What changed in this filing

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Item 9A. Controls and Procedures

2021-02-26 compared with 2020-02-28 · 639 added, 590 removed, 1198 unchanged (51% of the section changed)

47 unchanged sentences

In our opinion, American Homes 4 Rent (the Company) maintained, in all material aspects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of American Homes 4 Rent as of December 31, 2019 and 2018 , and the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2019 and the related notes and financial statement schedule listed in the Index at Item 15(a) of the Company and our report dated February 28, 2020 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of American Homes 4 Rent as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2020 and the related notes and financial statement schedule listed in the Index at Item 15(a) of the Company and our report dated February 26, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item with respect to trustees will be included under the caption “Proposal 1—Election of Trustees” in the Company’s definitive proxy statement for the 2020 Annual Meeting to be filed with the SEC within 120 days of the fiscal year ended December 31, 2019 (the “ 2020 Proxy Statement”) and is incorporated herein by reference.

The information required by this item with respect to executive officers will be included under the caption “Executive Officers” in the 2020 Proxy Statement and is incorporated herein by reference.

The information required by this item with respect to the nominating process, the audit committee and the audit committee financial expert will be included under the captions “Corporate Governance and Board Matters—Audit Committee” and “Corporate Governance and Board Matters—Consideration of Candidates for Trustee” in the 2020 Proxy Statement and is incorporated herein by reference.

The information required by this item with respect to Section 16(a) compliance will be included under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2020 Proxy Statement and is incorporated herein by reference.

The information required by this item with respect to a code of ethics will be included under the caption “Corporate Governance and Board Matters” in the 2020 Proxy Statement and is incorporated herein by reference.

The information required by this item with respect to trustees, executive officers and, to the extent applicable, Section 16(a) compliance will be included in the Company’s definitive proxy statement for the 2021 Annual Meeting to be filed with the SEC within 120 days of the fiscal year ended December 31, 2020 (the “2021 Proxy Statement”) and is incorporated herein by reference.

The information required by this item with respect to the nominating process, the audit committee and the audit committee financial expert will be included in the 2021 Proxy Statement and is incorporated herein by reference.

The information required by this item with respect to a code of ethics will be included in the 2021 Proxy Statement and is incorporated herein by reference.

Any amendments to or waivers of the code of ethics granted to the Company’s executive officers or the controller will be published promptly on our website or by other appropriate means in accordance with SEC rules and regulations.

EXECUTIVE COMPENSATION

The information required by this item will be included under the captions “Corporate Governance and Board Matters,” “Executive Compensation” and “Corporate Governance and Board Matters—Compensation Committee Interlocks and Insider Participation” in the 2020 Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in the 2021 Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item, other than the table below, will be included under the captions “Share Ownership of 5% or Greater Beneficial Owners” and “Share Ownership of Trustees and Management” in the 2020 Proxy Statement and is incorporated herein by reference.

The information required by this item, other than the table below, will be included in the 2021 Proxy Statement and is incorporated herein by reference.

The following table sets forth information as of December 31, 2020 for the Company’s equity compensation plan:

Plan Category

Number of securities to

Plan Category Number of securities to

be issued upon exercise

of outstanding options,

warrants and rights

Weighted-average

warrants and rights Weighted-average

exercise price of

outstanding options,

warrants and rights

Number of securities

warrants and rights Number of securities

remaining available for

2 unchanged sentences

Equity compensation plans approved by security holders (1)

1,090,300 $ 17.68 1,417,627

Equity compensation plans not approved by security holders — $ — —

1 unchanged sentence

Share-Based Compensation to the consolidated financial statements included as a separate section in Part IV, “Item 15.

Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.

Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K.

The 2012 Equity Incentive Plan was approved by the Company’s shareholders.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be included under the captions “Corporate Governance and Board Matters—Trustee Independence” and “Certain Relationships and Related Party Transactions” in the 2020 Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item will be included under the caption “Proposal 2—Ratification of Independent Registered Public Accounting Firm—Audit and Non-Audit Fees” in the 2020 Proxy Statement and is incorporated herein by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) (1) and (2) Financial Statements and Financial Statement Schedule

The information required by this item will be included in the 2021 Proxy Statement and is incorporated herein by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be included in the 2021 Proxy Statement and is incorporated herein by reference.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a) (1) and (2) Financial Statements and Financial Statement Schedules

The financial statements and financial statement schedule required by this item are included as a separate section of this Annual Report on Form 10-K beginning on page F-1.

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm F- 1

Audited Consolidated Financial Statements:

American Homes 4 Rent

Consolidated Balance Sheets as of December 31, 2019 and 2018

Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018, and 2017

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2019, 2018, and 2017

Consolidated Statements of Equity for the Years Ended December 31, 2019, 2018, and 2017

Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018, and 2017

Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 5

Consolidated Statements of Operations for the Years Ended December 31, 2020, 2019, and 2018 F- 6

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2020, 2019, and 2018 F- 7

Consolidated Statements of Equity for the Years Ended December 31, 2020, 2019, and 2018 F- 8

Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019, and 2018 F- 11

American Homes 4 Rent, L.P.

Consolidated Balance Sheets as of December 31, 2019 and 2018

Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018, and 2017

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2019, 2018, and 2017

Consolidated Statements of Capital for the Years Ended December 31, 2019, 2018, and 2017

Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018, and 2017

Notes to Consolidated Financial Statements

Schedule III—Real Estate and Accumulated Depreciation as of December 31, 2019

Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 13

Consolidated Statements of Operations for the Years Ended December 31, 2020, 2019, and 2018 F- 14

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2020, 2019, and 2018 F- 15

Consolidated Statements of Capital for the Years Ended December 31, 2020, 2019, and 2018 F- 16

Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019, and 2018 F- 18

Notes to Consolidated Financial Statements F- 20

Schedule III—Real Estate and Accumulated Depreciation as of December 31, 2020 F- 47

All other schedules are omitted because they are either not required, are not applicable, or the information is included in the consolidated financial statements and notes thereto.

(a) (3) Exhibits

Exhibit Document

Number Exhibit Document

3.1 Articles of Amendment and Restatement of Declaration of Trust of American Homes 4 Rent (Incorporated by reference to Exhibit 3.1 to Amendment No.

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3.7 Articles Supplementary for American Homes 4 Rent 6.25% Series H Cumulative Redeemable Perpetual Preferred Shares (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 14, 2018.)

Amended and Restated Bylaws of American Homes 4 Rent (Incorporated by reference to Exhibit 3.8 to the Company’s Annual Report on Form 10-K filed on February 24, 2017.)

3.8 Amended and Restated Bylaws of American Homes 4 Rent (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 10, 2020.)

4.1 Form of Indenture (Incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-3 (Registration Number 333-221878) filed December 1, 2017.)

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Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 7, 2018.)

Exhibit Document

Number Exhibit Document

4.3 First Supplemental Indenture, dated as of February 7, 2018, among American Homes 4 Rent, L.P., American Residential Properties OP, L.P.

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4.7 Description of Securities.

Filed herewith.

(Incorporated by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-K filed on February 28, 2020.)

10.1 Agreement of Limited Partnership of American Homes 4 Rent, L.P.

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(Incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed February 22, 2019.)

Exhibit Document

Number Exhibit Document

10.18 Agreement of Limited Partnership of American Residential Properties OP, L.P.

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10.30 Credit Agreement, dated August 17, 2016, by and among American Homes 4 Rent, L.P., as Borrower, American Homes 4 Rent, as Parent, Wells Fargo Bank, National Association, as Administrative Agent, and the other lending institutions that are parties thereto, as Lenders (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 18, 2016.)

Sales Agreement dated August 10, 2017, by and among the Company, the Operating Partnership and FBR Capital Markets & Co., Cantor Fitzgerald & Co., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co.

LLC, Jefferies LLC, JMP Securities LLC, J.P.

Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.

LLC, Raymond James & Associates, Inc., RBC Capital Markets, LLC and Wells Fargo Securities, LLC.

(Incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed August 10, 2017.)

10.31 Amendment No.

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Filed herewith.

Exhibit Document

32.1 Certification of Chief Executive Officer and Chief Financial Officer of American Homes 4 Rent pursuant to 18 U.S.C.

3 unchanged sentences

Filed herewith.

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Number Exhibit Document

101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of American Homes 4 Rent

To the Shareholders and Board of Trustees of American Homes 4 Rent

Opinion on the Financial Statements

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Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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Purchase Price Accounting

Description of the Matter

For the year ended December 31, 2019, the Company completed the acquisition of 451 single-family properties for a total purchase price of $118.5 million.

Description of the Matter For the year ended December 31, 2020, the Company completed the acquisition of 1,019 single-family properties for a total purchase price of $266.4 million.

As explained in Note 2 to the consolidated financial statements, the transactions were accounted for as asset acquisitions, and as such, are recorded at the price to acquire the single-family property, including acquisition costs.

1 unchanged sentence

Auditing the accounting for the Company’s 2020 acquisitions of single-family properties was challenging because the determination of the relative fair values of the acquired land and building involved a higher degree of subjectivity due to the lack of availability of direct comparable land market information.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s accounting for acquired single-family properties, including controls over the review of assumptions underlying the purchase price allocation and accuracy of the underlying data used.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s accounting for acquired single-family properties, including controls over the review of assumptions underlying the purchase price allocation and accuracy of the underlying data used.

For example, we tested controls over the determination of the fair value of the land and building assets and underlying assumptions used to develop those estimates.

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We have audited the accompanying consolidated balance sheets of American Homes 4 Rent, L.P.

(the Operating Partnership) as of December 31, 2019 and 2018 , and the related consolidated statements of operations, comprehensive income (loss), capital and cash flows for each of the three years in the period ended December 31, 2019 and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

(the Operating Partnership) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), capital and cash flows for each of the three years in the period ended December 31, 2020 and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S.

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Purchase Price Accounting

Description of the Matter For the year ended December 31, 2020, the Operating Partnership completed the acquisition of 1,019 single-family properties for a total purchase price of $266.4 million.

The purchase price is allocated to land and building based upon the relative fair values of the acquired land and building which were determined using the Operating Partnership’s own knowledge obtained from published market data such as county tax assessment records and supplemented by the Operating Partnership’s historical cost to construct a home.

Auditing the accounting for the Operating Partnership’s 2020 acquisitions of single-family properties was challenging because the determination of the relative fair values of the acquired land and building involved a higher degree of subjectivity due to the lack of availability of direct comparable land market information.

For example, we tested controls over the determination of the fair value of the land and building assets and underlying assumptions used to develop those estimates.

Management’s review of the allocated values included use of historical data and current internal construction costs to validate the reasonableness of the allocated land values.

For the 2020 single-family property acquisitions described above, our procedures included, among others, an evaluation of the methods and significant assumptions used by the Company and an evaluation of the sensitivity of changes in the significant assumptions on the purchase price allocation.

For a sample of acquisitions, we read the purchase and sale agreements and tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

For example, on a sub-market basis, we compared the allocated land and building values to the historical results of single-family properties acquired in the prior years.

We also performed a sensitivity analysis to evaluate the impact on the Operating Partnership’s financial statements resulting from changes in allocated land values.

In addition, for certain of these asset acquisitions, our valuation specialists performed corroborative calculations to assess whether the conclusions in the valuation were supported by observable market data.

Specifically, our valuation specialists utilized alternative data sources to develop a range of independent estimates of the land and building fair values to evaluate the reasonableness of management’s allocated land and building values.

/s/ Ernst & Young LLP

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(Amounts in thousands, except share data)

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Single-family properties:

Land $ 1,836,798 $ 1,756,504

Buildings and improvements 8,163,023 7,691,877

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Restricted cash 128,017 126,544

Rent and other receivables, net

Rent and other receivables 41,544 29,618

Escrow deposits, prepaid expenses and other assets 163,171 140,961

Deferred costs and other intangibles, net

Investments in unconsolidated joint ventures 93,109 67,935

Asset-backed securitization certificates 25,666 25,666

Goodwill 120,279 120,279

Total assets $ 9,593,625 $ 9,100,109

Revolving credit facility $ — $ —

Term loan facility, net

Asset-backed securitizations, net 1,927,607 1,945,044

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Shareholders' equity:

Class A common shares ($0.01 par value per share, 450,000,000 shares authorized, 300,107,599

and 296,014,546 shares issued and outstanding at December 31, 2019 and 2018, respectively)

Class B common shares ($0.01 par value per share, 50,000,000 shares authorized, 635,075 shares

issued and outstanding at December 31, 2019 and 2018)

Preferred shares ($0.01 par value per share, 100,000,000 shares authorized, 35,350,000 shares

issued and outstanding at December 31, 2019 and 2018)

Class A common shares ($ 0.01 par value per share, 450,000,000 shares authorized, 316,021,385 and 300,107,599 shares issued and outstanding at December 31, 2020 and 2019, respectively)

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

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

Additional paid-in capital 6,223,256 5,790,775

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Noncontrolling interest 683,336 683,364

Total equity 6,472,430 6,018,790

Total liabilities and equity $ 9,593,625 $ 9,100,109

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For the Years Ended December 31,

2020 2019 2018

Rents and other single-family property revenues $ 1,172,514 $ 1,132,137 $ 1,066,675

Other 10,322 11,241 6,180

Total revenues 1,182,836 1,143,378 1,072,855

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Depreciation and amortization 343,153 329,293 318,685

Hurricane-related charges, net

Other 14,036 6,733 7,265

Total expenses 1,072,201 1,030,332 978,128

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Remeasurement of participating preferred shares — — 1,212

Net income 154,829 156,260 112,438

Noncontrolling interest 14,455 15,221 4,165

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Redemption of participating preferred shares — — 32,215

Net income (loss) attributable to common shareholders

Net income attributable to common shareholders $ 85,246 $ 85,911 $ 23,472

Weighted-average common shares outstanding:

Net income (loss) attributable to common shareholders per share:

Basic 306,613,197 299,415,397 293,640,500

Diluted 307,074,747 299,918,966 294,268,330

Net income attributable to common shareholders per share:

Basic $ 0.28 $ 0.29 $ 0.08

Diluted $ 0.28 $ 0.29 $ 0.08

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

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For the Years Ended December 31,

2020 2019 2018

Net income $ 154,829 $ 156,260 $ 112,438

Other comprehensive (loss) income:

Gain on cash flow hedging instruments:

Gain on cash flow hedging instrument:

Gain on settlement of cash flow hedging instrument — — 9,553

Reclassification adjustment for amortization of interest expense included in net income ( 963 ) ( 963 ) ( 842 )

Gain on investment in equity securities:

Reclassification adjustment for realized gain included in net income

Other comprehensive (loss) income ( 963 ) ( 963 ) 8,711

Comprehensive income 153,866 155,297 121,149

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income attributable to noncontrolling interests 14,315 15,073 5,547

Dividends on preferred shares 55,128 55,128 52,586

Redemption of participating preferred shares — — 32,215

Comprehensive income (loss) attributable to common shareholders

Comprehensive income attributable to common shareholders $ 84,423 $ 85,096 $ 30,801

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

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(Amounts in thousands, except share data)

Class A common shares

Class B common shares

Preferred shares

Accumulated other

comprehensive income

Shareholders’

Noncontrolling

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, 2017 286,114,637 $ 2,861 635,075 $ 6 38,350,000 $ 384 $ 5,600,256 $ ( 453,953 ) $ 75 $ 5,149,629 $ 726,195 $ 5,875,824

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Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 821,918 8 — — — — 11,939 — — 11,947 — 11,947

Issuance of Class A common shares, net of offering costs of $10,904

Issuance of perpetual preferred shares, net of offering costs of $ 4,022

— — — — 4,600,000 46 110,932 — — 110,978 — 110,978

Redemptions of Class A units 33,327 — — — — — 515 — — 515 ( 515 ) —

Redemption of Series A and B participating preferred shares into Class A common shares

Redemption of Series C participating preferred shares into Class A common shares 10,848,827 109 — — ( 7,600,000 ) ( 76 ) 60,440 ( 32,215 ) — 28,258 — 28,258

Reacquisition of equity component upon settlement of exchangeable senior notes — — — — — — ( 20,098 ) — — ( 20,098 ) — ( 20,098 )

Repurchase of Class A common shares ( 1,804,163 ) ( 18 ) — — — — ( 34,951 ) — — ( 34,969 ) — ( 34,969 )

Liquidation of consolidated joint venture — — — — — — — ( 1,849 ) — ( 1,849 ) 1,608 ( 241 )

Distributions to equity holders:

Preferred shares (Note 9)

— — — — — — — ( 52,586 ) — ( 52,586 ) — ( 52,586 )

Noncontrolling interests — — — — — — — — — — ( 11,069 ) ( 11,069 )

Common shares ($ 0.20 per share)

Total other comprehensive loss

— — — — — — — ( 58,884 ) — ( 58,884 ) — ( 58,884 )

Net income — — — — — — — 108,273 — 108,273 4,165 112,438

Total other comprehensive income — — — — — — — — 7,318 7,318 1,393 8,711

Balances at December 31, 2018 296,014,546 $ 2,960 635,075 $ 6 35,350,000 $ 354 $ 5,732,466 $ ( 491,214 ) $ 7,393 $ 5,251,965 $ 721,777 $ 5,973,742

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(Amounts in thousands, except share data)

Class A common shares

Class B common shares

Preferred shares

Accumulated other

comprehensive income

Shareholders’

Noncontrolling

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, 2018 296,014,546 $ 2,960 635,075 $ 6 35,350,000 $ 354 $ 5,732,466 $ ( 491,214 ) $ 7,393 $ 5,251,965 $ 721,777 $ 5,973,742

1 unchanged sentence

Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 803,207 8 — — — — 10,682 — — 10,690 — 10,690

Issuance of perpetual preferred shares, net of offering costs of $4,022

Redemption of Class A units

Redemption of Series C participating preferred shares into Class A common shares

Reacquisition of equity component upon settlement of exchangeable senior notes

Repurchase of Class A common shares

Liquidation of consolidated joint venture

Redemptions of Class A units 3,289,846 33 — — — — 42,819 — 80 42,932 ( 42,932 ) —

Distributions to equity holders:

Preferred shares (Note 9)

— — — — — — — ( 55,128 ) — ( 55,128 ) — ( 55,128 )

Noncontrolling interests — — — — — — — — — — ( 10,554 ) ( 10,554 )

Common shares ($ 0.20 per share)

Total other comprehensive income

— — — — — — — ( 60,065 ) — ( 60,065 ) — ( 60,065 )

Net income — — — — — — — 141,039 — 141,039 15,221 156,260

Total other comprehensive loss — — — — — — — — ( 815 ) ( 815 ) ( 148 ) ( 963 )

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

2 unchanged sentences

(Amounts in thousands, except share data)

Class A common shares

Class B common shares

Preferred shares

Accumulated other

comprehensive income

Shareholders’

Noncontrolling

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

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Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 577,656 6 — — — — 5,354 — — 5,360 — 5,360

Redemption of Class A units

Issuance of Class A common shares, net of offering costs of $ 600

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

Redemptions of Class A units 300,000 3 — — — — 3,943 — 5 3,951 ( 3,951 ) —

Distributions to equity holders:

Preferred shares (Note 9)

— — — — — — — ( 55,128 ) — ( 55,128 ) — ( 55,128 )

Noncontrolling interests — — — — — — — — — — ( 10,392 ) ( 10,392 )

Common shares $ 0.20 per share)

— — — — — — — ( 61,906 ) — ( 61,906 ) — ( 61,906 )

Cumulative effect of adoption of ASU 2016-13 (Note 2)

— — — — — — — ( 1,494 ) ( 1,494 ) — ( 1,494 )

Net income — — — — — — — 140,374 — 140,374 14,455 154,829

Total other comprehensive loss — — — — — — — — ( 823 ) ( 823 ) ( 140 ) ( 963 )

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For the Years Ended December 31,

2020 2019 2018

Operating activities

Net income $ 154,829 $ 156,260 $ 112,438

Adjustments to reconcile net income to net cash provided by operating activities:

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Provision for bad debt — — 8,732

Hurricane-related charges, net

Loss on early extinguishment of debt — 659 1,447

Remeasurement of participating preferred shares — — ( 1,212 )

Equity in earnings of unconsolidated joint ventures

Equity in net losses (income) of unconsolidated joint ventures 774 ( 509 ) ( 546 )

Net gain on sale of single-family properties and other ( 44,194 ) ( 43,873 ) ( 17,946 )

Loss on impairment of single-family properties

Net gain on resolutions of mortgage loans

Loss on impairment of single-family properties and other 5,421 3,663 5,858

Other changes in operating assets and liabilities:

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Accounts payable and accrued expenses 14,193 17,408 11,772

Amounts payable to affiliates

Amounts due from related parties ( 290 ) ( 230 ) ( 50 )

Net cash provided by operating activities 474,100 457,887 410,882

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Distributions from joint ventures 129,007 22,561 36,917

Collections from mortgage financing receivables

Renovations to single-family properties ( 16,968 ) ( 21,883 ) ( 52,379 )

11 unchanged sentences

Payments related to tax withholding for share-based compensation ( 1,651 ) ( 834 ) ( 546 )

Redemptions of Class A common units

Payments on asset-backed securitizations ( 22,501 ) ( 21,517 ) ( 20,847 )

American Homes 4 Rent

Consolidated Statements of Cash Flows (Continued)

(Amounts in thousands)

For the Years Ended December 31,

Financing activities (continued)

Proceeds from revolving credit facility 130,000 — 405,000

Payments on revolving credit facility ( 130,000 ) ( 250,000 ) ( 295,000 )

Proceeds from term loan facility

Payments on term loan facility — ( 100,000 ) ( 100,000 )

3 unchanged sentences

Payments on exchangeable senior notes — — ( 135,093 )

American Homes 4 Rent

Consolidated Statements of Cash Flows (Continued)

(Amounts in thousands)

For the Years Ended December 31,

2020 2019 2018

Financing activities (continued)

Distributions to noncontrolling interests ( 10,381 ) ( 10,701 ) ( 11,071 )

2 unchanged sentences

Deferred financing costs paid — ( 3,572 ) ( 5,100 )

Net cash (used for) provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Net cash provided by (used for) financing activities 269,783 ( 92,116 ) 255,917

Net increase (decrease) in cash, cash equivalents and restricted cash 100,958 ( 11,095 ) ( 7,609 )

Cash, cash equivalents and restricted cash, beginning of period (see Note 2)

164,119 175,214 182,823

Cash, cash equivalents and restricted cash, end of period (see Note 2)

$ 265,077 $ 164,119 $ 175,214

Supplemental cash flow information

2 unchanged sentences

Accrued property renovations and development expenditures $ 36,544 $ 18,276 $ 1,921

Transfer of term loan borrowings to revolving credit facility

Transfer of deferred financing costs from term loan to revolving credit facility

Transfers of completed homebuilding deliveries to properties 322,024 167,652 94,212

Property and land contributions to an unconsolidated joint venture

Property and land contributions to unconsolidated joint ventures ( 132,439 ) ( 20,448 ) ( 40,942 )

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

Redemption of participating preferred shares — — ( 28,258 )

Noncash right-of-use assets obtained in exchange for operating lease liabilities 17,105 6,089 —

Accrued distributions to affiliates 4,834 4,629 71

4 unchanged sentences

(Amounts in thousands, except unit data)

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Single-family properties:

Land $ 1,836,798 $ 1,756,504

Buildings and improvements 8,163,023 7,691,877

7 unchanged sentences

Restricted cash 128,017 126,544

Rent and other receivables, net

Rent and other receivables 41,544 29,618

Escrow deposits, prepaid expenses and other assets 163,171 140,681

Investments in unconsolidated joint ventures 93,109 67,935

Amounts due from affiliates 25,666 25,946

Deferred costs and other intangibles, net

Goodwill 120,279 120,279

Total assets $ 9,593,625 $ 9,100,109

Revolving credit facility $ — $ —

Term loan facility, net

Asset-backed securitizations, net 1,927,607 1,945,044

7 unchanged sentences

Common units ( 316,656,460 and 300,742,674 units issued and outstanding at December 31, 2020 and 2019, respectively)

4,928,819 4,474,333

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

854,435 854,435

Limited partner:

Common units ( 51,726,980 and 52,026,980 units issued and outstanding at December 31, 2020 and 2019, respectively)

682,316 682,199

Accumulated other comprehensive income 6,860 7,823

6 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

Rents and other single-family property revenues $ 1,172,514 $ 1,132,137 $ 1,066,675

Other 10,322 11,241 6,180

Total revenues 1,182,836 1,143,378 1,072,855

5 unchanged sentences

Depreciation and amortization 343,153 329,293 318,685

Hurricane-related charges, net

Other 14,036 6,733 7,265

Total expenses 1,072,201 1,030,332 978,128

2 unchanged sentences

Remeasurement of participating preferred units — — 1,212

Net income 154,829 156,260 112,438

Noncontrolling interest — — ( 259 )

1 unchanged sentence

Redemption of participating preferred units — — 32,215

Net income (loss) attributable to common unitholders

Net income attributable to common unitholders $ 99,701 $ 101,132 $ 27,896

Weighted-average common units outstanding:

Net income (loss) attributable to common unitholders per unit:

Basic 358,603,291 352,460,401 348,990,561

Diluted 359,064,841 352,963,970 349,618,391

Net income attributable to common unitholders per unit:

Basic $ 0.28 $ 0.29 $ 0.08

Diluted $ 0.28 $ 0.29 $ 0.08

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

3 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

Net income $ 154,829 $ 156,260 $ 112,438

Other comprehensive (loss) income:

Gain on cash flow hedging instruments:

Gain on cash flow hedging instrument:

Gain on settlement of cash flow hedging instrument — — 9,553

Reclassification adjustment for amortization of interest expense included in net income ( 963 ) ( 963 ) ( 842 )

Gain on investment in equity securities:

Reclassification adjustment for realized gain included in net income

Other comprehensive (loss) income ( 963 ) ( 963 ) 8,711

Comprehensive income 153,866 155,297 121,149

Comprehensive (loss) income attributable to noncontrolling interests

Comprehensive loss attributable to noncontrolling interests — — ( 259 )

Preferred distributions 55,128 55,128 52,586

Redemption of participating preferred units — — 32,215

Comprehensive income (loss) attributable to common unitholders

Comprehensive income attributable to common unitholders $ 98,738 $ 100,169 $ 36,607

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

2 unchanged sentences

(Amounts in thousands, except unit data)

General Partner

Limited Partners

Common capital

Preferred capital amount

Common capital

comprehensive income

Total partners' capital

Noncontrolling

Total capital

General Partner Limited Partners

Common capital Preferred capital amount Common capital Accumulated

comprehensive income Total partners' capital Noncontrolling

interest Total capital

of units Amount Number

of units Amount

Balances at December 31, 2017 286,749,712 $ 4,248,236 $ 901,318 55,350,153 $ 727,544 $ 75 $ 5,877,173 $ ( 1,349 ) $ 5,875,824

1 unchanged sentence

Common units issued under share-based compensation plans, net of units withheld for employee taxes 821,918 11,947 — — — — 11,947 — 11,947

Issuance of Class A units, net of offering costs of $10,904

Issuance of perpetual preferred units, net of offering costs of $ 4,022

— — 110,978 — — — 110,978 — 110,978

Redemptions of Class A units 33,327 515 — ( 33,327 ) ( 515 ) — — — —

Redemption of Series A and B participating preferred units into Class A units

Redemption of Series C participating preferred units into Class A units 10,848,827 186,119 ( 157,861 ) — — — 28,258 — 28,258

Reacquisition of equity component upon settlement of exchangeable senior notes — ( 20,098 ) — — — — ( 20,098 ) — ( 20,098 )

Repurchases of Class A units ( 1,804,163 ) ( 34,969 ) — — — — ( 34,969 ) — ( 34,969 )

Liquidation of consolidated joint venture — ( 1,849 ) — — — — ( 1,849 ) 1,608 ( 241 )

Distributions to capital holders:

Preferred units (Note 9)

— — ( 52,586 ) — — — ( 52,586 ) — ( 52,586 )

Common units ($ 0.20 per unit)

Total other comprehensive loss

— ( 58,884 ) — — ( 11,069 ) — ( 69,953 ) — ( 69,953 )

Net income — 55,687 52,586 — 4,424 — 112,697 ( 259 ) 112,438

Total other comprehensive income — — — — — 8,711 8,711 — 8,711

Balances at December 31, 2018 296,649,621 $ 4,390,137 $ 854,435 55,316,826 $ 720,384 $ 8,786 $ 5,973,742 $ — $ 5,973,742

1 unchanged sentence

Common units issued under share-based compensation plans, net of units withheld for employee taxes 803,207 10,690 — — — — 10,690 — 10,690

Issuance of perpetual preferred units, net of offering costs of $4,022

Redemptions of Class A units 3,289,846 42,852 — ( 3,289,846 ) ( 42,852 ) — — — —

Redemption of Series C participating preferred units into Class A units

Reacquisition of equity component upon settlement of exchangeable senior notes

Repurchases of Class A units

Liquidation of consolidated joint venture

Distributions to capital holders:

Preferred units (Note 9)

— — ( 55,128 ) — — — ( 55,128 ) — ( 55,128 )

Common units ($ 0.20 per unit)

Total other comprehensive income

— ( 60,065 ) — — ( 10,554 ) — ( 70,619 ) — ( 70,619 )

Net income — 85,911 55,128 — 15,221 — 156,260 — 156,260

Total other comprehensive loss — — — — — ( 963 ) ( 963 ) — ( 963 )

Balances at December 31, 2019 300,742,674 $ 4,474,333 $ 854,435 52,026,980 $ 682,199 $ 7,823 $ 6,018,790 $ — $ 6,018,790

2 unchanged sentences

(Amounts in thousands, except unit data)

General Partner

Limited Partners

Common capital

Preferred capital amount

Common capital

comprehensive income

Total capital

General Partner Limited Partners

Common capital Preferred capital amount Common capital Accumulated

comprehensive income Total capital

of units Amount Number

of units Amount

Balances at December 31, 2019 300,742,674 $ 4,474,333 $ 854,435 52,026,980 $ 682,199 $ 7,823 $ 6,018,790

1 unchanged sentence

Common units issued under share-based compensation plans, net of units withheld for employee taxes 577,656 5,360 — — — — 5,360

Issuance of Class A common units, net of offering costs of $ 600

15,036,130 413,500 — — — — 413,500

Redemptions of Class A units 300,000 3,946 — ( 300,000 ) ( 3,946 ) — —

1 unchanged sentence

Preferred units (Note 9)

— — ( 55,128 ) — — — ( 55,128 )

Common units ($ 0.20 per unit)

— ( 61,906 ) — — ( 10,392 ) — ( 72,298 )

Cumulative effect of adoption of ASU 2016-13 (Note 2)

— ( 1,494 ) — — — — ( 1,494 )

Net income — 85,246 55,128 — 14,455 — 154,829

Total other comprehensive loss — — — — — ( 963 ) ( 963 )

5 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

Operating activities

Net income $ 154,829 $ 156,260 $ 112,438

Adjustments to reconcile net income to net cash provided by operating activities:

3 unchanged sentences

Provision for bad debt — — 8,732

Hurricane-related charges, net

Loss on early extinguishment of debt — 659 1,447

Remeasurement of participating preferred units — — ( 1,212 )

Equity in earnings of unconsolidated joint ventures

Equity in net losses (income) of unconsolidated joint ventures 774 ( 509 ) ( 546 )

Net gain on sale of single-family properties and other ( 44,194 ) ( 43,873 ) ( 17,946 )

Loss on impairment of single-family properties

Net gain on resolutions of mortgage loans

Loss on impairment of single-family properties and other 5,421 3,663 5,858

Other changes in operating assets and liabilities:

3 unchanged sentences

Accounts payable and accrued expenses 14,193 17,408 11,772

Amounts payable to affiliates

Amounts due from related parties ( 290 ) ( 230 ) ( 50 )

Net cash provided by operating activities 474,100 457,887 410,882

6 unchanged sentences

Distributions from joint ventures 129,007 22,561 36,917

Collections from mortgage financing receivables

Renovations to single-family properties ( 16,968 ) ( 21,883 ) ( 52,379 )

11 unchanged sentences

Payments related to tax withholding for share-based compensation ( 1,651 ) ( 834 ) ( 546 )

Redemptions of Class A common units

Payments on asset-backed securitizations ( 22,501 ) ( 21,517 ) ( 20,847 )

American Homes 4 Rent, L.P.

Consolidated Statements of Cash Flows (Continued)

(Amounts in thousands)

For the Years Ended December 31,

Financing activities (continued)

Proceeds from revolving credit facility 130,000 — 405,000

Payments on revolving credit facility ( 130,000 ) ( 250,000 ) ( 295,000 )

Proceeds from term loan facility

Payments on term loan facility — ( 100,000 ) ( 100,000 )

3 unchanged sentences

Payments on exchangeable senior notes — — ( 135,093 )

American Homes 4 Rent, L.P.

Consolidated Statements of Cash Flows (Continued)

(Amounts in thousands)

For the Years Ended December 31,

2020 2019 2018

Financing activities (continued)

Distributions to common unitholders ( 71,448 ) ( 70,533 ) ( 69,441 )

1 unchanged sentence

Deferred financing costs paid — ( 3,572 ) ( 5,100 )

Net cash (used for) provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Net cash provided by (used for) financing activities 269,783 ( 92,116 ) 255,917

Net increase (decrease) in cash, cash equivalents and restricted cash 100,958 ( 11,095 ) ( 7,609 )

Cash, cash equivalents and restricted cash, beginning of period (see Note 2)

164,119 175,214 182,823

Cash, cash equivalents and restricted cash, end of period (see Note 2)

$ 265,077 $ 164,119 $ 175,214

Supplemental cash flow information

2 unchanged sentences

Accrued property renovations and development expenditures $ 36,544 $ 18,276 $ 1,921

Transfer of term loan borrowings to revolving credit facility

Transfer of deferred financing costs from term loan to revolving credit facility

Transfers of completed homebuilding deliveries to properties 322,024 167,652 94,212

Property and land contributions to an unconsolidated joint venture

Property and land contributions to unconsolidated joint ventures ( 132,439 ) ( 20,448 ) ( 40,942 )

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

Redemption of participating preferred units — — ( 28,258 )

Noncash right-of-use assets obtained in exchange for operating lease liabilities 17,105 6,089 —

Accrued distributions to affiliates 4,834 4,629 71

5 unchanged sentences

Organization and Operations

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

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

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

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

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

As of December 31, 2020, the Company held 53,584 single-family properties in 22 states, including 711 properties classified as held for sale.

AH4R is the general partner of, and as of December 31, 2019 , owned approximately 85.2 % of the common partnership interest in the Operating Partnership with the remaining 14.8 % of the common partnership interest owned by limited partners.

AH4R is the general partner of, and as of December 31, 2020 owned approximately 85.9 % of the common partnership interest in, the Operating Partnership.

The remaining 14.1 % of the common partnership interest was owned by limited partners.

As the sole general partner of the Operating Partnership, AH4R has exclusive control of the Operating Partnership’s day-to-day management.

6 unchanged sentences

One difference between the Company and the Operating Partnership is $ 25.7 million of asset-backed securitization certificates issued by the Operating Partnership and purchased by AH4R.

The asset-backed securitization certificates are recorded as an asset-backed securitization certificates receivable by the Company and an amount due from affiliates by the Operating Partnership.

The asset-backed securitization certificates are recorded as an asset-backed securitization certificates receivable by the Company and as an amount due from affiliates by the Operating Partnership.

AH4R contributes all net proceeds from its various equity offerings to the Operating Partnership.

11 unchanged sentences

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

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

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

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

4 unchanged sentences

Notes to Consolidated Financial Statements

As a result of the expected growth in our joint venture activities, the investments in unconsolidated joint ventures balance has been reclassified into a separate balance sheet line item.

This resulted in the reclassification of $ 67.9 million as of December 31, 2019, which was previously included in escrow deposits, prepaid expenses and other assets, into investments in unconsolidated joint ventures on the consolidated balance sheets.

Certain other amounts in the consolidated financial statements for the prior periods have also been reclassified or presented to conform to the current year presentation.

Use of Estimates

4 unchanged sentences

We believe that we have operated, and continue to operate, in such a manner as to satisfy the requirements for qualification as a REIT.

Provided that we qualify as a REIT and our distributions to our shareholders equal or exceed our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains), we generally will not be subject to U.S.

Provided that we qualify as a REIT and our distributions to our shareholders equal or exceed our REIT taxable income (determined without regard to the deduction for dividends paid and including any net capital gains), we generally will not be subject to U.S.

federal income tax.

5 unchanged sentences

federal income and excise taxes on our undistributed REIT taxable income, if any.

Our taxable REIT subsidiaries (“TRS”) will be subject to U.S.

Certain of our subsidiaries are subject to taxation by U.S.

federal, state and local authorities for the periods presented.

We made joint elections to treat certain subsidiaries as taxable REIT subsidiaries which are subject to U.S.

federal, state and local taxes on their income at regular corporate rates.

9 unchanged sentences

Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

We recognize tax benefits of uncertain tax positions only if it is more likely than not that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full authority of all relevant information.

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.

1 unchanged sentence

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

As a REIT, we are required to distribute annually to our shareholders at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our REIT taxable income.

As a REIT, we generally are required to distribute annually to our shareholders at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and any net capital gains) and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our REIT taxable income (determined without regard to the deduction for dividends paid and including any net capital gains).

The Operating Partnership funds the payment of distributions.

We expect to use our NOL to reduce our REIT taxable income in future years.

AH4R had an NOL for U.S.

federal income tax purposes of an estimated $ 188.8 million as of December 31, 2019 and approximately $ 275.0 million as of December 31, 2018 .

Once our NOL is fully used, we may be required to increase AH4R’s distributions to comply with REIT distribution requirements and our current policy of distributing approximately all of our REIT taxable income (determined without regard to the deduction for dividends paid).

AH4R had a net

American Homes 4 Rent

1 unchanged sentence

Notes to Consolidated Financial Statements

operating loss (“NOL”) for U.S.

federal income tax purposes of an estimated $ 60.2 million as of December 31, 2020 and approximately $ 189.1 million as of December 31, 2019.

We intend to use our NOL (to the extent available) to reduce our REIT taxable income and will distribute approximately all of our remaining REIT taxable income (determined without regard to the deduction for dividends paid and including any net capital gains).

Investments in Real Estate

1 unchanged sentence

Fair value is determined in accordance with ASC 820, Fair Value Measurements and Disclosures , and is primarily based on unobservable data inputs.

In making estimates of fair values for purposes of allocating the purchase price of individually acquired properties subject to an existing lease, the Company utilizes its own market knowledge obtained from historical transactions, its internal construction program and published market data.

In this regard, the Company also utilizes information obtained from county tax assessment records to assist in the determination of the fair value of the land and building.

For the year ended December 31, 2019 , the Company completed the acquisition of 451 single-family properties for a total purchase price of $ 118.5 million , which was included in cash paid for single-family properties within the consolidated statement of cash flows.

The value of acquired lease-related intangibles is estimated based upon the costs we would have incurred to lease the property under similar terms.

Such costs are capitalized and amortized over the remaining life of the lease.

Acquired leases are generally short-term in nature (less than one year ).

For the year ended December 31, 2020, the Company purchased 1,019 single-family properties treated as asset acquisitions for accounting purposes for a total purchase price of $ 266.4 million, which was included in cash paid for single-family properties within the consolidated statement of cash flows.

The nature of our business requires that in certain circumstances we acquire single-family properties subject to existing liens.

Liens that we expect to be extinguished in cash are estimated and accrued for on the date of acquisition and recorded as a cost of the property.

We incur costs to prepare our acquired properties for rental.

We incur costs to prepare properties acquired through our traditional acquisition channels for rental.

These costs, along with related holding costs, are capitalized to the cost of the property during the period the property is undergoing activities to prepare it for its intended use.

2 unchanged sentences

Single-Family Properties Under Development and Development Land

Land and construction in progress related to our internal construction program (AMH Development Program) are presented separately in single-family properties under development and development land within the consolidated balance sheets.

Land and construction in progress for our AMH Development Program are presented separately in single-family properties under development and development land within the consolidated balance sheets.

Our capitalization policy on development properties follows the guidance in ASC 835-20, Capitalization of Interest , and ASC 970, Real Estate-General .

7 unchanged sentences

During the years ended December 31, 2020, 2019 and 2018, none of the properties classified as held for sale met the criteria to be reported as a discontinued operation.

Impairment of Long-lived Assets

We evaluate our long-lived assets for impairment periodically or whenever events or circumstances indicate that their carrying amount may not be recoverable.

Significant indicators of impairment may include, but are not limited to, declines in home

American Homes 4 Rent

1 unchanged sentence

Notes to Consolidated Financial Statements

values, rental rates and occupancy percentages, as well as significant changes in the economy.

Impairment of Long-lived Assets

We evaluate our long-lived assets for impairment periodically or whenever events or circumstances indicate that their carrying amount may not be recoverable.

Significant indicators of impairment may include, but are not limited to, declines in home values, rental rates and occupancy percentages, as well as significant changes in the economy.

If an impairment indicator exists, we compare the expected future undiscounted cash flows against the net carrying amount.

If the sum of the estimated undiscounted cash flows is less than the net carrying amount, we record an impairment loss for the difference between the estimated fair value of the individual property and the carrying amount of the property at that date.

No significant impairments on operating properties were recorded during the years ended December 31, 2019 , 2018 and 2017 , except for certain properties in our Houston, Florida and Southeast markets that were impacted by the hurricanes in the third quarter of 2017 (see Note 3 ).

Leasing Costs

As a result of the adoption of Accounting Standards Update (“ASU”) No.

2016-02, Leases (Topic 842) , (“ASC 842”) on January 1, 2019, only direct costs incurred due to the execution of a lease are capitalized and amortized over the term of the leases, which generally have a term of one year .

Prior to January 1, 2019, both direct and indirect incremental costs incurred to lease properties were capitalized and amortized over the term of the leases.

See “Accounting Pronouncements Adopted January 1, 2019” below for additional information.

No significant impairments on operating properties were recorded during the years ended December 31, 2020, 2019 and 2018.

Commercial Office Leases

We lease commercial office space from third parties for use in our corporate and property management operations.

Commercial office leases are accounted for as operating leases in accordance with ASC 842 which requires us to recognize right-of-use (“ROU”) assets and lease liabilities within the consolidated balance sheets for the rights and obligations created from these leases.

Operating lease ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date.

As the implicit rate is generally not determinable, the ROU assets and lease liabilities are measured using our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.

The expected lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

Lease expense for operating leases is recognized on a straight-line basis over the expected lease term in general and administrative expense within the consolidated statements of operations.

We elected the short-term lease measurement and recognition exemption and do not establish ROU assets or lease liabilities for operating leases with terms of twelve months or less.

We also elected the practical expedient allowing us to avoid separating non-lease components from the associated lease component for our commercial office leases.

The ROU assets and lease liabilities are presented in escrow deposits, prepaid expenses and other assets and accounts payable and accrued expenses, respectively, within the consolidated balance sheets.

Depreciation and Amortization

1 unchanged sentence

Buildings are depreciated over thirty years and improvements and other assets are depreciated over their estimated economic useful lives, generally three to thirty years .

We consider the value of in-place leases in the allocation of the purchase price, and amortize such amounts on a straight-line basis over the remaining terms of the leases.

The unamortized portion of the value of in-place leases is included in deferred costs and other intangibles, net within the consolidated balance sheets.

Intangible Assets

9 unchanged sentences

We also have the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the goodwill impairment test.

The impairment test compares the fair value of the reporting unit with its carrying amount.

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

impairment test compares the fair value of the reporting unit with its carrying amount.

If the carrying amount exceeds the fair value, the impairment loss is determined as the excess of the carrying amount of the goodwill reporting unit over the fair value of that goodwill, not to exceed the carrying amount.

3 unchanged sentences

Deferred Financing Costs

Financing costs related to the origination of the Company’s debt instruments are deferred and amortized as interest expense on an effective interest method over the contractual term of the applicable financing.

Financing costs related to the origination of the

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

Company’s revolving credit facility are presented net of accumulated amortization and are included in deferred costs and other intangibles, net within the consolidated balance sheets.

Financing costs related to the origination of the Company’s term loan credit facility, unsecured senior notes and asset-backed securitizations are presented net of accumulated amortization and are netted against the related debt instrument under liabilities within the consolidated balance sheets.

Financing costs related to the origination of the Company’s debt instruments are deferred and amortized as interest expense under the effective interest method over the contractual term of the applicable financing.

Financing costs related to the origination of the Company’s revolving credit facility are presented net of accumulated amortization and are included in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets.

Financing costs related to the origination of the Company’s unsecured senior notes and asset-backed securitizations are presented net of accumulated amortization and are netted against the related debt instrument under liabilities within the consolidated balance sheets.

Cash, Cash Equivalents and Restricted Cash

7 unchanged sentences

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

2020 2019 2018

Cash and cash equivalents $ 137,060 $ 37,575 $ 30,284

6 unchanged sentences

Investments in unconsolidated joint ventures are recorded initially at cost, and subsequently adjusted for equity in earnings and cash contributions and distributions.

Under the equity method of accounting, our net equity investment is included in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets, and our share of net income or loss from the joint ventures is included within other revenues in the consolidated statements of operations.

Under the equity method of accounting, our net equity investment is included in investments in unconsolidated joint ventures within the consolidated balance sheets, and our share of net income or loss from the joint ventures is included within other revenues in the consolidated statements of operations.

Our recognition of joint venture income or loss is generally based on ownership percentages, which may change upon the achievement of certain investment return thresholds.

1 unchanged sentence

Our investments in unconsolidated joint ventures are reviewed for impairment periodically and we will record an impairment charge when events or circumstances change indicating that a decline in the fair values below the carrying values has occurred and such decline is other-than-temporary.

Notes Receivable

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

Notes receivable are presented net of discounts in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets.

Interest income from the notes, including amortization of discounts, is presented in other revenues within the consolidated statements of operations.

The Company analyzes its notes receivables quarterly based on certain factors including, but not limited to, the borrower’s financial results and satisfying scheduled payments.

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

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.

During the year ended December 31, 2020, the Company

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Notes to Consolidated Financial Statements

recognized a $ 4.9 million impairment charge in other expenses within the consolidated statements of operations associated with the liquidation of legacy joint ventures, which were acquired as part of the American Residential Properties, Inc.

(“ARPI”) merger in February 2016.

Notes Receivable, Net

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.

Notes receivable are presented net of discounts in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets.

Interest income from the notes, including amortization of discounts, is presented in other revenues within the consolidated statements of operations.

Upon adoption of ASU 2016-13 on January 1, 2020, 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.

Beginning January 1, 2020, notes receivable are also 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.

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

Changes to the allowance for expected credit losses are recognized in other expenses within the consolidated statements of operations.

Revenue and Expense Recognition

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As a result of the adoption of ASC 842 on January 1, 2019, the Company classifies our single-family property leases as operating leases and elects to not separate the lease component, comprised of rents from single-family properties, from the associated non-lease component, comprised of fees from single-family properties and tenant charge-backs.

The combined component is accounted for under the new lease accounting standard while certain tenant charge-backs are accounted for as variable payments under the revenue accounting guidance.

Rental revenue, net of any concessions, is recognized on a straight-line basis over the term of the lease, which is not materially different than if it were recorded when due from tenants and recognized monthly as it is earned.

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This allowance was estimated based on, among other considerations, payment histories, overall delinquencies and available security deposits.

The Company’s allowance for doubtful accounts was $ 8.6 million as of December 31, 2018 and was included in rent and other receivables, net within the consolidated balance sheets.

See “Accounting Pronouncements Adopted January 1, 2019” below for additional information.

We accrue for property taxes and homeowners’ association (“HOA”) assessments based on amounts billed, and, in some circumstances, estimates and historical trends when bills or assessments are not available.

The actual assessment may differ from the estimates, resulting in a change in estimate in a subsequent period.

Gains on sales of properties are recognized pursuant to the provisions included in ASC 610-20, Other Income .

Gains or losses on sales of properties and upon contributions to our unconsolidated joint ventures are recognized pursuant to the provisions included in ASC 610-20, Other Income .

Under ASC 610-20, we must first determine whether the transaction is a sale to a customer or non-customer.

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If we determine that we do not have a controlling financial interest in the real estate, we evaluate whether a contract exists under ASC 606, Revenue from Contracts with Customers , and whether the buyer has obtained control of the asset that was sold.

We recognize a full gain on sale, which is presented in gain on sale of single-family properties and other, net within the consolidated statements of operations, when the derecognition criteria under ASC 610-20 have been met.

We recognize a full gain or loss on sale, which is presented in gain on sale of single-family properties and other, net within the consolidated statements of operations, when the derecognition criteria under ASC 610-20 have been met.

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

Leasing Costs

As a result of the adoption of Accounting Standards Update (“ASU”) No.

Prior to January 1, 2019, both direct and indirect incremental costs incurred to lease properties were capitalized and amortized over the term of the leases.

Accounts Payable and Accrued Expenses

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Share-Based Compensation

Our 2012 Equity Incentive Plan is accounted for under the provisions of ASC 718, Compensation—Stock Compensation .

Noncash share-based compensation expense related to options to purchase our Class A common shares and restricted stock units issued to members of the Company’s board of trustees and employees is based on the fair value of the options and restricted stock units on the grant date and amortized over the service period.

Our 2012 Equity Incentive Plan (the “Plan”) is accounted for under the provisions of ASC 718, Compensation—Stock Compensation .

Noncash share-based compensation costs related to options to purchase our Class A common shares and restricted stock units (“RSUs”) issued to members of the Company’s board of trustees and employees is based on the fair value of the options and RSUs on the grant date and generally amortized over the service period.

Forfeitures are recognized as they occur.

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

In February 2020, the Plan was modified to allow for continued release of awards based on the original vesting schedule, rather than forfeiture, of unvested share-based grants issued in 2020 upon termination of service for employees who meet certain retirement eligibility criteria, including age and years of service.

For the 2020 share-based grants, retirement eligible employees on the date of grant became fully vested and employees who will become retirement eligible prior to the end of their grant’s contractual life will become fully vested on the date they meet the criteria for retirement.

Full compensation cost is recognized immediately at the date of grant to the extent a participant is retirement eligible and compensation cost is accelerated to the extent that a participant will become retirement eligible prior to the end of the contractual life of their 2020 share-based grants.

Fair Value of Financial Instruments

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• Level 3 —Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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

Our revolving credit facility, term loan facility and asset-backed securitizations are also financial instruments, whose fair values were estimated using unobservable inputs by modeling the contractual cash flows required under the instruments and discounting them back to their present values using estimates of current market rates.

Our unsecured senior notes are also financial instruments whose fair values were estimated using observable inputs, based on the market value of the last trade at the end of the period.

The Company’s participating preferred shares derivative liability and treasury lock were the only financial instruments recorded at fair value on a recurring basis within our consolidated financial statements (see Note 12 ).

Fair Value for our consideration of the fair value of our financial instruments.

From time to time, we may use interest rate cap agreements or other derivative instruments for interest rate risk management purposes.

We assess these derivatives at inception and on an ongoing basis for the effectiveness of qualifying cash flow hedges.

For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings as interest expense during the period in which the hedged transaction affects earnings.

For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as

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Notes to Consolidated Financial Statements

a component of other comprehensive income and reclassified into earnings as interest expense during the period in which the hedged transaction affects earnings.

Segment Reporting

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Accounting Pronouncements Adopted January 1, 2020

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2016-02, Leases (Topic 842) , which sets forth principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessors and lessees).

Lessor accounting remains similar to lessor accounting under previous guidance while aligning with the FASB’s revised revenue recognition guidance for non-lease components of lease agreements.

The new guidance requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases.

We have elected the short-term lease measurement and recognition exemption and do not establish right-of-use assets or lease liabilities for operating leases with terms of twelve months or less.

The new guidance also requires lessees and lessors to capitalize, as initial direct costs, only those costs incurred due to the execution of a lease.

Other costs previously capitalized under ASC 840, including indirect leasing costs, are expensed as incurred.

In July 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842) Targeted Improvements , which provides lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease component if the non-lease components would otherwise be accounted for under the new revenue recognition standard and both the

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American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

timing and pattern of transfer are the same for the non-lease components and associated lease component and, if accounted for separately, the lease component would be classified as an operating lease.

As issued, ASU No.

2016-02 required modified retrospective application for all leases existing as of, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, with certain practical expedients available.

2018-11 simplifies the transition requirements by providing companies an option to initially apply the new lease requirements as of the date of adoption and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption.

In December 2018, the FASB issued ASU No.

2018-20, Narrow-Scope Improvements for Lessors , which allows lessors to make an accounting policy election to exclude sales taxes and other similar taxes on lease transactions from lease revenue and the associated expense and requires lessors to exclude costs paid directly by lessees to third parties on the lessor’s behalf from lease revenue.

The guidance is effective for the Company for annual reporting periods beginning after December 15, 2018, and for interim periods within those annual periods, with early adoption permitted.

The Company adopted this guidance (the “new lease accounting standard”) effective January 1, 2019.

As part of our accounting policy for the new guidance, the Company elected the simplified transition requirements provided by ASU No.

2018-11 and applied the new lease accounting standard beginning January 1, 2019.

Comparative periods are not restated.

We also elected the package of practical expedients which permits the Company to not reevaluate whether existing contracts contain leases, to not reevaluate existing leases for lease classification and to not reassess initial direct costs previously capitalized prior to the adoption of the new guidance.

As a result of our accounting policy elections, the Company did not recognize a cumulative effect adjustment on January 1, 2019.

The new guidance affects our policy for capitalizing initial direct costs.

Had we adopted this guidance on January 1, 2017, the Company would have expensed an additional $ 8.0 million and $ 3.6 million of indirect leasing costs that were capitalized under the previous guidance during the years ended December 31, 2018 and 2017 , respectively.

The Company classifies our single-family property leases as operating leases and elects to not separate the lease component, comprised of rents from single-family properties, from the associated non-lease component, comprised of fees from single-family properties and tenant charge-backs.

The combined component is accounted for under the new lease accounting standard while certain tenant charge-backs are accounted for as variable payments under the revenue accounting guidance.

As a result of the new guidance, the Company reclassified previously reported rents from single-family properties, fees from single-family properties and tenant charge-backs to rents and other single-family property revenues within the consolidated statements of operations.

Additionally, when collectability is not deemed probable, we write-off the tenant’s receivables and limit lease income to cash received.

Prior to the adoption of the new lease accounting standard, the Company classified bad debt expense as property operating expenses within the consolidated statements of operations;

previously reported property operating expenses were not restated.

As a lessee, the Company recognized $ 4.8 million of lease liabilities and corresponding right-of-use assets on January 1, 2019 for office space we lease at our corporate headquarters in Agoura Hills, CA and at our field offices.

In June 2018, the FASB issued ASU No.

2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting , which aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions.

The guidance is effective for the Company in annual reporting periods beginning after December 15, 2018, and for interim periods within those annual periods.

An entity should only remeasure liability-classified awards that have not been settled by the date of adoption and equity-classified awards for which a measurement date has not been established through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

The Company adopted this guidance effective January 1, 2019.

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

Recent Accounting Pronouncements Not Yet Effective

In June 2016, the FASB issued ASU No.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13, Financial Instruments—Credit Losses (Topic 326):

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In May 2019, the FASB issued ASU No.

2019-05, Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief , which provides entities that have certain instruments within the scope of Topic 326 with an option to irrevocably elect the fair value option for certain financial assets

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Notes to Consolidated Financial Statements

previously measured at amortized cost basis upon adoption of Topic 326.

In November 2019, the FASB issued ASU No.

2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which provides further clarification around some of the amendments in ASU 2016-13.

The guidance will be effective for the Company for annual reporting periods beginning after December 15, 2019, and for interim periods within those annual periods.

The guidance is effective for the Company for annual reporting periods beginning after December 15, 2019, and for interim periods within those annual periods.

Early adoption is permitted for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods.

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The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the effective date of the guidance.

The Company plans to adopt this guidance on January 1, 2020.

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

The Company adopted this guidance effective January 1, 2020.

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

In August 2018, the FASB issued ASU No.

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All other amendments should be applied retrospectively to all periods presented upon their effective date.

The Company plans to adopt this guidance on January 1, 2020.

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

The Company adopted this guidance effective January 1, 2020.

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

In August 2018, the FASB issued ASU No.

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Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use.

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 guidance is effective for fiscal years beginning after December 15, 2019, and for interim

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Notes to Consolidated Financial Statements

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 Company plans to adopt this guidance on January 1, 2020.

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

The Company adopted this guidance effective January 1, 2020.

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

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

The amendments in this ASU apply only to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform but do not apply to contract modifications made or hedging relationships entered into or evaluated after December 31, 2022.

The amendments in this ASU allow companies to (i) account for modifications to contracts within the scope of ASC 310, Receivables , and ASC 470, Debt , prospectively by adjusting the effective interest rate and (ii) account for modifications to contracts within the scope of ASC 842, Leases , as a continuation of existing lease agreements.

The guidance also provides optional expedients for modifications to contracts within the scope of ASC 815, Derivatives and Hedging .

The guidance is effective immediately, and entities may elect to apply the guidance as of January 1, 2020 or the beginning of a subsequent interim period, or prospectively from a date beginning January 1, 2020 or in a subsequent interim period up to the date the financial statements are available to be issued.

The Company adopted this guidance effective January 1, 2020.

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

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

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

Under ASC No.

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

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

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

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

Accounting Pronouncements Adopted July 1, 2020

In January 2020, the FASB issued ASU No.

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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.

American Homes 4 Rent

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

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Occupied single-family properties $ 7,957,513 $ 7,534,627

Single-family properties recently acquired

Single-family properties recently acquired or developed 66,857 88,181

Single-family properties in turnover process 149,684 308,008

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The following table summarizes the Company’s dispositions of single-family properties and land for the years ended December 31, 2020, 2019 and 2018 (in thousands, except property data):

For the Year Ended December 31,

For the Years Ended December 31,

2020 2019 2018

Single-family properties:

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Net proceeds (1)(2)

$ 228,495 $ 248,199 $ 105,394

Net gain on sale (3)

$ 47,187 $ 43,507 $ 16,313

Net proceeds $ 71 $ 3,205 $ 763

Net gain on sale $ 7 $ 366 $ 220

Total net proceeds for the years ended December 31, 2019 , 2018 and 2017 included $ 30.7 million , zero and $ 7.0 million , respectively, of notes receivable, before $ 1.2 million , zero and $ 1.5 million , respectively, of discounts, which are presented in escrow deposits, prepaid expenses and other assets (see Note 5 ).

During the third quarter of 2017, Hurricanes Harvey and Irma impacted certain properties in our Houston, Florida and Southeast markets.

Approximately 125 homes sustained major damage and nearly 3,400 homes incurred minor damage, consisting primarily of downed trees and damaged roofs and fences.

The Company’s property and casualty insurance policies provide coverage for wind and flood damage, as well as business interruption costs, during the period of remediation and repairs, subject to deductibles and limits.

During the year ended December 31, 2017 , the Company recognized an $ 11.0 million impairment charge to write down the net book values of the impacted properties, of which we believed it was probable that we would recover an estimated $ 8.9 million through insurance claims, and accrued $ 5.9 million of additional repair, remediation and other costs.

The $ 8.0 million of net charges were included in hurricane-related charges, net within the consolidated statement of operations for the year ended December 31, 2017 .

After the $ 11.0 million impairment charge, the impacted properties had an aggregate net book value of $ 7.1 million .

The impairment charge represents the difference between management’s estimates of the fair values of the impacted properties and their carrying values.

The fair values were based on current market prices of the components of the properties that did not sustain damage.

As these fair value measurements were estimated using unobservable inputs, we classify them within Level 3 of the valuation hierarchy.

During the year ended December 31, 2019 , we collected $ 3.5 million in proceeds from hurricane-related insurance claims, of which approximately $ 1.3 million related to business interruption recoveries, and during the year ended December 31, 2018 , we collected $ 4.5 million in proceeds from hurricane-related insurance claims.

Rent and Other Receivables, Net

Included in rent and other receivables, net is $ 2.7 million and $ 4.9 million of hurricane-related insurance claims receivable as of December 31, 2019 and 2018 , respectively.

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Notes to Consolidated Financial Statements

(1) Total net proceeds for the year ended December 31, 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 5.

Escrow Deposits, Prepaid Expenses and Other Assets).

(2) Net proceeds are net of deductions for working capital prorations.

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

Rent and Other Receivables

Rents and other single-family property revenues consisted of the following for the years ended December 31, 2020, 2019 and 2018 (in thousands):

For the Years Ended December 31,

2020 2019 2018

Rents from single-family properties (1)

$ 1,172,514 $ 1,132,137 $ 908,936

Fees from single-family properties — — 10,946

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Rents and other single-family property revenues $ 1,172,514 $ 1,132,137 $ 1,066,675

For the year ended December 31, 2019 , rents from single-family properties included $ 159.9 million of variable lease payments for tenant charge-backs, which are primarily related to cost recoveries on utilities, and $ 13.8 million of variable lease payments for fees from single-family properties.

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

(1) For the years ended December 31, 2020 and 2019, rents from single-family properties included $ 160.8 million and $ 159.9 million, respectively, of variable lease payments for tenant charge-backs, which are primarily related to cost recoveries on utilities, and $ 16.4 million and $ 13.8 million of variable lease payments for fees from single-family properties.

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Notes to Consolidated Financial Statements

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

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

Future Minimum Rental Revenues

December 31, 2020

2021 $ 550,012

Total $ 582,380

As of December 31, 2020 and 2019, rent and other receivables included $ 0.8 million and $ 2.7 million, respectively, of insurance claims receivables.

During the year ended December 31, 2020, proceeds collected from insurance claims included $ 4.0 million related to legal recoveries and $ 3.7 million related to hurricane-related insurance claims.

During the year ended December 31, 2019, we collected $ 3.5 million in proceeds from hurricane-related insurance claims, of which approximately $ 1.3 million related to business interruption recoveries, and during the year ended December 31, 2018, we collected $ 4.5 million in proceeds from hurricane-related insurance claims.

Escrow Deposits, Prepaid Expenses and Other Assets

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

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Escrow deposits, prepaid expenses and other $ 51,886 $ 50,709

Investments in joint ventures

Notes receivable

Deferred costs and other intangibles, net 4,864 6,840

Notes receivable, net 35,519 36,834

Operating lease ROU assets 18,772 3,836

Commercial real estate, software, vehicles and FF&E, net 52,130 42,742

Total $ 163,171 $ 140,961

Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $ 8.9 million, $ 7.6 million and $ 7.0 million for the years ended December 31, 2020, 2019 and 2018, respectively.

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American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

Investments in Joint Ventures

During the third quarter of 2018, the Operating Partnership entered into a joint venture with a leading institutional investor for the purpose of developing, leasing and operating newly constructed single-family rental homes located in select submarkets, which was subsequently amended and upsized to $ 312.5 million in July 2019.

The initial term of the joint venture is five years from the effective date of the amended agreement, during which neither member may unilaterally market properties for sale.

The Company is entitled to a proportionate share of the joint venture’s cash flows based on its 20 % ownership interest along with an opportunity for a promoted interest.

The Company also receives fees for services it provides to the joint venture.

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

During the years ended December 31, 2019 and 2018 , the Company contributed $ 20.4 million and $ 40.9 million , respectively, of single-family properties and single-family properties under development and development land, as well as $ 13.1 million and $ 8.4 million , respectively, of cash to the joint venture and received $ 17.5 million and $ 32.8 million , respectively, in distributions from the joint venture in respect of its contributions.

The balance of the Company’s investment in the joint venture as of December 31, 2019 and 2018 was $ 33.8 million and $ 18.0 million , respectively, which are included in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets.

The Company provides property management and development services to certain unconsolidated joint ventures that are related parties.

Management fee income from these joint ventures was $ 3.6 million , $ 1.9 million and $ 2.4 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, which are included in other revenues within the consolidated statements of operations.

Notes Receivable

During the second quarter of 2019, as part of a bulk portfolio disposition of 215 homes, the Company issued a $ 30.7 million secured promissory note, which is secured by a first priority mortgage on the disposed homes, guaranteed by a parent of the borrower, matures on June 20, 2025, bears interest at 2.70 % through October 31, 2019 and 4.50 % thereafter to maturity, and contains certain required covenants.

The secured promissory note requires quarterly interest payments with the full principal due at maturity.

As of December 31, 2019 , the secured note receivable, net of a $ 0.9 million discount, had a balance of $ 29.8 million included in escrow deposits, prepaid expenses and other assets on the consolidated balance sheet.

Deferred Costs and Other Intangibles, Net

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

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Deferred leasing costs $ 3,782 $ 3,738

Deferred financing costs 11,244 11,244

Intangible assets:

Database intangible asset — 2,100

15,026 17,082

accumulated amortization ( 10,162 ) ( 10,242 )

Total $ 4,864 $ 6,840

Amortization expense related to deferred leasing costs, the value of in-place leases, and database intangibles was $ 4.1 million, $ 8.0 million and $ 11.0 million for the years ended December 31, 2020, 2019 and 2018, respectively, and was included in depreciation and amortization within the consolidated statements of operations.

Amortization of deferred financing costs that relate to our revolving credit facility was $ 2.0 million , $ 2.0 million and $ 1.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, and was included in gross interest, prior to interest capitalization (see Note 7 ).

Amortization of deferred financing costs that relate to our revolving credit facility was $ 2.0 million for each of the years ended December 31, 2020, 2019 and 2018 and was included in gross interest, prior to interest capitalization (see Note 7.

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

Deferred Leasing Costs

Deferred Financing Costs

Deferred Leasing Costs Deferred Financing Costs Total

2021 $ 1,932 $ 1,964 $ 3,896

2022 — 968 968

Total $ 1,932 $ 2,932 $ 4,864

Investments in Unconsolidated Joint Ventures

As of December 31, 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 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.

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, which was subsequently amended and upsized to $ 312.5 million during the third quarter of 2019.

The initial term of the joint venture with Institutional Investor JV is five years from the effective date of the amended agreement, during which neither member may unilaterally market properties for sale.

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

Joint Venture Description % Ownership at December 31, 2020 Completed Homes at December 31, 2020 Balances at

December 31, 2020 Balances at

December 31, 2019

Alaska JV 20 % 363 $ 26,020 $ 29,326

Institutional Investor JV 20 % 743 34,112 33,757

Morgan JV 20 % 187 32,977 —

N/A N/A — 4,852

1,293 $ 93,109 $ 67,935

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

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

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

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 $ 5.8 million, $ 3.6 million and $ 1.9 million for the years ended December 31, 2020, 2019 and 2018, respectively, and was included in other revenues within the 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 consolidated balance sheets.

During the third quarter of 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 December 31, 2020, the joint venture’s loan had an $ 85.2 million outstanding principal balance.

The Company 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.

3 unchanged sentences

Interest Rate (1)

Maturity Date

December 31, 2019

December 31, 2018

AH4R 2014-SFR2 securitization

October 9, 2024

AH4R 2014-SFR3 securitization

December 9, 2024

Maturity Date December 31, 2020 December 31, 2019

AH4R 2014-SFR2 securitization 4.42 % October 9, 2024 $ 479,981 $ 485,828

AH4R 2014-SFR3 securitization 4.40 % December 9, 2024 495,392 501,393

AH4R 2015-SFR1 securitization (2)

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4.08 % February 15, 2028 500,000 500,000

2029 unsecured senior notes

February 15, 2029

2029 unsecured senior notes 4.90 % February 15, 2029 400,000 400,000

Revolving credit facility (5)

1.34 % June 30, 2022 — —

Term loan facility (6)

Total debt 2,848,492 2,870,993

Unamortized discount on unsecured senior notes ( 3,658 ) ( 4,143 )

Deferred financing costs, net (6)

( 27,422 ) ( 33,353 )

Total debt per balance sheet $ 2,817,412 $ 2,833,497

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The revolving credit facility bears interest at the London Inter-Bank Offered Rate (“LIBOR”) plus 1.20 % as of December 31, 2020.

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

The Company does not expect this modification to have a material impact on its financial statements.

The term loan was fully repaid in June 2019.

Deferred financing costs relate to our asset-backed securitizations, term loan facility and unsecured senior notes.

Amortization of these deferred financing costs was $ 5.9 million , $ 5.8 million and $ 6.4 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, which is included in gross interest, prior to interest capitalization.

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

Amortization of these deferred financing costs related to our asset-backed securitizations, term loan facility and unsecured senior notes was $ 5.9 million, $ 5.9 million and $ 5.8 million for the years ended December 31, 2020, 2019 and 2018, respectively, and is included in gross interest, prior to interest capitalization.

Early Extinguishment of Debt

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The payoff of the secured note payable also resulted in the release of the 572 homes pledged as collateral and $ 2.1 million of restricted cash for lender requirements.

Also during the year ended December 31, 2018 , the Company paid down $ 100.0 million on our term loan facility, which resulted in $ 0.9 million of charges related to the write-off of unamortized deferred financing costs.

During the year ended December 31, 2017 , the Company paid off the outstanding principal on the AH4R 2014-SFR1 asset-backed securitization of approximately $ 455.4 million using proceeds from the Class A common share offering in the first quarter of 2017 and available cash, which resulted in $ 6.6 million

Also during the year ended December 31, 2018, the Company paid down $ 100.0 million on our term loan facility, which resulted in

American Homes 4 Rent

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Notes to Consolidated Financial Statements

of charges primarily related to the write-off of unamortized deferred financing costs.

The payoff of the AH4R 2014-SFR1 asset-backed securitization also resulted in the release of the 3,799 homes pledged as collateral and $ 9.4 million of restricted cash for lender requirements.

The charges resulting from early the extinguishment of debt and write-off of unamortized deferred financing costs were included in loss on early extinguishment of debt within the consolidated statements of operations.

$ 0.9 million of charges related to the write-off of unamortized deferred financing costs.

The charges resulting from the early extinguishment of debt and write-off of unamortized deferred financing costs were included in loss on early extinguishment of debt within the consolidated statements of operations.

Debt Maturities

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Debt Maturities

2021 $ 20,714

Thereafter 1,821,609

Total debt $ 2,848,492

Encumbered Properties

The following table displays the number of properties pledged as collateral for the Company’s asset-backed securitization loans and the aggregate net book values as of December 31, 2020 and 2019 (in thousands, except property data):

December 31, 2019

December 31, 2018

Number of Properties

Net Book Value

Number of Properties

Net Book Value

December 31, 2020 December 31, 2019

Number of Properties Net Book Value Number of Properties Net Book Value

AH4R 2014-SFR2 securitization 4,537 $ 575,634 4,543 $ 592,203

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The Borrowers’ homes were substantially similar to the other properties owned by the Company and were leased to tenants underwritten on substantially the same basis as the tenants in the Company’s other properties.

During the duration of the loans, the Borrowers’ properties may not generally be transferred, sold or otherwise securitized and the Company can substitute properties if a property owned by the Borrowers becomes a disqualified property under the terms of the loan or voluntarily with properties eligible for substitution, in limited circumstances, subject to the terms, conditions and limitations

The loans are also secured by a security interest in all of the Borrowers’ personal property and a pledge of all of the assets of the Equity Owners, including a security interest in their membership interests in the Borrowers.

American Homes 4 Rent

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Notes to Consolidated Financial Statements

provided in the loan agreements.

The Company provides a limited guaranty (i) for certain losses arising out of designated acts of intentional misconduct and (ii) for the principal amount of the loans and all other obligations under the loan agreements in the event of insolvency or bankruptcy proceedings.

Company provides a limited guaranty (i) for certain losses arising out of designated acts of intentional misconduct and (ii) for the principal amount of the loans and all other obligations under the loan agreements in the event of insolvency or bankruptcy proceedings.

The Company has accounted for the transfers of the notes from its subsidiaries to the trusts as sales under ASC 860, Transfers and Servicing , with no resulting gain or loss as the notes were both originated by the third-party lenders and immediately transferred at the same fair market value.

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The loan was originally secured by first priority mortgages on a portfolio of 4,125 single-family residential properties owned by the Borrower and has an anticipated repayment date of October 9, 2025.

Gross proceeds from the transaction were $ 477.7 million , before

Gross proceeds from the transaction were $ 477.7 million, before issuance costs of $ 11.3 million, and were used to pay down the outstanding balance on the credit facility and for general corporate purposes.

American Homes 4 Rent

1 unchanged sentence

Notes to Consolidated Financial Statements

issuance costs of $ 11.3 million , and were used to pay down the outstanding balance on the credit facility and for general corporate purposes.

Unsecured Senior Notes

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If the 2028 Notes are redeemed on or after November 15, 2027 (three months prior to the maturity date), the redemption price will be equal to 100 % of the principal amount of the 2028 Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

Including the effect of a cash flow hedging instrument settled during the first quarter of 2018 (see Note 12 ), the 2028 Notes yield an effective interest rate of 4.08 % .

Including the effect of a cash flow hedging instrument settled during the first quarter of 2018 (see Note 12.

Fair Value), the 2028 Notes yield an effective interest rate of 4.08 %.

Credit Facilities

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Interest Expense

The following table displays our (i) total gross interest, which includes fees on our credit facilities and amortization of deferred financing costs, the discounts on unsecured senior notes and the fair value of the exchange settlement feature of the exchangeable senior notes, and (ii) capitalized interest for the years ended December 31, 2019 , 2018 and 2017 (in thousands):

The following table summarizes our (i) gross interest cost, which includes fees on our credit facilities and amortization of deferred financing costs, the discounts on unsecured senior notes and the fair value of the exchange settlement feature of the exchangeable senior notes, and (ii) capitalized interest for the years ended December 31, 2020, 2019 and 2018 (in thousands):

For the Years Ended December 31,

2020 2019 2018

Gross interest cost $ 137,034 $ 138,211 $ 129,571

3 unchanged sentences

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

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Resident security deposits $ 90,621 $ 84,832

Accrued property taxes 48,689 44,280

Accrued interest

Accrued construction and maintenance liabilities 42,483 20,435

Prepaid rent 24,421 19,970

Accrued interest 23,018 23,090

Operating lease liabilities 19,166 3,916

Accrued distribution payable 13,612 13,024

1 unchanged sentence

Other accrued liabilities 36,507 28,609

Total $ 298,949 $ 243,193

Shareholders’ Equity / Partners’ Capital

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AH4R owned 85.9 % and 85.2 % of the total 368,383,440 and 352,769,654 Class A units outstanding as of December 31, 2020 and 2019, respectively.

During the third quarter of 2017, the Company issued 13,800,000 Class A common shares of beneficial interest, $ 0.01 par value per share, in an underwritten public offering, raising gross proceeds of $ 312.0 million before offering costs of approximately $ 9.2 million .

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

During the first quarter of 2017, the Company issued 14,842,982 Class A common shares of beneficial interest, $ 0.01 par value per share, in an underwritten public offering and concurrent private placement, raising gross proceeds to the Company of $ 336.5 million after underwriter’s discount and before offering costs of approximately $ 0.4 million .

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 (i) to repay indebtedness the Company had incurred 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 its business strategy and (iv) 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 2016, the Company established an at-the-market common share offering program under which we were able to issue Class A common shares from time to time through various sales agents up to an aggregate of $ 400.0 million (the “Original At-the-Market

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.

The Company intends to use any net proceeds from the At-

American Homes 4 Rent

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Notes to Consolidated Financial Statements

During the year ended December 31, 2017 , the Company issued and sold 2.0 million Class A common shares under the Original At-the-Market Program for gross proceeds of $ 46.2 million , or $ 22.74 per share, and net proceeds of $ 45.6 million , after commissions and other expenses of approximately $ 0.6 million .

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

The Original At-the-Market Program was replaced during the third quarter of 2017 with an at-the-market common share offering program with a $ 500.0 million capacity with the same terms (the “At-the-Market Program”).

The programs were established in order to use the net proceeds from share issuances to repay borrowings against the Company’s revolving credit and term loan facilities, 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.

The program may be suspended or terminated by the Company at any time.

As of December 31, 2019 , no shares have been issued under the At-the-Market Program and $ 500.0 million remained available for future share issuances.

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 Company may suspend or terminate the At-the-Market Program at any time.

During the year ended December 31, 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 December 31, 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 year ended December 31, 2019 , we did no t repurchase and retire any of our shares.

During the years ended December 31, 2020 and 2019, we did no t repurchase and retire any of our shares.

During the year ended December 31, 2018, the Company repurchased and retired 1.8 million of our Class A common shares on a settlement date basis, in accordance with the program, at a weighted-average price of $ 19.36 per share and a total price of $ 34.9 million.

During the year ended December 31, 2017, we did not repurchase or retire any of our Class A common shares under the old share repurchase program.

As of December 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.

8 unchanged sentences

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

December 31, 2019

December 31, 2018

Issuance Date

Earliest Redemption Date

Dividend Rate

Outstanding Shares

Current Liquidation Value

Outstanding Shares

Current Liquidation Value

December 31, 2020 December 31, 2019

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

Series D perpetual preferred shares 5/24/2016 5/24/2021 6.500 % 10,750,000 $ 268,750 10,750,000 $ 268,750

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Perpetual preferred shares represent non-voting preferred equity interests in the Company and entitle holders to a cumulative annual cash dividend, based on the respective dividend rate in the table above, which is applied to the liquidation preference at issuance of $ 25.00 per share.

The Operating Partnership issues an equivalent number of corresponding perpetual preferred units for

The Operating Partnership issues an equivalent number of corresponding perpetual preferred units for the given class to AH4R in exchange for the net proceeds from the share issuances.

The Company may, at its option, redeem the perpetual preferred shares for cash, in whole or in part, from time to time, at any time on or after the earliest redemption date shown in

American Homes 4 Rent

1 unchanged sentence

Notes to Consolidated Financial Statements

the given class to AH4R in exchange for the net proceeds from the share issuances.

The Company may, at its option, redeem the perpetual preferred shares for cash, in whole or in part, from time to time, at any time on or after the earliest redemption date shown in the table above or within 120 days after the occurrence of a change in control at a redemption price equal to the $ 25.00 per share liquidation preference, plus any accumulated and unpaid dividends.

the table above or within 120 days after the occurrence of a change in control at a redemption price equal to the $ 25.00 per share liquidation preference, plus any accumulated and unpaid dividends.

During the third quarter of 2018, the Company issued 4,600,000 6.25 % Series H cumulative redeemable perpetual preferred shares in an underwritten public offering, raising gross proceeds of $ 115.0 million before offering costs of approximately $ 4.4 million, with a liquidation preference of $ 25.00 per share.

The Operating Partnership issued an equivalent number of the same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.

During the third quarter of 2017, the Company issued 4,600,000 5.875 % Series G cumulative redeemable perpetual preferred shares in an underwritten public offering, raising gross proceeds of $ 115.0 million before offering costs of approximately $ 4.1 million , with a liquidation preference of $ 25.00 per share.

The Operating Partnership issued an equivalent number of the same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.

During the second quarter of 2017, the Company issued 6,200,000 5.875 % Series F cumulative redeemable perpetual preferred shares in an underwritten public offering, raising gross proceeds of $ 155.0 million before offering costs of approximately $ 5.3 million , with a liquidation preference of $ 25.00 per share.

The Operating Partnership issued an equivalent number of the same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.

Participating Preferred Shares / Units

Participating preferred shares represented non-voting preferred equity interests in the Company and entitled holders to a cumulative annual cash dividend equal to 5.0 % for the Series A and B participating preferred shares and 5.5 % for the Series C participating preferred shares of an initial liquidation preference of $ 25.00 per share.

The Series C participating preferred shares represented non-voting preferred equity interests in the Company and entitled holders to a cumulative annual cash dividend equal to 5.5 % of an initial liquidation preference of $ 25.00 per share.

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

Any time between March 31, 2018, and March 31, 2021 (the “initial redemption period”), the Company had the option to redeem the Series C participating preferred shares for cash or Class A common shares, at a redemption price equal to the initial liquidation preference, adjusted by an amount equal to 50 % of the cumulative change in value of an index based on the purchase prices of single-family properties located in our top 20 markets (the “HPA adjustment”).

During the initial redemption period, the amount payable upon redemption was subject to a cap, such that the total internal rate of return, when considering the initial liquidation preference, the HPA adjustment and dividends up to, but excluding, the date of redemption, did not exceed 9.0 % .

Because the HPA adjustment meets the definition of a derivative under ASC 815, Derivatives and Hedging , and is not clearly and closely related to the economic characteristics and risks of the underlying preferred shares, the fair value of the HPA adjustment was reflected as a liability in the consolidated balance sheets and was adjusted to fair value each period and included in remeasurement of participating preferred shares in the consolidated statements of operations (see Note 12 ).

On April 5, 2018, the Company redeemed all 7,600,000 shares of the outstanding 5.5 % Series C participating preferred shares through a conversion of those participating preferred shares into Class A common shares of beneficial interest, $ 0.01 par value, in accordance with the conversion terms in the Articles Supplementary.

4 unchanged sentences

The original equity carrying value of the Series C participating preferred shares was net of the initial bifurcated home price appreciation derivative liability and offering costs.

On October 3, 2017, the Company redeemed all 5,060,000 shares of the outstanding 5.0 % Series A participating preferred shares and all 4,400,000 shares of the outstanding 5.0 % Series B participating preferred shares through a conversion of those participating preferred shares into Class A common shares of beneficial interest, $ 0.01 par value, in accordance with the conversion

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

terms in the Articles Supplementary.

This resulted in 12,398,276 total Class A common shares issued from the conversion, based on a conversion ratio of 1.3106 Class A common shares issued per Series A and B participating preferred share.

The Operating Partnership also redeemed its corresponding Series A and B participating preferred units through a conversion into Class A units on October 3, 2017.

The conversion ratio was calculated by dividing (i) the initial liquidation preference on the Series A and B participating preferred shares, as adjusted by an amount equal to 50 % of the cumulative change in value of an index based on the purchase prices of single-family properties located in our top 20 markets, plus unaccrued dividends by (ii) the one-day VWAP of the Company’s Class A common shares on September 27, 2017, the date the Company delivered the required notice of conversion.

As a result of the redemption, the Company recorded a $ 42.4 million allocation of income to the Series A and B participating preferred shareholders during the year ended December 31, 2017, which represents the initial liquidation value of the Series A and B participating preferred shares in excess of the original equity carrying value of the Series A and B participating preferred shares as of the redemption date.

The original equity carrying value of the Series A and B participating preferred shares was net of the initial bifurcated home price appreciation derivative liability and offering costs.

Exchangeable Senior Notes

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Distributions

The Operating Partnership funds the payment of distributions.

We expect to use our NOL to reduce our REIT taxable income in future years.

AH4R had an NOL for U.S.

federal income tax purposes of an estimated $ 60.2 million as of December 31, 2020 and approximately $ 189.1 million as of December 31, 2019.

No distributions can be paid on our Class A and Class B common shares unless we have first paid all cumulative distributions on our Series D, Series E, Series F, Series G and Series H perpetual preferred shares.

The distribution preference of our Series D, Series E, Series F, Series G and Series H perpetual preferred shares could limit our ability to make distributions to the holders of our Class A and Class B common shares.

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

The Company’s board of trustees declared the following distributions during the years ended December 31, 2020, 2019 and 2018.

1 unchanged sentence

For the Years Ended December 31,

2020 2019 2018

Class A and Class B common shares $ 0.20 $ 0.20 $ 0.20

5.000% Series A participating preferred shares

5.000% Series B participating preferred shares

5.500 % Series C participating preferred shares

6.500 % Series D perpetual preferred shares

1.63 1.63 1.63

6.350 % Series E perpetual preferred shares

1.59 1.59 1.59

5.875 % Series F perpetual preferred shares

1.47 1.47 1.47

5.875 % Series G perpetual preferred shares

1.47 1.47 1.47

6.250 % Series H perpetual preferred shares

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

1.56 1.56 0.44

Noncontrolling Interest

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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 and 1,073,509 , or approximately 0.2 % and 0.3 % of the total 352,769,654 and 351,966,447 Class A units in the Operating Partnership as of December 31, 2019 and 2018 , respectively.

Non-affiliate Class A unitholders owned 596,990 , or approximately 0.2 % of the total 368,383,440 and 352,769,654 Class A units in the Operating Partnership as of December 31, 2020 and 2019, respectively.

The following table summarizes the income or loss allocated to noncontrolling interests as reflected in the Company’s consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 (in thousands):

For the Years Ended December 31,

Net income (loss) allocated to Class A units

Net (loss) income allocated to noncontrolling interest in a consolidated subsidiary

2020 2019 2018

Net income allocated to Class A units $ 14,455 $ 15,221 $ 4,424

Net loss allocated to noncontrolling interest in a consolidated subsidiary — — ( 259 )

Total noncontrolling interest $ 14,455 $ 15,221 $ 4,165

Noncontrolling interest as reflected in the Operating Partnership’s consolidated balance sheets consisted solely of the outside ownership interest in a consolidated subsidiary of the Operating Partnership, which was liquidated during the second quarter of 2018.

Noncontrolling interest as reflected in the Operating Partnership’s consolidated statements of capital consisted solely of the outside ownership interest in a consolidated subsidiary of the Operating Partnership, which was liquidated during the second quarter of 2018.

Income and loss allocated to the Operating Partnership’s noncontrolling interest is reflected in noncontrolling interest within the Operating Partnership’s consolidated statements of operations.

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2012 Equity Incentive Plan

In 2012, the Company adopted the 2012 Equity Incentive Plan (the “Plan”) to provide persons with an incentive to contribute to the success of the Company and to operate and manage our business in a manner that will provide for the Company’s long-term growth and profitability.

The Plan provides for the issuance of up to 6,000,000 Class A common shares through the grant of a variety of awards including stock options, stock appreciation rights, restricted stock, unrestricted shares, dividend equivalent rights and performance-based awards.

In 2012, the Company adopted the 2012 Equity Incentive Plan to provide persons with an incentive to contribute to the success of the Company and to operate and manage our business in a manner that will provide for the Company’s long-term growth and profitability.

The Plan provides for the issuance of up to 6,000,000 Class A common shares through the grant of a variety of awards including stock options, stock appreciation rights, RSUs, unrestricted shares, dividend equivalent rights and performance-based awards.

The Plan terminates in November 2022, unless terminated earlier by the Company’s board of trustees.

The Company’s employees are compensated through the Operating Partnership, including share-based compensation.

When the Company issues Class A common shares under the Plan, the Operating Partnership issues an equivalent number of Class A units to AH4R.

The options and restricted stock units granted during the years ended December 31, 2019 , 2018 and 2017 generally vest over a four-year service period and the options expire 10 years from the date of grant.

Restricted stock units granted to non-management trustees during the year ended December 31, 2019 vest over a one-year service period.

Noncash share-based compensation expense related to options and restricted stock units is based on the fair value on the date of grant and is recognized in expense over the service period.

Forfeitures are recognized as they occur.

RSUs granted to employees during the year ended December 31, 2020 generally vest over a three-year service period, and stock options and RSUs granted during the years ended December 31, 2019 and 2018 generally vest over a four-year service period.

American Homes 4 Rent

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Notes to Consolidated Financial Statements

RSUs granted to non-management trustees during the years ended December 31, 2020 and 2019 vest over a one -year service period.

Options expire 10 years from the date of grant.

The following table summarizes stock option activity under the Plan for the years ended December 31, 2020, 2019 and 2018:

Weighted- Average Exercise Price

Weighted- Average Remaining Contractual Life (in years)

Aggregate Intrinsic Value (1) (in thousands)

Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (1) (in thousands)

Options outstanding at December 31, 2017 3,052,450 $ 16.65 6.9 $ 16,421

Granted 140,000 19.40

Exercised ( 769,875 ) 16.07 4,754

Forfeited ( 170,300 ) 17.93

Options outstanding at December 31, 2018 2,252,275 $ 16.92 6.1 $ 7,713

Granted 20,000 20.48

Exercised ( 730,125 ) 15.94 6,088

Forfeited ( 12,350 ) 20.80

Options outstanding at December 31, 2019 1,529,800 $ 17.40 5.3 $ 13,479

Exercised ( 426,150 ) 16.55 4,911

Forfeited ( 13,350 ) 21.89

Options outstanding at December 31, 2020 1,090,300 $ 17.68 4.5 $ 13,436

4 unchanged sentences

Because the Company’s stock has a limited trading history, the volatility assumption used in the model is based on the historical volatility of similar entities in our industry and the expected term assumption is based on the simplified method by using the average of the contractual term and vesting period.

There were no stock options granted during the year ended December 31, 2020.

The weighted-average fair value of stock options for Class A common shares granted during the years ended December 31, 2019 and 2018 were $ 2.85 and 3.03 , respectively, based on the following inputs used in the Black-Scholes Option Pricing Model:

1 unchanged sentence

Dividend yield 3.0 % 3.0 %

Volatility 17.3 % 18.9 %

Risk-free interest rate 2.6 % 2.8 %

2 unchanged sentences

Notes to Consolidated Financial Statements

The following table summarizes the activity that relates to the Company’s restricted stock units under the Plan for the years ended December 31, 2019 , 2018 and 2017 :

Restricted Stock Units

Weighted- Average Grant Date Fair Value

Aggregate Intrinsic Value (1) (in thousands)

Restricted stock units outstanding at December 31, 2016

Restricted stock units outstanding at December 31, 2017

Restricted stock units outstanding at December 31, 2018

Restricted stock units outstanding at December 31, 2019

Intrinsic value for outstanding restricted stock units is defined as the market value of the underlying Class A common shares on the last trading day of the period.

Intrinsic value for vested restricted stock units is defined as the market value of the underlying shares on the day the awards vested.

The following table summarizes RSU activity under the Plan for the years ended December 31, 2020, 2019 and 2018:

Restricted Stock Units Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value (1) (in thousands)

RSUs outstanding at December 31, 2017

243,875 $ 20.65 $ 5,326

Awarded 304,400 19.40

Vested ( 80,125 ) 19.51 1,552

Forfeited ( 95,775 ) 20.15

RSUs outstanding at December 31, 2018

372,375 $ 20.00 $ 7,392

Awarded 350,334 22.90

Vested ( 111,000 ) 19.75 2,431

Forfeited ( 12,600 ) 21.34

RSUs outstanding at December 31, 2019

599,109 $ 21.71 $ 15,703

Awarded 470,147 27.38

Vested ( 316,186 ) 23.61 8,835

Forfeited ( 101,533 ) 23.93

RSUs outstanding at December 31, 2020

651,537 $ 24.53 $ 19,546

(1) Intrinsic value for outstanding RSUs is defined as the market value of the underlying Class A common shares on the last trading day of the period.

Intrinsic value for vested RSUs is defined as the market value of the underlying shares on the day the awards vested.

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

Noncash share-based compensation expense relating to employees involved in the purchases of single-family properties, including newly constructed properties from third-party builders, or the disposal of certain properties is included in acquisition and other transaction costs.

The following table summarizes the activity that relates to the Company’s noncash share-based compensation expense for the years ended December 31, 2020, 2019 and 2018 (in thousands):

For the Years Ended December 31,

General and administrative expenses

2020 2019 2018

General and administrative expense $ 6,573 $ 3,466 $ 2,075

Property management expenses 1,745 1,342 1,358

Acquisition and other transaction costs 1,516 — —

Total noncash share-based compensation expense $ 9,834 $ 4,808 $ 3,433

As of December 31, 2019 , the unrecognized compensation expense for unvested stock options and unvested restricted stock units were $ 0.6 million and $ 9.3 million , respectively.

The unrecognized compensation expense for unvested stock options and restricted stock units is expected to be recognized over a weighted-average period of 1.2 years and 2.5 years, respectively.

As of December 31, 2020, the unrecognized compensation expense for unvested stock options and unvested RSUs were $ 0.2 million and $ 10.3 million, respectively.

The unrecognized compensation expense for unvested stock options and RSUs is expected to be recognized over a weighted-average period of 0.8 years and 1.8 years, respectively.

American Homes 4 Rent

3 unchanged sentences

American Homes 4 Rent

The following table reflects the Company’s computation of net income or loss per common share on a basic and diluted basis for the years ended December 31, 2019 , 2018 and 2017 (in thousands, except share and per share data):

The following table reflects the Company’s computation of net income per common share on a basic and diluted basis for the years ended December 31, 2020, 2019 and 2018 (in thousands, except share and per share data):

For the Years Ended December 31,

2020 2019 2018

Net income $ 154,829 $ 156,260 $ 112,438

Noncontrolling interest 14,455 15,221 4,165

2 unchanged sentences

Allocation to participating securities (1)

Numerator for income (loss) per common share–basic and diluted

Numerator for income per common share–basic and diluted $ 85,029 $ 85,745 $ 23,387

Weighted-average common shares outstanding–basic 306,613,197 299,415,397 293,640,500

1 unchanged sentence

Share-based compensation plan (2)

461,550 503,569 627,830

Weighted-average common shares outstanding–diluted (3)

Net income (loss) per common share:

Unvested restricted stock units that have nonforfeitable rights to participate in dividends declared on common stock are accounted for as participating securities and reflected in the calculation of basic and diluted earnings per share using the two-class method.

307,074,747 299,918,966 294,268,330

Net income per common share:

Basic $ 0.28 $ 0.29 $ 0.08

Diluted $ 0.28 $ 0.29 $ 0.08

(1) Unvested RSUs that have nonforfeitable rights to participate in dividends declared on common stock are accounted for as participating securities and reflected in the calculation of basic and diluted earnings per share using the two-class method.

(2) Reflects the effect of potentially dilutive securities issuable upon the assumed exercise of stock options.

The computation of diluted earnings per share for the years ended December 31, 2019 , 2018 and 2017 excludes an aggregate of 182,481 , zero and 17,084,135 potentially dilutive securities, respectively, which include a combination of participating preferred shares, exchangeable senior notes and common shares issuable for unvested restricted stock units, because their effect would have been antidilutive to the respective periods.

(3) The effect of the potential conversion of OP units is not reflected in the computation of basic and diluted earnings per share, as they are exchangeable for Class A common shares on a one -for-one basis.

5 unchanged sentences

American Homes 4 Rent, L.P.

The following table reflects the Operating Partnership’s computation of net income or loss per common unit on a basic and diluted basis for the years ended December 31, 2019 , 2018 and 2017 (in thousands, except unit and per unit data):

The following table reflects the Operating Partnership’s computation of net income per common unit on a basic and diluted basis for the years ended December 31, 2020, 2019 and 2018 (in thousands, except unit and per unit data):

For the Years Ended December 31,

2020 2019 2018

Net income $ 154,829 $ 156,260 $ 112,438

Noncontrolling interest — — ( 259 )

2 unchanged sentences

Allocation to participating securities (1)

Numerator for income (loss) per common unit–basic and diluted

Numerator for income per common unit–basic and diluted $ 99,484 $ 100,966 $ 27,811

Weighted-average common units outstanding–basic 358,603,291 352,460,401 348,990,561

1 unchanged sentence

Share-based compensation plan (2)

461,550 503,569 627,830

Weighted-average common units outstanding–diluted 359,064,841 352,963,970 349,618,391

Net income (loss) per common unit:

Net income per common unit:

Basic $ 0.28 $ 0.29 $ 0.08

Diluted $ 0.28 $ 0.29 $ 0.08

(2) Reflects the effect of potentially dilutive securities issuable upon the assumed exercise of stock options.

The computation of diluted earnings per unit for the years ended December 31, 2019 , 2018 and 2017 excludes an aggregate of 182,481 , zero and 17,084,135 potentially dilutive securities, respectively, which include a combination of participating preferred units, exchangeable senior notes and common units issuable for unvested restricted stock units, because their effect would have been antidilutive to the respective periods.

Related Party Transactions

As of December 31, 2019 and 2018 , affiliates owned approximately 13.6 % and 14.0 % , 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 and 53,985,492 Class A units as of December 31, 2019 and 2018 , respectively) an approximate 26.3 % and 27.3 % interest at December 31, 2019 and 2018 , respectively.

Concurrently with the Company’s public offering of Class A common shares in the first quarter of 2017, the Chairman of the Company’s Board of Trustees at that time, B.

Wayne Hughes, purchased $ 50.0 million of the Company’s Class A common shares in a private placement at the public offering price.

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

American Homes 4 Rent

As of December 31, 2019 , the Company had a $ 4.6 million payable related to accrued common distributions to affiliates, compared to a $ 5.0 million payable related to accrued common distributions to affiliates and an unconsolidated joint venture as of December 31, 2018 , which are included in amounts payable to affiliates on the Company’s consolidated balance sheets.

American Homes 4 Rent, L.P.

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

The Company’s participating preferred shares derivative liability and treasury lock were the only financial instruments recorded at fair value on a recurring basis in the consolidated financial statements.

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

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

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

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

We estimated the fair values of the asset-backed securitizations by modeling the contractual cash flows required under the instruments and discounting them back to their present values using estimates of current market rates.

As our revolving credit facility bears interest at a floating rate based on an index plus a spread (see Note 7.

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

Our unsecured senior notes are 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.

American Homes 4 Rent

1 unchanged sentence

Notes to Consolidated Financial Statements

consolidated balance sheets, and had a $ 4.6 million payable related to accrued common distributions to affiliates, which is included in amounts payable to affiliates in the Operating Partnership’s consolidated balance sheets.

As of December 31, 2018 , the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AH4R, which is included in amounts due from affiliates in the Operating Partnership’s consolidated balance sheets, and had a $ 5.0 million payable related to accrued common distributions to affiliates and an unconsolidated joint venture, which is included in amounts payable to affiliates in the Operating Partnership’s consolidated balance sheets.

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

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

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

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

December 31, 2019

December 31, 2018

Carrying Value

Carrying Value (1)

December 31, 2020 December 31, 2019

Carrying Value Fair Value Carrying Value Fair Value

AH4R 2014-SFR2 securitization $ 475,144 $ 488,140 $ 479,706 $ 491,302

7 unchanged sentences

Revolving credit facility — — — —

Term loan facility (1) (2)

To conform with current year presentation, the carrying values of the asset-backed securitizations, unsecured senior notes and term loan facility are presented net of unamortized deferred financing costs of $ 31.0 million , $ 4.7 million and $ 0.8 million , respectively, as of December 31, 2018 .

The carrying values of the unsecured senior notes, net remain presented net of unamortized discounts.

As our revolving credit facility and term loan facility bear interest at a floating rate based on an index plus a spread (see Note 7 ), management believes that the carrying values (excluding deferred financing costs) of the revolving credit facility and term loan facility reasonably approximate fair value.

Total debt $ 2,817,412 $ 3,040,579 $ 2,833,497 $ 2,981,475

During the fourth quarter of 2017, in anticipation of the issuance of the 2028 Notes and in order to hedge interest rate risk, the Operating Partnership entered into a treasury lock agreement on a notional amount of $ 350.0 million, based on the 10-year treasury note rate at the time.

2 unchanged sentences

The treasury lock was classified as Level 2 within the fair value hierarchy as its fair value was estimated using observable inputs based on the 10-year treasury note rate.

Valuation of the participating preferred shares derivative liability was classified as Level 3 within the fair value hierarchy and considered scenarios in which the participating preferred shares would be redeemed or converted into Class A common shares by the Company and the subsequent payoffs under those scenarios.

The valuation also considered certain variables such as the risk-free rate

Valuation of the Series C participating preferred shares derivative liability was classified as Level 3 within the fair value hierarchy and considered scenarios in which the participating preferred shares would be redeemed or converted into Class A common shares by the Company and the subsequent payoffs under those scenarios.

The valuation also considered certain variables such as the risk-free rate matching the assumed timing of either redemption or conversion, volatility of the underlying home price appreciation index, dividend payments, conversion rates, the assumed timing of either redemption or conversion and an assumed drift factor in home price appreciation across certain metropolitan statistical areas, or MSAs, as outlined in the agreement.

The Series C participating preferred shares were redeemed through a conversion into Class A common shares on April 5, 2018 (see Note 9 Shareholders’ Equity / Partners’ Capital).

The following tables present changes in the fair values of our Level 3 financial instruments that were measured on a recurring basis with changes in fair value recognized in remeasurement of participating preferred shares within the consolidated statements of operations for the year ended December 31, 2018 (in thousands):

Description January 1, 2018 Conversions Remeasurement Included in Earnings December 31, 2018

Participating preferred shares derivative liability $ 29,470 $ ( 28,258 ) $ ( 1,212 ) $ —

Related Party Transactions

As of December 31, 2020 and 2019, affiliates owned approximately 14.3 % 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 50,972,165 and 51,272,165 Class A units as of December 31, 2020 and 2019, respectively) an approximate 26.3 % interest at December 31, 2020 and 2019.

In November 2020, we entered into a settlement and release agreement with a former employee, pursuant to which the parties agreed to settle any and all claims arising out of the employee’s relationship with the company.

We paid $ 2.9 million, net of insurance proceeds, related to this matter, which was included in other expenses within the consolidated statements of operations.

American Homes 4 Rent

1 unchanged sentence

Notes to Consolidated Financial Statements

matching the assumed timing of either redemption or conversion, volatility of the underlying home price appreciation index, dividend payments, conversion rates, the assumed timing of either redemption or conversion and an assumed drift factor in home price appreciation across certain metropolitan statistical areas, or MSAs, as outlined in the agreement.

The Series C participating preferred shares were redeemed through a conversion into Class A common shares on April 5, 2018 and the Series A and B participating preferred shares were redeemed through a conversion into Class A common shares on October 3, 2017 (see Note 9 ).

January 1, 2018

Remeasurement Included in Earnings

December 31, 2018

Participating preferred shares derivative liability

January 1, 2017

Remeasurement Included in Earnings

December 31, 2017

Participating preferred shares derivative liability

American Homes 4 Rent

As of December 31, 2020 and 2019, the Company had a $ 4.8 million and $ 4.6 million payable, respectively, related to accrued common distributions to affiliates, which were included in amounts payable to affiliates on the Company’s consolidated balance sheets.

American Homes 4 Rent, L.P.

As of December 31, 2020, the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AH4R, which was included in amounts due from affiliates on the Operating Partnership’s consolidated balance sheets, and had a $ 4.8 million payable related to accrued common distributions to affiliates, which was included in amounts payable to affiliates in the Operating Partnership’s 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 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 consolidated balance sheets.

Commitments and Contingencies

The Company leases office space from third parties for our corporate and property management operations under non-cancelable operating lease agreements.

For the years ended December 31, 2019 , 2018 and 2017 , operating lease costs, which are recognized on a straight-line basis over the lease term and net of amounts capitalized, were as follows (in thousands):

Our operating leases have remaining lease terms of one to 11 years before any unexercised options to extend.

For the years ended December 31, 2020, 2019 and 2018, operating lease costs were as follows (in thousands):

For the Years Ended December 31,

2020 2019 2018

Lease costs $ 3,447 $ 2,612 $ 2,829

income from subleases — — ( 347 )

Net lease costs $ 3,447 $ 2,612 $ 2,482

Our operating leases have remaining lease terms of one to five years of which some include options for extension.

Other information related to our operating lease terms and discount rates were as follows:

December 31, 2020 December 31, 2019

Weighted-Average Remaining Lease Term 8.7 years 3.0 years

Weighted-Average Discount Rate 2.9 % 3.3 %

Future lease obligations under our operating leases as of December 31, 2020 were as follows (in thousands):

Operating Lease Obligations

Thereafter 9,889

Total lease payments 21,940

imputed interest ( 2,774 )

Operating lease liability

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 internal construction program.

As of December 31, 2018 , the Company had commitments to acquire 88 single-family properties for an aggregate purchase price of $ 25.3 million , as well as $ 58.1 million in purchase commitments that relate to both third-party developer agreements and land for our internal construction program.

As of December 31, 2019 and 2018 , the Company had sales in escrow for approximately 305 and 78 , respectively, of our single-family properties for aggregate selling prices of $ 57.5 million and $ 13.6 million , respectively.

Operating lease liabilities $ 19,166

As of December 31, 2020, the Company had commitments to acquire 323 single-family properties for an aggregate purchase price of $ 81.7 million, as well as $ 72.3 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.

American Homes 4 Rent

1 unchanged sentence

Notes to Consolidated Financial Statements

As of December 31, 2020 and 2019, the Company had sales in escrow for approximately 97 and 305 , respectively, of our single-family properties for aggregate selling prices of $ 24.0 million and $ 57.5 million, respectively.

As of December 31, 2020 and 2019, the Company, as a condition for entering into some of its development contracts, had outstanding surety bonds of approximately $ 36.7 million and $ 14.5 million, respectively.

1 unchanged sentence

In addition to employee contributions, we have elected to provide company contributions (subject to statutory limitations), which amounted to approximately $ 2.0 million, $ 1.6 million and $ 1.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

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

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.

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.

On January 16, 2018, we received a letter from the staff of the SEC stating that it is conducting an investigation captioned “Trading in Silver Bay Realty Trust Corp.” On February 4, 2020, we were advised by the SEC that it had concluded its investigation and no further action would be taken.

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

Quarterly Financial Information (unaudited)

American Homes 4 Rent

The following table presents the Company’s summarized quarterly financial data for the years ended December 31, 2019 and 2018 (in thousands, except per share data):

Rents and other single-family property revenues

Net income attributable to common shareholders

Net income attributable to common shareholders per share–basic

Net income attributable to common shareholders per share–diluted

Rents and other single-family property revenues (1)

Net income (loss) attributable to common shareholders

Net income (loss) attributable to common shareholders per share–basic

Net income (loss) attributable to common shareholders per share–diluted

As a result of the adoption of the new lease accounting standard, the Company reclassified previously reported rents from single-family properties, fees from single-family properties and tenant charge-backs to rents and other single-family property revenues within the condensed consolidated statements of operations in the interim periods in 2018.

See Note 2 for additional information.

During the second quarter of 2018, the Company incurred a net loss attributable to common shareholders primarily due to a $ 32.2 million allocation of income to the Series C participating preferred shareholders as a result of the redemption of all outstanding participating preferred shares through a conversion of those participating preferred shares into Class A common shares.

See Note 9 for additional information.

American Homes 4 Rent, L.P.

The following table presents the Operating Partnership’s summarized quarterly financial data for the years ended December 31, 2019 and 2018 (in thousands, except per unit data):

Rents and other single-family property revenues

Net income attributable to common unitholders

Net income attributable to common unitholders per unit–basic

Net income attributable to common unitholders per unit–diluted

American Homes 4 Rent

American Homes 4 Rent, L.P.

Notes to Consolidated Financial Statements

Rents and other single-family property revenues (1)

Net income (loss) attributable to common unitholders

Net income (loss) attributable to common unitholders per unit–basic

Net income (loss) attributable to common unitholders per unit–diluted

As a result of the adoption of the new lease accounting standard, the Operating Partnership reclassified previously reported rents from single-family properties, fees from single-family properties and tenant charge-backs to rents and other single-family property revenues within the condensed consolidated statements of operations in the interim periods in 2018.

See Note 2 for additional information.

During the second quarter of 2018, the Operating Partnership incurred a net loss attributable to common unitholders primarily due to a $ 32.2 million allocation of income to the Series C participating preferred unitholders as a result of the redemption of all outstanding participating preferred units through a conversion of those participating preferred units into Class A common units.

See Note 9 for additional information.

COVID-19 Pandemic

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 the first quarter of 2021 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 distribution and actions by government authorities to contain the pandemic or treat its impact, among other things.

Subsequent Events

Revolving Credit Facility

From January 1, 2020 through February 21, 2020, the Company borrowed an additional $ 55.0 million under its revolving credit facility, resulting in $ 55.0 million of outstanding borrowings under the revolving credit facility as of February 21, 2020.

Distributions

On February 24, 2021, the Company’s board of trustees approved an increase in quarterly dividends to $ 0.10 per Class A and Class B common share for the first quarter of 2021.

The quarterly dividends are payable on March 31, 2021 to shareholders of record on March 15, 2021.

Subsequent Acquisitions

From January 1, 2020 through February 21, 2020, the Company added 318 properties to its portfolio for a total cost of approximately $ 84.1 million , which included 191 homes developed through our new construction channel.

From January 1, 2021 through February 19, 2021, the Company added 330 properties to its portfolio for a total cost of approximately $ 89.3 million, which included 175 newly constructed properties delivered through our AMH Development Program and 34 newly constructed homes acquired from third-party developers through our National Builder Program.

Subsequent Dispositions

From January 1, 2021 through February 19, 2021, the Company disposed of 102 properties for aggregate net proceeds of approximately $ 25.9 million.

Investment in Joint Venture

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

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

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

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

American Homes 4 Rent

1 unchanged sentence

Schedule III—Real Estate and Accumulated Depreciation as of December 31, 2020

(Amounts in thousands, except number of single-family homes)

Initial Cost to Company

Cost Capitalized Subsequent to Acquisition

(Amounts in thousands, except number of single-family homes) Initial Cost to Company Cost Capitalized Subsequent to Acquisition Total Cost

as of December 31, 2020 (1)

Number of Single-Family Homes

Gross Book Value of Encumbered Assets

Buildings and Improvements

Accumulated Depreciation

Net Cost Basis

Date of Acquisition

Market Number of Single-Family Homes Gross Book Value of Encumbered Assets Land Buildings and Improvements Land Buildings and Improvements Land Buildings and Improvements Total Accumulated Depreciation Net Cost Basis Date of Acquisition

Single-family properties in operation

Albuquerque 212 $ — $ 6,481 $ 24,088 $ — $ 4,196 $ 6,481 $ 28,285 $ 34,766 $ ( 7,918 ) $ 26,848 2013-2015

Atlanta 4,977 191,270 158,809 639,258 — 124,566 158,809 763,823 922,632 ( 148,028 ) 774,604 2012-2020

Austin 930 41,150 30,793 129,206 — 23,430 30,793 152,636 183,429 ( 27,318 ) 156,111 2012-2020

Boise 479 7,824 18,460 62,598 — 8,266 18,460 70,864 89,324 ( 12,427 ) 76,897 2013-2020

Charleston 1,238 82,876 51,243 177,451 — 24,313 51,243 201,764 253,007 ( 35,464 ) 217,543 2012-2020

Charlotte 3,811 286,061 146,554 540,729 — 69,679 146,554 610,408 756,962 ( 116,918 ) 640,044 2012-2020

Cincinnati 1,982 236,807 61,743 245,214 — 44,883 61,743 290,097 351,840 ( 77,002 ) 274,838 2012-2020

Colorado Springs 22 — 903 2,953 — 757 903 3,710 4,613 ( 1,087 ) 3,526 2013

Columbus 2,062 142,459 60,399 252,308 — 49,203 60,399 301,511 361,910 ( 65,312 ) 296,598 2012-2020

Dallas-Fort Worth 4,312 289,042 110,788 512,321 — 97,832 110,788 610,153 720,941 ( 149,253 ) 571,688 2012-2020

Denver 831 — 46,227 180,657 — 22,990 46,227 203,647 249,874 ( 41,595 ) 208,279 2012-2020

Greater Chicago area, IL and IN 1,730 184,002 54,307 214,382 — 50,045 54,307 264,427 318,734 ( 74,990 ) 243,744 2012-2015

Greensboro 701 53,289 20,044 90,681 — 11,811 20,044 102,492 122,536 ( 24,164 ) 98,372 2013-2020

Greenville 667 72,815 16,927 87,887 — 12,757 16,927 100,644 117,571 ( 24,617 ) 92,954 2013-2020

Houston 2,979 174,376 61,646 368,369 — 65,439 61,646 433,808 495,454 ( 103,197 ) 392,257 2012-2017

Indianapolis 2,813 297,698 74,865 300,845 — 62,217 74,865 363,062 437,927 ( 101,632 ) 336,295 2012-2020

Inland Empire 106 — 11,143 13,708 — 2,189 11,143 15,897 27,040 ( 3,340 ) 23,700 2012-2016

Jacksonville 2,424 61,410 75,437 309,965 — 60,338 75,437 370,303 445,740 ( 71,274 ) 374,466 2012-2020

Knoxville 386 17,551 12,667 61,009 — 7,104 12,667 68,113 80,780 ( 15,635 ) 65,145 2013-2017

Las Vegas 1,127 22,020 38,724 144,400 — 32,043 38,724 176,443 215,167 ( 42,118 ) 173,049 2011-2020

Memphis 652 17,178 21,016 75,392 — 14,003 21,016 89,395 110,411 ( 20,212 ) 90,199 2013-2018

Miami 185 3,602 2,210 21,363 — 5,075 2,210 26,438 28,648 ( 7,293 ) 21,355 2013-2015

Milwaukee 109 — 6,459 19,135 — 2,246 6,459 21,381 27,840 ( 6,053 ) 21,787 2013

Nashville 2,907 184,511 122,810 450,035 — 61,609 122,810 511,644 634,454 ( 100,818 ) 533,636 2012-2020

Orlando 1,743 46,901 63,440 222,416 — 38,828 63,440 261,244 324,684 ( 54,903 ) 269,781 2011-2020

Phoenix 3,147 56,370 135,953 370,814 — 59,616 135,953 430,430 566,383 ( 88,168 ) 478,215 2011-2020

Portland 298 24,537 22,403 47,039 — 3,394 22,403 50,433 72,836 ( 8,718 ) 64,118 2013-2020

Raleigh 2,118 213,127 74,154 285,713 — 36,979 74,154 322,692 396,846 ( 71,230 ) 325,616 2012-2020

Salt Lake City 1,595 158,899 94,546 270,926 — 50,916 94,546 321,842 416,388 ( 58,005 ) 358,383 2012-2020

San Antonio 938 54,450 29,018 103,868 — 20,572 29,018 124,440 153,458 ( 29,888 ) 123,570 2012-2020

Savannah/Hilton Head 917 42,191 30,658 122,130 — 15,981 30,658 138,111 168,769 ( 23,967 ) 144,802 2013-2019

Seattle 773 28,177 53,493 149,019 — 12,401 53,493 161,420 214,913 ( 24,524 ) 190,389 2012-2020

Tampa 2,464 46,234 93,944 353,805 — 54,255 93,944 408,060 502,004 ( 79,113 ) 422,891 2012-2020

Tucson 425 12,102 9,359 45,855 — 9,681 9,359 55,536 64,895 ( 14,157 ) 50,738 2011-2020

Winston Salem 813 43,181 19,175 96,073 — 11,797 19,175 107,870 127,045 ( 24,095 ) 102,950 2013-2020

12 unchanged sentences

Acquisitions and building improvements 689,566 379,466 628,118

Dispositions ( 208,540 ) ( 233,094 ) ( 59,308 )

Write-offs ( 20,843 ) ( 12,353 ) ( 9,572 )

Impairment ( 1,957 ) ( 3,663 ) ( 5,858 )

Reclassifications to single-family properties held for sale, net of dispositions 93,214 120,929 ( 325,185 )

5 unchanged sentences

Depreciation (1)

( 330,192 ) ( 313,683 ) ( 300,746 )

Dispositions 29,433 28,154 11,738

Write-offs 20,843 12,353 9,572

Reclassifications to single-family properties held for sale, net of dispositions ( 12,412 ) ( 12,430 ) 42,661

11 unchanged sentences

(Principal Financial Officer and Principal Accounting Officer)

/s/ JOHN CORRIGAN

John Corrigan

/s/ JACK CORRIGAN

Jack Corrigan

Chief Investment Officer and Trustee

5 unchanged sentences

/s/ MATTHEW J.

/s/ WINIFRED WEBB

Winifred Webb

/s/ MICHELLE C.

/s/ WINIFRED M.

/s/ JAY WILLOUGHBY

Jay Willoughby

/s/ KENNETH WOOLLEY

Kenneth Woolley

/s/ KENNETH M.

/s/ MATTHEW R.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 26, 2021.

9 unchanged sentences

(Principal Financial Officer and Principal Accounting Officer)

/s/ JOHN CORRIGAN

John Corrigan

/s/ JACK CORRIGAN

Jack Corrigan

Chief Investment Officer and Trustee

5 unchanged sentences

/s/ MATTHEW J.

/s/ WINIFRED WEBB

Winifred Webb

/s/ MICHELLE C.

/s/ WINIFRED M.

/s/ JAY WILLOUGHBY

Jay Willoughby

/s/ KENNETH WOOLLEY

Kenneth Woolley

/s/ KENNETH M.

/s/ MATTHEW R.

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-K

Item 9A. Controls and Procedures