UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549

FORM 10-Q
(Mark One)
ý☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20182020
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
 
Commission File Number: 001-36013 (American Homes 4 Rent)
Commission File Number: 333-221878-02 (American Homes 4 Rent, L.P.)
AMERICAN HOMES 4 RENT
AMERICAN HOMES 4 RENT, L.P.
(Exact name of registrant as specified in its charter) 

Maryland (AmericanAmerican Homes 4 Rent)RentMaryland46-1229660
Delaware (AmericanAmerican Homes 4 Rent, L.P.)Delaware80-0860173
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)

30601 Agoura Road, Suite 200
Agoura Hills, California 91301
(Address of principal executive offices) (Zip Code)
 
(805) 413-5300
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolsName of each exchange on which registered
Class A common shares of beneficial interest, $.01 par valueAMHNew York Stock Exchange
Series D perpetual preferred shares of beneficial interest, $.01 par valueAMH-DNew York Stock Exchange
Series E perpetual preferred shares of beneficial interest, $.01 par valueAMH-ENew York Stock Exchange
Series F perpetual preferred shares of beneficial interest, $.01 par valueAMH-FNew York Stock Exchange
Series G perpetual preferred shares of beneficial interest, $.01 par valueAMH-GNew York Stock Exchange
Series H perpetual preferred shares of beneficial interest, $.01 par valueAMH-HNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
American Homes 4 Rent ý☒  Yes   ¨☐  No    American Homes 4 Rent, L.P. ý☒  Yes   ¨☐  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
American Homes 4 Rent ý☒  Yes   ¨☐  No    American Homes 4 Rent, L.P. ý☒  Yes   ¨☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
American Homes 4 Rent

Large accelerated filerýAccelerated filer¨
Non-accelerated filer
¨

(Do not check if a smaller reporting company)Smaller reporting company¨
Emerging growth company
¨

Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
American Homes 4 Rent, L.P.
Large accelerated filer
¨

☐		Accelerated filer
¨

☐
Non-accelerated filerý☒(Do not check if a smaller reporting company)Smaller reporting company
¨

☐
Emerging growth company
¨

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
American Homes 4 Rent  ¨☐       American Homes 4 Rent, L.P. ¨☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
American Homes 4 Rent ¨☐  Yes   ý☒  No    American Homes 4 Rent, L.P. ¨☐  Yes   ý☒  No
There were 295,218,488300,316,309 shares of American Homes 4 Rent'sRent’s Class A common shares, $0.01 par value per share, and 635,075 shares of American Homes 4 Rent'sRent’s Class B common shares, $0.01 par value per share, outstanding on May 2, 2018.6, 2020.






EXPLANATORY NOTE


This report combines the quarterly reports on Form 10-Q for the period ended March 31, 2018,2020 of American Homes 4 Rent and American Homes 4 Rent, L.P. Unless stated otherwise or the context otherwise requires, references to “AH4R"“AH4R” or "the General Partner"the “General Partner” mean American Homes 4 Rent, a Maryland real estate investment trust (“REIT”), and references to “the Operatingthe “Operating Partnership," "our operating partnership"” our “operating partnership” or “the OP”the “OP” mean American Homes 4 Rent, L.P., a Delaware limited partnership, and its subsidiaries taken as a whole. References to “the Company,the “Company,” “we,” "our,"“our,” and “us” mean collectively AH4R, the Operating Partnership and those entities/subsidiaries owned or controlled by AH4R and/or the Operating Partnership.


AH4R is the general partner of, and as of March 31, 2018,2020 owned an approximate 83.7%approximately 85.2% of the common partnership interest in, the Operating Partnership. The remaining 16.3%14.8% 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.


The Company believes that combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report provides the following benefits:


•enhances investors'investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;


•eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and


•creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.


The Company believes it is important to understand the few differences between AH4R and the Operating Partnership in the context of how AH4R and the Operating Partnership operate as a consolidated company. 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, (the "Agreement of Limited Partnership"), 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.


Shareholders'        Shareholders’ equity, partners'partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The limited partnership interests in the Operating Partnership are accounted for as partners'partners’ capital in the Operating Partnership'sPartnership’s financial statements and as noncontrolling interests in the Company'sCompany’s financial statements. The noncontrolling interests in the Operating Partnership's financial statements include an outside ownership interest in a consolidated subsidiary of the Company. The noncontrolling interests in the Company's financial statements include the same noncontrolling interests at the Operating Partnership level, as well as the limited partnership interests in the Operating Partnership. The differences between shareholders'shareholders’ equity and partners'partners’ capital result from differences in the equity and capital issued at the Company and Operating Partnership levels.


To help investors understand the differences between the Company and the Operating Partnership, this report provides
separate consolidated financial statements for the Company and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of each entity'sentity’s debt, noncontrolling interests and shareholders'shareholders’ equity or partners'partners’ capital, as applicable; and a combined Management'sPart I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations” section that includes discrete information related to each entity.




This report also includes separate Part I, Item“Item 4. Controls and ProceduresProcedures” sections and separate Exhibits 31 and 32
certifications for each of the Company and the Operating Partnership in order to establish that the requisite certifications have been
been


made and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities
Exchange Act of 1934 and 18 U.S.C. §1350.


In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership. The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.



American Homes 4 Rent
American Homes 4 Rent, L.P.
Form 10-Q
INDEXTABLE OF CONTENTS
 
Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
i
1
Condensed Consolidated Balance Sheets as of March 31, 2018,2020 and December 31, 20172019
1
Condensed Consolidated Statements of Operations for the three months ended March 31, 20182020 and 20172019
2
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 20182020 and 20172019
3
Condensed Consolidated StatementStatements of Equity for the three months ended March 31, 20182020 and 2019
4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 20182020 and 20172019
56
Condensed Consolidated Balance Sheets as of March 31, 2018,2020 and December 31, 20172019
78
Condensed Consolidated Statements of Operations for the three months ended March 31, 20182020 and 20172019
89
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months endedMarch 31, 20182020 and 20172019
910
Condensed Consolidated StatementStatements of Capital for the three months ended March 31 2018, 2020 and 2019
1011
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 20182020 and 20172019
1113
Notes to Unaudited Condensed Consolidated Financial Statements
1315
3727
5041
5042
5143
43
Risk Factors
51
Item 2.
5144
5244
5244
44
5244
Item 6.
5246
Exhibit Index
53
Signatures
55




CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
Various statements contained in this Quarterly Report on Form 10-Q, of American Homes 4 Rent ("AH4R,” “the General Partner") and of American Homes 4 Rent, L.P. ("the Operating Partnership," "our operating partnership," or “the OP”) including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future operations, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, operating results and cash flows of the Company, our tenants, the real estate market, the global economy and the financial markets. The extent to which the COVID-19 pandemic impacts us and our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and the direct and indirect economic effects of the pandemic and containment measures, among others.

These and other important factors, including those discussed or incorporated by reference under Part II, Item“Item 1A.”Risk Factors”,Factors,” Part I, Item“Item 2. “Management’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2017,2019, filed with the Securities and Exchange Commission (the “SEC”), may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
 
While forward-looking statements reflect our good faith beliefs, assumptions and expectations, they are not guarantees of future performance, and you should not unduly rely on them. The forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date of this report. We are not obligated to update or revise these statements as a result of new information, future events or otherwise, unless required by applicable law.




i


PART I
I—FINANCIAL INFORMATION
Item 1. Financial Statements.Statements
American Homes 4 Rent
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share data)

March 31, 2018 December 31, 2017March 31, 2020December 31, 2019
(Unaudited)  (Unaudited) 
Assets 
  
Assets  
Single-family properties: 
  
Single-family properties:  
Land$1,670,599
 $1,665,631
Land$1,784,804  $1,756,504  
Buildings and improvements7,286,264
 7,303,270
Buildings and improvements7,814,877  7,691,877  
Single-family properties in operationSingle-family properties in operation9,599,681  9,448,381  
Less: accumulated depreciationLess: accumulated depreciation(1,532,306) (1,462,105) 
Single-family properties in operation, netSingle-family properties in operation, net8,067,375  7,986,276  
Single-family properties under development and development landSingle-family properties under development and development land407,456  355,427  
Single-family properties held for sale, net201,693
 35,803
Single-family properties held for sale, net172,045  209,828  
9,158,556
 9,004,704
Less: accumulated depreciation(989,476) (939,724)
Single-family properties, net8,169,080
 8,064,980
Total real estate assets, netTotal real estate assets, net8,646,876  8,551,531  
Cash and cash equivalents203,883
 46,156
Cash and cash equivalents33,108  37,575  
Restricted cash156,272
 136,667
Restricted cash128,621  126,544  
Rent and other receivables, net28,115
 30,144
Rent and other receivablesRent and other receivables29,956  29,618  
Escrow deposits, prepaid expenses and other assets241,707
 171,851
Escrow deposits, prepaid expenses and other assets151,326  140,961  
Deferred costs and other intangibles, net13,031
 13,025
Investments in unconsolidated joint venturesInvestments in unconsolidated joint ventures65,533  67,935  
Asset-backed securitization certificates25,666
 25,666
Asset-backed securitization certificates25,666  25,666  
Goodwill120,279
 120,279
Goodwill120,279  120,279  
Total assets$8,958,033
 $8,608,768
Total assets$9,201,365  $9,100,109  
   
Liabilities 
  
Liabilities  
Revolving credit facility$—
 $140,000
Revolving credit facility$105,000  $—  
Term loan facility, net198,132
 198,023
Asset-backed securitizations, net1,973,242
 1,977,308
Asset-backed securitizations, net1,940,869  1,945,044  
Unsecured senior notes, net492,282
 —
Unsecured senior notes, net888,791  888,453  
Exchangeable senior notes, net112,597
 111,697
Secured note payable48,604
 48,859
Accounts payable and accrued expenses262,267
 222,867
Accounts payable and accrued expenses241,950  243,193  
Amounts payable to affiliates2,001
 4,720
Amounts payable to affiliates—  4,629  
Participating preferred shares derivative liability28,258
 29,470
Total liabilities3,117,383
 2,732,944
Total liabilities3,176,610  3,081,319  
   
Commitments and contingencies

 

Commitments and Contingencies (see Note 15)Commitments and Contingencies (see Note 15)

   
Equity 
  
Equity  
Shareholders’ equity: 
  
Shareholders’ equity:  
Class A common shares, $0.01 par value per share, 450,000,000 shares authorized, 284,369,661 and 286,114,637 shares issued and outstanding at March 31, 2018, and December 31, 2017, respectively2,844
 2,861
Class B common shares, $0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at March 31, 2018, and December 31, 20176
 6
Preferred shares, $0.01 par value per share, 100,000,000 shares authorized, 38,350,000 shares issued and outstanding at March 31, 2018, and December 31, 2017384
 384
Class A common shares ($0.01 par value per share, 450,000,000 shares authorized, 300,315,609 and 300,107,599 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively)Class A common shares ($0.01 par value per share, 450,000,000 shares authorized, 300,315,609 and 300,107,599 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively)3,003  3,001  
Class B common shares ($0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at March 31, 2020 and December 31, 2019)Class B common shares ($0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at March 31, 2020 and December 31, 2019)6  6  
Preferred shares ($0.01 par value per share, 100,000,000 shares authorized, 35,350,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)Preferred shares ($0.01 par value per share, 100,000,000 shares authorized, 35,350,000 shares issued and outstanding at March 31, 2020 and December 31, 2019)354  354  
Additional paid-in capital5,565,871
 5,600,256
Additional paid-in capital5,792,418  5,790,775  
Accumulated deficit(462,504) (453,953)Accumulated deficit(461,706) (465,368) 
Accumulated other comprehensive income9,508
 75
Accumulated other comprehensive income6,452  6,658  
Total shareholders’ equity5,116,109
 5,149,629
Total shareholders’ equity5,340,527  5,335,426  
   
Noncontrolling interest724,541
 726,195
Noncontrolling interest684,228  683,364  
Total equity5,840,650
 5,875,824
Total equity6,024,755  6,018,790  
   
Total liabilities and equity$8,958,033
 $8,608,768
Total liabilities and equity$9,201,365  $9,100,109  


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
March 31,		For the Three Months Ended
March 31,
2018 2017 20202019
Revenues: 
  
Revenues:  
Rents from single-family properties$218,023
 $201,107
Fees from single-family properties2,833
 2,604
Tenant charge-backs35,807
 28,373
Rents and other single-family property revenuesRents and other single-family property revenues$287,342  $277,694  
Other1,341
 1,670
Other2,252  1,510  
Total revenues258,004
 233,754
Total revenues289,594  279,204  
   
Expenses: 
  
Expenses:  
Property operating expenses100,987
 83,305
Property operating expenses107,497  106,684  
Property management expenses18,987
 17,478
Property management expenses23,276  20,709  
General and administrative expense9,231
 9,295
General and administrative expense11,266  9,435  
Interest expense29,301
 31,889
Interest expense29,715  31,915  
Acquisition fees and costs expensed1,311
 1,096
Acquisition and other transaction costsAcquisition and other transaction costs2,147  834  
Depreciation and amortization79,303
 73,953
Depreciation and amortization82,821  81,161  
Other827
 1,558
Other6,110  1,024  
Total expenses239,947
 218,574
Total expenses262,832  251,762  
   
Gain on sale of single-family properties and other, net2,256
 2,026
Gain on sale of single-family properties and other, net10,765  5,649  
Remeasurement of participating preferred shares1,212
 (5,410)
   
Net income21,525
 11,796
Net income37,527  33,091  
   
Noncontrolling interest1,114
 (301)Noncontrolling interest3,501  3,026  
Dividends on preferred shares14,597
 13,587
Dividends on preferred shares13,782  13,782  
   
Net income (loss) attributable to common shareholders$5,814
 $(1,490)
   
Weighted-average shares outstanding:   
Net income attributable to common shareholdersNet income attributable to common shareholders$20,244  $16,283  
Weighted-average common shares outstanding:Weighted-average common shares outstanding:
Basic286,183,429
 244,391,368
Basic300,813,069  296,833,755  
Diluted286,727,863
 244,391,368
Diluted301,305,068  297,444,941  
   
Net income (loss) attributable to common shareholders per share:   
Net income attributable to common shareholders per share:Net income attributable to common shareholders per share:
Basic$0.02
 $(0.01)Basic$0.07  $0.05  
Diluted$0.02
 $(0.01)Diluted$0.07  $0.05  
   
Dividends declared per common share$0.05
 $0.05
 
The accompanying notes are an integral part of these condensed consolidated financial statements.


2

American Homes 4 Rent
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Amounts in thousands)
(Unaudited)
 
 For the Three Months Ended
March 31,
 2018 2017
Net income$21,525
 $11,796
Other comprehensive income (loss):   
Gain on cash flow hedging instruments:   
Gain on settlement of cash flow hedging instrument9,553
 —
Reclassification adjustment for amortization of interest expense included in net income(120) (28)
Gain on investment in equity securities:   
Reclassification adjustment for realized gain included in net income—
 (67)
Other comprehensive income (loss)9,433
 (95)
Comprehensive income30,958
 11,701
Comprehensive income (loss) attributable to noncontrolling interests2,643
 (283)
Dividends on preferred shares14,597
 13,587
Comprehensive income (loss) attributable to common shareholders$13,718
 $(1,603)
For the Three Months Ended
March 31,
 20202019
Net income$37,527  $33,091  
Other comprehensive loss:
Gain on cash flow hedging instrument:
Reclassification adjustment for amortization of interest expense included in net income(241) (241) 
Other comprehensive loss(241) (241) 
Comprehensive income37,286  32,850  
Comprehensive income attributable to noncontrolling interests3,466  2,988  
Dividends on preferred shares13,782  13,782  
Comprehensive income attributable to common shareholders$20,038  $16,080  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.



3

American Homes 4 Rent
Condensed Consolidated StatementStatements of Equity
(Amounts in thousands, except share data)
(Unaudited)

 Class A common sharesClass B common sharesPreferred shares      
Number
of shares		AmountNumber
of shares		AmountNumber
of shares		AmountAdditional
paid-in
capital		Accumulated
deficit		Accumulated other comprehensive incomeShareholders’
equity		Noncontrolling
interest		Total
equity
Balances at December 31, 2018296,014,546  $2,960  635,075  $6  35,350,000  $354  $5,732,466  $(491,214) $7,393  $5,251,965  $721,777  $5,973,742  
Share-based compensation—  —  —  —  —  —  952  —  —  952  —  952  
Common stock issued under share-based compensation plans, net of shares withheld for employee taxes77,830  1  —  —  —  —  (761) —  —  (760) —  (760) 
Redemptions of Class A units500,000  5  —  —  —  —  6,505  —  12  6,522  (6,522) —  
Distributions to equity holders:
Preferred shares (Note 10)—  —  —  —  —  —  —  (13,782) —  (13,782) —  (13,782) 
Noncontrolling interests—  —  —  —  —  —  —  —  —  —  (2,741) (2,741) 
Common shares ($0.05 per share)—  —  —  —  —  —  —  (14,889) —  (14,889) —  (14,889) 
Net income—  —  —  —  —  —  —  30,065  —  30,065  3,026  33,091  
Total other comprehensive loss—  —  —  —  —  —  —  —  (203) (203) (38) (241) 
Balances at March 31, 2019296,592,376  $2,966  635,075  $6  35,350,000  $354  $5,739,162  $(489,820) $7,202  $5,259,870  $715,502  $5,975,372  





4

 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, 2017286,114,637
 $2,861
 635,075
 $6
 38,350,000
 $384
 $5,600,256
 $(453,953) $75
 $5,149,629
 $726,195
 $5,875,824
                        
Share-based compensation—
 —
 —
 —
 —
 —
 975
 —
 —
 975
 —
 975
                        
Common stock issued under share-based compensation plans, net of shares withheld for employee taxes59,187
 1
 —
 —
 —
 —
 (409) —
 —
 (408) —
 (408)
                        
Repurchase of Class A common shares(1,804,163) (18) —
 —
 —
 —
 (34,951) —
 —
 (34,969) —
 (34,969)
                        
Distributions to equity holders:                       
Preferred shares—
 —
 —
 —
 —
 —
 —
 (14,597) —
 (14,597) —
 (14,597)
Noncontrolling interests—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (2,768) (2,768)
Common shares—
 —
 —
 —
 —
 —
 —
 (14,365) —
 (14,365) —
 (14,365)
                        
Net income—
 —
 —
 —
 —
 —
 —
 20,411
 —
 20,411
 1,114
 21,525
                        
Total other comprehensive income—
 —
 —
 —
 —
 —
 —
 —
 9,433
 9,433
 —
 9,433
                        
Balances at March 31, 2018284,369,661
 $2,844
 635,075
 $6
 38,350,000
 $384
 $5,565,871
 $(462,504) $9,508
 $5,116,109
 $724,541
 $5,840,650
American Homes 4 Rent
Condensed Consolidated Statements of Equity (continued)
(Amounts in thousands, except share data)
(Unaudited)

 Class A common sharesClass B common sharesPreferred shares      
Number
of shares		AmountNumber
of shares		AmountNumber
of shares		AmountAdditional
paid-in
capital		Accumulated
deficit		Accumulated other comprehensive incomeShareholders’
equity		Noncontrolling
interest		Total
equity
Balances at December 31, 2019300,107,599  $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 taxes208,010  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 (Notes 2 and 6)—  —  —  —  —  —  —  (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, 2020300,315,609  $3,003  635,075  $6  35,350,000  $354  $5,792,418  $(461,706) $6,452  $5,340,527  $684,228  $6,024,755  

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 Three Months Ended
March 31,
 20202019
Operating activities      
Net income$37,527  $33,091  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization82,821  81,161  
Noncash amortization of deferred financing costs, debt discounts and cash flow hedging instrument1,849  1,810  
Noncash share-based compensation1,808  952  
Equity in net losses of unconsolidated joint ventures1,231  26  
Net gain on sale of single-family properties and other(10,765) (5,649) 
Loss on impairment of single-family properties and other4,446  504  
Other changes in operating assets and liabilities:
Rent and other receivables(3,746) (3,801) 
Prepaid expenses and other assets(5,980) (1,096) 
Deferred leasing costs(910) (999) 
Accounts payable and accrued expenses18,397  42,010  
Amounts payable to affiliates(182) (73) 
Net cash provided by operating activities126,496  147,936  
Investing activities      
Cash paid for single-family properties(102,575) (57,740) 
Change in escrow deposits for purchase of single-family properties2,259  (870) 
Net proceeds received from sales of single-family properties and other81,257  32,919  
Proceeds received from hurricane-related insurance claims3,408  —  
Investment in unconsolidated joint ventures(1,000) —  
Distributions from joint ventures887  282  
Renovations to single-family properties(858) (9,727) 
Recurring and other capital expenditures for single-family properties(21,224) (15,703) 
Cash paid for development activity(138,957) (79,990) 
Other purchases of productive assets(2,411) (40) 
Net cash used for investing activities(179,214) (130,869) 
Financing activities      
Proceeds from exercise of stock options1,449  60  
Payments related to tax withholding for share-based compensation(1,612) (830) 
Payments on asset-backed securitizations(5,435) (5,556) 
Proceeds from revolving credit facility105,000  —  
Payments on revolving credit facility—  (250,000) 
Proceeds from unsecured senior notes, net of discount—  397,944  
Distributions to noncontrolling interests(5,178) (2,748) 
Distributions to common shareholders(30,114) (14,832) 
Distributions to preferred shareholders(13,782) —  
Deferred financing costs paid—  (3,572) 
Net cash provided by financing activities50,328  120,466  
Net (decrease) increase in cash, cash equivalents and restricted cash(2,390) 137,533  
Cash, cash equivalents and restricted cash, beginning of period (see Note 3)164,119  175,214  
Cash, cash equivalents and restricted cash, end of period (see Note 3)$161,729  $312,747  


6
 For the Three Months Ended
March 31,
 2018 2017
Operating activities 
  
Net income$21,525
 $11,796
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization79,303
 73,953
Noncash amortization of deferred financing costs1,900
 2,562
Noncash amortization of discounts on debt instruments935
 840
Noncash amortization of cash flow hedging instrument(120) —
Noncash share-based compensation975
 938
Provision for bad debt2,000
 1,510
Remeasurement of participating preferred shares(1,212) 5,410
Equity in net earnings of unconsolidated ventures(314) (295)
Net gain on sale of single-family properties and other(2,256) (2,026)
Loss on impairment of single-family properties700
 929
Net gain on resolutions of mortgage loans—
 (15)
Other changes in operating assets and liabilities:   
Rent and other receivables(3,886) (2,657)
Prepaid expenses and other assets(13,476) (8,356)
Deferred leasing costs(2,723) (1,482)
Accounts payable and accrued expenses29,150
 22,050
Amounts payable to affiliates(10) 4,880
Net cash provided by operating activities112,491
 110,037
    
Investing activities 
  
Cash paid for single-family properties(149,674) (73,622)
Change in escrow deposits for purchase of single-family properties(4,115) (1,072)
Net proceeds received from sales of single-family properties and other11,967
 31,306
Proceeds received from hurricane-related insurance claims4,000
 —
Collections from mortgage financing receivables—
 70
Distributions from joint ventures1,230
 1,192
Initial renovations to single-family properties(20,400) (7,677)
Recurring and other capital expenditures for single-family properties(11,167) (6,484)
Other purchases of productive assets(53,472) (13,710)
Net cash used for investing activities(221,631) (69,997)
    
Financing activities 
  
Proceeds from issuance of Class A common shares—
 350,612
Payments of Class A common share issuance costs—
 (236)
Repurchase of Class A common shares(34,969) —
Share-based compensation (payments) proceeds, net(414) 258
Payments on asset-backed securitizations(5,312) (6,231)
Proceeds from revolving credit facility100,000
 —
Payments on revolving credit facility(240,000) —
Proceeds from term loan facility—
 25,000
Payments on secured note payable(255) (245)
Proceeds from unsecured senior notes, net of discount497,210
 —
Settlement of cash flow hedging instrument9,628
 —
Distributions to noncontrolling interests(5,457) (2,779)
Distributions to common shareholders(14,337) (12,214)
Distributions to preferred shareholders(14,597) (13,587)
Deferred financing costs paid(5,025) —
Net cash provided by financing activities286,472
 340,578
    
Net increase in cash, cash equivalents and restricted cash177,332
 380,618
Cash, cash equivalents and restricted cash, beginning of period182,823
 250,241
Cash, cash equivalents and restricted cash, end of period (see Note 3)$360,155
 $630,859



American Homes 4 Rent
Condensed Consolidated Statements of Cash Flows (continued)
(Amounts in thousands)
(Unaudited)

For the Three Months Ended
March 31,		For the Three Months Ended
March 31,
2018 201720202019
Supplemental cash flow information 
  
Supplemental cash flow information  
Cash payments for interest, net of amounts capitalized$(22,690) $(28,487)Cash payments for interest, net of amounts capitalized$(37,987) $(32,042) 
   
Supplemental schedule of noncash investing and financing activities 
  
Supplemental schedule of noncash investing and financing activities  
Accounts payable and accrued expenses related to property acquisitions, renovations and construction$9,375
 $(951)
Accrued property renovations and development expendituresAccrued property renovations and development expenditures$9,618  $6,769  
Transfers of completed homebuilding deliveries to properties$8,693
 $—
Transfers of completed homebuilding deliveries to properties75,498  23,055  
Note receivable related to a bulk sale of properties, net of discount$—
 $5,483
Property and land contributions to an unconsolidated joint ventureProperty and land contributions to an unconsolidated joint venture9,835  —  
Accrued distributions to affiliates$(2,719) $—
Accrued distributions to affiliates—  4,768  
Accrued distributions to non-affiliates$25
 $—
Accrued distributions to non-affiliates41  26,633  


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)

March 31, 2018 December 31, 2017March 31, 2020December 31, 2019
(Unaudited)  (Unaudited) 
Assets   Assets
Single-family properties:   Single-family properties:
Land$1,670,599
 $1,665,631
Land$1,784,804  $1,756,504  
Buildings and improvements7,286,264
 7,303,270
Buildings and improvements7,814,877  7,691,877  
Single-family properties in operationSingle-family properties in operation9,599,681  9,448,381  
Less: accumulated depreciationLess: accumulated depreciation(1,532,306) (1,462,105) 
Single-family properties in operation, netSingle-family properties in operation, net8,067,375  7,986,276  
Single-family properties under development and development landSingle-family properties under development and development land407,456  355,427  
Single-family properties held for sale, net201,693
 35,803
Single-family properties held for sale, net172,045  209,828  
9,158,556
 9,004,704
Less: accumulated depreciation(989,476) (939,724)
Single-family properties, net8,169,080
 8,064,980
Total real estate assets, netTotal real estate assets, net8,646,876  8,551,531  
Cash and cash equivalents203,883
 46,156
Cash and cash equivalents33,108  37,575  
Restricted cash156,272
 136,667
Restricted cash128,621  126,544  
Rent and other receivables, net28,115
 30,144
Rent and other receivablesRent and other receivables29,956  29,618  
Escrow deposits, prepaid expenses and other assets241,697
 171,851
Escrow deposits, prepaid expenses and other assets151,326  140,681  
Investments in unconsolidated joint venturesInvestments in unconsolidated joint ventures65,533  67,935  
Amounts due from affiliates25,676
 25,666
Amounts due from affiliates25,666  25,946  
Deferred costs and other intangibles, net13,031
 13,025
Goodwill120,279
 120,279
Goodwill120,279  120,279  
Total assets$8,958,033
 $8,608,768
Total assets$9,201,365  $9,100,109  
   
Liabilities   Liabilities
Revolving credit facility$—
 $140,000
Revolving credit facility$105,000  $—  
Term loan facility, net198,132
 198,023
Asset-backed securitizations, net1,973,242
 1,977,308
Asset-backed securitizations, net1,940,869  1,945,044  
Unsecured senior notes, net492,282
 —
Unsecured senior notes, net888,791  888,453  
Exchangeable senior notes, net112,597
 111,697
Secured note payable48,604
 48,859
Accounts payable and accrued expenses262,267
 222,867
Accounts payable and accrued expenses241,950  243,193  
Amounts payable to affiliates2,001
 4,720
Amounts payable to affiliates—  4,629  
Participating preferred units derivative liability28,258
 29,470
Total liabilities3,117,383
 2,732,944
Total liabilities3,176,610  3,081,319  
   
Commitments and contingencies
 
Commitments and contingencies (see Note 15)Commitments and contingencies (see Note 15)
   
Capital   Capital
Partners' capital:   
Partners’ capital:Partners’ capital:
General partner:   General partner:
Common units (285,004,736 and 286,749,712 units issued and outstanding at March 31, 2018, and December 31, 2017, respectively)4,205,283
 4,248,236
Preferred units (38,350,000 units issued and outstanding at March 31, 2018, and December 31, 2017)901,318
 901,318
Limited partners:   
Common units (55,350,153 units issued and outstanding at March 31, 2018, and December 31, 2017)725,901
 727,544
Common units (300,950,684 and 300,742,674 units issued and outstanding at March 31, 2020 and December 31, 2019, respectively)Common units (300,950,684 and 300,742,674 units issued and outstanding at March 31, 2020 and December 31, 2019, respectively)4,479,640  4,474,333  
Preferred units (35,350,000 units issued and outstanding at March 31, 2020 and December 31, 2019)Preferred units (35,350,000 units issued and outstanding at March 31, 2020 and December 31, 2019)854,435  854,435  
Limited partner:Limited partner:
Common units (52,026,980 units issued and outstanding at March 31, 2020 and December 31, 2019)Common units (52,026,980 units issued and outstanding at March 31, 2020 and December 31, 2019)683,098  682,199  
Accumulated other comprehensive income9,508
 75
Accumulated other comprehensive income7,582  7,823  
Total partners' capital5,842,010
 5,877,173
   
Noncontrolling interest(1,360) (1,349)
Total capital5,840,650
 5,875,824
Total capital6,024,755  6,018,790  
   
Total liabilities and capital$8,958,033
 $8,608,768
Total liabilities and capital$9,201,365  $9,100,109  


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
March 31,		For the Three Months Ended
March 31,
2018 201720202019
Revenues:   Revenues:
Rents from single-family properties$218,023
 $201,107
Fees from single-family properties2,833
 2,604
Tenant charge-backs35,807
 28,373
Rents and other single-family property revenuesRents and other single-family property revenues$287,342  $277,694  
Other1,341
 1,670
Other2,252  1,510  
Total revenues258,004
 233,754
Total revenues289,594  279,204  
   
Expenses:   Expenses:
Property operating expenses100,987
 83,305
Property operating expenses107,497  106,684  
Property management expenses18,987
 17,478
Property management expenses23,276  20,709  
General and administrative expense9,231
 9,295
General and administrative expense11,266  9,435  
Interest expense29,301
 31,889
Interest expense29,715  31,915  
Acquisition fees and costs expensed1,311
 1,096
Acquisition and other transaction costsAcquisition and other transaction costs2,147  834  
Depreciation and amortization79,303
 73,953
Depreciation and amortization82,821  81,161  
Other827
 1,558
Other6,110  1,024  
Total expenses239,947
 218,574
Total expenses262,832  251,762  
   
Gain on sale of single-family properties and other, net2,256
 2,026
Gain on sale of single-family properties and other, net10,765  5,649  
Remeasurement of participating preferred units1,212
 (5,410)
   
Net income21,525
 11,796
Net income37,527  33,091  
   
Noncontrolling interest(11) 38
Preferred distributions14,597
 13,587
Preferred distributions13,782  13,782  
   
Net income (loss) attributable to common unitholders$6,939
 $(1,829)
Net income attributable to common unitholdersNet income attributable to common unitholders$23,745  $19,309  
   
Weighted-average common units outstanding:   Weighted-average common units outstanding:
Basic341,533,582
 299,947,328
Basic352,840,049  352,000,581  
Diluted342,078,016
 299,947,328
Diluted353,332,048  352,611,767  
   
Net income (loss) attributable to common unitholders per unit:   
Net income attributable to common unitholders per unit:Net income attributable to common unitholders per unit:
Basic$0.02
 $(0.01)Basic$0.07  $0.05  
Diluted$0.02
 $(0.01)Diluted$0.07  $0.05  
 
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 (Loss)
(Amounts in thousands)
(Unaudited)
 
 For the Three Months Ended
March 31,
 2018 2017
Net income$21,525
 $11,796
Other comprehensive income (loss):   
Gain on cash flow hedging instruments:   
Gain on settlement of cash flow hedging instrument9,553
 —
Reclassification adjustment for amortization of interest expense included in net income(120) (28)
Gain on investment in equity securities:   
Reclassification adjustment for realized gain included in net income—
 (67)
Other comprehensive income (loss)9,433
 (95)
Comprehensive income30,958
 11,701
Comprehensive (loss) income attributable to noncontrolling interests(11) 38
Preferred distributions14,597
 13,587
Comprehensive income (loss) attributable to common unitholders$16,372
 $(1,924)
For the Three Months Ended
March 31,
20202019
Net income$37,527  $33,091  
Other comprehensive loss:
Gain on cash flow hedging instruments:
Reclassification adjustment for amortization of interest expense included in net income(241) (241) 
Other comprehensive loss(241) (241) 
Comprehensive income37,286  32,850  
Preferred distributions13,782  13,782  
Comprehensive income attributable to common unitholders$23,504  $19,068  
 
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 data)
(Unaudited)

General PartnerLimited PartnersAccumulated other comprehensive incomeTotal capital
Common capitalPreferred capital amountCommon capital
Number of unitsAmountNumber of unitsAmount
Balances at December 31, 2018296,649,621  $4,390,137  $854,435  55,316,826  $720,384  $8,786  $5,973,742  
Share-based compensation—  952  —  —  —  —  952  
Common units issued under share-based compensation plans, net of units withheld for employee taxes77,830  (760) —  —  —  —  (760) 
Redemptions of Class A units500,000  6,510  —  (500,000) (6,510) —  —  
Distributions to capital holders:
Preferred units (Note 10)—  —  (13,782) —  —  —  (13,782) 
Common units ($0.05 per unit)—  (14,889) —  —  (2,741) —  (17,630) 
Net income—  16,283  13,782  —  3,026  —  33,091  
Total other comprehensive loss—  —  —  —  —  (241) (241) 
Balances at March 31, 2019297,227,451  $4,398,233  $854,435  54,816,826  $714,159  $8,545  $5,975,372  


11

American Homes 4 Rent, L.P.
Condensed Consolidated Statement of Capital (continued)
(Amounts in thousands, except unit data)
(Unaudited)

 General Partner Limited Partners Accumulated other comprehensive income Total partners' capital Noncontrolling interest Total capital
 Common capital Preferred capital amount Common capital    
 Units Amount  Units Amount    
                  
Balances at December 31, 2017286,749,712
 $4,248,236
 $901,318
 55,350,153
 $727,544
 $75
 $5,877,173
 $(1,349) $5,875,824
                  
Share-based compensation—
 975
 —
 —
 —
 —
 975
 —
 975
                  
Common units issued under share-based compensation plans, net of units withheld for employee taxes59,187
 (408) —
 —
 —
 —
 (408) —
 (408)
                  
Repurchase of Class A units(1,804,163) (34,969) —
 —
 —
 —
 (34,969) —
 (34,969)
                  
Distributions to capital holders:                 
Preferred units—
 —
 (14,597) —
 —
 —
 (14,597) —
 (14,597)
Common units—
 (14,365) —
 —
 (2,768) —
 (17,133) —
 (17,133)
                  
Net income—
 5,814
 14,597
 —
 1,125
 —
 21,536
 (11) 21,525
                  
Total other comprehensive income—
 —
 —
 —
 —
 9,433
 9,433
 —
 9,433
                  
Balances at March 31, 2018285,004,736
 $4,205,283
 $901,318
 55,350,153
 $725,901
 $9,508
 $5,842,010
 $(1,360) $5,840,650
General PartnerLimited PartnersAccumulated other comprehensive incomeTotal capital
Common capitalPreferred capital amountCommon capital
Number of unitsAmountNumber of unitsAmount
Balances at December 31, 2019300,742,674  $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 taxes208,010  (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 (Notes 2 and 6)—  (1,494) —  —  —  —  (1,494) 
Net income—  20,244  13,782  —  3,501  —  37,527  
Total other comprehensive loss—  —  —  —  —  (241) (241) 
Balances at March 31, 2020300,950,684  $4,479,640  $854,435  52,026,980  $683,098  $7,582  $6,024,755  

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 Three Months Ended
March 31,
20202019
Operating activities
Net income$37,527  $33,091  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization82,821  81,161  
Noncash amortization of deferred financing costs, debt discounts and cash flow hedging instrument1,849  1,810  
Noncash share-based compensation1,808  952  
Equity in net losses of unconsolidated joint ventures1,231  26  
Net gain on sale of single-family properties and other(10,765) (5,649) 
Loss on impairment of single-family properties and other4,446  504  
Other changes in operating assets and liabilities:
Rent and other receivables(3,746) (3,801) 
Prepaid expenses and other assets(5,980) (1,096) 
Deferred leasing costs(910) (999) 
Accounts payable and accrued expenses18,397  42,010  
Amounts payable to affiliates(182) (73) 
Net cash provided by operating activities126,496  147,936  
Investing activities
Cash paid for single-family properties(102,575) (57,740) 
Change in escrow deposits for purchase of single-family properties2,259  (870) 
Net proceeds received from sales of single-family properties and other81,257  32,919  
Proceeds received from hurricane-related insurance claims3,408  —  
Investment in unconsolidated joint ventures(1,000) —  
Distributions from joint ventures887  282  
Renovations to single-family properties(858) (9,727) 
Recurring and other capital expenditures for single-family properties(21,224) (15,703) 
Cash paid for development activity(138,957) (79,990) 
Other purchases of productive assets(2,411) (40) 
Net cash used for investing activities(179,214) (130,869) 
Financing activities
Proceeds from exercise of stock options1,449  60  
Payments related to tax withholding for share-based compensation(1,612) (830) 
Payments on asset-backed securitizations(5,435) (5,556) 
Proceeds from revolving credit facility105,000  —  
Payments on revolving credit facility—  (250,000) 
Proceeds from unsecured senior notes, net of discount—  397,944  
Distributions to common unitholders(35,292) (17,580) 
Distributions to preferred unitholders(13,782) —  
Deferred financing costs paid—  (3,572) 
Net cash provided by financing activities50,328  120,466  
Net (decrease) increase in cash, cash equivalents and restricted cash(2,390) 137,533  
Cash, cash equivalents and restricted cash, beginning of period (see Note 3)164,119  175,214  
Cash, cash equivalents and restricted cash, end of period (see Note 3)$161,729  $312,747  


13
 For the Three Months Ended
March 31,
 2018 2017
Operating activities   
Net income$21,525
 $11,796
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization79,303
 73,953
Noncash amortization of deferred financing costs1,900
 2,562
Noncash amortization of discounts on debt instruments935
 840
Noncash amortization of cash flow hedging instrument(120) —
Noncash share-based compensation975
 938
Provision for bad debt2,000
 1,510
Remeasurement of participating preferred units(1,212) 5,410
Equity in net earnings of unconsolidated ventures(314) (295)
Net gain on sale of single-family properties and other(2,256) (2,026)
Loss on impairment of single-family properties700
 929
Net gain on resolutions of mortgage loans—
 (15)
Other changes in operating assets and liabilities:   
Rent and other receivables(3,886) (2,657)
Prepaid expenses and other assets(13,476) (8,356)
Deferred leasing costs(2,723) (1,482)
Accounts payable and accrued expenses29,150
 22,050
Amounts payable to affiliates(10) 4,880
Net cash provided by operating activities112,491
 110,037
    
Investing activities   
Cash paid for single-family properties(149,674) (73,622)
Change in escrow deposits for purchase of single-family properties(4,115) (1,072)
Net proceeds received from sales of single-family properties and other11,967
 31,306
Proceeds received from hurricane-related insurance claims4,000
 —
Collections from mortgage financing receivables—
 70
Distributions from joint ventures1,230
 1,192
Initial renovations to single-family properties(20,400) (7,677)
Recurring and other capital expenditures for single-family properties(11,167) (6,484)
Other purchases of productive assets(53,472) (13,710)
Net cash used for investing activities(221,631) (69,997)
    
Financing activities   
Proceeds from issuance of Class A units—
 350,612
Payments of Class A unit issuance costs—
 (236)
Repurchase of Class A units(34,969) —
Share-based compensation (payments) proceeds, net(414) 258
Payments on asset-backed securitizations(5,312) (6,231)
Proceeds from revolving credit facility100,000
 —
Payments on revolving credit facility(240,000) —
Proceeds from term loan facility—
 25,000
Payments on secured note payable(255) (245)
Proceeds from unsecured senior notes, net of discount497,210
 —
Settlement of cash flow hedging instrument9,628
 —
Distributions to common unitholders(19,794) (14,993)
Distributions to preferred unitholders(14,597) (13,587)
Deferred financing costs paid(5,025) —
Net cash provided by financing activities286,472
 340,578
    
Net increase in cash, cash equivalents and restricted cash177,332
 380,618
Cash, cash equivalents and restricted cash, beginning of period182,823
 250,241
Cash, cash equivalents and restricted cash, end of period (see Note 3)$360,155
 $630,859



American Homes 4 Rent, L.P.
Condensed Consolidated Statements of Cash Flows (continued)
(Amounts in thousands)
(Unaudited)

For the Three Months Ended
March 31,		For the Three Months Ended
March 31,
2018 201720202019
Supplemental cash flow information   Supplemental cash flow information
Cash payments for interest, net of amounts capitalized$(22,690) $(28,487)Cash payments for interest, net of amounts capitalized$(37,987) $(32,042) 
   
Supplemental schedule of noncash investing and financing activities   Supplemental schedule of noncash investing and financing activities
Accounts payable and accrued expenses related to property acquisitions, renovations and construction$9,375
 $(951)
Accrued property renovations and development expendituresAccrued property renovations and development expenditures$9,618  $6,769  
Transfers of completed homebuilding deliveries to properties$8,693
 $—
Transfers of completed homebuilding deliveries to properties75,498  23,055  
Note receivable related to a bulk sale of properties, net of discount$—
 $5,483
Property and land contributions to an unconsolidated joint ventureProperty and land contributions to an unconsolidated joint venture9,835  —  
Accrued distributions to affiliates$(2,719) $—
Accrued distributions to affiliates—  4,768  
Accrued distributions to non-affiliates$25
 $—
Accrued distributions to non-affiliates41  26,633  


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"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“Operating Partnership,"” our "operating partnership"“operating partnership” or the "OP"“OP”) is the entity through which the Company conducts substantially all of our business and owns, directly or through subsidiaries, substantially all of our assets. References to “the Company,the “Company,” “we,” "our,"“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 March 31, 2018,2020, the Company held 51,84052,776 single-family properties in 22 states, including 1,892 properties identified as part of the Company's disposition program, comprised of 1,318960 properties classified as held for sale and 574 properties identified for future sale.


AH4R is the general partner of, and as of March 31, 2018,2020 owned an approximate 83.7%approximately 85.2% of the common partnership interest in, the Operating Partnership withPartnership. The remaining 14.8% of the remaining 16.3% 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-one1-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 condensed consolidated financial statements are unaudited and include the accounts of AH4R, the Operating Partnership and their consolidated subsidiaries. The condensed consolidated financial statements of the Operating Partnership include the accounts of 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 (“ASC”) No. 810, Consolidation, if it is the primary beneficiary of the VIE as determined by its power to direct the VIE’sVIE��s activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE. Entities for which the Company owns an interest, but does not consolidate, are accounted for under the equity method of accounting as an investment in an unconsolidated subsidiary and are included in escrow deposits, prepaid expenses and other assets within the condensed consolidated balance sheets. The ownership interest in a consolidated subsidiary of the Company held by outside parties is included in noncontrolling interest within the condensed consolidated financial statements.


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, 2017.2019. Any references in this report to the number of properties is outside the scope of our independent registered public accounting firm’s review of our financial statements, in accordance with the standards of the Public Company Accounting Oversight

15

Board. In the opinion of management, all adjustments of a normal and recurring nature necessary for a fair presentationstatement 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.


There have        Effective March 31, 2020, as a result of the expected growth in our joint venture activities, the investments in unconsolidated joint ventures balance has been no changes to our significant accounting policies that have hadreclassified into a material impact on ourseparate balance sheet line item. This resulted in the reclassification of $67.9 million as of December 31, 2019, which was previously included in escrow deposits, prepaid expenses and other assets, into investments in unconsolidated joint ventures in the condensed consolidated financial statements and related notes, compared to those policies disclosedbalance sheets. Certain other amounts in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Therefore, notes to the condensed consolidated financial statements that would substantially duplicate the disclosures contained in our most recent audited consolidated financial statements have been omitted.

Recent Accounting Pronouncements

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce the existing diversity in practice by addressing eight specific cash flow issues related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for the Company for annual reportingprior periods beginning after December 15, 2017, and for interim periods within those annual periods with early adoption permitted. The Company adopted this guidance effectivehave also been reclassified to conform to the current year presentation.

Accounting Pronouncements Adopted January 1, 2018. The adoption of this guidance did not have a material impact on our financial statements.2020

In June 2016, the FASBFinancial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to amend the accounting for credit losses for certain financial instruments by requiring companies to recognize an estimate of expected credit losses as an allowance in order to recognize such losses more timely than under previous guidance that had allowed companies to wait until it was probable such losses had been incurred. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which clarifies that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which provides further clarification around some of the amendments in ASU 2016-13. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief, which provides entities that have certain instruments within the scope of Topic 326 with an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis upon adoption of Topic 326. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which provides further clarification around some of the amendments in ASU 2016-13. The guidance will beis effective for the Company for annual reporting periods beginning after December 15, 2019, and for interim periods within those annual periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is currently assessingAn entity will apply the impactamendments in these ASUs through a cumulative-effect adjustment to retained earnings as of the guidance on our financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which sets forth principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessors and lessees). Lessor accounting will remain similar to lessor accounting under previous guidance, while aligning with the FASB's new revenue recognition guidance for non-lease components. The new guidance will require lessees to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than one year. The new guidance will also require lessees and lessors to capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Any other costs incurred, including allocated indirect costs, will no longer be capitalized and instead will be expensed as incurred. The guidance will be effective for the Company for annual reporting periods beginning after December 15, 2018, and for interim periods within those annual periods, with early adoption permitted, and requires the use of the modified retrospective transition method. The Company does not anticipate significant changesfirst reporting period in the accounting for our residential operating leases for which we are the lessor, as our leases generally do not have terms of more than one year. As part of our operations, we lease office space for our corporate and property management offices under non-cancelable operating lease agreements for which we are the lessee. We anticipate that the adoption of this guidance will require us to recognize a right-of-use asset and corresponding lease liability for these office leases. The Company is currently assessing the impact of the adoption of this guidance on our financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in net income. The guidance is effective (that is, a modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the Company for annual reporting periods beginningeffective date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after December 15, 2017, and for interim periods within those annual periods.the effective date of the guidance. The Company adopted this guidance effective January 1, 2018.2020. The adoption of this guidance did not have a material impact on our financial statements.statements (see Note 6. Escrow Deposits, Prepaid Expenses and Other Assets).


In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers(Topic 606), which provides guidance on revenue recognition and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, most industry-specific guidance and some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These judgments include identifying “distinct” performance obligations in multi-element contracts, estimating the amount of variable consideration to include in the transaction price at contract inception, allocating the transaction price to each separate performance obligation, and determining at contract inception whether the performance obligation is satisfied over time or at a point in time. Since lease contracts under ASC 840, "Leases", are specifically excluded from ASU No. 2014-09’s scope, most of the Company’s rental

contract revenue will continue to follow current leasing guidance. We have reviewed our other sources of revenue and identified that the non-lease components (tenant chargebacks and recovery revenue) in our single-family home and office leases will continue being accounted for under ASC 840 until the adoption of ASU 2016-02 beginning January 1, 2019. Based on our assessment, the Company’s current accounting policies for these non-lease components are aligned with the revenue recognition principles prescribed by the new guidance. Therefore, the new standard did not ultimately change the amount or timing of our revenue recognition. As part of ASU No. 2014-09, the FASB issued consequential amendments to other sections, eliminating ASC 360-20, Real Estate Sales and adding ASU No. 2017-05 Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets, Subtopic 610-20, "Other Income". Real estate sales to noncustomers will follow new guidance from ASC 610-20, while sales to customers will follow the general revenue guidance in ASC 606. While the Company’s property sales are not part of our ordinary customer activity and will fall under ASC 610-20, there is little economic difference in the accounting for real estate sales to customers versus noncustomers, with the exception of the presentation of comprehensive income (revenue and expense when sales to customers or gains and losses when sales to noncustomers). The Company adopted the new revenue recognition guidance using the modified retrospective approach, effective January 1, 2018. We evaluated the revenue recognition for our contracts under existing accounting standards and under the new revenue recognition ASU and determined that there were no differences in the amounts or timing of recognition. Therefore, the adoption of this ASU did not result in an adjustment to our retained earnings on January 1, 2018.

In FebruaryAugust 2018, the FASB issued ASU No. 2018-03, Recognition and2018-13, Fair Value Measurement of Financial Assets and Financial Liabilities(Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which retainedeliminates, adds and modifies certain disclosure requirements for fair value measurements. Companies will no longer be required to disclose the current frameworkamount of and reasons for accounting for financial instruments in GAAP but made targeted improvementstransfers between Level 1 and Level 2 of the fair value hierarchy. Companies will also be required to address certain aspectsdisclose the range and weighted average of recognition, measurement, presentation, and disclosure of financial instruments.significant unobservable inputs used to develop Level 3 fair value measurements. The guidance will beis effective for fiscal years beginning after December 15, 2017,2019, and for interim periods within those annual periods with early adoption permitted. The amendments on the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material impact on our financial statements.

        In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The guidance is effective for fiscal years beginning after JuneDecember 15, 2018.2019, and for interim periods within those annual periods with early adoption permitted. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material impact on our financial statements.

16


        In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU apply only to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform but do not apply to contract modifications made or hedging relationships entered into or evaluated after December 31, 2022. The amendments in this ASU allow companies to (i) account for modifications to contracts within the scope of ASC 310, Receivables, and ASC 470, Debt, prospectively by adjusting the effective interest rate and (ii) account for modifications to contracts within the scope of ASC 842, Leases, as a continuation of existing lease agreements. The guidance also provides optional expedients for modifications to contracts within the scope of ASC 815, Derivatives and Hedging. The guidance is effective immediately, and entities may elect to apply the guidance as of January 1, 2020 or the beginning of a subsequent interim period, or prospectively from a date beginning January 1, 2020 or in a subsequent interim period up to the date the financial statements are available to be issued. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material impact on our financial statements.

Recent Accounting Pronouncements Not Yet Effective

        In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which clarifies the interaction between ASC Topics 321, 323 and 815. ASC 321, Investments—Equity Securities, provides a company with a measurement alternative to measure certain equity securities without a readily determinable fair value at cost, minus impairment, if any. If the company then identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, it should measure the equity security at fair value as of the date that the observable transaction occurred. The amendments in this ASU clarify that a company should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with ASC 321 immediately before applying or upon discontinuing the equity method. The amendments in this ASU also clarify the accounting treatment of forward contracts and purchased options for securities that will be accounted for under the equity method of accounting upon settlement or exercise. The guidance is effective for fiscal years beginning after December 15, 2020, and for interim periods within those annual periods with early adoption permitted. The amendments in this ASU should be applied prospectively by applying the amendments at the beginning of the interim period that includes the adoption date. The Company is currently assessing the impact of the guidance on ourits financial statements.


Note 3. Cash, Cash Equivalents and Restricted Cash

We consider all demand deposits, cashier's checks, money market accounts and certificates of deposit with a maturity of three months or less to be cash equivalents. We maintain our cash and cash equivalents and escrow deposits at financial institutions. The combined account balances typically exceed the Federal Deposit Insurance Corporation ("FDIC") insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit. We believe that the risk is not significant.
        
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 Company'sCompany’s and the Operating Partnership'sPartnership’s condensed consolidated statements of cash flows to the corresponding financial statement line items in the condensed consolidated balance sheets as of March 31, 2018 and 2017:(in thousands):
March 31,December 31,
2020201920192018
Cash and cash equivalents$33,108  $154,584  $37,575  $30,284  
Restricted cash128,621  158,163  126,544  144,930  
Total cash, cash equivalents and restricted cash$161,729  $312,747  $164,119  $175,214  


17
 March 31, 2018 March 31, 2017
Balance Sheet:   
Cash and cash equivalents$203,883
 $495,802
Restricted cash156,272
 135,057
Statement of Cash Flows:   
Cash, cash equivalents and restricted cash$360,155
 $630,859



Note 4. Single-Family PropertiesReal Estate Assets, Net
 
Single-family properties,        The net book values of real estate assets consisted of the following as of March 31, 2018,2020 and December 31, 20172019 (in thousands, except property data)thousands):
March 31, 2020December 31, 2019
Occupied single-family properties$7,561,775  $7,534,627  
Single-family properties recently acquired133,141  88,181  
Single-family properties in turnover process287,079  308,008  
Single-family properties leased, not yet occupied85,380  55,460  
Single-family properties in operation, net8,067,375  7,986,276  
Development land246,438  224,041  
Single-family properties under development161,018  131,386  
Single-family properties held for sale, net172,045  209,828  
Total real estate assets, net$8,646,876  $8,551,531  
 March 31, 2018
 Number of
properties		 Net book
value
Leased single-family properties47,677
 $7,455,093
Single-family properties being renovated503
 124,233
Single-family properties being prepared for re-lease289
 37,630
Vacant single-family properties available for lease1,479
 262,429
Single-family properties held for sale, net1,318
 201,693
Single-family properties identified for future sale574
 88,002
Total51,840
 $8,169,080

 December 31, 2017
 Number of
properties		 Net book
value
Leased single-family properties46,996
 $7,284,708
Single-family properties being renovated980
 225,194
Single-family properties being prepared for re-lease372
 47,994
Vacant single-family properties available for lease2,581
 471,281
Single-family properties held for sale, net310
 35,803
Total51,239
 $8,064,980

Single-family properties, net as of March 31, 2018, and December 31, 2017, included $4.7 million and $44.2 million, respectively, related to properties for which the recorded grant deed had not been received. For these properties, the trustee or seller has warranted that all legal rights of ownership have been transferred to us on the date of the sale, but there was a delay for the deeds to be recorded.

Depreciation expense related to single-family properties was $75.4$79.8 million and $68.7$76.8 million for the three months ended March 31, 20182020 and 2017,2019, respectively.


During        The following table summarizes the Company’s dispositions of single-family properties and land for the three months ended March 31, 2018, the Company sold 103 homes, which generated total net proceeds of $11.5 million2020 and resulted in a net gain on sale of $2.1 million,2019 (in thousands, except property data):
For the Three Months Ended
March 31, 2020March 31, 2019
Single-family properties:
Properties sold410  180  
Net proceeds$81,186  $32,623  
Net gain on sale$13,758  $5,579  
Land:
Net proceeds$71  $296  
Net gain on sale$7  $70  

Note 5. Rent and sold land, which generated total net proceeds of $0.5 million and resulted in a net gain on sale of $0.1 million. DuringOther Receivables

        For the three months ended March 31, 2017, the2020 and 2019, rents from single-family properties included $40.0 million in both periods of variable lease payments for tenant charge-backs, which are primarily related to cost recoveries on utilities, and $4.0 million and $3.0 million, respectively, of variable lease payments for fees from single-family properties.

        The Company sold 504 homes, which generated total net proceedsgenerally rents our single-family properties under non-cancelable lease agreements with a term of $24.0 million, which includes a $7.0 million note receivable, before a $1.5 million discount, and resulted in a net lossone year. The following table summarizes our future minimum rental revenues under existing leases on saleour properties as of $1.0 million.March 31, 2020 (in thousands):

March 31, 2020
Remaining 2020$438,182  
202173,230  
20223,592  
202311  
Total$515,015  
Note 5. Rent and Other Receivables, Net
        
Included inAs of December 31, 2019, rent and other receivables net is an allowance for doubtful accounts of $10.8 million and $10.4 million as of March 31, 2018, and December 31, 2017, respectively. Alsoalso included in rent and other receivables, net, is $4.9$2.7 million of hurricane-related insurance claims receivable, and $0.2 million of non-tenant receivables as ofwhich was fully collected during the three months ended March 31, 2018, compared to $8.9 million of hurricane-related insurance claims receivable and $1.2 million of non-tenant receivables as of December 31, 2017.2020.



18

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 March 31, 2018,2020 and December 31, 20172019 (in thousands):
 March 31, 2020December 31, 2019
Escrow deposits, prepaid expenses and other$66,641  $54,545  
Deferred costs and other intangibles, net6,180  6,840  
Notes receivable, net35,326  36,834  
Commercial real estate, software, vehicles and FF&E, net43,179  42,742  
Total$151,326  $140,961  
 March 31, 2018 December 31, 2017
Escrow deposits, prepaid expenses and other$49,628
 $33,964
Investments in joint ventures41,425
 42,341
Commercial real estate, vehicles and FF&E, net45,168
 43,608
Land held for development70,023
 39,079
Homebuilding construction in progress35,463
 12,859
Total$241,707
 $171,851


        Depreciation expense related to commercial real estate, software, vehicles and furniture, fixtures and equipment (“FF&E”), net was $2.0 million and $1.9 million for the three months ended March 31, 2020 and 2019, respectively.

Note 7. Deferred Costs and Other Intangibles, Net

        
Deferred costs and other intangibles, net, consisted of the following as of March 31, 2018,2020 and December 31, 20172019 (in thousands):
 March 31, 2020December 31, 2019
Deferred leasing costs$3,607  $3,738  
Deferred financing costs11,244  11,244  
Database intangible asset2,100  2,100  
 16,951  17,082  
Less: accumulated amortization(10,771) (10,242) 
Total$6,180  $6,840  
 March 31, 2018 December 31, 2017
Deferred leasing costs$9,753
 $7,030
Deferred financing costs11,244
 11,244
Intangible assets: 
  
Value of in-place leases179
 179
Trademark—
 3,100
Database2,100
 2,100
 23,276
 23,653
Less: accumulated amortization(10,245) (10,628)
Total$13,031
 $13,025


Amortization expense related to deferred leasing costs, the value of in-place leases, trademark and database intangibles was $2.2$1.0 million and $2.9$2.5 million for the three months ended March 31, 20182020 and 2017,2019, respectively, which has beenand was included in depreciation and amortization within the condensed consolidated statements of operations. Deferred financing costs that relate to our revolving credit facility are included in deferred costs and other intangibles, net within the condensed consolidated balance sheets. Amortization of deferred financing costs that relate to our revolving credit facility was $0.5 million and $0.4 million for both the three months ended March 31, 20182020 and 2017, respectively, which has been2019 and was included in gross interest, prior to interest capitalization (see Note 8)8. Debt).
 
The following table sets forth the estimated annual amortization expense related to deferred costs and other intangibles, net as of March 31, 2018,2020 for future periods (in thousands):
Deferred
Leasing Costs		Deferred
Financing Costs		Database Intangible AssetTotal
Remaining 2020$1,636  $1,479  $57  $3,172  
202176  1,964  —  2,040  
2022—  968  —  968  
Total$1,712  $4,411  $57  $6,180  

Notes Receivable, Net

The Company has obtained promissory notes in connection with 2 bulk dispositions of our single-family properties, which are secured by first priority mortgages on the disposed homes and contain certain covenants. The secured promissory notes require monthly or quarterly interest payments with the full principal due at maturity.

        Notes receivable are presented net of discounts, and interest income from the notes, including amortization of discounts, is presented in other revenues within the condensed consolidated statements of operations. Upon adoption of ASU 2016-13 on January 1, 2020 (see Note 2. Significant Accounting Policies), we are required to estimate and recognize lifetime expected losses, rather than incurred losses, on these notes receivable, which results in the earlier recognition of credit losses even if the expected risk of credit loss is remote. An allowance for expected credit losses of $1.5 million was established with a cumulative-effect adjustment to accumulated deficit in the condensed consolidated statements of equity. Notes receivable are presented net of the allowance for expected credit losses, which the Company estimates on a quarterly basis based on (i) credit quality indicators such as the borrower’s historical performance, including the borrower’s financial results and satisfaction of scheduled payments, (ii) current conditions, including macroeconomic conditions and other conditions affecting the borrower, and (iii) other reasonable and supportable forecasts about the future. As part of the monitoring process, we may meet with a borrower’s management to better understand such borrower’s

19

Year Deferred
Leasing Costs		 Deferred
Financing Costs		 Value of
In-place Leases		 Database
Remaining 2018 $3,751
 $1,479
 $6
 $225
2019 272
 1,964
 2
 300
2020 —
 1,969
 —
 132
2021 —
 1,964
 —
 —
2022 —
 967
 —
 —
Total $4,023
 $8,343
 $8
 $657
financial performance and its future plans on an as-needed basis. A note receivable will be categorized as non-performing if a borrower experiences financial difficulty and has failed to make scheduled payments. Changes to the allowance for expected credit losses are recognized in other expenses within the condensed consolidated statements of operations.



Note 7. Investments in Unconsolidated Joint Ventures
        In February 2020, the Operating Partnership entered into a $253.1 million strategic joint venture with institutional investors advised by J.P. Morgan Asset Management focused on constructing and operating newly built rental homes. 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. In evaluating the Company’s 20% ownership interest in the joint venture, we concluded that the joint venture is not a variable interest entity after applying the variable interest model and, therefore, we account for our interest in the joint venture as an investment in an unconsolidated subsidiary after applying the voting interest model using the equity method of accounting.

        Subsequent to March 31, 2020, as contemplated by the joint venture agreement, the parties entered into an amended agreement to increase the size of the partnership to $625.0 million while the other principal terms of the agreement remain the same. The changes to the agreement do not impact the accounting treatment of the joint venture.

        The Company provides property management and development services to certain unconsolidated joint ventures, which are considered to be related parties. Management fee income from these joint ventures was $0.9 million and $0.7 million for the three months ended March 31, 2020 and 2019, respectively, which were included in other revenues within the condensed consolidated statements of operations.

Note 8. Debt

        
All of the Company'sCompany’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 March 31, 2018,2020 and December 31, 20172019 (in thousands):
   Outstanding Principal Balance
 
Interest Rate (1)
Maturity DateMarch 31, 2020December 31, 2019
AH4R 2014-SFR2 securitization4.42%October 9, 2024$484,546  $485,828  
AH4R 2014-SFR3 securitization4.40%December 9, 2024499,816  501,393  
AH4R 2015-SFR1 securitization (2)
4.14%April 9, 2045525,178  526,560  
AH4R 2015-SFR2 securitization (3)
4.36%October 9, 2045456,018  457,212  
Total asset-backed securitizations  1,965,558  1,970,993  
2028 unsecured senior notes (4)
4.08%February 15, 2028500,000  500,000  
2029 unsecured senior notes4.90%February 15, 2029400,000  400,000  
Revolving credit facility (5)
2.19%June 30, 2022105,000  —  
Total debt    2,970,558  2,870,993  
Unamortized discounts on unsecured senior notes(4,022) (4,143) 
Deferred financing costs, net (6)
(31,876) (33,353) 
Total debt per balance sheet$2,934,660  $2,833,497  
(1)Interest rates are as of March 31, 2020. 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 $800.0 million and the Company had approximately $3.7 million and $6.2 million committed to outstanding letters of credit that reduced our borrowing capacity as of March 31, 2020 and December 31, 2019, respectively. The revolving credit facility bears interest at LIBOR plus 1.20% as of March 31, 2020. LIBOR is expected to be discontinued after 2021 and the Company expects to replace the contractual reference rate with an appropriate alternative. The Company does not expect this modification to have a material impact on its financial statements.
(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 March 31, 2020 and 2019, which was included in gross interest, prior to interest capitalization.


20
     Outstanding Principal Balance
 Interest Rate (1) Maturity Date March 31, 2018 December 31, 2017
AH4R 2014-SFR2 securitization4.42% October 9, 2024 $495,043
 $496,326
AH4R 2014-SFR3 securitization4.40% December 9, 2024 510,721
 512,041
AH4R 2015-SFR1 securitization (2)4.14% April 9, 2045 536,341
 537,723
AH4R 2015-SFR2 securitization (3)4.36% October 9, 2045 465,940
 467,267
Total asset-backed securitizations    2,008,045
 2,013,357
Unsecured senior notes (4)4.08% February 15, 2028 500,000
 —
Exchangeable senior notes3.25% November 15, 2018 115,000
 115,000
Secured note payable4.06% July 1, 2019 48,604
 48,859
Revolving credit facility (5)3.08% June 30, 2022 —
 140,000
Term loan facility (6)3.23% June 30, 2022 200,000
 200,000
Total debt (7)    2,871,649
 2,517,216
Unamortized discounts on unsecured and exchangeable senior notes    (3,412) (895)
Equity component of exchangeable senior notes    (1,746) (2,408)
Deferred financing costs, net (8)    (41,634) (38,026)
Total debt per balance sheet    $2,824,857
 $2,475,887

(1)Interest rates are as of March 31, 2018. Unless otherwise stated, interest rates are fixed percentages.
(2)The AH4R 2015-SFR1 securitization has a maturity date of April 9, 2045, with an anticipated repayment date of April 9, 2025.
(3)The AH4R 2015-SFR2 securitization has a maturity date of October 9, 2045, with an anticipated repayment date of October 9, 2025.
(4)The stated interest rate on the unsecured senior notes is 4.25%, which was effectively hedged to yield an interest rate of 4.08%.
(5)
The revolving credit facility provides for a borrowing capacity of up to $800.0 million, with a fully extended maturity date of June 2022, and bears interest at a LIBOR rate plus a margin ranging from 0.825% to 1.55% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.00% to 0.55%. The interest rate stated represents the applicable spread for LIBOR based borrowings as of March 31, 2018, plus 1-month LIBOR.
(6)
The term loan facility provides for a borrowing capacity of up to $200.0 million, with a maturity date of June 2022, and bears interest at a LIBOR rate plus a margin ranging from 0.90% to 1.75% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.00% to 0.75%. The interest rate stated represents the applicable spread for LIBOR based borrowings as of March 31, 2018, plus 1-month LIBOR.
(7)The Company was in compliance with all debt covenants associated with its asset-backed securitizations, unsecured senior notes, secured note payable, revolving credit facility and term loan facility as of March 31, 2018, and December 31, 2017.
(8)Deferred financing costs relate to our asset-backed securitizations, term loan facility and unsecured senior notes. Amortization of deferred financing costs was $1.4 million and $2.2 million for the three months ended March 31, 2018 and 2017, respectively, which has been included in gross interest, prior to interest capitalization.

Debt Maturities

The following table summarizes the contractual maturities of the Company'sCompany’s principal debt balances on a fully extended basis as of March 31, 20182020 (in thousands):
Debt Maturities
Remaining 2020$15,536  
202120,714  
2022125,714  
202320,714  
2024955,618  
Thereafter1,832,262  
Total debt$2,970,558  
Remaining 2018$131,290
201968,564
202020,714
202120,714
2022220,714
Thereafter2,409,653
Total debt2,871,649
Unamortized discounts and deferred financing costs (1)(46,792)
Total debt per balance sheet$2,824,857
(1)Includes the unamortized discounts on the unsecured and exchangeable senior notes, the equity component of the exchangeable senior notes and deferred financing costs, net.
Unsecured Senior Notes

In February 2018, the Operating Partnership issued $500.0 million of 4.25% unsecured senior notes with a maturity date of February 15, 2028 (the "2028 Notes"). Interest on the 2028 Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2018. The Operating Partnership received net proceeds of $494.0 million from this issuance, after underwriting fees of approximately $3.2 million and a $2.8 million discount, and before estimated offering costs of $1.8 million. The Operating Partnership intends to use the net proceeds from this issuance for general corporate purposes, including, without limitation, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, the expansion, redevelopment and/or improvement of our properties, working capital and other general purposes, including repurchases of securities. The 2028 Notes are the Operating Partnership's unsecured and unsubordinated obligation 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 2028 Notes at any time, in whole or in part, at the applicable redemption price specified in the Indenture with respect to the 2028 Notes. If the 2028 Notes are redeemed on or after November 15, 2027 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the 2028 Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date. The 2028 Notes have been initially guaranteed by American Residential Properties OP, L.P., (the “Guarantor Subsidiary”), a 100% owned subsidiary of the Operating Partnership, but such guarantee will be automatically released at the time that the Guarantor Subsidiary no longer guarantees our credit facility. Including the effect of a cash flow hedging instrument settled in February 2018 (see Note 13), the 2028 Notes yield an effective interest rate of 4.08%.

Exchangeable Senior Notes, Net

The exchangeable senior notes, which were assumed in connection with the Company's merger (the "ARPI Merger") with American Residential Properties, Inc. ("ARPI") during 2016, contain an exchange settlement feature, which provides that the exchangeable senior notes may, under certain circumstances, be exchangeable for cash, our Class A common shares or a combination of cash and our Class A common shares, at the option of the Operating Partnership, based on an initial exchange rate of 46.9423 shares of ARPI's common stock per $1,000 principal amount of the notes. Settlements for cash will be paid for by the Operating Partnership, while settlements for the Company's Class A common shares will be issued by AH4R with the Operating Partnership issuing an equivalent number of Class A units to AH4R. The adjusted initial exchange rate would be 53.2795 of our Class A common shares per $1,000 principal amount of the notes, based on the 1.135 exchange ratio of ARPI shares to our shares resulting from the ARPI Merger. The current exchange rate as of March 31, 2018, was 55.4118 of the Company's Class A common shares per $1,000 principal amount of the notes. The exchange rate is adjusted based on the Company's Class A common share price and distributions to common shareholders.



Interest Expense
 
The following table displays our total(i) gross interest cost, which includes unused commitment and other fees on our credit facilities and amortization of deferred financing costs and the discounts on unsecured senior notes, and the fair value of the exchange settlement feature of the exchangeable senior notes, and(ii) capitalized interest for the three months ended March 31, 20182020 and 20172019 (in thousands):
 For the Three Months Ended
 March 31, 2020March 31, 2019
Gross interest cost$34,364  $34,612  
Capitalized interest(4,649) (2,697) 
Interest expense$29,715  $31,915  

 For the Three Months Ended
 March 31, 2018 March 31, 2017
Gross interest$31,737
 $32,492
Capitalized interest(2,436) (603)
Interest expense$29,301
 $31,889

Note 9. Accounts Payable and Accrued Expenses
 
The following table summarizes accounts payable and accrued expenses as of March 31, 2018,2020 and December 31, 20172019 (in thousands):
 March 31, 2020December 31, 2019
Resident security deposits$85,561  $84,832  
Accrued property taxes72,864  44,280  
Prepaid rent22,904  19,970  
Accrued interest12,969  23,090  
Accrued construction and maintenance liabilities12,659  20,435  
Accounts payable1,274  5,037  
Accrued distribution payable—  13,024  
Other accrued liabilities33,719  32,525  
Total$241,950  $243,193  

 March 31, 2018 December 31, 2017
Accounts payable$272
 $1,726
Accrued property taxes67,190
 47,765
Other accrued liabilities37,023
 31,788
Accrued distribution payable27,006
 26,982
Accrued construction and maintenance liabilities29,173
 17,928
Resident security deposits80,156
 75,951
Prepaid rent21,447
 20,727
Total$262,267
 $222,867
Note 10. Shareholders’ Equity / Partners'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.


At-the-Market Common Share Offering Program
In November 2016, the        The Company established an at-the-market common share offering program under which we were able tocan issue Class A common shares from time to time through various sales agents up to an aggregate of $400.0$500.0 million (the "Original At-the-Market Program"“At-the-Market Program”). The program was established in orderCompany intends to use theany net proceeds from share issuancesthe At-the-Market Program to repay borrowings againstunder the Company’s revolving credit and term loan facilities,facility, to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy, and for working capital and general corporate purposes. The programAt-the-Market Program may be suspended or terminated by the Company at any time. During the three months ended March 31, 2017, the Company issued and sold 0.6 million Class A common shares under the Original At-the-Market Program for gross proceeds of $14.3 million, or $22.72 per share, and net proceeds of $14.1 million, after commissions and other expenses 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 share issuances. The Original At-the-Market Program was replaced in August 2017 with an at-the-market common share offering program with a $500.0 million capacity with the same terms (the "At-the-Market Program"). As of March 31, 2018,2020, no shares have been issued under the At-the-Market Program and $500.0$500.0 million remained available for future share issuances.



21

Share Repurchase Program


In February 2018, the Company's        The Company’s board of trustees re-authorizedauthorized the establishment of our existing share repurchase program, authorizing the repurchase of up to $300.0$300.0 million of our outstanding Class A common shares and up to $250.0$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 three months ended March 31, 2018, the Company repurchased2020 and retired 1.8 million of our Class A common shares on a settlement date basis, in accordance with the program, at a weighted-average price of $19.36 per share and a total price of $34.9 million. We2019, we did not repurchase and retire any of our shares during the three months ended March 31, 2017.

shares. As of March 31, 2018,2020, we had a remaining repurchase authorization of up to $265.1 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares under the program.


Preferred Shares

As of March 31, 2018,2020 and December 31, 2017,2019, the Company had the following series of preferred shares outstanding (in thousands, except share data):
March 31, 2020December 31, 2019
SeriesIssuance DateEarliest Redemption DateDividend RateOutstanding SharesCurrent Liquidation ValueOutstanding SharesCurrent Liquidation Value
Series D perpetual preferred shares5/24/20165/24/20216.500 %10,750,000  $268,750  10,750,000  $268,750  
Series E perpetual preferred shares6/29/20166/29/20216.350 %9,200,000  230,000  9,200,000  230,000  
Series F perpetual preferred shares4/24/20174/24/20225.875 %6,200,000  155,000  6,200,000  155,000  
Series G perpetual preferred shares7/17/20177/17/20225.875 %4,600,000  115,000  4,600,000  115,000  
Series H perpetual preferred shares9/19/20189/19/20236.250 %4,600,000  115,000  4,600,000  115,000  
Total preferred shares35,350,000  $883,750  35,350,000  $883,750  
        March 31, 2018 December 31, 2017
Series Issuance Date Earliest Redemption Date Dividend Rate Outstanding Shares Current Liquidation Value (1) Outstanding Shares Current Liquidation Value (1)
Series C participating preferred shares (2) 5/2/2014 3/31/2018 5.500% 7,600,000
 $219,238
 7,600,000
 $218,236
Series D perpetual preferred shares 5/24/2016 5/24/2021 6.500% 10,750,000
 268,750
 10,750,000
 268,750
Series E perpetual preferred shares 6/29/2016 6/29/2021 6.350% 9,200,000
 230,000
 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
Total preferred shares       38,350,000
 $987,988
 38,350,000
 $986,986
(1)Liquidation value for the Series C participating preferred shares reflects initial liquidation value of $25.00 per share, adjusted by an amount equal to 50% of the cumulative change in value of an index based on the purchase prices of single-family properties located in our top 20 markets
(2)All of the outstanding Series C participating preferred shares were converted into 10,848,827 Class A common shares on April 5, 2018, based on a conversion ratio of 1.4275 common shares per preferred share in accordance with the conversion terms in the Articles Supplementary.

Redemption of Series C Participating Preferred Shares

On April 5, 2018, the Company redeemed all 7,600,000 shares of the outstanding 5.5% Series C participating preferred shares through a conversion of those participating preferred shares into Class A common shares of beneficial interest, $0.01 par value, in accordance with the conversion terms in the Articles Supplementary. This resulted in 10,848,827 Class A common shares issued from the conversion, based on a conversion ratio of 1.4275 Class A common shares issued per Series C participating preferred share. The Operating Partnership also redeemed its corresponding Series C participating preferred units through a conversion into Class A units on April 5, 2018. The conversion ratio was calculated by dividing (1) the initial liquidation preference on the Series C participating preferred shares, as adjusted by an amount equal to 50% of the cumulative change in value of an index based on the purchase prices of single-family properties located in our top 20 markets (adjusted for a maximum 9.0% internal rate of return), plus unaccrued dividends by (2) the one-day volume weighted-average price (“VWAP”) of the Company’s Class A common shares on March 29, 2018, the date the Company delivered the required notice of redemption. As a result of the redemption, the Company will record a $32.2 million allocation of income to the Series C participating preferred shareholders in the second quarter of 2018, which represents the initial liquidation value of the Series C participating preferred shares in excess of the original equity carrying value of the Series C participating preferred shares as of the redemption date. The original equity carrying value of the Series C participating preferred shares was net of the initial bifurcated home price appreciation derivative liability and offering costs.


Distributions
 
During the quarter ended March 31, 2018, the Company's        The Company’s board of trustees declared the following distributions that totaled $0.05 per share onduring the Company's Class A and Class B common shares, $0.34 on the Company's 5.5% Series C participating preferred shares, $0.41 on the Company's 6.5% Series D perpetual preferred shares, $0.40 on the Company's 6.35% Series E perpetual preferred shares, $0.37 on the Company's 5.875% Series F perpetual preferred shares and $0.37 on the Company's 5.875% Series G perpetual preferred shares. During the quarter ended March 31, 2017, the Company's board of trustees declared distributions that totaled $0.05 per share on the Company's Class A and Class B common shares, $0.31 on the Company's5.0% Series A participating preferred shares, $0.31 on the Company's5.0% Series B participating preferred shares, $0.34 on the Company's5.5% Series C participating preferred shares, $0.41 on the Company's 6.5% Series D perpetual preferred shares and $0.40 on the Company's 6.35% Series E perpetual preferred shares.respective quarters. The Operating Partnership funds the payment of distributions, and the board of trustees declared an equivalent amount of distributions were declared on the corresponding Operating Partnership units.
For the Three Months Ended
SecurityMarch 31, 2020March 31, 2019
Class A and Class B common shares  $0.05  $0.05  
6.500% Series D perpetual preferred shares  0.41  0.41  
6.350% Series E perpetual preferred shares  0.40  0.40  
5.875% Series F perpetual preferred shares  0.37  0.37  
5.875% Series G perpetual preferred shares  0.37  0.37  
6.250% Series H perpetual preferred shares  0.39  0.39  

Noncontrolling Interest


Noncontrolling interest as reflected in the Company’s condensed consolidated balance sheets primarily consists of the interests held by former American Homes 4 Rent, LLC ("(“AH LLC"LLC”) members in units in the Operating Partnership. Former AH LLC members owned 54,276,644,51,429,990, or approximately 16.0% and 15.9%14.6%, of the total 340,354,889352,977,664 and 342,099,865352,769,654 Class A units in the Operating Partnership as of March 31, 2018,2020 and December 31, 2017,2019, respectively. Noncontrolling interest also includes interests held

by non-affiliates in Class A units in the Operating Partnership. Non-affiliate Class A unitholders owned 1,073,509,596,990, or approximately 0.3%0.2%, of the total 340,354,889352,977,664 and 342,099,865352,769,654 Class A units in the Operating Partnership as of March 31, 2018,2020 and December 31, 2017,2019, respectively. Also included in noncontrolling interest is the outside ownership interest in a consolidated subsidiary of the Operating Partnership.

The following table summarizes the income or loss allocated to noncontrolling interests as reflected in the Company's condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in thousands):
 For the Three Months Ended
 March 31, 2018 March 31, 2017
Net income (loss) allocated to Class A units$1,125
 $(339)
Net (loss) income allocated to noncontrolling interest in a consolidated subsidiary(11) 38
 $1,114
 $(301)
Noncontrolling interest as reflected in the Operating Partnership's condensed consolidated balance sheets consists solely of the outside ownership interest in a consolidated subsidiary of the Operating Partnership. Income and loss allocated to the Operating Partnership's noncontrolling interest is reflected in noncontrolling interest within the Operating Partnership's condensed consolidated statements of operations. The Operating Partnership units owned by former AH LLC members and non-affiliates that are reflected as noncontrolling interest in the Company'sCompany’s condensed consolidated balance sheets are reflected as limited partner capital in the Operating Partnership'sPartnership’s condensed consolidated balance sheets.



22

Note 11. Share-Based Compensation

2012 Equity Incentive Plan


The Company'sCompany’s employees are compensated through the Operating Partnership, including share-based compensation. When the Company issues Class A common shares under the 2012 Equity Incentive Plan (the "Plan"“Plan”), the Operating Partnership issues an equivalent number of Class A units to AH4R.AH4R and non-management members of our board of trustees.
 
During        Restricted stock units (“RSU”) granted to employees during the three months ended March 31, 20182020 vest over a three-year service period, and 2017, the Company granted stock options for 140,000 and 385,200 Class A common shares, respectively, and 304,400 and 174,000 restricted stock units, respectively,RSUs granted to certain employees ofduring the Company under the Plan. Thethree months ended March 31, 2019 vest over a four-year service period. RSUs granted to non-management trustees vest over a one-year service period. Stock options and restricted stock units granted during the three months ended March 31, 2018 and 2017, vest over four2019 expire 10 years and the options expire 10 years from the date of grant.
 
The following table summarizes stock option activity under the Plan for the three months ended March 31, 20182020 and 2017:2019:

For the Three Months Ended
Shares Weighted-
Average
Exercise Price		 Weighted-
Average
Remaining
Contractual 
Life (in years)		 Aggregate
Intrinsic
Value (1)
(in thousands)		 March 31, 2020March 31, 2019
Options outstanding at January 1, 20172,826,500
 $15.69
 7.6 $14,956
Options outstanding at beginning of periodOptions outstanding at beginning of period1,529,800  2,252,275  
Granted385,200
 23.38
    
Granted—  20,000  
Exercised(16,000) 16.07
   117
Exercised(83,600) (5,000) 
Forfeited(5,000) 16.48
    
Forfeited(1,600) (9,850) 
Options outstanding at March 31, 20173,190,700
 $16.62
 7.7 $20,404
Options exercisable at March 31, 20171,660,750
 $15.84
 6.9 $11,824
     
Options outstanding at January 1, 20183,052,450
 $16.65
 6.9 $16,421
Granted140,000
 19.40
    
Exercised(7,500) 16.62
   22
Forfeited(10,000) 17.83
    
Options outstanding at March 31, 20183,174,950
 $16.76
 6.7 $11,748
Options exercisable at March 31, 20182,272,675
 $16.16
 6.1 $9,213
Options outstanding at end of periodOptions outstanding at end of period1,444,600  2,257,425  
Options exercisable at end of periodOptions exercisable at end of period1,296,750  1,867,025  

(1)Intrinsic value for activities other than exercises is defined as the difference between the grant price and the market value on the last trading day of the period for those stock options where the market value is greater than the exercise price. For exercises, intrinsic value is defined as the difference between the grant price and the market value on the date of exercise.


The following table summarizes RSU activity under the Black-Scholes Option Pricing Model inputs usedPlan for valuation of the stock options for Class A common shares granted during the three months ended March 31, 20182020 and 2017:2019:

 2018 2017
Weighted-average fair value$3.03
 $3.82
Expected term (years) 7.0
  7.0
Dividend yield 3.0%  3.0%
Volatility 18.9%  21.3%
Risk-free interest rate 2.8%  2.2%
For the Three Months Ended
 March 31, 2020March 31, 2019
RSUs outstanding at beginning of period599,109  372,375  
Units awarded422,285  317,950  
Units vested(181,213) (110,650) 
Units forfeited(19,010) (5,400) 
RSUs outstanding at end of period821,171  574,275  

        
The Company’s noncash share-based compensation expense relating to corporate administrative employees is included in general and administrative expense and the noncash share-based compensation relating to centralized and field property management employees is included in property management expenses. The following table summarizes the activity that relates to the Company’s restricted stock units under the Plannoncash share-based compensation expense for the three months ended March 31, 20182020 and 2017:2019 (in thousands):

For the Three Months Ended
March 31, 2020March 31, 2019
General and administrative expense$1,369  $659  
Property management expenses439  293  
Total noncash share-based compensation expense$1,808  $952  


23
 2018 2017
Restricted stock units at beginning of period243,875
 130,150
Units awarded304,400
 174,000
Units vested(79,525) (41,975)
Units forfeited(5,625) (1,750)
Restricted stock units at end of period463,125

260,425

For the three months ended March 31, 2018 and 2017, total non-cash share-based compensation expense related to stock options and restricted stock units was $1.0 million and $0.9 million, respectively, of which $0.6 million and $0.5 million, respectively, related to corporate administrative employees and was included in general and administrative expense and $0.4 million related to centralized and field property management employees and was included in property management expenses within the condensed consolidated statements of operations.



Note 11.12. Earnings per Share / Unit
 
American Homes 4 Rent


The following table reflects the Company'sCompany’s computation of net income or loss per common share on a basic and diluted basis for the three months ended March 31, 20182020 and 20172019 (in thousands, except share and per share data):
For the Three Months Ended
 March 31, 2020March 31, 2019
Numerator:  
Net income$37,527  $33,091  
Less:
Noncontrolling interest3,501  3,026  
Dividends on preferred shares13,782  13,782  
Allocation to participating securities (1)
54  31  
Numerator for income per common share–basic and diluted$20,190  $16,252  
Denominator:
Weighted-average common shares outstanding–basic300,813,069  296,833,755  
Effect of dilutive securities:
Share-based compensation plan (2)
491,999  611,186  
Weighted-average common shares outstanding–diluted (3)
301,305,068  297,444,941  
Net income per common share:
Basic$0.07  $0.05  
Diluted$0.07  $0.05  
 For the Three Months Ended
March 31,
 2018 2017
Numerator: 
  
Net income$21,525
 $11,796
Less:   
Noncontrolling interest1,114
 (301)
Dividends on preferred shares14,597
 13,587
Allocation to participating securities (1)23
 —
Numerator for income (loss) per common share—basic and diluted$5,791
 $(1,490)
    
Denominator:   
Weighted-average common shares outstanding—basic286,183,429
 244,391,368
Effect of dilutive securities:   
Share-based compensation plan (2)544,434
 —
Weighted-average common shares outstanding—diluted (3)286,727,863
 244,391,368
    
Net income (loss) per common share:   
Basic$0.02
 $(0.01)
Diluted$0.02
 $(0.01)
(1)Unvested restricted stock units that have nonforfeitable rights to participate in dividends declared on common stock are accounted for as participating securities and reflected in the calculation of basic and diluted earnings per share using the two-class method.
(1)Participating securities include unvested restricted stock units that have nonforfeitable rights to participate in dividends declared on common stock.
(2)Reflects the effect of potentially dilutive securities issuable upon the assumed vesting / exercise of restricted stock units and stock options.
(3)The computation of diluted earnings per share for the three months ended March 31, 2018 and 2017, excludes an aggregate of 17,221,189 and 27,790,165 potentially dilutive securities, respectively, which include a combination of participating preferred shares, exchangeable senior notes, common shares issuable upon exercise of stock options and unvested restricted stock units, because their effect would have been antidilutive to the respective periods. 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 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.

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

(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 1-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.

American Homes 4 Rent, L.P.


The following table reflects the Operating Partnership'sPartnership’s computation of net income or loss per common unit on a basic and diluted basis for the three months ended March 31, 20182020 and 20172019 (in thousands, except unit and per unit data):
For the Three Months Ended
 March 31, 2020March 31, 2019
Numerator:  
Net income$37,527  $33,091  
Less:
Preferred distributions13,782  13,782  
Allocation to participating securities (1)
54  31  
Numerator for income per common unit–basic and diluted$23,691  $19,278  
Denominator:
Weighted-average common units outstanding–basic352,840,049  352,000,581  
Effect of dilutive securities:
Share-based compensation plan (2)
491,999  611,186  
Weighted-average common units outstanding–diluted353,332,048  352,611,767  
Net income per common unit:
Basic$0.07  $0.05  
Diluted$0.07  $0.05  
(1)Unvested restricted stock units that have nonforfeitable rights to participate in dividends declared on common stock are accounted for as participating securities and reflected in the calculation of basic and diluted earnings per share using the two-class method.
(2)Reflects the effect of potentially dilutive securities issuable upon the assumed exercise of stock options.

24

 For the Three Months Ended
March 31,
 2018 2017
Numerator: 
  
Net income$21,525
 $11,796
Less:   
Noncontrolling interest(11) 38
Preferred distributions14,597
 13,587
Allocation to participating securities (1)23
 —
Numerator for income (loss) per common unit—basic and diluted$6,916
 $(1,829)
    
Denominator:   
Weighted-average common units outstanding—basic341,533,582
 299,947,328
Effect of dilutive securities:   
Share-based compensation plan (2)544,434
 —
Weighted-average common units outstanding—diluted (3)342,078,016
 299,947,328
    
Net income (loss) per common unit:   
Basic$0.02
 $(0.01)
Diluted$0.02
 $(0.01)


(1)Participating securities include unvested restricted stock units that have nonforfeitable rights to participate in dividends declared on common stock.
(2)Reflects the effect of potentially dilutive securities issuable upon the assumed vesting / exercise of restricted stock units and stock options.
(3)The computation of diluted earnings per unit for the three months ended March 31, 2018 and 2017, excludes an aggregate of 17,221,189 and 27,790,165 potentially dilutive securities, respectively, which include a combination of participating preferred units, exchangeable senior notes, common units issuable upon exercise of stock options and unvested restricted stock units, because their effect would have been antidilutive to the respective periods.

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 approximate fair value because of the short maturity of these amounts.

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

        The following table displays the carrying values and fair values of our debt instruments as of March 31, 2020 and December 31, 2019 (in thousands):
March 31, 2020December 31, 2019
Carrying ValueFair ValueCarrying ValueFair Value
AH4R 2014-SFR2 securitization$478,742  $489,685  $479,706  $491,302  
AH4R 2014-SFR3 securitization493,774  508,650  495,029  510,486  
AH4R 2015-SFR1 securitization518,530  532,012  519,576  534,531  
AH4R 2015-SFR2 securitization449,823  466,022  450,733  466,558  
Total asset-backed securitizations1,940,869  1,996,369  1,945,044  2,002,877  
2028 unsecured senior notes, net493,786  508,780  493,589  531,870  
2029 unsecured senior notes, net395,005  392,100  394,864  446,728  
Total unsecured senior notes, net888,791  900,880  888,453  978,598  
Revolving credit facility105,000  105,000  —  —  
Total debt$2,934,660  $3,002,249  $2,833,497  $2,981,475  

Note 14. Related Party Transactions

        As of March 31, 2020 and December 31, 2019, affiliates owned approximately 14.9% and 13.6%, respectively, of the Company’s outstanding Class A common shares. On a fully-diluted basis, affiliates held (including consideration of 635,075 Class B common shares and 51,272,165 Class A units as of March 31, 2020 and December 31, 2019) an approximate 27.4% and 26.3% interest as of March 31, 2020 and December 31, 2019, respectively.

American Homes 4 Rent

        As of March 31, 2020, the Company had $8.5 million of receivables related to unconsolidated joint ventures, which were included in escrow deposits, prepaid expenses and other assets on the Company’s condensed consolidated balance sheets. As of December 31, 2019, the Company had a $4.6 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 March 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 $8.5 million of receivables related to unconsolidated joint ventures, which were included in escrow deposits, prepaid expenses and other assets on the Operating Partnership’s condensed consolidated balance sheets. As of December 31, 2019, the Operating Partnership had a receivable from affiliates of $25.7 million related to the asset-backed securitization certificates held by AH4R, which was included in amounts due from affiliates on the Operating Partnership’s condensed consolidated balance sheets, and had a $4.6 million payable related to accrued common distributions to affiliates, which was included in amounts payable to affiliates on the Operating Partnership’s condensed consolidated balance sheets.


25

Note 12.15. Commitments and Contingencies
 
As of March 31, 2018,2020, the Company had commitments to acquire 219258 single-family properties for an aggregate purchase price of $58.6$71.3 million,, as well as $42.4$38.8 million in land purchase commitments that relate to both third partythird-party developer agreements and land for our internal construction program.AMH Development Program. As of December 31, 2017,2019, the Company had commitments to acquire 520289 single-family properties for an aggregate purchase price of $128.1$75.1 million,, as well as $24.0$44.3 million in land purchase commitments that relate to both third partythird-party developer agreements and land for our internal construction program.AMH Development Program.


As of March 31, 2018,2020 and December 31, 2017,2019, the Company had sales in escrow for approximately 36109 and 69305 of our single-family properties, respectively, for aggregate selling prices of $5.1$25.9 million and $7.0$57.5 million, respectively.


        As of March 31, 2020 and December 31, 2019, the Company, as a condition for entering into some of its development contracts, had outstanding surety bonds of approximately $23.4 million and $14.5 million, respectively.

We are involved in various legal and administrative proceedings that are incidental to our business. We do not believe these matters will not have a materialmaterially adverse effect on our financial position or results of operations upon resolution.


Radian Group Inc. (“Radian”), the indirect parent company of Green River Capital LLC (“GRC”), which has been a service provider that provided certain broker price opinions (“BPO”) to us, disclosed in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017, that GRC had received a letter in March 2017 from the staff of the SEC stating that it is conducting an investigation captioned “In the Matter of Certain Single Family Rental Securitizations” and requesting information from market participants. Radian disclosed that the letter asked GRC to provide information regarding BPOs that GRC provided on properties included in single family rental securitization transactions (“Securitizations”). On September 13, 2017, we received a letter from the staff of the SEC stating that it is conducting an investigation captioned “In the Matter of Certain Single Family Rental Securitizations.” The letter enclosed a subpoena that requests the production of certain documents and communications related to our Securitizations, including, without limitation, those related to BPOs provided by GRC on properties included in Securitizations. The letter does not allege any violation of law and we are cooperating with the SEC. We understand that other transaction parties in

Securitizations have received requests in this matter. We do not believe this matter will have a material adverse impact on our financial position or results of operations upon resolution.

On January 16, 2018, we received a letter from the staff of the SEC stating that it is conducting an investigation captioned “Trading in Silver Bay Realty Trust Corp.” The letter enclosed a subpoena that requests us to produce certain documents and communications, including those related to our communications and agreements with Silver Bay Realty Trust Corp. (“Silver Bay”), communications with Silver Bay’s financial advisor, and our purchases, sales and holdings of Silver Bay stock. We purchased Silver Bay stock in 2016 and 2017 and then sold all of our holdings in 2017 for a profit of approximately $3.0 million. We intend to cooperate fully with the SEC in connection with this matter. We do not believe this matter will have a material adverse impact on our financial position or results of operations upon resolution.

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 approximate fair value because of the short maturity of these amounts. The Company’s participating preferred shares derivative liability is the only financial instrument recorded at fair value on a recurring basis in the consolidated financial statements as of March 31, 2018.

Our revolving credit facility, term loan facility, asset-backed securitizations and secured note payable are also financial instruments, which are classified as Level 3 in the fair value hierarchy as they were estimated by using unobservable inputs. We estimated their fair values by modeling the contractual cash flows required under the instruments and discounting them back to their present values using estimates of current market rates. Our unsecured senior notes and exchangeable senior notes are also financial instruments, which are classified as Level 2 in the fair value hierarchy as their fair values are estimated using observable inputs, based on the market value of the last trade at the end of the period.

The following table displays the carrying values and fair values of our debt instruments as of March 31, 2018, and December 31, 2017 (in thousands):
 March 31, 2018 December 31, 2017
 Carrying Value Fair Value Carrying Value Fair Value
AH4R 2014-SFR2 securitization$495,043
 $500,863
 $496,326
 $504,730
AH4R 2014-SFR3 securitization510,721
 518,292
 512,041
 521,252
AH4R 2015-SFR1 securitization536,341
 541,689
 537,723
 544,592
AH4R 2015-SFR2 securitization465,940
 472,594
 467,267
 475,832
Total asset-backed securitizations (1)2,008,045
 2,033,438
 2,013,357
 2,046,406
Unsecured senior notes, net (1) (2)497,245
 491,395
 —
 —
Exchangeable senior notes, net (2)112,597
 131,968
 111,697
 147,462
Secured note payable48,604
 48,652
 48,859
 49,027
Revolving credit facility (1) (3)—
 —
 140,000
 140,000
Term loan facility (1) (4)200,000
 200,000
 200,000
 200,000
Total debt$2,866,491
 $2,905,453
 $2,513,913
 $2,582,895

(1)The carrying values of the asset-backed securitizations, unsecured senior notes, revolving credit facility and term loan facility exclude $34.8 million, $5.0 million, $8.3 million and $1.9 million, respectively, of unamortized deferred financing costs as of March 31, 2018, and exclude $36.0 million, zero, $8.8 million and $2.0 million, respectively, of unamortized deferred financing costs as of December 31, 2017.
(2)The carrying values of the unsecured senior notes, net and exchangeable senior notes, net are presented net of unamortized discounts.
(3)As our revolving credit facility bears interest at a floating rate based on an index plus a spread, which is a LIBOR rate plus a margin ranging from 0.825% to 1.55% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.00% to 0.55%, management believes that the carrying value of the revolving credit facility reasonably approximates fair value.
(4)As our term loan facility bears interest at a floating rate based on an index plus a spread, which is a LIBOR rate plus a margin ranging from 0.90% to 1.75% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.00% to 0.75%, management believes that the carrying value of the term loan facility reasonably approximates fair value.

Valuation of the participating preferred shares derivative liability considers scenarios in which the participating preferred shares would be redeemed or converted into Class A common shares by the Company and the subsequent payoffs under those

scenarios. The valuation also considers certain variables such as the risk-free rate matching the assumed timing of either redemption or conversion, volatility of the underlying home price appreciation index, dividend payments, conversion rates, the assumed timing of either redemption or conversion and an assumed drift factor in home price appreciation across certain metropolitan statistical areas, or MSAs, as outlined in the agreement. The Series C participating preferred shares were redeemed through a conversion into Class A common shares on April 5, 2018, and the related participating preferred shares derivative liability was therefore remeasured based on the actual liquidation value at March 31, 2018 (see Note 10).

In October 2017, in anticipation of the issuance of the 2028 Notes and in order to hedge interest rate risk, the Operating Partnership entered into a treasury lock agreement on a notional amount of $350.0 million, based on the 10-year treasury note rate at the time. The treasury lock was designated as a cash flow hedging instrument and had a fair value of $0.1 million as of December 31, 2017, which was included in escrow deposits, prepaid expenses and other assets within the consolidated balance sheets, with a corresponding unrealized gain reflected in other comprehensive income. The treasury lock was settled upon the issuance of the 2028 Notes in February 2018 and resulted in a $9.6 million gain that was recorded in other comprehensive income and will be reclassified into earnings as a reduction of interest expense over the term of the 2028 Notes. 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.

The following tables set forth the fair values of the participating preferred shares derivative liability and treasury lock as of March 31, 2018, and December 31, 2017 (in thousands):
  March 31, 2018
Description Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
Liabilities:  
  
  
  
Participating preferred shares derivative liability $—
 $—
 $28,258
 $28,258
  December 31, 2017
Description Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Total
Assets:  
  
  
  
Treasury lock $—
 $75
 $—
 $75
         
Liabilities:  
  
  
  
Participating preferred shares derivative liability $—
 $—
 $29,470
 $29,470

The following tables present changes in the fair values of our Level 3 financial instruments that are measured on a recurring basis with changes in fair value recognized in remeasurement of participating preferred shares within the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in thousands):
Description January 1, 2018 Remeasurement included in earnings March 31, 2018
Liabilities:  
  
  
Participating preferred shares derivative liability $29,470
 $(1,212) $28,258
Description January 1, 2017 Remeasurement included in earnings March 31, 2017
Liabilities:  
  
  
Participating preferred shares derivative liability $69,810
 $5,410
 $75,220

Note 14. Condensed Consolidating Financial Statements

American Homes 4 Rent, L.P.

The 2028 Notes issued by American Homes 4 Rent, L.P. (the “Parent Company”) have been initially guaranteed by American Residential Properties OP, L.P. (the “Guarantor Subsidiary”), a 100% owned subsidiary of the Parent Company, but such guarantee will be automatically released at the time that the Subsidiary Guarantor no longer guarantees our credit facility. The Parent Company’s other subsidiaries, including, but not limited to, the subsidiaries that own substantially all of our properties (collectively, the “Combined Non-Guarantor Subsidiaries”), have not provided a guarantee of the 2028 Notes. Pursuant to Rule 3-10 of Regulation S-X, the following condensed consolidating financial information is provided for the Operating Partnership, including the Parent Company, the Guarantor Subsidiary and the Combined Non-Guarantor Subsidiaries. This summarized financial information may not necessarily be indicative of the results of operations or financial position had the Parent Company, the Guarantor Subsidiary or the Combined Non-Guarantor Subsidiaries operated as independent entities. All intercompany balances and transactions between the Parent Company, the Guarantor Subsidiary and the Non-Guarantor Subsidiaries have been eliminated as shown in the “Consolidating Adjustments” column. All assets and liabilities have been allocated to the Parent Company, the Guarantor Subsidiary and the Combined Non-Guarantor Subsidiaries based on legal entity ownership.


Condensed Consolidating Balance Sheets
(Amounts in thousands)
 As of March 31, 2018
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Assets         
Single-family properties, net$—
 $934
 $8,168,146
 $—
 $8,169,080
Cash and cash equivalents174,161
 —
 29,722
 —
 203,883
Restricted cash29,071
 30
 127,171
 —
 156,272
Rent and other receivables, net147
 3
 27,965
 —
 28,115
Intercompany receivables218,777
 —
 —
 (218,777) —
Escrow deposits, prepaid expenses and other assets, including due from affiliates58,483
 163
 208,727
 —
 267,373
Investments in subsidiaries5,979,193
 116,533
 —
 (6,095,726) —
Deferred costs and other intangibles, net9,001
 —
 4,030
 —
 13,031
Goodwill120,279
 —
 —
 —
 120,279
Total assets$6,589,112
 $117,663
 $8,565,761
 $(6,314,503) $8,958,033
          
Liabilities         
Revolving credit facility$—
 $—
 $—
 $—
 $—
Term loan facility, net198,132
 —
 —
 —
 198,132
Asset-backed securitizations, net—
 —
 1,973,242
 —
 1,973,242
Unsecured senior notes, net492,282
 —
 —
 —
 492,282
Exchangeable senior notes, net—
 112,597
 —
 —
 112,597
Secured note payable—
 —
 48,604
 —
 48,604
Accounts payable and accrued expenses33,399
 3,661
 225,207
 —
 262,267
Amounts payable to affiliates2,001
 —
 —
 —
 2,001
Intercompany payables—
 8,391
 210,386
 (218,777) —
Participating preferred units derivative liability28,258
 —
 —
 —
 28,258
Total liabilities754,072
 124,649
 2,457,439
 (218,777) 3,117,383
          
Capital         
Partners' capital:         
General partner:         
Common units4,198,313
 (6,986) 6,109,682
 (6,095,726) 4,205,283
Preferred units901,318
 —
 —
 —
 901,318
Limited partner:         
Common units725,901
 —
 —
 —
 725,901
Accumulated other comprehensive income9,508
 —
 —
 —
 9,508
Total partners' capital:5,835,040
 (6,986) 6,109,682
 (6,095,726) 5,842,010
          
Noncontrolling interest—
 —
 (1,360) —
 (1,360)
Total capital5,835,040
 (6,986) 6,108,322
 (6,095,726) 5,840,650
          
Total liabilities and capital$6,589,112
 $117,663
 $8,565,761
 $(6,314,503) $8,958,033


Condensed Consolidating Balance Sheets (continued)
(Amounts in thousands)
 As of December 31, 2017
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Assets         
Single-family properties, net$—
 $1,732
 $8,063,248
 $—
 $8,064,980
Cash and cash equivalents22,157
 —
 23,999
 —
 46,156
Restricted cash14,742
 31
 121,894
 —
 136,667
Rent and other receivables, net114
 57
 29,973
 —
 30,144
Intercompany receivables154,621
 —
 —
 (154,621) —
Escrow deposits, prepaid expenses and other assets, including due from affiliates59,271
 164
 138,082
 —
 197,517
Investments in subsidiaries5,889,146
 115,303
 —
 (6,004,449) —
Deferred costs and other intangibles, net9,652
 —
 3,373
 —
 13,025
Goodwill120,279
 —
 —
 —
 120,279
Total assets$6,269,982
 $117,287
 $8,380,569
 $(6,159,070) $8,608,768
          
Liabilities         
Revolving credit facility$140,000
 $—
 $—
 $—
 $140,000
Term loan facility, net198,023
 —
 —
 —
 198,023
Asset-backed securitizations, net—
 —
 1,977,308
 —
 1,977,308
Exchangeable senior notes, net—
 111,697
 —
 —
 111,697
Secured note payable—
 —
 48,859
 —
 48,859
Accounts payable and accrued expenses27,566
 2,757
 192,544
 —
 222,867
Amounts payable to affiliates4,720
 —
 —
 —
 4,720
Intercompany payables—
 8,428
 146,193
 (154,621) —
Participating preferred units derivative liability29,470
 —
 —
 —
 29,470
Total liabilities399,779
 122,882
 2,364,904
 (154,621) 2,732,944
          
Capital         
Partners' capital:         
General partner:         
Common units4,241,266
 (5,595) 6,017,014
 (6,004,449) 4,248,236
Preferred units901,318
 —
 —
 —
 901,318
Limited partner:         
Common units727,544
 —
 —
 —
 727,544
Accumulated other comprehensive income75
 —
 —
 —
 75
Total partners' capital:5,870,203
 (5,595) 6,017,014
 (6,004,449) 5,877,173
          
Noncontrolling interest—
 —
 (1,349) —
 (1,349)
Total capital5,870,203
 (5,595) 6,015,665
 (6,004,449) 5,875,824
          
Total liabilities and capital$6,269,982
 $117,287
 $8,380,569
 $(6,159,070) $8,608,768


Condensed Consolidating Statements of Operations
(Amounts in thousands)
 For the Three Months Ended March 31, 2018
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Revenues:         
Rents from single-family properties$—
 $22
 $218,001
 $—
 $218,023
Fees from single-family properties—
 —
 2,833
 —
 2,833
Tenant charge-backs—
 3
 35,804
 —
 35,807
Other334
 —
 1,007
 —
 1,341
Total revenues334
 25
 257,645
 —
 258,004
          
Expenses:         
Property operating expenses—
 3
 100,984
 —
 100,987
Property management expenses—
 3
 18,984
 —
 18,987
General and administrative expense5,937
 1
 3,293
 —
 9,231
Interest expense6,257
 1,835
 21,209
 —
 29,301
Acquisition fees and costs expensed—
 —
 1,311
 —
 1,311
Depreciation and amortization297
 —
 79,006
 —
 79,303
Hurricane-related charges, net—
 —
 —
 —
 —
Other expense95
 9
 723
 —
 827
Total expenses12,586
 1,851
 225,510
 —
 239,947
          
Intercompany income451
 —
 57
 (508) —
Intercompany expenses(57) —
 (451) 508
 —
Gain on sale of single-family properties and other, net—
 435
 1,821
 —
 2,256
Remeasurement of participating preferred units1,212
 —
 —
 —
 1,212
Equity in income of subsidiaries32,182
 10,232
 —
 (42,414) —
          
Net income21,536
 8,841
 33,562
 (42,414) 21,525
          
Noncontrolling interest—
 —
 (11) —
 (11)
Preferred distributions14,597
 —
 —
 —
 14,597
Redemption of participating preferred units—
 —
 —
 —
 —
          
Net income attributable to common unitholders$6,939
 $8,841
 $33,573
 $(42,414) $6,939


Condensed Consolidating Statements of Operations (continued)
(Amounts in thousands)
 For the Three Months Ended March 31, 2017
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Revenues:         
Rents from single-family properties$—
 $102
 $201,005
 $—
 $201,107
Fees from single-family properties—
 1
 2,603
 —
 2,604
Tenant charge-backs—
 7
 28,366
 —
 28,373
Other386
 —
 1,284
 —
 1,670
Total revenues386
 110
 233,258
 —
 233,754
          
Expenses:         
Property operating expenses—
 48
 83,257
 —
 83,305
Property management expenses—
 6
 17,472
 —
 17,478
General and administrative expense4,994
 2
 4,299
 —
 9,295
Interest expense3,328
 1,774
 26,787
 —
 31,889
Acquisition fees and costs expensed355
 —
 741
 —
 1,096
Depreciation and amortization409
 2
 73,542
 —
 73,953
Other99
 1
 1,458
 —
 1,558
Total expenses9,185
 1,833
 207,556
 —
 218,574
          
Intercompany income76
 —
 148
 (224) —
Intercompany expenses(148) —
 (76) 224
 —
Gain on sale of single-family properties and other, net3,031
 (1,460) 455
 —
 2,026
Remeasurement of participating preferred units(5,410) —
 —
 —
 (5,410)
Equity in income of subsidiaries23,008
 9,237
 —
 (32,245) —
          
Net income (loss)11,758
 6,054
 26,229
 (32,245) 11,796
          
Noncontrolling interest—
 —
 38
 —
 38
Preferred distributions13,587
 —
 —
 —
 13,587
          
Net (loss) income attributable to common unitholders$(1,829) $6,054
 $26,191
 $(32,245) $(1,829)


Condensed Consolidating Statements of Comprehensive Income (Loss)
(Amounts in thousands)
 For the Three Months Ended March 31, 2018
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Net income$21,536
 $8,841
 $33,562
 $(42,414) $21,525
Other comprehensive income:         
Gain on cash flow hedging instrument:         
Gain on settlement of cash flow hedging instrument9,553
 —
 —
 —
 9,553
Reclassification adjustment for amortization of interest expense included in net income(120) —
 —
 —
 (120)
Other comprehensive income9,433
 —
 —
 —
 9,433
Comprehensive income30,969
 8,841
 33,562
 (42,414) 30,958
Comprehensive loss attributable to noncontrolling interests—
 —
 (11) —
 (11)
Preferred distributions14,597
 —
 —
 —
 14,597
Comprehensive income attributable to common unitholders$16,372
 $8,841
 $33,573
 $(42,414) $16,372

 For the Three Months Ended March 31, 2017
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Net income$11,758
 $6,054
 $26,229
 $(32,245) $11,796
Other comprehensive loss:         
Gain on cash flow hedging instrument:         
Reclassification adjustment for amortization of interest expense included in net income—
 —
 (28) —
 (28)
Unrealized gain on investment in equity securities:         
Reclassification adjustment for realized gain included in net income(67) —
 —
 —
 (67)
Other comprehensive loss(67) —
 (28) —
 (95)
Comprehensive income11,691
 6,054
 26,201
 (32,245) 11,701
Comprehensive income attributable to noncontrolling interests—
 —
 38
 —
 38
Preferred distributions13,587
 —
 —
 —
 13,587
Comprehensive (loss) income attributable to common unitholders$(1,896) $6,054
 $26,163
 $(32,245) $(1,924)

Condensed Consolidating Statements of Cash Flows
(Amounts in thousands)
 For the Three Months Ended March 31, 2018
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Operating activities         
Net cash (used for) provided by operating activities$(68,398) $12
 $180,877
 $—
 $112,491
          
Investing activities         
Cash paid for single-family properties—
 —
 (149,674) —
 (149,674)
Change in escrow deposits for purchase of single-family properties—
 —
 (4,115) —
 (4,115)
Net proceeds received from sales of single-family properties and other—
 1,422
 10,545
 —
 11,967
Proceeds received from hurricane-related insurance claims—
 —
 4,000
 —
 4,000
Distributions from joint ventures180
 —
 1,050
 —
 1,230
(Investment in) return of investment in subsidiaries(57,488) 9,002
 —
 48,486
 —
Initial renovations to single-family properties—
 —
 (20,400) —
 (20,400)
Recurring and other capital expenditures for single-family properties—
 (205) (10,962) —
 (11,167)
Other purchases of productive assets—
 —
 (53,472) —
 (53,472)
Net cash (used for) provided by investing activities(57,308) 10,219
 (223,028) 48,486
 (221,631)
          
Financing activities         
Repurchase of Class A units(34,969) —
 —
 —
 (34,969)
Share-based compensation payments, net(414) —
 —
 —
 (414)
Payments on asset-backed securitizations—
 —
 (5,312) —
 (5,312)
Proceeds from revolving credit facility100,000
 —
 —
 —
 100,000
Payments on revolving credit facility(240,000) —
 —
 —
 (240,000)
Payments on secured note payable—
 —
 (255) —
 (255)
Proceeds from unsecured senior notes, net of discount497,210
 —
 —
 —
 497,210
Settlement of cash flow hedging instrument9,628
 —
 —
 —
 9,628
Intercompany financing and distributions to parent—
 (10,232) 58,718
 (48,486) —
Distributions to common unitholders(19,794) —
 —
 —
 (19,794)
Distributions to preferred unitholders(14,597) —
 —
 —
 (14,597)
Deferred financing costs paid(5,025) —
 —
 —
 (5,025)
Net cash provided by (used for) financing activities292,039
 (10,232) 53,151
 (48,486) 286,472
          
Net increase (decrease) in cash, cash equivalents and restricted cash166,333
 (1) 11,000
 —
 177,332
Cash, cash equivalents and restricted cash, beginning of period36,899
 31
 145,893
 —
 182,823
Cash, cash equivalents and restricted cash, end of period$203,232
 $30
 $156,893
 $—
 $360,155
          
Supplemental cash flow information         
Cash payments for interest, net of amounts capitalized$(2,708) $—
 $(19,982) $—
 $(22,690)
          
Supplemental schedule of noncash investing and financing activities         
Accounts payable and accrued expenses related to property acquisitions, renovations and construction$—
 $(12) $9,387
 $—
 $9,375
Transfers of completed homebuilding deliveries to properties$—
 $—
 $8,693
 $—
 $8,693
Accrued distributions to affiliates$(2,719) $—
 $—
 $—
 $(2,719)
Accrued distributions to non-affiliates$25
 $—
 $—
 $—
 $25


Condensed Consolidating Statements of Cash Flows (continued)
(Amounts in thousands)
 For the Three Months Ended March 31, 2017
 American Homes 4 Rent, L.P.
(Parent Company)		 American Residential Properties OP, L.P.
(Guarantor Subsidiary)		 Combined
Non-Guarantor
Subsidiaries		 Consolidating Adjustments Consolidated Total
Operating activities         
Net cash (used for) provided by operating activities$(7,999) $(4,271) $122,307
 $—
 $110,037
          
Investing activities         
Cash paid for single-family properties—
 —
 (73,622) —
 (73,622)
Change in escrow deposits for purchase of single-family properties—
 —
 (1,072) —
 (1,072)
Net proceeds received from sales of single-family properties and other14,265
 199
 16,842
 —
 31,306
Collections from mortgage financing receivables—
 —
 70
 —
 70
Distributions from unconsolidated joint ventures280
 —
 912
 —
 1,192
Collections from intercompany notes2,857
 —
 —
 (2,857) —
Return of investment in subsidiaries32,162
 15,757
 —
 (47,919) —
Initial renovations to single-family properties—
 (1,549) (6,128) —
 (7,677)
Recurring and other capital expenditures for single-family properties—
 —
 (6,484) —
 (6,484)
Other purchases of productive assets(6,657) —
 (7,053) —
 (13,710)
Net cash provided by (used for) investing activities42,907
 14,407
 (76,535) (50,776) (69,997)
          
Financing activities         
Proceeds from issuance of Class A units350,612
 —
 —
 —
 350,612
Payments of Class A unit issuance costs(236) —
 —
 —
 (236)
Proceeds from exercise of stock options, net of tax withholding258
 —
 —
 —
 258
Payments on asset-backed securitizations—
 —
 (6,231) —
 (6,231)
Proceeds from term loan facility25,000
 —
 —
 —
 25,000
Payments on secured note payable—
 —
 (245) —
 (245)
Payments on intercompany notes borrowed—
 —
 (2,857) 2,857
 —
Intercompany financing and distributions to parent—
 (9,237) (38,682) 47,919
 —
Distributions to common unitholders(14,993) —
 —
 —
 (14,993)
Distributions to preferred unitholders(13,587) —
 —
 —
 (13,587)
Net cash provided by (used for) financing activities347,054
 (9,237) (48,015) 50,776
 340,578
          
Net increase (decrease) in cash, cash equivalents and restricted cash381,962
 899
 (2,243) —
 380,618
Cash, cash equivalents and restricted cash, beginning of period76,913
 62
 173,266
 —
 250,241
Cash, cash equivalents and restricted cash, end of period$458,875
 $961
 $171,023
 $—
 $630,859
          
Supplemental cash flow information         
Cash payments for interest, net of amounts capitalized$(2,749) $(934) $(24,804) $—
 $(28,487)
          
Supplemental schedule of noncash investing and financing activities         
Accounts payable and accrued expenses related to property acquisitions and renovations$—
 $26
 $(977) $—
 $(951)
Note receivable related to a bulk sale of properties, net of discount$5,483
 $—
 $—
 $—
 $5,483

Note 15.16. Subsequent Events


COVID-19 Pandemic

        Subsequent to March 31, 2020, 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 second fiscal quarter and likely beyond. The extent to which our operations will be impacted will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the pandemic and actions by government authorities to contain the pandemic or treat its impact, among other things.

Subsequent Acquisitions

From April 1, 2018,2020 through April 30, 2018,2020, the Company acquired 52added 158 properties to its portfolio for an aggregate purchase pricea total cost of approximately $12.4$39.2 million, which included 16143 homes developed through our internalnew construction program.channel.


Redemption of Series C Participating Preferred SharesSubsequent Dispositions


On        From April 5, 2018,1, 2020 through April 30, 2020, the Company redeemed all 7,600,000 sharesdisposed of the outstanding 5.5% Series C participating preferred shares through a conversion60 properties for aggregate net proceeds of those participating preferred shares into Class A common shares of beneficial interest, $0.01 par value, in accordance with the conversion terms in the Articles Supplementary. This resulted in 10,848,827 Class A common shares issued from the conversion, based on a conversion ratio of 1.4275 Class A common shares issued per Series C participating preferred share. The Operating Partnership also redeemed its corresponding Series C participating preferred units through a conversion into Class A units on April 5, 2018 (see Note 10).approximately $13.8 million.



26
Declaration of Dividends

On May 3, 2018, the Company's board of trustees declared quarterly dividends of $0.05 per share on the Company's Class A and Class B common shares, $0.41 per share on the Company’s 6.5% Series D perpetual preferred shares, $0.40 per share on the Company’s 6.35% Series E perpetual preferred shares, $0.37 per share on the Company’s 5.875% Series F perpetual preferred shares, and $0.37 per share on the Company's 5.875% Series G perpetual preferred shares. The quarterly dividends are payable on July 2, 2018, to shareholders of record on June 15, 2018. The Operating Partnership funds the payment of distributions, and an equivalent amount of distributions were declared on the corresponding Operating Partnership units.




Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations
 
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.


Overview
 
We are a Maryland REIT focused on acquiring, developing, renovating, leasing and operating single-family homes as rental properties. The Operating Partnership is the entity through which we conduct substantially all of our business and own, directly or through subsidiaries, substantially all of our assets. We commenced operations in November 2012 to continue the investment activities of AH LLC, which was founded by our chairman, B. Wayne Hughes, in 2011 to take advantage of the dislocation in the single-family home market. Effective August 31, 2016, AH LLC was liquidated and its ownership interests in the Operating Partnership were distributed to its members.2012.
 
As of March 31, 2018,2020, we owned 51,84052,776 single-family properties in selected sub-markets of metropolitan statistical areas, or MSAs, in 22 states, including 1,892960 properties to be disposed,held for sale, compared to 51,23952,552 single-family properties in 22 states, including 3101,187 properties to be disposed,held for sale, as of December 31, 2017,2019, and 48,33652,923 single-family properties in 22 states, including 7041,793 properties to be disposed,held for sale as of March 31, 2017.2019. As of March 31, 2018,2020, we had commitments to acquire an additional 219258 single-family properties for an aggregate purchase price of $58.6 million.$71.3 million, as well as $38.8 million in purchase commitments that relate to both third-party developer agreements and land for our AMH Development Program. As of March 31, 2018, 47,677,2020, 49,029, or 95.5%94.6%, of our total properties (excluding properties to be disposed)held for sale) were leased,occupied, compared to 46,996,48,767, or 92.3%94.9%, of our total properties (excluding properties to be disposed)held for sale) as of December 31, 2017,2019, and 45,285,48,867, or 95.1%95.6%, of our total properties (excluding properties to be disposed)held for sale) as of March 31, 2017.2019. Also, as of March 31, 2020, the Company had an additional 876 properties held in unconsolidated joint ventures, representing a net increase of 68 properties, compared to 808 properties held in unconsolidated joint ventures as of December 31, 2019, and a net increase of 258 properties, compared to 618 properties held in unconsolidated joint ventures as of March 31, 2019. Our portfolio of single-family properties, including those held in our unconsolidated joint ventures, is internally managed through our proprietary property management platform.

COVID-19 Business Update

        Since the COVID-19 pandemic began towards the end of the first quarter, the Company has been able to maintain continuity in business operations through the use of its mobile technology enabled operating platform as it prioritizes the health and safety of its residents and employees.The Company has implemented comprehensive remote working policies for all corporate and field offices, and additional safety measures for field staff to ensure continuity of services, while protecting employees, residents and their families.

        The Company has waived late fees and halted evictions for nonpayment of rent for the months of April and May 2020 and is experiencing lower levels of resident move-outs with an April 2020 Same-Home portfolio monthly turnover rate of 3.0%, which compares to 3.2% in April 2019. The Company has also offered zero percent increases on renewal leases signed in April and May. New leasing activity continues without interruption, as the Company’s proprietary Let Yourself In℠ technology provides full functionality for prospective residents to tour homes, submit applications and execute leases while following social distancing guidelines, resulting in an April 2020 Same-Home portfolio Average Occupied Days Percentage of approximately 95.1%. Additionally, the Company collected 95% of April rents and collected 82% of May rents through May 5, 2020, which represents approximately 94% of rent typically collected during the first five calendar days of the month. Our Propertiesreported collections numbers reflect actual cash payments received, without application of security deposits, compared to our historic collection levels.

        As previously announced, the Company is continuing its temporary suspension of traditional acquisition channel and National Builder Program acquisitions. However, where in compliance with state and local mandates, the Company is continuing construction activity on its pipeline of internally developed built-for-rental homes.

        The extent to which the COVID-19 pandemic will ultimately impact us and our residents will depend on future developments which are highly uncertain. These include the scope, severity and duration of the pandemic and the direct and indirect economic effects of the pandemic and containment measures, among others.

        For more information on risks related to COVID-19, see Part II, “Item 1A. Risk Factors—We are subject to risks from the global pandemic associated with COVID-19 and we may in the future be subject to risks from other public health crises.”


27

Key OperatingSingle-Family Property and Leasing Metrics
 
The following table provides a summary of oursummarizes certain key single-family properties metrics as of March 31, 2018:2020:

Market
Number of Single-Family Properties (1)
% of Total Single-Family PropertiesGross Book Value (millions)% of Gross Book Value TotalAvg. Gross Book Value per PropertyAvg.
Sq. Ft.		Avg. Property Age (years)Avg. Year
Purchased
 Atlanta, GA4,809  9.3 %$867.6  9.0 %$180,405  2,161  17.52015
 Dallas-Fort Worth, TX4,319  8.3 %715.8  7.5 %165,729  2,117  16.02014
 Charlotte, NC3,703  7.1 %718.7  7.5 %194,074  2,097  15.92015
 Phoenix, AZ3,115  6.0 %548.5  5.7 %176,089  1,835  16.52015
 Houston, TX3,032  5.9 %499.3  5.2 %164,676  2,094  14.22014
 Nashville, TN2,818  5.4 %601.3  6.3 %213,364  2,109  14.82015
 Indianapolis, IN2,804  5.4 %431.0  4.5 %153,708  1,930  17.52013
 Tampa, FL2,315  4.5 %461.4  4.8 %199,294  1,943  14.72015
 Jacksonville, FL2,266  4.4 %402.2  4.2 %177,513  1,938  14.82015
 Raleigh, NC2,077  4.0 %383.7  4.0 %184,753  1,877  15.02014
 Columbus, OH2,043  3.9 %353.6  3.7 %173,098  1,870  18.22015
 Cincinnati, OH1,969  3.8 %345.3  3.6 %175,372  1,851  17.72013
 Greater Chicago area, IL and IN1,743  3.4 %318.3  3.3 %182,616  1,869  18.62013
 Orlando, FL1,702  3.3 %309.2  3.2 %181,646  1,897  18.32014
 Salt Lake City, UT1,462  2.8 %362.2  3.8 %247,729  2,183  17.62014
 Charleston, SC1,204  2.3 %241.9  2.5 %200,948  1,971  11.72015
 Las Vegas, NV1,039  2.0 %186.6  1.9 %179,581  1,845  16.82013
 San Antonio, TX1,018  2.0 %164.5  1.7 %161,603  2,012  15.82014
 Savannah/Hilton Head, SC885  1.7 %160.0  1.7 %180,789  1,861  12.52015
 Denver, CO831  1.6 %247.1  2.6 %297,340  2,104  17.72015
All Other (2)
6,662  12.9 %1,281.5  13.3 %192,356  1,880  15.52014
Total / Average51,816  100.0 %$9,599.7  100.0 %$185,265  1,986  16.12014

(1)Excludes 960 single-family properties held for sale as of March 31, 2020.
(2)Represents 15 markets in 14 states.


28

Market Number of Single-Family Properties (1) % of Total Single-Family Properties Avg. Gross Book Value per Property Avg.
Sq. Ft.		 Avg. Property Age (years) Avg. Year
Purchased
Atlanta, GA 4,631
 9.3% $170,752
 2,144
 16.4 2015
Dallas-Fort Worth, TX 4,307
 8.6% 162,597
 2,118
 14.3 2014
Charlotte, NC 3,476
 7.0% 186,644
 2,079
 14.5 2015
Houston, TX 3,122
 6.3% 160,639
 2,106
 12.3 2014
Phoenix, AZ 2,920
 5.8% 166,487
 1,824
 15.1 2014
Indianapolis, IN 2,892
 5.8% 151,607
 1,933
 15.5 2013
Nashville, TN 2,613
 5.2% 205,287
 2,115
 13.8 2014
Jacksonville, FL 2,047
 4.1% 166,555
 1,936
 13.6 2014
Tampa, FL 2,047
 4.1% 191,628
 1,945
 14.1 2014
Raleigh, NC 2,018
 4.0% 182,427
 1,880
 13.3 2014
All Other (2) 19,875
 39.8% 183,768
 1,904
 14.9 2014
Total / Average 49,948
 100.0% $177,304
 1,980
 14.7 2014

(1)Excludes 1,892 single-family properties identified as part of the Company's disposition program, including 1,318 properties classified as held for sale and 574 properties identified for future sale, as of March 31, 2018.
(2)Represents 28 markets in 21 states.



The following table summarizes certain key leasing metrics as of March 31, 2018:2020:

 Total Single-Family Properties (1)
Total Single-Family Properties (1)
Market Leased Percentage (2) Avg. Occupied Days Percentage (3) Avg. Monthly Realized Rent per property (4) Avg. Original Lease Term (months) (2) Avg. Remaining Lease Term (months) (2) Avg. Blended Change in Rent (5)Market
Avg. Occupied Days
Percentage (2)
Avg. Monthly Realized Rent per property (3)
Avg. Original Lease Term (months) (4)
Avg. Remaining Lease Term (months) (4)
Avg. Blended Change in
Rent (5)
Atlanta, GA 94.3% 90.7% $1,488
 11.9 6.4 5.1%Atlanta, GA94.4 %$1,646  12.0  5.6  4.8 %
Dallas-Fort Worth, TX 96.9% 93.6% 1,677
 11.8 6.3 3.8%Dallas-Fort Worth, TX94.7 %1,783  12.1  5.8  3.2 %
Charlotte, NC 95.1% 87.9% 1,527
 12.5 7.1 2.2%Charlotte, NC94.5 %1,623  12.4  5.8  3.5 %
Phoenix, AZPhoenix, AZ96.6 %1,482  12.0  6.1  7.9 %
Houston, TX 92.5% 90.2% 1,586
 11.7 6.4 2.6%Houston, TX93.9 %1,670  12.4  5.5  3.0 %
Phoenix, AZ 97.1% 93.5% 1,283
 12.0 6.8 6.4%
Nashville, TNNashville, TN93.7 %1,759  12.0  5.6  3.9 %
Indianapolis, IN 96.8% 94.5% 1,359
 12.3 6.1 3.4%Indianapolis, IN95.1 %1,454  12.0  5.8  3.6 %
Nashville, TN 95.4% 91.6% 1,679
 12.3 6.7 2.6%
Tampa, FLTampa, FL93.1 %1,730  12.1  6.1  3.3 %
Jacksonville, FL 96.7% 91.5% 1,487
 12.9 8.0 4.6%Jacksonville, FL93.4 %1,609  12.0  5.9  3.5 %
Tampa, FL 96.7% 92.6% 1,650
 12.0 6.7 2.9%
Raleigh, NC 95.0% 89.9% 1,474
 11.9 6.3 3.0%Raleigh, NC93.9 %1,571  12.0  5.9  3.6 %
Columbus, OHColumbus, OH96.0 %1,668  12.0  5.9  3.9 %
Cincinnati, OHCincinnati, OH96.7 %1,629  12.0  5.6  4.8 %
Greater Chicago area, IL and INGreater Chicago area, IL and IN96.3 %1,889  12.2  6.0  2.7 %
Orlando, FLOrlando, FL95.4 %1,701  12.1  5.8  4.7 %
Salt Lake City, UTSalt Lake City, UT94.2 %1,810  12.0  6.0  5.5 %
Charleston, SCCharleston, SC91.8 %1,723  12.0  6.2  3.3 %
Las Vegas, NVLas Vegas, NV94.5 %1,618  12.0  5.8  6.1 %
San Antonio, TXSan Antonio, TX94.1 %1,562  12.1  5.5  2.9 %
Savannah/Hilton Head, SCSavannah/Hilton Head, SC93.0 %1,580  12.1  5.9  3.3 %
Denver, CODenver, CO94.8 %2,245  12.0  5.7  4.4 %
All Other (6) 95.3% 91.2% 1,578
 12.0 6.6 3.9%
All Other (6)
95.4 %1,640  12.0  5.7  4.9 %
Total / Average 95.5% 91.4% $1,545
 12.1 6.6 3.7%Total / Average94.7 %$1,664  12.1  5.8  4.2 %


(1) Leasing information excludes 1,892 single-family properties identified as part of the Company's disposition program, including 1,318 properties classified as held for sale and 574 properties identified for future sale, as of March 31, 2018.
(2)Leased percentage, average original lease term and average remaining lease term are reflected as of period end.
(3)Represents the number of days a property is occupied in the period divided by the total number of days the property is owned during the same period.
(4)
For the three months ended March 31, 2018, Average Monthly Realized Rent is calculated as rents from single-family properties divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months. For properties partially owned during the period, this is adjusted to reflect the number of days of ownership.
(5)
Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the three months ended March 31, 2018, compared to the annual rent of the previously expired non-month-to-month lease for each property.
(6) Represents 28 markets in 21 states.

(1)Leasing information excludes 960 single-family properties held for sale as of March 31, 2020.
(2)For the three months ended March 31, 2020, Average Occupied Days Percentage represents the number of days a property is occupied in the period divided by the total number of days the property is owned during the same period.
(3)For the three months ended March 31, 2020, Average Monthly Realized Rent is calculated as the lease component of rents and other single-family property revenues (i.e., rents from single-family properties) divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months. For properties partially owned during the period, this is adjusted to reflect the number of days of ownership.
(4)Average Original Lease Term and Average Remaining Lease Term are reflected as of period end.
(5)Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the three months ended March 31, 2020, compared to the annual rent of the previously expired non-month-to-month lease for each property.
(6)Represents 15 markets in 14 states.

        We believe these key single-family property and leasing metrics provide useful information to investors because they allow investors to understand the composition and performance of our properties on a market by market basis. Management also uses these metrics to understand the composition and performance of our properties at the market level.

Factors That Affect Our Results of Operations and Financial Condition
 
Our results of operations and financial condition are affected by numerous factors, many of which are beyond our control. KeyCurrently, the most significant factor impacting us is the effect of the COVID-19 pandemic, which is discussed above.Other key factors that impact our results of operations and financial condition include our ability tothe pace at which we identify and acquire properties; our pace of property acquisitions;suitable properties, the time and cost required to gain accessrenovate the acquired properties, the pace and cost of our property developments, the time to the properties and then to renovate and lease a newly acquired propertyor developed properties at acceptable rental rates;rates, occupancy levels;levels, rates of tenant turnover;turnover, the length of vacancy in properties between tenant leases;leases, our expense ratios;ratios, our ability to raise capital;capital and our capital structure.
 
Property Acquisitions, Development and Dispositions
 
Since our formation, we have rapidly but systematically grown our portfolio of single-family homes.properties. Our ability to identify and acquire single-family homes that meet our investment criteria is impacted by home prices in our target markets, the inventory of properties available-for-sale through ourtraditional acquisition channels, competition for our target assets and our available capital. Additionally, opportunitiesWe are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program and acquiring newly constructed homes from third-party developers through our National Builder Program. Opportunities from these new

29

construction acquisition channels are impacted by the availability of undevelopedvacant developed lots, development land assets and inventory of homes currently under construction or newly developed. Our level of acquisitioninvestment activity has fluctuated based on the number of suitable investmentsopportunities and the level of capital available to invest. During the quarterthree months ended March 31, 2018, our total portfolio increased by 6012020, we acquired or developed 656 homes, including 505401 newly constructed properties delivered through our AMH Development and National Builder Programs and 255 homes acquired through broker acquisitions, 118 homes acquired through new construction acquisitions, of which 37 homes were developed through our internal construction program, and 81 homes acquired through trustee acquisitions,traditional acquisition channels, partially offset by 103410 homes sold or rescinded. Rescinded properties represent properties for which the sale has been unwound, as in certain jurisdictions,and 22 homes contributed to an unconsolidated joint venture. Although we are currently continuing construction activity on our purchasesexisting pipeline of single-family properties at foreclosure and judicial auctions areinternally developed built-for-rental homes, subject to the right of rescission, which is generally caused by the borrower filing for bankruptcy.compliance with state and local mandates related to COVID-19, given market uncertainties regarding future asset values, we have temporarily suspended our traditional acquisition channel and National Builder acquisition programs.


As of March 31, 2018, we had 1,892        Our properties to be disposed, including 1,318 properties classified as held for sale and 574 properties identified for future sale, compared to 310 properties to be disposed as of December 31, 2017, which were all classified as held for sale. In the beginning of 2018, we expanded our disposition program, which identified approximately 1,200 properties to be disposed from five of our smaller markets that we are fully exiting based on market analysis. Our remaining properties to be disposed were identified based on sub-market analysis, as well as individual property-level operational review. As of March 31, 2020 and December 31, 2019, there were 960 and 1,187 properties, respectively, classified as held for sale. We will continue to evaluate our properties for potential disposition going forward as a normal course of business.



Property Operations

The        Homes added to our portfolio through new construction channels include properties developed through our internal AMH Development Program and newly constructed properties acquired from third-party developers through our National Builder Program. Rental homes developed through these channels involve substantial up-front costs, time to acquire and develop land, time to build the rental home, and time to lease the rental home before the home generates income. This process is dependent upon the nature of each lot acquired and the timeline varies primarily due to land development requirements. Once land development requirements have been met, on average it takes approximately four to six months to complete the rental home vertical construction process. Our internal construction program is managed by our team of development professionals that oversee the full rental home construction process including all land development and work performed by subcontractors. We typically incur costs between $200,000 and $350,000 to acquire and develop land and build a rental home. Homes added from our new construction channels are available for lease immediately upon or shortly after receipt of a certificate of occupancy.

        Homes added to our portfolio through traditional acquisition of properties involveschannels require expenditures in addition to payment of the purchase price, including property inspections, closing costs, liens, title insurance, transfer taxes, recording fees, broker commissions, property taxes and homeowner association (“HOA”) fees, when applicable. In addition, we typically incur costs between $10,000$15,000 and $25,000$30,000 to renovate a home acquired through traditional acquisition channels to prepare it for rental. Renovation work varies, but may include paint, flooring, carpeting, cabinetry, appliances, plumbing hardware and other items required to prepare the home for rental. The time and cost involved in initially accessingto prepare our homes to prepare them for rental can impact our financial performance and varies among properties based on several factors, including the source of acquisition channel whether the property is located in a judicial or non-judicial foreclosure state, if applicable, and whether or not the home is occupied at the time of acquisition. This process of finalizing the acquisition and gaining initial access to the home can range from immediate access to multiple months and, on average, takes approximately 20 to 30 days. Additionally, after gaining access to the home, the time to renovate a property can vary significantly among properties and is most impacted by the age and condition of the property. On average, it takes approximately 5040 to 7060 days to complete the renovation process after gaining initial access to the home.process.

        Our operating results are also impacted by the amount of time it takes to market and lease a property, which can vary greatly among properties, and is impacted by local demand, our marketing techniques and the size of our available inventory. On average, it takes approximately 20 to 40 days to lease a property after acquiring or developing a new property through our new construction channels or after completing the renovation process.process for a traditionally acquired property. Lastly, our operating results are impacted by the length of stay of our tenants and the amount of time it takes to prepare and re-lease a property after a tenant vacates. This process, which we refer to as “turnover,” is impacted by numerous factors, including the condition of the home upon move-out of the previous tenant, and by local demand, our marketing techniques and the size of our available inventory at the time of the turnover. On average, it takes approximately 5040 to 60 days to complete the turnover process.
 
Revenue        Revenues
 
Our revenue isrevenues are derived primarily from rents collected under lease agreements withfrom tenants for our single-family properties. These include short-term leases that we enter into directly with our tenants,properties under lease agreements which typically have a term of one year. Our rental rates and occupancy levels are affected by macroeconomic factors and local and property-level factors, including market conditions, seasonality and tenant defaults, and the amount of time it takes to renovate and re-leaseturn properties when tenants vacate. Additionally, our ability to collect revenues and related operating results are impacted by the credit worthiness and quality of our tenants. On average, our tenants have household incomes ranging from $60,000$70,000 to $120,000$110,000 and primarily consist of families with approximately two adults and one or more children.
 
In addition to rental revenues, we receive fees        Our rents and other reimbursements, referred to as “tenant charge-backs”,single-family property revenues are comprised of rental revenue from single-family properties, fees from our tenants,single-family property rentals and “tenant charge-backs,” which are primarily designedrelated to recover costs for certain items, such as utilities, damages and maintenance. In accordance with GAAP, these fees and tenant charge-backs are presented gross in the condensed consolidated statements of operations.cost recoveries on utilities.
 
Our ability to maintain and grow revenues from our existing portfolio of homes will be dependent on our ability to retain tenants and increase rental rates. We believe that our platform will allow us to achieve strong tenant retention and rental rate increases. Based on our Same-Home population of properties (defined below), the year-over-year increase in average monthly realized rent

30

Average Monthly Realized Rent per property was 3.9%3.6% for the three months ended March 31, 2018,2020, and we experienced turnover rates of 8.5% and 8.9%remained flat at 8.0% for both the three months ended March 31, 20182020 and 2017, respectively.2019. However, in response to the COVID-19 pandemic, we are offering zero percent increases on renewal leases signed in April and May.
 
Expenses
 
We monitor the following categories of expenses that we believe most significantly affect our results of operations.
Property Operating Expenses
 
Once a property is available for lease, which we refer to as “rent-ready,” we incur ongoing property-related expenses primarily HOA fees (when applicable); property taxes; insurance; marketing expenses; repairs and maintenance; and turnover costs, which may not be subject to our control. These include primarily property taxes, repairs and maintenance (“R&M”), turnover costs, HOA fees (when applicable) and insurance.
 
Property Management Expenses
 
As we internally manage our portfolio of single-family properties through our proprietary property management platform, we incur costs such as salary expenses for property management personnel, lease expenses and operating costs for property management offices and technology expenses for maintaining our property management platform. As part of developing our property management platform, we have made significant investments in our infrastructure, systems and technology. We believe that these investments will enable our property management platform to become more efficient over time, especially as our portfolio grows in size.grows. Also included in property management expenses is noncash share-based compensation expense related to centralized and field property management employees.

        
Seasonality
 
We believe that our business and related operating results will be impacted by seasonal factors throughout the year. In particular, we have experiencedWe experience higher levels of tenant move-outs and move-ins during the late spring and summer months, which impacts both our rental revenues and related turnover costs. Further, ourOur property operating costs are seasonally impacted in certain markets for expenses such as HVAC repairs, turn costs and landscaping expenses during the summer season. Additionally, our single-family properties are at greater risk in certain markets for adverse weather conditions such as hurricanes in the late summer months and extreme cold weather in the winter months.
        
General and Administrative Expense
 
General and administrative expense primarily consists of corporate payroll and personnel costs, federal and state taxes, trustees’ and officers’ insurance expenses, audit and tax fees, trustee fees and other expenses associated with our corporate and administrative functions. Also included in general and administrative expense is noncash share-based compensation expense related to corporate administrative employees.

Results of Operations
 
Net income totaled $21.5$37.5 million for the three months ended March 31, 2018,2020, compared to net income of $11.8$33.1 million for the three months ended March 31, 2017.2019. This improvement was primarily attributable to higher revenues resulting from a larger number of leasedoccupied properties and higher rental rates.rates, which were offset in part by higher property management expenses, higher general and administrative expense and a noncash write-down included in other expenses associated with the liquidation of legacy joint ventures, which were acquired as part of the American Residential Properties, Inc. (“ARPI”) merger in February 2016, as well as an increase in gain on sale of single-family properties and other, net.


As we continue to grow our portfolio with a portion of our homes still recently developed, acquired and/or renovated, we distinguish our portfolio of homes between Same-Home properties and Non-Same-Home and Other properties in evaluating our operating performance. We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the earliest period presented under comparison and if it has not been classified as held for sale identified for future sale or taken out of service as a result of a casualty loss, which allows the performance of these properties to be compared between periods. Single-family properties that we acquire individually (i.e., not through a bulk purchase) are classified as either stabilized or non-stabilized. A property is classified as stabilized once it has been renovated by the Company or newly constructed and then initially leased or available for rent for a period greater than 90 days. Properties acquired through a bulk purchase are first considered non-stabilized, as an entire group, until (1) we have owned them for an adequate period of time to allow for complete on-boarding to our operating platform, and (2) a substantial portion of the properties have experienced tenant turnover at least once under our ownership, providing the opportunity for

31

renovations and improvements to meet our property standards. After such time has passed, properties acquired through a bulk purchase are then evaluated on an individual property basis under our standard stabilization criteria. All other properties, including those classified as held for sale or identified for future sale,taken out of service as a result of a casualty loss, are classified as Non-Same-Home and Other.
 
One of the primary financial measures we use in evaluating the operating performance of our single-family properties is Core Net Operating Income (“Core NOI”), which we also present separately for our Same-Home portfolio. Core NOI is a supplemental non-GAAP financial measure that we define as core revenues, which is calculated as rentstotal revenues, excluding expenses reimbursed by tenant charge-backs and fees from single-family properties, net of bad debt expense,other revenues, less core property operating expenses, which is calculated as property operating and property management expenses, excluding noncash share-based compensation expense and expenses reimbursed by tenant charge-backs and bad debt expense.charge-backs.


Core NOI also excludes (1) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value, (2) noncash gain or loss on conversion of shares or units, (3) gain or loss on early extinguishment of debt, (4)(2) hurricane-related charges, net, (5)which result in material charges to the impacted single-family properties, (3) gain or loss on sales of single-family properties and other, (6)(4) depreciation and amortization, (7)(5) acquisition fees and other transaction costs expensed incurred with business combinations and the acquisition or disposition of individual properties, (8)(6) noncash share-based compensation expense, (9)(7) interest expense, (10)(8) general and administrative expense, (11)(9) other expenses and (12)(10) other revenues. We believe Core NOI provides useful information to investors about the operating performance of our single-family properties without the impact of certain operating expenses that are reimbursed through tenant charge-backs. We further adjust Core NOI for our Same-Home portfolio by subtracting recurring capital expenditures to calculate Same-Home Core NOI After Capital Expenditures, which we believe provides useful information to investors because it more fully reflects our operating performance after the impact of all property-level expenditures, regardless of whether they are capitalized or expensed.


Core NOI and Same-Home Core NOI After Capital Expenditures should be considered only as supplements to net income or loss as a measure of our performance and should not be used as measures of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. Additionally, these metrics should not be used as substitutes for net income or loss or net cash flows from operating activities (as computed in accordance with GAAP).




32

Comparison of the Three Months Ended March 31, 2018,2020 to the Three Months Ended March 31, 20172019
 
The following table presents a summary of Core NOI for our Same-Home properties, Non-Same-Home and Other properties, and total properties for the three months ended March 31, 20182020 and 20172019 (in thousands):

 For the Three Months Ended March 31, 2020
 
Same-Home
Properties (1)
% of Core
Revenue		Non-Same-
Home and Other
Properties		% of Core
Revenue		Total
Properties		% of Core
Revenue
Rents from single-family properties$215,376   $29,954   $245,330   
Fees from single-family properties3,373   641   4,014   
Bad debt(1,586)  (429)  (2,015)  
Core revenues217,163   30,166   247,329   
Property tax expense38,634  17.8 %6,334  21.0 %44,968  18.2 %
HOA fees, net (2)
3,786  1.7 %730  2.4 %4,516  1.8 %
R&M and turnover costs, net (2)
14,468  6.7 %2,639  8.8 %17,107  6.9 %
Insurance1,963  0.9 %350  1.2 %2,313  0.9 %
Property management expenses, net (3)
18,090  8.3 %3,327  11.0 %21,417  8.7 %
Core property operating expenses76,941  35.4 %13,380  44.4 %90,321  36.5 %
Core NOI$140,222  64.6 %$16,786  55.6 %$157,008  63.5 %

 For the Three Months Ended March 31, 2019
 
Same-Home
Properties (1)
% of Core
Revenue		Non-Same-
Home and Other
Properties		% of Core
Revenue		Total
Properties		% of Core
Revenue
Rents from single-family properties$207,941   $28,556   $236,497   
Fees from single-family properties2,496   517   3,013   
Bad debt(1,461)  (307)  (1,768)  
Core revenues208,976   28,766   237,742   
Property tax expense35,970  17.2 %6,401  22.2 %42,371  17.8 %
HOA fees, net (2)
5,089  2.4 %878  3.1 %5,967  2.5 %
R&M and turnover costs, net (2)
14,621  7.1 %2,942  10.3 %17,563  7.5 %
Insurance1,870  0.9 %323  1.1 %2,193  0.9 %
Property management expenses, net (3)
16,398  7.8 %2,656  9.2 %19,054  8.0 %
Core property operating expenses73,948  35.4 %13,200  45.9 %87,148  36.7 %
Core NOI$135,028  64.6 %$15,566  54.1 %$150,594  63.3 %

(1)Includes 45,253 properties that have been stabilized longer than 90 days prior to January 1, 2019.
(2)Presented net of tenant charge-backs.
(3)Presented net of tenant charge-backs and excludes noncash share-based compensation expense related to centralized and field property management employees.

33

 For the Three Months Ended March 31, 2018
 Same-Home
Properties (1)		 % of Core
Revenue		 Non-Same-
Home and Other
Properties		 % of Core
Revenue		 Total
Properties		 % of Core
Revenue
Rents from single-family properties$171,312
  
 $46,711
  
 $218,023
  
Fees from single-family properties1,990
  
 843
  
 2,833
  
Bad debt expense(1,538)  
 (462)  
 (2,000)  
Core revenues171,764
  
 47,092
  
 218,856
  
            
Property tax expense29,989
 17.4% 9,101
 19.4% 39,090
 17.9%
HOA fees, net (2)3,378
 2.0% 1,099
 2.3% 4,477
 2.0%
R&M and turnover costs, net (2)13,645
 7.9% 5,094
 10.8% 18,739
 8.6%
Insurance1,531
 0.9% 516
 1.1% 2,047
 0.9%
Property management expenses, net (3)13,373
 7.8% 4,064
 8.6% 17,437
 8.0%
Core property operating expenses61,916
 36.0% 19,874
 42.2% 81,790
 37.4%
            
Core NOI$109,848
 64.0% $27,218
 57.8% $137,066
 62.6%

 For the Three Months Ended March 31, 2017
 Same-Home
Properties (1)		 % of Core
Revenue		 Non-Same-
Home and Other
Properties		 % of Core
Revenue		 Total
Properties		 % of Core
Revenue
Rents from single-family properties$165,728
  
 $35,379
  
 $201,107
  
Fees from single-family properties1,992
  
 612
  
 2,604
  
Bad debt expense(1,197)  
 (313)  
 (1,510)  
Core revenues166,523
  
 35,678
  
 202,201
  
            
Property tax expense29,621
 17.7% 7,141
 19.9% 36,762
 18.2%
HOA fees, net (2)3,127
 1.9% 759
 2.1% 3,886
 1.9%
R&M and turnover costs, net (2)9,600
 5.8% 2,695
 7.6% 12,295
 6.1%
Insurance1,633
 1.0% 307
 0.9% 1,940
 1.0%
Property management expenses, net (3)12,651
 7.6% 2,949
 8.3% 15,600
 7.7%
Core property operating expenses56,632
 34.0% 13,851
 38.8% 70,483
 34.9%
            
Core NOI$109,891
 66.0% $21,827
 61.2% $131,718
 65.1%

(1) Includes 38,828 properties that have been stabilized longer than 90 days prior to January 1, 2017.
(2)Presented net of tenant charge-backs.
(3)Presented net of tenant charge-backs and excludes noncash share-based compensation expense related to centralized and field property management employees.



The following are reconciliations of core revenues, Same-Home core revenues, core property operating expenses, Same-Home core property operating expenses, Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures to their respective GAAP metrics for the three months ended March 31, 20182020 and 20172019 (amounts in thousands):
 For the Three Months Ended
March 31,
 2018 2017
 (Unaudited) (Unaudited)
Core revenues   
Total revenues$258,004
 $233,754
Tenant charge-backs(35,807) (28,373)
Bad debt expense(2,000) (1,510)
Other revenues(1,341) (1,670)
Core revenues$218,856
 $202,201

Core property operating expenses   
Property operating expenses$100,987
 $83,305
Property management expenses18,987
 17,478
Noncash share-based compensation - property management(377) (417)
Expenses reimbursed by tenant charge-backs(35,807) (28,373)
Bad debt expense(2,000) (1,510)
Core property operating expenses$81,790
 $70,483
For the Three Months Ended
March 31,
20202019
(Unaudited)(Unaudited)
Core revenues and Same-Home core revenues
Total revenues$289,594  $279,204  
Tenant charge-backs(40,013) (39,952) 
Other revenues(2,252) (1,510) 
Core revenues247,329  237,742  
Less: Non-Same-Home core revenues30,166  28,766  
Same-Home core revenues$217,163  $208,976  

Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures  
Net income$21,525
 $11,796
Remeasurement of participating preferred shares(1,212) 5,410
Gain on sale of single-family properties and other, net(2,256) (2,026)
Depreciation and amortization79,303
 73,953
Acquisition fees and costs expensed1,311
 1,096
Noncash share-based compensation - property management377
 417
Interest expense29,301
 31,889
General and administrative expense9,231
 9,295
Other expenses827
 1,558
Other revenues(1,341) (1,670)
Tenant charge-backs35,807
 28,373
Expenses reimbursed by tenant charge-backs(35,807) (28,373)
Bad debt expense excluded from operating expenses2,000
 1,510
Bad debt expense included in revenues(2,000) (1,510)
Core NOI137,066
 131,718
Less: Non-Same-Home Core NOI27,218
 21,827
Same-Home Core NOI109,848
 109,891
Less: Same-Home recurring capital expenditures6,054
 5,336
Same-Home Core NOI After Capital Expenditures$103,794
 $104,555
Core property operating expenses and Same-Home core property operating expenses
Property operating expenses$107,497  $106,684  
Property management expenses23,276  20,709  
Noncash share-based compensation - property management(439) (293) 
Expenses reimbursed by tenant charge-backs(40,013) (39,952) 
Core property operating expenses90,321  87,148  
Less: Non-Same-Home core property operating expenses13,380  13,200  
Same-Home core property operating expenses$76,941  $73,948  


Core
Core NOI and Same-Home Core NOI
Net income$37,527  $33,091  
Gain on sale of single-family properties and other, net(10,765) (5,649) 
Depreciation and amortization82,821  81,161  
Acquisition and other transaction costs2,147  834  
Noncash share-based compensation - property management439  293  
Interest expense29,715  31,915  
General and administrative expense11,266  9,435  
Other expenses6,110  1,024  
Other revenues(2,252) (1,510) 
Core NOI157,008  150,594  
Less: Non-Same-Home Core NOI16,786  15,566  
Same-Home Core NOI$140,222  $135,028  

Total Revenues from Same-Home Properties


Core        Total revenues from Same-Home properties for the three months ended March 31, 2018, increased $5.3 million, or 3.1%,3.7% to $171.8 million from $166.5$289.6 million for the three months ended March 31, 2017.2020 from $279.2 million for the three months ended March 31, 2019. Revenue growth was primarily driven by continued strong leasing activity, as our average occupied portfolio grew to 48,898 homes for the three months ended March 31, 2020, compared to 48,345 homes for the three months ended March 31, 2019, as well as higher rental rates.

Property Operating Expenses

        Property operating expenses increased 0.8% to $107.5 million for the three months ended March 31, 2020 from $106.7 million for the three months ended March 31, 2019. This increase was primarily attributable to higher average monthly realized rental rates,property tax expense related to growth in the number of homes in our portfolio and the timing of valuation increases, partially offset by lower HOA fees, net of tenant chargebacks.


34

Property Management Expenses

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

Core Revenues from Same-Home Properties

        Core revenues from Same-Home properties increased 3.9% to $217.2 million for the three months ended March 31, 2020 from $209.0 million for the three months ended March 31, 2019. This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 3.6% to $1,553$1,664 per month for the three months ended March 31, 2018,2020 compared to $1,494$1,606 per month for the three months ended March 31, 2017.2019, as well as higher fees from single-family properties resulting from operational enhancements to our fee structure.

Core Property Operating Expenses from Same-Home Properties
 
Core property operating expenses consist of direct property operating expenses, net of tenant charge-backs, and property management costs, net of tenant charge-backs, and excludingexcludes noncash share-based compensation expense. Core property operating expenses from Same-Home properties for the three months ended March 31, 2018, increased $5.3 million, or 9.3%,4.0% to $61.9 million from $56.6$76.9 million for the three months ended March 31, 2017.2020 from $73.9 million for the three months ended March 31, 2019. Same-Home core property operating expenses as a percentage of total

Same-Home core revenues increased to 36.0%remained flat at 35.4% for the three months ended March 31, 2018, from 34.0% for2020 and 2019. The increase in Same-Home core property operating expenses was driven by higher property tax expense related to the three months ended March 31, 2017. This increase was partially attributable to one-time costs due to winter freeze damages in certain markets and elevated carrying costs on above average levelstiming of vacant inventory incurred during the three months ended March 31, 2018. The remainder of this increase was primarily attributable to temporarily elevated turnover costs andvaluation increases as well as higher property management expenses, incurred as partnet of the Company's strategic initiative to improve occupancy back to stabilized levels during the first quarter of 2018.tenant charge-backs and excluding noncash share-based compensation expense.
 
General and Administrative Expense
 
For the three months ended March 31, 2018 and 2017, respectively, general        General and administrative expense which primarily consists of corporate payroll and personnel costs, federal and state taxes, trustees’ and officers’ insurance expense, audit and tax fees, trustee fees and other expenses associated with our corporate and administrative functions,functions. General and administrative expense for the three months ended March 31, 2020 and 2019 was $9.2$11.3 million and $9.3$9.4 million, respectively, which included $0.6$1.4 million and $0.5$0.7 million, respectively, of noncash share-based compensation expense related to corporate administrative employees. GeneralThe increase in general and administrative expense was primarily impacted by nonrecurring rating agency fees incurred during 2017 associated with the Company receiving inaugural investment grade corporate ratings, partially offset byrelated to higher legalpersonnel costs.
 
Interest Expense
 
Interest expense was $29.3decreased 6.9% to $29.7 million andfor the three months ended March 31, 2020 from $31.9 million for the three months ended March 31, 2018 and 2017, respectively.2019. This decrease was primarily duerelated to additional capitalized interest during the three months ended March 31, 2020 and the payoff of the AH4R 2014-SFR1 asset-backed securitizationterm loan facility in April 2017 and increased capitalized interest,June 2019, partially offset by interest expense on the unsecured senior notes issued in February 2018.late January 2019.
 
Acquisition Fees and Other Transaction Costs Expensed
 
All        Acquisition and other transaction costs of our internal acquisition function are expensed in accordance with GAAP. Forwere $2.1 million and $0.8 million for the three months ended March 31, 2018, acquisition fees2020 and costs expensed totaled $1.3 million,2019, respectively, which wasprimarily related to costs associated with purchases of single-family properties. For the three months ended March 31, 2017, acquisition fees and costs expensed totaled $1.1 million,properties, including $0.7 million ofnewly constructed properties from third-party builders, as well as costs associated with purchasesthe disposal of single-familycertain properties and $0.4 millionor portfolios of otherproperties. The growth in our acquisition fees and costs expensed.program was the primary driver for the year-over-year increase.


Depreciation and Amortization
 
Depreciation and amortization expense consists primarily of depreciation of buildings and improvements. Depreciation of our assets is calculated over their useful lives on a straight-line basis over 3three to 30 years. Our intangible assets are amortized on a straight-line basis over the asset’s estimated economic useful life. Depreciation and amortization expense was $79.3 million and $74.0increased 2.0% to $82.8 million for the three months ended March 31, 2018 and 2017, respectively. This increase was2020 from $81.2 million for the three months ended March 31, 2019 primarily attributabledue to growth in our average number of depreciable properties.



35

Other Revenues


Other revenues totaled $1.3were $2.3 million and $1.5 million for the three months ended March 31, 2018,2020 and 2019, respectively, which included $0.4 million ofprimarily related to interest income, on short-term investments, $0.3 million offees from unconsolidated joint ventures, and equity in earnings from unconsolidated joint ventures, $0.2ventures.

Other Expenses

        Other expenses were $6.1 million of management fee income related to joint ventures and $0.4 million of other income. Other revenues totaled $1.7$1.0 million for the three months ended March 31, 2017,2020 and 2019, respectively, which included $0.6 million of management fee income related to joint ventures, $0.3 million of equity in earnings from unconsolidated joint ventures and $0.8 million of other income.

Other Expenses

Other expenses totaled $0.8 million for the three months ended March 31, 2018, which included $0.7 millionprimarily related to impairments on properties held for sale and $0.1 million ofexpenses related to joint ventures. Also included in other expenses. Other expenses totaled $1.6 million for the three months ended March 31, 2017,2020 was a $4.9 million noncash write-down associated with the liquidation of legacy joint ventures, which included $0.9 million related to impairments on properties held for sale, $0.5 millionwere acquired as part of expenses related to a joint venture and $0.2 million of other expenses.the ARPI merger in February 2016.


Critical Accounting Policies and Estimates
 
Our critical accounting policies are included in Item 7, Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,,” of our Annual Report on Form 10-K for the year ended December 31, 2017.2019 (the “2019 Annual Report”). There have been no significant changes to ourthese policies during the three months ended March 31, 2018. For a discussion of recent accounting pronouncements, see Note 2.2020.
 

Income Taxes
 
The Company        AH4R has elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the “Code”), which commencedcommencing with our taxable year ended December 31, 2012. We believe that we have operated, and continue to operate, in such a manner as to satisfy the requirements for qualification as a REIT. Accordingly, we will not be subject to federal income tax, providedProvided that we qualify as a REIT and our distributions to our shareholders equal or exceed our REIT taxable income.income (determined without regard to the deduction for dividends paid and excluding any net capital gains), we generally will not be subject to U.S. federal income tax.


However, qualification        Qualification and taxation as a REIT dependsdepend upon our ability to meet the various qualification tests imposed under the Code, including tests related to the percentage of income that we earn from specified sources and the percentage of our earnings that we distribute to our shareholders. Accordingly, no assurance can be given that we will continue to be organized or be able to operate in a manner so as to remain qualified as a REIT. If we fail to qualify as a REIT in any taxable year and do not qualify for certain statutory relief provisions, our incomewe would be subject to U.S. federal income tax and state income tax (including any applicable alternative minimum tax for taxable years beginning before December 31, 2017) on our taxable income at regular corporate tax rates, and we would likely be precluded from qualifying for treatment as a REIT until the fifth calendar year following the year in which we fail to qualify.

        Even if we qualify as a REIT, we may be subject to certain state or local income and capital taxes and U.S. federal income and excise taxes on our undistributed REIT taxable income, if any. OurCertain of our subsidiaries are subject to taxation by U.S. federal, state and local authorities for the periods presented. We made joint elections to treat certain subsidiaries as taxable REIT subsidiaries (our "TRSs") will bewhich are subject to U.S. federal, state and local taxes on their income at regular corporate rates. The tax years from 2013 through 20172015 to present generally remain open to examination by the taxing jurisdictions to which the Company is subject.


We believe that our Operating Partnership is properly treated as a partnership for U.S. federal income tax purposes. As a partnership, the Operating Partnership is not subject to U.S. federal income tax on ourits income. Instead, each of ourthe Operating Partnership’s partners, including AH4R, is allocated, and may be required to pay tax with respect to, its share of the Operating Partnership’s income. As such, no provision for U.S. federal income taxes has been included for the Operating Partnership.


ASC        Accounting Standards Codification 740-10, Income Taxes, requires recognition of deferred tax assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We recognize tax benefits of uncertain tax positions only if it is more likely than not that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledgeauthority of all relevant information. The measurement of a tax benefit for an uncertain tax position that meets the more likely than not threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority having full knowledge of all the relevant information. As of March 31, 2018,2020, there were no deferred tax assets and liabilities or unrecognized tax benefits recorded by the Company. We do not anticipate a significant change in unrecognized tax benefits within the next 12 months.


36

        As a REIT, we are required to distribute annually to our shareholders at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding any net capital gains) and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our REIT taxable income. The Operating Partnership funds the payment of distributions. We expect to use our net operating loss carryforward (“NOL”) to reduce our REIT taxable income in the current and future years. As of December 31, 2019, AH4R had an NOL for U.S. federal income tax purposes of an estimated $188.8 million. Once our NOL is fully used, we would be required to increase AH4R’s distributions to comply with REIT distribution requirements and our current policy of distributing approximately all of our REIT taxable income (determined without regard to the deduction for dividends paid).

Recent Accounting Pronouncements

        See Note 2. Significant Accounting Policies to our condensed consolidated financial statements in this report for a discussion of the adoption and potential impact of recently issued accounting standards.

Liquidity and Capital Resources
 
Our liquidity and capital resources as of March 31, 2018,2020 included cash and cash equivalents of $203.9$33.1 million. Additionally, as of March 31, 2018,2020, we had no$105.0 million of outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of up to $800.0 million, and $200.0of which $3.7 million was committed to outstanding letters of outstanding borrowings under our term loan facility, which provides for maximum borrowings of $200.0 million.credit. We have no debt maturities, other than recurring principal amortization, until 2022.
  
Liquidity is a measure of our ability to meet potential cash requirements, maintain our assets, fund our operations, make distributions to our shareholders and OP unitholders, including AH4R, and meet other general requirements of our business. Our liquidity, to a certain extent, is subject to general economic, financial, competitive and other factors beyond our control. Our liquidity requirements consist primarily of funds necessary to pay for the acquisition, development, renovation maintenance and developmentmaintenance of our properties, HOA fees (as applicable), real estate taxes, non-recurring capital expenditures, interest and principal payments on our indebtedness, general and administrative expenses, payment of quarterly dividends on our preferred shares and units, and payment of distributions to our common shareholders and unitholders.
 
We seek to satisfy our liquidity needs through cash provided by operations, long-term secured and unsecured borrowings, issuances of debt and equity securities (including OP units), asset-backed securitizations, property dispositions and joint venture transactions. We have financed our operations, acquisitions and acquisitionsdevelopment expenditures to date through the issuance of equity securities, borrowings under our credit facilities, asset-backed securitizations and unsecured senior notes.notes, and proceeds from the sale of single-family properties. Going forward, we expect to meet our operating liquidity requirements generally through cash on hand and cash provided by operations. We believe our rental income, net of operating expenses and recurring capital expenditures, will generally provide cash flow sufficient to fund our operations and dividend distributions. However, our real estate assets are illiquid in nature. A timely liquidation of assets might not be a viable source of short-term liquidity should a cash flow shortfall arise, and we may need to source liquidity from other financing alternatives.alternatives including drawing on our revolving credit facility.

        As discussed above under “COVID-19 Business Update,” the COVID-19 pandemic has had an adverse impact on financial markets and may adversely impact our operating cash flows.Since we do not know the ultimate severity and length of the COVID-19 pandemic, and thus cannot predict the impact it will have on our tenants and on the debt and equity capital markets, we cannot estimate the ultimate impact it will have on our liquidity and capital resources.

        As of April 30, 2020, the Company had cash and cash equivalents of $30.1 million with no changes to total outstanding debt since March 31, 2020. During April 2020, the Company sold an additional 60 properties generating $13.8 million of net proceeds.
 


To qualify as a REIT, the Company is required to distribute annually to our shareholders at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. The Operating Partnership funds the payment of distributions. The Company intends to pay quarterly distributions to our shareholders and to the Operating Partnership's unitholders, including AH4R, which in the aggregate are approximately equal to or exceed the Company's net taxable income in the relevant year.37

        
Cash Flows


The following table summarizes the Company'sCompany’s and the Operating Partnership’s cash flows for the three months ended March 31, 20182020 and 20172019 (in thousands):

For the Three Months Ended
March 31,		For the Three Months Ended
March 31,
2018 201720202019Change
Net cash provided by operating activities$112,491
 $110,037
Net cash provided by operating activities$126,496  $147,936  $(21,440) 
Net cash used for investing activities(221,631) (69,997)Net cash used for investing activities(179,214) (130,869) (48,345) 
Net cash provided by financing activities286,472
 340,578
Net cash provided by financing activities50,328  120,466  (70,138) 
Net increase in cash, cash equivalents and restricted cash$177,332
 $380,618
Net (decrease) increase in cash, cash equivalents and restricted cashNet (decrease) increase in cash, cash equivalents and restricted cash$(2,390) $137,533  $(139,923) 

Operating Activities

Our cash flows provided by operating activities, which is our principal source of cash flows, depend on numerous factors, including the occupancy level of our properties, the rental rates achieved on our leases, the collection of rent from our tenants and the level of property operating expenses, property management expenses and general and administrative expenses. Net cash provided by operating activities decreased $21.4 million, or 14.5%, from $147.9 million for the three months ended March 31, 2019 to $126.5 million for the three months ended March 31, 2020, primarily as a result of changes in operating assets and liabilities, partially offset by increased cash flows generated from a larger number of occupied properties and increases in rental rates on lease renewals and re-leasing of our single-family properties.

Investing Activities

        
DuringNet cash used for investing activities increased $48.3 million, or 36.9%, from $130.9 million for the three months ended March 31, 2018, net2019 to $179.2 million for the three months ended March 31, 2020, primarily driven by the strategic expansion of our portfolio through traditional acquisition channels, the development of “built-for-rental” homes through our AMH Development Program, and acquiring newly built properties through our National Builder Program using cash providedgenerated from operating and financing activities and by operating activities was $112.5 million, which included cash from operations of $103.4 million and $9.1 million from other changes in operating assets and liabilities. Net cash used for investing activities was $221.6 million, which primarily consisted of cash outflows of $153.8 million related torecycling capital through the acquisition of properties, $53.5 million related to purchases of productive assets and $20.4 million of initial renovation costs to prepare our properties for rental, partially offset by cash inflows of $12.0 million in net proceeds received from the salessale of single-family propertiesproperties. However, as a result of the COVID-19 pandemic, given the market uncertainty regarding future asset values, the Company has temporarily suspended its traditional acquisition channel and National Builder acquisition programs. The Company plans to continue construction activity, while in compliance with state and local mandates, on its existing pipeline of “built-for-rental” homes through our AMH Development Program. Recurring and other assets. Renovation costs typically include paint, flooring, appliances, landscapingcapital expenditures for single-family properties increased as a result of investments in properties to increase future revenues or reduce maintenance expenditures. The development of “built-for-rental” homes and our property-enhancing capital expenditures may reduce recurring and other improvements.capital expenditures on an average per home basis in the future.

Financing Activities

        Net cash provided by financing activities was $286.5decreased $70.1 million, which primarily consisted ofor 58.2%, from $120.5 million for the three months ended March 31, 2019 to $50.3 million for the three months ended March 31, 2020, driven by decreased borrowing activity and an increase in cash inflows of $497.2paid for distributions. The Company borrowed $105.0 million in proceeds from the issuance of unsecured senior notes, net of a discount, partially offset by cash outflows including $140.0 million of net payments on ourunder its revolving credit facility $35.0 million for Class A common share repurchases and $34.4 million for distributions. The net increase in cash, cash equivalents and restricted cash during the three months ended March 31, 2018, was $177.3 million.
During the three months ended March 31, 2017, net cash provided by operating activities was $110.0 million, which included cash from operations of $95.6 million and $14.4 million from other changes in operating assets and liabilities. Net cash used for investing activities was $70.0 million, which primarily consisted of cash outflows of $74.7 million related2020, compared to the acquisition of properties, $13.7 million related to purchases of productive assets and $7.7$397.9 million of initial renovation costs to prepare our properties for rental,proceeds from unsecured senior notes, net of discount, partially offset by cash inflows of $31.3 million in net proceeds received from the sales of single-family properties and other assets. Net cash provided by financing activities was $340.6 million, which primarily consisted of cash inflows including $350.4$250.0 million of net proceeds from issuances of Class A common shares and $25.0 million of borrowings against our term loanpayments on its revolving credit facility, partially offset by cash outflows of $28.6 million for distributions. The net increase in cash, cash equivalents and restricted cash during the three months ended March 31, 2017, was $380.6 million.

Unsecured Senior Notes

In February 2018, the Operating Partnership issued $500.02019. The Company distributed$49.1 million of 4.25% unsecured senior notes with a maturity date of February 15, 2028 (the "2028 Notes"). Interest on the 2028 Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2018. The Operating Partnership received net proceeds of $494.0 million from this issuance, after underwriting fees of approximately $3.2 million and a $2.8 million discount, and before estimated offering costs of $1.8 million. The Operating Partnership intends to use the net proceeds from this issuance for general corporate purposes, including, without limitation, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, the expansion, redevelopment and/or improvement of our properties, working capital and other general purposes, including repurchases of securities. The 2028 Notes are the Operating Partnership's unsecured and unsubordinated obligation 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 2028 Notes at any time, in whole or in part, at the applicable redemption price specified in the Indenture with respect to the 2028 Notes. If the 2028 Notes are redeemed on or after November 15, 2027 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the 2028 Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date. The 2028 Notes have been initially guaranteed by American Residential Properties OP, L.P., (the “Guarantor Subsidiary”), a 100% owned subsidiary of the Operating Partnership, but such guarantee will be automatically released at

the time that the Guarantor Subsidiary no longer guarantees our credit facility. Including the effect of a cash flow hedging instrument settled in February 2018 (see Note 13),basis to share and unit holders during the 2028 Notes yield an effective interest rate of 4.08%.

Exchangeable Senior Notes, Net

The exchangeable senior notes, which were assumed in connection with the ARPI Merger during 2016, contain an exchange settlement feature, which provides that the exchangeable senior notes may, under certain circumstances, be exchangeable for cash, our Class A common shares or a combination of cash and our Class A common shares, at the option of the Operating Partnership, based on an initial exchange rate of 46.9423 shares of ARPI's common stock per $1,000 principal amount of the notes. Settlements for cash will be paid for by the Operating Partnership, while settlements for the Company's Class A common shares will be issued by AH4R with the Operating Partnership issuing an equivalent number of Class A units to AH4R. The adjusted initial exchange rate would be 53.2795 of our Class A common shares per $1,000 principal amount of the notes, based on the 1.135 exchange ratio of ARPI shares to our shares resulting from the ARPI Merger. The current exchange rate as ofthree months ended March 31, 2018, was 55.41182020, compared to $17.6 million during the three months ended March 31, 2019, as a result of the Company's Class A common shares per $1,000 principal amount of the notes. The exchange rate is adjusted based on the Company's Class A common share price andtiming differences in distributions to common shareholders.year-over-year.

At-the-Market Common Share Offering Program


In November 2016, the        The Company established the Original At-the-Market Programan at-the-market common share offering program under which we were able tocan issue Class A common shares from time to time through various sales agents up to an aggregate of $400.0 million.$500.0 million (the “At-the-Market Program”). The program was established in orderCompany intends to use theany net proceeds from share issuancesthe At-the-Market Program to repay borrowings againstunder the Company’s revolving credit and term loan facilities,facility, to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy, and for working capital and general corporate purposes. The programAt-the-Market Program may be suspended or terminated by the Company at any time. During the three months ended March 31, 2017, the Company issued and sold 0.6 million Class A common shares under the Original At-the-Market Program for gross proceeds of $14.3 million, or $22.72 per share, and net proceeds of $14.1 million, after commissions and other expenses 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 share issuances. The Original At-the-Market Program was replaced in August 2017 with the At-the-Market Program with a $500.0 million capacity and the same terms as the previous program. As of March 31, 2018,2020, no shares have been issued under the At-the-Market Program and $500.0$500.0 million remained available for future share issuances.



38

Share Repurchase Program


In February 2018, the Company's        The Company’s board of trustees re-authorizedauthorized the establishment of our existing share repurchase program, authorizing the repurchase of up to $300.0$300.0 million of our outstanding Class A common shares and up to $250.0$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 three months ended March 31, 2018, the Company repurchased2020 and retired 1.8 million of our Class A common shares on a settlement date basis, in accordance with the program, at a weighted-average price of $19.36 per share and a total price of $34.9 million. We2019, we did not repurchase and retire any of our shares during the three months ended March 31, 2017.shares. As of March 31, 2018,2020, we had a remaining repurchase authorization of up to $265.1 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares under the program.


RedemptionDistributions

        As a REIT, we are required to distribute annually to our shareholders at least 90% of Series C Participating Preferred Shares

On April 5, 2018,our REIT taxable income (determined without regard to the Company redeemed all 7,600,000 sharesdeduction for dividends paid and excluding any net capital gains) and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of the outstanding 5.5% Series C participating preferred shares through a conversion of those participating preferred shares into Class A common shares of beneficial interest, $0.01 par value, in accordance with the conversion terms in the Articles Supplementary. This resulted in 10,848,827 Class A common shares issued from the conversion, based on a conversion ratio of 1.4275 Class A common shares issued per Series C participating preferred share.our REIT taxable income. The Operating Partnership also redeemed its corresponding Series C participating preferred units through a conversion into Class A units on April 5, 2018.funds the payment of distributions. We expect to use our NOL to reduce our REIT taxable income in the current and future years. As a result of the redemption, the Company will record a $32.2 million allocationDecember 31, 2019, AH4R had an NOL for U.S. federal income tax purposes of an estimated $188.8 million. Once our NOL is fully used, we would be required to increase AH4R’s distributions to comply with REIT distribution requirements and our current policy of distributing approximately all of our REIT taxable income (determined without regard to the Series C participating preferred shareholders in the second quarter of 2018, which represents the initial liquidation value of the Series C participating preferred shares in excess of the original equity carrying value of the Series C participating preferred shares as of the redemption date. The original equity carrying value of the Series C participating preferred shares was net of the initial bifurcated home price appreciation derivative liability and offering costs. (see Note 10)deduction for dividends paid).

Off-Balance Sheet Arrangements
 
We have no material obligations, assets or liabilities that would be considered off-balance sheet arrangements.


Contractual Obligations and Commitments

        Material changes to our aggregate indebtedness, if any, are described in Note 8. Debt to our condensed consolidated financial statements in this report.

        Except as described in Note 15. Commitments and Contingencies to our condensed consolidated financial statements in this report, as of March 31, 2020, there have been no other material changes outside of the ordinary course of business to our other known contractual obligations, which are set forth in the table included in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Annual Report.

Additional Non-GAAP Measures


Funds from Operations ("FFO"(“FFO”) / Core FFO / Adjusted FFO attributable to common share and unit holders

FFO attributable to common share and unit holders is a non-GAAP financial measure that we calculate in accordance with the White Paper on FFOdefinition approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income or loss calculated in accordance with GAAP, excluding extraordinary items, as defined by GAAP, gains and losses from sales or impairment of real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustmentadjustments for unconsolidated partnerships and joint ventures.ventures to reflect FFO on the same basis.


Core FFO attributable to common share and unit holders is a non-GAAP financial measure that we use as a supplemental measure of our performance. We compute this metric by adjusting FFO attributable to common share and unit holders for (1) acquisition fees and other transaction costs expensed incurred with business combinations and the acquisition or disposition of individual properties, (2) noncash share-based compensation expense, (3) noncash interest expense related to acquired debt, (4) hurricane-related charges, net, (5)which result in material charges to the impacted single-family properties, and (4) gain or loss on early extinguishment of debt, (6) noncash gain or loss on redemption or conversion of shares or units and (7) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value.debt.


Adjusted FFO attributable to common share and unit holders is a non-GAAP financial measure that we use as a supplemental measure of our performance. We compute this metric by adjusting Core FFO attributable to common share and unit holders for (1) recurring capital expenditures that are necessary to help preserve the value and maintain functionality of our properties and (2) actualcapitalized leasing costs incurred during the period. As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home propertyProperty by (b) our total number of properties, excluding newly acquired non-stabilized properties properties identified for future sale as part of the Company's disposition program and properties classified as held for sale.



39

We present FFO attributable to common share and unit holders because we consider this metric to be an important measure of the performance of real estate companies, as do many investors and analysts in evaluating the Company. We believe that FFO attributable to common share and unit holders provides useful information to investors because this metric excludes depreciation, which is included in computing net income and assumes the value of real estate diminishes predictably over time. We believe that real estate values fluctuate due to market conditions and in response to inflation. We also believe that Core FFO and Adjusted FFO attributable to common share and unit holders provide useful information to investors because they allow investors to compare our operating performance to prior reporting periods without the effect of certain items that, by nature, are not comparable from period to period.


FFO, Core FFO and Adjusted FFO attributable to common share and unit holders are not a substitute for net income or net cash flow provided by operating activities, each as determined in accordance with GAAP, as a measure of our operating performance, liquidity or ability to pay dividends. These metrics also are not necessarily indicative of cash available to fund future cash needs. Because other REITs may not compute these measures in the same manner, they may not be comparable among REITs.



The following is a reconciliation of the Company'sCompany’s net income or loss attributable to common shareholders, determined in accordance with GAAP, to FFO attributable to common share and unit holders, Core FFO attributable to common share and unit holders and Adjusted FFO attributable to common share and unit holders for the three months ended March 31, 20182020 and 20172019 (in thousands):
 For the Three Months Ended
March 31,
 20202019
 (Unaudited)(Unaudited)
Net income attributable to common shareholders$20,244  $16,283  
Adjustments:
Noncontrolling interests in the Operating Partnership3,501  3,026  
Net (gain) on sale / impairment of single-family properties and other(5,614) (5,145) 
Adjustments for unconsolidated joint ventures238  554  
Depreciation and amortization82,821  81,161  
Less: depreciation and amortization of non-real estate assets(2,064) (1,940) 
FFO attributable to common share and unit holders$99,126  $93,939  
Adjustments:  
Acquisition and other transaction costs2,147  834  
Noncash share-based compensation - general and administrative1,369  659  
Noncash share-based compensation - property management439  293  
Core FFO attributable to common share and unit holders$103,081  $95,725  
Recurring capital expenditures (1)
(8,711) (7,860) 
Leasing costs(910) (999) 
Adjusted FFO attributable to common share and unit holders$93,460  $86,866  
 For the Three Months Ended
March 31,
 2018 2017
 (Unaudited) (Unaudited)
Net income (loss) attributable to common shareholders$5,814
 $(1,490)
Adjustments: 
  
Noncontrolling interests in the Operating Partnership1,125
 (339)
Net (gain) on sale / impairment of single-family properties and other(1,556) (1,097)
Depreciation and amortization79,303
 73,953
Less: depreciation and amortization of non-real estate assets(1,830) (2,549)
FFO attributable to common share and unit holders$82,856
 $68,478
Adjustments: 
  
Acquisition fees and costs expensed1,311
 1,096
Noncash share-based compensation - general and administrative598
 521
Noncash share-based compensation - property management377
 417
Noncash interest expense related to acquired debt900
 840
Remeasurement of participating preferred shares(1,212) 5,410
Core FFO attributable to common share and unit holders$84,830
 $76,762
Recurring capital expenditures (1)(7,386) (6,397)
Leasing costs(2,723) (1,482)
Adjusted FFO attributable to common share and unit holders$74,721
 $68,883
(1)As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home propertyProperty by (b) our total number of properties, excluding newly acquired non-stabilized properties properties identified for future sale as part of the Company's disposition program and properties classified as held for sale.


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


EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP financial measure and is used by us and others as a supplemental measure of performance. Adjusted EBITDAEBITDAre is a supplemental non-GAAP financial measure, calculatedwhich we calculate in accordance with the definition approved by NAREIT by adjusting EBITDA for (1) acquisition fees and costs expensed incurred with business combinations and the acquisition of individual properties, (2) net gain or loss on sales / impairment of single-family properties and other (3)and adjusting for unconsolidated partnerships and joint ventures on the same basis. Adjusted EBITDAre is a supplemental non-GAAP financial measure calculated by adjusting EBITDAre for (1) acquisition and other transaction costs incurred with business combinations and the acquisition or disposition of properties, (2) noncash share-based compensation expense, (4)(3) hurricane-related charges, net, (5)which result in material charges to the impacted single-family properties, and (4) gain or loss on early extinguishment of debt, (6) gain or loss on conversion of shares and units and (7) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value.debt. Adjusted EBITDAEBITDAre after Capex and Leasing Costs is a supplemental non-GAAP financial measure calculated by adjusting Adjusted EBITDAEBITDAre for (1) recurring capital expenditures and (2) leasing costs. We believe these metrics provide useful information to investors because they exclude the impact of various income and expense items that are not indicative of operating performance.



40

The following is a reconciliation of net income, or loss,as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAEBITDAre and Adjusted EBITDAEBITDAre after Capex and Leasing Costs for the three months ended March 31, 20182020 and 20172019 (in thousands):
For the Three Months Ended
March 31,
20202019
(Unaudited)(Unaudited)
Net income$37,527  $33,091  
Interest expense29,715  31,915  
Depreciation and amortization82,821  81,161  
EBITDA$150,063  $146,167  
Net (gain) on sale / impairment of single-family properties and other(5,614) (5,145) 
Adjustments for unconsolidated joint ventures238  554  
EBITDAre$144,687  $141,576  
Noncash share-based compensation - general and administrative1,369  659  
Noncash share-based compensation - property management439  293  
Acquisition and other transaction costs2,147  834  
Adjusted EBITDAre$148,642  $143,362  
Recurring capital expenditures (1)
(8,711) (7,860) 
Leasing costs(910) (999) 
Adjusted EBITDAre after Capex and Leasing Costs$139,021  $134,503  
 For the Three Months Ended
March 31,
 2018 2017
 (Unaudited) (Unaudited)
Net income$21,525
 $11,796
Interest expense29,301
 31,889
Depreciation and amortization79,303
 73,953
EBITDA$130,129
 $117,638
    
Noncash share-based compensation - general and administrative598
 521
Noncash share-based compensation - property management377
 417
Acquisition fees and costs expensed1,311
 1,096
Net (gain) on sale / impairment of single-family properties and other(1,556) (1,097)
Remeasurement of participating preferred shares(1,212) 5,410
Adjusted EBITDA$129,647
 $123,985
    
Recurring capital expenditures (1)(7,386) (6,397)
Leasing costs(2,723) (1,482)
Adjusted EBITDA after Capex and Leasing Costs$119,538
 $116,106
(1)As a portion of our homes are recently developed, acquired and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home propertyProperty by (b) our total number of properties, excluding newly acquired non-stabilized properties properties identified for future sale as part of the Company's disposition program and properties classified as held for sale.





ITEMItem 3.Quantitative and Qualitative Disclosures aboutAbout Market Risk
 
Interest Rate Risk

The primary market risk to which we believe we are exposed is interest        During the three months ended March 31, 2020, the Company borrowed an additional $105.0 million, resulting in $105.0 million of outstanding variable rate risk, which may result from many factors, including government monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control.debt as of March 31, 2020. We may incur additional variable rate debt in the future, including additional amounts that we may borrow under our revolving credit and term loan facilities. In addition, decreases in interest rates may lead to additional competition for the acquisition of single-family homes, which may lead to future acquisitions being costlier and resulting in lower yields on single-family homes targeted for acquisition. Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to acquire single-family homes with rental rates high enough to offset the increase in interest rates on our borrowings.facility.

        
The Company's variable-rate debt was comprised of borrowings on our term loan facility of $200.0 million asAs of March 31, 2018, and comprised of borrowings on our revolving credit facility and term loan facility of $140.0 million and $200.0 million, respectively, as of December 31, 2017. All borrowings under our revolving credit facility bear interest at a LIBOR rate plus a margin ranging from 0.825% to 1.55% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.00% to 0.55% until the fully extended maturity date of June 2022. All borrowings under our term loan facility bear interest at a LIBOR rate plus a margin ranging from 0.90% to 1.75% or a base rate (generally determined according to a prime rate or federal funds rate) plus a margin ranging from 0.00% to 0.75% until the maturity date of June 2022. Assuming2020, assuming no change in the outstanding balance of our existing variable-ratevariable rate debt, the following table illustrates the effect of a hypothetical 100 basis point increase or decrease in the LIBOR rate onLondon Inter-Bank Offered Rate would increase or decrease our projected annual interest expense as of March 31, 2018, and December 31, 2017 (in thousands):
 March 31, 2018 December 31, 2017
Impact to future earnings due to variable rate debt, before the effect of capitalization: 
  
Rate increase of 1%$2,000
 $3,400
Rate decrease of 1% (1)$(2,000) $(3,400)

(1)Calculation of projected decrease in annual interest expense as a result of a 100 basis point decrease is reflective of any LIBOR floors or minimum interest rates stated in the agreements of respective borrowings.
by approximately $1.1 million. This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our exposure to the change. However, because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.

        There have been no other material changes to our market risk from those disclosed in section Part II, “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” of our 2019 Annual Report.

41


ITEMItem 4.Controls and Procedures


American Homes 4 Rent


Disclosure Controls and Procedures
 
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file and submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in accordance with SEC guidelines and that such information is communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures in reaching that level of reasonable assurance.
 
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at a reasonable assurance level.


Internal Control over Financial Reporting
 
There were no changes in the Company'sCompany’s internal control over financial reporting during the quarter ended March 31, 2018,2020, that have materially affected, or are reasonably likely to materially affect, the Company'sCompany’s internal control over financial reporting.


American Homes 4 Rent, L.P.


Disclosure Controls and Procedures


The Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file and submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in accordance with SEC guidelines and that such information is communicated to the Operating Partnership'sPartnership’s management, including the Operating Partnership's Chief Executive Officer and Chief Financial Officer of its general partner, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, the Operating Partnership'sPartnership’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures in reaching that level of reasonable assurance.
 
Under the supervision and with the participation of the Operating Partnership'sPartnership’s management, including itsthe Chief Executive Officer and Chief Financial Officer of its general partner, the Operating Partnership evaluated the effectiveness of its disclosure controls and procedures, as required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report. Based on that evaluation, the Operating Partnership's Chief Executive Officer and Chief Financial Officer of the Operating Partnership’s general partner concluded that the Operating Partnership'sPartnership’s disclosure controls and procedures were effective, at a reasonable assurance level.


Internal Control over Financial Reporting
 
There were no changes in the Operating Partnership'sPartnership’s internal control over financial reporting during the quarter ended March 31, 2018,2020, that have materially affected, or are reasonably likely to materially affect, the Operating Partnership'sPartnership’s internal control over financial reporting.



42

PART II
II—OTHER INFORMATION
 
Item 1.Legal Proceedings
 
For a description of the Company'sCompany’s legal proceedings, see Note 12.15. Commitments and Contingencies to our condensed consolidated financial statements in this report.


Item 1A.Risk Factors
 
In addition to the other information in this Quarterly Report on Form 10-Q, you should carefully consider the risks described in our 2019 Annual Report on Form 10-K filed for the year ended December 31, 2017, in Part I, Item 1A,“Item 1A. Risk FactorsFactors” and in our other filings with the SEC. These factors may materially affect our business, financial condition and operating results and could cause our actual results to differ materially from expectations.


There        The following risk factor supplements the existing risk factors set forth in our 2019 Annual Report.

We are subject to risks from the global pandemic associated with COVID-19 and we may in the future be subject to risks from other public health crises.

        Our business is subject to risks from the COVID-19 pandemic that is currently impacting our tenants, employees and suppliers. The COVID-19 pandemic has spread rapidly,adversely affecting public health, economic activity and employment. The risks to our business from the COVID-19 pandemic include:

•The pandemic and the measures taken to combat it have resulted in a significant increase in unemployment. Our operating results depend significantly on the ability of our current and prospective tenants to pay their rent. To the extent our current tenants or prospective tenants experience unemployment, deteriorating financial conditions, and declines in household income, they may be unwilling or unable to pay rent in full on a timely basis or renew or enter into new leases for our homes, and our revenues and operating results could be negatively affected. We have received a number of tenant inquiries regarding rent relief. The longer the COVID-19 pandemic continues, the greater the adverse impact is expected to be on our tenants’ ability to make timely rental payments, on prospective residents to afford our homes, and ultimately on our occupancy.

•State, local, federal and industry-initiated efforts in response to the COVID-19 pandemic may adversely affect our business. Certain government actions have, and future government actions may, restrict our ability to collect rent or enforce remedies for failure to pay rent. In addition, government restrictions on movement have and may in the future limit the ability of prospective tenants to visit our properties or new tenants to move into our properties. These government efforts to respond to the COVID-19 pandemic could adversely affect our occupancy levels and increase possible credit losses.

•Our acquisition and development activities have been no material changesslowed. Our growth may be adversely impacted as our ability to acquire and construct homes has been negatively affected by COVID-19. Due to market uncertainties regarding future asset values, we have temporarily ceased broker and third-party builder home acquisitions. We have continued new home construction, which most states permit as an essential business activity; however, some states where we are constructing new homes, such as Washington, temporarily prohibited residential construction. In addition, adverse impacts on the supply of construction materials and labor may delay or halt our risk factors from those disclosedconstruction activity.

•Our employees face COVID-19 health risks. If a significant number or our employees, or if key personnel, are unable to work as a result of COVID-19, this would adversely impact our business and operating results. In addition, during the COVID-19 outbreak, substantially all of our employees are working remotely and depend on Internet and third-party communications vendors that may be unreliable, experience shut-downs or be subject to new cybersecurity risks, adversely impacting operations.

•COVID-19 may delay our ability to maintain our properties. During the COVID-19 outbreak, we are prioritizing emergency repair and maintenance activities for occupied homes and we believe some tenants may be reluctant to request routine maintenance during the COVID-19 pandemic. Deferring routine repairs and maintenance may impact the value and desirability of our rental homes. It may also increase the expense and difficulty of completing these repairs in the section entitled “Risk Factors”future and may delay other needed repairs when the COVID-19 pandemic no longer constrains business activity.

•COVID-19 has adversely affected the capital markets. The financial and capital markets have experienced significant volatility and disruptions during the COVID-19 pandemic. If this volatility continues, it may increase the cost and availability of capital. As a result, we may have difficulty accessing debt and equity markets on attractive terms, or at all, which could affect our Annual Reportability to meet liquidity and capital expenditure requirements.

43


        We believe that the degree to which COVID-19 adversely impacts our business, operating results, cash flows and/or financial condition will be driven primarily by the duration, spread and severity of the pandemic, all of which are uncertain and difficult to predict. As a result, we are not able at this time to estimate the effect of these factors on Form 10-K forour business, but the year ended December 31, 2017.adverse impact on our business, results of operations, financial condition and cash flows could be material. Future public health crises could have similar impacts.


Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the Company’s repurchases of our outstanding Class A common shares during the three months ended March 31, 2018 (in thousands, except share and per share data):        None.

Period Total Number of Class A Common Shares Purchased Average Price Paid per Class A Common Share Total Number of Class A Common Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Class A Common Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2018 to January 31, 2018 —
 $—
 —
 $146,746
February 1, 2018 to February 28, 2018 —
 —
 —
 300,000
March 1, 2018 to March 31, 2018 1,804,163
 19.36
 1,804,163
 265,067
Total 1,804,163
 $19.36
 1,804,163
 $265,067

On February 22, 2018, the Company's board of trustees re-authorized our existing share repurchase program, authorizing 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 three months ended March 31, 2018, the Company repurchased and retired 1.8 million of our Class A common shares on a settlement date basis, in accordance with the program, at a weighted-average price of $19.36 per share and a total price of $34.9 million. As of March 31, 2018, 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.

Item 3.Defaults uponUpon Senior Securities
 
None.
 
Item 4.Mine Safety Disclosures
 
Not applicable.
 
Item 5.Other Information
 
None.
 
Item 6.Exhibits
 
The exhibits listed below are filed herewith or incorporated herein by reference.


Exhibit Index

Exhibit
Number		Exhibit Document
Exhibit
Number
Exhibit Document
2.1‡
Amended and Restated Contribution Agreement, dated December 28, 2012, by and among American Homes 4 Rent, American Homes 4 Rent, L.P., American Homes 4 Rent Properties One, LLC and American Homes 4 Rent, LLC (Incorporated by reference to Exhibit 2.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed June 25, 2013.)
2.2‡
First Amendment to Amended and Restated Contribution Agreement, dated January 30, 2013, by and among American Homes 4 Rent, American Homes 4 Rent, L.P., American Homes 4 Rent Properties One, LLC and American Homes 4 Rent, LLC (Incorporated by reference to Exhibit 2.2 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed June 25, 2013.)
2.3‡
Second Amendment to Amended and Restated Contribution Agreement, dated March 18, 2013, by and among American Homes 4 Rent, American Homes 4 Rent, L.P., American Homes 4 Rent Properties One, LLC and American Homes 4 Rent, LLC (Incorporated by reference to Exhibit 2.3 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed June 25, 2013.)
2.4‡
Contribution Agreement, dated February 25, 2013, by and among American Homes 4 Rent, LLC, American Homes 4 Rent, American Homes 4 Rent, L.P. and AH4R Properties Holdings, LLC (Incorporated by reference to Exhibit 2.4 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed June 25, 2013.)
2.5‡
Contribution Agreement, dated May 28, 2013, by and among American Homes 4 Rent, LLC, American Homes 4 Rent and American Homes 4 Rent, L.P. (Incorporated by reference to Exhibit 2.5 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed June 25, 2013.)
2.6‡
Contribution Agreement, dated June 11, 2013, by and among American Homes 4 Rent, American Homes 4 Rent, LLC, Alaska Permanent Fund Corporation, American Homes 4 Rent, L.P., American Homes 4 Rent I, LLC and American Homes 4 Rent TRS, LLC (Incorporated by reference to Exhibit 2.6 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed June 25, 2013.)
2.7‡
Agreement and Plan of Merger by and among American Homes 4 Rent, Sunrise Merger Sub, LLC, American Homes 4 Rent, L.P., OP Merger Sub, LLC, American Residential Properties, Inc., American Residential Properties, O.P., L.P. and American Residential GP, LLC, dated December 3, 2015 (Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed December 4, 2015)
2.8‡3.1

2.9‡
Contribution Agreement dated as of December 12, 2014 (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed December 18, 2014.)
3.1
Articles of Amendment and Restatement of Declaration of Trust of American Homes 4 Rent (Incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed June 25, 2013.)
3.2
3.3
3.4
Articles Supplementary for American Homes 4 Rent 6.500% Series D Cumulative Redeemable Perpetual Preferred Shares (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 17, 2016.)
3.53.4
3.63.5
3.73.6

Exhibit
Number
3.7
3.8
4.1
Indenture, dated November 27, 2013, among American Residential OP, L.P., as issuer, American Residential Properties, Inc., as guarantor, and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to American Residential Properties, Inc.’s Current Report on Form 8-K filed November 27, 2013.)
4.2
First Supplemental Indenture, dated February 29, 2016, among American Homes 4 Rent, ARPI REIT, LLC, American Residential Properties OP, L.P. and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.23.1 to the Company's Current Report on Form 8-K filed March 4, 2016.10, 2020.)
4.34.1
4.4
Form of Indenture (Incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-3 (Registration Number 333-221878) filed December 1, 2017.)
4.5
Indenture, dated as of February 7, 2018, between American Homes 4 Rent, L.P. and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 7, 2018.)


4.64.2
4.74.3

44

Exhibit
Number		 Exhibit Document
12.1
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Distributions of American Homes 4 Rent. Filed herewith.
4.4
12.2
31.14.5
31.1
31.2
31.3
31.4
32.1
32.2
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document

‡104The schedulesCover Page Interactive Data File (formatted as Inline XBRL and exhibits to this agreement have been omitted from this filing. The Company will furnish supplementally a copy of any such omitted schedules or exhibits to the SEC upon request.contained in Exhibit 101)




45

SIGNATURES
 
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




AMERICAN HOMES 4 RENT
AMERICAN HOMES 4 RENT/s/ Christopher C. Lau
/s/ Diana M. LaingChristopher C. Lau
Diana M. Laing
Chief Financial Officer
(Principal Financial Officer and duly authorized signatory of registrant)
Date: May 4, 20188, 2020

AMERICAN HOMES 4 RENT, L.P.
/s/ Diana M. LaingBy: American Homes 4 Rent, its General Partner
Diana M. Laing/s/ Christopher C. Lau
Christopher C. Lau
Chief Financial Officer
(Principal Financial Officer and duly authorized signatory of registrant)
Date: May 4, 20188, 2020






55

46