $63.8 million and $61.5 million, respectively, which included $2.8 million and $2.2 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 an increase in personnel related expenses and noncash share-based compensation expense.

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties increased 5.5% to $671.7 million for the six months ended June 30, 2024 from $636.9 million for the six months ended June 30, 2023.

This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 5.7% to $2,163 per month for the six months ended June 30, 2024 compared to $2,045 per month for the six months ended June 30, 2023, as well as higher fees from single-family properties and lower uncollectible rents, partially offset by a decrease in Average Occupied Days Percentage, which was 96.4% for the six months ended June 30, 2024 compared to 97.1% for the six months ended June 30, 2023.

Core Property Operating Expenses from Same-Home Properties

Core property operating expenses from Same-Home properties increased 5.3% to $232.8 million for the six months ended June 30, 2024 from $221.2 million for the six months ended June 30, 2023 primarily driven by annual increases in property tax expense and inflationary increases in all other expenses.

General and Administrative Expense

General and administrative expense for the six months ended June 30, 2024 and 2023 was $43.6 million and $37.8 million, respectively, which included $14.4 million and $9.7 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 an increase in personnel related expenses.

Interest Expense

Interest expense increased 9.2% to $77.3 million for the six months ended June 30, 2024 from $70.7 million for the six months ended June 30, 2023.

Acquisition and Other Transaction Costs

Acquisition and other transaction costs for the six months ended June 30, 2024 and 2023 were $6.3 million and $9.3 million, respectively, which included $3.2 million and $2.4 million, respectively, of noncash share-based compensation expense in each period related to employees in these functions.

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 3.3% to $233.3 million for the six months ended June 30, 2024 from $225.9 million for the six months ended June 30, 2023 primarily due to growth in the average number and cost of depreciable properties as well as ongoing capital investments into existing 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 six months ended June 30, 2024 and 2023 was $112.8 million and $147.4 million, respectively, which included $3.3 million and $0.8 million, respectively, of impairment charges in each

period related to homes classified as held for sale during each period.

The decrease was primarily related to lower net gains on property sales resulting from fewer properties sold.

Loss on Early Extinguishment of Debt

Loss on early extinguishment of debt was $1.0 million for the six months ended June 30, 2024, compared to zero for the six months ended June 30, 2023, as a result of the payoff of the AMH 2014-SFR2 securitization in February 2024.

Other Income and Expense, net

Other income and expense, net for the six months ended June 30, 2024 and 2023 was $7.4 million and $7.2 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 2023 Annual Report.

There have been no material changes to these estimates during the three months ended March 31, 2024.

There have been no material changes to these estimates during the six months ended June 30, 2024.

Recent Accounting Pronouncements

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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 2023 At-the-Market Program described below, borrowings under our credit facility, 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 2023 At-the-Market Program described below, borrowings under our $1.25 billion 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 March 31, 2024 included cash and cash equivalents of $124.8 million.

Additionally, as of March 31, 2024, we had no outstanding borrowings and $2.7 million committed to outstanding letters of credit under our $1.25 billion revolving credit facility, leaving $1.25 billion of remaining borrowing capacity.

During the three months ended March 31, 2024, the Company issued $600.0 million of 5.500% unsecured senior notes due 2034 (the “2034 Notes”), raising net proceeds of $595.5 million, and issued additional shares under its 2023 At-the-Market Program, raising $33.7 million in gross proceeds with $864.3 million remaining available for future share issuances as of March 31, 2024.

As of March 31, 2024, the Company also had estimated net proceeds of $108.6 million available from future settlement of the March 2024 Forward Sale Agreement under its 2023 At-the-Market Program (described below).

Our liquidity and capital resources as of June 30, 2024 included $718.4 million of cash and cash equivalents.

Additionally, as of June 30, 2024, we had no outstanding borrowings and $2.3 million committed to outstanding letters of credit under our $1.25 billion revolving credit facility, leaving $1.25 billion of remaining borrowing capacity.

During the six months ended June 30, 2024, the Company issued (i) $600.0 million of 5.500% unsecured senior notes with a maturity date of February 1, 2034 (the “2034 Notes I”), raising net proceeds of $595.5 million, (ii) $500.0 million of 5.500% unsecured senior notes with a maturity date of July 15, 2034 (the “2034 Notes II”), raising net proceeds of $494.0 million, and (iii) 932,746 Class A common shares under its 2023 At-the-Market Program, raising gross proceeds of $33.7 million with $864.3 million remaining available for future share issuances as of June 30, 2024.

As of June 30, 2024, the Company also had estimated net proceeds of $109.3 million available from future settlement of the March 2024 Forward Sale Agreement under its 2023 At-the-Market Program (described below).

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

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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, the repayment of our AMH 2014-SFR3 asset-backed securitization, operating lease obligations and purchase commitments to acquire single-family properties and land for our AMH Development Program.

During the three months ended March 31, 2024, the Company repaid all amounts due under the AMH 2014-SFR2 securitization.

During the six months ended June 30, 2024, the Company repaid all amounts due under the AMH 2014-SFR2 securitization and in July 2024, the Company provided notice to the third-party lender of its intent to repay all amounts due under the AMH 2014-SFR3 securitization during the third quarter of 2024.

Except as described in Note 8.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2023 Annual Report.

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the three months ended March 31, 2024 and 2023 (amounts in thousands):

For the Three Months Ended

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the six months ended June 30, 2024 and 2023 (amounts in thousands):

For the Six Months Ended

2024 2023 Change

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Net cash used for investing activities (108,312) (237,822) 129,510

Net cash (used for) provided by financing activities (72,204) 63,300 (135,504)

Net cash provided by (used for) financing activities 292,317 (34,044) 326,361

Net increase in cash, cash equivalents and restricted cash $ 659,785 $ 143,810 $ 515,975

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 $1.3 million, or 0.7%, from $200.5 million for the three months ended March 31, 2023 to $201.8 million for the three months ended March 31, 2024 as a result of increased cash inflows generated from higher rental rates, partially offset by higher cash outflows for property related expenses as a result of inflationary increases as well as changes in working capital primarily related to the timing of payments for prepaid expenses and other assets.

Net cash provided by operating activities increased $60.1 million, or 14.5%, from $415.7 million for the six months ended June 30, 2023 to $475.8 million for the six months ended June 30, 2024 as a result of increased cash inflows generated from a larger number of occupied properties and higher rental rates, partially offset by higher cash outflows for property related expenses as a result of inflationary increases as well as changes in working capital primarily related to the timing of payments for accounts payable and accrued expenses and prepaid expenses and other assets.

Investing Activities

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.

Net cash used for investing activities decreased $129.5 million, or 54.5%, from $237.8 million for the six months ended June 30, 2023 to $108.3 million for the six months ended June 30, 2024.

Our investing activities are most significantly impacted by the level of investment activity through traditional acquisition channels, availability of bulk portfolio acquisition opportunities, the development of “built-for-rental” homes through our AMH Development Program and the acquisition of newly built properties through our National Builder Program.

We will continue to evaluate all of our growth channels and grow accordingly, if and when, acquisition opportunities are attractive relative to the condition of capital markets.

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.

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

Cash outflows for the addition of single-family properties to our portfolio, primarily for our AMH Development Program, decreased $21.3 million as a result of the timing of development-related payments.

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.

Net cash used for investing activities decreased $4.8 million, or 6.5%, from $72.9 million for the three months ended March 31, 2023 to $68.1 million for the three months ended March 31, 2024.

Cash outflows for the addition of single-family properties to our portfolio, primarily for our AMH Development Program, decreased $7.3 million during the three months ended March 31, 2024 as a result of the timing of development-related payments and certain cash outflows to a land banking entity being recognized as a financing activity during the three months ended March 31, 2024.

In addition, (i) we received $25.7 million in cash proceeds for our AMH 2014-SFR2 Class F asset-backed securitization certificates, (ii) cash outflows for recurring and other capital expenditures for single-family properties decreased $7.9 million and (iii) cash outflows for other investing activities decreased $6.3 million primarily due to a nonrecurring investment in a residential-focused proptech company during the three months ended March 31, 2023.

These changes were partially offset by (i) a decrease of $28.4 million in net proceeds received from the sale of single-family properties and other as a result of a decreased volume of properties sold during the three months ended March 31, 2024, (ii) an $11.9 million net reduction in net cash inflows from unconsolidated joint ventures due to the timing of contributions and distributions to and from our unconsolidated joint ventures and (iii) a $2.1 million increase in cash outflows for renovations to single-family properties.

Cash outflows for recurring and other capital expenditures for single-family properties and renovations to single-family properties decreased $10.9 million largely as a result of scaled back acquisitions and a reduction in spend on property-enhancing capital expenditures during the six months ended June 30, 2024.

Additional drivers for the decrease in net cash used for investing activities include (i) a $96.4 million increase in distributions from joint ventures, net of contributions, primarily due to additional cash distributions received with respect to our property and land contributions during the six months ended June 30, 2024, (ii) $25.7 million of cash proceeds received during the six months ended June 30, 2024 for our AMH 2014-SFR2 Class F asset-backed securitization certificates, and (iii) a $7.3 million decrease in cash outflows for other investing activities primarily due to a nonrecurring investment

in a residential-focused proptech company during the six months ended June 30, 2023.

These changes were partially offset by a $32.1 million decrease in net proceeds received from sales of single-family properties and other primarily resulting from fewer properties sold during the six months ended June 30, 2024.

Financing Activities

Net cash used for financing activities was $72.2 million for the three months ended March 31, 2024 compared to net cash provided by financing activities of $63.3 million for the three months ended March 31, 2023.

This $135.5 million change in financing activities was primarily due to (i) a $459.4 million increase in payments on asset-backed securitization resulting from the payoff of the AMH 2014-SFR2 securitization during the three months ended March 31, 2024, (ii) a $265.2 million reduction in proceeds from the issuance of Class A common shares, net of offering costs, (iii) $24.2 million of payments to a land banking entity related to liabilities to repurchase consolidated land not owned for our AMH Development Program during the three months ended March 31, 2024 and (iv) an $18.2 million increase in distributions paid to common share and unit holders resulting from an 18% increase in distributions paid per common share and unit.

These changes were partially offset by (i) a $594.1 million increase in proceeds from unsecured senior notes, net of discount and deferred financing costs paid, from the issuance of the 2034 Notes during the three months ended March 31, 2024 and (ii) a $40.0 million reduction in net cash outflows to pay down our revolving credit facility.

Net cash provided by financing activities was $292.3 million for the six months ended June 30, 2024 compared to net cash used for financing activities of $34.0 million for the six months ended June 30, 2023.

This $326.4 million change in financing activities was primarily due to (i) $1.1 billion of proceeds from unsecured senior notes, net of discounts and deferred financing costs paid, from the issuances of unsecured senior notes (see below) during the six months ended June 30, 2024 and (ii) a $40.0 million reduction in cash outflows to pay down our revolving credit facility.

These changes were partially offset by (i) a $459.0 million increase in payments on asset-backed securitizations resulting from the payoff of the AMH 2014-SFR2 securitization during the six months ended June 30, 2024, (ii) a $265.2 million reduction in proceeds from the issuance of Class A common shares, net of offering costs, (iii) $36.4 million of payments to a land banking entity related to liabilities to repurchase consolidated land not owned for our AMH Development Program during the six months ended June 30, 2024, and (iv) a $35.9 million increase in distributions paid to common share and unit holders resulting from an 18% increase in distributions paid per common share and unit during the six months ended June 30, 2024.

Early Extinguishment of Debt

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Unsecured Senior Notes

During the first quarter of 2024, the Operating Partnership issued the 2034 Notes, which carry a green bond designation and were issued under the Company’s green finance framework.

Interest on the 2034 Notes is payable semi-annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2024.

During the first quarter of 2024, the Operating Partnership issued the 2034 Notes I, which carry a green bond designation and were issued under the Company’s green finance framework.

Interest on the 2034 Notes I is payable semi-annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2024.

The Operating Partnership received aggregate net proceeds of $595.5 million from this offering, after underwriting fees of $3.9 million and a $0.6 million discount, and before offering costs of $1.3 million.

Pending full allocation of an amount equal to the net proceeds to finance new or existing projects meeting the eligibility criteria described in the prospectus supplement related to the offering, the Operating Partnership used the net proceeds primarily to repay outstanding indebtedness, including the payoff of the AMH 2014-SFR2 securitization.

The 2034 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 indenture requires that we maintain certain financial covenants.

The Operating Partnership may redeem the 2034 Notes in whole at any time or in part from time to time at the applicable redemption price specified in the indenture.

If the 2034 Notes are redeemed on or after November 1, 2033 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the 2034 Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

The Operating Partnership may redeem the 2034 Notes I in whole at any time or in part from time to time at the applicable redemption price specified in the indenture.

If the 2034 Notes I are redeemed on or after November 1, 2033 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the 2034 Notes I being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

During the second quarter of 2024, the Operating Partnership issued the 2034 Notes II.

Interest on the 2034 Notes II is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2025.

The Operating Partnership received aggregate net proceeds of $494.0 million from this offering, after underwriting fees of $3.3 million and a $2.7 million discount, and before offering costs of $1.1 million.

The Operating Partnership intends to use the net proceeds from the offering for the repayment of outstanding indebtedness, which may include the repayment or voluntary prepayment of all or a portion of the outstanding AMH 2014-SFR3 securitization, as well as general corporate purposes, including, without limitation, property acquisitions and developments, the expansion, redevelopment and/or improvement of existing properties in the Company’s portfolio, other capital expenditures, working capital and other general purposes.

The Operating Partnership may redeem the 2034 Notes II in whole at any time or in part from time to time at the applicable redemption price specified in the indenture.

If the 2034 Notes II are redeemed on or after April 15, 2034 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the 2034 Notes II being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

The 2034 Notes I and 2034 Notes II 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.

At-the-Market Common Share Offering Program

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The 2023 At-the-Market Program may be suspended or terminated by the Company at any time.

During the three months ended March 31, 2024, the Company issued 932,746 Class A common shares under its 2023 At-the-Market Program, raising $33.7 million in gross proceeds before commissions and other expenses of approximately $0.5 million.

As of March 31, 2024, 3,732,429 shares have been issued under the 2023 At-the-Market Program and $864.3 million remained available for future share issuances.

During the first quarter of 2024, the Company issued 932,746 Class A common shares under its 2023 At-the-Market Program, raising $33.7 million in gross proceeds before commissions and other expenses of approximately $0.5 million.

As of June 30, 2024, 3,732,429 shares have been issued under the 2023 At-the-Market Program and $864.3 million remained available for future share issuances.

During the first quarter of 2024, the Company entered into a forward sale agreement with the forward purchaser (the “March 2024 Forward Sale Agreement”), which is accounted for in equity, to offer 2,987,024 Class A common shares on a forward basis under its 2023 At-the-Market Program at the request of the Company by the forward seller.

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The March 2024 Forward Sale Agreement is subject to early termination or settlement under certain circumstances.

As of March 31, 2024, the Company has estimated net proceeds of approximately $108.6 million available from future settlement under the March 2024 Forward Sale Agreement, subject to adjustment in accordance with the forward sale transaction.

As of June 30, 2024, the Company has estimated net proceeds of approximately $109.3 million available from future settlement under the March 2024 Forward Sale Agreement, subject to adjustment in accordance with the forward sale transaction.

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.

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

During the three months ended March 31, 2024 and 2023, we did not repurchase and retire any of our Class A common shares or preferred shares.

As of March 31, 2024, 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.

During the six months ended June 30, 2024 and 2023, we did not repurchase and retire any of our Class A common shares or preferred shares.

As of June 30, 2024, 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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federal income tax purposes to reduce our REIT taxable income and have substantially utilized our NOL as of December 31, 2023.

During the three months ended March 31, 2024 and 2023, the Company distributed an aggregate $112.7 million and $94.6 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.

During the six months ended June 30, 2024 and 2023, the Company distributed an aggregate $225.1 million and $189.2 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.

Additional Non-GAAP Measures

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We compute this metric by adjusting Core FFO attributable to common share and unit holders for (1) Recurring Capital Expenditures that are necessary to help preserve the value and maintain functionality of our properties and (2) capitalized leasing costs incurred during the period.

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.

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 present FFO attributable to common share and unit holders because we consider this metric to be an important measure of the performance of real estate companies, as do many investors and analysts in evaluating the Company.

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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 months ended March 31, 2024 and 2023 (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 and six months ended June 30, 2024 and 2023 (amounts in thousands):

For the Three Months Ended

June 30, For the Six Months Ended

2024 2023 2024 2023

Net income attributable to common shareholders $ 92,142 $ 98,029 $ 201,431 $ 215,494

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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 months ended March 31, 2024 and 2023 (amounts in thousands):

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 six months ended June 30, 2024 and 2023 (amounts in thousands):

For the Three Months Ended

June 30, For the Six Months Ended

2024 2023 2024 2023

Net income $ 108,534 $ 115,414 $ 236,629 $ 253,113

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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