American Homes 4 Rent 10-Q

Item 1. Financial Statements American Homes 4 Rent Condensed Consolidated Balance Sheets (Amounts in thousands, except share data) June 30, 2021 December 31, 2020 (Unaudited) Assets Single-family properties: Land $ 1,911,697 $ 1,836,798 Buildings and improvements 8,548,603 8,163,023 Single-family properties in operation 10,460,300 9,999,821 Less: accumulated depreciation ( 1,913,648 ) ( 1,754,433 ) Single-family properties in operation, net 8,546,652 8,245,388 Single-family properties under development and development land 647,979 510,365 Single-family properties held for sale, net 107,363 129,026 Total real estate assets, net 9,301,994 8,884,779 Cash and cash equivalents 40,585 137,060 Restricted cash 142,951 128,017 Rent and other receivables 50,916 41,544 Escrow deposits, prepaid expenses and other assets 182,701 163,171 Investments in unconsolidated joint ventures 103,634 93,109 Asset-backed securitization certificates 25,666 25,666 Goodwill 120,279 120,279 Total assets $ 9,968,726 $ 9,593,625 Liabilities Revolving credit facility $ 620,000 $ — Asset-backed securitizations, net 1,917,833 1,927,607 Unsecured senior notes, net 890,481 889,805 Accounts payable and accrued expenses 366,907 298,949 Amounts payable to affiliates — 4,834 Total liabilities 3,795,221 3,121,195 Commitments and contingencies (see Note 15) Equity Shareholders’ equity: Class A common shares ($ 0.01 par value per share, 450,000,000 shares authorized, 322,208,183 and 316,021,385 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively) 3,222 3,160 Class B common shares ($ 0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at June 30, 2021 and December 31, 2020) 6 6 Preferred shares ($ 0.01 par value per share, 100,000,000 shares authorized, 15,400,000 and 35,350,000 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively) 154 354 Additional paid-in capital 5,949,615 6,223,256 Accumulated deficit ( 457,404 ) ( 443,522 ) Accumulated other comprehensive income 1,991 5,840 Total shareholders’ equity 5,497,584 5,789,094 Noncontrolling interest 675,921 683,336 Total equity 6,173,505 6,472,430 Total liabilities and equity $ 9,968,726 $ 9,593,625 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 American Homes 4 Rent Condensed Consolidated Statements of Operations (Amounts in thousands, except share and per share data) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Rents and other single-family property revenues $ 313,654 $ 280,689 $ 626,227 $ 568,031 Expenses: Property operating expenses 116,578 110,436 235,272 217,933 Property management expenses 22,416 22,260 46,115 45,536 General and administrative expense 12,793 11,493 27,998 22,759 Interest expense 27,528 29,558 55,533 59,273 Acquisition and other transaction costs 2,968 1,956 7,814 4,103 Depreciation and amortization 91,117 84,836 181,188 167,657 Total expenses 273,400 260,539 553,920 517,261 Gain on sale and impairment of single-family properties and other, net 10,760 9,997 26,829 16,316 Other income and expense, net 800 1,660 1,599 2,248 Net income 51,814 31,807 100,735 69,334 Noncontrolling interest 3,218 2,656 8,143 6,157 Dividends on preferred shares 12,615 13,782 26,397 27,564 Redemption of perpetual preferred shares 15,879 — 15,879 — Net income attributable to common shareholders $ 20,102 $ 15,369 $ 50,316 $ 35,613 Weighted-average common shares outstanding: Basic 319,752,730 301,011,545 318,380,175 300,912,307 Diluted 320,808,996 301,412,243 319,408,153 301,358,769 Net income attributable to common shareholders per share: Basic $ 0.06 $ 0.05 $ 0.16 $ 0.12 Diluted $ 0.06 $ 0.05 $ 0.16 $ 0.12 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 American Homes 4 Rent Condensed Consolidated Statements of Comprehensive Income (Amounts in thousands) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Net income $ 51,814 $ 31,807 $ 100,735 $ 69,334 Other comprehensive loss: Cash flow hedging instruments: Loss on settlement of cash flow hedging instrument ( 13,229 ) — ( 3,999 ) — Reclassification adjustment for amortization of interest expense included in net income ( 240 ) ( 240 ) ( 481 ) ( 481 ) Other comprehensive loss ( 13,469 ) ( 240 ) ( 4,480 ) ( 481 ) Comprehensive income 38,345 31,567 96,255 68,853 Comprehensive income attributable to noncontrolling interests 1,334 2,621 7,519 6,087 Dividends on preferred shares 12,615 13,782 26,397 27,564 Redemption of perpetual preferred shares 15,879 — 15,879 — Comprehensive income attributable to common shareholders $ 8,517 $ 15,164 $ 46,460 $ 35,202 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 American Homes 4 Rent Condensed Consolidated Statements of Equity (Amounts in thousands, except share and per share data) (Unaudited) Class A common shares Class B common shares Preferred shares Number of shares Amount Number of shares Amount Number of shares Amount Additional paid-in capital Accumulated deficit Accumulated other comprehensive income Shareholders’ equity Noncontrolling interest Total equity 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 Share-based compensation — — — — — — 1,808 — — 1,808 — 1,808 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 208,010 2 — — — — ( 165 ) — — ( 163 ) — ( 163 ) Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 13,782 ) — ( 13,782 ) — ( 13,782 ) Noncontrolling interests — — — — — — — — — — ( 2,602 ) ( 2,602 ) Common shares ($ 0.05 per share) — — — — — — — ( 15,088 ) — ( 15,088 ) — ( 15,088 ) Cumulative effect of adoption of ASU 2016-13 — — — — — — — ( 1,494 ) — ( 1,494 ) — ( 1,494 ) Net income — — — — — — — 34,026 — 34,026 3,501 37,527 Total other comprehensive loss — — — — — — — — ( 206 ) ( 206 ) ( 35 ) ( 241 ) Balances at March 31, 2020 300,315,609 $ 3,003 635,075 $ 6 35,350,000 $ 354 $ 5,792,418 $ ( 461,706 ) $ 6,452 $ 5,340,527 $ 684,228 $ 6,024,755 Share-based compensation — — — — — — 2,090 — — 2,090 — 2,090 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 197,334 2 — — — — 2,876 — — 2,878 — 2,878 Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 13,782 ) — ( 13,782 ) — ( 13,782 ) Noncontrolling interests — — — — — — — — — — ( 2,601 ) ( 2,601 ) Common shares ($ 0.05 per share) — — — — — — — ( 15,098 ) — ( 15,098 ) — ( 15,098 ) Net income — — — — — — — 29,151 — 29,151 2,656 31,807 Total other comprehensive loss — — — — — — — — ( 205 ) ( 205 ) ( 35 ) ( 240 ) Balances at June 30, 2020 300,512,943 $ 3,005 635,075 $ 6 35,350,000 $ 354 $ 5,797,384 $ ( 461,435 ) $ 6,247 $ 5,345,561 $ 684,248 $ 6,029,809 4 American Homes 4 Rent Condensed Consolidated Statements of Equity (continued) (Amounts in thousands, except share and per share data) (Unaudited) Class A common shares Class B common shares Preferred shares Number of shares Amount Number of shares Amount Number of shares Amount Additional paid-in capital Accumulated deficit Accumulated other comprehensive income Shareholders’ equity Noncontrolling interest Total equity Balances at December 31, 2020 316,021,385 $ 3,160 635,075 $ 6 35,350,000 $ 354 $ 6,223,256 $ ( 443,522 ) $ 5,840 $ 5,789,094 $ 683,336 $ 6,472,430 Share-based compensation — — — — — — 8,110 — — 8,110 — 8,110 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 246,425 2 — — — — ( 1,523 ) — — ( 1,521 ) — ( 1,521 ) Redemptions of Class A units 350,000 4 — — — — 4,613 — 7 4,624 ( 4,624 ) — Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 13,782 ) — ( 13,782 ) — ( 13,782 ) Noncontrolling interests — — — — — — — — — — ( 5,172 ) ( 5,172 ) Common shares ($ 0.10 per share) — — — — — — — ( 31,795 ) — ( 31,795 ) — ( 31,795 ) Net income — — — — — — — 43,996 — 43,996 4,925 48,921 Total other comprehensive income — — — — — — — — 7,729 7,729 1,260 8,989 Balances at March 31, 2021 316,617,810 $ 3,166 635,075 $ 6 35,350,000 $ 354 $ 6,234,456 $ ( 445,103 ) $ 13,576 $ 5,806,455 $ 679,725 $ 6,486,180 Share-based compensation — — — — — — 3,151 — — 3,151 — 3,151 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 90,373 1 — — — — 894 — — 895 — 895 Issuance of Class A common shares, net of offering costs of $ 200 5,500,000 55 — — — — 193,785 — — 193,840 — 193,840 Redemption of Series D perpetual preferred shares — — — — ( 10,750,000 ) ( 108 ) ( 260,133 ) ( 8,509 ) — ( 268,750 ) — ( 268,750 ) Redemption of Series E perpetual preferred shares — — — — ( 9,200,000 ) ( 92 ) ( 222,538 ) ( 7,370 ) — ( 230,000 ) — ( 230,000 ) Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 12,615 ) — ( 12,615 ) — ( 12,615 ) Noncontrolling interests — — — — — — — — — — ( 5,138 ) ( 5,138 ) Common shares ($ 0.10 per share) — — — — — — — ( 32,403 ) — ( 32,403 ) — ( 32,403 ) Net income — — — — — — — 48,596 — 48,596 3,218 51,814 Total other comprehensive loss — — — — — — — — ( 11,585 ) ( 11,585 ) ( 1,884 ) ( 13,469 ) Balances at June 30, 2021 322,208,183 $ 3,222 635,075 $ 6 15,400,000 $ 154 $ 5,949,615 $ ( 457,404 ) $ 1,991 $ 5,497,584 $ 675,921 $ 6,173,505 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 American Homes 4 Rent Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) For the Six Months Ended June 30, 2021 2020 Operating activities Net income $ 100,735 $ 69,334 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 181,188 167,657 Noncash amortization of deferred financing costs, debt discounts and cash flow hedging instrument 3,828 3,697 Noncash share-based compensation 11,261 3,898 Equity in net (income) losses of unconsolidated joint ventures ( 660 ) 1,090 Gain on sale and impairment of single-family properties and other, net ( 26,829 ) ( 16,316 ) Other changes in operating assets and liabilities: Rent and other receivables ( 9,372 ) ( 6,420 ) Prepaid expenses and other assets 6,870 ( 2,130 ) Deferred leasing costs ( 1,880 ) ( 1,902 ) Accounts payable and accrued expenses 66,339 60,777 Amounts due from related parties 307 ( 481 ) Net cash provided by operating activities 331,787 279,204 Investing activities Cash paid for single-family properties ( 279,016 ) ( 136,772 ) Change in escrow deposits for purchase of single-family properties ( 9,159 ) 3,344 Net proceeds received from sales of single-family properties and other 74,451 128,883 Proceeds received from hurricane-related insurance claims — 3,705 Investment in unconsolidated joint ventures ( 14,596 ) ( 5,155 ) Distributions from joint ventures 34,372 17,239 Renovations to single-family properties ( 13,310 ) ( 8,046 ) Recurring and other capital expenditures for single-family properties ( 56,579 ) ( 46,435 ) Cash paid for development activity ( 309,706 ) ( 271,670 ) Other purchases of productive assets ( 11,615 ) ( 7,559 ) Net cash used for investing activities ( 585,158 ) ( 322,466 ) Financing activities Proceeds from issuance of Class A common shares 194,040 — Payments of Class A common share issuance costs ( 200 ) — Redemption of perpetual preferred shares ( 498,750 ) — Proceeds from exercise of stock options 2,030 4,341 Payments related to tax withholding for share-based compensation ( 2,656 ) ( 1,626 ) Payments on asset-backed securitizations ( 12,278 ) ( 11,763 ) Proceeds from revolving credit facility 790,000 130,000 Payments on revolving credit facility ( 170,000 ) — Distributions to noncontrolling interests ( 12,896 ) ( 7,779 ) Distributions to common shareholders ( 79,881 ) ( 45,221 ) Distributions to preferred shareholders ( 26,397 ) ( 27,564 ) Deferred financing costs paid ( 11,182 ) — Net cash provided by financing activities 171,830 40,388 Net decrease in cash, cash equivalents and restricted cash ( 81,541 ) ( 2,874 ) Cash, cash equivalents and restricted cash, beginning of period (see Note 3) 265,077 164,119 Cash, cash equivalents and restricted cash, end of period (see Note 3) $ 183,536 $ 161,245 6 American Homes 4 Rent Condensed Consolidated Statements of Cash Flows (continued) (Amounts in thousands) (Unaudited) For the Six Months Ended June 30, 2021 2020 Supplemental cash flow information Cash payments for interest, net of amounts capitalized $ ( 51,449 ) $ ( 55,392 ) Supplemental schedule of noncash investing and financing activities Accrued property renovations and development expenditures $ 42,795 $ 12,614 Transfers of completed homebuilding deliveries to properties 142,211 156,367 Property and land contributions to unconsolidated joint ventures ( 30,014 ) ( 18,978 ) Accrued loss on settlement of cash flow hedging instrument ( 3,999 ) — Noncash right-of-use assets obtained in exchange for operating lease liabilities 537 2,911 Accrued distributions to non-affiliates 158 32 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 American Homes 4 Rent, L.P. Condensed Consolidated Balance Sheets (Amounts in thousands, except unit data) June 30, 2021 December 31, 2020 (Unaudited) Assets Single-family properties: Land $ 1,911,697 $ 1,836,798 Buildings and improvements 8,548,603 8,163,023 Single-family properties in operation 10,460,300 9,999,821 Less: accumulated depreciation ( 1,913,648 ) ( 1,754,433 ) Single-family properties in operation, net 8,546,652 8,245,388 Single-family properties under development and development land 647,979 510,365 Single-family properties held for sale, net 107,363 129,026 Total real estate assets, net 9,301,994 8,884,779 Cash and cash equivalents 40,585 137,060 Restricted cash 142,951 128,017 Rent and other receivables 50,916 41,544 Escrow deposits, prepaid expenses and other assets 182,701 163,171 Investments in unconsolidated joint ventures 103,634 93,109 Amounts due from affiliates 25,666 25,666 Goodwill 120,279 120,279 Total assets $ 9,968,726 $ 9,593,625 Liabilities Revolving credit facility $ 620,000 $ — Asset-backed securitizations, net 1,917,833 1,927,607 Unsecured senior notes, net 890,481 889,805 Accounts payable and accrued expenses 366,907 298,949 Amounts payable to affiliates — 4,834 Total liabilities 3,795,221 3,121,195 Commitments and contingencies (see Note 15) Capital Partners’ capital: General partner: Common units ( 322,843,258 and 316,656,460 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively) 5,124,029 4,928,819 Preferred units ( 15,400,000 and 35,350,000 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively) 371,564 854,435 Limited partner: Common units ( 51,376,980 and 51,726,980 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively) 675,532 682,316 Accumulated other comprehensive income 2,380 6,860 Total capital 6,173,505 6,472,430 Total liabilities and capital $ 9,968,726 $ 9,593,625 The accompanying notes are an integral part of these condensed consolidated financial statements. 8 American Homes 4 Rent, L.P. Condensed Consolidated Statements of Operations (Amounts in thousands, except unit and per unit data) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Rents and other single-family property revenues $ 313,654 $ 280,689 $ 626,227 $ 568,031 Expenses: Property operating expenses 116,578 110,436 235,272 217,933 Property management expenses 22,416 22,260 46,115 45,536 General and administrative expense 12,793 11,493 27,998 22,759 Interest expense 27,528 29,558 55,533 59,273 Acquisition and other transaction costs 2,968 1,956 7,814 4,103 Depreciation and amortization 91,117 84,836 181,188 167,657 Total expenses 273,400 260,539 553,920 517,261 Gain on sale and impairment of single-family properties and other, net 10,760 9,997 26,829 16,316 Other income and expense, net 800 1,660 1,599 2,248 Net income 51,814 31,807 100,735 69,334 Preferred distributions 12,615 13,782 26,397 27,564 Redemption of perpetual preferred units 15,879 — 15,879 — Net income attributable to common unitholders $ 23,320 $ 18,025 $ 58,459 $ 41,770 Weighted-average common units outstanding: Basic 371,129,710 353,038,525 369,900,249 352,939,287 Diluted 372,185,976 353,439,223 370,928,227 353,385,749 Net income attributable to common unitholders per unit: Basic $ 0.06 $ 0.05 $ 0.16 $ 0.12 Diluted $ 0.06 $ 0.05 $ 0.16 $ 0.12 The accompanying notes are an integral part of these condensed consolidated financial statements. 9 American Homes 4 Rent, L.P. Condensed Consolidated Statements of Comprehensive Income (Amounts in thousands) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Net income $ 51,814 $ 31,807 $ 100,735 $ 69,334 Other comprehensive loss: Cash flow hedging instruments: Loss on settlement of cash flow hedging instrument ( 13,229 ) — ( 3,999 ) — Reclassification adjustment for amortization of interest expense included in net income ( 240 ) ( 240 ) ( 481 ) ( 481 ) Other comprehensive loss ( 13,469 ) ( 240 ) ( 4,480 ) ( 481 ) Comprehensive income 38,345 31,567 96,255 68,853 Preferred distributions 12,615 13,782 26,397 27,564 Redemption of perpetual preferred units 15,879 — 15,879 — Comprehensive income attributable to common unitholders $ 9,851 $ 17,785 $ 53,979 $ 41,289 The accompanying notes are an integral part of these condensed consolidated financial statements. 10 American Homes 4 Rent, L.P. Condensed Consolidated Statements of Capital (Amounts in thousands, except unit and per unit data) (Unaudited) General Partner Limited Partners Accumulated other comprehensive income Total capital Common capital Preferred capital amount Common capital Number 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 Share-based compensation — 1,808 — — — — 1,808 Common units issued under share-based compensation plans, net of units withheld for employee taxes 208,010 ( 163 ) — — — — ( 163 ) Distributions to capital holders: Preferred units (Note 10) — — ( 13,782 ) — — — ( 13,782 ) Common units ($ 0.05 per unit) — ( 15,088 ) — — ( 2,602 ) — ( 17,690 ) Cumulative effect of adoption of ASU 2016-13 — ( 1,494 ) — — — — ( 1,494 ) Net income — 20,244 13,782 — 3,501 — 37,527 Total other comprehensive loss — — — — — ( 241 ) ( 241 ) Balances at March 31, 2020 300,950,684 $ 4,479,640 $ 854,435 52,026,980 $ 683,098 $ 7,582 $ 6,024,755 Share-based compensation — 2,090 — — — — 2,090 Common units issued under share-based compensation plans, net of units withheld for employee taxes 197,334 2,878 — — — — 2,878 Distributions to capital holders: Preferred units (Note 10) — — ( 13,782 ) — — — ( 13,782 ) Common units ($ 0.05 per unit) — ( 15,098 ) — — ( 2,601 ) — ( 17,699 ) Net income — 15,369 13,782 — 2,656 — 31,807 Total other comprehensive loss — — — — — ( 240 ) ( 240 ) Balances at June 30, 2020 301,148,018 $ 4,484,879 $ 854,435 52,026,980 $ 683,153 $ 7,342 $ 6,029,809 11 American Homes 4 Rent, L.P. Condensed Consolidated Statements of Capital (continued) (Amounts in thousands, except unit and per unit data) (Unaudited) General Partner Limited Partners Accumulated other comprehensive income Total capital Common capital Preferred capital amount Common capital Number of units Amount Number of units Amount Balances at December 31, 2020 316,656,460 $ 4,928,819 $ 854,435 51,726,980 $ 682,316 $ 6,860 $ 6,472,430 Share-based compensation — 8,110 — — — — 8,110 Common units issued under share-based compensation plans, net of units withheld for employee taxes 246,425 ( 1,521 ) — — — — ( 1,521 ) Redemptions of Class A units 350,000 4,617 — ( 350,000 ) ( 4,617 ) — — Distributions to capital holders: Preferred units (Note 10) — — ( 13,782 ) — — — ( 13,782 ) Common units ($ 0.10 per unit) — ( 31,795 ) — — ( 5,172 ) — ( 36,967 ) Net income — 30,214 13,782 — 4,925 — 48,921 Total other comprehensive income — — — — — 8,989 8,989 Balances at March 31, 2021 317,252,885 $ 4,938,444 $ 854,435 51,376,980 $ 677,452 $ 15,849 $ 6,486,180 Share-based compensation — 3,151 — — — — 3,151 Common units issued under share-based compensation plans, net of units withheld for employee taxes 90,373 895 — — — — 895 Issuance of Class A common units, net of offering costs of $ 200 5,500,000 193,840 — — — — 193,840 Redemption of Series D perpetual preferred units — ( 8,509 ) ( 260,241 ) — — — ( 268,750 ) Redemption of Series E perpetual preferred units — ( 7,370 ) ( 222,630 ) — — — ( 230,000 ) Distributions to capital holders: Preferred units (Note 10) — — ( 12,615 ) — — — ( 12,615 ) Common units ($ 0.10 per unit) — ( 32,403 ) — — ( 5,138 ) — ( 37,541 ) Net income — 35,981 12,615 — 3,218 — 51,814 Total other comprehensive loss — — — — — ( 13,469 ) ( 13,469 ) Balances at June 30, 2021 322,843,258 $ 5,124,029 $ 371,564 51,376,980 $ 675,532 $ 2,380 $ 6,173,505 The accompanying notes are an integral part of these condensed consolidated financial statements. 12 American Homes 4 Rent, L.P. Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) For the Six Months Ended June 30, 2021 2020 Operating activities Net income $ 100,735 $ 69,334 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 181,188 167,657 Noncash amortization of deferred financing costs, debt discounts and cash flow hedging instrument 3,828 3,697 Noncash share-based compensation 11,261 3,898 Equity in net (income) losses of unconsolidated joint ventures ( 660 ) 1,090 Gain on sale and impairment of single-family properties and other, net ( 26,829 ) ( 16,316 ) Other changes in operating assets and liabilities: Rent and other receivables ( 9,372 ) ( 6,420 ) Prepaid expenses and other assets 6,870 ( 2,130 ) Deferred leasing costs ( 1,880 ) ( 1,902 ) Accounts payable and accrued expenses 66,339 60,777 Amounts due from related parties 307 ( 481 ) Net cash provided by operating activities 331,787 279,204 Investing activities Cash paid for single-family properties ( 279,016 ) ( 136,772 ) Change in escrow deposits for purchase of single-family properties ( 9,159 ) 3,344 Net proceeds received from sales of single-family properties and other 74,451 128,883 Proceeds received from hurricane-related insurance claims — 3,705 Investment in unconsolidated joint ventures ( 14,596 ) ( 5,155 ) Distributions from joint ventures 34,372 17,239 Renovations to single-family properties ( 13,310 ) ( 8,046 ) Recurring and other capital expenditures for single-family properties ( 56,579 ) ( 46,435 ) Cash paid for development activity ( 309,706 ) ( 271,670 ) Other purchases of productive assets ( 11,615 ) ( 7,559 ) Net cash used for investing activities ( 585,158 ) ( 322,466 ) Financing activities Proceeds from issuance of Class A common units 194,040 — Payments of Class A common unit issuance costs ( 200 ) — Redemption of perpetual preferred units ( 498,750 ) — Proceeds from exercise of stock options 2,030 4,341 Payments related to tax withholding for share-based compensation ( 2,656 ) ( 1,626 ) Payments on asset-backed securitizations ( 12,278 ) ( 11,763 ) Proceeds from revolving credit facility 790,000 130,000 Payments on revolving credit facility ( 170,000 ) — Distributions to common unitholders ( 92,777 ) ( 53,000 ) Distributions to preferred unitholders ( 26,397 ) ( 27,564 ) Deferred financing costs paid ( 11,182 ) — Net cash provided by financing activities 171,830 40,388 Net decrease in cash, cash equivalents and restricted cash ( 81,541 ) ( 2,874 ) Cash, cash equivalents and restricted cash, beginning of period (see Note 3) 265,077 164,119 Cash, cash equivalents and restricted cash, end of period (see Note 3) $ 183,536 $ 161,245 13 American Homes 4 Rent, L.P. Condensed Consolidated Statements of Cash Flows (continued) (Amounts in thousands) (Unaudited) For the Six Months Ended June 30, 2021 2020 Supplemental cash flow information Cash payments for interest, net of amounts capitalized $ ( 51,449 ) $ ( 55,392 ) Supplemental schedule of noncash investing and financing activities Accrued property renovations and development expenditures $ 42,795 $ 12,614 Transfers of completed homebuilding deliveries to properties 142,211 156,367 Property and land contributions to unconsolidated joint ventures ( 30,014 ) ( 18,978 ) Accrued loss on settlement of cash flow hedging instrument ( 3,999 ) — Noncash right-of-use assets obtained in exchange for operating lease liabilities 537 2,911 Accrued distributions to non-affiliates 158 32 The accompanying notes are an integral part of these condensed consolidated financial statements. 14 American Homes 4 Rent American Homes 4 Rent, L.P. Notes to Unaudited Condensed Consolidated Financial Statements Note 1. Organization and Operations American Homes 4 Rent (“AH4R” or “General Partner”) is a Maryland real estate investment trust (“REIT”) formed on October 19, 2012 for the purpose of acquiring, developing, renovating, leasing and operating single-family homes as rental properties. American Homes 4 Rent, L.P., a Delaware limited partnership formed on October 22, 2012, and its consolidated subsidiaries (collectively, the “Operating Partnership” or the “OP”) is the entity through which the Company conducts substantially all of its business and owns, directly or through subsidiaries, substantially all of its 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 June 30, 2021, the Company held 54,785 single-family properties in 22 states, including 589 properties classified as held for sale. AH4R is the general partner of, and as of June 30, 2021 owned approximately 86.2 % of the common partnership interest in, the Operating Partnership. The remaining 13.8 % 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. The Company’s management operates AH4R and the Operating Partnership as one business, and the management of AH4R consists of the same members as the management of the Operating Partnership. AH4R’s primary function is acting as the general partner of the Operating Partnership. The only material asset of AH4R is its partnership interest in the Operating Partnership. As a result, AH4R generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity from time to time and guaranteeing certain debt of the Operating Partnership. AH4R itself is not directly obligated under any indebtedness, but guarantees some of the debt of the Operating Partnership. The Operating Partnership owns substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures, either directly or through its subsidiaries, conducts the operations of the Company’s business and is structured as a limited partnership with no publicly traded equity. 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 as an amount due from affiliates by the Operating Partnership. AH4R contributes all net proceeds from its various equity offerings to the Operating Partnership. In return for those contributions, AH4R receives Operating Partnership units (“OP units”) equal to the number of shares it has issued in the equity offering. Based on the terms of the Agreement of Limited Partnership of the Operating Partnership, as amended, OP units can be exchanged for shares on a one -for-one basis. Except for net proceeds from equity issuances by AH4R, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s incurrence of indebtedness or through the issuance of OP units. Note 2. Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and present the accounts of both the Company, which include AH4R, the Operating Partnership and their consolidated subsidiaries, as well as the Operating Partnership, which include the Operating Partnership and its consolidated subsidiaries. Intercompany accounts and transactions have been eliminated. The Company consolidates real estate partnerships and other entities that are not variable interest entities (“VIEs”) when it owns, directly or indirectly, a majority interest in the entity or is otherwise able to control the entity. The Company consolidates VIEs in accordance with Accounting Standards Codification No. 810, Consolidation, if the Company is the primary beneficiary of the VIE as determined by the Company’s power to direct the VIE’s activities and its obligation to absorb its losses or the right to receive its benefits, 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 investments in unconsolidated joint ventures within the condensed consolidated balance sheets. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Any references in this report to the number of properties is outside the scope of our independent registered public accounting firm’s review of our financial statements, in accordance with the standards of the Public Company Accounting Oversight 15 Board. In the opinion of management, all adjustments of a normal and recurring nature necessary for a fair statement of the condensed consolidated financial statements for the interim periods have been made. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Effective March 31, 2021, the Company reclassified certain impairment charges related to homes classified as held for sale from other expenses to gain on sale and impairment of single-family properties and other, net within the condensed consolidated statements of operations. The Company also reclassified other revenues and the remaining other expenses to other income and expense, net within the condensed consolidated statements of operations. Certain other amounts in the condensed consolidated financial statements for the prior periods have also been reclassified to conform to the current year presentation. Note 3. Cash, Cash Equivalents and Restricted Cash Restricted cash primarily consists of funds held related to resident security deposits, cash reserves in accordance with certain loan agreements and funds held in the custody of our transfer agent for the payment of distributions. Funds held related to resident security deposits are restricted during the term of the related lease agreement, which is generally one year . Cash reserved in connection with lender requirements is restricted during the term of the related debt instrument. The following table provides a reconciliation of cash, cash equivalents and restricted cash per the condensed consolidated statements of cash flows to the corresponding financial statement line items in the condensed consolidated balance sheets (in thousands): June 30, December 31, 2021 2020 2020 2019 Cash and cash equivalents $ 40,585 $ 32,010 $ 137,060 $ 37,575 Restricted cash 142,951 129,235 128,017 126,544 Total cash, cash equivalents and restricted cash $ 183,536 $ 161,245 $ 265,077 $ 164,119 Note 4. Real Estate Assets, Net The net book values of real estate assets consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Occupied single-family properties $ 8,223,674 $ 7,957,513 Single-family properties recently acquired or developed 134,991 66,857 Single-family properties in turnover process 89,091 149,684 Single-family properties leased, not yet occupied 98,896 71,334 Single-family properties in operation, net 8,546,652 8,245,388 Development land 325,543 270,767 Single-family properties under development 322,436 239,598 Single-family properties held for sale, net 107,363 129,026 Total real estate assets, net $ 9,301,994 $ 8,884,779 Depreciation expense related to single-family properties was $ 87.4 million and $ 81.6 million for the three months ended June 30, 2021 and 2020, respectively, and $ 173.7 million and $ 161.4 million for the six months ended June 30, 2021 and 2020, respectively. 16 The following table summarizes the Company’s dispositions of single-family properties and land for the three and six months ended June 30, 2021 and 2020 (in thousands, except property data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Single-family properties: Properties sold 97 216 277 626 Net proceeds (1) $ 28,092 $ 47,626 $ 74,132 $ 128,812 Net gain on sale $ 11,422 $ 10,651 $ 26,772 $ 24,409 Land: Net proceeds $ 55 $ — $ 319 $ 71 Net (loss) gain on sale $ ( 62 ) $ — $ ( 139 ) $ 7 (1) Net proceeds are net of deductions for working capital prorations. Note 5. Rent and Other Receivables Included in rents and other single-family property revenues are variable lease payments for tenant charge-backs, which primarily relate to cost recoveries on utilities, and variable lease payments for fees from single-family properties. Variable lease payments for tenant charge-backs were $ 38.0 million and $ 35.4 million for the three months ended June 30, 2021 and 2020, respectively, and $ 83.8 million and $ 75.4 million for the six months ended June 30, 2021 and 2020, respectively. Variable lease payments for fees from single-family properties were $ 5.5 million and $ 3.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 10.7 million and $ 7.3 million for the six months ended June 30, 2021 and 2020, respectively. The Company generally rents its single-family properties under non-cancelable lease agreements with a term of one year . The following table summarizes future minimum rental revenues under existing leases on our properties as of June 30, 2021 (in thousands): June 30, 2021 Remaining 2021 $ 413,500 2022 221,596 2023 10,996 2024 49 Total $ 646,141 As of June 30, 2021 and December 31, 2020, rent and other receivables included $ 5.9 million and $ 0.8 million, respectively, of insurance claims receivables related to storm damages and other matters. Note 6. Escrow Deposits, Prepaid Expenses and Other Assets The following table summarizes the components of escrow deposits, prepaid expenses and other assets as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Escrow deposits, prepaid expenses and other $ 57,784 $ 51,886 Deferred costs and other intangibles, net 14,735 4,864 Notes receivable, net 34,719 35,519 Operating lease ROU assets 17,863 18,772 Commercial real estate, software, vehicles and FF&E, net 57,600 52,130 Total $ 182,701 $ 163,171 Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $ 2.6 million and $ 2.1 million for the three months ended June 30, 2021 and 2020, respectively, and $ 5.4 million and $ 4.1 million for the six months ended June 30, 2021 and 2020, respectively. 17 Deferred Costs and Other Intangibles, Net Deferred costs and other intangibles, net, consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Deferred leasing costs $ 3,677 $ 3,782 Deferred financing costs 22,426 11,244 26,103 15,026 Less: accumulated amortization ( 11,368 ) ( 10,162 ) Total $ 14,735 $ 4,864 Amortization expense related to deferred leasing costs was $ 1.1 million for both the three months ended June 30, 2021 and 2020 and $ 2.1 million for both the six months ended June 30, 2021 and 2020 and was included in depreciation and amortization within the condensed consolidated statements of operations. Amortization of deferred financing costs that relate to our revolving credit facility was $ 0.6 million and $ 0.5 million for three months ended June 30, 2021 and 2020, respectively, and $ 1.1 million and $ 1.0 million for the six months ended June 30, 2021 and 2020, respectively, and was included in gross interest, prior to interest capitalization (see Note 8. Debt). The following table sets forth the estimated annual amortization expense related to deferred costs and other intangibles, net as of June 30, 2021 for future periods (in thousands): Deferred Leasing Costs Deferred Financing Costs Total Remaining 2021 $ 1,370 $ 1,367 $ 2,737 2022 375 2,709 3,084 2023 — 2,709 2,709 2024 — 2,717 2,717 2025 — 2,709 2,709 Thereafter — 779 779 Total $ 1,745 $ 12,990 $ 14,735 Note 7. Investments in Unconsolidated Joint Ventures As of June 30, 2021, 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. Equity in net income (losses) of unconsolidated joint ventures is included in other income and expense, net within the condensed consolidated statements of operations. The Company entered into a joint venture with (i) the Alaska Permanent Fund Corporation (the “Alaska JV”) during the second quarter of 2014 to invest in homes acquired through traditional acquisition channels, (ii) another leading institutional investor (the “Institutional Investor JV”) during the third quarter of 2018 to invest in newly constructed single-family rental homes, and (iii) institutional investors advised by J.P. Morgan Asset Management (the “J.P. Morgan JV”) during the first quarter of 2020 focused on constructing and operating newly built rental homes. The following table summarizes our investments in unconsolidated joint ventures (in thousands, except percentages and property data): Joint Venture Description % Ownership at June 30, 2021 Completed Homes at June 30, 2021 Balances at June 30, 2021 Balances at December 31, 2020 Alaska JV 20 % 337 $ 23,642 $ 26,020 Institutional Investor JV 20 % 901 29,084 34,112 J.P. Morgan JV 20 % 292 50,908 32,977 1,530 $ 103,634 $ 93,109 18 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 $ 2.5 million and $ 1.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 4.6 million and $ 2.2 million for the six months ended June 30, 2021 and 2020, respectively, and was included in other income and expense, net within the condensed consolidated statements of operations. As a result of the Company’s management of these joint ventures, certain related party receivables and payables arise in the ordinary course of business and are included in escrow deposits, prepaid expenses and other assets or amounts payable to affiliates in the condensed consolidated balance sheets. 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 June 30, 2021, the joint venture’s loan had a $ 139.7 million outstanding principal balance. The Company has provided a customary non-recourse guarantee that may become a liability for us upon a voluntary bankruptcy filing by the joint venture or occurrence of other actions such as fraud or a material misrepresentation by us or the joint venture. To date, the guarantee has not been invoked and we believe that the actions that would trigger a guarantee would generally be disadvantageous to the joint venture and us, and therefore are unlikely to occur. However, there can be no assurances that actions that could trigger the guarantee will not occur. Note 8. Debt All of the Company’s indebtedness is debt of the Operating Partnership. AH4R is not directly obligated under any indebtedness, but guarantees some of the debt of the Operating Partnership. The following table presents the Company’s debt as of June 30, 2021 and December 31, 2020 (in thousands): Outstanding Principal Balance Interest Rate (1) Maturity Date June 30, 2021 December 31, 2020 AH4R 2014-SFR2 securitization 4.42 % October 9, 2024 $ 476,810 $ 479,981 AH4R 2014-SFR3 securitization 4.40 % December 9, 2024 492,208 495,392 AH4R 2015-SFR1 securitization (2) 4.14 % April 9, 2045 517,741 520,957 AH4R 2015-SFR2 securitization (3) 4.36 % October 9, 2045 449,455 452,162 Total asset-backed securitizations 1,936,214 1,948,492 2028 unsecured senior notes (4) 4.08 % February 15, 2028 500,000 500,000 2029 unsecured senior notes 4.90 % February 15, 2029 400,000 400,000 Revolving credit facility (5) 1.20 % April 15, 2026 620,000 — Total debt 3,456,214 2,848,492 Unamortized discounts on unsecured senior notes ( 3,416 ) ( 3,658 ) Deferred financing costs, net (6) ( 24,484 ) ( 27,422 ) Total debt per balance sheet $ 3,428,314 $ 2,817,412 (1) Interest rates are as of June 30, 2021. Unless otherwise stated, interest rates are fixed percentages. (2) The AH4R 2015-SFR1 securitization has an anticipated repayment date of April 9, 2025. (3) The AH4R 2015-SFR2 securitization has an anticipated repayment date of October 9, 2025. (4) The stated interest rate on the 2028 unsecured senior notes is 4.25 %, which was effectively hedged to yield an interest rate of 4.08 %. (5) The revolving credit facility provides for a borrowing capacity of up to $ 1.25 billion and the Company had approximately $ 1.2 million and $ 1.5 million, respectively, committed to outstanding letters of credit that reduced our borrowing capacity as of June 30, 2021 and December 31, 2020. The revolving credit facility bears interest at LIBOR plus 1.10 % as of June 30, 2021. (6) Deferred financing costs relate to our asset-backed securitizations and unsecured senior notes. Amortization of deferred financing costs was $ 1.5 million for both the three months ended June 30, 2021 and 2020 and $ 3.0 million for both the six months ended June 30, 2021 and 2020, respectively, which was included in gross interest, prior to interest capitalization. Revolving Credit Facility In April 2021, the Company closed a $ 1.25 billion revolving credit facility, amending its existing $ 800 million revolving credit facility. The amended revolving credit facility provides for expanded borrowing capacity, reflects a more favorable pricing grid based on current market conditions, and includes a sustainability component based upon third-party performance measures through which overall pricing can further improve if the Company meets certain targets. The interest rate on the amended revolving credit facility is at either LIBOR plus a margin ranging from 0.725 % to 1.45 % or a base rate (determined according to the greater of a prime rate, federal funds rate plus 0.5 % or daily LIBOR rate plus 1.0 %) plus a margin ranging from 0.00 % to 0.45 %. In each case the actual margin is determined based on the Company’s credit ratings in effect from time to time. The amended revolving credit facility matures on April 15, 2025, with two six-month extension options at the Company’s election if certain conditions are met. 19 Debt Maturities The following table summarizes the contractual maturities of the Company’s principal debt balances on a fully extended basis as of June 30, 2021 (in thousands): Debt Maturities Remaining 2021 $ 10,358 2022 20,714 2023 20,714 2024 953,288 2025 10,302 Thereafter 2,440,838 Total debt $ 3,456,214 Interest Expense The following table summarizes our (i) gross interest cost, which includes fees on our credit facilities and amortization of deferred financing costs and the discounts on unsecured senior notes, and (ii) capitalized interest for the three and six months ended June 30, 2021 and 2020 (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Gross interest cost $ 34,415 $ 34,630 $ 68,298 $ 68,994 Capitalized interest ( 6,887 ) ( 5,072 ) ( 12,765 ) ( 9,721 ) Interest expense $ 27,528 $ 29,558 $ 55,533 $ 59,273 Note 9. Accounts Payable and Accrued Expenses The following table summarizes accounts payable and accrued expenses as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Accrued property taxes $ 109,397 $ 48,689 Resident security deposits 99,093 90,621 Accrued construction and maintenance liabilities 54,062 42,483 Accrued interest 23,274 23,018 Prepaid rent 23,184 24,421 Operating lease liabilities 19,000 19,166 Accounts payable 4,598 432 Accrued distribution payable 188 13,612 Other accrued liabilities 34,111 36,507 Total $ 366,907 $ 298,949 Note 10. Shareholders’ Equity / Partners’ Capital When the Company issues common or preferred shares, the Operating Partnership issues an equivalent number of units of partnership interest of a corresponding class to AH4R, with the Operating Partnership receiving the net proceeds from the share issuances. Class A Common Share / Unit Offering In May 2021, the Company completed an underwritten public offering for 18,745,000 of its Class A common shares of beneficial interest, $ 0.01 par value per share, of which 5,500,000 shares were issued directly by the Company, and 13,245,000 shares were offered on a forward basis at the request of the Company by the forward sellers. In connection with this offering, the Company entered into forward sale agreements with the forward purchasers (the “May 2021 Forward Sale Agreements”) for these 13,245,000 shares which are accounted for in equity. The Company expects to physically settle the May 2021 Forward Sale Agreements by the delivery of the Class A common shares and receive proceeds by May 21, 2022, although the Company has the right to elect settlement prior to that time subject to certain conditions. Although the Company expects to physically settle, the May 2021 Forward Sale Agreements allow the Company to cash or net-share settle all or a portion of its obligations. If the Company elects to cash or net share 20 settle the May 2021 Forward Sale Agreements, the Company may not receive any proceeds, and may owe cash or Class A common shares to the forward purchasers in certain circumstances. The May 2021 Forward Sale Agreements are subject to early termination or settlement under certain circumstances. The Company received net proceeds of $ 194.0 million from the 5,500,000 Class A common shares issued directly by the Company after deducting underwriting discounts and before offering costs of approximately $ 0.2 million. The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance. The Company used the net proceeds to repay indebtedness under its revolving credit facility, to partially fund the redemption of its Series D and Series E perpetual preferred shares discussed below and for general corporate purposes. The Company did not initially receive proceeds from the sale of the Class A common shares offered on a forward basis but estimates that net proceeds will be approximately $ 467.3 million after deducting underwriting discounts. The Company expects to use these net proceeds for general corporate purposes including, without limitation, property acquisitions and developments. At-the-Market Common Share Offering Program During the second quarter of 2020, the Company extended its at-the-market common share offering program under which it can issue Class A common shares from time to time through various sales agents up to an aggregate gross sales offering price of $ 500.0 million (the “At-the-Market Program”). The At-the-Market Program also provides that we may enter into forward contracts for our Class A common shares with forward sellers and forward purchasers. The Company intends to use any net proceeds from the At-the-Market Program (i) to repay indebtedness the Company has incurred or expects to incur under its revolving credit facility, (ii) to develop new single-family properties and communities, (iii) to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy and (iv) for working capital and general corporate purposes, including repurchases of the Company’s securities, acquisitions of additional properties, capital expenditures and the expansion, redevelopment and/or improvement of properties in the Company’s portfolio. The At-the-Market Program may be suspended or terminated by the Company at any time. During the six months ended June 30, 2021 and 2020, no shares were issued under the At-the-Market Program. As of June 30, 2021, 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 The Company’s board of trustees authorized the establishment of our share repurchase program for the repurchase of up to $ 300.0 million of our outstanding Class A common shares and up to $ 250.0 million of our outstanding preferred shares from time to time in the open market or in privately negotiated transactions. The program does not have an expiration date, but may be suspended or discontinued at any time without notice. All repurchased shares are constructively retired and returned to an authorized and unissued status. The Operating Partnership funds the repurchases and constructively retires an equivalent number of corresponding Class A units. During the six months ended June 30, 2021 and 2020, we did not repurchase and retire any of our shares. As of June 30, 2021, 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. Perpetual Preferred Shares As of June 30, 2021 and December 31, 2020, the Company had the following series of perpetual preferred shares outstanding (in thousands, except share data): June 30, 2021 December 31, 2020 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 Series E perpetual preferred shares 6/29/2016 6/29/2021 6.350 % — — 9,200,000 230,000 Series F perpetual preferred shares 4/24/2017 4/24/2022 5.875 % 6,200,000 155,000 6,200,000 155,000 Series G perpetual preferred shares 7/17/2017 7/17/2022 5.875 % 4,600,000 115,000 4,600,000 115,000 Series H perpetual preferred shares 9/19/2018 9/19/2023 6.250 % 4,600,000 115,000 4,600,000 115,000 Total preferred shares 15,400,000 $ 385,000 35,350,000 $ 883,750 In June 2021, the Company redeemed all 10,750,000 shares of the outstanding 6.500 % Series D perpetual preferred shares, $ 0.01 par value per share, for cash at a liquidation preference of $ 25.00 per share plus any accrued and unpaid dividends in accordance with the terms of such shares. The Operating Partnership also redeemed its corresponding Series D perpetual preferred units. As a result of the redemption, the Company recorded an $ 8.5 million allocation of income to the Series D perpetual preferred shareholders 21 within the condensed consolidated statements of operations in the second quarter of 2021, which represents the initial liquidation value of the Series D perpetual preferred shares in excess of its carrying value as of the redemption date. In June 2021, the Company redeemed all 9,200,000 shares of the outstanding 6.350 % Series E perpetual preferred shares, $ 0.01 par value per share, for cash at a liquidation preference of $ 25.00 per share plus accrued and unpaid dividends in accordance with the terms of such shares. The Operating Partnership also redeemed its corresponding Series E perpetual preferred units. As a result of the redemption, the Company recorded a $ 7.4 million allocation of income to the Series E perpetual preferred shareholders within the condensed consolidated statements of operations in the second quarter of 2021, which represents the initial liquidation value of the Series E perpetual preferred shares in excess of its carrying value as of the redemption date. Distributions The Company’s board of trustees declared the following distributions during the respective quarters. The Operating Partnership funds the payment of distributions, and the board of trustees declared an equivalent amount of distributions on the corresponding OP units. For the Three Months Ended Security June 30, 2021 March 31, 2021 June 30, 2020 March 31, 2020 Class A and Class B common shares $ 0.10 $ 0.10 $ 0.05 $ 0.05 6.500 % Series D perpetual preferred shares (1) 0.30 0.41 0.41 0.41 6.350 % Series E perpetual preferred shares 0.40 0.40 0.40 0.40 5.875 % Series F perpetual preferred shares 0.37 0.37 0.37 0.37 5.875 % Series G perpetual preferred shares 0.37 0.37 0.37 0.37 6.250 % Series H perpetual preferred shares 0.39 0.39 0.39 0.39 (1) The 6.500 % Series D perpetual preferred shares were redeemed on June 7, 2021 and the distributions for the three months ended June 30, 2021 represent the accrued and unpaid dividends paid to shareholders as part of the redemption. Noncontrolling Interest Noncontrolling interest as reflected in the Company’s condensed consolidated balance sheets primarily consists of the interests held by former American Homes 4 Rent, LLC (“AH LLC”) members in units in the Operating Partnership. Former AH LLC members owned 50,779,990 and 51,129,990 , or approximately 13.6 % and 13.9 %, of the total 374,220,238 and 368,383,440 Class A units in the Operating Partnership as of June 30, 2021 and December 31, 2020, respectively. Noncontrolling interest also includes interests held by non-affiliates in Class A units in the Operating Partnership. Non-affiliate Class A unitholders owned 596,990 , or approximately 0.2 %, of the total 374,220,238 and 368,383,440 Class A units in the Operating Partnership as of June 30, 2021 and December 31, 2020, respectively. The OP units owned by former AH LLC members and non-affiliates that are reflected as noncontrolling interest in the Company’s condensed consolidated balance sheets are reflected as limited partner capital in the Operating Partnership’s condensed consolidated balance sheets. Note 11. Share-Based Compensation 2021 Equity Incentive Plan In May 2021, the Company’s shareholders approved and the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan replaced the 2012 Equity Incentive Plan (the “2012 Plan”) and provides for the issuance of up to 9,544,095 Class A common shares (including shares that remained available for future awards under the 2012 Plan as of the effective date of the 2021 Plan and shares related to outstanding awards under the 2012 Plan that may become available after expiration, forfeiture or cancellation of such awards). The 2021 Plan provides for the issuance of Class A common shares through the grant of a variety of awards including stock options, stock appreciation rights, restricted share units (“RSUs”), unrestricted shares, dividend equivalent rights and performance-based awards. The 2021 Plan terminates in May 2031, unless terminated earlier by the Company’s board of trustees. When the Company issues Class A common shares under the 2021 Plan, the Operating Partnership issues an equivalent number of Class A units to AH4R. During the six months ended June 30, 2021 and 2020, the Human Capital and Compensation Committee granted RSUs to employees that vest over a three-year service period. RSUs granted to non-management trustees vest over a one-year service period. During the six months ended June 30, 2021, the Human Capital and Compensation Committee granted performance-based restricted share units (“PSUs”) to certain executives that cliff vest at the end of a three-year service period. The performance conditions of the PSUs are measured over a three-year performance period beginning January 1, 2021 and ending December 31, 2023. 22 A portion of the PSUs are based on (i) the achievement of relative total shareholder return compared to a specified peer group (the “TSR Awards”), and a portion are based on (ii) average annual growth in core funds from operations per share (the “Core FFO Awards”). The number of PSUs that may ultimately vest range from zero to 200 % of the number of PSUs granted based on the level of achievement of these performance conditions. For the TSR Awards, grant date fair value was determined using a multifactor Monte Carlo model and the resulting compensation cost is amortized over the service period regardless of whether the performance condition is achieved. For the Core FFO Awards, fair value is based on the market value on the date of grant and compensation cost is recognized based on the probable achievement of the performance condition at each reporting period. The following table summarizes stock option activity under the 2012 Plan and 2021 Plan for the six months ended June 30, 2021 and 2020: For the Six Months Ended June 30, 2021 2020 Options outstanding at beginning of period 1,090,300 1,529,800 Granted — — Exercised ( 114,000 ) ( 255,550 ) Forfeited — ( 2,850 ) Options outstanding at end of period 976,300 1,271,400 Options exercisable at end of period 938,800 1,124,800 The following table summarizes RSU activity under the 2012 Plan and 2021 Plan for the six months ended June 30, 2021 and 2020: For the Six Months Ended June 30, 2021 2020 RSUs outstanding at beginning of period 651,537 599,109 Awarded 568,313 461,279 Vested ( 200,939 ) ( 206,597 ) Forfeited ( 17,697 ) ( 39,995 ) RSUs outstanding at end of period 1,001,214 813,796 The following table summarizes PSU activity under the 2012 Plan and 2021 Plan for the six months ended June 30, 2021 and 2020: For the Six Months Ended June 30, 2021 2020 PSUs outstanding at beginning of period — — Awarded 92,319 — Vested — — Forfeited — — PSUs outstanding at end of period 92,319 — The Company’s noncash share-based compensation expense relating to corporate administrative employees is included in general and administrative expense and the noncash share-based compensation expense relating to centralized and field property management employees is included in property management expenses. Noncash share-based compensation expense relating to employees involved in the purchases of single-family properties, including newly constructed properties from third-party builders, the development of single-family properties, or the disposal of certain properties or portfolios of 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 three and six months ended June 30, 2021 and 2020 (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 General and administrative expense $ 1,823 $ 1,649 $ 6,165 $ 3,018 Property management expenses 599 441 1,598 880 Acquisition and other transaction costs 729 — 3,498 — Total noncash share-based compensation expense $ 3,151 $ 2,090 $ 11,261 $ 3,898 23 Note 12. Earnings per Share / Unit American Homes 4 Rent The following table reflects the Company’s computation of net income per common share on a basic and diluted basis for the three and six months ended June 30, 2021 and 2020 (in thousands, except share and per share data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net income $ 51,814 $ 31,807 $ 100,735 $ 69,334 Less: Noncontrolling interest 3,218 2,656 8,143 6,157 Dividends on preferred shares 12,615 13,782 26,397 27,564 Redemption of perpetual preferred shares 15,879 — 15,879 — Allocation to participating securities (1) 101 42 194 96 Numerator for income per common share–basic and diluted $ 20,001 $ 15,327 $ 50,122 $ 35,517 Denominator: Weighted-average common shares outstanding–basic 319,752,730 301,011,545 318,380,175 300,912,307 Effect of dilutive securities: Share-based compensation plan and forward sale equity contracts (2) 1,056,266 400,698 1,027,978 446,462 Weighted-average common shares outstanding–diluted (3) 320,808,996 301,412,243 319,408,153 301,358,769 Net income per common share: Basic $ 0.06 $ 0.05 $ 0.16 $ 0.12 Diluted $ 0.06 $ 0.05 $ 0.16 $ 0.12 (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 and the dilutive effect of unsettled forward sale equity contracts under the treasury stock method (see Note 10). (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. The income allocable to the OP units is allocated on this same basis and reflected as noncontrolling interest in the accompanying condensed consolidated financial statements. As such, the assumed conversion of the OP units would have no net impact on the determination of diluted earnings per share. 24 American Homes 4 Rent, L.P. The following table reflects the Operating Partnership’s computation of net income per common unit on a basic and diluted basis for the three and six months ended June 30, 2021 and 2020 (in thousands, except unit and per unit data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net income $ 51,814 $ 31,807 $ 100,735 $ 69,334 Less: Preferred distributions 12,615 13,782 26,397 27,564 Redemption of perpetual preferred units 15,879 — 15,879 — Allocation to participating securities (1) 101 42 194 96 Numerator for income per common unit–basic and diluted $ 23,219 $ 17,983 $ 58,265 $ 41,674 Denominator: Weighted-average common units outstanding–basic 371,129,710 353,038,525 369,900,249 352,939,287 Effect of dilutive securities: Share-based compensation plan and forward sale equity contracts (2) 1,056,266 400,698 1,027,978 446,462 Weighted-average common units outstanding–diluted 372,185,976 353,439,223 370,928,227 353,385,749 Net income per common unit: Basic $ 0.06 $ 0.05 $ 0.16 $ 0.12 Diluted $ 0.06 $ 0.05 $ 0.16 $ 0.12 (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 unit using the two-class method. (2) Reflects the effect of potentially dilutive securities issuable upon the assumed exercise of stock options and the dilutive effect of unsettled forward sale equity contracts under the treasury stock method (see Note 10). Note 13. Fair Value The carrying amount of rents and other receivables, restricted cash, escrow deposits, prepaid expenses and other assets, and accounts payable and accrued expenses generally approximate fair value because of the short maturity of these amounts. Our notes receivable are financial instruments classified as Level 3 in the fair value hierarchy as their fair values were estimated using unobservable inputs. We estimated the fair values of the notes receivable by modeling the expected contractual cash flows required under the instruments and discounting them back to their present values using estimates of current market rates. As the estimated current market rates were not substantially different from the discount rates originally applied, the carrying amount of notes receivable, net approximates fair value. Our asset-backed securitizations and revolving credit facility are financial instruments classified as Level 3 in the fair value hierarchy as their fair values were estimated using unobservable inputs. 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 8. 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. 25 The following table displays the carrying values and fair values of our debt instruments as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Carrying Value Fair Value Carrying Value Fair Value AH4R 2014-SFR2 securitization $ 472,610 $ 483,541 $ 475,144 $ 488,140 AH4R 2014-SFR3 securitization 487,774 500,415 490,319 504,364 AH4R 2015-SFR1 securitization 512,778 525,461 515,326 529,542 AH4R 2015-SFR2 securitization 444,671 458,748 446,818 461,037 Total asset-backed securitizations 1,917,833 1,968,165 1,927,607 1,983,083 2028 unsecured senior notes, net 494,773 561,940 494,378 575,220 2029 unsecured senior notes, net 395,708 465,212 395,427 482,276 Total unsecured senior notes, net 890,481 1,027,152 889,805 1,057,496 Revolving credit facility 620,000 620,000 — — Total debt $ 3,428,314 $ 3,615,317 $ 2,817,412 $ 3,040,579 During the first quarter of 2021, in anticipation of a debt issuance and in order to hedge interest rate risk, the Company entered into a treasury lock agreement with a notional amount of $ 400.0 million based on the 10 -year treasury note rate at the time. The treasury lock was designated as a cash flow hedging instrument. The treasury lock was settled in June 2021 in connection with the pricing of the 2031 Notes (see Note 16) and resulted in a $ 4.0 million loss that was recorded in other comprehensive loss as of June 30, 2021 and will be reclassified into earnings as an increase to interest expense over the 10 -year term of the 2031 Notes. As the $ 4.0 million loss was paid upon issuance of the 2031 Notes in July 2021 (see Note 16), the amount was recorded in accounts payable and accrued expenses within the condensed consolidated balance sheets as of June 30, 2021. The treasury lock is 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. Note 14. Related Party Transactions As of June 30, 2021 and December 31, 2020, affiliates owned approximately 14.1 % and 14.3 %, 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 50,622,165 and 50,972,165 Class A units as of June 30, 2021 and December 31, 2020, respectively) an approximate 25.9 % and 26.3 % interest as of June 30, 2021 and December 31, 2020, respectively. American Homes 4 Rent As of December 31, 2020, the Company had a $ 4.8 million payable related to accrued common distributions to affiliates, which was included in amounts payable to affiliates on the Company’s condensed consolidated balance sheets. American Homes 4 Rent, L.P. As of June 30, 2021, the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AH4R, which was included in amounts due from affiliates on the Operating Partnership’s condensed consolidated balance sheets. As of December 31, 2020, the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AH4R, which was included in amounts due from affiliates on the Operating Partnership’s condensed consolidated balance sheets, and had a $ 4.8 million payable related to accrued common distributions to affiliates, which was included in amounts payable to affiliates on the Operating Partnership’s condensed consolidated balance sheets. Note 15. Commitments and Contingencies As of June 30, 2021, the Company had commitments to acquire 626 single-family properties for an aggregate purchase price of $ 183.0 million, as well as $ 197.6 million in purchase commitments for land relating to our AMH Development Program. 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 for land relating to our AMH Development Program. As of June 30, 2021 and December 31, 2020, the Company had sales in escrow for approximately 43 and 97 , respectively, of our single-family properties for aggregate selling prices of $ 14.4 million and $ 24.0 million, respectively. As of June 30, 2021 and December 31, 2020, the Company, as a condition for entering into some of its development contracts, had outstanding surety bonds of approximately $ 59.9 million and $ 36.7 million, respectively. 26 Captive Insurance Company In the first quarter of 2021, the Company formed a wholly owned captive insurance company, American Dream Insurance, LLC, which provides general liability insurance coverage for losses below the deductible under the Company’s third-party liability insurance policy. The Company created American Dream Insurance, LLC as part of its overall risk management program and to stabilize its insurance costs, manage exposure and recoup expenses through the functions of the captive program. The captive insurance company’s impact on the Company’s condensed consolidated financial statements is immaterial. Legal Matters 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. 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 our third fiscal quarter and likely beyond. The extent to which our operations will be impacted will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the pandemic, including with respect to new variants or strains, the speed and effectiveness of vaccine distribution, vaccine adoption rates and actions by government authorities to contain the pandemic or treat its impact, among other things. Note 16. Subsequent Events Subsequent Acquisitions From July 1, 2021 through July 31, 2021, the Company added 412 properties to its portfolio for a total cost of approximately $ 143.0 million, which included 107 newly constructed properties delivered through our AMH Development Program and 46 newly constructed homes acquired from third-party developers through our National Builder Program. Subsequent Dispositions From July 1, 2021 through July 31, 2021, the Company disposed of 31 properties for aggregate net proceeds of approximately $ 8.9 million. Revolving Credit Facility From July 1, 2021 through July 31, 2021, the Company paid down $ 620.0 million and borrowed an additional $ 20.0 million under its revolving credit facility, resulting in $ 20.0 million of outstanding borrowings under its revolving credit facility as of July 31, 2021. Unsecured Senior Notes In July 2021, the Operating Partnership issued $ 450.0 million of 2.375 % unsecured senior notes with a maturity date of July 15, 2031 (the “2031 Notes”) and $ 300.0 million of 3.375 % unsecured senior notes with a maturity date of July 15, 2051 (the “2051 Notes” and, together with the 2031 Notes, the “Notes”). Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2022. The Operating Partnership received aggregate net proceeds of $ 731.6 million from these issuances, after underwriting fees of approximately $ 5.6 million and a $ 12.8 million discount, and before estimated offering costs of $ 1.1 million. The Operating Partnership used the net proceeds from this offering to repay amounts outstanding on its revolving credit facility and intends to use any remaining net proceeds for general corporate purposes, including, without limitation, property acquisitions and developments, the expansion, redevelopment and/or improvement of existing properties in the Operating Partnership’s portfolio, other capital expenditures, the redemption of its preferred shares, the repayment of outstanding indebtedness, working capital and other general purposes. 27 The Notes are the Operating Partnership’s unsecured and unsubordinated obligations and rank equally in right of payment with all of the Operating Partnership’s existing and future unsecured and unsubordinated indebtedness. The Operating Partnership may redeem the Notes in whole at any time or in part from time to time at the applicable redemption price specified in the indentures with respect to the Notes. If the 2031 Notes are redeemed on or after April 15, 2031 (three months prior to the maturity date), the redemption price will be equal to 100 % of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date. If the 2051 Notes are redeemed on or after January 15, 2051 (six months prior to the maturity date), the redemption price will be equal to 100 % of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date. 28