What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2020-08-07 compared with 2020-05-08 · 233 added, 94 removed, 359 unchanged (48% of the section changed)

4 unchanged sentences

We commenced operations in November 2012.

As of March 31, 2020, we owned 52,776 single-family properties in selected sub-markets of metropolitan statistical areas, or MSAs, in 22 states, including 960 properties held for sale, compared to 52,552 single-family properties in 22 states, including 1,187 properties held for sale, as of December 31, 2019, and 52,923 single-family properties in 22 states, including 1,793 properties held for sale as of March 31, 2019.

As of March 31, 2020, we had commitments to acquire an additional 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 March 31, 2020, 49,029, or 94.6%, of our total properties (excluding properties held for sale) were occupied, compared to 48,767, or 94.9%, of our total properties (excluding properties held for sale) as of December 31, 2019, and 48,867, or 95.6%, of our total properties (excluding properties held for sale) as of March 31, 2019.

Also, as of March 31, 2020, the Company had an additional 876 properties held in unconsolidated joint ventures, representing a net increase of 68 properties, compared to 808 properties held in unconsolidated joint ventures as of December 31, 2019, and a net increase of 258 properties, compared to 618 properties held in unconsolidated joint ventures as of March 31, 2019.

As of June 30, 2020, we owned 53,000 single-family properties in selected sub-markets of metropolitan statistical areas (“MSAs”) in 22 states, including 948 properties held for sale, compared to 52,552 single-family properties in 22 states, including 1,187 properties held for sale, as of December 31, 2019, and 52,634 single-family properties in 22 states, including 1,664 properties held for sale as of June 30, 2019.

As of June 30, 2020, we had commitments to acquire an additional 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 June 30, 2020, 50,170, or 96.4%, of our total properties (excluding properties held for sale) were occupied, compared to 48,767, or 94.9%, of our total properties (excluding properties held for sale) as of December 31, 2019, and 49,111, or 96.4%, of our total properties (excluding properties held for sale) as of June 30, 2019.

Also, as of June 30, 2020, the Company had an additional 936 properties held in unconsolidated joint ventures, compared to 808 properties held in unconsolidated joint ventures as of December 31, 2019, and 659 properties held in unconsolidated joint ventures as of June 30, 2019.

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

COVID-19 Business Update

Since the COVID-19 pandemic began towards the end of the first quarter, the Company has been able to maintain continuity in business operations through the use of its mobile technology enabled operating platform as it prioritizes the health and safety of its residents and employees.

The Company has implemented comprehensive remote working policies for all corporate and field offices, and additional safety measures for field staff to ensure continuity of services, while protecting employees, residents and their families.

The Company has waived late fees and halted evictions for nonpayment of rent for the months of April and May 2020 and is experiencing lower levels of resident move-outs with an April 2020 Same-Home portfolio monthly turnover rate of 3.0%, which compares to 3.2% in April 2019.

The Company has also offered zero percent increases on renewal leases signed in April and May.

New leasing activity continues without interruption, as the Company’s proprietary Let Yourself In℠ technology provides full functionality for prospective residents to tour homes, submit applications and execute leases while following social distancing guidelines, resulting in an April 2020 Same-Home portfolio Average Occupied Days Percentage of approximately 95.1%.

Additionally, the Company collected 95% of April rents and collected 82% of May rents through May 5, 2020, which represents approximately 94% of rent typically collected during the first five calendar days of the month.

Our reported collections numbers reflect actual cash payments received, without application of security deposits, compared to our historic collection levels.

As previously announced, the Company is continuing its temporary suspension of traditional acquisition channel and National Builder Program acquisitions.

However, where in compliance with state and local mandates, the Company is continuing construction activity on its pipeline of internally developed built-for-rental homes.

The extent to which the COVID-19 pandemic will ultimately impact us and our residents will depend on future developments which are highly uncertain.

These include the scope, severity and duration of the pandemic and the direct and indirect economic effects of the pandemic and containment measures, among others.

The Company has maintained continuity in business operations since the beginning of the COVID-19 pandemic and produced strong operating results in the second quarter of 2020 demonstrating the flexibility of its technology enabled operating platform and the resiliency of its high-quality, diversified portfolio.

Comprehensive remote working policies remain in place for all corporate and field offices, and operational protocols have been tailored based on state and local mandates to ensure continuity of services, while protecting employees, residents and their families.

Additionally, during the second quarter of 2020, the Company waived late fees and month-to-month lease premiums, halted evictions for nonpayment of rent, and offered zero percent increases on newly signed renewals for leases expiring between April and July 2020.

Driven by shifting housing preferences as households migrate away from city centers and apartments, the Company is experiencing record demand levels and reported its highest ever Same-Home portfolio Average Occupied Days Percentages in June and July 2020 of 96.1% and 96.4%, respectively.

Additionally, as the Company entered the third quarter of 2020, it began a socially responsible return to normal operating practices, including the assessment of late fees, in jurisdictions where allowable, and modest renewal increases on expiring leases.

Collections continue to remain resilient with the Company recognizing revenue on 96.5% of its second quarter 2020 rental billings, all of which has been collected in cash through July 2020 without application of any existing resident security deposits or adjustment for deferred payment plans.

As further second quarter 2020 collections are received, the associated revenue will be recognized in the applicable future period.

As we pursue additional collections, we are working closely with delinquent residents on a case-by-case basis to find the resolution that is best for the resident and the Company.

Although minimal to date, workout options may include deferred payment plans which we began offering in June, or, where appropriate, early lease termination.

For the month of July, collections are tracking in line with the second quarter of 2020 as the Company collected 92% of July rents during July 2020, which represents over 99% of second quarter 2020 payment history for the same time frame.

Although the Company has produced strong operating results to date during the COVID-19 pandemic, the extent to which the pandemic will ultimately impact us and our residents will depend on future developments which are highly uncertain.

These include the scope, severity and duration of the pandemic, including potential resurgences, and the direct and indirect economic effects of the pandemic and containment measures, among others.

For more information on risks related to COVID-19, see Part II, “Item 1A.

1 unchanged sentence

Key Single-Family Property and Leasing Metrics

The following table summarizes certain key single-family properties metrics as of March 31, 2020:

The following table summarizes certain key single-family properties metrics as of June 30, 2020:

Market Number of Single-Family Properties (1)

2 unchanged sentences

Property Age (years) Avg.

Purchased or Delivered

Atlanta, GA 4,869 9.4 % $ 887.7 9.1 % $ 182,316 2,162 17.3 2015

22 unchanged sentences

Total/Average 52,052 100.0 % $ 9,699.6 100.0 % $ 186,342 1,987 16.2 2014

(1) Excludes 960 single-family properties held for sale as of March 31, 2020.

(1) Excludes 948 single-family properties held for sale as of June 30, 2020.

(2) Represents 15 markets in 14 states.

The following table summarizes certain key leasing metrics as of March 31, 2020:

The following table summarizes certain key leasing metrics as of June 30, 2020:

Total Single-Family Properties (1)

28 unchanged sentences

Total/Average 95.1 % $ 1,680 12.1 6.8 2.4 %

(1) Leasing information excludes 960 single-family properties held for sale as of March 31, 2020.

(2) For the three months ended March 31, 2020, 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.

(3) For the three months ended March 31, 2020, 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) Leasing information excludes 948 single-family properties held for sale as of June 30, 2020.

(2) For the three months ended June 30, 2020, 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.

(3) For the three months ended June 30, 2020, 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, 2020, compared to the annual rent of the previously expired non-month-to-month lease for each property.

(5) Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the three months ended June 30, 2020, 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 14 states.

12 unchanged sentences

Our level of investment activity has fluctuated based on the number of suitable opportunities and the level of capital available to invest.

During the three months ended March 31, 2020, we acquired or developed 656 homes, including 401 newly constructed properties delivered through our AMH Development and National Builder Programs and 255 homes acquired through traditional acquisition channels, partially offset by 410 homes sold and 22 homes contributed to an unconsolidated joint venture.

Although we are currently continuing construction activity on our existing pipeline of internally developed built-for-rental homes, subject to compliance with state and local mandates related to COVID-19, given market uncertainties regarding future asset values, we have temporarily suspended our traditional acquisition channel and National Builder acquisition programs.

During the three months ended June 30, 2020, we developed or acquired 440 homes, including 327 newly constructed properties delivered through our AMH Development Program and 113 homes acquired through our National Builder Program and traditional acquisition channel, partially offset by 216 homes sold.

Although we are currently continuing construction activity on our existing pipeline of internally developed built-for-rental homes, subject to compliance with state and local mandates related to COVID-19, given market uncertainties regarding future asset values, we have temporarily suspended our acquisitions through traditional channels and the National Builder Program.

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

As of March 31, 2020 and December 31, 2019, there were 960 and 1,187 properties, respectively, classified as held for sale.

As of June 30, 2020 and December 31, 2019, there were 948 and 1,187 properties, respectively, classified as held for sale.

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

1 unchanged sentence

Homes added to our portfolio through new construction channels include properties developed through our internal AMH Development Program and newly constructed properties acquired from third-party developers through our National Builder Program.

Rental homes developed through these channels involve substantial up-front costs, time to acquire and develop land, time to build the rental home, and time to lease the rental home before the home generates income.

Rental homes developed through our AMH Development Program involve substantial up-front costs, time to acquire and develop land, time to build the rental home, and time to lease the rental home before the home generates income.

This process is dependent upon the nature of each lot acquired and the timeline varies primarily due to land development requirements.

2 unchanged sentences

We typically incur costs between $200,000 and $350,000 to acquire and develop land and build a rental home.

Homes added from our new construction channels are available for lease immediately upon or shortly after receipt of a certificate of occupancy.

Homes added through our AMH Development Program are available for lease immediately upon or shortly after receipt of a certificate of occupancy.

Rental homes acquired from third-party developers through our National Builder Program are dependent on the inventory of newly constructed homes and homes currently under construction.

Homes added to our portfolio through traditional acquisition channels require expenditures in addition to payment of the purchase price, including property inspections, closing costs, liens, title insurance, transfer taxes, recording fees, broker commissions, property taxes and homeowner association (“HOA”) fees, when applicable.

14 unchanged sentences

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 3.6% for the three months ended March 31, 2020, and turnover rates remained flat at 8.0% for both the three months ended March 31, 2020 and 2019.

However, in response to the COVID-19 pandemic, we are offering zero percent increases on renewal leases signed in April and May.

Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 3.1% for the three months ended June 30, 2020, and we experienced turnover rates of 9.3% and 10.9% during the three months ended June 30, 2020 and 2019, respectively.

Based on our Same-Home population of properties, the year-over-year increase in Average Monthly Realized Rent per property was 3.3% for the six months ended June 30, 2020, and we experienced turnover rates of 17.2% and 18.9% during the six months ended June 30, 2020 and 2019, respectively.

In response to the COVID-19 pandemic, we offered zero percent increases on newly signed renewals for leases expiring during the three months ended June 30, 2020.

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

15 unchanged sentences

Results of Operations

Net income totaled $37.5 million for the three months ended March 31, 2020, compared to net income of $33.1 million for the three months ended March 31, 2019.

This improvement was primarily attributable to higher revenues resulting from a larger number of occupied properties and higher rental rates, which were offset in part by higher property management expenses, higher general and administrative expense and a noncash write-down included in other expenses associated with the liquidation of legacy joint ventures, which were acquired as part of the American Residential Properties, Inc.

(“ARPI”) merger in February 2016, as well as an increase in gain on sale of single-family properties and other, net.

Net income totaled $31.8 million for the three months ended June 30, 2020, compared to net income of $40.3 million for the three months ended June 30, 2019.

This decrease was primarily attributable to increased uncollectible rents and tenant utility reimbursements related to the COVID-19 pandemic, as well as higher property operating expenses and a reduction in gain on sale of single-family properties and other, net.

Net income totaled $69.3 million for the six months ended June 30, 2020, compared to net income of $73.4 million for the six months ended June 30, 2019.

This decrease was primarily attributable to increased uncollectible rents and tenant utility reimbursements related to the COVID-19 pandemic, as well as higher property operating expenses and a noncash write-down included in other expenses associated with the liquidation of legacy joint ventures, which were acquired as part of the American Residential Properties, Inc.

(“ARPI”) merger in February 2016.

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.

We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the earliest period presented under comparison and if it has not been classified as held for sale or taken out of service as a result of a casualty loss, which allows the performance of these properties to be compared between periods.

We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the

earliest period presented under comparison and if it has not been classified as held for sale or taken out of service as a result of a casualty loss, which allows the performance of these properties to be compared between periods.

Single-family properties that we acquire individually (i.e., not through a bulk purchase) are classified as either stabilized or non-stabilized.

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.

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

5 unchanged sentences

Core NOI and Same-Home Core NOI should be considered only as supplements to net income or loss as a measure of our performance and should not be used as measures of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.

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 GAAP).

Comparison of the Three Months Ended March 31, 2020 to the Three Months Ended March 31, 2019

The following table presents 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, 2020 and 2019 (in thousands):

For the Three Months Ended March 31, 2020

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 June 30, 2020 to the Three Months Ended June 30, 2019

The following table presents 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, 2020 and 2019 (in thousands):

For the Three Months Ended June 30, 2020

Properties (1)

5 unchanged sentences

Rents from single-family properties (2)

$ 216,995 $ 33,769 $ 250,764

Fees from single-family properties (2)

Bad debt (1,586) (429) (2,015)

2,627 684 3,311

(7,590) (1,225) (8,815)

Core revenues 212,032 33,228 245,260

9 unchanged sentences

Core NOI $ 130,361 61.5 % $ 18,073 54.4 % $ 148,434 60.5 %

For the Three Months Ended March 31, 2019

For the Three Months Ended June 30, 2019

Properties (1)

19 unchanged sentences

(1) Includes 45,075 properties that have been stabilized longer than 90 days prior to January 1, 2019.

(2) As a result of the COVID-19 pandemic, rents from single-family properties were impacted by the Company’s socially responsible decisions to waive month-to-month lease premiums and offer zero percent increases on newly signed renewals for leases expiring throughout the second quarter of 2020.

Fees from single-family properties were also impacted as the Company waived late fees throughout the second quarter of 2020.

(3) Includes $7.0 million and $6.0 million for the total portfolio and Same-Home portfolio, respectively, of increased uncollectible rents related to the COVID-19 pandemic for the second quarter of 2020.

(4) Presented net of tenant charge-backs.

(5) Includes $1.9 million and $1.8 million for the total portfolio and Same-Home portfolio, respectively, of increased uncollectible tenant utility reimbursements and $0.5 million and $0.4 million, respectively, of increased costs associated with enhanced cleaning and safety protocols related to the COVID-19 pandemic for the second quarter of 2020.

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

The following are reconciliations of core revenues, Same-Home core revenues, core property operating expenses, Same-Home core property operating expenses, Core NOI, and Same-Home Core NOI to their respective GAAP metrics for the three months ended March 31, 2020 and 2019 (amounts in thousands):

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 June 30, 2020 and 2019 (amounts in thousands):

For the Three Months Ended

(Unaudited) (Unaudited)

Core revenues and Same-Home core revenues

15 unchanged sentences

Net income $ 31,807 $ 40,304

Loss on early extinguishment of debt — 659

Gain on sale of single-family properties and other, net (10,651) (13,725)

10 unchanged sentences

Total Revenues

Total revenues increased 3.7% to $289.6 million for the three months ended March 31, 2020 from $279.2 million for the three months ended March 31, 2019.

Revenue growth was primarily driven by continued strong leasing activity, as our average occupied portfolio grew to 48,898 homes for the three months ended March 31, 2020, compared to 48,345 homes for the three months ended March 31, 2019, as well as higher rental rates.

Total revenues increased 0.4% to $283.1 million for the three months ended June 30, 2020 from $281.9 million for the three months ended June 30, 2019.

Revenue growth was driven by an increase in our average occupied portfolio which grew to 49,600 homes for the three months ended June 30, 2020, compared to 48,989 homes for the three months ended June 30, 2019, as well as higher rental rates, offset by an increase in uncollectible rents and tenant utility reimbursements related to the COVID-19 pandemic.

Property Operating Expenses

Property operating expenses increased 0.8% to $107.5 million for the three months ended March 31, 2020 from $106.7 million for the three months ended March 31, 2019.

This increase was primarily attributable to higher property tax expense related to growth in the number of homes in our portfolio and the timing of valuation increases, partially offset by lower HOA fees, net of tenant chargebacks.

Property operating expenses increased 5.6% to $110.4 million for the three months ended June 30, 2020 from $104.6 million for the three months ended June 30, 2019.

This increase was primarily attributable to higher property tax expense and higher repairs and maintenance and turnover costs.

Property Management Expenses

Property management expenses for the three months ended March 31, 2020 and 2019 were $23.3 million and $20.7 million, respectively, which included $0.4 million and $0.3 million, respectively, of noncash share-based compensation expense related to centralized and field property management employees.

The increase in property management expense was primarily attributable to higher personnel costs.

Property management expenses for the three months ended June 30, 2020 and 2019 were $22.3 million and $21.7 million, respectively, which included $0.4 million and $0.3 million, respectively, of noncash share-based compensation expense related to

centralized and field property management employees.

The increase in property management expenses was primarily attributable to higher personnel costs.

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties increased 3.9% to $217.2 million for the three months ended March 31, 2020 from $209.0 million for the three months ended March 31, 2019.

This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 3.6% to $1,664 per month for the three months ended March 31, 2020 compared to $1,606 per month for the three months ended March 31, 2019, as well as higher fees from single-family properties resulting from operational enhancements to our fee structure.

Core revenues from Same-Home properties were $212.0 million for both the three months ended June 30, 2020 and 2019, primarily driven by a 3.1% increase in Average Monthly Realized Rent per property, which increased to $1,678 per month for the three months ended June 30, 2020 compared to $1,627 per month for the three months ended June 30, 2019, offset by an increase in uncollectible rents related to the COVID-19 pandemic.

Additionally, during the three months ended June 30, 2020, core revenues from Same-Home properties were impacted by (i) the Company’s socially responsible decisions to waive month-to-month lease premiums and offer zero percent increases on newly signed renewals for leases expiring throughout the quarter and (ii) waived late fees throughout the quarter.

Core Property Operating Expenses from Same-Home Properties

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

Core property operating expenses from Same-Home properties increased 4.0% to $76.9 million for the three months ended March 31, 2020 from $73.9 million for the three months ended March 31, 2019.

Same-Home core property operating expenses as a percentage of Same-Home core revenues remained flat at 35.4% for the three months ended March 31, 2020 and 2019.

The increase in Same-Home core property operating expenses was driven by higher property tax expense related to the timing of valuation increases as well as higher property management expenses, net of tenant charge-backs and excluding noncash share-based compensation expense.

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

Core property operating expenses from Same-Home properties increased 6.1% to $81.7 million for the three months ended June 30, 2020 from $77.0 million for the three months ended June 30, 2019, primarily driven by $2.2 million of incremental costs incurred during the three months ended June 30, 2020 related to the COVID-19 pandemic including enhanced cleaning costs and increased uncollectible tenant utility reimbursements.

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, 2020 and 2019 was $11.3 million and $9.4 million, respectively, which included $1.4 million and $0.7 million, respectively, of noncash share-based compensation expense related to corporate administrative employees.

The increase in general and administrative expense was primarily related to higher personnel costs.

General and administrative expense for the three months ended June 30, 2020 and 2019 was $11.5 million and $10.5 million, respectively, which included $1.6 million and $0.9 million, respectively, of noncash share-based compensation expense related to corporate administrative employees.

The increase in general and administrative expense was primarily related to higher noncash share-based compensation expense as well as an increase in state taxes and professional fees.

Interest Expense

Interest expense decreased 6.9% to $29.7 million for the three months ended March 31, 2020 from $31.9 million for the three months ended March 31, 2019.

This decrease was primarily related to additional capitalized interest during the three months ended March 31, 2020 and the payoff of the term loan facility in June 2019, partially offset by the unsecured senior notes issued in late January 2019.

Interest expense decreased 9.3% to $29.6 million for the three months ended June 30, 2020 from $32.6 million for the three months ended June 30, 2019.

This decrease was primarily related to additional capitalized interest during the three months ended June 30, 2020 and the payoff of the term loan facility in June 2019, partially offset by draws on our revolving credit facility during the first six months of 2020.

Acquisition and Other Transaction Costs

Acquisition and other transaction costs were $2.1 million and $0.8 million for the three months ended March 31, 2020 and 2019, respectively, which primarily related to costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, as well as costs associated with the disposal of certain properties or portfolios of properties.

The growth in our acquisition program was the primary driver for the year-over-year increase.

Acquisition and other transaction costs were $2.0 million and $1.0 million for the three months ended June 30, 2020 and 2019, respectively, which primarily related to costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, as well as costs associated with the disposal of certain properties or portfolios of properties.

The planned growth in our acquisition program, including an increase in personnel, was the primary driver for the year-over-year increase.

Depreciation and Amortization

2 unchanged sentences

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

Depreciation and amortization expense increased 2.0% to $82.8 million for the three months ended March 31, 2020 from $81.2 million for the three months ended March 31, 2019 primarily due to growth in our average number of depreciable properties.

Depreciation and amortization expense increased 2.4% to $84.8 million for the three months ended June 30, 2020 from $82.8 million for the three months ended June 30, 2019 primarily due to growth in our average number of depreciable properties.

Other Revenues

Other revenues were $2.3 million and $1.5 million for the three months ended March 31, 2020 and 2019, respectively, which primarily related to interest income, fees from unconsolidated joint ventures, and equity in earnings from unconsolidated joint ventures.

Other revenues were $2.4 million and $1.9 million for the three months ended June 30, 2020 and 2019, respectively, which primarily related to interest income, fees from unconsolidated joint ventures, and equity in earnings from unconsolidated joint ventures.

Other Expenses

Other expenses were $6.1 million and $1.0 million for the three months ended March 31, 2020 and 2019, respectively, which primarily related to impairments on properties held for sale and expenses related to joint ventures.

Also included in other expenses for the three months ended March 31, 2020 was a $4.9 million noncash write-down associated with the liquidation of legacy joint ventures, which were acquired as part of the ARPI merger in February 2016.

Other expenses were $1.4 million and $1.5 million for the three months ended June 30, 2020 and 2019, respectively, which primarily related to impairments on properties held for sale and expenses related to joint ventures.

Comparison of the Six Months Ended June 30, 2020 to the Six Months Ended June 30, 2019

The following table presents 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, 2020 and 2019 (in thousands):

For the Six Months Ended June 30, 2020

Properties (1)

Revenue Non-Same-

Home and Other

Properties % of Core

Revenue Total

Properties % of Core

Rents from single-family properties (2)

$ 431,565 $ 64,529 $ 496,094

Fees from single-family properties (2)

5,986 1,339 7,325

(9,150) (1,680) (10,830)

Core revenues 428,401 64,188 492,589

Property tax expense 77,046 18.0 % 13,071 20.4 % 90,117 18.3 %

HOA fees, net (4)

7,874 1.8 % 1,625 2.5 % 9,499 1.9 %

R&M and turnover costs, net (4)(5)

33,792 7.9 % 6,329 9.8 % 40,121 8.1 %

Insurance 3,975 0.9 % 758 1.2 % 4,733 1.0 %

Property management expenses, net (6)

35,554 8.3 % 7,123 11.1 % 42,677 8.7 %

Core property operating expenses 158,241 36.9 % 28,906 45.0 % 187,147 38.0 %

Core NOI $ 270,160 63.1 % $ 35,282 55.0 % $ 305,442 62.0 %

For the Six Months Ended June 30, 2019

Properties (1)

Revenue Non-Same-

Home and Other

Properties % of Core

Revenue Total

Properties % of Core

Rents from single-family properties $ 417,688 $ 61,667 $ 479,355

Fees from single-family properties 5,407 1,099 6,506

Bad debt (2,967) (541) (3,508)

Core revenues 420,128 62,225 482,353

Property tax expense 72,657 17.3 % 13,187 21.2 % 85,844 17.8 %

HOA fees, net (4)

9,641 2.3 % 1,697 2.7 % 11,338 2.3 %

R&M and turnover costs, net (4)

31,063 7.4 % 5,902 9.5 % 36,965 7.7 %

Insurance 3,783 0.9 % 682 1.1 % 4,465 0.9 %

Property management expenses, net (6)

33,492 8.0 % 5,636 9.1 % 39,128 8.1 %

Core property operating expenses 150,636 35.9 % 27,104 43.6 % 177,740 36.8 %

Core NOI $ 269,492 64.1 % $ 35,121 56.4 % $ 304,613 63.2 %

(1) Includes 45,075 properties that have been stabilized longer than 90 days prior to January 1, 2019.

Fees from single-family properties were also impacted as the Company waived late fees throughout the second quarter of 2020.

(4) Presented net of tenant charge-backs.

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

The following are reconciliations of core revenues, Same-Home core revenues, core property operating expenses, Same-Home core property operating expenses, Core NOI and Same-Home Core NOI to their respective GAAP metrics for the six months ended June 30, 2020 and 2019 (amounts in thousands):

For the Six Months Ended

Core revenues and Same-Home core revenues

Total revenues $ 572,692 $ 561,064

Tenant charge-backs (75,442) (75,255)

Other revenues (4,661) (3,456)

Core revenues 492,589 482,353

Non-Same-Home core revenues 64,188 62,225

Same-Home core revenues $ 428,401 $ 420,128

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

Property operating expenses $ 217,933 $ 211,275

Property management expenses 45,536 42,359

Noncash share-based compensation - property management (880) (639)

Expenses reimbursed by tenant charge-backs (75,442) (75,255)

Core property operating expenses 187,147 177,740

Non-Same-Home core property operating expenses 28,906 27,104

Same-Home core property operating expenses $ 158,241 $ 150,636

Core NOI and Same-Home Core NOI

Net income $ 69,334 $ 73,395

Loss on early extinguishment of debt — 659

Gain on sale of single-family properties and other, net (21,416) (19,374)

Depreciation and amortization 167,657 164,001

Acquisition and other transaction costs 4,103 1,804

Noncash share-based compensation - property management 880 639

Interest expense 59,273 64,486

General and administrative expense 22,759 19,921

Other expenses 7,513 2,538

Other revenues (4,661) (3,456)

Core NOI 305,442 304,613

Non-Same-Home Core NOI 35,282 35,121

Same-Home Core NOI $ 270,160 $ 269,492

Total Revenues

Total revenues increased 2.1% to $572.7 million for the six months ended June 30, 2020 from $561.1 million for the six months ended June 30, 2019.

Revenue growth was driven by an increase in our average occupied portfolio which grew to 49,322 homes for the six months ended June 30, 2020, compared to 48,600 homes for the six months ended June 30, 2019, as well as higher rental rates, offset by an increase in uncollectible rents and tenant utility reimbursements related to the COVID-19 pandemic.

Property Operating Expenses

Property operating expenses increased 3.2% to $217.9 million for the six months ended June 30, 2020 from $211.3 million for the six months ended June 30, 2019.

This increase was primarily attributable to higher property tax expense and higher repairs and maintenance and turnover costs.

Property Management Expenses

Property management expenses for the six months ended June 30, 2020 and 2019 were $45.5 million and $42.4 million, respectively, which included $0.9 million and $0.6 million, respectively, of noncash share-based compensation expense related to

centralized and field property management employees.

The increase in property management expenses was primarily attributable to higher personnel costs.

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties increased 2.0% to $428.4 million for the six months ended June 30, 2020 from $420.1 million for the six months ended June 30, 2019, primarily driven by a 3.3% increase in Average Monthly Realized Rent per property, which increased to $1,671 per month for the six months ended June 30, 2020 compared to $1,617 per month for the six months ended June 30, 2019, partially offset by an increase in uncollectible rents related to the COVID-19 pandemic.

Additionally, during the six months ended June 30, 2020, core revenues from Same-Home properties were impacted by (i) the Company’s socially responsible decisions to waive month-to-month lease premiums and offer zero percent increases on newly signed renewals for leases expiring throughout the second quarter of 2020 and (ii) waived late fees throughout the second quarter of 2020.

Core Property Operating Expenses from Same-Home Properties

Core property operating expenses from Same-Home properties increased 5.0% to $158.2 million for the six months ended June 30, 2020 from $150.6 million for the six months ended June 30, 2019, primarily driven by higher property tax expense and $2.2 million of incremental costs incurred during the three months ended June 30, 2020 related to the COVID-19 pandemic including enhanced cleaning costs and increased uncollectible tenant utility reimbursements.

General and Administrative Expense

General and administrative expense for the six months ended June 30, 2020 and 2019 was $22.8 million and $19.9 million, respectively, which included $3.0 million and $1.6 million, respectively, of noncash share-based compensation expense related to corporate administrative employees.

The increase in general and administrative expense was primarily related to higher noncash share-based compensation expense as well as higher personnel costs and an increase in state taxes.

Interest Expense

Interest expense decreased 8.1% to $59.3 million for the six months ended June 30, 2020 from $64.5 million for the six months ended June 30, 2019.

This decrease was primarily related to additional capitalized interest during the six months ended June 30, 2020 and the payoff of the term loan facility in June 2019, partially offset by the unsecured senior notes issued in late January 2019 and draws on our revolving credit facility during the first six months of 2020.

Acquisition and Other Transaction Costs

Acquisition and other transaction costs were $4.1 million and $1.8 million for the six months ended June 30, 2020 and 2019, respectively, which primarily related to costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, as well as costs associated with the disposal of certain properties or portfolios of properties.

The planned growth in our acquisition program, including an increase in personnel, was the primary driver for the year-over-year increase.

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 2.2% to $167.7 million for the six months ended June 30, 2020 from $164.0 million for the six months ended June 30, 2019 primarily due to growth in our average number of depreciable properties.

Other Revenues

Other revenues were $4.7 million and $3.5 million for the six months ended June 30, 2020 and 2019, respectively, which primarily related to interest income, fees from unconsolidated joint ventures, and equity in earnings from unconsolidated joint ventures.

Other Expenses

Other expenses were $7.5 million and $2.5 million for the six months ended June 30, 2020 and 2019, respectively, which primarily related to impairments on properties held for sale and expenses related to joint ventures.

Also included in other expenses for the six months ended June 30, 2020 was a $4.9 million noncash write-down associated with the liquidation of legacy joint ventures, which were acquired as part of the ARPI merger in February 2016.

Critical Accounting Policies and Estimates

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”).

There have been no changes to these policies during the three months ended March 31, 2020.

There have been no changes to these policies during the six months ended June 30, 2020.

AH4R has elected to be taxed as a REIT for U.S.

25 unchanged sentences

The measurement of a tax benefit for an uncertain tax position that meets the more likely than not threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority having full knowledge of all the relevant information.

As of March 31, 2020, there were no deferred tax assets and liabilities or unrecognized tax benefits recorded by the Company.

As of June 30, 2020, there were no deferred tax assets and liabilities or unrecognized tax benefits recorded by the Company.

We do not anticipate a significant change in unrecognized tax benefits within the next 12 months.

8 unchanged sentences

Liquidity and Capital Resources

Our liquidity and capital resources as of March 31, 2020 included cash and cash equivalents of $33.1 million.

Additionally, as of March 31, 2020, we had $105.0 million of outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of up to $800.0 million, of which $3.7 million was committed to outstanding letters of credit.

Our liquidity and capital resources as of June 30, 2020 included cash and cash equivalents of $32.0 million.

Additionally, as of June 30, 2020, we had $130.0 million of outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of up to $800.0 million, of which $3.7 million was committed to outstanding letters of credit.

We have no debt maturities, other than recurring principal amortization, until 2022.

10 unchanged sentences

Since we do not know the ultimate severity and length of the COVID-19 pandemic, and thus cannot predict the impact it will have on our tenants and on the debt and equity capital markets, we cannot estimate the ultimate impact it will have on our liquidity and capital resources.

As of April 30, 2020, the Company had cash and cash equivalents of $30.1 million with no changes to total outstanding debt since March 31, 2020.

During April 2020, the Company sold an additional 60 properties generating $13.8 million of net proceeds.

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the three months ended March 31, 2020 and 2019 (in thousands):

For the Three Months Ended

As of July 31, 2020, the Company had cash and cash equivalents of $55.7 million and $105.0 million of outstanding borrowings on its revolving credit facility, with no other changes to total outstanding debt since June 30, 2020.

During July 2020, the Company sold an additional 91 properties generating $20.1 million of net proceeds.

The following table summarizes the Company’s and the Operating Partnership’s cash flows for the six months ended June 30, 2020 and 2019 (in thousands):

For the Six Months Ended

2020 2019 Change

1 unchanged sentence

Net cash used for investing activities (322,466) (170,033) (152,433)

Net cash provided by financing activities 50,328 120,466 (70,138)

Net cash provided by (used for) financing activities 40,388 (7,763) 48,151

Net (decrease) increase in cash, cash equivalents and restricted cash $ (2,874) $ 109,696 $ (112,570)

1 unchanged sentence

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 decreased $21.4 million, or 14.5%, from $147.9 million for the three months ended March 31, 2019 to $126.5 million for the three months ended March 31, 2020, primarily as a result of changes in operating assets and liabilities, partially offset by increased cash flows generated from a larger number of occupied properties and increases in rental rates on lease renewals and re-leasing of our single-family properties.

Net cash provided by operating activities decreased $8.3 million, or 2.9%, from $287.5 million for the six months ended June 30, 2019 to $279.2 million for the six months ended June 30, 2020, primarily as a result of changes in operating assets and liabilities , including a decrease in collections on rent and tenant utility reimbursements associated with the COVID-19 pandemic, partially offset by cash flows generated from a larger number of occupied properties and increases in rental rates on lease renewals and re-leasing of our single-family properties.

Investing Activities

Net cash used for investing activities increased $48.3 million, or 36.9%, from $130.9 million for the three months ended March 31, 2019 to $179.2 million for the three months ended March 31, 2020, primarily driven by the strategic expansion of our portfolio through traditional acquisition channels, the development of “built-for-rental” homes through our AMH Development Program, and acquiring newly built properties through our National Builder Program using cash generated from operating and financing activities and by recycling capital through the sale of single-family properties.

However, as a result of the COVID-19 pandemic, given the market uncertainty regarding future asset values, the Company has temporarily suspended its traditional acquisition channel and National Builder acquisition programs.

Net cash used for investing activities increased $152.4 million, or 89.6%, from $170.0 million for the six months ended June 30, 2019 to $322.5 million for the six months ended June 30, 2020, primarily driven by the strategic expansion of our portfolio through traditional acquisition channels, the development of “built-for-rental” homes through our AMH Development Program, and acquiring newly built properties through our National Builder Program using cash generated from operating and financing activities and by recycling capital through the sale of single-family properties.

However, as a result of the COVID-19 pandemic and given the market uncertainty regarding future asset values, the Company has temporarily suspended its acquisitions through traditional channels and the National Builder Program.

The Company plans to continue construction activity, while in compliance with state and local mandates, on its existing pipeline of “built-for-rental” homes through our AMH Development Program.

2 unchanged sentences

Financing Activities

Net cash provided by financing activities decreased $70.1 million, or 58.2%, from $120.5 million for the three months ended March 31, 2019 to $50.3 million for the three months ended March 31, 2020, driven by decreased borrowing activity and an increase in cash paid for distributions.

The Company borrowed $105.0 million under its revolving credit facility during the three months ended March 31, 2020, compared to $397.9 million of proceeds from unsecured senior notes, net of discount, partially offset by $250.0 million of payments on its revolving credit facility, during the three months ended March 31, 2019.

The Company distributed$49.1 million on a cash basis to share and unit holders during the three months ended March 31, 2020, compared to $17.6 million during the three months ended March 31, 2019, as a result of timing differences in distributions year-over-year.

Net cash provided by or used for financing activities increased $48.2 million from $7.8 million of net cash outflows for the six months ended June 30, 2019 to $40.4 million of net cash inflows for the six months ended June 30, 2020, driven by $81.0 million of increased borrowing activity, net of repayments, partially offset by a $31.6 million increase in cash paid for distributions.

The Company received $130.0 million of proceeds from its revolving credit facility, offset by $11.8 million of payments on its asset-backed securitizations, during the six months ended June 30, 2020, compared to $397.9 million of proceeds from unsecured senior notes, net of discount, offset by $350.0 million of payments on its revolving credit and term loan facilities and $10.7 million of payments on its asset-backed securitizations, during the six months ended June 30, 2019.

The Company distributed $80.6 million on a cash basis to share and unit holders during the six months ended June 30, 2020, compared to $49.0 million during the six months ended June 30, 2019, as a result of timing differences in distributions year-over-year.

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

3 unchanged sentences

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.

Distributions

11 unchanged sentences

Except as described in Note 15.

Commitments and Contingencies to our condensed consolidated financial statements in this report, as of March 31, 2020, there have been no other material changes outside of the ordinary course of business to our other known contractual obligations, which are set forth in the table included in Part II, “Item 7.

Commitments and Contingencies to our condensed consolidated financial statements in this report, as of June 30, 2020, there have been no other material changes outside of the ordinary course of business to our other known contractual obligations, which are set forth in the table included in Part II, “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Annual Report.

14 unchanged sentences

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, 2020 and 2019 (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, 2020 and 2019 (in thousands):

For the Three Months Ended

(Unaudited) (Unaudited)

June 30, For the Six Months Ended

2020 2019 2020 2019

Net income attributable to common shareholders $ 15,369 $ 22,518 $ 35,613 $ 38,801

8 unchanged sentences

Noncash share-based compensation - property management 441 346 880 639

Loss on early extinguishment of debt — 659 — 659

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

$ 94,810 $ 98,240 $ 197,891 $ 193,965

Recurring capital expenditures (2)

2 unchanged sentences

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

$ 81,634 $ 86,780 $ 175,094 $ 173,646

(1) Core FFO and Adjusted FFO attributable to common share and unit holders include negative financial impacts associated with the COVID-19 pandemic that relate to (i) the Company’s socially responsible decisions to waive month-to-month lease premiums and offer zero percent increases on newly signed renewals for leases expiring throughout the second quarter of 2020, (ii) waived late fees throughout the second quarter of 2020, and (iii) $9.4 million of other negative financial impacts from the COVID-19 pandemic including $7.0 million of increased uncollectible rents, $1.9 million of increased uncollectible tenant utility reimbursements and $0.5 million of increased costs associated with enhanced cleaning and safety protocols.

Additionally, due to stay-at-home orders during the COVID-19 pandemic, Adjusted FFO attributable to common share and unit holders includes above average levels of HVAC system replacements resulting in $1.3 million of incremental HVAC capital expenditures within the second quarter of 2020.

(2) As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.

EBITDA / EBITDAre / Adjusted EBITDAre / Adjusted EBITDAre after Capex and Leasing Costs

EBITDA / EBITDAre / Adjusted EBITDAre / Fully Adjusted EBITDAre

EBITDA is defined as earnings before interest, taxes, depreciation and amortization.

2 unchanged sentences

Adjusted EBITDAre is a supplemental non-GAAP financial measure calculated by adjusting EBITDAre for (1) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties, (2) noncash share-based compensation expense, (3) hurricane-related charges, net, which result in material charges to the impacted single-family properties, and (4) gain or loss on early extinguishment of debt.

Adjusted EBITDAre after Capex and Leasing Costs is a supplemental non-GAAP financial measure calculated by adjusting Adjusted EBITDAre for (1) recurring capital expenditures and (2) leasing costs.

Fully Adjusted EBITDAre (formerly known as Adjusted EBITDAre after Capex and Leasing Costs) is a supplemental non-GAAP financial measure calculated by adjusting Adjusted EBITDAre for (1) Recurring Capital Expenditures and (2) leasing costs.

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 Adjusted EBITDAre after Capex and Leasing Costs for the three months ended March 31, 2020 and 2019 (in thousands):

The following is a reconciliation of net income, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre and Fully Adjusted EBITDAre for the three and six months ended June 30, 2020 and 2019 (in thousands):

For the Three Months Ended

(Unaudited) (Unaudited)

June 30, For the Six Months Ended

2020 2019 2020 2019

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

8 unchanged sentences

Acquisition and other transaction costs 1,956 970 4,103 1,804

Loss on early extinguishment of debt — 659 — 659

Adjusted EBITDAre $ 140,342 $ 146,564 $ 288,984 $ 289,926

2 unchanged sentences

Leasing costs (992) (1,130) (1,902) (2,129)

Adjusted EBITDAre after Capex and Leasing Costs $ 139,021 $ 134,503

Fully Adjusted EBITDAre $ 127,166 $ 135,104 $ 266,187 $ 269,607

(1) As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis