American Homes 4 Rent — FY 2022 Form 10-K
Business context and reporting period. American Homes 4 Rent (AMH), a REIT operating primarily through American Homes 4 Rent, L.P., acquires, develops, renovates, leases and manages single-family rental homes. This annual filing covers the year ended December 31, 2022; it is not a quarterly-only report. At year-end, AMH owned 58,993 homes in 21 states, including 1,115 classified as held for sale, and held another 2,540 homes through unconsolidated joint ventures.
Financial and operating performance
| Metric | FY 2022 | FY 2021 | Change / context |
|---|---|---|---|
| Rents and other single-family property revenue | $1.491 billion | $1.304 billion | Up 14.3% |
| Net income | $310.0 million | $210.6 million | Up 47.2%; benefited from higher property-sale gains |
| Net income attributable to common shareholders | $250.8 million | $135.3 million | Basic EPS $0.72, versus $0.42 |
| Core NOI | $829.6 million | $719.8 million | Margin 64.4%, versus 64.0% |
| Same-home Core NOI | $694.6 million | $636.8 million | Same-home revenue increased 8.5%; expenses increased 7.4% |
| Net cash from operating activities | $665.5 million | $595.2 million | Up 11.8% |
| Net cash used in investing activities | $1.426 billion | $1.733 billion | Lower mainly as acquisitions were scaled back |
| Net cash from financing activities | $786.2 million | $1.065 billion | Cash and restricted cash increased $26.2 million |
Year-end same-home average monthly realized rent was $1,920, up 8.0% from $1,777; average occupied days were 97.3%, compared with 97.6%. Across the portfolio, year-end average occupancy was 95.8%, average monthly realized rent was $2,001, and blended rent change on renewals and re-leases was 8.1%.
Debt and liquidity. Gross principal debt was $4.582 billion at year-end: $1.902 billion in asset-backed securitizations, $2.550 billion in unsecured senior notes and $130.0 million drawn on the revolving facility. The balance-sheet carrying amount of total debt was $4.516 billion. Cash and cash equivalents were $69.2 million, with an additional $148.8 million of restricted cash. The $1.25 billion revolving credit facility had approximately $1.1 billion of remaining capacity after borrowings and letters of credit. Contractual principal maturities include $951.0 million in 2024. Interest expense was $134.9 million, up 17.4%.
AMH declared common-share distributions of $0.72 per share in 2022, versus $0.40 in 2021. In February 2023, the board approved a first-quarter dividend of $0.22 per share. Series G and H preferred dividends rank ahead of common distributions.
Material changes versus FY 2021
- Portfolio growth and higher rents, alongside lower uncollectible rents, drove revenue and operating cash flow increases. Average occupied homes for the year rose to 54,847 from 52,542.
- Net gains on property sales increased to $136.5 million from $49.7 million. AMH sold 987 homes in 2022, with net proceeds of $288.0 million.
- Operating costs rose: property operating expenses increased 12.6%, reflecting portfolio growth, inflation in repairs and turnover costs, and higher property taxes in certain states. Property management and general and administrative expenses also increased.
- Interest expense rose as a result of additional senior notes issued in 2021 and 2022. In April 2022, AMH issued $900 million of 2032 and 2052 notes.
- AMH redeemed all 6.2 million Series F preferred shares for $155 million. It issued common shares directly and settled part of a forward share offering during 2022; the remaining 8 million forward shares were settled in January 2023 for $298.4 million of net proceeds.
- Acquisition and development activity shifted: in the second half of 2022, AMH strategically reduced purchases through traditional and National Builder channels as housing and capital markets adjusted. Development remained active.
Outlook, commentary and risks
- Management said it expects demand trends supporting single-family rentals—including housing shortages, family formation, work-from-home patterns and higher mortgage costs—to continue into 2023. It also noted that a return to in-person work or lower mortgage rates could weigh on demand. The filing provides no numerical earnings or revenue guidance.
- AMH expects to resume growth in traditional and National Builder acquisitions when housing and capital markets stabilize. Development and renovation costs, labor availability and supply-chain constraints may affect timing and returns.
- Inflation has raised labor, materials, insurance, transportation and tax costs. Many expenses are relatively fixed, and management cautions that rent increases may not fully offset cost increases.
- Interest-rate increases raise borrowing costs and can constrain acquisition and development returns. Most debt is fixed-rate, but the revolving facility is variable-rate; a 100-basis-point rate change was estimated to affect annual interest expense by approximately $1.3 million at the year-end balance.
- Hurricane Ian resulted in $8.9 million of gross estimated charges, partly offset by $2.8 million of probable insurance recoveries, for $6.1 million of net charges in 2022.
- Key risks include geographic concentration (58.7% of properties were in ten major markets), property illiquidity, tenant defaults and turnover, rent and eviction regulation, climate and severe-weather exposure, insurance deductibles and coverage gaps, cybersecurity, HOA restrictions, development execution, and debt covenant compliance.
- The company disclosed that it was cooperating with a Georgia Attorney General investigation concerning customary landlord-tenant matters and discussing a possible negotiated resolution. It also reported other ordinary-course legal proceedings, which management did not expect to materially adversely affect financial position or results.
- Ernst & Young issued an unqualified opinion on the financial statements; management and the auditor reported effective internal control over financial reporting for AMH as of year-end.
Most important facts for investors to verify
- How much of net-income growth is sustainable operating improvement versus increased gains from home sales, and how sales activity affects future recurring revenue.
- Whether same-home rent growth and occupancy hold up as leasing conditions change, including by market and against the reported cost increases.
- Near-term refinancing and repayment plans for the 2024 securitization maturities and the 2025 anticipated repayment dates for two securitizations; review potential rate increases if those loans are not repaid on schedule.
- Development commitments, land obligations and capital spending relative to operating cash flow, debt capacity and distributions.
- Insurance recoveries and remaining exposure from storms, as well as developments in the Georgia AG matter and other contingencies.
- Definitions and reconciliations of Core NOI, Core FFO and Adjusted FFO; these are non-GAAP measures and are not substitutes for GAAP earnings or operating cash flow.