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, 2023 December 31, 2022 (Unaudited) Assets Single-family properties: Land $ 2,208,667 $ 2,197,233 Buildings and improvements 10,351,621 10,127,891 Single-family properties in operation 12,560,288 12,325,124 Less: accumulated depreciation ( 2,552,998 ) ( 2,386,452 ) Single-family properties in operation, net 10,007,290 9,938,672 Single-family properties under development and development land 1,339,508 1,187,221 Single-family properties and land held for sale, net 154,190 198,716 Total real estate assets, net 11,500,988 11,324,609 Cash and cash equivalents 199,601 69,155 Restricted cash 162,169 148,805 Rent and other receivables 45,911 47,752 Escrow deposits, prepaid expenses and other assets 359,473 331,446 Investments in unconsolidated joint ventures 108,351 107,347 Asset-backed securitization certificates 25,666 25,666 Goodwill 120,279 120,279 Total assets $ 12,522,438 $ 12,175,059 Liabilities Revolving credit facility $ — $ 130,000 Asset-backed securitizations, net 1,880,348 1,890,842 Unsecured senior notes, net 2,497,691 2,495,156 Accounts payable and accrued expenses 594,154 484,403 Total liabilities 4,972,193 5,000,401 Commitments and contingencies (see Note 15) Equity Shareholders’ equity: Class A common shares ($ 0.01 par value per share, 450,000,000 shares authorized, 361,365,692 and 352,881,826 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively) 3,614 3,529 Class B common shares ($ 0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at June 30, 2023 and December 31, 2022) 6 6 Preferred shares ($ 0.01 par value per share, 100,000,000 shares authorized, 9,200,000 shares issued and outstanding at June 30, 2023 and December 31, 2022) 92 92 Additional paid-in capital 7,244,204 6,931,819 Accumulated deficit ( 385,434 ) ( 440,791 ) Accumulated other comprehensive income 1,090 1,332 Total shareholders’ equity 6,863,572 6,495,987 Noncontrolling interest 686,673 678,671 Total equity 7,550,245 7,174,658 Total liabilities and equity $ 12,522,438 $ 12,175,059 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, 2023 2022 2023 2022 Rents and other single-family property revenues $ 395,548 $ 361,876 $ 793,251 $ 717,981 Expenses: Property operating expenses 142,553 129,270 289,621 262,913 Property management expenses 30,666 28,768 61,466 54,802 General and administrative expense 19,937 18,847 37,792 36,129 Interest expense 34,844 34,801 70,726 62,368 Acquisition and other transaction costs 4,175 7,658 9,251 13,632 Depreciation and amortization 113,199 104,415 225,916 204,369 Total expenses 345,374 323,759 694,772 634,213 Gain on sale and impairment of single-family properties and other, net 62,758 32,811 147,417 54,855 Other income and expense, net 2,482 3,627 7,217 5,946 Net income 115,414 74,555 253,113 144,569 Noncontrolling interest 13,899 8,343 30,647 16,655 Dividends on preferred shares 3,486 4,346 6,972 10,109 Redemption of perpetual preferred shares — 5,276 — 5,276 Net income attributable to common shareholders $ 98,029 $ 56,590 $ 215,494 $ 112,529 Weighted-average common shares outstanding: Basic 362,148,911 348,484,158 361,267,035 347,123,576 Diluted 362,479,942 349,002,624 361,593,174 347,751,958 Net income attributable to common shareholders per share: Basic $ 0.27 $ 0.16 $ 0.59 $ 0.32 Diluted $ 0.27 $ 0.16 $ 0.59 $ 0.32 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, 2023 2022 2023 2022 Net income $ 115,414 $ 74,555 $ 253,113 $ 144,569 Other comprehensive loss: Cash flow hedging instruments: Reclassification adjustment for amortization of interest expense included in net income ( 140 ) ( 141 ) ( 281 ) ( 282 ) Other comprehensive loss ( 140 ) ( 141 ) ( 281 ) ( 282 ) Comprehensive income 115,274 74,414 252,832 144,287 Comprehensive income attributable to noncontrolling interests 13,881 8,325 30,608 16,612 Dividends on preferred shares 3,486 4,346 6,972 10,109 Redemption of perpetual preferred shares — 5,276 — 5,276 Comprehensive income attributable to common shareholders $ 97,907 $ 56,467 $ 215,252 $ 112,290 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, 2021 337,362,716 $ 3,374 635,075 $ 6 15,400,000 $ 154 $ 6,492,933 $ ( 438,710 ) $ 1,814 $ 6,059,571 $ 678,858 $ 6,738,429 Share-based compensation — — — — — — 7,405 — — 7,405 — 7,405 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 280,172 2 — — — — ( 2,621 ) — — ( 2,619 ) — ( 2,619 ) Issuance of Class A common shares, net of offering costs of $ 200 10,000,000 100 — — — — 375,540 — — 375,640 — 375,640 Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 5,763 ) — ( 5,763 ) — ( 5,763 ) Noncontrolling interests — — — — — — — — — — ( 9,248 ) ( 9,248 ) Common shares ($ 0.18 per share) — — — — — — — ( 62,938 ) — ( 62,938 ) — ( 62,938 ) Net income — — — — — — — 61,702 — 61,702 8,312 70,014 Total other comprehensive loss — — — — — — — — ( 116 ) ( 116 ) ( 25 ) ( 141 ) Balances at March 31, 2022 347,642,888 $ 3,476 635,075 $ 6 15,400,000 $ 154 $ 6,873,257 $ ( 445,709 ) $ 1,698 $ 6,432,882 $ 677,897 $ 7,110,779 Share-based compensation — — — — — — 10,643 — — 10,643 — 10,643 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 53,606 1 — — — — 54 — — 55 — 55 Redemption of Series F perpetual preferred shares — — — — ( 6,200,000 ) ( 62 ) ( 149,662 ) ( 5,276 ) — ( 155,000 ) — ( 155,000 ) Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 4,346 ) — ( 4,346 ) — ( 4,346 ) Noncontrolling interests — — — — — — — — — — ( 9,248 ) ( 9,248 ) Common shares ($ 0.18 per share) — — — — — — — ( 63,036 ) — ( 63,036 ) — ( 63,036 ) Net income — — — — — — — 66,212 — 66,212 8,343 74,555 Total other comprehensive loss — — — — — — — — ( 123 ) ( 123 ) ( 18 ) ( 141 ) Balances at June 30, 2022 347,696,494 $ 3,477 635,075 $ 6 9,200,000 $ 92 $ 6,734,292 $ ( 452,155 ) $ 1,575 $ 6,287,287 $ 676,974 $ 6,964,261 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, 2022 352,881,826 $ 3,529 635,075 $ 6 9,200,000 $ 92 $ 6,931,819 $ ( 440,791 ) $ 1,332 $ 6,495,987 $ 678,671 $ 7,174,658 Share-based compensation — — — — — — 5,824 — — 5,824 — 5,824 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 264,466 2 — — — — ( 3,744 ) — — ( 3,742 ) — ( 3,742 ) Issuance of Class A common shares 8,000,000 80 — — — — 298,292 — — 298,372 — 298,372 Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 3,486 ) — ( 3,486 ) — ( 3,486 ) Noncontrolling interests — — — — — — — — — — ( 11,303 ) ( 11,303 ) Common shares ($ 0.22 per share) — — — — — — — ( 79,977 ) — ( 79,977 ) — ( 79,977 ) Net income — — — — — — — 120,951 — 120,951 16,748 137,699 Total other comprehensive loss — — — — — — — — ( 120 ) ( 120 ) ( 21 ) ( 141 ) Balances at March 31, 2023 361,146,292 $ 3,611 635,075 $ 6 9,200,000 $ 92 $ 7,232,191 $ ( 403,303 ) $ 1,212 $ 6,833,809 $ 684,095 $ 7,517,904 Share-based compensation — — — — — — 8,508 — — 8,508 — 8,508 Common stock issued under share-based compensation plans, net of shares withheld for employee taxes 219,400 3 — — — — 3,505 — — 3,508 — 3,508 Distributions to equity holders: Preferred shares (Note 10) — — — — — — — ( 3,486 ) — ( 3,486 ) — ( 3,486 ) Noncontrolling interests — — — — — — — — — — ( 11,303 ) ( 11,303 ) Common shares ($ 0.22 per share) — — — — — — — ( 80,160 ) — ( 80,160 ) — ( 80,160 ) Net income — — — — — — — 101,515 — 101,515 13,899 115,414 Total other comprehensive loss — — — — — — — — ( 122 ) ( 122 ) ( 18 ) ( 140 ) Balances at June 30, 2023 361,365,692 $ 3,614 635,075 $ 6 9,200,000 $ 92 $ 7,244,204 $ ( 385,434 ) $ 1,090 $ 6,863,572 $ 686,673 $ 7,550,245 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, 2023 2022 Operating activities Net income $ 253,113 $ 144,569 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 225,916 204,369 Noncash amortization of deferred financing costs, debt discounts and cash flow hedging instruments 6,108 5,502 Noncash share-based compensation 14,332 18,048 Equity in net income of unconsolidated joint ventures ( 711 ) ( 2,457 ) Return on investment from unconsolidated joint ventures 1,788 3,986 Gain on sale and impairment of single-family properties and other, net ( 147,417 ) ( 54,855 ) Other changes in operating assets and liabilities: Rent and other receivables 1,841 1,605 Prepaid expenses and other assets ( 2,117 ) ( 3,924 ) Deferred leasing costs ( 1,576 ) ( 1,179 ) Accounts payable and accrued expenses 62,511 73,887 Amounts due from related parties 1,888 ( 10,555 ) Net cash provided by operating activities 415,676 378,996 Investing activities Cash paid for single-family properties ( 3,181 ) ( 531,249 ) Change in escrow deposits for purchase of single-family properties 558 6,225 Net proceeds received from sales of single-family properties and other 311,878 113,002 Proceeds received from storm-related insurance claims — 1,981 Proceeds from notes receivable related to the sale of properties 349 33,186 Investment in unconsolidated joint ventures ( 4,278 ) ( 12,759 ) Distributions from joint ventures 13,155 38,347 Renovations to single-family properties ( 14,891 ) ( 54,961 ) Recurring and other capital expenditures for single-family properties ( 67,564 ) ( 53,770 ) Cash paid for development activity ( 452,967 ) ( 473,637 ) Other investing activities ( 20,881 ) ( 19,876 ) Net cash used for investing activities ( 237,822 ) ( 953,511 ) Financing activities Proceeds from issuance of Class A common shares 298,372 375,840 Payments of Class A common share issuance costs — ( 200 ) Redemption of perpetual preferred shares — ( 155,000 ) Proceeds from issuances under share-based compensation plans 3,580 1,516 Payments related to tax withholding for share-based compensation ( 3,814 ) ( 4,080 ) Payments on asset-backed securitizations ( 12,999 ) ( 11,277 ) Proceeds from revolving credit facility — 420,000 Payments on revolving credit facility ( 130,000 ) ( 770,000 ) Proceeds from unsecured senior notes, net of discount — 876,813 Proceeds from liabilities related to consolidated land not owned — 33,821 Distributions to noncontrolling interests ( 22,511 ) ( 18,394 ) Distributions to common shareholders ( 159,700 ) ( 125,781 ) Distributions to preferred shareholders ( 6,972 ) ( 10,109 ) Deferred financing costs paid — ( 8,236 ) Net cash (used for) provided by financing activities ( 34,044 ) 604,913 Net increase in cash, cash equivalents and restricted cash 143,810 30,398 Cash, cash equivalents and restricted cash, beginning of period (see Note 3) 217,960 191,767 Cash, cash equivalents and restricted cash, end of period (see Note 3) $ 361,770 $ 222,165 6 American Homes 4 Rent Condensed Consolidated Statements of Cash Flows (continued) (Amounts in thousands) (Unaudited) For the Six Months Ended June 30, 2023 2022 Supplemental cash flow information Cash payments for interest, net of amounts capitalized $ ( 64,872 ) $ ( 49,323 ) Supplemental schedule of noncash investing and financing activities Accrued property renovations and development expenditures $ 94,592 $ 79,596 Transfers of completed homebuilding deliveries to properties 286,060 226,993 Property and land contributions to unconsolidated joint ventures ( 11,647 ) ( 25,053 ) Property and land distributions from unconsolidated joint ventures — 8,397 Noncash right-of-use assets obtained in exchange for operating lease liabilities — 3,679 Accrued distributions to affiliates 841 241 Accrued distributions to non-affiliates 139 112 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, 2023 December 31, 2022 (Unaudited) Assets Single-family properties: Land $ 2,208,667 $ 2,197,233 Buildings and improvements 10,351,621 10,127,891 Single-family properties in operation 12,560,288 12,325,124 Less: accumulated depreciation ( 2,552,998 ) ( 2,386,452 ) Single-family properties in operation, net 10,007,290 9,938,672 Single-family properties under development and development land 1,339,508 1,187,221 Single-family properties and land held for sale, net 154,190 198,716 Total real estate assets, net 11,500,988 11,324,609 Cash and cash equivalents 199,601 69,155 Restricted cash 162,169 148,805 Rent and other receivables 45,911 47,752 Escrow deposits, prepaid expenses and other assets 359,473 331,446 Investments in unconsolidated joint ventures 108,351 107,347 Amounts due from affiliates 25,666 25,666 Goodwill 120,279 120,279 Total assets $ 12,522,438 $ 12,175,059 Liabilities Revolving credit facility $ — $ 130,000 Asset-backed securitizations, net 1,880,348 1,890,842 Unsecured senior notes, net 2,497,691 2,495,156 Accounts payable and accrued expenses 594,154 484,403 Total liabilities 4,972,193 5,000,401 Commitments and contingencies (see Note 15) Capital Partners’ capital: General partner: Common units ( 362,000,767 and 353,516,901 units issued and outstanding at June 30, 2023 and December 31, 2022, respectively) 6,640,642 6,272,815 Preferred units ( 9,200,000 units issued and outstanding at June 30, 2023 and December 31, 2022) 221,840 221,840 Limited partner: Common units ( 51,376,980 units issued and outstanding at June 30, 2023 and December 31, 2022) 686,518 678,477 Accumulated other comprehensive income 1,245 1,526 Total capital 7,550,245 7,174,658 Total liabilities and capital $ 12,522,438 $ 12,175,059 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, 2023 2022 2023 2022 Rents and other single-family property revenues $ 395,548 $ 361,876 $ 793,251 $ 717,981 Expenses: Property operating expenses 142,553 129,270 289,621 262,913 Property management expenses 30,666 28,768 61,466 54,802 General and administrative expense 19,937 18,847 37,792 36,129 Interest expense 34,844 34,801 70,726 62,368 Acquisition and other transaction costs 4,175 7,658 9,251 13,632 Depreciation and amortization 113,199 104,415 225,916 204,369 Total expenses 345,374 323,759 694,772 634,213 Gain on sale and impairment of single-family properties and other, net 62,758 32,811 147,417 54,855 Other income and expense, net 2,482 3,627 7,217 5,946 Net income 115,414 74,555 253,113 144,569 Preferred distributions 3,486 4,346 6,972 10,109 Redemption of perpetual preferred units — 5,276 — 5,276 Net income attributable to common unitholders $ 111,928 $ 64,933 $ 246,141 $ 129,184 Weighted-average common units outstanding: Basic 413,525,891 399,861,138 412,644,015 398,500,556 Diluted 413,856,922 400,379,604 412,970,154 399,128,938 Net income attributable to common unitholders per unit: Basic $ 0.27 $ 0.16 $ 0.59 $ 0.32 Diluted $ 0.27 $ 0.16 $ 0.59 $ 0.32 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, 2023 2022 2023 2022 Net income $ 115,414 $ 74,555 $ 253,113 $ 144,569 Other comprehensive loss: Cash flow hedging instruments: Reclassification adjustment for amortization of interest expense included in net income ( 140 ) ( 141 ) ( 281 ) ( 282 ) Other comprehensive loss ( 140 ) ( 141 ) ( 281 ) ( 282 ) Comprehensive income 115,274 74,414 252,832 144,287 Preferred distributions 3,486 4,346 6,972 10,109 Redemption of perpetual preferred units — 5,276 — 5,276 Comprehensive income attributable to common unitholders $ 111,788 $ 64,792 $ 245,860 $ 128,902 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, 2021 337,997,791 $ 5,686,193 $ 371,564 51,376,980 $ 678,582 $ 2,090 $ 6,738,429 Share-based compensation — 7,405 — — — — 7,405 Common units issued under share-based compensation plans, net of units withheld for employee taxes 280,172 ( 2,619 ) — — — — ( 2,619 ) Issuance of Class A common units, net of offering costs of $ 200 10,000,000 375,640 — — — — 375,640 Distributions to capital holders: Preferred units (Note 10) — — ( 5,763 ) — — — ( 5,763 ) Common units ($ 0.18 per unit) — ( 62,938 ) — — ( 9,248 ) — ( 72,186 ) Net income — 55,939 5,763 — 8,312 — 70,014 Total other comprehensive loss — — — — — ( 141 ) ( 141 ) Balances at March 31, 2022 348,277,963 $ 6,059,620 $ 371,564 51,376,980 $ 677,646 $ 1,949 $ 7,110,779 Share-based compensation — 10,643 — — — — 10,643 Common units issued under share-based compensation plans, net of units withheld for employee taxes 53,606 55 — — — — 55 Redemption of Series F perpetual preferred units — ( 5,276 ) ( 149,724 ) — — — ( 155,000 ) Distributions to capital holders: Preferred units (Note 10) — — ( 4,346 ) — — — ( 4,346 ) Common units ($ 0.18 per unit) — ( 63,036 ) — — ( 9,248 ) — ( 72,284 ) Net income — 61,866 4,346 — 8,343 — 74,555 Total other comprehensive loss — — — — — ( 141 ) ( 141 ) Balances at June 30, 2022 348,331,569 $ 6,063,872 $ 221,840 51,376,980 $ 676,741 $ 1,808 $ 6,964,261 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, 2022 353,516,901 $ 6,272,815 $ 221,840 51,376,980 $ 678,477 $ 1,526 $ 7,174,658 Share-based compensation — 5,824 — — — — 5,824 Common units issued under share-based compensation plans, net of units withheld for employee taxes 264,466 ( 3,742 ) — — — — ( 3,742 ) Issuance of Class A common units 8,000,000 298,372 — — — — 298,372 Distributions to capital holders: Preferred units (Note 10) — — ( 3,486 ) — — — ( 3,486 ) Common units ($ 0.22 per unit) — ( 79,977 ) — — ( 11,303 ) — ( 91,280 ) Net income — 117,465 3,486 — 16,748 — 137,699 Total other comprehensive loss — — — — — ( 141 ) ( 141 ) Balances at March 31, 2023 361,781,367 $ 6,610,757 $ 221,840 51,376,980 $ 683,922 $ 1,385 $ 7,517,904 Share-based compensation — 8,508 — — — — 8,508 Common units issued under share-based compensation plans, net of units withheld for employee taxes 219,400 3,508 — — — — 3,508 Distributions to capital holders: Preferred units (Note 10) — — ( 3,486 ) — — — ( 3,486 ) Common units ($ 0.22 per unit) — ( 80,160 ) — — ( 11,303 ) — ( 91,463 ) Net income — 98,029 3,486 — 13,899 — 115,414 Total other comprehensive loss — — — — — ( 140 ) ( 140 ) Balances at June 30, 2023 362,000,767 $ 6,640,642 $ 221,840 51,376,980 $ 686,518 $ 1,245 $ 7,550,245 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, 2023 2022 Operating activities Net income $ 253,113 $ 144,569 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 225,916 204,369 Noncash amortization of deferred financing costs, debt discounts and cash flow hedging instruments 6,108 5,502 Noncash share-based compensation 14,332 18,048 Equity in net income of unconsolidated joint ventures ( 711 ) ( 2,457 ) Return on investment from unconsolidated joint ventures 1,788 3,986 Gain on sale and impairment of single-family properties and other, net ( 147,417 ) ( 54,855 ) Other changes in operating assets and liabilities: Rent and other receivables 1,841 1,605 Prepaid expenses and other assets ( 2,117 ) ( 3,924 ) Deferred leasing costs ( 1,576 ) ( 1,179 ) Accounts payable and accrued expenses 62,511 73,887 Amounts due from related parties 1,888 ( 10,555 ) Net cash provided by operating activities 415,676 378,996 Investing activities Cash paid for single-family properties ( 3,181 ) ( 531,249 ) Change in escrow deposits for purchase of single-family properties 558 6,225 Net proceeds received from sales of single-family properties and other 311,878 113,002 Proceeds received from storm-related insurance claims — 1,981 Proceeds from notes receivable related to the sale of properties 349 33,186 Investment in unconsolidated joint ventures ( 4,278 ) ( 12,759 ) Distributions from joint ventures 13,155 38,347 Renovations to single-family properties ( 14,891 ) ( 54,961 ) Recurring and other capital expenditures for single-family properties ( 67,564 ) ( 53,770 ) Cash paid for development activity ( 452,967 ) ( 473,637 ) Other investing activities ( 20,881 ) ( 19,876 ) Net cash used for investing activities ( 237,822 ) ( 953,511 ) Financing activities Proceeds from issuance of Class A common units 298,372 375,840 Payments of Class A common unit issuance costs — ( 200 ) Redemption of perpetual preferred units — ( 155,000 ) Proceeds from issuances under share-based compensation plans 3,580 1,516 Payments related to tax withholding for share-based compensation ( 3,814 ) ( 4,080 ) Payments on asset-backed securitizations ( 12,999 ) ( 11,277 ) Proceeds from revolving credit facility — 420,000 Payments on revolving credit facility ( 130,000 ) ( 770,000 ) Proceeds from unsecured senior notes, net of discount — 876,813 Proceeds from liabilities related to consolidated land not owned — 33,821 Distributions to common unitholders ( 182,211 ) ( 144,175 ) Distributions to preferred unitholders ( 6,972 ) ( 10,109 ) Deferred financing costs paid — ( 8,236 ) Net cash (used for) provided by financing activities ( 34,044 ) 604,913 Net increase in cash, cash equivalents and restricted cash 143,810 30,398 Cash, cash equivalents and restricted cash, beginning of period (see Note 3) 217,960 191,767 Cash, cash equivalents and restricted cash, end of period (see Note 3) $ 361,770 $ 222,165 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, 2023 2022 Supplemental cash flow information Cash payments for interest, net of amounts capitalized $ ( 64,872 ) $ ( 49,323 ) Supplemental schedule of noncash investing and financing activities Accrued property renovations and development expenditures $ 94,592 $ 79,596 Transfers of completed homebuilding deliveries to properties 286,060 226,993 Property and land contributions to unconsolidated joint ventures ( 11,647 ) ( 25,053 ) Property and land distributions from unconsolidated joint ventures — 8,397 Noncash right-of-use assets obtained in exchange for operating lease liabilities — 3,679 Accrued distributions to affiliates 841 241 Accrued distributions to non-affiliates 139 112 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 (“AMH” or the “General Partner”) is an internally managed Maryland real estate investment trust (“REIT”) formed on October 19, 2012 for the purpose of acquiring, developing, renovating, leasing and managing 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 AMH, the Operating Partnership and those entities/subsidiaries owned or controlled by AMH and/or the Operating Partnership. As of June 30, 2023, the Company held 58,693 single-family properties in 21 states, including 648 properties classified as held for sale. AMH is the general partner of, and as of June 30, 2023 owned approximately 87.6 % of the common partnership interest in, the Operating Partnership. The remaining 12.4 % of the common partnership interest was owned by limited partners. As the sole general partner of the Operating Partnership, AMH has exclusive control of the Operating Partnership’s day-to-day management. The Company’s management operates AMH and the Operating Partnership as one business, and the management of AMH consists of the same members as the management of the Operating Partnership. AMH’s primary function is acting as the general partner of the Operating Partnership. The only material asset of AMH is its partnership interest in the Operating Partnership. As a result, AMH 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. AMH 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 AMH. 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. AMH contributes all net proceeds from its various equity offerings to the Operating Partnership. In return for those contributions, AMH 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 AMH, 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 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, 2022. Any references in this report to the number of properties is outside the scope of our independent registered public accounting firm’s review of our financial statements, in accordance with the standards of the Public Company Accounting Oversight Board. In the opinion of management, all adjustments of a normal and recurring nature necessary for a fair statement of the condensed consolidated financial statements for the interim periods have been made. The operating results for interim periods are not necessarily indicative of results for other interim periods or the full year. 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. 15 Principles of Consolidation The condensed consolidated financial statements present the accounts of both (i) the Company, which include AMH, the Operating Partnership and their consolidated subsidiaries, and (ii) 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”) in accordance with Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”) , when it owns, directly or indirectly, a majority interest in the entity or is otherwise able to control the entity. Entities that are not VIEs and for which the Company owns an interest and has the ability to exercise significant influence but does not control 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 Company consolidates VIEs in accordance with ASC 810 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. The Company holds investments in venture capital funds and deposits with land banking entities that we determined are VIEs. As the Company does not control the activities that most significantly impact the economic performance of these entities, the Company was deemed not to be the primary beneficiary and therefore did not consolidate the entities. The investments in the unconsolidated venture capital funds are accounted for under the equity method of accounting and included in escrow deposits, prepaid expenses and other assets within the condensed consolidated balance sheets. As of June 30, 2023, the carrying value of the investments in these venture capital funds was $ 13.5 million and the Company’s maximum exposure to loss was $ 16.1 million, which includes all future capital funding requirements. The deposits with land banking entities are held at cost and included in escrow deposits, prepaid expenses and other assets within the condensed consolidated balance sheets. As of June 30, 2023, the carrying value of the deposits with land banking entities and the Company’s maximum exposure to loss was $ 14.5 million. 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 (amounts in thousands): June 30, December 31, 2023 2022 2022 2021 Cash and cash equivalents $ 199,601 $ 70,375 $ 69,155 $ 48,198 Restricted cash 162,169 151,790 148,805 143,569 Total cash, cash equivalents and restricted cash $ 361,770 $ 222,165 $ 217,960 $ 191,767 16 Note 4. Real Estate Assets, Net The net book values of real estate assets consisted of the following as of June 30, 2023 and December 31, 2022 (amounts in thousands): June 30, 2023 December 31, 2022 Occupied single-family properties $ 9,583,609 $ 9,419,098 Single-family properties leased, not yet occupied 80,120 52,325 Single-family properties in turnover process 264,493 281,356 Single-family properties recently renovated or developed 79,068 182,336 Single-family properties newly acquired and under renovation — 3,557 Single-family properties in operation, net 10,007,290 9,938,672 Development land 588,510 631,539 Single-family properties under development 750,998 555,682 Single-family properties and land held for sale, net 154,190 198,716 Total real estate assets, net $ 11,500,988 $ 11,324,609 Depreciation expense related to single-family properties was $ 108.3 million and $ 100.6 million for the three months ended June 30, 2023 and 2022, respectively, and $ 216.1 million and $ 196.8 million for the six months ended June 30, 2023 and 2022, respectively. The following table summarizes the Company’s dispositions of single-family properties and land for the three and six months ended June 30, 2023 and 2022 (amounts in thousands, except property data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Single-family properties: Properties sold 415 197 1,081 366 Net proceeds (1) $ 126,795 $ 60,801 $ 310,379 $ 111,060 Net gain on sale $ 62,622 $ 33,147 $ 148,325 $ 57,692 Land: Net proceeds $ 573 $ 794 $ 1,499 $ 1,942 Net gain on sale $ 135 $ 148 $ 169 $ 426 (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 $ 45.8 million and $ 43.1 million for the three months ended June 30, 2023 and 2022, respectively, and $ 101.2 million and $ 95.4 million for the six months ended June 30, 2023 and 2022, respectively. Variable lease payments for fees from single-family properties were $ 7.4 million and $ 6.9 million for the three months ended June 30, 2023 and 2022, respectively, and $ 14.8 million and $ 13.0 million for the six months ended June 30, 2023 and 2022, 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, 2023 (amounts in thousands): June 30, 2023 Remaining 2023 $ 509,166 2024 250,774 2025 7,422 Total $ 767,362 As of June 30, 2023 and December 31, 2022, rent and other receivables included $ 5.2 million and $ 5.0 million, respectively, of insurance claims receivables related to Hurricane Ian and Winter Storm Elliott. 17 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, 2023 and December 31, 2022 (amounts in thousands): June 30, 2023 December 31, 2022 Consolidated land not owned $ 125,682 $ 108,114 Escrow deposits, prepaid expenses and other 113,978 105,811 Commercial real estate, software, vehicles and FF&E, net 91,355 85,772 Operating lease right-of-use assets 17,389 19,129 Deferred costs and other intangibles, net 9,035 10,237 Notes receivable, net 2,034 2,383 Total $ 359,473 $ 331,446 Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $ 4.2 million and $ 3.1 million for the three months ended June 30, 2023 and 2022, respectively, and $ 8.4 million and $ 6.1 million for the six months ended June 30, 2023 and 2022, respectively. Deferred Costs and Other Intangibles, Net Deferred costs and other intangibles, net consisted of the following as of June 30, 2023 and December 31, 2022 (amounts in thousands): June 30, 2023 December 31, 2022 Deferred leasing costs $ 2,753 $ 2,375 Deferred financing costs 22,491 22,491 25,244 24,866 Less: accumulated amortization ( 16,209 ) ( 14,629 ) Total $ 9,035 $ 10,237 Amortization expense related to deferred leasing costs was $ 0.7 million for both the three months ended June 30, 2023 and 2022 and $ 1.4 million and $ 1.5 million for the six months ended June 30, 2023 and 2022, respectively, and is included in depreciation and amortization within the condensed consolidated statements of operations. Amortization of deferred financing costs related to our revolving credit facility was $ 0.6 million and $ 0.7 million for the three months ended June 30, 2023 and 2022, respectively, and $ 1.3 million and $ 1.4 million for the six months ended June 30, 2023 and 2022, respectively, and is 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, 2023 for future periods (amounts in thousands): Deferred Leasing Costs Deferred Financing Costs Total Remaining 2023 $ 1,013 $ 1,378 $ 2,391 2024 408 2,730 3,138 2025 — 2,722 2,722 2026 — 784 784 Total $ 1,421 $ 7,614 $ 9,035 Note 7. Investments in Unconsolidated Joint Ventures As of June 30, 2023, 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. 18 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. During the first quarter of 2023, the parties to the J.P. Morgan JV agreed to reinvest proceeds from debt financing obtained in the first quarter of 2022 (see below) to increase the size of the joint venture up to approximately $ 900.0 million. The changes do not impact the accounting treatment of the joint venture. In July 2023, the Company entered into a $ 625 million second strategic joint venture with institutional investors advised by J.P. Morgan Asset Management focused on constructing and operating newly built rental homes. The Company holds a 20 % ownership interest in the joint venture, which has an evergreen term. Additionally, the Company will earn fees for development and management services provided to the joint venture and have an opportunity to earn a promoted interest after construction and initial operation of the joint venture’s properties. The following table summarizes our investments in unconsolidated joint ventures as of June 30, 2023 and December 31, 2022 (amounts in thousands, except percentages and property data): Joint Venture Description % Ownership at June 30, 2023 Completed Homes at June 30, 2023 Balances at June 30, 2023 Balances at December 31, 2022 Alaska JV 20 % 232 $ 16,690 $ 18,890 Institutional Investor JV 20 % 1,012 15,854 16,567 J.P. Morgan JV 20 % 1,602 75,807 71,890 2,846 $ 108,351 $ 107,347 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 $ 2.9 million and $ 3.6 million for the three months ended June 30, 2023 and 2022, respectively, and $ 6.2 million and $ 6.4 million for the six months ended June 30, 2023 and 2022, respectively, and is 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 first quarter of 2022, the Company acquired 200 properties in a bulk transaction from the Institutional Investor JV for total consideration of $ 74.6 million, of which (i) $ 66.2 million was paid in cash and included in cash paid for single-family properties in the condensed consolidated statements of cash flows and (ii) $ 8.4 million was recorded as a noncash distribution resulting in a reduction to our equity method investment. The transaction was accounted for as an asset acquisition and resulted in a gain on sale at the Institutional Investor JV. Recognition of our pro rata portion of the gain on sale has been deferred by reducing the carrying value of the acquired properties in our condensed consolidated balance sheets. During the first quarter of 2022, the J.P. Morgan JV entered into a loan agreement to borrow up to a $ 375.0 million aggregate commitment. During the initial three-year term, the loan bears interest at the Secured Overnight Financing Rate (“SOFR”) plus a 1.5 % margin and matures on January 28, 2025. The loan agreement provides for one one-year extension option that includes additional fees and interest. As of June 30, 2023, the joint venture’s loan had a $ 324.0 million outstanding principal balance. During the third quarter of 2022, the Institutional Investor JV amended its existing loan agreement to increase borrowing capacity to $ 250.0 million. During the initial two-year term, the loan bears interest at SOFR plus a 2.4 % margin and matures on July 1, 2024. The loan agreement provides for two one-year extension options that include additional fees and interest. As of June 30, 2023, the joint venture’s loan had a $ 232.7 million outstanding principal balance. The Company has provided customary non-recourse guarantees for the J.P. Morgan JV and Institutional Investor JV loans that may become a liability for us upon a voluntary bankruptcy filing by the joint venture or the occurrence of other actions such as fraud or a material misrepresentation by us or the joint venture. To date, the guarantees have not been invoked, and we believe that the actions that would trigger a guarantee would generally be disadvantageous to the joint ventures and us and therefore are unlikely to occur. However, there can be no assurances that actions that could trigger the guarantee will not occur. 19 Note 8. Debt All of the Company’s indebtedness is debt of the Operating Partnership. AMH 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, 2023 and December 31, 2022 (amounts in thousands): Outstanding Principal Balance Interest Rate (1) Maturity Date June 30, 2023 December 31, 2022 AMH 2014-SFR2 securitization 4.42 % October 9, 2024 $ 464,582 $ 468,138 AMH 2014-SFR3 securitization 4.40 % December 9, 2024 480,082 482,964 AMH 2015-SFR1 securitization (2) 4.14 % April 9, 2045 505,167 508,672 AMH 2015-SFR2 securitization (3) 4.36 % October 9, 2045 438,798 441,854 Total asset-backed securitizations 1,888,629 1,901,628 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 2031 unsecured senior notes (5) 2.46 % July 15, 2031 450,000 450,000 2032 unsecured senior notes 3.63 % April 15, 2032 600,000 600,000 2051 unsecured senior notes 3.38 % July 15, 2051 300,000 300,000 2052 unsecured senior notes 4.30 % April 15, 2052 300,000 300,000 Revolving credit facility (6) 6.09 % April 15, 2026 — 130,000 Total debt 4,438,629 4,581,628 Unamortized discounts on unsecured senior notes ( 34,539 ) ( 36,099 ) Deferred financing costs, net (7) ( 26,051 ) ( 29,531 ) Total debt per balance sheet $ 4,378,039 $ 4,515,998 (1) Interest rates are rounded and as of June 30, 2023. Unless otherwise stated, interest rates are fixed percentages. (2) The AMH 2015-SFR1 securitization has an anticipated repayment date of April 9, 2025. If the securitization is not repaid by this date, the duration-adjusted weighted-average interest rate will increase by a minimum of 3.00 %. (3) The AMH 2015-SFR2 securitization has an anticipated repayment date of October 9, 2025. If the securitization is not repaid by this date, the duration-adjusted weighted-average interest rate will increase by a minimum of 3.00 %. (4) The stated interest rate on the 2028 unsecured senior notes is 4.25 %, which was hedged to yield an interest rate of 4.08 %. (5) The stated interest rate on the 2031 unsecured senior notes is 2.38 %, which was hedged to yield an interest rate of 2.46 %. (6) The revolving credit facility provides for a borrowing capacity of up to $ 1.25 billion, and the Company had approximately $ 4.0 million committed to outstanding letters of credit that reduced our borrowing capacity as of both June 30, 2023 and December 31, 2022. During the second quarter of 2023, the Company amended its revolving credit facility in connection with the transition from the London Inter-Bank Offered Rate to the SOFR. The revolving credit facility bears interest at SOFR, as adjusted for the Company’s SOFR spread, plus 0.90 % as of June 30, 2023. (7) Deferred financing costs relate to our asset-backed securitizations and unsecured senior notes. Amortization of deferred financing costs related to our asset-backed securitizations and unsecured senior notes was $ 1.8 million and $ 1.7 million for the three months ended June 30, 2023 and 2022, respectively, and $ 3.5 million and $ 3.3 million for the six months ended June 30, 2023 and 2022, respectively, and is included in gross interest, prior to interest capitalization. Debt Maturities The following table summarizes the contractual maturities of the Company’s principal debt balances on a fully extended basis as of June 30, 2023 (amounts in thousands): Debt Maturities Remaining 2023 $ 10,358 2024 949,759 2025 10,302 2026 10,302 2027 10,302 Thereafter 3,447,606 Total debt $ 4,438,629 20 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, 2023 and 2022 (amounts in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Gross interest cost $ 48,577 $ 48,461 $ 97,547 $ 88,922 Capitalized interest ( 13,733 ) ( 13,660 ) ( 26,821 ) ( 26,554 ) Interest expense $ 34,844 $ 34,801 $ 70,726 $ 62,368 Note 9. Accounts Payable and Accrued Expenses The following table summarizes accounts payable and accrued expenses as of June 30, 2023 and December 31, 2022 (amounts in thousands): June 30, 2023 December 31, 2022 Accrued property taxes $ 129,269 $ 51,586 Resident security deposits 122,692 119,386 Accrued construction and maintenance liabilities 113,188 86,775 Liability for consolidated land not owned 87,040 69,434 Accrued interest 39,872 40,126 Prepaid rent 30,334 26,922 Operating lease liabilities 19,048 20,755 Accounts payable 3,925 5,719 Other accrued liabilities 48,786 63,700 Total $ 594,154 $ 484,403 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 AMH, with the Operating Partnership receiving the net proceeds from the share issuances. Class A Common Share Offering During the first quarter of 2022, the Company completed an underwritten public offering for 23,000,000 of its Class A common shares of beneficial interest, $ 0.01 par value per share, of which 10,000,000 shares were issued directly by the Company and 13,000,000 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 “January 2022 Forward Sale Agreements”) for these 13,000,000 shares which were accounted for in equity. The Company did not initially receive proceeds from the sale of the Class A common shares offered on a forward basis. During the third quarter of 2022, the Company issued and physically settled 5,000,000 Class A common shares under the January 2022 Forward Sale Agreements, receiving net proceeds of $ 185.6 million. During the first quarter of 2023, the Company issued and physically settled the remaining 8,000,000 Class A common shares under the January 2022 Forward Sale Agreements, receiving net proceeds of $ 298.4 million, which it used to repay indebtedness under its revolving credit facility and for general corporate purposes. At-the-Market Common Share Offering Program In June 2023, the Company entered into a new at-the-market common share offering program, replacing the previously expiring 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 $ 1.0 billion (the “June 2023 At-the-Market Program”). The June 2023 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 June 2023 At-the-Market Program (i) to repay indebtedness the Company has incurred or expects to incur under its revolving credit facility or other debt obligations under its securitizations, (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 21 properties in the Company’s portfolio. The June 2023 At-the-Market Program may be suspended or terminated by the Company at any time. As of June 30, 2023, no shares have been issued under the June 2023 At-the-Market Program and $ 1.0 billion 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, 2023 and 2022, we did no t repurchase and retire any of our Class A common shares or preferred shares. As of June 30, 2023, 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, 2023 and December 31, 2022, the Company had the following series of perpetual preferred shares outstanding (amounts in thousands, except share data): June 30, 2023 December 31, 2022 Series Issuance Date Earliest Redemption Date Dividend Rate Outstanding Shares Current Liquidation Value Outstanding Shares Current Liquidation Value Series G perpetual preferred shares July 17, 2017 July 17, 2022 5.875 % 4,600,000 $ 115,000 4,600,000 $ 115,000 Series H perpetual preferred shares September 19, 2018 September 19, 2023 6.250 % 4,600,000 115,000 4,600,000 115,000 Total preferred shares 9,200,000 $ 230,000 9,200,000 $ 230,000 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, 2023 March 31, 2023 June 30, 2022 March 31, 2022 Class A and Class B common shares $ 0.22 $ 0.22 $ 0.18 $ 0.18 5.875 % Series F perpetual preferred shares (1) — — 0.14 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 5.875 % Series F perpetual preferred shares were redeemed on May 5, 2022 and the distributions for the three months ended June 30, 2022 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 , or approximately 12.3 % and 12.5 %, of the total 413,377,747 and 404,893,881 Class A units in the Operating Partnership as of June 30, 2023 and December 31, 2022, 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 0.1 % and 0.2 %, of the total 413,377,747 and 404,893,881 Class A units in the Operating Partnership as of June 30, 2023 and December 31, 2022, respectively. The OP units owned by former AH LLC members and non-affiliates are reflected as noncontrolling interest in the Company’s condensed consolidated balance sheets and limited partner capital in the Operating Partnership’s condensed consolidated balance sheets. Note 11. Share-Based Compensation 2021 Equity Incentive Plan The Company’s 2021 Equity Incentive Plan (the “2021 Plan”), which replaced the 2012 Equity Incentive Plan (the “2012 Plan”), provides for the issuance of Class A common shares through the grant of a variety of awards including stock options, stock 22 appreciation rights, restricted share units (“RSUs”), unrestricted shares, dividend equivalent rights and performance-based awards. When the Company issues Class A common shares under the 2012 Plan and 2021 Plan, the Operating Partnership issues an equivalent number of Class A units to AMH. RSUs granted to employees during the six months ended June 30, 2023 and 2022 generally vest over a three-year service period. RSUs granted to non-management trustees during the six months ended June 30, 2023 and 2022 vest over a one-year service period. Performance-based restricted share units (“PSUs”) granted to certain senior employees during the six months ended June 30, 2023 and 2022 cliff vest at the end of a three-year service period based on satisfaction of performance conditions. The performance conditions of the PSUs are measured over the three-year performance period January 1, 2023 through December 31, 2025 for PSUs granted during the six months ended June 30, 2023 and January 1, 2022 through December 31, 2024 for PSUs granted during the six months ended June 30, 2022. 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, 2023 and 2022: For the Six Months Ended June 30, 2023 2022 Options outstanding at beginning of period 730,550 824,300 Granted — — Exercised ( 129,750 ) ( 33,750 ) Forfeited — — Options outstanding at end of period 600,800 790,550 Options exercisable at end of period 600,800 785,550 The following table summarizes RSU activity under the 2012 Plan and 2021 Plan for the six months ended June 30, 2023 and 2022: For the Six Months Ended June 30, 2023 2022 RSUs outstanding at beginning of period 1,024,722 1,050,599 Awarded 498,557 446,883 Vested ( 414,772 ) ( 375,039 ) Forfeited ( 19,772 ) ( 28,140 ) RSUs outstanding at end of period 1,088,735 1,094,303 The following table summarizes PSU activity under the 2012 Plan and 2021 Plan for the six months ended June 30, 2023 and 2022: For the Six Months Ended June 30, 2023 2022 PSUs outstanding at beginning of period 294,423 92,319 Awarded 227,033 202,104 Vested — — Forfeited ( 693 ) — PSUs outstanding at end of period 520,763 294,423 23 For the TSR Awards, the following assumptions were used in the calculation of fair value using the Monte Carlo simulation model: For the Six Months Ended June 30, 2023 2022 Expected term (years) 3.0 3.0 Dividend yield 2.09 % 1.03 % Estimated volatility (1) 27.45 % 27.62 % Risk-free interest rate 4.16 % 1.39 % (1) Estimated volatility for the performance period is based on 50% historical volatility and 50% implied volatility. 2021 Employee Stock Purchase Plan The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) provides for the issuance of up to 3,000,000 Class A common shares and allows employees to acquire the Company’s Class A common shares through payroll deductions, subject to maximum purchase limitations, during six-month purchase periods. The purchase price for Class A common shares may be set at a maximum discount equal to 85 % of the lower of the closing price of the Company’s Class A common shares on the first day or the last day of the applicable purchase period. The 2021 ESPP terminates in June 2031 or the date on which there are no longer any Class A common shares available for issuance. When the Company issues Class A common shares under the 2021 ESPP, the Operating Partnership issues an equivalent number of Class A units to AMH. Share-Based Compensation Expense 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 related to the Company’s noncash share-based compensation expense for the three and six months ended June 30, 2023 and 2022 (amounts in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 General and administrative expense $ 5,982 $ 5,932 $ 9,725 $ 9,962 Property management expenses 1,132 1,132 2,198 2,131 Acquisition and other transaction costs 1,394 3,579 2,409 5,955 Total noncash share-based compensation expense $ 8,508 $ 10,643 $ 14,332 $ 18,048 24 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, 2023 and 2022 (amounts in thousands, except share and per share data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net income $ 115,414 $ 74,555 $ 253,113 $ 144,569 Less: Noncontrolling interest 13,899 8,343 30,647 16,655 Dividends on preferred shares 3,486 4,346 6,972 10,109 Redemption of perpetual preferred shares — 5,276 — 5,276 Allocation to participating securities (1) 288 198 633 395 Numerator for income per common share–basic and diluted $ 97,741 $ 56,392 $ 214,861 $ 112,134 Denominator: Weighted-average common shares outstanding–basic 362,148,911 348,484,158 361,267,035 347,123,576 Effect of dilutive securities: Share-based compensation plan and forward sale equity contracts (2) 331,031 518,466 326,139 628,382 Weighted-average common shares outstanding–diluted (3) 362,479,942 349,002,624 361,593,174 347,751,958 Net income per common share: Basic $ 0.27 $ 0.16 $ 0.59 $ 0.32 Diluted $ 0.27 $ 0.16 $ 0.59 $ 0.32 (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 for the three and six months ended June 30, 2023 and 2022 and the dilutive effect of forward sale equity contracts under the treasury stock method for the three and six months ended June 30, 2022 (see Note 10. Shareholders’ Equity / Partners’ Capital). (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. 25 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, 2023 and 2022 (amounts in thousands, except unit and per unit data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net income $ 115,414 $ 74,555 $ 253,113 $ 144,569 Less: Preferred distributions 3,486 4,346 6,972 10,109 Redemption of perpetual preferred units — 5,276 — 5,276 Allocation to participating securities (1) 288 198 633 395 Numerator for income per common unit–basic and diluted $ 111,640 $ 64,735 $ 245,508 $ 128,789 Denominator: Weighted-average common units outstanding–basic 413,525,891 399,861,138 412,644,015 398,500,556 Effect of dilutive securities: Share-based compensation plan and forward sale equity contracts (2) 331,031 518,466 326,139 628,382 Weighted-average common units outstanding–diluted 413,856,922 400,379,604 412,970,154 399,128,938 Net income per common unit: Basic $ 0.27 $ 0.16 $ 0.59 $ 0.32 Diluted $ 0.27 $ 0.16 $ 0.59 $ 0.32 (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 for the three and six months ended June 30, 2023 and 2022 and the dilutive effect of forward sale equity contracts under the treasury stock method for the three and six months ended June 30, 2022 (see Note 10. Shareholders’ Equity / Partners’ Capital). 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. 26 The following table displays the carrying values and fair values of our debt instruments as of June 30, 2023 and December 31, 2022 (amounts in thousands): June 30, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value AMH 2014-SFR2 securitization $ 462,945 $ 465,962 $ 465,864 $ 469,192 AMH 2014-SFR3 securitization 478,223 478,040 480,467 484,350 AMH 2015-SFR1 securitization 502,902 506,554 505,738 509,714 AMH 2015-SFR2 securitization 436,278 440,014 438,773 442,286 Total asset-backed securitizations 1,880,348 1,890,570 1,890,842 1,905,542 2028 unsecured senior notes, net 496,350 470,110 495,956 463,920 2029 unsecured senior notes, net 396,825 383,612 396,543 377,680 2031 unsecured senior notes, net 441,653 358,016 441,133 347,243 2032 unsecured senior notes, net 582,527 517,386 581,533 504,294 2051 unsecured senior notes, net 291,344 196,164 291,189 189,750 2052 unsecured senior notes, net 288,992 233,817 288,802 221,922 Total unsecured senior notes, net 2,497,691 2,159,105 2,495,156 2,104,809 Revolving credit facility — — 130,000 130,000 Total debt $ 4,378,039 $ 4,049,675 $ 4,515,998 $ 4,140,351 Note 14. Related Party Transactions As of June 30, 2023 and December 31, 2022, affiliates owned approximately 12.7 % and 12.9 %, 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 Class A units as of June 30, 2023 and December 31, 2022) an approximate 23.5 % and 23.9 % interest as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023 and December 31, 2022, the Operating Partnership had a receivable from affiliates of $ 25.7 million related to the asset-backed securitization certificates held by AMH, which is included in amounts due from affiliates on the Operating Partnership’s condensed consolidated balance sheets. See Note 7. Investments in Unconsolidated Joint Ventures for a description of related party transactions between the Company and its unconsolidated joint ventures. Note 15. Commitments and Contingencies As of June 30, 2023, the Company had commitments to acquire 37 single-family properties through our National Builder Program for an aggregate purchase price of $ 8.7 million, as well as $ 163.1 million in purchase commitments for land relating to our AMH Development Program, which includes certain land deals expected to close beyond twelve months when development is ready to commence. Purchase commitments exclude option contracts where we have acquired the right to purchase land for our AMH Development Program or single-family properties because the contracts do not contain provisions requiring our specific performance. As of June 30, 2023, the Company had sales in escrow for approximately 101 of our single-family properties and 265 of our land lots for aggregate selling prices of $ 67.0 million. As of June 30, 2023, the Company, as a condition for entering into some of its development contracts, had outstanding surety bonds of approximately $ 200.7 million. Legal Matters During the third quarter of 2020, we received a notice from the Georgia Attorney General’s Office (the “Georgia AG”) seeking certain information relevant to an investigation they are conducting about our customary landlord-tenant matters. We have been cooperating with the Georgia AG and have been discussing a possible negotiated resolution with the Georgia AG. 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. 27 Note 16. Subsequent Events Subsequent Acquisitions From July 1, 2023 through July 21, 2023, the Company added 129 newly constructed properties to its portfolio for a total cost of approximately $ 44.5 million through its AMH Development Program. Subsequent Dispositions From July 1, 2023 through July 21, 2023, the Company disposed of 67 properties for aggregate net proceeds of approximately $ 22.3 million. 28