What changed in this filing

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Item 1. Financial Statements

2020-08-07 compared with 2020-05-08 · 222 added, 120 removed, 652 unchanged (34% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share data)

March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019

Single-family properties:

23 unchanged sentences

Shareholders’ equity:

Class A common shares ($ 0.01 par value per share, 450,000,000 shares authorized, 300,315,609 and 300,107,599 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively)

Class B common shares ($ 0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at March 31, 2020 and December 31, 2019)

Preferred shares ($ 0.01 par value per share, 100,000,000 shares authorized, 35,350,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)

Class A common shares ($ 0.01 par value per share, 450,000,000 shares authorized, 300,512,943 and 300,107,599 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively)

Class B common shares ($ 0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at June 30, 2020 and December 31, 2019)

Preferred shares ($ 0.01 par value per share, 100,000,000 shares authorized, 35,350,000 shares issued and outstanding at June 30, 2020 and December 31, 2019)

Additional paid-in capital 5,797,384 5,790,775

10 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2020 2019 2020 2019

Rents and other single-family property revenues $ 280,689 $ 279,914 $ 568,031 $ 557,608

10 unchanged sentences

Gain on sale of single-family properties and other, net 10,651 13,725 21,416 19,374

Loss on early extinguishment of debt — ( 659 ) — ( 659 )

Net income 31,807 40,304 69,334 73,395

13 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2020 2019 2020 2019

Net income $ 31,807 $ 40,304 $ 69,334 $ 73,395

2 unchanged sentences

Reclassification adjustment for amortization of interest expense included in net income

( 240 ) ( 240 ) ( 481 ) ( 481 )

Other comprehensive loss ( 240 ) ( 240 ) ( 481 ) ( 481 )

29 unchanged sentences

Balances at March 31, 2019 296,592,376 $ 2,966 635,075 $ 6 35,350,000 $ 354 $ 5,739,162 $ ( 489,820 ) $ 7,202 $ 5,259,870 $ 715,502 $ 5,975,372

Share-based compensation — — — — — — 1,269 — — 1,269 — 1,269

Common stock issued under share-based compensation plans, net of shares withheld for employee taxes

645,567 6 — — — — 10,257 — — 10,263 — 10,263

Redemptions of Class A units 2,589,846 26 — — — — 33,710 — 63 33,799 ( 33,799 ) —

Distributions to equity holders:

Preferred shares (Note 10)

— — — — — — — ( 13,782 ) — ( 13,782 ) — ( 13,782 )

Noncontrolling interests — — — — — — — — — — ( 2,611 ) ( 2,611 )

Common shares ($ 0.05 per share)

— — — — — — — ( 15,052 ) — ( 15,052 ) — ( 15,052 )

Net income — — — — — — — 36,300 — 36,300 4,004 40,304

Total other comprehensive loss — — — — — — — — ( 203 ) ( 203 ) ( 37 ) ( 240 )

Balances at June 30, 2019 299,827,789 $ 2,998 635,075 $ 6 35,350,000 $ 354 $ 5,784,398 $ ( 482,354 ) $ 7,062 $ 5,312,464 $ 683,059 $ 5,995,523

American Homes 4 Rent

24 unchanged sentences

Balances at March 31, 2020 300,315,609 $ 3,003 635,075 $ 6 35,350,000 $ 354 $ 5,792,418 $ ( 461,706 ) $ 6,452 $ 5,340,527 $ 684,228 $ 6,024,755

Share-based compensation — — — — — — 2,090 — — 2,090 — 2,090

Common stock issued under share-based compensation plans, net of shares withheld for employee taxes

197,334 2 — — — — 2,876 — — 2,878 — 2,878

Distributions to equity holders:

Preferred shares (Note 10)

— — — — — — — ( 13,782 ) — ( 13,782 ) — ( 13,782 )

Noncontrolling interests — — — — — — — — — — ( 2,601 ) ( 2,601 )

Common shares ($ 0.05 per share)

— — — — — — — ( 15,098 ) — ( 15,098 ) — ( 15,098 )

Net income — — — — — — — 29,151 — 29,151 2,656 31,807

Total other comprehensive loss — — — — — — — — ( 205 ) ( 205 ) ( 35 ) ( 240 )

Balances at June 30, 2020 300,512,943 $ 3,005 635,075 $ 6 35,350,000 $ 354 $ 5,797,384 $ ( 461,435 ) $ 6,247 $ 5,345,561 $ 684,248 $ 6,029,809

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

For the Three Months Ended

For the Six Months Ended

Operating activities

4 unchanged sentences

Noncash share-based compensation 3,898 2,221

Loss on early extinguishment of debt — 659

Equity in net losses of unconsolidated joint ventures 1,090 147

6 unchanged sentences

Accounts payable and accrued expenses 60,777 74,493

Amounts payable to affiliates ( 182 ) ( 73 )

Amounts due from related parties ( 481 ) 50

Net cash provided by operating activities 279,204 287,492

17 unchanged sentences

Payments on revolving credit facility — ( 250,000 )

Payments on term loan facility — ( 100,000 )

Proceeds from unsecured senior notes, net of discount — 397,944

3 unchanged sentences

Deferred financing costs paid — ( 3,572 )

Net cash provided by financing activities 50,328 120,466

Net cash provided by (used for) financing activities 40,388 ( 7,763 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 2,874 ) 109,696

4 unchanged sentences

(Amounts in thousands)

For the Three Months Ended

For the Six Months Ended

Supplemental cash flow information

3 unchanged sentences

Transfers of completed homebuilding deliveries to properties 156,367 51,946

Property and land contributions to an unconsolidated joint venture 9,835 —

Property and land contributions to unconsolidated joint ventures ( 18,978 ) ( 5,190 )

Note receivable related to a bulk sale of properties, net of discount — 29,474

Accrued distributions to affiliates — 4,647

4 unchanged sentences

(Amounts in thousands, except unit data)

March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019

Single-family properties:

24 unchanged sentences

General partner:

Common units ( 300,950,684 and 300,742,674 units issued and outstanding at March 31, 2020 and December 31, 2019, respectively)

Common units ( 301,148,018 and 300,742,674 units issued and outstanding at June 30, 2020 and December 31, 2019, respectively)

4,484,879 4,474,333

Preferred units ( 35,350,000 units issued and outstanding at March 31, 2020 and December 31, 2019)

Preferred units ( 35,350,000 units issued and outstanding at June 30, 2020 and December 31, 2019)

854,435 854,435

Limited partner:

Common units ( 52,026,980 units issued and outstanding at March 31, 2020 and December 31, 2019)

Common units ( 52,026,980 units issued and outstanding at June 30, 2020 and December 31, 2019)

683,153 682,199

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2020 2019 2020 2019

Rents and other single-family property revenues $ 280,689 $ 279,914 $ 568,031 $ 557,608

10 unchanged sentences

Gain on sale of single-family properties and other, net 10,651 13,725 21,416 19,374

Loss on early extinguishment of debt — ( 659 ) — ( 659 )

Net income 31,807 40,304 69,334 73,395

12 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2020 2019 2020 2019

Net income $ 31,807 $ 40,304 $ 69,334 $ 73,395

Other comprehensive loss:

Gain on cash flow hedging instruments:

Gain on cash flow hedging instrument:

Reclassification adjustment for amortization of interest expense included in net income

( 240 ) ( 240 ) ( 481 ) ( 481 )

Other comprehensive loss ( 240 ) ( 240 ) ( 481 ) ( 481 )

16 unchanged sentences

Preferred units (Note 10)

— — ( 13,782 ) — — — ( 13,782 )

Common units ($ 0.05 per unit)

— ( 14,889 ) — — ( 2,741 ) — ( 17,630 )

Net income — 16,283 13,782 — 3,026 — 33,091

1 unchanged sentence

Balances at March 31, 2019 297,227,451 $ 4,398,233 $ 854,435 54,816,826 $ 714,159 $ 8,545 $ 5,975,372

Share-based compensation — 1,269 — — — — 1,269

Common units issued under share-based compensation plans, net of units withheld for employee taxes

645,567 10,263 — — — — 10,263

Redemptions of Class A units 2,589,846 33,736 — ( 2,589,846 ) ( 33,736 ) — —

Distributions to capital holders:

Preferred units (Note 10)

— — ( 13,782 ) — — — ( 13,782 )

Common units ($ 0.05 per unit)

— ( 15,052 ) — — ( 2,611 ) — ( 17,663 )

Net income — 22,518 13,782 — 4,004 — 40,304

Total other comprehensive loss — — — — — ( 240 ) ( 240 )

Balances at June 30, 2019 300,462,864 $ 4,450,967 $ 854,435 52,226,980 $ 681,816 $ 8,305 $ 5,995,523

American Homes 4 Rent, L.P.

Condensed Consolidated Statement of Capital (continued)

Condensed Consolidated Statements of Capital (continued)

(Amounts in thousands, except unit data)

10 unchanged sentences

Common units ($ 0.05 per unit)

— ( 15,088 ) — — ( 2,602 ) — ( 17,690 )

Cumulative effect of adoption of ASU 2016-13 (Notes 2 and 6) — ( 1,494 ) — — — — ( 1,494 )

2 unchanged sentences

Balances at March 31, 2020 300,950,684 $ 4,479,640 $ 854,435 52,026,980 $ 683,098 $ 7,582 $ 6,024,755

Share-based compensation — 2,090 — — — — 2,090

Common units issued under share-based compensation plans, net of units withheld for employee taxes

197,334 2,878 — — — — 2,878

Distributions to capital holders:

Preferred units (Note 10)

— — ( 13,782 ) — — — ( 13,782 )

Common units ($ 0.05 per unit)

— ( 15,098 ) — — ( 2,601 ) — ( 17,699 )

Net income — 15,369 13,782 — 2,656 — 31,807

Total other comprehensive loss — — — — — ( 240 ) ( 240 )

Balances at June 30, 2020 301,148,018 $ 4,484,879 $ 854,435 52,026,980 $ 683,153 $ 7,342 $ 6,029,809

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

For the Three Months Ended

For the Six Months Ended

Operating activities

4 unchanged sentences

Noncash share-based compensation 3,898 2,221

Loss on early extinguishment of debt — 659

Equity in net losses of unconsolidated joint ventures 1,090 147

6 unchanged sentences

Accounts payable and accrued expenses 60,777 74,493

Amounts payable to affiliates ( 182 ) ( 73 )

Amounts due from related parties ( 481 ) 50

Net cash provided by operating activities 279,204 287,492

17 unchanged sentences

Payments on revolving credit facility — ( 250,000 )

Payments on term loan facility — ( 100,000 )

Proceeds from unsecured senior notes, net of discount — 397,944

2 unchanged sentences

Deferred financing costs paid — ( 3,572 )

Net cash provided by financing activities 50,328 120,466

Net cash provided by (used for) financing activities 40,388 ( 7,763 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 2,874 ) 109,696

4 unchanged sentences

(Amounts in thousands)

For the Three Months Ended

For the Six Months Ended

Supplemental cash flow information

3 unchanged sentences

Transfers of completed homebuilding deliveries to properties 156,367 51,946

Property and land contributions to an unconsolidated joint venture 9,835 —

Property and land contributions to unconsolidated joint ventures ( 18,978 ) ( 5,190 )

Note receivable related to a bulk sale of properties, net of discount — 29,474

Accrued distributions to affiliates — 4,647

6 unchanged sentences

American Homes 4 Rent (“AH4R” or “General Partner”) is a Maryland real estate investment trust (“REIT”) formed on October 19, 2012 for the purpose of acquiring, developing, renovating, leasing and operating single-family homes as rental properties.

American Homes 4 Rent, L.P., a Delaware limited partnership formed on October 22, 2012, and its consolidated subsidiaries (collectively, the “Operating Partnership,” our “operating partnership” or the “OP”) is the entity through which the Company conducts substantially all of our business and owns, directly or through subsidiaries, substantially all of our assets.

American Homes 4 Rent, L.P., a Delaware limited partnership formed on October 22, 2012, and its consolidated subsidiaries (collectively, the “Operating Partnership” or the “OP”) is the entity through which the Company conducts substantially all of our business and owns, directly or through subsidiaries, substantially all of our assets.

References to the “Company,” “we,” “our” and “us” mean collectively AH4R, the Operating Partnership and those entities/subsidiaries owned or controlled by AH4R and/or the Operating Partnership.

As of March 31, 2020, the Company held 52,776 single-family properties in 22 states, including 960 properties classified as held for sale.

AH4R is the general partner of, and as of March 31, 2020 owned approximately 85.2 % of the common partnership interest in, the Operating Partnership.

As of June 30, 2020, the Company held 53,000 single-family properties in 22 states, including 948 properties classified as held for sale.

AH4R is the general partner of, and as of June 30, 2020 owned approximately 85.2 % of the common partnership interest in, the Operating Partnership.

The remaining 14.8 % of the common partnership interest was owned by limited partners.

14 unchanged sentences

Basis of Presentation

The condensed consolidated financial statements are unaudited and include the accounts of AH4R, the Operating Partnership and their consolidated subsidiaries.

The condensed consolidated financial statements of the Operating Partnership include the accounts of the Operating Partnership and its consolidated subsidiaries.

The condensed consolidated financial statements are unaudited.

The condensed consolidated financial statements of the Company include the accounts of AH4R, the Operating Partnership and their consolidated subsidiaries, and the condensed consolidated financial statements of the Operating Partnership include the accounts of the Operating Partnership and its consolidated subsidiaries.

Intercompany accounts and transactions have been eliminated.

1 unchanged sentence

The Company consolidates VIEs in accordance with Accounting Standards Codification (“ASC”) No.

810, Consolidation, if it is the primary beneficiary of the VIE as determined by its power to direct the VIE’s activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE.

Entities for which the Company owns an interest, but does not consolidate, are accounted for under the equity method of accounting as an investment in an unconsolidated subsidiary and are included in escrow deposits, prepaid expenses and other assets within the condensed consolidated balance sheets.

810, Consolidation, if the Company is the primary beneficiary of the VIE as determined by the Company’s power to direct the VIE’s activities and its obligation to absorb its losses or the right to receive its benefits that are potentially significant to the VIE.

Entities for which the Company owns an interest, but does not consolidate, are accounted for under the equity method of accounting as an investment in an unconsolidated subsidiary and are included in investments in unconsolidated joint ventures within the condensed consolidated balance sheets.

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”).

1 unchanged sentence

Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Any references in this report to the number of properties is outside the scope of our independent registered public accounting firm’s review of our financial statements, in accordance with the standards of the Public Company Accounting Oversight

Any references in this report to the number of properties is outside the scope of our independent registered public

accounting firm’s review of our financial statements, in accordance with the standards of the Public Company Accounting Oversight Board.

In the opinion of management, all adjustments of a normal and recurring nature necessary for a fair statement of the condensed consolidated financial statements for the interim periods have been made.

38 unchanged sentences

The guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those annual periods with early adoption permitted.

The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.

The amendments in this ASU should be applied either

retrospectively or prospectively to all implementation costs incurred after the date of adoption.

The Company adopted this guidance effective January 1, 2020.

8 unchanged sentences

The adoption of this guidance did not have a material impact on our financial statements.

In April 2020, the FASB issued staff question and answer (“Q&A”) document Topic 842 and Topic 840:

Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic .

Under ASC No.

842, Leases, lease concessions granted by lessors beyond the enforceable rights and obligations contained in the existing lease agreement would generally be accounted for as a lease modification.

The staff Q&A document permits lessors to make an election, if certain criteria are met, to account for a lease concession related to the effects of the COVID-19 pandemic as though it were part of the enforceable rights and obligations of the existing lease agreement rather than account for the concession as a lease modification.

The Company elects to not evaluate whether a COVID-19-related concession is a lease modification and elects to not apply the lease modification guidance in those circumstances.

The effect of these elections did not have a material impact on the Company’s condensed consolidated financial statements.

Recent Accounting Pronouncements Not Yet Effective

12 unchanged sentences

Cash reserved in connection with lender requirements is restricted during the term of the related debt instrument.

The following table provides a reconciliation of cash, cash equivalents and restricted cash per the Company’s and the Operating Partnership’s condensed consolidated statements of cash flows to the corresponding financial statement line items in the condensed consolidated balance sheets (in thousands):

March 31, December 31,

The following table provides a reconciliation of cash, cash equivalents and restricted cash per the condensed consolidated statements of cash flows to the corresponding financial statement line items in the condensed consolidated balance sheets (in thousands):

June 30, December 31,

2020 2019 2019 2018

3 unchanged sentences

Real Estate Assets, Net

The net book values of real estate assets consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands):

March 31, 2020 December 31, 2019

The net book values of real estate assets consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Occupied single-family properties $ 7,775,254 $ 7,534,627

7 unchanged sentences

Total real estate assets, net $ 8,720,972 $ 8,551,531

Depreciation expense related to single-family properties was $ 79.8 million and $ 76.8 million for the three months ended March 31, 2020 and 2019, respectively.

The following table summarizes the Company’s dispositions of single-family properties and land for the three months ended March 31, 2020 and 2019 (in thousands, except property data):

For the Three Months Ended

March 31, 2020 March 31, 2019

Depreciation expense related to single-family properties was $ 81.6 million and $ 78.6 million for the three months ended June 30, 2020 and 2019, respectively, and $ 161.4 million and $ 155.4 million for the six months ended June 30, 2020 and 2019, respectively.

The following table summarizes the Company’s dispositions of single-family properties and land for the three and six months ended June 30, 2020 and 2019 (in thousands, except property data):

For the Three Months Ended For the Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

Single-family properties:

1 unchanged sentence

Net proceeds (1)

$ 47,626 $ 82,828 $ 128,812 $ 115,451

Net gain on sale $ 10,651 $ 13,569 $ 24,409 $ 19,149

1 unchanged sentence

Net gain on sale $ — $ 156 $ 7 $ 225

(1) Total net proceeds for the three and six months ended June 30, 2019 included a $ 30.7 million note receivable, before a $ 1.2 million discount, which is presented in escrow deposits, prepaid expenses and other assets (see Note 6.

Escrow Deposits, Prepaid Expenses and Other Assets).

Rent and Other Receivables

For the three months ended March 31, 2020 and 2019, rents from single-family properties included $ 40.0 million in both periods of variable lease payments for tenant charge-backs, which are primarily related to cost recoveries on utilities, and $ 4.0 million and $ 3.0 million, respectively, of variable lease payments for fees from single-family properties.

The Company generally rents our single-family properties under non-cancelable lease agreements with a term of one year .

The following table summarizes our future minimum rental revenues under existing leases on our properties as of March 31, 2020 (in thousands):

March 31, 2020

Included in rents and other single-family property revenues are variable lease payments for tenant charge-backs, which primarily relate to cost recoveries on utilities, and variable lease payments for fees from single-family properties.

Variable lease payments for tenant charge-backs were $ 35.4 million and $ 35.3 million for the three months ended June 30, 2020 and 2019, respectively, and $ 75.4 million and $ 75.3 million for the six months ended June 30, 2020 and 2019, respectively.

Variable lease payments for fees from single-family properties were $ 3.3 million and $ 3.5 million for the three months ended June 30, 2020 and 2019, respectively, and $ 7.3 million and $ 6.5 million for the six months ended June 30, 2020 and 2019, respectively.

The Company generally rents its single-family properties under non-cancelable lease agreements with a term of one year .

The following table summarizes future minimum rental revenues under existing leases on our properties as of June 30, 2020 (in thousands):

June 30, 2020

Remaining 2020 $ 382,221

2 unchanged sentences

Escrow Deposits, Prepaid Expenses and Other Assets

The following table summarizes the components of escrow deposits, prepaid expenses and other assets as of March 31, 2020 and December 31, 2019 (in thousands):

March 31, 2020 December 31, 2019

The following table summarizes the components of escrow deposits, prepaid expenses and other assets as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Escrow deposits, prepaid expenses and other $ 54,129 $ 54,545

3 unchanged sentences

Total $ 141,302 $ 140,961

Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $ 2.0 million and $ 1.9 million for the three months ended March 31, 2020 and 2019, respectively.

Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $ 2.1 million and $ 1.8 million for the three months ended June 30, 2020 and 2019, respectively, and $ 4.1 million and $ 3.7 million for the six months ended June 30, 2020 and 2019, respectively.

Deferred Costs and Other Intangibles, Net

Deferred costs and other intangibles, net, consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands):

March 31, 2020 December 31, 2019

Deferred costs and other intangibles, net, consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Deferred leasing costs $ 3,506 $ 3,738

4 unchanged sentences

Total $ 5,662 $ 6,840

Amortization expense related to deferred leasing costs, the value of in-place leases, and database intangibles was $ 1.0 million and $ 2.5 million for the three months ended March 31, 2020 and 2019, respectively, and was included in depreciation and amortization within the condensed consolidated statements of operations.

Amortization of deferred financing costs that relate to our revolving credit facility was $ 0.5 million for both the three months ended March 31, 2020 and 2019 and was included in gross interest, prior to interest capitalization (see Note 8.

The following table sets forth the estimated annual amortization expense related to deferred costs and other intangibles, net as of March 31, 2020 for future periods (in thousands):

Amortization expense related to deferred leasing costs, the value of in-place leases, and database intangibles was $ 1.1 million and $ 2.4 million for the three months ended June 30, 2020 and 2019, respectively, and $ 2.1 million and $ 4.9 million for the six months ended June 30, 2020 and 2019, respectively, and was included in depreciation and amortization within the condensed consolidated statements of operations.

Amortization of deferred financing costs that relate to our revolving credit facility was $ 0.5 million for both the three months ended June 30, 2020 and 2019 and $ 1.0 million for both the six months ended June 30, 2020 and 2019 and was included in gross interest, prior to interest capitalization (see Note 8.

The following table sets forth the estimated annual amortization expense related to deferred costs and other intangibles, net as of June 30, 2020 for future periods (in thousands):

Leasing Costs Deferred

Financing Costs Database Intangible Asset Total

Financing Costs Total

Remaining 2020 $ 1,321 $ 991 $ 2,312

3 unchanged sentences

Notes Receivable, Net

The Company has obtained promissory notes in connection with two bulk dispositions of our single-family properties, which are secured by first priority mortgages on the disposed homes and contain certain covenants.

The secured promissory notes require monthly or quarterly interest payments with the full principal due at maturity.

The Company obtained promissory notes in connection with two bulk dispositions of our single-family properties.

The promissory notes are secured by first priority mortgages on the disposed homes, contain certain covenants and require monthly or quarterly interest payments with the full principal due at maturity.

Notes receivable are presented net of discounts, and interest income from the notes, including amortization of discounts, is presented in other revenues within the condensed consolidated statements of operations.

2 unchanged sentences

An allowance for expected credit losses of $ 1.5 million was established with a cumulative-effect adjustment to accumulated deficit in the condensed consolidated statements of equity.

Notes receivable are presented net of the allowance for expected credit losses, which the Company estimates on a quarterly basis based on (i) credit quality indicators such as the borrower’s historical performance, including the borrower’s financial results and satisfaction of scheduled payments, (ii) current conditions, including macroeconomic conditions and other conditions affecting the borrower, and (iii) other reasonable and supportable forecasts about the future.

As part of the monitoring process, we may meet with a borrower’s management to better understand such borrower’s

financial performance and its future plans on an as-needed basis.

including macroeconomic conditions and other conditions affecting the borrower, and (iii) other reasonable and supportable forecasts about the future.

As part of the monitoring process, we may meet with a borrower’s management to better understand such borrower’s financial performance and its future plans on an as-needed basis.

A note receivable will be categorized as non-performing if a borrower experiences financial difficulty and has failed to make scheduled payments.

1 unchanged sentence

Investments in Unconsolidated Joint Ventures

In February 2020, the Operating Partnership entered into a $ 253.1 million strategic joint venture with institutional investors advised by J.P.

Morgan Asset Management focused on constructing and operating newly built rental homes.

As of June 30, 2020, the Company held 20 % ownership interests in three unconsolidated joint ventures.

During the second quarter of 2014, the Company entered into a joint venture with the Alaska Permanent Fund Corporation (the “Alaska JV”) to invest in homes acquired through traditional acquisition channels and during the third quarter of 2018, the Company entered into a joint venture with another leading institutional investor (the “Institutional Investor JV”) to invest in newly constructed single-family rental homes.

In evaluating the Company’s 20 % ownership interests in these joint ventures, we concluded that the joint ventures are not VIEs after applying the variable interest model and, therefore, we account for our interests in the joint ventures as investments in unconsolidated subsidiaries after applying the voting interest model using the equity method of accounting.

During the first quarter of 2020, the Company entered into a $ 253.1 million strategic joint venture with institutional investors advised by J.P.

Morgan Asset Management (the “J.P.

Morgan JV”) focused on constructing and operating newly built rental homes, which was subsequently upsized to $ 625.0 million during the second quarter of 2020.

The Company holds a 20 % ownership interest in the joint venture, which has an evergreen term.

Additionally, the Company will earn fees for development and management services provided to the joint venture and have an opportunity to earn a promoted interest after construction and initial operation of the joint venture’s properties.

In evaluating the Company’s 20 % ownership interest in the joint venture, we concluded that the joint venture is not a variable interest entity after applying the variable interest model and, therefore, we account for our interest in the joint venture as an investment in an unconsolidated subsidiary after applying the voting interest model using the equity method of accounting.

Subsequent to March 31, 2020, as contemplated by the joint venture agreement, the parties entered into an amended agreement to increase the size of the partnership to $ 625.0 million while the other principal terms of the agreement remain the same.

The changes to the agreement do not impact the accounting treatment of the joint venture.

The Company provides property management and development services to certain unconsolidated joint ventures, which are considered to be related parties.

Management fee income from these joint ventures was $ 0.9 million and $ 0.7 million for the three months ended March 31, 2020 and 2019, respectively, which were included in other revenues within the condensed consolidated statements of operations.

In evaluating the Company’s 20 % ownership interest in the joint venture, we concluded that the Company does not have a controlling financial interest and, therefore, we account for our interest in the joint venture as an investment in an unconsolidated subsidiary using the equity method of accounting.

The following table summarizes our investments in unconsolidated joint ventures (in thousands, except percentages and property data):

Joint Venture Description % Ownership at June 30, 2020 Completed Homes at June 30, 2020 Balances at

June 30, 2020 Balances at

December 31, 2019

Alaska JV 20 % 380 $ 27,528 $ 29,326

Institutional Investor JV 20 % 542 39,712 33,757

Morgan JV 20 % 14 2,739 —

N/A N/A — 4,852

936 $ 69,979 $ 67,935

(1) Includes legacy joint ventures, which the Company acquired as part of the American Residential Properties, Inc.

merger in February 2016, that were liquidated during the first quarter of 2020.

The Company provides various services to these joint ventures, which are considered to be related parties, including property management and development services and has opportunities to earn promoted interests.

Management fee and development fee income from unconsolidated joint ventures was $ 1.3 million and $ 0.7 million for the three months ended June 30, 2020 and 2019, respectively, and $ 2.2 million and $ 1.4 million for the six months ended June 30, 2020 and 2019, respectively, and was included in other revenues within the condensed consolidated statements of operations.

All of the Company’s indebtedness is debt of the Operating Partnership.

AH4R is not directly obligated under any indebtedness, but guarantees some of the debt of the Operating Partnership.

The following table presents the Company’s debt as of March 31, 2020 and December 31, 2019 (in thousands):

The following table presents the Company’s debt as of June 30, 2020 and December 31, 2019 (in thousands):

Outstanding Principal Balance

Interest Rate (1)

Maturity Date March 31, 2020 December 31, 2019

Maturity Date June 30, 2020 December 31, 2019

AH4R 2014-SFR2 securitization 4.42 % October 9, 2024 $ 482,812 $ 485,828

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Total debt per balance sheet $ 2,954,929 $ 2,833,497

(1) Interest rates are as of March 31, 2020.

(1) Interest rates are as of June 30, 2020.

Unless otherwise stated, interest rates are fixed percentages.

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(4) The stated interest rate on the 2028 unsecured senior notes is 4.25 %, which was effectively hedged to yield an interest rate of 4.08 %.

(5) The revolving credit facility provides for a borrowing capacity of up to $ 800.0 million and the Company had approximately $ 3.7 million and $ 6.2 million committed to outstanding letters of credit that reduced our borrowing capacity as of March 31, 2020 and December 31, 2019, respectively.

The revolving credit facility bears interest at LIBOR plus 1.20 % as of March 31, 2020.

The revolving credit facility bears interest at LIBOR plus 1.20 % as of June 30, 2020.

LIBOR is expected to be discontinued after 2021 and the Company expects to replace the contractual reference rate with an appropriate alternative.

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(6) Deferred financing costs relate to our asset-backed securitizations and unsecured senior notes.

Amortization of deferred financing costs was $ 1.5 million for both the three months ended March 31, 2020 and 2019, which was included in gross interest, prior to interest capitalization.

Amortization of deferred financing costs was $ 1.5 million for both the three months ended June 30, 2020 and 2019 and $ 3.0 million for both the six months ended June 30, 2020 and 2019, respectively, which was included in gross interest, prior to interest capitalization.

Debt Maturities

The following table summarizes the contractual maturities of the Company’s principal debt balances on a fully extended basis as of March 31, 2020 (in thousands):

The following table summarizes the contractual maturities of the Company’s principal debt balances on a fully extended basis as of June 30, 2020 (in thousands):

Debt Maturities

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Interest Expense

The following table displays our (i) gross interest cost, which includes fees on our credit facilities and amortization of deferred financing costs and the discounts on unsecured senior notes, and (ii) capitalized interest for the three months ended March 31, 2020 and 2019 (in thousands):

For the Three Months Ended

March 31, 2020 March 31, 2019

The following table summarizes our (i) gross interest cost, which includes fees on our credit facilities and amortization of deferred financing costs and the discounts on unsecured senior notes, and (ii) capitalized interest for the three and six months ended June 30, 2020 and 2019 (in thousands):

For the Three Months Ended For the Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

Gross interest cost $ 34,630 $ 35,221 $ 68,994 $ 69,833

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Accounts Payable and Accrued Expenses

The following table summarizes accounts payable and accrued expenses as of March 31, 2020 and December 31, 2019 (in thousands):

March 31, 2020 December 31, 2019

Resident security deposits $ 85,561 $ 84,832

The following table summarizes accounts payable and accrued expenses as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Accrued property taxes $ 100,839 $ 44,280

Resident security deposits 88,147 84,832

Prepaid rent 23,310 19,970

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At-the-Market Common Share Offering Program

The Company established an at-the-market common share offering program under which we can issue Class A common shares from time to time through various sales agents up to an aggregate of $ 500.0 million (the “At-the-Market Program”).

The Company intends to use any net proceeds from the At-the-Market Program to repay borrowings under the Company’s revolving credit facility, to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy, and for working capital and general corporate purposes.

In June 2020, the Company extended its at-the-market common share offering program under which we can issue Class A common shares from time to time through various sales agents up to an aggregate gross sales offering price of $ 500.0 million (the “At-the-Market Program”).

The At-the-Market Program also provides that we may enter into forward contracts for our Class A common shares with forward sellers and forward purchasers.

The Company intends to use any net proceeds from the At-the-Market Program (i) to repay indebtedness the Company has incurred or expects to incur under its revolving credit facility, (ii) to develop new single-family properties and communities, (iii) to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy and (iv) for working capital and general corporate purposes, including repurchases of the Company’s securities, acquisitions of additional properties, capital expenditures and the expansion, redevelopment and/or improvement of properties in the Company’s portfolio.

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

As of March 31, 2020, no shares have been issued under the At-the-Market Program and $ 500.0 million remained available for future share issuances.

As of June 30, 2020, no shares have been issued under the At-the-Market Program and $ 500.0 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 three months ended March 31, 2020 and 2019, we did not repurchase and retire any of our shares.

As of March 31, 2020, 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, 2020 and 2019, we did not repurchase and retire any of our shares.

As of June 30, 2020, 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.

Preferred Shares

As of March 31, 2020 and December 31, 2019, the Company had the following series of preferred shares outstanding (in thousands, except share data):

March 31, 2020 December 31, 2019

As of June 30, 2020 and December 31, 2019, the Company had the following series of preferred shares outstanding (in thousands, except share data):

June 30, 2020 December 31, 2019

Series Issuance Date Earliest Redemption Date Dividend Rate Outstanding Shares Current Liquidation Value Outstanding Shares Current Liquidation Value

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For the Three Months Ended

Security March 31, 2020 March 31, 2019

Security June 30, 2020 March 31, 2020 June 30, 2019 March 31, 2019

Class A and Class B common shares $ 0.05 $ 0.05 $ 0.05 $ 0.05

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Noncontrolling interest as reflected in the Company’s condensed consolidated balance sheets primarily consists of the interests held by former American Homes 4 Rent, LLC (“AH LLC”) members in units in the Operating Partnership.

Former AH LLC members owned 51,429,990 , or approximately 14.6 %, of the total 352,977,664 and 352,769,654 Class A units in the Operating Partnership as of March 31, 2020 and December 31, 2019, respectively.

Former AH LLC members owned 51,429,990 , or approximately 14.6 %, of the total 353,174,998 and 352,769,654 Class A units in the Operating Partnership as of June 30, 2020 and December 31, 2019, respectively.

Noncontrolling interest also includes interests held by non-affiliates in Class A units in the Operating Partnership.

Non-affiliate Class A unitholders owned 596,990 , or approximately 0.2 %, of the total 352,977,664 and 352,769,654 Class A units in the Operating Partnership as of March 31, 2020 and December 31, 2019, respectively.

The Operating Partnership units owned by former AH LLC members and non-affiliates that are reflected as noncontrolling interest in the Company’s condensed consolidated balance sheets are reflected as limited partner capital in the Operating Partnership’s condensed consolidated balance sheets.

Non-affiliate Class A unitholders owned 596,990 , or approximately 0.2 %, of the total 353,174,998 and 352,769,654 Class A units in the Operating Partnership as of June 30, 2020 and December 31, 2019, respectively.

The Operating Partnership units owned by former AH LLC members and non-affiliates reflected as noncontrolling interest in the Company’s condensed consolidated balance sheets are reflected as limited partner capital in the Operating Partnership’s condensed consolidated balance sheets.

Share-Based Compensation

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When the Company issues Class A common shares under the 2012 Equity Incentive Plan (the “Plan”), the Operating Partnership issues an equivalent number of Class A units to AH4R and non-management members of our board of trustees.

Restricted stock units (“RSU”) granted to employees during the three months ended March 31, 2020 vest over a three -year service period, and stock options and RSUs granted to employees during the three months ended March 31, 2019 vest over a four -year service period.

Restricted stock units (“RSUs”) granted to employees during the six months ended June 30, 2020 vest over a three-year service period, and stock options and RSUs granted to employees during the six months ended June 30, 2019 vest over a four-year service period.

RSUs granted to non-management trustees vest over a one-year service period.

Stock options granted during the three months ended March 31, 2019 expire 10 years from the date of grant.

The following table summarizes stock option activity under the Plan for the three months ended March 31, 2020 and 2019:

For the Three Months Ended

March 31, 2020 March 31, 2019

Stock options granted during the six months ended June 30, 2019 expire 10 years from the date of grant.

The following table summarizes stock option activity under the Plan for the six months ended June 30, 2020 and 2019:

For the Six Months Ended

June 30, 2020 June 30, 2019

Options outstanding at beginning of period 1,529,800 2,252,275

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Options exercisable at end of period 1,124,800 1,240,400

The following table summarizes RSU activity under the Plan for the three months ended March 31, 2020 and 2019:

For the Three Months Ended

March 31, 2020 March 31, 2019

The following table summarizes RSU activity under the Plan for the six months ended June 30, 2020 and 2019:

For the Six Months Ended

June 30, 2020 June 30, 2019

RSUs outstanding at beginning of period 599,109 372,375

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RSUs outstanding at end of period 813,796 596,109

The Company’s noncash share-based compensation expense relating to corporate administrative employees is included in general and administrative expense and the noncash share-based compensation relating to centralized and field property management employees is included in property management expenses.

The following table summarizes the activity that relates to the Company’s noncash share-based compensation expense for the three months ended March 31, 2020 and 2019 (in thousands):

For the Three Months Ended

March 31, 2020 March 31, 2019

The Company’s noncash share-based compensation expense relating to corporate administrative employees is included in general and administrative expense and the noncash share-based compensation expense relating to centralized and field property management employees is included in property management expenses.

The following table summarizes the activity that relates to the Company’s noncash share-based compensation expense for the three and six months ended June 30, 2020 and 2019 (in thousands):

For the Three Months Ended For the Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

General and administrative expense $ 1,649 $ 923 $ 3,018 $ 1,582

3 unchanged sentences

American Homes 4 Rent

The following table reflects the Company’s computation of net income per common share on a basic and diluted basis for the three months ended March 31, 2020 and 2019 (in thousands, except share and per share data):

For the Three Months Ended

March 31, 2020 March 31, 2019

The following table reflects the Company’s computation of net income per common share on a basic and diluted basis for the three and six months ended June 30, 2020 and 2019 (in thousands, except share and per share data):

For the Three Months Ended For the Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

Net income $ 31,807 $ 40,304 $ 69,334 $ 73,395

18 unchanged sentences

American Homes 4 Rent, L.P.

The following table reflects the Operating Partnership’s computation of net income per common unit on a basic and diluted basis for the three months ended March 31, 2020 and 2019 (in thousands, except unit and per unit data):

For the Three Months Ended

March 31, 2020 March 31, 2019

The following table reflects the Operating Partnership’s computation of net income per common unit on a basic and diluted basis for the three and six months ended June 30, 2020 and 2019 (in thousands, except unit and per unit data):

For the Three Months Ended For the Six Months Ended

June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019

Net income $ 31,807 $ 40,304 $ 69,334 $ 73,395

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The carrying amount of rents and other receivables, restricted cash, escrow deposits, prepaid expenses and other assets, and accounts payable and accrued expenses approximate fair value because of the short maturity of these amounts.

Our notes receivable are financial instruments classified as Level 3 in the fair value hierarchy as their fair values were estimated using unobservable inputs.

We estimated the fair values of the notes receivable by modeling the expected contractual cash flows required under the instruments and discounting them back to their present values using estimates of current market rates.

As the estimated current market rates were not substantially different from the discount rates originally applied, the carrying amount of notes receivable, net approximates fair value.

Our asset-backed securitizations and revolving credit facility are financial instruments classified as Level 3 in the fair value hierarchy as their fair values were estimated using unobservable inputs.

2 unchanged sentences

Debt), management believes that the carrying value (excluding deferred financing costs) of the revolving credit facility reasonably approximates fair value.

Our unsecured senior notes are also financial instruments which are classified as Level 2 in the fair value hierarchy as their fair values were estimated using observable inputs based on the market value of the last trade at the end of the period.

The following table displays the carrying values and fair values of our debt instruments as of March 31, 2020 and December 31, 2019 (in thousands):

March 31, 2020 December 31, 2019

Our unsecured senior notes are financial instruments classified as Level 2 in the fair value hierarchy as their fair values were estimated using observable inputs based on the market value of the last trade at the end of the period.

The following table displays the carrying values and fair values of our debt instruments as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

Carrying Value Fair Value Carrying Value Fair Value

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Related Party Transactions

As of March 31, 2020 and December 31, 2019, affiliates owned approximately 14.9 % and 13.6 %, respectively, of the Company’s outstanding Class A common shares.

On a fully-diluted basis, affiliates held (including consideration of 635,075 Class B common shares and 51,272,165 Class A units as of March 31, 2020 and December 31, 2019) an approximate 27.4 % and 26.3 % interest as of March 31, 2020 and December 31, 2019, respectively.

As of June 30, 2020 and December 31, 2019, affiliates owned approximately 14.9 % and 13.6 %, respectively, of the Company’s outstanding Class A common shares.

On a fully-diluted basis, affiliates held (including consideration of 635,075 Class B common shares and 51,272,165 Class A units as of June 30, 2020 and December 31, 2019) an approximate 27.4 % and 26.3 % interest as of June 30, 2020 and December 31, 2019, respectively.

American Homes 4 Rent

As of March 31, 2020, the Company had $ 8.5 million of receivables related to unconsolidated joint ventures, which were included in escrow deposits, prepaid expenses and other assets on the Company’s condensed consolidated balance sheets.

As of December 31, 2019, the Company had a $ 4.6 million payable related to accrued common distributions to affiliates, which was included in amounts payable to affiliates on the Company’s condensed consolidated balance sheets.

American Homes 4 Rent, L.P.

As of March 31, 2020, the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AH4R, which was included in amounts due from affiliates on the Operating Partnership’s condensed consolidated balance sheets, and $ 8.5 million of receivables related to unconsolidated joint ventures, which were included in escrow deposits, prepaid expenses and other assets on the Operating Partnership’s condensed consolidated balance sheets.

As of June 30, 2020, the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AH4R, which was included in amounts due from affiliates on the Operating Partnership’s condensed consolidated balance sheets.

As of December 31, 2019, the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AH4R, which was included in amounts due from affiliates on the Operating Partnership’s condensed consolidated balance sheets, and had a $ 4.6 million payable related to accrued common distributions to affiliates, which was included in amounts payable to affiliates on the Operating Partnership’s condensed consolidated balance sheets.

Commitments and Contingencies

As of March 31, 2020, the Company had commitments to acquire 258 single-family properties for an aggregate purchase price of $ 71.3 million, as well as $ 38.8 million in purchase commitments that relate to both third-party developer agreements and land for our AMH Development Program.

As of June 30, 2020, the Company had commitments to acquire 72 single-family properties for an aggregate purchase price of $ 20.8 million, as well as $ 55.6 million in purchase commitments that relate to both third-party developer agreements and land for our AMH Development Program.

As of December 31, 2019, the Company had commitments to acquire 289 single-family properties for an aggregate purchase price of $ 75.1 million, as well as $ 44.3 million in purchase commitments that relate to both third-party developer agreements and land for our AMH Development Program.

As of March 31, 2020 and December 31, 2019, the Company had sales in escrow for approximately 109 and 305 of our single-family properties, respectively, for aggregate selling prices of $ 25.9 million and $ 57.5 million, respectively.

As of March 31, 2020 and December 31, 2019, the Company, as a condition for entering into some of its development contracts, had outstanding surety bonds of approximately $ 23.4 million and $ 14.5 million, respectively.

As of June 30, 2020 and December 31, 2019, the Company had sales in escrow for approximately 112 and 305 of our single-family properties, respectively, for aggregate selling prices of $ 28.4 million and $ 57.5 million, respectively.

As of June 30, 2020 and December 31, 2019, the Company, as a condition for entering into some of its development contracts, had outstanding surety bonds of approximately $ 34.0 million and $ 14.5 million, respectively.

We are involved in various legal and administrative proceedings that are incidental to our business.

We believe these matters will not have a materially adverse effect on our financial position or results of operations upon resolution.

Subsequent Events

COVID-19 Pandemic

Subsequent to March 31, 2020, the global economy has continued to be severely impacted by the COVID-19 pandemic.

We are actively monitoring the impact of the COVID-19 pandemic, which we anticipate will negatively impact our business and results of operations for our second fiscal quarter and likely beyond.

The global economy has continued to be severely impacted by the COVID-19 pandemic.

We are actively monitoring the impact of the COVID-19 pandemic, which we anticipate will negatively impact our business and results of operations for our third fiscal quarter and likely beyond.

The extent to which our operations will be impacted will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the pandemic and actions by government authorities to contain the pandemic or treat its impact, among other things.

Subsequent Events

Revolving Credit Facility

From July 1, 2020 through July 31, 2020, the Company paid down $ 25.0 million under its revolving credit facility, resulting in $ 105.0 million of outstanding borrowings under its revolving credit facility as of July 31, 2020.

Subsequent Acquisitions

From April 1, 2020 through April 30, 2020, the Company added 158 properties to its portfolio for a total cost of approximately $ 39.2 million, which included 143 homes developed through our new construction channel.

From July 1, 2020 through July 31, 2020, the Company added 157 properties to its portfolio for a total cost of approximately $ 38.8 million, which included 128 newly constructed properties delivered through our AMH Development Program and 29 newly constructed homes acquired from third-party developers through our National Builder Program.

Subsequent Dispositions

From April 1, 2020 through April 30, 2020, the Company disposed of 60 properties for aggregate net proceeds of approximately $ 13.8 million.

From July 1, 2020 through July 31, 2020, the Company disposed of 91 properties for aggregate net proceeds of approximately $ 20.1 million.

Subsequent Joint Venture Activity

From July 1, 2020 through July 31, 2020, the Company contributed $ 57.8 million of land and in-process development projects to unconsolidated joint ventures and received $ 46.2 million in cash distributions from unconsolidated joint ventures in respect of its contributions.

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 1. Financial Statements