What changed in this filing

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Item 1. Financial Statements

2020-11-06 compared with 2020-08-07 · 243 added, 120 removed, 754 unchanged (32% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share data)

June 30, 2020 December 31, 2019

September 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, 300,512,943 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)

Class A common shares ($ 0.01 par value per share, 450,000,000 shares authorized, 315,628,067 and 300,107,599 shares issued and outstanding at September 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 September 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 September 30, 2020 and December 31, 2019)

Additional paid-in capital 6,214,149 5,790,775

10 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

27 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

59 unchanged sentences

interest Total

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

Share-based compensation — — — — — — 1,288 — — 1,288 — 1,288

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

48,210 — — — — — 660 — — 660 — 660

Redemptions of Class A units 200,000 2 — — — — 2,604 — 5 2,611 ( 2,611 ) —

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)

— — — — — — — ( 15,059 ) — ( 15,059 ) — ( 15,059 )

Net income — — — — — — — 37,302 — 37,302 4,099 41,401

Total other comprehensive loss — — — — — — — — ( 205 ) ( 205 ) ( 36 ) ( 241 )

Balances at September 30, 2019 300,075,999 $ 3,000 635,075 $ 6 35,350,000 $ 354 $ 5,788,950 $ ( 473,893 ) $ 6,862 $ 5,325,279 $ 681,910 $ 6,007,189

American Homes 4 Rent

Condensed Consolidated Statements of Equity (continued)

(Amounts in thousands, except share data)

Class A common shares Class B common shares Preferred shares

of shares Amount Number

of shares Amount Additional

capital Accumulated

deficit Accumulated other comprehensive income Shareholders’

equity Noncontrolling

interest Total

Balances at December 31, 2019 300,107,599 $ 3,001 635,075 $ 6 35,350,000 $ 354 $ 5,790,775 $ ( 465,368 ) $ 6,658 $ 5,335,426 $ 683,364 $ 6,018,790

25 unchanged sentences

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

American Homes 4 Rent

Condensed Consolidated Statements of Equity (continued)

(Amounts in thousands, except share data)

Class A common shares Class B common shares Preferred shares

of shares Amount Number

of shares Amount Additional

capital Accumulated

deficit Accumulated other comprehensive income Shareholders’

equity Noncontrolling

interest Total

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

Share-based compensation — — — — — — 2,170 — — 2,170 — 2,170

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

78,994 1 — — — — 1,245 — — 1,246 — 1,246

Issuance of Class A common shares, net of offering costs of $ 0.6 million

15,036,130 150 — — — — 413,350 — — 413,500 — 413,500

Distributions to equity holders:

Preferred shares (Note 10)

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

Noncontrolling interests — — — — — — — — — — ( 2,602 ) ( 2,602 )

Common shares ($ 0.05 per share)

— — — — — — — ( 15,814 ) — ( 15,814 ) — ( 15,814 )

Net income — — — — — — — 36,334 — 36,334 3,819 40,153

Total other comprehensive loss — — — — — — — — ( 206 ) ( 206 ) ( 35 ) ( 241 )

Balances at September 30, 2020 315,628,067 $ 3,156 635,075 $ 6 35,350,000 $ 354 $ 6,214,149 $ ( 454,697 ) $ 6,041 $ 5,769,009 $ 685,430 $ 6,454,439

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

2 unchanged sentences

(Amounts in thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

Operating activities

5 unchanged sentences

Loss on early extinguishment of debt — 659

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

Equity in net losses (income) of unconsolidated joint ventures 963 ( 771 )

Net gain on sale of single-family properties and other ( 33,838 ) ( 32,895 )

20 unchanged sentences

Financing activities

Proceeds from issuance of Class A common shares 414,100 —

Payments of Class A common share issuance costs ( 600 ) —

Proceeds from exercise of stock options 5,599 11,105

10 unchanged sentences

Net cash provided by (used for) financing activities 287,589 ( 73,523 )

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

Net increase in cash, cash equivalents and restricted cash 277,908 122,796

Cash, cash equivalents and restricted cash, beginning of period (see Note 3) 164,119 175,214

3 unchanged sentences

(Amounts in thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

Supplemental cash flow information

5 unchanged sentences

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

Accrued distributions to affiliates — 4,647

Accrued distributions to non-affiliates 32 59

3 unchanged sentences

(Amounts in thousands, except unit data)

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Single-family properties:

24 unchanged sentences

General partner:

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

Common units ( 316,263,142 and 300,742,674 units issued and outstanding at September 30, 2020 and December 31, 2019, respectively)

4,908,533 4,474,333

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

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

854,435 854,435

Limited partner:

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

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

684,370 682,199

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

26 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

40 unchanged sentences

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

Share-based compensation — 1,288 — — — — 1,288

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

48,210 660 — — — — 660

Redemptions of Class A units 200,000 2,606 — ( 200,000 ) ( 2,606 ) — —

Distributions to capital holders:

Preferred units (Note 10)

— — ( 13,782 ) — — — ( 13,782 )

Common units ($ 0.05 per unit)

— ( 15,059 ) — — ( 2,601 ) — ( 17,660 )

Net income — 23,520 13,782 — 4,099 — 41,401

Total other comprehensive loss — — — — — ( 241 ) ( 241 )

Balances at September 30, 2019 300,711,074 $ 4,463,982 $ 854,435 52,026,980 $ 680,708 $ 8,064 $ 6,007,189

American Homes 4 Rent, L.P.

28 unchanged sentences

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

Share-based compensation — 2,170 — — — — 2,170

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

78,994 1,246 — — — — 1,246

Issuance of Class A common units, net of offering costs of $ 0.6 million

15,036,130 413,500 — — — — 413,500

Distributions to capital holders:

Preferred units (Note 10)

— — ( 13,782 ) — — — ( 13,782 )

Common units ($ 0.05 per unit)

— ( 15,814 ) — — ( 2,602 ) — ( 18,416 )

Net income — 22,552 13,782 — 3,819 — 40,153

Total other comprehensive loss — — — — — ( 241 ) ( 241 )

Balances at September 30, 2020 316,263,142 $ 4,908,533 $ 854,435 52,026,980 $ 684,370 $ 7,101 $ 6,454,439

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

2 unchanged sentences

(Amounts in thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

Operating activities

5 unchanged sentences

Loss on early extinguishment of debt — 659

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

Equity in net losses (income) of unconsolidated joint ventures 963 ( 771 )

Net gain on sale of single-family properties and other ( 33,838 ) ( 32,895 )

20 unchanged sentences

Financing activities

Proceeds from issuance of Class A common units 414,100 —

Payments of Class A common unit issuance costs ( 600 ) —

Proceeds from exercise of stock options 5,599 11,105

9 unchanged sentences

Net cash provided by (used for) financing activities 287,589 ( 73,523 )

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

Net increase in cash, cash equivalents and restricted cash 277,908 122,796

Cash, cash equivalents and restricted cash, beginning of period (see Note 3) 164,119 175,214

3 unchanged sentences

(Amounts in thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

Supplemental cash flow information

5 unchanged sentences

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

Accrued distributions to affiliates — 4,647

Accrued distributions to non-affiliates 32 59

7 unchanged sentences

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 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.

As of September 30, 2020, the Company held 53,229 single-family properties in 22 states, including 813 properties classified as held for sale.

AH4R is the general partner of, and as of September 30, 2020 owned approximately 85.8 % of the common partnership interest in, the Operating Partnership.

The remaining 14.2 % of the common partnership interest was owned by limited partners.

14 unchanged sentences

Basis of Presentation

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.

The accompanying condensed consolidated financial statements are unaudited and present the accounts of both the Company, which include AH4R, the Operating Partnership and their consolidated subsidiaries, as well as the Operating Partnership, which include the Operating Partnership and its consolidated subsidiaries.

Intercompany accounts and transactions have been eliminated.

6 unchanged sentences

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 Board.

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

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.

15 unchanged sentences

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

Accounting Pronouncements Adopted July 1, 2020

In January 2020, the FASB issued ASU No.

6 unchanged sentences

The amendments in this ASU should be applied prospectively by applying the amendments at the beginning of the interim period that includes the adoption date.

The Company is currently assessing the impact of the guidance on its financial statements.

The Company adopted this guidance effective July 1, 2020.

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

Cash, Cash Equivalents and Restricted Cash

3 unchanged sentences

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,

September 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 June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020 December 31, 2019

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

September 30, 2020 December 31, 2019

Occupied single-family properties $ 7,935,286 $ 7,534,627

Single-family properties recently acquired 31,669 88,181

Single-family properties recently acquired or developed 22,830 88,181

Single-family properties in turnover process 139,100 308,008

5 unchanged sentences

Total real estate assets, net $ 8,755,251 $ 8,551,531

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

Depreciation expense related to single-family properties was $ 83.7 million and $ 78.3 million for the three months ended September 30, 2020 and 2019, respectively, and $ 245.1 million and $ 233.7 million for the nine months ended September 30, 2020 and 2019, respectively.

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

Single-family properties:

3 unchanged sentences

Net gain on sale (2)

$ 12,422 $ 13,506 $ 36,831 $ 32,655

Net proceeds $ — $ 316 $ 71 $ 1,511

Net gain on sale $ — $ 15 $ 7 $ 240

(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.

(1) Total net proceeds for the nine months ended September 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).

(2) Includes gain or loss on transfers to unconsolidated joint ventures.

Rent and Other Receivables

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.

Variable lease payments for tenant charge-backs were $ 49.9 million and $ 48.3 million for the three months ended September 30, 2020 and 2019, respectively, and $ 125.4 million and $ 123.6 million for the nine months ended September 30, 2020 and 2019, respectively.

Variable lease payments for fees from single-family properties were $ 4.3 million and $ 3.7 million for the three months ended September 30, 2020 and 2019, respectively, and $ 11.7 million and $ 10.2 million for the nine months ended September 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

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

September 30, 2020

Remaining 2020 $ 232,350

Total $ 631,327

As of December 31, 2019, rent and other receivables also included $ 2.7 million of hurricane-related insurance claims receivable, which was fully collected during the three months ended March 31, 2020.

As of September 30, 2020 and December 31, 2019, rent and other receivables also included $ 4.8 million and $ 2.7 million of insurance claims receivables.

Escrow Deposits, Prepaid Expenses and Other Assets

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

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

September 30, 2020 December 31, 2019

Escrow deposits, prepaid expenses and other $ 45,687 $ 54,545

3 unchanged sentences

Total $ 135,251 $ 140,961

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.

Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $ 2.3 million and $ 2.0 million for the three months ended September 30, 2020 and 2019, respectively, and $ 6.4 million and $ 5.7 million for the nine months ended September 30, 2020 and 2019, respectively.

Deferred Costs and Other Intangibles, Net

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

September 30, 2020 December 31, 2019

Deferred leasing costs $ 3,632 $ 3,738

4 unchanged sentences

Total $ 5,352 $ 6,840

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):

Amortization expense related to deferred leasing costs, the value of in-place leases, and database intangibles was $ 1.0 million and $ 1.8 million for the three months ended September 30, 2020 and 2019, respectively, and $ 3.1 million and $ 6.7 million for the nine months ended September 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 September 30, 2020 and 2019 and $ 1.5 million for both the nine months ended September 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 September 30, 2020 for future periods (in thousands):

Leasing Costs Deferred

6 unchanged sentences

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

The promissory note obtained during the second quarter of 2019 matures in the second quarter of 2025 and the promissory note obtained during the first quarter of 2017 matures in the first quarter of 2022.

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.

1 unchanged sentence

Upon adoption of ASU 2016-13 on January 1, 2020 (see Note 2.

Significant Accounting Policies), we are required to estimate and recognize lifetime expected losses, rather than incurred losses, on these notes receivable, which results in the earlier recognition of credit losses even if the expected risk of credit loss is remote.

loss is remote.

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.

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

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.

2 unchanged sentences

Investments in Unconsolidated Joint Ventures

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.

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

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.

During the first quarter of 2020, the Company entered into a $ 253.1 million strategic joint venture, which has an evergreen term, 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.

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

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

September 30, 2020 Balances at

December 31, 2019

7 unchanged sentences

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.

Management fee and development fee income from unconsolidated joint ventures was $ 1.7 million and $ 1.0 million for the three months ended September 30, 2020 and 2019, respectively, and $ 3.9 million and $ 2.4 million for the nine months ended September 30, 2020 and 2019, respectively, and was included in other revenues within the condensed consolidated statements of operations.

As a result of the Company’s management of these joint ventures, certain related party receivables and payables arise in the ordinary course of business and are included in escrow deposits, prepaid expenses and other assets or amounts payable to affiliates in the condensed consolidated balance sheets.

In August 2020, Institutional Investor JV entered into a loan agreement to borrow up to a $ 201.0 million aggregate commitment.

During the initial two-year term, the loan bears interest at LIBOR plus a 3.50 % margin and matures on August 11, 2022.

The loan agreement provides for three one-year extension options that include additional fees and interest.

As of September 30, 2020, the joint venture’s loan had an $ 85.2 million outstanding principal balance.

The Company has provided a customary non-recourse guarantee that may become a liability for us upon a voluntary bankruptcy filing by the joint venture or occurrence of other actions such as fraud or a material misrepresentation by us or the joint venture.

To date, the guarantee has not been invoked and we believe that the actions that would trigger a guarantee would generally be disadvantageous to the joint venture and us, and therefore are unlikely to occur.

However, there can be no assurances that actions that could trigger the guarantee will not occur.

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 June 30, 2020 and December 31, 2019 (in thousands):

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

Outstanding Principal Balance

Interest Rate (1)

Maturity Date June 30, 2020 December 31, 2019

Maturity Date September 30, 2020 December 31, 2019

AH4R 2014-SFR2 securitization 4.42 % October 9, 2024 $ 481,520 $ 485,828

15 unchanged sentences

Total debt per balance sheet $ 2,821,192 $ 2,833,497

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

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

Unless otherwise stated, interest rates are fixed percentages.

2 unchanged sentences

(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 June 30, 2020 and December 31, 2019, respectively.

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

(5) The revolving credit facility provides for a borrowing capacity of up to $ 800.0 million and the Company had approximately $ 1.5 million and $ 6.2 million committed to outstanding letters of credit that reduced our borrowing capacity as of September 30, 2020 and December 31, 2019, respectively.

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

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

1 unchanged sentence

(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 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.

Amortization of deferred financing costs was $ 1.5 million for both the three months ended September 30, 2020 and 2019 and $ 4.5 million for both the nine months ended September 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 June 30, 2020 (in thousands):

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

Debt Maturities

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Interest Expense

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

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 nine months ended September 30, 2020 and 2019 (in thousands):

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

Gross interest cost $ 34,075 $ 34,213 $ 103,069 $ 104,046

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Accounts Payable and Accrued Expenses

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

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

September 30, 2020 December 31, 2019

Accrued property taxes $ 132,246 $ 44,280

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Prepaid rent 21,259 19,970

Accrued interest 23,274 23,090

Accrued construction and maintenance liabilities 18,959 20,435

Accrued interest 12,805 23,090

Accounts payable 1,598 5,037

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

Class A Common Share Offering

During the third quarter of 2020, the Company issued 14,950,000 Class A common shares of beneficial interest, $ 0.01 par value per share, in an underwritten public offering, raising net proceeds of $ 411.7 million after deducting underwriting discounts and before offering costs of approximately $ 0.2 million.

The Company used the net proceeds from this offering to repay indebtedness the Company had incurred under its revolving credit facility and intends to use the remaining net proceeds (i) to develop new single-family properties and communities, (ii) to acquire and renovate single-family properties and for related activities in accordance with its business strategy and (iii) for general corporate purposes.

The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance.

At-the-Market Common Share Offering Program

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”).

During the second quarter of 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.

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

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.

During the three and nine months ended September 30, 2020, the Company issued 86,130 Class A common shares under the At-the-Market Program, raising $ 2.4 million in gross proceeds before commissions and other expenses of approximately $ 0.4 million.

As of September 30, 2020, 86,130 shares have been issued under the At-the-Market Program and $ 497.6 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 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.

During the nine months ended September 30, 2020 and 2019, we did not repurchase and retire any of our shares.

As of September 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 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

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

September 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 June 30, 2020 March 31, 2020 June 30, 2019 March 31, 2019

Security September 30,

2020 June 30,

2020 March 31,

2020 September 30,

2019 June 30,

2019 March 31,

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

6.500% Series D perpetual preferred shares

0.41 0.41 0.41 0.41 0.41 0.41

6.350% Series E perpetual preferred shares

0.40 0.40 0.40 0.40 0.40 0.40

5.875% Series F perpetual preferred shares

0.37 0.37 0.37 0.37 0.37 0.37

5.875% Series G perpetual preferred shares

0.37 0.37 0.37 0.37 0.37 0.37

6.250% Series H perpetual preferred shares

0.39 0.39 0.39 0.39 0.39 0.39

Noncontrolling Interest

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 353,174,998 and 352,769,654 Class A units in the Operating Partnership as of June 30, 2020 and December 31, 2019, respectively.

Former AH LLC members owned 51,429,990 , or approximately 14.0 % and 14.6 %, of the total 368,290,122 and 352,769,654 Class A units in the Operating Partnership as of September 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 353,174,998 and 352,769,654 Class A units in the Operating Partnership as of June 30, 2020 and December 31, 2019, respectively.

Non-affiliate Class A unitholders owned 596,990 , or approximately 0.2 %, of the total 368,290,122 and 352,769,654 Class A units in the Operating Partnership as of September 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.

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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 (“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.

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

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

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

For the Nine Months Ended

September 30,

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

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Options exercisable at end of period 1,049,200 1,194,750

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

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

For the Nine Months Ended

September 30,

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

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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

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

General and administrative expense $ 1,723 $ 938 $ 4,741 $ 2,520

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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 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

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

Net income $ 40,153 $ 41,401 $ 109,487 $ 114,796

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Allocation to participating securities (1)

56 48 152 122

Numerator for income per common share–basic and diluted $ 22,496 $ 23,472 $ 58,013 $ 62,199

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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 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

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 nine months ended September 30, 2020 and 2019 (in thousands, except unit and per unit data):

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2020 2019 2020 2019

Net income $ 40,153 $ 41,401 $ 109,487 $ 114,796

1 unchanged sentence

Allocation to participating securities (1)

56 48 152 122

Numerator for income per common unit–basic and diluted $ 26,315 $ 27,571 $ 67,989 $ 73,328

18 unchanged sentences

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

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

September 30, 2020 December 31, 2019

Carrying Value Fair Value Carrying Value Fair Value

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Related Party Transactions

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.

As of September 30, 2020 and December 31, 2019, affiliates owned approximately 14.2 % 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 September 30, 2020 and December 31, 2019) an approximate 26.3 % interest as of September 30, 2020 and December 31, 2019.

American Homes 4 Rent

1 unchanged sentence

American Homes 4 Rent, L.P.

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 September 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 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 September 30, 2020, the Company had commitments to acquire 396 single-family properties for an aggregate purchase price of $ 99.8 million, as well as $ 65.5 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 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.

As of September 30, 2020 and December 31, 2019, the Company had sales in escrow for approximately 108 and 305 of our single-family properties, respectively, for aggregate selling prices of $ 26.7 million and $ 57.5 million, respectively.

As of September 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 $ 36.0 million and $ 14.5 million, respectively.

During the third quarter of 2020, we received a notice from the Georgia Attorney General’s Office seeking certain information relevant to an investigation they are conducting about our customary landlord-tenant matters.

We are cooperating with the Georgia Attorney General’s Office on this matter.

The Company is currently involved in a legal matter with a former employee.

The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

of September 30, 2020, the Company recorded a provision of $ 2.9 million for its estimated liability, net of insurance recoveries, related to this matter.

We are involved in various other 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.

1 unchanged sentence

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.

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 fourth 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, the speed and effectiveness of vaccine and treatment developments 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 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.

From October 1, 2020 through October 31, 2020, the Company added 202 properties to its portfolio for a total cost of approximately $ 57.0 million, which included 95 newly constructed properties delivered through our AMH Development Program and 15 newly constructed homes acquired from third-party developers through our National Builder Program.

Subsequent Dispositions

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

From October 1, 2020 through October 31, 2020, the Company disposed of 79 properties for aggregate net proceeds of approximately $ 18.2 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.

From October 1, 2020 through October 31, 2020, the Company contributed $ 22.9 million of land and in-process development projects to unconsolidated joint ventures and received $ 18.3 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