UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

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 ~~September~~June 30, ~~2017~~2018



¨		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:~~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 (American Homes 4 Rent)		46-1229660
Delaware (American Homes 4 Rent, L.P.)		80-0860173
(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)

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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



American Homes 4 Rent
Large accelerated filer	ý		Accelerated filer	¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨
			Emerging growth company	¨
American Homes 4 Rent, L.P.
Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	ý	(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 ~~286,103,292~~295,383,219 shares of American Homes 4 Rent's Class A common shares, ~~of beneficial interest,~~ $0.01 par value per share, and 635,075 shares of American Homes 4 Rent's Class B common shares, ~~of beneficial interest,~~ $0.01 par value per share, outstanding on ~~November~~August 1, ~~2017.~~2018.

EXPLANATORY NOTE

This report combines the quarterly ~~report~~reports on Form 10-Q for the period ended ~~September~~June 30, ~~2017,~~2018, of American Homes 4 Rent ~~also includes the financial results of~~and American Homes 4 Rent, L.P. Unless stated otherwise or the context otherwise requires, references to “AH4R" or "the General Partner" mean American Homes 4 Rent, a Maryland real estate investment trust (“REIT”), and references to “the Operating Partnership," "our ~~Operating Partnership"~~operating partnership" or “the OP” mean American Homes 4 Rent, L.P., a Delaware limited partnership, and its subsidiaries taken as a whole. References to “the Company,” “we,” "our," and “us” mean collectively AH4R, the Operating Partnership and those entities/subsidiaries owned or controlled by AH4R and/or the Operating Partnership.

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' 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 ~~units of partnership interest.~~OP units.

Shareholders' equity, partners' capital and noncontrolling interests are the main areas of difference between the ~~condensed~~ 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' capital in the Operating Partnership's financial statements and as noncontrolling interests in the Company'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' equity and 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 ~~condensed~~ 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's debt, noncontrolling interests and shareholders' equity or partners' capital, as applicable; and a combined Management's Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity.

This report also includes separate Part I, Item 4. Controls and Procedures 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 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

INDEX



		Page
	CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	i

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

	American Homes 4 Rent

	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017	1

	Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	2

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	3

	Condensed Consolidated Statement of Equity for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018	4

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	5

	American Homes 4 Rent, L.P.

	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017	7

	Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	8

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	9

	Condensed Consolidated Statement of Capital for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018	10

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017	11

	American Homes 4 Rent and American Homes 4 Rent, L.P.

	Notes to Condensed Consolidated Financial Statements	13

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3038

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4654

Item 4.	Controls and Procedures	4654

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	4755

Item 1A.	Risk Factors	4755

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4755

Item 3.	Defaults Upon Senior Securities	4755

Item 4.	Mine Safety Disclosures	4756

Item 5.	Other Information	4756

Item 6.	Exhibits	4756

	Exhibit Index	4857

	Signatures	5059

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Various statements contained in this Quarterly Report on Form 10-Q of American Homes 4 Rent ~~(the “Company,~~("AH4R,” ~~“we,” “our”~~“the General Partner") and ~~“us”~~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. These and other important factors, including those discussed or incorporated by reference under Part II, Item 1A.”Risk Factors”, Part I, Item 2. “Management’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, ~~2016, and in our Quarterly Report on Form 10-Q for the quarter ended June 30,~~ 2017, filed with the Securities and Exchange Commission, 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.

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

American Homes 4 Rent

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share data)


	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
	(Unaudited)						(Unaudited)
Assets
Single-family properties:
Land	$	1,600,906		$	1,512,183		$	1,670,214		$	1,665,631
Buildings and improvements	7,020,774			6,614,953			7,276,606			7,303,270
Single-family properties held for sale, net	50,370			87,430			284,012			35,803
	8,672,050			8,214,566			9,230,832			9,004,704
Less: accumulated depreciation	(869,551		)	(666,710		)	(1,046,911		)	(939,724		)
Single-family properties, net	7,802,499			7,547,856			8,183,921			8,064,980
Cash and cash equivalents	243,547			118,799			53,504			46,156
Restricted cash	119,574			131,442			159,010			136,667
Rent and other receivables, net	35,429			17,618			28,049			30,144
Escrow deposits, prepaid expenses and other assets	149,366			133,594			246,877			171,851
Deferred costs and other intangibles, net	13,516			11,956			13,142			13,025
Asset-backed securitization certificates	25,666			25,666			25,666			25,666
Goodwill	120,279			120,279			120,279			120,279
Total assets	$	8,509,876		$	8,107,210		$	8,830,448		$	8,608,768

Liabilities
Revolving credit facility	$	—		$	—		$	—		$	140,000
Term loan facility, net	197,913			321,735			99,120			198,023
Asset-backed securitizations, net	1,981,444			2,442,863			1,969,322			1,977,308
Unsecured senior notes, net							492,406			—
Exchangeable senior notes, net	110,771			108,148			113,533			111,697
Secured note payable	49,107			49,828			—			48,859
Accounts payable and accrued expenses	263,745			177,206			282,734			222,867
Amounts payable to affiliates							4,571			4,720
Participating preferred shares derivative liability	68,469			69,810			—			29,470
Total liabilities	2,671,449			3,169,590			2,961,686			2,732,944

Commitments and contingencies

Equity
Shareholders’ equity:
Class A common shares, $0.01 par value per share, 450,000,000 shares authorized, 273,605,703 and 242,740,482 shares issued and outstanding at September 30, 2017, and December 31, 2016, respectively	2,736			2,427
Class B common shares, $0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at September 30, 2017, and December 31, 2016	6			6
Preferred shares, $0.01 par value per share, 100,000,000 shares authorized, 47,810,000 and 37,010,000 shares issued and outstanding at September 30, 2017, and December 31, 2016, respectively	478			370
Class A common shares, $0.01 par value per share, 450,000,000 shares authorized, 295,383,159 and 286,114,637 shares issued and outstanding at June 30, 2018, and December 31, 2017, respectively							2,954			2,861
Class B common shares, $0.01 par value per share, 50,000,000 shares authorized, 635,075 shares issued and outstanding at June 30, 2018, and December 31, 2017							6			6
Preferred shares, $0.01 par value per share, 100,000,000 shares authorized, 30,750,000 and 38,350,000 shares issued and outstanding at June 30, 2018, and December 31, 2017, respectively							308			384
Additional paid-in capital	5,517,978			4,568,616			5,630,321			5,600,256
Accumulated deficit	(417,609		)	(378,578		)	(494,326		)	(453,953		)
Accumulated other comprehensive income	—			95			9,267			75
Total shareholders’ equity	5,103,589			4,192,936			5,148,530			5,149,629

Noncontrolling interest	734,838			744,684			720,232			726,195
Total equity	5,838,427			4,937,620			5,868,762			5,875,824

Total liabilities and equity	$	8,509,876		$	8,107,210		$	8,830,448		$	8,608,768

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

American Homes 4 Rent

Condensed Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

(Unaudited)


	For the Three Months Ended September 30,					For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017		2016			2017			2016			2018			2017			2018			2017
Revenues:
Rents from single-family properties	$	207,490	$	197,137		$	613,245		$	558,623		$	227,211		$	204,648		$	445,234		$	405,755
Fees from single-family properties	2,843		2,898			8,137			7,819			2,754			2,690			5,587			5,294
Tenant charge-backs	36,094		30,808			91,849			72,077			32,917			27,382			68,724			55,755
Other	409		5,214			4,367			12,811			1,601			2,288			2,942			3,958
Total revenues	246,836		236,057			717,598			651,330			264,483			237,008			522,487			470,762

Expenses:
Property operating expenses	97,944		92,488			267,203			238,987			98,843			85,954			199,830			169,259
Property management expenses	17,447		18,335			52,367			53,177			18,616			17,442			37,603			34,920
General and administrative expense	8,525		8,043			26,746			24,544			9,677			8,926			18,908			18,221
Interest expense	26,592		32,851			86,873			99,309			31,978			28,392			61,279			60,281
Acquisition fees and costs expensed	1,306		1,757			3,814			10,899			1,321			1,412			2,632			2,508
Depreciation and amortization	74,790		75,392			221,459			224,513			78,319			72,716			157,622			146,669
Hurricane-related charges, net	10,136		—			10,136			—
Other	1,285		3,142			4,202			6,482			1,624			1,359			2,451			2,917
Total expenses	238,025		232,008			672,800			657,911			240,378			216,201			480,325			434,775

Gain on sale of single-family properties and other, net	1,895		11,682			6,375			12,574			3,240			2,454			5,496			4,480
Loss on early extinguishment of debt	—		(13,408		)	(6,555		)	(13,408		)	(1,447		)	(6,555		)	(1,447		)	(6,555		)
Gain on conversion of Series E units	—		—			—			11,463
Remeasurement of participating preferred shares	8,391		(2,490		)	1,341			(2,940		)	—			(1,640		)	1,212			(7,050		)

Net income (loss)	19,097		(167		)	45,959			1,108
Net income												25,898			15,066			47,423			26,862

Noncontrolling interest	309		7,316			(22		)	10,391			(3,150		)	(30		)	(2,036		)	(331		)
Dividends on preferred shares	17,253		13,669			46,122			26,650			11,984			15,282			26,581			28,869
Redemption of participating preferred shares												32,215			—			32,215			—

Net income (loss) attributable to common shareholders	$	1,535	$	(21,152	)	$	(141	)	$	(35,933	)
Net loss attributable to common shareholders												$	(15,151	)	$	(186	)	$	(9,337	)	$	(1,676	)

Weighted-average shares outstanding:
Basic	266,767,313		238,401,343			256,768,343			232,036,802
Diluted	289,153,060		238,401,343			256,768,343			232,036,802
Weighted-average shares outstanding─basic and diluted												295,462,572			258,900,456			290,848,633			251,685,993

Net income (loss) attributable to common shareholders per share:
Basic	$	0.01	$	(0.09	)	$	—		$	(0.15	)
Diluted	$	—	$	(0.09	)	$	—		$	(0.15	)
Net loss attributable to common shareholders per share─basic and diluted												$	(0.05	)	$	—		$	(0.03	)	$	(0.01	)

Dividends declared per common share	$	0.05	$	0.05		$	0.15		$	0.15		$	0.05		$	0.05		$	0.10		$	0.10

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

American Homes 4 Rent

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Amounts in thousands)

(Unaudited)

For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2017 2016 2017 2016
Net income (loss) $ 19,097
$ (167 ) $ 45,959
$ 1,108
Other comprehensive income (loss):

Unrealized gain on interest rate cap agreement:

Reclassification adjustment for amortization of interest expense included in net income (loss) —
28
(28 ) 130
Unrealized gain on investment in equity securities:

Reclassification adjustment for realized gain included in net income (loss) —
—
(67 ) —
Other comprehensive income (loss) —
28
(95 ) 130
Comprehensive income (loss) 19,097
(139 ) 45,864
1,238
Comprehensive income (loss) attributable to noncontrolling interests 309
7,308
(5 ) 10,366
Dividends on preferred shares 17,253
13,669
46,122
26,650
Comprehensive income (loss) attributable to common shareholders $ 1,535
$ (21,116 ) $ (253 ) $ (35,778 )



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Net income	$	25,898		$	15,066		$	47,423		$	26,862
Other comprehensive (loss) income:
Gain on cash flow hedging instruments:
Gain on settlement of cash flow hedging instrument	—			—			9,553			—
Reclassification adjustment for amortization of interest expense included in net income	(241		)	—			(361		)	(28		)
Gain on investment in equity securities:										—
Reclassification adjustment for realized gain included in net income	—			—			—			(67		)
Other comprehensive (loss) income	(241		)	—			9,192			(95		)
Comprehensive income	25,657			15,066			56,615			26,767
Comprehensive loss attributable to noncontrolling interests	(3,209		)	(31		)	(566		)	(314		)
Dividends on preferred shares	11,984			15,282			26,581			28,869
Redemption of participating preferred shares	32,215			—			32,215			—
Comprehensive loss attributable to common shareholders	$	(15,333	)	$	(185	)	$	(1,615	)	$	(1,788	)

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

American Homes 4 Rent

Condensed Consolidated Statement of Equity

(Amounts in thousands, except share data)

(Unaudited)

Class A common shares Class B common shares Preferred shares
Number
of shares Amount Number
of shares Amount Number
of shares Amount Additional
paid-in
capital Accumulated
deficit Accumulated other
comprehensive
income Shareholders’
equity Noncontrolling
interest Total
equity

Balances at December 31, 2016 242,740,482
$ 2,427
635,075
$ 6
37,010,000
$ 370
$ 4,568,616
$ (378,578 ) $ 95
$ 4,192,936
$ 744,684
$ 4,937,620

Share-based compensation —
—
—
—
—
—
3,175
—
—
3,175
—
3,175

Common shares issued under share-based compensation plans, net of shares withheld for employee taxes 89,829
1
—
—
—
—
629
—
—
630
—
630

Issuance of Class A common shares, net of offering costs of $10,759 30,676,080
307
—
—
—
—
683,700
—
—
684,007
—
684,007

Issuance of perpetual preferred shares, net of offering costs of $9,355 —
—
—
—
10,800,000
108
260,537
—
—
260,645
—
260,645

Redemptions of Class A units 99,312
1
—
—
—
—
1,321
—
—
1,322
(1,491 ) (169 )

Distributions to equity holders:

Preferred shares —
—
—
—
—
—
—
(46,122 ) —
(46,122 ) —
(46,122 )
Noncontrolling interests —
—
—
—
—
—
—
—
—
—
(8,333 ) (8,333 )
Common shares —
—
—
—
—
—
—
(38,890 ) —
(38,890 ) —
(38,890 )

Net income (loss) —
—
—
—
—
—
—
45,981
—
45,981
(22 ) 45,959

Total other comprehensive loss —
—
—
—
—
—
—
—
(95 ) (95 ) —
(95 )

Balances at September 30, 2017 273,605,703
$ 2,736
635,075
$ 6
47,810,000
$ 478
$ 5,517,978
$ (417,609 ) $ —
$ 5,103,589
$ 734,838
$ 5,838,427



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

Share-based compensation	—		—			—	—		—		—			1,918			—			—		1,918			—			1,918

Common stock issued under share-based compensation plans, net of shares withheld for employee taxes	223,858		2			—	—		—		—			2,658			—			—		2,660			—			2,660

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

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

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

Distributions to equity holders:
Preferred shares	—		—			—	—		—		—			—			(26,581		)	—		(26,581		)	—			(26,581		)
Noncontrolling interests	—		—			—	—		—		—			—			—			—		—			(5,535		)	(5,535		)
Common shares	—		—			—	—		—		—			—			(29,187		)	—		(29,187		)	—			(29,187		)

Net income	—		—			—	—		—		—			—			49,459			—		49,459			(2,036		)	47,423

Total other comprehensive income	—		—			—	—		—		—			—			—			9,192		9,192			—			9,192

Balances at June 30, 2018	295,383,159		$	2,954		635,075	$	6	30,750,000		$	308		$	5,630,321		$	(494,326	)	$	9,267	$	5,148,530		$	720,232		$	5,868,762

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

American Homes 4 Rent

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2017			2016			2018			2017
Operating activities
Net income	$	45,959		$	1,108		$	47,423		$	26,862
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	221,459			224,513			157,622			146,669
Noncash amortization of deferred financing costs	6,285			7,912			3,888			4,410
Noncash amortization of discount on exchangeable senior notes	2,624			1,955
Noncash amortization of discount on ARP 2014-SFR1 securitization	—			1,744
Noncash amortization of discounts on debt instruments							1,941			1,714
Noncash amortization of cash flow hedging instrument							(361		)	—
Noncash share-based compensation	3,175			2,744			1,918			2,059
Provision for bad debt	5,142			5,092			3,616			2,843
Hurricane-related charges, net	10,136			—
Loss on early extinguishment of debt	6,555			13,408			1,447			6,555
Gain on conversion of Series E units to Series D units	—			(11,463		)
Remeasurement of participating preferred shares	(1,341		)	2,940			(1,212		)	7,050
Equity in net earnings of unconsolidated ventures	(1,367		)	(418		)	(587		)	(1,623		)
Net gain on sale of single-family properties and other	(6,375		)	(12,574		)	(5,496		)	(4,480		)
Loss on impairment of single-family properties	3,786			1,467			2,236			2,487
Net gain on resolutions of mortgage loans	(17		)	(7,205		)	—			(16		)
Other changes in operating assets and liabilities:
Rent and other receivables	(11,929		)	(12,110		)	(5,522		)	(4,497		)
Prepaid expenses and other assets	(5,690		)	(429		)	(12,167		)	(7,440		)
Deferred leasing costs	(5,361		)	(6,199		)	(5,834		)	(3,401		)
Accounts payable and accrued expenses	71,325			47,920			61,061			40,967
Amounts payable to affiliates	5,009			(5,425		)	(8		)	5,047
Net cash provided by operating activities	349,375			254,980			249,965			225,206

Investing activities
Cash paid for single-family properties	(462,875		)	(187,886		)	(206,137		)	(226,937		)
Change in escrow deposits for purchase of single-family properties	(2,710		)	(821		)	(4,357		)	(1,708		)
Cash acquired in noncash business combinations	—			25,020
Payoff of credit facility in connection with ARPI merger	—			(350,000		)
Net proceeds received from sales of single-family properties and other	68,618			71,894			30,142			54,232
Net proceeds received from sales of non-performing loans	—			44,538
Purchase of commercial office buildings	—			(27,105		)
Proceeds received from hurricane-related insurance claims							4,000			—
Collections from mortgage financing receivables	83			17,687			—			78
Distributions from unconsolidated joint ventures	5,981			6,400
Renovations to single-family properties	(31,208		)	(21,710		)
Other capital expenditures for single-family properties	(26,725		)	(22,026		)
Distributions from joint ventures							2,440			2,144
Initial renovations to single-family properties							(33,030		)	(18,351		)
Recurring and other capital expenditures for single-family properties							(23,331		)	(15,038		)
Other purchases of productive assets	(38,060		)	—			(95,354		)	(16,936		)
Net cash used for investing activities	(486,896		)	(444,009		)	(325,627		)	(222,516		)

Financing activities
Proceeds from issuance of Class A common shares	694,765			—			—			355,589
Payments of Class A common share issuance costs	(10,444		)	—			—			(350		)
Proceeds from issuance of perpetual preferred shares	270,000			498,750			—			155,000
Payments of perpetual preferred share issuance costs	(9,229		)	(15,922		)	—			(5,209		)
Proceeds from exercise of stock options	988			2,777
Repurchase of Class A common shares	—			(96,098		)	(34,969		)	—
Share-based compensation proceeds, net							1,933			1,858
Redemptions of Class A units	(169		)	(399		)	—			(169		)
Payments on asset-backed securitizations	(472,470		)	(374,031		)	(10,490		)	(466,793		)
Proceeds from revolving credit facility	62,000			951,000			100,000			62,000
Payments on revolving credit facility	(112,000		)	(876,000		)	(240,000		)	(20,000		)
Proceeds from term loan facility	25,000			250,000			—			25,000
Payments on term loan facility	(100,000		)	—			(100,000		)	(100,000		)
Payments on secured note payable	(721		)	(687		)	(49,427		)	(482		)
Proceeds from unsecured senior notes, net of discount							497,210			—
Settlement of cash flow hedging instrument							9,628			—
Distributions to noncontrolling interests	(8,333		)	(8,582		)	(5,536		)	(5,555		)
Distributions to common shareholders	(38,890		)	(35,997		)	(28,702		)	(25,172		)
Distributions to preferred shareholders	(46,122		)	(26,650		)	(29,194		)	(28,869		)
Deferred financing costs paid	(3,974		)	(10,425		)	(5,100		)	(3,930		)
Net cash provided by financing activities	250,401			257,736
Net cash provided by (used for) financing activities							105,353			(57,082		)

Net increase in cash, cash equivalents and restricted cash	112,880			68,707
Cash, cash equivalents and restricted cash, beginning of period	250,241			168,968
Cash, cash equivalents and restricted cash, end of period (see Note 3)	$	363,121		$	237,675

American Homes 4 Rent

Condensed Consolidated Statements of Cash Flows (continued)

(Amounts in thousands)

(Unaudited)

For the Nine Months Ended
September 30,
2017 2016
Supplemental cash flow information

Cash payments for interest, net of amounts capitalized $ (77,964 ) $ (87,707 )

Supplemental schedule of noncash investing and financing activities

Accounts payable and accrued expenses related to property acquisitions and renovations $ 7,151
$ (226 )
Transfer of term loan borrowings to revolving credit facility $ 50,000
$ —
Transfer of deferred financing costs from term loan to revolving credit facility $ 1,524
$ —
Transfers of completed homebuilding deliveries to properties $ 3,010
$ —
Note receivable related to a bulk sale of properties, net of discount $ 5,635
$ —

Merger with ARPI
Single-family properties $ —
$ 1,277,253
Restricted cash $ —
$ 9,521
Rent and other receivables, net $ —
$ 843
Escrow deposits, prepaid expenses and other assets $ —
$ 35,134
Deferred costs and other intangibles, net $ —
$ 22,696
Asset-backed securitization $ —
$ (329,703 )
Exchangeable senior notes, net $ —
$ (112,298 )
Accounts payable and accrued expenses $ —
$ (38,485 )
Class A common shares and units issued $ —
$ (530,460 )



	For the Six Months Ended June 30,
	2018			2017
Net increase (decrease) in cash, cash equivalents and restricted cash	29,691			(54,392		)
Cash, cash equivalents and restricted cash, beginning of period	182,823			250,241
Cash, cash equivalents and restricted cash, end of period (see Note 3)	$	212,514		$	195,849

Supplemental cash flow information
Cash payments for interest, net of amounts capitalized	$	(47,663	)	$	(54,157	)

Supplemental schedule of noncash investing and financing activities
Accounts payable and accrued expenses related to property acquisitions, renovations and construction	$	979		$	3,922
Transfer of term loan borrowings to revolving credit facility	$	—		$	50,000
Transfer of deferred financing costs from term loan to revolving credit facility	$	—		$	1,354
Transfers of completed homebuilding deliveries to properties	$	37,541		$	—
Note receivable related to a bulk sale of properties, net of discount	$	—		$	5,559
Redemption of participating preferred shares	$	(28,258	)	$	—
Accrued distributions to affiliates	$	(149	)	$	—
Accrued distributions to non-affiliates	$	(1,995	)	$	—

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

American Homes 4 Rent, L.P.

Condensed Consolidated Balance Sheets

(Amounts in thousands, except unit data)


	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
	(Unaudited)						(Unaudited)
Assets
Single-family properties:
Land	$	1,600,906		$	1,512,183		$	1,670,214		$	1,665,631
Buildings and improvements	7,020,774			6,614,953			7,276,606			7,303,270
Single-family properties held for sale, net	50,370			87,430			284,012			35,803
	8,672,050			8,214,566			9,230,832			9,004,704
Less: accumulated depreciation	(869,551		)	(666,710		)	(1,046,911		)	(939,724		)
Single-family properties, net	7,802,499			7,547,856			8,183,921			8,064,980
Cash and cash equivalents	243,547			118,799			53,504			46,156
Restricted cash	119,574			131,442			159,010			136,667
Rent and other receivables, net	35,429			17,618			28,049			30,144
Escrow deposits, prepaid expenses and other assets	149,184			128,403			246,869			171,851
Amounts due from affiliates	25,848			30,857			25,674			25,666
Deferred costs and other intangibles, net	13,516			11,956			13,142			13,025
Goodwill	120,279			120,279			120,279			120,279
Total assets	$	8,509,876		$	8,107,210		$	8,830,448		$	8,608,768

Liabilities
Revolving credit facility	$	—		$	—		$	—		$	140,000
Term loan facility, net	197,913			321,735			99,120			198,023
Asset-backed securitizations, net	1,981,444			2,442,863			1,969,322			1,977,308
Unsecured senior notes, net							492,406			—
Exchangeable senior notes, net	110,771			108,148			113,533			111,697
Secured note payable	49,107			49,828			—			48,859
Accounts payable and accrued expenses	263,745			177,206			282,734			222,867
Amounts payable to affiliates							4,571			4,720
Participating preferred units derivative liability	68,469			69,810			—			29,470
Total liabilities	2,671,449			3,169,590			2,961,686			2,732,944

Commitments and contingencies

Capital
Partners' capital:
General partner:
Common units (274,240,778 and 243,375,557 units issued and outstanding at September 30, 2017, and December 31, 2016, respectively)	4,008,095			3,357,992
Preferred units (47,810,000 and 37,010,000 units issued and outstanding at September 30, 2017, and December 31, 2016, respectively)	1,095,494			834,849
Common units (296,018,234 and 286,749,712 units issued and outstanding at June 30, 2018, and December 31, 2017, respectively)							4,395,806			4,248,236
Preferred units (30,750,000 and 38,350,000 units issued and outstanding at June 30, 2018, and December 31, 2017, respectively)							743,457			901,318
Limited partners:
Common units (55,449,466 and 55,555,960 units issued and outstanding at September 30, 2017, and December 31, 2016, respectively)	736,320			746,174
Common units (55,350,153 units issued and outstanding at June 30, 2018, and December 31, 2017)							720,232			727,544
Accumulated other comprehensive income	—			95			9,267			75
Total partners' capital	5,839,909			4,939,110			5,868,762			5,877,173

Noncontrolling interest	(1,482		)	(1,490		)	—			(1,349		)
Total capital	5,838,427			4,937,620			5,868,762			5,875,824

Total liabilities and capital	$	8,509,876		$	8,107,210		$	8,830,448		$	8,608,768

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

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 September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
Revenues:
Rents from single-family properties	$	207,490		$	197,137		$	613,245		$	558,623		$	227,211		$	204,648		$	445,234		$	405,755
Fees from single-family properties	2,843			2,898			8,137			7,819			2,754			2,690			5,587			5,294
Tenant charge-backs	36,094			30,808			91,849			72,077			32,917			27,382			68,724			55,755
Other	409			5,214			4,367			12,811			1,601			2,288			2,942			3,958
Total revenues	246,836			236,057			717,598			651,330			264,483			237,008			522,487			470,762

Expenses:
Property operating expenses	97,944			92,488			267,203			238,987			98,843			85,954			199,830			169,259
Property management expenses	17,447			18,335			52,367			53,177			18,616			17,442			37,603			34,920
General and administrative expense	8,525			8,043			26,746			24,544			9,677			8,926			18,908			18,221
Interest expense	26,592			32,851			86,873			99,309			31,978			28,392			61,279			60,281
Acquisition fees and costs expensed	1,306			1,757			3,814			10,899			1,321			1,412			2,632			2,508
Depreciation and amortization	74,790			75,392			221,459			224,513			78,319			72,716			157,622			146,669
Hurricane-related charges, net	10,136			—			10,136			—
Other	1,285			3,142			4,202			6,482			1,624			1,359			2,451			2,917
Total expenses	238,025			232,008			672,800			657,911			240,378			216,201			480,325			434,775

Gain on sale of single-family properties and other, net	1,895			11,682			6,375			12,574			3,240			2,454			5,496			4,480
Loss on early extinguishment of debt	—			(13,408		)	(6,555		)	(13,408		)	(1,447		)	(6,555		)	(1,447		)	(6,555		)
Gain on conversion of Series E units	—			—			—			11,463
Remeasurement of participating preferred units	8,391			(2,490		)	1,341			(2,940		)	—			(1,640		)	1,212			(7,050		)

Net income (loss)	19,097			(167		)	45,959			1,108
Net income													25,898			15,066			47,423			26,862

Noncontrolling interest	(31		)	(226		)	8			(446		)	(248		)	1			(259		)	39
Preferred distributions	17,253			13,669			46,122			26,650			11,984			15,282			26,581			28,869
Income allocated to Series C and D limited partners	—			10,915			—			16,478
Redemption of participating preferred units													32,215			—			32,215			—

Net income (loss) attributable to common unitholders	$	1,875		$	(24,525	)	$	(171	)	$	(41,574	)
Net loss attributable to common unitholders													$	(18,053	)	$	(217	)	$	(11,114	)	$	(2,046	)

Weighted-average common units outstanding:
Basic	322,303,138			285,208,489			312,315,728			271,994,345
Diluted	344,688,885			285,208,489			312,315,728			271,994,345
Weighted-average common units outstanding─basic and diluted													350,812,725			314,451,049			346,198,786			307,239,255

Net income (loss) attributable to common unitholders per unit:
Basic	$	0.01		$	(0.09	)	$	—		$	(0.15	)
Diluted	$	—		$	(0.09	)	$	—		$	(0.15	)
Net loss attributable to common unitholders per unit─basic and diluted													$	(0.05	)	$	—		$	(0.03	)	$	(0.01	)

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

American Homes 4 Rent, L.P.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Amounts in thousands)

(Unaudited)

For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2017 2016 2017 2016
Net income (loss) $ 19,097
$ (167 ) $ 45,959
$ 1,108
Other comprehensive income (loss):
Unrealized gain on interest rate cap agreement:
Reclassification adjustment for amortization of interest expense included in net income (loss) —
28
(28 ) 130
Unrealized gain on investment in equity securities:
Reclassification adjustment for realized gain included in net income (loss) —
—
(67 ) —
Other comprehensive income (loss) —
28
(95 ) 130
Comprehensive income (loss) 19,097
(139 ) 45,864
1,238
Comprehensive (loss) income attributable to noncontrolling interests (31 ) (226 ) 8
(446 )
Preferred distributions 17,253
13,669
46,122
26,650
Income allocated to Series C and D limited partners —
10,915
—
16,478
Comprehensive income (loss) attributable to common unitholders $ 1,875
$ (24,497 ) $ (266 ) $ (41,444 )



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Net income	$	25,898		$	15,066		$	47,423		$	26,862
Other comprehensive (loss) income:
Gain on cash flow hedging instruments:
Gain on settlement of cash flow hedging instrument	—			—			9,553			—
Reclassification adjustment for amortization of interest expense included in net income	(241		)	—			(361		)	(28		)
Gain on investment in equity securities:
Reclassification adjustment for realized gain included in net income	—			—			—			(67		)
Other comprehensive (loss) income	(241		)	—			9,192			(95		)
Comprehensive income	25,657			15,066			56,615			26,767
Comprehensive (loss) income attributable to noncontrolling interests	(248		)	1			(259		)	39
Preferred distributions	11,984			15,282			26,581			28,869
Redemption of participating preferred units	32,215			—			32,215			—
Comprehensive loss attributable to common unitholders	$	(18,294	)	$	(217	)	$	(1,922	)	$	(2,141	)

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

American Homes 4 Rent, L.P.

Condensed Consolidated Statement of Capital

(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, 2016 243,375,557
$ 3,357,992
$ 834,849
55,555,960
$ 746,174
$ 95
$ 4,939,110
$ (1,490 ) $ 4,937,620

Share-based compensation —
3,175
—
—
—
—
3,175
—
3,175

Common units issued under share-based compensation plans, net of units withheld for employee taxes 89,829
630
—
—
—
—
630
—
630

Issuance of Class A common units, net of offering costs of $10,759 30,676,080
684,007
—
—
—
—
684,007
—
684,007

Issuance of perpetual preferred units, net of offering costs of $9,355 —
—
260,645
—
—
—
260,645
—
260,645

Redemptions of Class A units 99,312
1,322
—
(106,494 ) (1,491 ) —
(169 ) —
(169 )

Distributions to capital holders:
Preferred units —
—
(46,122 ) —
—
—
(46,122 ) —
(46,122 )
Noncontrolling interests —
—
—
—
—
—
—
—
—
Common units —
(38,890 ) —
—
(8,333 ) —
(47,223 ) —
(47,223 )

Net income (loss) —
(141 ) 46,122
—
(30 ) —
45,951
8
45,959

Total other comprehensive loss —
—
—
—
—
(95 ) (95 ) —
(95 )

Balances at September 30, 2017 274,240,778
$ 4,008,095
$ 1,095,494
55,449,466
$ 736,320
$ —
$ 5,839,909
$ (1,482 ) $ 5,838,427



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

Share-based compensation	—		1,918			—			—	—			—		1,918			—			1,918

Common units issued under share-based compensation plans, net of units withheld for employee taxes	223,858		2,660			—			—	—			—		2,660			—			2,660

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

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

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

Distributions to capital holders:
Preferred units	—		—			(26,581		)	—	—			—		(26,581		)	—			(26,581		)
Common units	—		(29,187		)	—			—	(5,535		)	—		(34,722		)	—			(34,722		)

Net income	—		22,878			26,581			—	(1,777		)	—		47,682			(259		)	47,423

Total other comprehensive income	—		—			—			—	—			9,192		9,192			—			9,192

Balances at June 30, 2018	296,018,234		$	4,395,806		$	743,457		55,350,153	$	720,232		$	9,267	$	5,868,762		$	—		$	5,868,762

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

American Homes 4 Rent, L.P.

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2017			2016			2018			2017
Operating activities
Net income	$	45,959		$	1,108		$	47,423		$	26,862
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	221,459			224,513			157,622			146,669
Noncash amortization of deferred financing costs	6,285			7,912			3,888			4,410
Noncash amortization of discount on exchangeable senior notes	2,624			1,955
Noncash amortization of discount on ARP 2014-SFR1 securitization	—			1,744
Noncash amortization of discounts on debt instruments							1,941			1,714
Noncash amortization of cash flow hedging instrument							(361		)	—
Noncash share-based compensation	3,175			2,744			1,918			2,059
Provision for bad debt	5,142			5,092			3,616			2,843
Hurricane-related charges, net	10,136			—
Loss on early extinguishment of debt	6,555			13,408			1,447			6,555
Gain on conversion of Series E units to Series D units	—			(11,463		)
Remeasurement of participating preferred units	(1,341		)	2,940			(1,212		)	7,050
Equity in net earnings of unconsolidated ventures	(1,367		)	(418		)	(587		)	(1,623		)
Net gain on sale of single-family properties and other	(6,375		)	(12,574		)	(5,496		)	(4,480		)
Loss on impairment of single-family properties	3,786			1,467			2,236			2,487
Net gain on resolutions of mortgage loans	(17		)	(7,205		)	—			(16		)
Other changes in operating assets and liabilities:
Rent and other receivables	(11,929		)	(12,110		)	(5,522		)	(4,497		)
Prepaid expenses and other assets	(5,690		)	(429		)	(12,167		)	(7,440		)
Deferred leasing costs	(5,361		)	(6,199		)	(5,834		)	(3,401		)
Accounts payable and accrued expenses	71,325			47,920			61,061			40,967
Amounts payable to affiliates	5,009			(5,425		)	(8		)	5,047
Net cash provided by operating activities	349,375			254,980			249,965			225,206

Investing activities
Cash paid for single-family properties	(462,875		)	(187,886		)	(206,137		)	(226,937		)
Change in escrow deposits for purchase of single-family properties	(2,710		)	(821		)	(4,357		)	(1,708		)
Cash acquired in noncash business combinations	—			25,020
Payoff of credit facility in connection with ARPI merger	—			(350,000		)
Net proceeds received from sales of single-family properties and other	68,618			71,894			30,142			54,232
Net proceeds received from sales of non-performing loans	—			44,538
Purchase of commercial office buildings	—			(27,105		)
Proceeds received from hurricane-related insurance claims							4,000			—
Collections from mortgage financing receivables	83			17,687			—			78
Distributions from unconsolidated joint ventures	5,981			6,400
Renovations to single-family properties	(31,208		)	(21,710		)
Other capital expenditures for single-family properties	(26,725		)	(22,026		)
Distributions from joint ventures							2,440			2,144
Initial renovations to single-family properties							(33,030		)	(18,351		)
Recurring and other capital expenditures for single-family properties							(23,331		)	(15,038		)
Other purchases of productive assets	(38,060		)	—			(95,354		)	(16,936		)
Net cash used for investing activities	(486,896		)	(444,009		)	(325,627		)	(222,516		)

Financing activities
Proceeds from issuance of Class A common units	694,765			—
Payments of Class A common unit issuance costs	(10,444		)	—
Proceeds from issuance of Class A units							—			355,589
Payments of Class A unit issuance costs							—			(350		)
Proceeds from issuance of perpetual preferred units	270,000			498,750			—			155,000
Payments of perpetual preferred unit issuance costs	(9,229		)	(15,922		)	—			(5,209		)
Proceeds from exercise of stock options	988			2,777
Repurchase of Class A common units	—			(96,098		)
Repurchase of Class A units							(34,969		)	—
Share-based compensation proceeds, net							1,933			1,858
Redemptions of Class A units	(169		)	(399		)	—			(169		)
Payments on asset-backed securitizations	(472,470		)	(374,031		)	(10,490		)	(466,793		)
Proceeds from revolving credit facility	62,000			951,000			100,000			62,000
Payments on revolving credit facility	(112,000		)	(876,000		)	(240,000		)	(20,000		)
Proceeds from term loan facility	25,000			250,000			—			25,000
Payments on term loan facility	(100,000		)	—			(100,000		)	(100,000		)
Payments on secured note payable	(721		)	(687		)	(49,427		)	(482		)
Distributions to noncontrolling interests	—			(230		)
Proceeds from unsecured senior notes, net of discount							497,210			—
Settlement of cash flow hedging instrument							9,628			—
Distributions to common unitholders	(47,223		)	(43,493		)	(34,238		)	(30,727		)
Distributions to preferred unitholders	(46,122		)	(26,650		)	(29,194		)	(28,869		)
Distributions to Series D convertible unitholders	—			(856		)
Deferred financing costs paid	(3,974		)	(10,425		)	(5,100		)	(3,930		)
Net cash provided by financing activities	250,401			257,736

Net increase in cash, cash equivalents and restricted cash	112,880			68,707
Cash, cash equivalents and restricted cash, beginning of period	250,241			168,968
Cash, cash equivalents and restricted cash, end of period (see Note 3)	$	363,121		$	237,675
Net cash provided by (used for) financing activities							105,353			(57,082		)

American Homes 4 Rent, L.P.

Condensed Consolidated Statements of Cash Flows (continued)

(Amounts in thousands)

(Unaudited)

For the Nine Months Ended
September 30,
2017 2016
Supplemental cash flow information
Cash payments for interest, net of amounts capitalized $ (77,964 ) $ (87,707 )

Supplemental schedule of noncash investing and financing activities
Accounts payable and accrued expenses related to property acquisitions and renovations $ 7,151
$ (226 )
Transfer of term loan borrowings to revolving credit facility $ 50,000
$ —
Transfer of deferred financing costs from term loan to revolving credit facility $ 1,524
$ —
Transfers of completed homebuilding deliveries to properties $ 3,010
$ —
Note receivable related to a bulk sale of properties, net of discount $ 5,635
$ —

Merger with ARPI
Single-family properties $ —
$ 1,277,253
Restricted cash $ —
$ 9,521
Rent and other receivables, net $ —
$ 843
Escrow deposits, prepaid expenses and other assets $ —
$ 35,134
Deferred costs and other intangibles, net $ —
$ 22,696
Asset-backed securitization $ —
$ (329,703 )
Exchangeable senior notes, net $ —
$ (112,298 )
Accounts payable and accrued expenses $ —
$ (38,485 )
Class A common units issued $ —
$ (530,460 )



	For the Six Months Ended June 30,
	2018			2017
Net increase (decrease) in cash, cash equivalents and restricted cash	29,691			(54,392		)
Cash, cash equivalents and restricted cash, beginning of period	182,823			250,241
Cash, cash equivalents and restricted cash, end of period (see Note 3)	$	212,514		$	195,849

Supplemental cash flow information
Cash payments for interest, net of amounts capitalized	$	(47,663	)	$	(54,157	)

Supplemental schedule of noncash investing and financing activities
Accounts payable and accrued expenses related to property acquisitions, renovations and construction	$	979		$	3,922
Transfer of term loan borrowings to revolving credit facility	$	—		$	50,000
Transfer of deferred financing costs from term loan to revolving credit facility	$	—		$	1,354
Transfers of completed homebuilding deliveries to properties	$	37,541		$	—
Note receivable related to a bulk sale of properties, net of discount	$	—		$	5,559
Redemption of participating preferred units	$	(28,258	)	$	—
Accrued distributions to affiliates	$	(149	)	$	—
Accrued distributions to non-affiliates	$	(1,995	)	$	—

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

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") is a Maryland real estate investment trust (“REIT”) formed on October 19, 2012, for the purpose of acquiring, renovating, leasing and operating single-family homes as rental properties. American Homes 4 Rent, L.P., a Delaware limited partnership formed on October 22, 2012, and its consolidated subsidiaries (collectively, the "Operating Partnership," our ~~"Operating Partnership"~~"operating partnership" or the "OP") is the entity through which the Company conducts substantially all of our business and owns, directly or through subsidiaries, substantially all of our assets. References to “the Company,” “we,” "our," and “us” mean collectively, AH4R, the Operating Partnership and those entities/subsidiaries owned or controlled by AH4R and/or the Operating Partnership. As of ~~September~~June 30, ~~2017,~~2018, the Company held ~~50,015~~52,049 single-family properties in 22 states, including ~~469~~2,209 properties identified as part of the Company's disposition program, comprised of 1,838 properties classified as held for sale and 371 properties identified for future sale.

AH4R is the general partner of, and as of ~~September~~June 30, ~~2017,~~2018, owned an approximate ~~83.2%~~84.2% common partnership interest in, the Operating Partnership with the remaining ~~16.8%~~15.8% common partnership interest 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 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, 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 ~~units of partnership interest.~~

From our formation through June 10, 2013, the Company was externally managed and advised by American Homes 4 Rent Advisor, LLC (the “Advisor”) and the leasing, managing and advertising of our properties were overseen and directed by American Homes 4 Rent Management Holdings, LLC (the “Property Manager”), both of which were subsidiaries of American Homes 4 Rent, LLC (“AH LLC”). On June 10, 2013, we acquired the Advisor and the Property Manager from AH LLC in exchange for ~~4,375,000~~ ~~Series D convertible units and~~ ~~4,375,000~~ Series E convertible units from the Operating Partnership, therefore internalizing our management including all administrative, financial, property management, marketing and leasing personnel, including executive management. The Company consolidates the Advisor and the Property Manager and the results of these operations are reflected in the condensed consolidated financial statements. Effective August 31, 2016, AH LLC was liquidated and its ownership interests in the Operating Partnership were distributed to its members.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’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 unconsolidated subsidiary and are included in escrow deposits, prepaid expenses and other assets within the condensed consolidated balance sheets. ~~Ownership interests~~The ownership interest in ~~certain~~a consolidated ~~subsidiaries~~subsidiary of the Company held by outside parties ~~are~~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, ~~2016.~~2017. Any references in this report to the number of properties is outside the scope of our independent registered public accounting firm’s review of our financial statements, in accordance with the standards of the Public Company Accounting Oversight Board. In the opinion of management, all adjustments of a normal and recurring nature necessary for a fair presentation 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, ~~and~~ liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Effective December 31, 2016, in accordance with our adoption of Accounting Standards Update ("ASU") No. 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash~~, the Company includes restricted cash together with cash and cash equivalents when reconciling the beginning and ending balances shown in the statements of cash flows, which has the effect of excluding the presentation of transfers between restricted and unrestricted cash amounts in the statements of cash flows. Prior to the adoption, the beginning and ending balances presented in the statements of cash flows included only cash and cash equivalents, and transfers between restricted and unrestricted cash amounts were presented within operating and investing activities based on the nature of the amounts. All prior period amounts have been reclassified to conform to the current presentation. This resulted in $131.4 million and $111.3 million of restricted cash as of September 30, 2016, and December 31, 2015, respectively, being added to cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows.

~~Effective January 1, 2017,~~in order to include share-based compensation costs for employees in the same financial statement line item as the cash compensation paid to the employees, noncash share-based compensation expense has been reclassified with the amounts related to corporate administrative employees and centralized and field property management employees reflected in general and administrative expense and property management expenses, respectively, within the condensed consolidated statements of operations. Additionally, all costs associated with operating our proprietary property management platform such as salary expenses for both centralized and field property management personnel, lease expenses and operating costs for property management offices and technology expenses for maintaining the property management platform, which were previously included in property operating expenses, have been reclassified into property management expenses. This resulted in the reclassification of $0.9 million and $2.7 million of noncash share-based compensation expense for the three and nine months ended September 30, 2016, respectively, with $0.4 million and $1.1 million of noncash share-based compensation expense reclassified to property management expenses, respectively, and $0.5 million and $1.6 million of noncash share-based compensation expense reclassified to general and administrative expense, respectively, in the condensed consolidated statements of operations. This also resulted in $17.9 million and $52.0 million of property management expenses for the three and nine months ended September 30, 2016, respectively, which were previously included in property operating expenses, being reclassified to property management expenses in the condensed consolidated statements of operations.

There have been no ~~other~~ changes to our significant accounting policies that have had a material impact on our condensed consolidated financial statements and related notes, compared to those policies disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~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 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, to amend ASC No. 815,~~ ~~Derivatives and Hedging~~, to more closely align hedge accounting with a company’s risk management strategies, provide additional transparency and understandability of hedge results, as well as to simplify the application of hedge accounting. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness. Instead, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness will be recorded in other comprehensive income, and amounts deferred in other comprehensive income will be reclassified into earnings and presented in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings. This guidance will be effective for public companies for annual reporting periods beginning after December 15, 2018, and for interim periods within those annual periods, with early adoption permitted. The Company adopted this guidance effective September 30, 2017, which will impact our hedge accounting policy as disclosed above. The adoption of this guidance did not have a material impact on our financial statements.

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~, to simplify the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which had involved determining the fair value of individual assets and liabilities of a reporting unit to measure goodwill. Instead, goodwill impairment will be determined as the excess of a reporting unit’s carrying value over its fair value, not to exceed the carrying amount of goodwill. The guidance will be effective for the Company for annual reporting periods beginning after December 15, 2019, and for interim periods within those annual periods. Early adoption is permitted for any goodwill impairment tests performed after January 1, 2017. The Company is currently assessing the impact of the guidance on our financial statements.

~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~, which changed the definition of a business and will now require management to determine whether substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. When this is the case, the transferred assets and activities is not a business. This determination is important as the accounting treatment for business combinations and asset acquisitions differs since transactions costs are expensed in a business combination and capitalized in an asset acquisition. The guidance will be effective for public companies for annual reporting periods beginning after December 15, 2017, and for interim periods within those annual periods, with early adoption permitted. The guidance will be applied prospectively to any transactions occurring within the period of adoption. The Company adopted this guidance as of January 1, 2017, on a prospective basis, which results in our leased properties no longer meeting the definition of a business. Therefore, dispositions of leased properties will no longer result in a reduction to goodwill. The adoption of this guidance did not have a material impact on our financial statements.

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 ~~will be~~is effective for the Company for annual reporting periods beginning after December 15, 2017, and for interim periods within those annual periods with early adoption permitted. ~~If early adopted, an entity must adopt all of the amendments in the same period.~~ The Company ~~is currently assessing the impact of the~~adopted this guidance effective January 1, 2018. The adoption of this guidance ~~and does~~did not ~~anticipate that the adoption of this guidance will~~ have a material impact on our financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), 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. The guidance will be effective for the Company for annual reporting periods beginning after December 15, 2019, and for interim periods within those annual periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is currently assessing the impact of the guidance on our financial statements.

In ~~March 2016, the FASB issued ASU No. 2016-09,~~ ~~Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance became effective for the Company for annual reporting periods beginning after December 15, 2016, and for interim periods within those annual periods. The Company adopted this guidance effective January 1, 2017, which resulted in our election to recognize forfeitures of share-based compensation as they occur. The adoption of this guidance did not have a material impact on our financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases~~(Topic~~ (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. ~~Lessor accounting will remain similar to lessor accounting under previous GAAP, while aligning with the FASB's new revenue recognition guidance for non-lease components.~~ 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 changes 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 ~~will be~~is effective for the Company for annual reporting periods beginning after December 15, 2017, and for interim periods within those annual periods. The Company ~~is currently assessing the~~adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material impact ~~of the guidance~~ on our financial statements.

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 ~~customer~~customers versus ~~noncustomer,~~noncustomers, with the exception toof the presentation of comprehensive income (revenue and expense when ~~sale~~sales to ~~customer~~customers or ~~gain~~gains and ~~loss~~losses when ~~sale~~sales to ~~noncustomer)~~noncustomers).

~~In our initial assessment, the Company’s current accounting policies for tenant chargebacks, recovery revenue, and real estate property sales are aligned with~~ The Company adopted the new revenue recognition ~~principles prescribed by~~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 ~~guidance. Although we do not expect~~revenue recognition ASU and determined that there were no differences in the ~~new standards to ultimately change the amount~~amounts or timing of recognition. Therefore, the adoption of this ASU did not result in an adjustment to our ~~revenue recognition,~~retained earnings on January 1, 2018.

In February 2018, the ~~Company will continue to assess the potential effects of~~FASB issued ASU No. ~~2014-09~~2018-03, Recognition and ~~ASU No. 2017-05, noting that~~Measurement of Financial Assets and Financial Liabilities, which retained the ~~underlying principles~~current framework for accounting for financial instruments in GAAP but made targeted improvements to address certain aspects of recognition, measurement, presentation, and ~~processes used to record that revenue are changing under ASC 606 and ASC 610-20.~~disclosure of financial instruments. The guidance ~~will be~~is effective for ~~the Company in~~ fiscal years ~~(interim and annual reporting periods) that begin~~beginning after December 15, 2017, ~~with early adoption permitted. At that time, the Company may adopt the full retrospective approach or the modified retrospective approach.~~and interim periods within those fiscal years beginning after June 15, 2018. The Company ~~does not anticipate that adoption~~is currently assessing the impact of ~~this~~the guidance ~~will have a material impact~~ on our 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, ~~and~~ cash reserves in accordance with certain loan ~~agreements.~~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's and the Operating Partnership's condensed consolidated statements of cash flows to the corresponding financial statement line items in the condensed consolidated balance sheets as of ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:


	September 30, 2017		September 30, 2016		June 30, 2018		June 30, 2017
Balance Sheet:
Cash and cash equivalents	$	243,547	$	106,308	$	53,504	$	67,325
Restricted cash	119,574		131,367		159,010		128,524
Statement of Cash Flows:
Cash, cash equivalents and restricted cash	$	363,121	$	237,675	$	212,514	$	195,849

Note 4. Single-Family Properties

Single-family properties, net, consisted of the following as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016 (dollars in thousands)~~2017 (in thousands, except property data):


	September 30, 2017			June 30, 2018
	Number of properties	Net book value		Number of properties	Net book value
Leased single-family properties	46,026	$	7,130,878	48,020	$	7,526,347
Single-family properties being renovated	858	179,208		223	57,472
Single-family properties being prepared for re-lease	392	49,341		332	46,805
Vacant single-family properties available for lease	2,270	392,702		1,265	218,285
Single-family properties held for sale, net	469	50,370		1,838	284,012
Single-family properties identified for future sale				371	51,000
Total	50,015	$	7,802,499	52,049	$	8,183,921


	December 31, 2016			December 31, 2017
	Number of properties	Net book value		Number of properties	Net book value
Leased single-family properties	44,798	$	7,040,000	46,996	$	7,284,708
Single-family properties being renovated	312	57,200		980	225,194
Single-family properties being prepared for re-lease	91	14,453		372	47,994
Vacant single-family properties available for lease	2,102	348,773		2,581	471,281
Single-family properties held for sale, net	1,119	87,430		310	35,803
Total	48,422	$	7,547,856	51,239	$	8,064,980

Single-family properties, net as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016,~~2017, included ~~$27.5~~$4.8 million and ~~$14.3~~$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 ~~$71.2~~$74.1 million and ~~$67.2~~$69.0 million for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, and ~~$208.9~~$149.5 million and ~~$194.2~~$137.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively.

During the three ~~and nine~~ months ended ~~September~~June 30, 2018, the Company sold 113 homes, which generated total net proceeds of $18.2 million and resulted in a net gain on sale of $3.2 million. During the six months ended June 30, 2018, the Company sold 216 homes, which generated total net proceeds of $29.6 million and resulted in a net gain on sale of $5.4 million, and sold land which generated total net proceeds of $0.5 million and resulted in a net gain on sale of $0.1 million. During the three and six months ended June 30, 2017, the Company sold ~~107~~127 and ~~738~~631 homes, respectively, which generated total net proceeds of ~~$14.4~~$15.7 million and ~~$54.2~~$39.8 million, respectively, and resulted in a net gain on sale of ~~$1.9~~$2.2 million and ~~$3.1~~$1.2 million, respectively. Total net proceeds for the ~~nine~~six months ended ~~September~~June 30, 2017, included a $7.0 million note receivable, before a $1.5 million discount, that was recorded during the first quarter of 2017. During the three and nine months ended September 30, 2016, the Company sold 453 and 587 homes, respectively, which generated total net proceeds of $56.2 million and $71.9 million, respectively, and resulted in a net gain on sale of $11.7 million and $12.6 million, respectively.

Hurricanes Harvey and Irma impacted certain properties in our Houston, Florida and Southeast markets during the third quarter of 2017. Approximately 140 homes sustained major damage and nearly 3,400 homes incurred minor damage, consisting primarily of downed trees and damaged roofs and fences. The Company’s property and casualty insurance policies provide coverage for wind and flood damage, as well as business interruption costs, during the period of remediation and repairs, subject to deductibles and limits. During the three months ended September 30, 2017, the Company recognized a $12.6 million impairment charge to write down the net book values of the impacted properties, of which we believe it is probable that we will recover an estimated $11.0 million through insurance claims, and accrued $8.5 million of additional repair, remediation and other costs. The $10.1 million of net charges were included in hurricane-related charges, net within the condensed consolidated statement of operations for the three months ended September 30, 2017. After the $12.6 million impairment charge, the impacted properties had an aggregate net book value of $8.3 million. The impairment charge represents the difference between management’s estimates of the fair values of the impacted properties and their carrying values. The fair values were based on current market prices of the components of the properties that did not sustain damage. As these fair value measurements were estimated using unobservable inputs, we classify them within Level 3 of the valuation hierarchy.

Note 5. Rent and Other Receivables, Net

Included in rent and other receivables, net is an allowance for doubtful accounts of ~~$9.3~~$10.1 million and ~~$5.7~~$10.4 million as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016,~~2017, respectively. Also included in rent and other receivables, net, is ~~$11.0~~$4.9 million of

hurricane-related insurance claims receivable and $0.9 million of non-tenant receivables as of ~~September~~June 30, ~~2017,~~2018, compared to ~~$0.6~~$8.9 million of hurricane-related insurance claims receivable and $1.2 million of non-tenant receivables as of December 31, ~~2016.~~2017.

Note 6. Escrow Deposits, Prepaid Expenses and Other Assets

The following table summarizes escrow deposits, prepaid expenses and other assets as of June 30, 2018, and December 31, 2017 (in thousands):



	June 30, 2018		December 31, 2017
Escrow deposits, prepaid expenses and other	$	45,944	$	33,964
Investments in joint ventures	40,487		42,341
Commercial real estate, vehicles and FF&E, net	44,652		43,608
Land held for development	72,948		39,079
Homebuilding construction in progress	42,846		12,859
Total	$	246,877	$	171,851

Note 6.7. Deferred Costs and Other Intangibles, Net

Deferred costs and other intangibles, net, consisted of the following as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017 (in thousands):


	September 30, 2017			December 31, 2016			June 30, 2018			December 31, 2017
Deferred leasing costs	$	12,831		$	7,470		$	9,171		$	7,030
Deferred financing costs	11,244			6,552			11,244			11,244
Intangible assets:
Value of in-place leases	4,623			4,739			20			179
Trademark	3,100			3,100			—			3,100
Database	2,100			2,100			2,100			2,100
	33,898			23,961			22,535			23,653
Less: accumulated amortization	(20,382		)	(12,005		)	(9,393		)	(10,628		)
Total	$	13,516		$	11,956		$	13,142		$	13,025

Amortization expense related to deferred leasing costs, the value of in-place leases, trademark and database was ~~$2.1~~$2.5 million and ~~$6.9~~$2.2 million for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, and ~~$7.2~~$4.7 million and ~~$26.7~~$5.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, which has been 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 the three months ended ~~September~~June 30, 2018 and 2017, respectively, and ~~2016, and $1.3~~$1.0 million and ~~$1.9~~$0.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, which has been included in gross interest, prior to interest capitalization (see Note 7)8).

The following table sets forth the estimated annual amortization expense related to deferred costs and other intangibles, net as of ~~September~~June 30, ~~2017,~~2018, for future periods (in thousands):


Year	Deferred Leasing Costs		Deferred Financing Costs		Value of In-place Leases		Trademark		Database		Deferred Leasing Costs		Deferred Financing Costs		Value of In-place Leases		Database		Total
Remaining 2017	$	1,240	$	495	$	31	$	165	$	75
2018	1,835		1,964		21		92		300
Remaining 2018											$	3,430	$	990	$	3	$	150	$	4,573
2019	—		1,964		2		—		300		1,271		1,964		2		300		3,537
2020	—		1,969		—		—		132		—		1,969		—		132		2,101
2021	—		1,964		—		—		—		—		1,964		—		—		1,964
Thereafter	—		967		—		—		—
2022											—		967		—		—		967
Total	$	3,075	$	9,323	$	54	$	257	$	807	$	4,701	$	7,854	$	5	$	582	$	13,142

Note 7.8. Debt

All of the Company's indebtedness is debt of the Operating Partnership. AH4R is not directly obligated under any indebtedness, but guarantees some of the debt of the Operating Partnership. The following table presents the Company’s debt as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017 (in thousands):


			Outstanding Principal Balance								Outstanding Principal Balance
	Interest Rate (1)	Maturity Date	September 30, 2017			December 31, 2016			Interest Rate (1)	Maturity Date	June 30, 2018			December 31, 2017
AH4R 2014-SFR1 securitization (2)	N/A	N/A	$	—		$	456,074
AH4R 2014-SFR2 securitization	4.42%	October 9, 2024	497,743			501,810			4.42%	October 9, 2024	$	493,761		$	496,326
AH4R 2014-SFR3 securitization	4.40%	December 9, 2024	513,361			517,827			4.40%	December 9, 2024	509,400			512,041
AH4R 2015-SFR1 securitization (3)	4.14%	April 9, 2045	539,199			543,480
AH4R 2015-SFR2 securitization (4)	4.36%	October 9, 2045	468,461			472,043
AH4R 2015-SFR1 securitization (2)									4.14%	April 9, 2045	534,960			537,723
AH4R 2015-SFR2 securitization (3)									4.36%	October 9, 2045	464,746			467,267
Total asset-backed securitizations			2,018,764			2,491,234					2,002,867			2,013,357
Unsecured senior notes (4)									4.08%	February 15, 2028	500,000			—
Exchangeable senior notes	3.25%	November 15, 2018	115,000			115,000			3.25%	November 15, 2018	115,000			115,000
Secured note payable(5)	4.06%	July 1, 2019	49,107			49,828			N/A	N/A	—			48,859
Revolving credit facility ~~(5)~~(6)	2.43%	June 30, 2022	—			—			3.29%	June 30, 2022	—			140,000
Term loan facility ~~(6)~~(7)	2.58%	June 30, 2022	200,000			325,000			3.44%	June 30, 2022	100,000			200,000
Total debt ~~(7)~~(8)			2,382,871			2,981,062					2,717,867			2,517,216
Unamortized discount on exchangeable senior notes			(1,156		)	(1,883		)
Unamortized discounts on unsecured and exchangeable senior notes											(3,092		)	(895		)
Equity component of exchangeable senior notes			(3,073		)	(4,969		)			(1,062		)	(2,408		)
Deferred financing costs, net ~~(8)~~(9)			(39,407		)	(51,636		)			(39,332		)	(38,026		)
Total debt per balance sheet			$	2,339,235		$	2,922,574				$	2,674,381		$	2,475,887


(1)	Interest rates are as of ~~September~~June 30, ~~2017.~~2018. Unless otherwise stated, interest rates are fixed percentages.


(2)	~~The AH4R 2014-SFR1 securitization was paid off in full during the second quarter of 2017.~~


~~(3)~~	The AH4R 2015-SFR1 securitization has a maturity date of April 9, 2045, with an anticipated repayment date of April 9, 2025.


~~(4)~~(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 secured note payable was paid off in full during the second quarter of 2018.

(6)

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 ~~September~~June 30, ~~2017,~~2018, plus 1-month LIBOR.

~~(6)~~(7)

The term loan component of our credit facility ~~provides for a borrowing capacity of up to $200.0 million, with a maturity date of~~matures 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 ~~September~~June 30, ~~2017,~~2018, plus 1-month LIBOR.


~~(7)~~(8)	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 ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016.~~2017.

~~(8)~~(9)

Deferred financing costs relate to our asset-backed securitizations, ~~and our~~ term loan ~~facility.~~facility and unsecured senior notes. Amortization of deferred financing costs was ~~$1.4~~$1.5 million and ~~$2.2~~$1.4 million for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, and ~~$5.0~~$2.9 million and ~~$6.3~~$3.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively, which has been included in gross interest, prior to interest capitalization.

Early Extinguishment of Debt

During the second quarter of 2018, the Company paid off the outstanding principal on the secured note payable of approximately $48.4 million, which resulted in $0.5 million of charges that were included in loss on early extinguishment of debt within the condensed consolidated statements of operations. The payoff of the secured note payable also resulted in the release of the 572 homes pledged as collateral and $2.1 million of restricted cash for lender requirements. Also during the second quarter of 2018, the Company paid down $100.0 million on our term loan facility, which resulted in $0.9 million of charges related to the write-off of unamortized deferred financing costs that were included in loss on early extinguishment of debt within the condensed consolidated statements of operations. During the second quarter of 2017, the Company paid off the outstanding principal on the AH4R 2014-SFR1 asset-backed securitization of approximately $455.4 million, ~~using proceeds from the Class A common share offering in the first quarter of 2017 and available cash,~~ which resulted in $6.6 million of charges primarily related to the write-off of unamortized deferred financing costs that were included in loss on early extinguishment of debt within the condensed consolidated statements of operations. The payoff of the AH4R 2014-SFR1 asset-backed securitization also resulted in the release of the 3,799 homes pledged as collateral and $9.4 million of restricted cash for lender requirements.

Debt Maturities

The following table summarizes the contractual maturities of the Company's debt on a fully extended basis as of June 30, 2018 (in thousands):



Remaining 2018	$	125,358
2019	20,714
2020	20,714
2021	20,714
2022	120,714
Thereafter	2,409,653
Total debt	2,717,867
Unamortized discounts and deferred financing costs (1)	(43,486		)
Total debt per balance sheet	$	2,674,381


(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 $1.9 million. The net proceeds from this issuance were used 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, are senior unsecured obligations of the Operating Partnership and rank equally in right of payment with all other existing and future senior unsecured indebtedness of the Operating Partnership. The Operating Partnership’s obligations under the exchangeable senior notes are fully and unconditionally guaranteed by the Company.

~~The exchangeable senior notes bear interest at a rate of 3.25% per annum and~~ 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 ~~September~~June 30, ~~2017,~~2018, was ~~55.1453~~55.5443 of ~~our~~the Company's Class A common shares per $1,000 principal amount of the notes. The exchange rate is adjusted based on ~~our~~the Company's Class A common share price and distributions to common shareholders.

As of September 30, 2017, the exchangeable senior notes, net had a balance of $110.8 million in the condensed consolidated balance sheets, which was net of an unamortized discount of $1.2 million and $3.1 million of unamortized fair value of the exchange settlement feature, which was included in additional paid-in capital within the Company's condensed consolidated balance sheets and was included in general partner's common capital within the Operating Partnership's condensed consolidated balance sheets.

~~Credit Facilities~~

During 2016, the Company entered into a $1.0 billion credit agreement, which was subsequently amended in June 2017. The amendment expanded our borrowing capacity on the revolving credit facility to $800.0 million and reduced the term loan facility to $200.0 million. The amendment also lowered our cost of borrowing and provides a more flexible borrowing structure. The interest rate on the revolving credit facility is, at the Company’s election, 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%. Borrowings under the term loan facility accrue interest, at the Company’s election, at either a LIBOR rate plus a margin ranging from 0.90% to 1.75% or a base rate plus a margin ranging from 0.00% to 0.75%. In each case, the actual margin is determined based on the Company's credit ratings in effect from time to time. Based on current corporate ratings for LIBOR-based borrowings as of September 30, 2017, the revolving credit facility bears interest at 1-month LIBOR plus 1.20%, and the term loan facility bears interest at 1-month LIBOR plus 1.35%. The credit agreement includes an accordion feature allowing the revolving credit facility or the term loan facility to be increased to an aggregate amount not to exceed $1.75 billion, subject to certain conditions. The revolving credit facility matures on June 30, 2021, with two six-month extension options at the Company's election upon payment of an extension fee, and the term loan facility matures on June 30, 2022. No amortization payments are required on the term loan facility prior to the maturity date. The credit agreement requires that we maintain certain financial covenants. As of September 30, 2017 and December 31, 2016, the Company had no outstanding borrowings against the revolving credit facility, $200.0 million and $325.0 million, respectively, of outstanding borrowings against the term loan facility and was in compliance with all loan covenants.

Interest Expense

The following table displays our total gross interest, which includes unused commitment and other fees on our credit facilities and amortization of deferred financing costs, the discounts on ~~the ARP 2014-SFR1 securitization and exchangeable~~ senior notes and the fair value of the exchange settlement feature of the exchangeable senior notes, and capitalized interest for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (in thousands):


	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Gross interest	$	28,125		$	33,433		$	90,044		$	100,886		$	33,341		$	29,427		$	65,078		$	61,919
Capitalized interest	(1,533		)	(582		)	(3,171		)	(1,577		)	(1,363		)	(1,035		)	(3,799		)	(1,638		)
Interest expense	$	26,592		$	32,851		$	86,873		$	99,309		$	31,978		$	28,392		$	61,279		$	60,281

Note 8.9. Accounts Payable and Accrued Expenses

The following table summarizes accounts payable and accrued expenses as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017 (in thousands):


	September 30, 2017		December 31, 2016		June 30, 2018		December 31, 2017
Accounts payable	$	1,091	$	9	$	194	$	1,726
Accrued property taxes	110,572		46,091		90,629		47,765
Other accrued liabilities	40,490		31,262		38,948		31,788
Accrued distribution payable					24,987		26,982
Accrued construction and maintenance liabilities	17,107		9,899		20,942		17,928
Resident security deposits	74,285		70,430		82,952		75,951
Prepaid rent	20,200		19,515		24,082		20,727
Total	$	263,745	$	177,206	$	282,734	$	222,867

Note 9.10. Shareholders’ Equity / Partners' Capital

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

~~Class A Common Share Offering~~

During the first quarter of 2017, the Company issued 14,842,982 Class A common shares of beneficial interest, $0.01 par value per share, in an underwritten public offering and concurrent private placement, raising gross proceeds to the Company of $336.5 million after underwriter's discount and before offering costs of approximately $0.3 million. The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance.

During the third quarter of 2017, the Company issued 13,800,000 Class A common shares of beneficial interest, $0.01 par value per share, in an underwritten public offering, raising gross proceeds of $312.0 million before offering costs of approximately $9.2 million. The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance.

At-the-Market Common Share Offering Program

In November 2016, the Company established an at-the-market common share offering program under which we were able to issue Class A common shares from time to time through various sales agents up to an aggregate of $400.0 million (the "Original At-the-Market ~~Program"), which was replaced in August 2017 with an at-the-market common share offering program with a $500.0 million capacity on the same terms (the "At-the-Market~~ Program"). The program was established in order to use the net proceeds from share issuances to repay borrowings against the Company’s revolving credit and term loan facilities, to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy, and for working capital and general corporate purposes. The program may be suspended or terminated by the Company at any time. During the ~~nine~~six months ended ~~September~~June 30, 2017, the Company issued and sold ~~2.0~~0.9 million Class A common shares under the Original At-the-Market Program for gross proceeds of ~~$46.2~~$19.4 million, or ~~$22.74~~$22.75 per share, and net proceeds of ~~$45.6~~$19.1 million, after commissions and other expenses of approximately ~~$0.6~~$0.3 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 ~~September~~June 30, ~~2017, $500.0~~2018, no shares have been issued under the At-the-Market Program and $500.0 million remained available for future share ~~issuances under the At-the-Market Program.~~issuances.

Share Repurchase Program

In ~~September 2015,~~February 2018, the ~~Company announced that our~~Company's board of trustees ~~approved a~~re-authorized our existing share repurchase program, authorizing ~~us to~~the repurchase of up to ~~$300.0~~$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 ~~nine~~six months ended ~~September~~June 30, ~~2017, we did not repurchase and retire any of our Class A common shares. During~~2018, the ~~nine months ended September 30, 2016, we~~Company repurchased and retired ~~6.2~~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 ~~$15.44~~$19.36 per share and a total price of ~~$96.0~~$34.9 million. We did not repurchase and retire any of our shares during the six months ended June 30, 2017. As of ~~September~~

June 30, ~~2017,~~2018, we had a remaining repurchase authorization of ~~$146.7~~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.

~~Participating~~ Preferred Shares

As of ~~September~~June 30, 2018, and December 31, 2017, the Company had the following series of preferred shares outstanding (in thousands, except share data):



					June 30, 2018			December 31, 2017
Series	Issuance Date	Earliest Redemption Date	Dividend Rate		Outstanding Shares	Current Liquidation Value		Outstanding Shares	Current Liquidation Value (1)
Series C participating preferred shares (2)	N/A	N/A	N/A		—	$	—	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					30,750,000	$	768,750	38,350,000	$	986,986


(1)	Liquidation value reflects initial liquidation value of $25.00 per share, which in the case of the Series C participating preferred shares is 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 ~~Company’s~~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 ~~all~~a maximum 9.0% internal rate of the Company’s outstanding 5.0% Series A participating preferred shares, 5.0% Series B participating preferred shares and 5.5% Series C participating preferred shares was $490.7 million. As of September 30, 2017, the Operating Partnership had a liquidation preference on its corresponding participating preferred units for the same amount.

~~Conversion of Series A and B Participating Preferred Shares into Class A Common Shares~~

On October 3, 2017, the Company converted all 5,060,000 shares of the outstanding 5.0% Series A participating preferred shares and all 4,400,000 shares of the outstanding 5.0% Series B participating preferred shares 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 12,398,276 total Class A common shares issued from the conversion, based on a conversion ratio of 1.3106 Class A common shares issued per Series A and B participating preferred share. The Operating Partnership also converted its corresponding Series A and B participating preferred units into Class A units on October 3, 2017. The conversion ratio was calculated by dividing (1) the initial liquidation preference on the Series A and B participating preferred shares, as adjusted by an amount equal to 50% of the cumulative change in value of an index based on the purchase prices of single-family properties located in our top 20 markets,return), plus unaccrued dividends by (2) the one-day volume weighted-average price (“VWAP”) of the Company’s Class A common shares on ~~September 27, 2017,~~March 29, 2018, the date the Company delivered the required notice of ~~conversion.~~redemption. As a result of the ~~conversion,~~redemption, the Company ~~will record~~recorded a ~~$27.6~~$32.2 million allocation of income to the Series ~~A and B~~C participating preferred shareholders in the ~~fourth~~second quarter of ~~2017,~~2018, which represents the initial liquidation value of the Series C participating preferred shares in excess of ~~initial recorded~~the original equity carrying value ~~due to~~of the ~~bifurcation~~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 ~~amount as a liability upon issuance. As the Series A and B participating preferred shares were converted into Class A common shares on October 3, 2017, the related participating preferred shares~~ derivative liability ~~was therefore remeasured based on the actual liquidation value at September 30, 2017.~~

~~Perpetual Preferred Shares~~

~~During the second quarter of 2017, the Company issued 6,200,000 5.875% Series F cumulative redeemable perpetual preferred shares in an underwritten public~~and offering raising gross proceeds of $155.0 million before offering costs of approximately $5.3 million, with a liquidation preference of $25.00 per share. The Operating Partnership issued an equivalent number of the same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.

During the third quarter of 2017, the Company issued 4,600,000 5.875% Series G cumulative redeemable perpetual preferred shares in an underwritten public offering, raising gross proceeds of $115.0 million before offering costs of approximately $4.1 million, with a liquidation preference of $25.00 per share. The Operating Partnership issued an equivalent number of the same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.costs.

Distributions

During the quarter ended ~~September~~June 30, ~~2017, our~~2018, the Company's board of trustees declared distributions that totaled $0.05 per share on ~~our~~the Company's Class A and Class B common shares, ~~$0.31 on our~~ ~~5.0%~~ ~~Series A participating preferred shares, $0.31 on our~~ ~~5.0%~~ ~~Series B participating preferred shares, $0.34 on our~~ ~~5.5%~~ ~~Series C participating preferred shares,~~ $0.41 on ~~our~~the Company's 6.5% Series D perpetual preferred shares, $0.40 on ~~our~~the Company's 6.35% Series E perpetual preferred shares, ~~and~~ $0.37 on ~~our~~the Company's 5.875% Series F perpetual preferred ~~shares. Distributions declared~~shares and $0.37 on ~~our~~the Company's 5.875% Series G perpetual preferred ~~shares were for a pro-rated amount of $0.30 during the quarter ended September 30, 2017.~~shares. During the quarter ended ~~September~~June 30, ~~2016, our~~2017, the Company's board of trustees declared distributions that totaled $0.05 per share on ~~our~~the Company's Class A and Class B common shares, $0.31 on ~~our~~the Company's 5.0% Series A participating preferred shares, $0.31 on ~~our~~the Company's 5.0% Series B participating preferred shares, $0.34 on ~~our~~the Company's 5.5% Series C participating preferred shares, ~~and~~ $0.41 on ~~our~~the Company's 6.5% Series D perpetual preferred shares and $0.40 on the Company's 6.35% Series E perpetual preferred shares. Distributions declared on our ~~6.35%~~5.875% Series EF perpetual preferred shares were for a pro-rated amount of ~~$0.41 per share~~$0.27 during the quarter ended ~~September~~June 30, ~~2016. Distributions declared on our Series D convertible units totaled $0.04 per unit for the quarter ended September 30, 2016, which represented 70% of distributions declared on Class A units.~~2017. The Operating Partnership funds the payment of distributions, and an equivalent amount of distributions were declared on the corresponding Operating Partnership units.

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, or approximately ~~16.5%~~15.5% and ~~18.2%~~15.9%, of the total ~~329,690,244~~351,368,387 and ~~298,931,517~~342,099,865 Class A units in the Operating Partnership as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016,~~2017, respectively. Noncontrolling interest also includes interests held by non-affiliates in

Class A units in the Operating Partnership. Non-affiliate Class A unitholders owned ~~1,172,822 and 1,279,316,~~1,073,509, or approximately 0.3% ~~and 0.4%~~ of the total ~~329,690,244~~351,368,387 and ~~298,931,517~~342,099,865 Class A units in the Operating Partnership as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016,~~2017, respectively. Also included in noncontrolling interest isas of December 31, 2017, was the outside ownership interest in a consolidated subsidiary of the Operating ~~Partnership.~~Partnership, which was liquidated during the second quarter of 2018.

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 and ~~nine~~six months ended ~~September~~June 30, 2018 and 2017 ~~and 2016:~~(in thousands):

For the Three Months Ended For the Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Preferred income allocated to Series C convertible units $ —
$ —
$ —
$ 3,027
Net income (loss) allocated to Class A units 340
(27 ) (30 ) 108
Net income allocated to Series D convertible units —
—
—
133
Beneficial conversion feature —
7,569
—
7,569
Net (loss) income allocated to noncontrolling interest in a consolidated subsidiary (31 ) (226 ) 8
(446 )
$ 309
$ 7,316
$ (22 ) $ 10,391



	For the Three Months Ended						For the Six Months Ended
	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Net loss allocated to Class A units	$	(2,902	)	$	(31	)	$	(1,777	)	$	(370	)
Net (loss) income allocated to noncontrolling interest in a consolidated subsidiary	(248		)	1			(259		)	39
	$	(3,150	)	$	(30	)	$	(2,036	)	$	(331	)

Noncontrolling interest as reflected in the Operating Partnership's condensed consolidated balance sheets ~~consists~~consisted solely of the outside ownership interest in a consolidated subsidiary of the Operating ~~Partnership.~~Partnership, which was liquidated during the second quarter of 2018. Income and loss allocated to the Operating Partnership's noncontrolling interest is reflected in noncontrolling interest within the Operating Partnership's 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's condensed consolidated balance sheets are reflected as limited partner capital in the Operating Partnership's condensed consolidated balance sheets.

2012 Equity Incentive Plan

The Company'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"), the Operating Partnership issues an equivalent number of Class A units to AH4R.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, the Company granted stock options for ~~385,600~~140,000 and ~~708,000~~385,200 Class A common shares, respectively, and ~~174,000~~304,400 and ~~74,100~~174,000 restricted stock units, respectively, to certain employees of the Company under the Plan. The options and restricted stock units granted during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, vest over four years, and the options expire 10 years from the date of grant.

The following table summarizes stock option activity under the Plan for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:


	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (1) (in thousands)
Options outstanding at January 1, 2016	2,484,400		$	16.22	8.0	$	1,225
Granted	708,000		14.15
Exercised	(172,250	)	16.12			680
Forfeited	(153,150	)	16.36
Options outstanding at September 30, 2016	2,867,000		$	15.70	7.8	$	17,021
Options exercisable at September 30, 2016	1,051,125		$	16.04	7.1	$	5,885
								Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (1) (in thousands)
Options outstanding at January 1, 2017	2,826,500		$	15.69	7.6	$	14,956	2,826,500		$	15.69	7.6	$	14,956
Granted	385,600		23.38					385,200		23.38
Exercised	(62,655	)	15.77			444		(28,250	)	15.96			196
Forfeited	(85,250	)	16.24					(50,000	)	16.38
Options outstanding at September 30, 2017	3,064,195		$	16.64	7.1	$	16,149
Options exercisable at September 30, 2017	1,681,595		$	15.90	6.3	$	9,764
Options outstanding at June 30, 2017								3,133,450		$	16.62	7.3	$	18,940
Options exercisable at June 30, 2017								1,716,000		$	15.89	6.5	$	11,468

Options outstanding at January 1, 2018								3,052,450		$	16.65	6.9	$	16,421
Granted								140,000		19.40
Exercised								(171,875	)	16.04			787
Forfeited								(66,250	)	17.69
Options outstanding at June 30, 2018								2,954,325		$	16.79	6.0	$	16,347
Options exercisable at June 30, 2018								2,174,550		$	16.20	5.3	$	13,123


(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 the Black-Scholes Option Pricing Model inputs used for valuation of the stock options for Class A common shares granted during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:


	2017			2016			2018			2017
Weighted-average fair value	$	3.82		$	2.82		$	3.03		$	3.82
Expected term (years)		7.0			7.0			7.0			7.0
Dividend yield		3.0	%		3.0	%		3.0	%		3.0	%
Volatility		21.3	%		27.3	%		18.9	%		21.3	%
Risk-free interest rate		2.2	%		1.5	%		2.8	%		2.2	%

The following table summarizes the activity that relates to the Company’s restricted stock units under the Plan for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016:~~2017:


	2017		2016		2018		2017
Restricted stock units at beginning of period	130,150		91,650		243,875		130,150
Units awarded	174,000		74,100		304,400		174,000
Units vested	(42,475	)	(27,250	)	(80,025	)	(42,475	)
Units forfeited	(16,200	)	(6,550	)	(48,375	)	(10,250	)
Restricted stock units at end of the period	245,475		131,950
Restricted stock units at end of period					419,875		251,425

For the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, total non-cash share-based compensation expense related to stock options and restricted stock units was ~~$1.1~~$0.9 million and ~~$0.9~~$1.1 million, respectively, of which ~~$0.7~~$0.5 million and ~~$0.5~~$0.7 million, respectively, related to corporate administrative employees and was included in general and administrative expense and $0.4 million, respectively, related to centralized and field property management employees and was included in property management expenses within the condensed consolidated statements of operations. For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, total non-cash share-based compensation expense related to stock options and restricted stock units was ~~$3.2~~$1.9 million and ~~$2.7~~$2.1 million, respectively, of which ~~$1.9~~$1.1 million and ~~$1.6~~$1.2 million, respectively, related to corporate administrative employees and was included in general and administrative expense and ~~$1.3~~$0.8 million and ~~$1.1~~$0.9 million, respectively, related to centralized and field property management employees and was included in property management expenses ~~within~~in the condensed consolidated statements of operations.

~~Note 10. Related Party Transactions~~

Concurrently with the Company's public offering of Class A common shares in the first quarter of 2017, the Chairman of our Board of Trustees, B. Wayne Hughes, purchased $50.0 million of our Class A common shares in a private placement at the public offering price. The Operating Partnership issued an equivalent number of corresponding Class A units to AH4R in exchange for the net proceeds from the issuance.

Note 11. Earnings per Share / Unit

American Homes 4 Rent

The following table reflects the Company's computation of net ~~income (loss)~~loss per common share on a basic and diluted basis for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (in thousands, except share and per share data):

For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2017 2016 2017 2016
Numerator:

Net income (loss) $ 19,097
$ (167 ) $ 45,959
$ 1,108
Less:
Noncontrolling interest 309
7,316
(22 ) 10,391
Dividends on preferred shares 17,253
13,669
46,122
26,650
Allocation to participating securities (1) 12
—
—
—
Numerator for basic income (loss) per common share $ 1,523
$ (21,152 ) $ (141 ) $ (35,933 )
Add back:
Dividends on participating preferred shares (2) 5,569
—
—
—
Remeasurement of participating preferred shares (2) (8,391 ) —
—
—
Numerator for diluted loss per common share $ (1,299 ) $ (21,152 ) $ (141 ) $ (35,933 )

Denominator:
Weighted-average common shares outstanding–basic 266,767,313
238,401,343
256,768,343
232,036,802
Effect of dilutive securities:
Participating preferred shares (2) 22,385,747
—
—
—
Weighted-average common shares outstanding–diluted 289,153,060
238,401,343
256,768,343
232,036,802

Net income (loss) per common share:
Basic $ 0.01
$ (0.09 ) $ —
$ (0.15 )
Diluted $ —
$ (0.09 ) $ —
$ (0.15 )



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Numerator:
Net income	$	25,898		$	15,066		$	47,423		$	26,862
Less:
Noncontrolling interest	(3,150		)	(30		)	(2,036		)	(331		)
Dividends on preferred shares	11,984			15,282			26,581			28,869
Redemption of participating preferred shares	32,215			—			32,215			—
Numerator for loss per common share—basic and diluted	$	(15,151	)	$	(186	)	$	(9,337	)	$	(1,676	)

Denominator:
Weighted-average common shares outstanding—basic and diluted (1)	295,462,572			258,900,456			290,848,633			251,685,993

Net loss per common share—basic and diluted	$	(0.05	)	$	—		$	(0.03	)	$	(0.01	)

(1)

~~Participating~~The computation of diluted earnings per share for the three months ended June 30, 2018 and 2017, excludes an aggregate of 6,974,868 and 28,351,580 potentially dilutive securities, respectively, and for the six months ended June 30, 2018 and 2017, excludes an aggregate of 6,971,928 and 28,342,309 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, ~~that~~because their effect would have ~~nonforfeitable rights~~been antidilutive to ~~participate~~the respective periods. The effect of the potential conversion of OP Units is not reflected in ~~dividends declared~~the computation of basic and diluted earnings per share, as they are exchangeable for Class A common shares on ~~common stock.~~

~~(2)~~

~~Reflects~~a one-for-one basis. The income allocable to the ~~dilutive effect of~~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 ~~participating preferred shares into Class A common shares.~~OP units would have no net impact on the determination of diluted earnings per share.

The computation of diluted earnings per share for the three months ended September 30, 2017 and 2016, excludes an aggregate of 7,078,066 and 26,342,332 potentially dilutive securities, respectively, and for the nine months ended September 30, 2017 and 2016, excludes an aggregate of 29,474,000 and 26,342,332 potentially dilutive securities, respectively, which include a combination of Series A, B and C 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.

American Homes 4 Rent, L.P.

The following table reflects the Operating Partnership's computation of net ~~income (loss)~~loss per common unit on a basic and diluted basis for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (in thousands, except unit and per unit data):

For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2017 2016 2017 2016
Numerator:

Net income (loss) $ 19,097
$ (167 ) $ 45,959
$ 1,108
Less:
Noncontrolling interest (31 ) (226 ) 8
(446 )
Preferred distributions 17,253
13,669
46,122
26,650
Income allocated to Series C and D limited partners —
10,915
—
16,478
Allocation to participating securities (1) 12
—
—
—
Numerator for basic income (loss) per common unit $ 1,863
$ (24,525 ) $ (171 ) $ (41,574 )
Add back:
Distributions to participating preferred units (2) 5,569
—
—
—
Remeasurement of participating preferred units (2) (8,391 ) —
—
—
Numerator for diluted loss per common unit $ (959 ) $ (24,525 ) $ (171 ) $ (41,574 )

Denominator:
Weighted-average common units outstanding–basic 322,303,138
285,208,489
312,315,728
271,994,345
Effect of dilutive securities:
Participating preferred units (2) 22,385,747
—
—
—
Weighted-average common units outstanding–diluted 344,688,885
285,208,489
312,315,728
271,994,345

Net income (loss) per common unit:
Basic $ 0.01
$ (0.09 ) $ —
$ (0.15 )
Diluted $ —
$ (0.09 ) $ —
$ (0.15 )



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Numerator:
Net income	$	25,898		$	15,066		$	47,423		$	26,862
Less:
Noncontrolling interest	(248		)	1			(259		)	39
Preferred distributions	11,984			15,282			26,581			28,869
Redemption of participating preferred units	32,215			—			32,215			—
Numerator for loss per common unit—basic and diluted	$	(18,053	)	$	(217	)	$	(11,114	)	$	(2,046	)

Denominator:
Weighted-average common units outstanding—basic and diluted (1)	350,812,725			314,451,049			346,198,786			307,239,255

Net loss per common unit—basic and diluted	$	(0.05	)	$	—		$	(0.03	)	$	(0.01	)

(1)

~~Participating~~The computation of diluted earnings per unit for the three months ended June 30, 2018 and 2017, excludes an aggregate of 6,974,868 and 28,351,580 potentially dilutive securities, respectively, and for the six months ended June 30, 2018 and 2017, excludes an aggregate of 6,971,928 and 28,342,309 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, ~~that~~because their effect would have ~~nonforfeitable rights~~been antidilutive to ~~participate in dividends declared on common stock.~~


~~(2)~~	~~Reflects~~ the ~~dilutive effect of the assumed conversion of the participating preferred units into Class A common units.~~respective periods.

The computation of diluted earnings per unit for the three months ended September 30, 2017 and 2016, excludes an aggregate of 7,078,066 and 26,342,332 potentially dilutive securities, respectively, and for the nine months ended September 30, 2017 and 2016, excludes an aggregate of 29,474,000 and 26,342,332 potentially dilutive securities, respectively, which include a combination of Series A, B and C 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.

There was no income or loss allocated to Series C convertible units during the three months ended September 30, 2017 and 2016, and zero and $0.87 of net income per basic and diluted unit were allocated to Series D convertible units during the three months ended September 30, 2017 and 2016, respectively. Zero and $0.46 of net income per basic and diluted unit were allocated to Series C convertible units during the nine months ended September 30, 2017 and 2016, respectively, and zero and $0.99 of net income per basic and diluted unit were allocated to Series D convertible units during the nine months ended September 30, 2017 and 2016, respectively. There was no income or loss allocated to Series E convertible units during the three and nine months ended September 30, 2017 and 2016.

Note 12. Commitments and Contingencies

As of ~~September~~June 30, ~~2017,~~2018, the Company had commitments to acquire ~~511~~236 single-family properties for an aggregate purchase price of $~~122.6~~62.2 million ~~and $13.7~~, as well as $42.5 million in purchase commitments that relate to both third party developer agreements and land ~~purchase commitments.~~for our internal construction program. As of December 31, ~~2016,~~2017, the Company had commitments to acquire ~~203~~520 single-family properties for an aggregate purchase price of $~~41.7~~128.1 million ~~and~~, as well as $~~3.9~~24.0 million in land purchase ~~commitments.~~commitments that relate to both third party developer agreements and our internal construction program.

As of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016,~~2017, the Company had sales in escrow for ~~184~~approximately 156 and 5769 of our single-family properties, respectively, for aggregate selling prices of ~~$17.1~~$24.7 million and ~~$6.6~~$7.0 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 ~~materially~~material 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 condensed consolidated financial statements.~~

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 ~~value is~~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 ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017 (in thousands):


	September 30, 2017				December 31, 2016				June 30, 2018				December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
AH4R 2014-SFR1 securitization	$	—	$	—	$	456,074	$	465,343
AH4R 2014-SFR2 securitization	497,743		506,835		501,810		510,941		$	493,761	$	497,707	$	496,326	$	504,730
AH4R 2014-SFR3 securitization	513,361		523,653		517,827		530,549		509,400		515,755		512,041		521,252
AH4R 2015-SFR1 securitization	539,199		546,630		543,480		553,689		534,960		538,855		537,723		544,592
AH4R 2015-SFR2 securitization	468,461		477,401		472,043		483,901		464,746		468,648		467,267		475,832
Total asset-backed securitizations (1)	2,018,764		2,054,519		2,491,234		2,544,423		2,002,867		2,020,965		2,013,357		2,046,406
Unsecured senior notes, net (1) (2)									497,315		497,190		—		—
Exchangeable senior notes, net (2)	110,771		143,297		108,148		142,808		113,533		145,771		111,697		147,462
Secured note payable(3)	49,107		49,383		49,828		50,053		—		—		48,859		49,027
Term loan facility (3)	200,000		200,000		325,000		325,000
Revolving credit facility (1) (4)									—		—		140,000		140,000
Term loan facility (1) (5)									100,000		100,000		200,000		200,000
Total debt	$	2,378,642	$	2,447,199	$	2,974,210	$	3,062,284	$	2,713,715	$	2,763,926	$	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 ~~$37.3~~$33.5 million, $4.9 million, $7.9 million and ~~$48.4~~$0.9 million, respectively, of unamortized deferred financing costs as of ~~September~~June 30, ~~2017,~~2018, and exclude $36.0 million, zero, $8.8 million and $2.0 million, respectively, of unamortized deferred financing costs as of December 31, ~~2016, respectively.~~2017.


(2)	The carrying ~~value~~values of the unsecured senior notes, net and exchangeable senior notes, net isare presented net of an unamortized ~~discount.~~discounts.


(3)	The secured note payable was paid off in full during the second quarter of 2018.

(4)

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 ~~term loan~~revolving credit facility ~~excludes $2.1 million and $3.3 million of deferred financing costs as of September 30, 2017, and December 31, 2016, respectively.~~ reasonably approximates fair value.


(5)	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~~considered scenarios in which the participating preferred shares would be redeemed or converted into Class A common shares by the Company and the subsequent payoffs under those scenarios. The valuation also ~~considers~~considered certain variables such as the risk-free rate matching the assumed timing of either redemption or conversion, volatility of the underlying home price appreciation index, dividend payments, conversion rates, the assumed timing of

either redemption or conversion and an assumed drift factor in home price appreciation across certain metropolitan statistical areas, or MSAs, as outlined in the agreement. The Series ~~A and B~~C participating preferred shares were ~~converted~~redeemed through a conversion into Class A common shares on April 5, 2018 (see Note 10).

In October 3, 2017, in anticipation of the issuance of the 2028 Notes and in order to hedge interest rate risk, the ~~related participating preferred shares derivative liability was therefore remeasured~~Operating Partnership entered into a treasury lock agreement on a notional amount of $350.0 million, based on the ~~actual liquidation~~10-year treasury note rate at the time. The treasury lock was designated as a cash flow hedging instrument and had a fair value ~~at September 30,~~ of $0.1 million as of December 31,

2017, ~~(see Note 9).~~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~~table sets forth the fair ~~value~~values of the participating preferred shares derivative liability and treasury lock as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017 (in thousands):

September 30, 2017
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 $ —
$ —
$ 68,469
$ 68,469


	December 31, 2016
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Fair Value Hierarchy	June 30, 2018		December 31, 2017
Assets:
Treasury lock									Level 2	$	—	$	75
Liabilities:
Participating preferred shares derivative liability	$	—	$	—	$	69,810	$	69,810	Level 3	$	—	$	29,470

The following tables present changes in the fair values of our Level 3 financial instruments that ~~are~~were 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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (in thousands):


Description	January 1, 2017		Conversions		Remeasurement included in earnings			September 30, 2017		January 1, 2018		Conversions			Remeasurement included in earnings			June 30, 2018
Liabilities:
Participating preferred shares derivative liability	$	69,810	$	—	$	(1,341	)	$	68,469	$	29,470	$	(28,258	)	$	(1,212	)	$	—

Description January 1, 2016 Conversions Gain and remeasurement
included in
earnings September 30, 2016
Liabilities:

Contingently convertible Series E units liability $ 69,957
$ (58,494 ) $ (11,463 ) $ —
Participating preferred shares derivative liability $ 62,790
$ —
$ 2,940
$ 65,730

~~Changes in inputs or assumptions used to value the participating preferred shares derivative liability may have a material impact on the resulting valuation.~~



Description	January 1, 2017		Conversions		Remeasurement included in earnings		June 30, 2017
Liabilities:
Participating preferred shares derivative liability	$	69,810	$	—	$	7,050	$	76,860

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 June 30, 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	$	—	$	656		$	8,183,265	$	—		$	8,183,921
Cash and cash equivalents	32,521		—			20,983		—			53,504
Restricted cash	26,910		30			132,070		—			159,010
Rent and other receivables, net	186		2			27,861		—			28,049
Intercompany receivables	255,388		—			—		(255,388		)	—
Escrow deposits, prepaid expenses and other assets, including due from affiliates	58,231		172			214,140		—			272,543
Investments in subsidiaries	5,988,782		115,663			—		(6,104,445		)	—
Deferred costs and other intangibles, net	8,436		—			4,706		—			13,142
Goodwill	120,279		—			—		—			120,279
Total assets	$	6,490,733	$	116,523		$	8,583,025	$	(6,359,833	)	$	8,830,448

Liabilities
Revolving credit facility	$	—	$	—		$	—	$	—		$	—
Term loan facility, net	99,120		—			—		—			99,120
Asset-backed securitizations, net	—		—			1,969,322		—			1,969,322
Unsecured senior notes, net	492,406		—			—		—			492,406
Exchangeable senior notes, net	—		113,533			—		—			113,533
Accounts payable and accrued expenses	32,844		2,648			247,242		—			282,734
Amounts payable to affiliates	4,571		—			—		—			4,571
Intercompany payables	—		9,011			246,377		(255,388		)	—
Total liabilities	628,941		125,192			2,462,941		(255,388		)	2,961,686

Capital
Partners' capital:
General partner:
Common units	4,388,836		(8,669		)	6,120,084		(6,104,445		)	4,395,806
Preferred units	743,457		—			—		—			743,457
Limited partner:
Common units	720,232		—			—		—			720,232
Accumulated other comprehensive income	9,267		—			—		—			9,267
Total partners' capital:	5,861,792		(8,669		)	6,120,084		(6,104,445		)	5,868,762
Total capital	5,861,792		(8,669		)	6,120,084		(6,104,445		)	5,868,762

Total liabilities and capital	$	6,490,733	$	116,523		$	8,583,025	$	(6,359,833	)	$	8,830,448

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 equivalents	22,157		—			23,999			—			46,156
Restricted cash	14,742		31			121,894			—			136,667
Rent and other receivables, net	114		57			29,973			—			30,144
Intercompany receivables	154,621		—			—			(154,621		)	—
Escrow deposits, prepaid expenses and other assets, including due from affiliates	59,271		164			138,082			—			197,517
Investments in subsidiaries	5,889,146		115,303			—			(6,004,449		)	—
Deferred costs and other intangibles, net	9,652		—			3,373			—			13,025
Goodwill	120,279		—			—			—			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, net	198,023		—			—			—			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 expenses	27,566		2,757			192,544			—			222,867
Amounts payable to affiliates	4,720		—			—			—			4,720
Intercompany payables	—		8,428			146,193			(154,621		)	—
Participating preferred units derivative liability	29,470		—			—			—			29,470
Total liabilities	399,779		122,882			2,364,904			(154,621		)	2,732,944

Capital
Partners' capital:
General partner:
Common units	4,241,266		(5,595		)	6,017,014			(6,004,449		)	4,248,236
Preferred units	901,318		—			—			—			901,318
Limited partner:
Common units	727,544		—			—			—			727,544
Accumulated other comprehensive income	75		—			—			—			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 capital	5,870,203		(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 June 30, 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	$	—		$	18	$	227,193		$	—		$	227,211
Fees from single-family properties	—			1		2,753			—			2,754
Tenant charge-backs	—			1		32,916			—			32,917
Other	400			—		1,201			—			1,601
Total revenues	400			20		264,063			—			264,483

Expenses:
Property operating expenses	—			1		98,842			—			98,843
Property management expenses	—			—		18,616			—			18,616
General and administrative expense	6,014			1		3,662			—			9,677
Interest expense	7,972			1,870		22,136			—			31,978
Acquisition fees and costs expensed	—			—		1,321			—			1,321
Depreciation and amortization	204			—		78,115			—			78,319
Other expense	80			—		1,544			—			1,624
Total expenses	14,270			1,872		224,236			—			240,378

Intercompany income	575			—		85			(660		)	—
Intercompany expenses	(85		)	—		(575		)	660			—
Gain on sale of single-family properties and other, net	—			169		3,071			—			3,240
Loss on early extinguishment of debt	(879		)	—		(568		)	—			(1,447		)
Equity in income of subsidiaries	40,405			11,035		—			(51,440		)	—

Net income	26,146			9,352		41,840			(51,440		)	25,898

Noncontrolling interest	—			—		(248		)	—			(248		)
Preferred distributions	11,984			—		—			—			11,984
Redemption of participating preferred units	32,215			—		—			—			32,215

Net (loss) income attributable to common unitholders	$	(18,053	)	$	9,352	$	42,088		$	(51,440	)	$	(18,053	)

Condensed Consolidating Statements of Operations (continued)

(Amounts in thousands)



	For the Three Months Ended June 30, 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	$	—		$	64	$	204,584		$	—		$	204,648
Fees from single-family properties	—			1		2,689			—			2,690
Tenant charge-backs	—			7		27,375			—			27,382
Other	333			—		1,955			—			2,288
Total revenues	333			72		236,603			—			237,008

Expenses:
Property operating expenses	—			54		85,900			—			85,954
Property management expenses	—			5		17,437			—			17,442
General and administrative expense	5,020			—		3,906			—			8,926
Interest expense	3,187			1,809		23,396			—			28,392
Acquisition fees and costs expensed	3			—		1,409			—			1,412
Depreciation and amortization	369			4		72,343			—			72,716
Other	81			50		1,228			—			1,359
Total expenses	8,660			1,922		205,619			—			216,201

Intercompany income	45			—		179			(224		)	—
Intercompany expenses	(179		)	—		(45		)	224			—
Gain on sale of single-family properties and other, net	—			285		2,169			—			2,454
Loss on early extinguishment of debt	—			—		(6,555		)	—			(6,555		)
Remeasurement of participating preferred units	(1,640		)	—		—			—			(1,640		)
Equity in income of subsidiaries	25,166			9,251		—			(34,417		)	—

Net income	15,065			7,686		26,732			(34,417		)	15,066

Noncontrolling interest	—			—		1			—			1
Preferred distributions	15,282			—		—			—			15,282

Net (loss) income attributable to common unitholders	$	(217	)	$	7,686	$	26,731		$	(34,417	)	$	(217	)

Condensed Consolidating Statements of Operations (continued)

(Amounts in thousands)



	For the Six Months Ended June 30, 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	$	—		$	40	$	445,194		$	—		$	445,234
Fees from single-family properties	—			1		5,586			—			5,587
Tenant charge-backs	—			4		68,720			—			68,724
Other	734			—		2,208			—			2,942
Total revenues	734			45		521,708			—			522,487

Expenses:
Property operating expenses	—			4		199,826			—			199,830
Property management expenses	—			3		37,600			—			37,603
General and administrative expense	11,951			2		6,955			—			18,908
Interest expense	14,229			3,705		43,345			—			61,279
Acquisition fees and costs expensed	—			—		2,632			—			2,632
Depreciation and amortization	501			—		157,121			—			157,622
Other expense	175			9		2,267			—			2,451
Total expenses	26,856			3,723		449,746			—			480,325

Intercompany income	1,026			—		142			(1,168		)	—
Intercompany expenses	(142		)	—		(1,026		)	1,168			—
Gain on sale of single-family properties and other, net	—			604		4,892			—			5,496
Loss on early extinguishment of debt	(879		)	—		(568		)	—			(1,447		)
Remeasurement of participating preferred units	1,212			—		—			—			1,212
Equity in income of subsidiaries	72,587			21,267		—			(93,854		)	—

Net income	47,682			18,193		75,402			(93,854		)	47,423

Noncontrolling interest	—			—		(259		)	—			(259		)
Preferred distributions	26,581			—		—			—			26,581
Redemption of participating preferred units	32,215			—		—			—			32,215

Net (loss) income attributable to common unitholders	$	(11,114	)	$	18,193	$	75,661		$	(93,854	)	$	(11,114	)

Condensed Consolidating Statements of Operations (continued)

(Amounts in thousands)



	For the Six Months Ended June 30, 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	$	—		$	166		$	405,589		$	—		$	405,755
Fees from single-family properties	—			2			5,292			—			5,294
Tenant charge-backs	—			14			55,741			—			55,755
Other	719			—			3,239			—			3,958
Total revenues	719			182			469,861			—			470,762

Expenses:
Property operating expenses	—			102			169,157			—			169,259
Property management expenses	—			11			34,909			—			34,920
General and administrative expense	10,014			2			8,205			—			18,221
Interest expense	6,515			3,583			50,183			—			60,281
Acquisition fees and costs expensed	358			—			2,150			—			2,508
Depreciation and amortization	778			6			145,885			—			146,669
Other	180			51			2,686			—			2,917
Total expenses	17,845			3,755			413,175			—			434,775

Intercompany income	121			—			327			(448		)	—
Intercompany expenses	(327		)	—			(121		)	448			—
Gain (loss) on sale of single-family properties and other, net	3,031			(1,175		)	2,624			—			4,480
Loss on early extinguishment of debt	—			—			(6,555		)	—			(6,555		)
Remeasurement of participating preferred units	(7,050		)	—			—			—			(7,050		)
Equity in income of subsidiaries	48,174			18,488			—			(66,662		)	—

Net income	26,823			13,740			52,961			(66,662		)	26,862

Noncontrolling interest	—			—			39			—			39
Preferred distributions	28,869			—			—			—			28,869

Net (loss) income attributable to common unitholders	$	(2,046	)	$	13,740		$	52,922		$	(66,662	)	$	(2,046	)

Condensed Consolidating Statements of Comprehensive Income (Loss)

(Amounts in thousands)



	For the Three Months Ended June 30, 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	$	26,146		$	9,352	$	41,840		$	(51,440	)	$	25,898
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 income	25,905			9,352		41,840			(51,440		)	25,657
Comprehensive loss attributable to noncontrolling interests	—			—		(248		)	—			(248		)
Preferred distributions	11,984			—		—			—			11,984
Redemption of participating preferred units	32,215			—		—			—			32,215
Comprehensive (loss) income attributable to common unitholders	$	(18,294	)	$	9,352	$	42,088		$	(51,440	)	$	(18,294	)



	For the Three Months Ended June 30, 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	$	15,065		$	7,686	$	26,732	$	(34,417	)	$	15,066
Comprehensive income	15,065			7,686		26,732		(34,417		)	15,066
Comprehensive income attributable to noncontrolling interests	—			—		1		—			1
Preferred distributions	15,282			—		—		—			15,282
Comprehensive (loss) income attributable to common unitholders	$	(217	)	$	7,686	$	26,731	$	(34,417	)	$	(217	)

Condensed Consolidating Statements of Comprehensive Income (Loss) (continued)

(Amounts in thousands)



	For the Six Months Ended June 30, 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	$	47,682		$	18,193	$	75,402		$	(93,854	)	$	47,423
Other comprehensive income:
Gain on cash flow hedging instrument:
Gain on settlement of cash flow hedging instrument	9,553			—		—			—			9,553
Reclassification adjustment for amortization of interest expense included in net income	(361		)	—		—			—			(361		)
Other comprehensive income	9,192			—		—			—			9,192
Comprehensive income	56,874			18,193		75,402			(93,854		)	56,615
Comprehensive loss attributable to noncontrolling interests	—			—		(259		)	—			(259		)
Preferred distributions	26,581			—		—			—			26,581
Redemption of participating preferred units	32,215			—		—			—			32,215
Comprehensive (loss) income attributable to common unitholders	$	(1,922	)	$	18,193	$	75,661		$	(93,854	)	$	(1,922	)



	For the Six Months Ended June 30, 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	$	26,823		$	13,740	$	52,961		$	(66,662	)	$	26,862
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 income	26,756			13,740		52,933			(66,662		)	26,767
Comprehensive income attributable to noncontrolling interests	—			—		39			—			39
Preferred distributions	28,869			—		—			—			28,869
Comprehensive (loss) income attributable to common unitholders	$	(2,113	)	$	13,740	$	52,894		$	(66,662	)	$	(2,141	)

Condensed Consolidating Statements of Cash Flows

(Amounts in thousands)



	For the Six Months Ended June 30, 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	$	(115,080	)	$	(1,305	)	$	366,350		$	—		$	249,965

Investing activities
Cash paid for single-family properties	—			—			(206,137		)	—			(206,137		)
Change in escrow deposits for purchase of single-family properties	—			—			(4,357		)	—			(4,357		)
Net proceeds received from sales of single-family properties and other	—			2,165			27,977			—			30,142
Proceeds received from hurricane-related insurance claims	—			—			4,000			—			4,000
Distributions from joint ventures	440			—			2,000			—			2,440
(Investment in) return of investment in subsidiaries	(28,098		)	20,907			—			7,191			—
Initial renovations to single-family properties	—			—			(33,030		)	—			(33,030		)
Recurring and other capital expenditures for single-family properties	—			(501		)	(22,830		)	—			(23,331		)
Other purchases of productive assets	—			—			(95,354		)	—			(95,354		)
Net cash (used for) provided by investing activities	(27,658		)	22,571			(327,731		)	7,191			(325,627		)

Financing activities
Repurchase of Class A units	(34,969		)	—			—			—			(34,969		)
Share-based compensation proceeds, net	1,933			—			—			—			1,933
Payments on asset-backed securitizations	—			—			(10,490		)	—			(10,490		)
Proceeds from revolving credit facility	100,000			—			—			—			100,000
Payments on revolving credit facility	(240,000		)	—			—			—			(240,000		)
Payments on term loan facility	(100,000		)	—			—			—			(100,000		)
Payments on secured note payable	—			—			(49,427		)	—			(49,427		)
Proceeds from unsecured senior notes, net of discount	497,210			—			—			—			497,210
Settlement of cash flow hedging instrument	9,628			—			—			—			9,628
Intercompany financing and distributions to parent	—			(21,267		)	28,458			(7,191		)	—
Distributions to common unitholders	(34,238		)	—			—			—			(34,238		)
Distributions to preferred unitholders	(29,194		)	—			—			—			(29,194		)
Deferred financing costs paid	(5,100		)	—			—			—			(5,100		)
Net cash provided by (used for) financing activities	165,270			(21,267		)	(31,459		)	(7,191		)	105,353

Net increase (decrease) in cash, cash equivalents and restricted cash	22,532			(1		)	7,160			—			29,691
Cash, cash equivalents and restricted cash, beginning of period	36,899			31			145,893			—			182,823
Cash, cash equivalents and restricted cash, end of period	$	59,431		$	30		$	153,053		$	—		$	212,514

Supplemental cash flow information
Cash payments for interest, net of amounts capitalized	$	(4,799	)	$	(1,869	)	$	(40,995	)	$	—		$	(47,663	)

Supplemental schedule of noncash investing and financing activities
Accounts payable and accrued expenses related to property acquisitions, renovations and construction	$	—		$	(12	)	$	991		$	—		$	979
Transfers of completed homebuilding deliveries to properties	$	—		$	—		$	37,541		$	—		$	37,541
Redemption of participating preferred units	$	(28,258	)	$	—		$	—		$	—		$	(28,258	)
Accrued distributions to affiliates	$	(149	)	$	—		$	—		$	—		$	(149	)
Accrued distributions to non-affiliates	$	(1,995	)	$	—		$	—		$	—		$	(1,995	)

Condensed Consolidating Statements of Cash Flows (continued)

(Amounts in thousands)



	For the Six Months Ended June 30, 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	$	(31,632	)	$	(4,980	)	$	261,818		$	—		$	225,206

Investing activities
Cash paid for single-family properties	—			—			(226,937		)	—			(226,937		)
Change in escrow deposits for purchase of single-family properties	—			—			(1,708		)	—			(1,708		)
Net proceeds received from sales of single-family properties and other	14,265			949			39,018			—			54,232
Collections from mortgage financing receivables	—			—			78			—			78
Distributions from joint ventures	480			—			1,664			—			2,144
Collections from intercompany notes	9,507			—			—			(9,507		)	—
(Investment in) return of investment in subsidiaries	(444,589		)	24,064			—			420,525			—
Initial renovations to single-family properties	—			(1,565		)	(16,786		)	—			(18,351		)
Recurring and other capital expenditures for single-family properties	—			—			(15,038		)	—			(15,038		)
Other purchases of productive assets	(6,657		)	—			(10,279		)	—			(16,936		)
Net cash (used for) provided by investing activities	(426,994		)	23,448			(229,988		)	411,018			(222,516		)

Financing activities
Proceeds from issuance of Class A units	355,589			—			—			—			355,589
Payments of Class A unit issuance costs	(350		)	—			—			—			(350		)
Proceeds from issuance of perpetual preferred units	155,000			—			—			—			155,000
Payments of perpetual preferred unit issuance costs	(5,209		)	—			—			—			(5,209		)
Share-based compensation proceeds, net	1,858			—			—			—			1,858
Redemptions of Class A units	(169		)	—			—			—			(169		)
Payments on asset-backed securitizations	—			—			(466,793		)	—			(466,793		)
Proceeds from revolving credit facility	62,000			—			—			—			62,000
Payments on revolving credit facility	(20,000		)	—			—			—			(20,000		)
Proceeds from term loan facility	25,000			—			—			—			25,000
Payments on term loan facility	(100,000		)	—			—			—			(100,000		)
Payments on secured note payable	—			—			(482		)	—			(482		)
Payments on intercompany notes borrowed	—			—			(9,507		)	9,507			—
Intercompany financing and distributions to parent	—			(18,488		)	439,013			(420,525		)	—
Distributions to common unitholders	(30,727		)	—			—			—			(30,727		)
Distributions to preferred unitholders	(28,869		)	—			—			—			(28,869		)
Deferred financing costs paid	(3,930		)	—			—			—			(3,930		)
Net cash provided by (used for) financing activities	410,193			(18,488		)	(37,769		)	(411,018		)	(57,082		)

Net decrease in cash, cash equivalents and restricted cash	(48,433		)	(20		)	(5,939		)	—			(54,392		)
Cash, cash equivalents and restricted cash, beginning of period	76,913			62			173,266			—			250,241
Cash, cash equivalents and restricted cash, end of period	$	28,480		$	42		$	167,327		$	—		$	195,849

Supplemental cash flow information
Cash payments for interest, net of amounts capitalized	$	(5,347	)	$	(1,869	)	$	(46,941	)	$	—		$	(54,157	)

Supplemental schedule of noncash investing and financing activities
Accounts payable and accrued expenses related to property acquisitions and renovations	$	—		$	21		$	3,901		$	—		$	3,922
Transfer of term loan borrowings to revolving credit facility	$	50,000		$	—		$	—		$	—		$	50,000
Transfer of deferred financing costs from term loan to revolving credit facility	$	1,354		$	—		$	—		$	—		$	1,354
Note receivable related to a bulk sale of properties, net of discount	$	5,559		$	—		$	—		$	—		$	5,559

Note ~~14.~~15. Subsequent Events

Subsequent Acquisitions

From ~~October~~July 1, ~~2017,~~2018, through ~~October~~July 31, ~~2017,~~2018, the Company acquired ~~471~~176 properties for an aggregate purchase price of approximately ~~$106.1~~$45.0 million, which included ~~four~~13 homes developed through our internal construction program.

~~Conversion of Series A and B Participating Preferred Shares into Class A Common Shares~~

~~Declaration of Distributions~~

On November 2, 2017, our board of trustees declared quarterly distributions of $0.05 per share on the Company's Class A and Class B common shares are payable on January 5, 2018, to shareholders of record on January 2, 2018. Our board of trustees also declared quarterly distributions of $0.34 per share on the Company's 5.5% Series C participating preferred 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 distributions are payable on January 2, 2018, to shareholders of record on December 15, 2017. 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.

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

~~The Company is~~We are a Maryland REIT focused on acquiring, renovating, leasing and operating single-family homes as rental properties. The Operating Partnership is the entity through which ~~the Company conducts~~we conduct substantially all of our business and ~~owns,~~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.

As of ~~September~~June 30, ~~2017,~~2018, we owned ~~50,015~~52,049 single-family properties, in selected sub-markets of MSAs in 22 states, including ~~469~~2,209 properties ~~held for sale, of which 384 properties were former ARPI properties,~~to be disposed, compared to ~~48,422~~51,239 single-family properties in 22 states, including ~~1,119~~310 properties ~~held for sale,~~to be disposed, as of December 31, ~~2016,~~2017, and ~~48,153~~48,982 single-family properties in 22 states, including ~~1,238~~582 properties ~~held for sale,~~to be disposed, as of ~~September~~June 30, ~~2016.~~2017. As of ~~September~~June 30, ~~2017,~~2018, we had commitments to acquire an additional ~~511~~236 single-family properties for an aggregate purchase price of ~~$122.6~~$62.2 million. As of ~~September~~June 30, ~~2017, 46,026,~~2018, 48,020, or ~~92.9%~~96.3%, of our total properties (excluding ~~held for sale properties)~~properties to be disposed) were leased, compared to ~~44,798,~~46,996, or ~~94.7%~~92.3%, of our total properties (excluding ~~held for sale properties)~~properties to be disposed) as of December 31, ~~2016,~~2017, and ~~44,746,~~46,089, or ~~95.4%~~95.2%, of our total properties (excluding ~~held for sale properties)~~properties to be disposed) as of ~~September~~June 30, ~~2016. As of September 30, 2017, our~~2017. Our portfolio of single-family properties ~~was~~is internally managed through our proprietary property management platform.

Our Properties and Key Operating Metrics

The following table provides a summary of our single-family properties as of ~~September~~June 30, ~~2017:~~2018:


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	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									4,680	9.4	%	$	171,915	2,146	16.5	2015
Dallas-Fort Worth, TX	4,354	8.8	%	$	162,364	2,121	13.9	2014	4,307	8.6	%	163,011		2,118	14.6	2014
Atlanta, GA	4,319	8.7	%	165,430		2,114	16.4	2014
Charlotte, NC									3,489	7.0	%	187,097		2,080	14.7	2015
Houston, TX	3,158	6.4	%	159,123		2,113	11.8	2014	3,101	6.2	%	160,963		2,101	12.6	2014
Charlotte, NC	3,248	6.6	%	181,934		2,064	14.1	2014
Phoenix, AZ									2,938	5.9	%	167,521		1,827	15.2	2015
Indianapolis, IN	2,897	5.8	%	151,377		1,933	15.0	2013	2,889	5.8	%	151,903		1,933	15.7	2013
Phoenix, AZ	2,768	5.6	%	162,343		1,815	14.9	2014
Nashville, TN	2,557	5.2	%	202,594		2,108	13.3	2014	2,619	5.3	%	205,943		2,116	14.0	2014
Greater Chicago area, IL and IN	2,033	4.1	%	180,753		1,896	16.1	2013
Cincinnati, OH	1,993	4.0	%	172,939		1,852	15.3	2013
Jacksonville, FL									2,085	4.2	%	168,049		1,944	13.7	2014
Tampa, FL									2,057	4.1	%	192,502		1,947	14.2	2014
Raleigh, NC	1,968	4.0	%	179,187		1,858	12.9	2014	2,014	4.0	%	182,415		1,879	13.5	2014
All Other (2)	20,251	40.8	%	179,481		1,904	14.4	2014	19,661	39.5	%	185,340		1,905	15.5	2014
Total / Average	49,546	100.0	%	$	174,014	1,968	14.4	2014	49,840	100.0	%	$	178,306	1,981	15.0	2014


(1)	Excludes ~~469~~2,209 single-family properties identified as part of the Company's disposition program, including 1,838 properties classified as held for sale and 371 properties identified for future sale, as of ~~September~~June 30, ~~2017.~~2018.


(2)	Represents 3226 markets in 1920 states.

The following table summarizes certain key leasing metrics as of ~~September~~June 30, ~~2017:~~2018:


	Total Single-family Properties (1)										Total Single-Family Properties (1)
Market	Leased Percentage (2)		Occupancy Percentage (2)		Avg. Contractual Monthly Rent Per Property (2)		Avg. Original Lease Term (months) (2)	Avg. Remaining Lease Term (months) (2)	Avg. Blended Change in Rent (3)		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)
Atlanta, GA											96.6	%	95.5	%	$	1,521	12.2	6.8	5.8	%
Dallas-Fort Worth, TX	94.0	%	92.9	%	$	1,662	11.9	6.4	4.9	%	95.9	%	95.0	%	1,690		11.8	6.0	5.0	%
Atlanta, GA	94.0	%	93.5	%	1,465		12.0	6.8	5.8	%
Charlotte, NC											96.9	%	94.0	%	1,539		12.6	7.1	3.6	%
Houston, TX	90.2	%	89.3	%	1,595		12.3	6.8	1.5	%	93.2	%	91.3	%	1,587		12.0	6.2	3.9	%
Charlotte, NC	88.6	%	88.2	%	1,508		12.0	6.7	4.1	%
Phoenix, AZ											97.4	%	96.0	%	1,309		12.0	6.6	7.8	%
Indianapolis, IN	95.0	%	94.3	%	1,350		12.8	6.9	3.9	%	97.2	%	94.9	%	1,371		12.1	6.6	5.1	%
Phoenix, AZ	97.7	%	97.3	%	1,238		12.4	6.6	6.9	%
Nashville, TN	92.1	%	91.4	%	1,656		12.1	6.5	3.6	%	96.9	%	94.8	%	1,681		12.7	7.3	3.8	%
Greater Chicago area, IL and IN	95.4	%	94.4	%	1,784		13.0	7.3	3.5	%
Cincinnati, OH	94.5	%	93.8	%	1,519		12.7	7.2	3.7	%
Jacksonville, FL											96.2	%	96.0	%	1,505		12.9	7.3	5.5	%
Tampa, FL											95.8	%	95.2	%	1,665		12.1	6.7	4.4	%
Raleigh, NC	93.6	%	92.7	%	1,456		12.0	6.7	3.7	%	96.8	%	93.7	%	1,485		12.0	6.7	3.6	%
All Other ~~(4)~~(6)	92.2	%	91.4	%	1,527		12.2	6.6	4.0	%	96.4	%	95.1	%	1,594		12.2	6.8	4.9	%
Total / Average	92.9	%	92.2	%	$	1,523	12.2	6.7	4.1	%	96.3	%	94.8	%	$	1,561	12.2	6.7	4.9	%


(1)	Leasing information excludes 2,209 single-family properties identified as part of the Company's disposition program, including 1,838 properties classified as held for sale ~~properties.~~and 371 properties identified for future sale, as of June 30, 2018.


(2)	Leased percentage, ~~occupancy percentage, average contractual monthly rent per property,~~ 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 June 30, 2018, Average ~~blended change in rent represents~~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 ~~third quarter of 2017,~~three months ended June 30, 2018, compared to the annual rent of the previously expired non-month-to-month lease for each ~~individual~~ property.


~~(4)~~(6)	Represents 3226 markets in 1920 states.

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. Key factors that impact our results of operations and financial condition include our ability to identify and acquire properties; our pace of property acquisitions; the time and cost required to gain access to the properties and then to renovate and lease a newly acquired property at acceptable rental rates; occupancy levels; rates of tenant turnover; the length of vacancy in properties between tenant leases; our expense ratios; our ability to raise capital; and our capital structure.

Property Acquisitions and Dispositions

Since our formation, we have rapidly but systematically grown our portfolio of single-family homes. 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 our acquisition channels, competition for our target assets and our available capital. Additionally, opportunities from new construction acquisition channels are impacted by the availability of undeveloped land assets and inventory of homes currently under construction or newly developed. Our level of acquisition activity has fluctuated based on the number of suitable investments and the level of capital available to invest. During the quarter ended ~~September~~June 30, ~~2017,~~2018, our total portfolio increased by ~~1,033~~209 homes, including ~~806 homes acquired through broker acquisitions, 213 homes acquired through trustee acquisitions and 124~~215 homes acquired through new construction acquisitions, of which 13116 homes were developed through our internal construction program, 98 homes acquired through broker acquisitions and 10 homes acquired through trustee acquisitions, offset by ~~110~~114 homes sold or ~~rescinded, of which 67 properties were former ARPI properties.~~rescinded. Rescinded properties represent properties for which the sale has been unwound, as in certain jurisdictions, our purchases of single-family properties at foreclosure and judicial auctions are subject to the right of rescission, which is generally caused by the borrower filing for bankruptcy.

As of June 30, 2018, we had 2,209 properties to be disposed, including 1,838 properties classified as held for sale and 371 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. During 2018, we expanded our disposition program, which identified approximately 1,400 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. We will continue to evaluate our properties for potential disposition going forward as a normal course of business.

Property Operations

The acquisition of properties involves 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 and $25,000 to renovate a home 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 accessing 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 50 to 70 days to complete the renovation process after gaining initial access to the home. 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 completing the renovation process. 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 4550 to 5560 days to complete the turnover process.

Revenue

Our revenue is derived primarily from rents collected under lease agreements with tenants for our single-family properties. These include short-term leases that we enter into directly with our tenants, 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-lease 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 ~~$70,000~~$60,000 to ~~$100,000~~$120,000 and primarily consist of families with approximately two adults and one or more children.

In addition to rental revenues, we receive fees and other reimbursements, referred to as “tenant charge-backs”, from our tenants, which are primarily designed 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.

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. ~~The average~~Based on our Same-Home population of properties, the year-over-year increase in average monthly realized rent ~~for renewals~~per property was ~~3.6% and 3.4% and the average increase in rent for re-leases was 4.9% and 5.0%~~3.5% for the three months ended ~~September~~June 30, ~~2017~~2018, and ~~2016,~~we experienced turnover rates of 10.7% and 11.6% for the three months ended June 30, 2018 and 2017, respectively. Based on our Same-Home population of properties, the year-over-year increase in average monthly realized rent per property was 3.7% for the six months ended June 30, 2018, and we experienced turnover rates of ~~11.1%~~19.2% and ~~11.5%~~20.4% for the ~~three~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016, respectively. The average increase in rent for renewals was 3.3% and 3.8% and the average increase in rent for re-leases was 5.1% and 5.8% for the nine months ended September 30,~~ 2017, ~~and 2016, respectively. Based on our Same-Home population of properties, we experienced turnover rates of 31.7% and 32.9% for the nine months ended September 30, 2017 and 2016,~~ respectively.

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.

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 ~~the~~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. 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 experienced 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, our property operating costs are seasonally impacted in certain markets for expenses such as HVAC repairs, turn costs and landscaping expenses during the summer season.

General and Administrative Expense

General and administrative expense primarily consists of corporate payroll and personnel costs, state taxes, trustees’ and officers’ insurance expenses, audit and tax fees, ~~state taxes,~~ 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 ~~$19.1~~$25.9 million for the three months ended ~~September~~June 30, ~~2017,~~2018, compared to a net ~~loss~~income of ~~$0.2~~$15.1 million for the three months ended ~~September~~June 30, ~~2016. This improvement was~~2017. Net income totaled $47.4 million for the six months ended June 30, 2018, compared to net income of $26.9 million for the six months ended June 30, 2017. These improvements were primarily attributable to higher revenues resulting from a larger number of leased properties and the remeasurement of our participating preferred shares, partially offset by hurricane-related charges in the third quarter of 2017, as well as a loss on early extinguishment of debt in the third quarter of 2016. Net income totaled $46.0 million for the nine months ended September 30, 2017, compared to net income of $1.1 million for the nine months ended September 30, 2016. This improvement was primarily attributable to higher revenues and lower interest expense, partially offset by an increase in property operating expenses and hurricane-related charges in the third quarter of 2017, as well as a gain on the conversion of Series E convertible units into Series D convertible units in the first quarter of 2016.rental rates.

As we continue to grow our portfolio with a portion of our homes still recently acquired ~~and /~~ and/or renovated, we distinguish our portfolio of homes between Same-Home properties and Non-Same-Home and Other ~~properties and Former ARPI~~ 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 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 ~~stabilized,~~non-stabilized, as an entire group, ~~provided~~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 renovations and improvements to meet our property standards. ~~We classify a property as Former ARPI if it was~~After such time has passed, properties acquired through ~~the ARPI Merger and is not classified as held for sale as of the end of the current period.~~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, 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 rents and fees from single-family properties, net of bad debt expense, less core property operating expenses, which is calculated as property operating and property management expenses, excluding noncash share-based compensation expense, expenses reimbursed by tenant charge-backs and bad debt expense.

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 ~~convertible~~shares or units, (3) gain or loss on early extinguishment of debt, (4) hurricane-related charges, net, (5) gain or loss on sales of single-family properties and other, (6) depreciation and amortization, (7) acquisition fees and costs expensed incurred with ~~recent~~ business combinations and the acquisition of individual properties, (8) noncash share-based compensation expense, (9) interest expense, (10) general and administrative expense, (11) other expenses and (12) other revenues. We ~~consider~~believe Core NOI ~~to be a meaningful financial measure because we believe it is helpful~~provides useful information to investors ~~in understanding~~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 ~~is a meaningful supplemental non-GAAP financial measure~~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 ~~(loss)~~or loss or net cash flows from operating activities (as computed in accordance with GAAP).

Comparison of the Three Months Ended ~~September~~June 30, ~~2017,~~2018, to the Three Months Ended ~~September~~June 30, ~~2016~~2017

The following table presents a summary of Core NOI for our Same-Home properties, Non-Same-Home and Other properties, ~~Former ARPI properties~~ and total properties for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (in thousands):


	For the Three Months Ended September 30, 2017																				For the Three Months Ended June 30, 2018
	Same-Home Properties (1)			% of Core Revenue		Non-Same- Home and Other Properties			% of Core Revenue		Former ARPI Properties			% of Core Revenue		Total Properties			% of Core Revenue		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	$	158,491				$	18,771				$	30,228				$	207,490				$	171,966				$	55,245				$	227,211
Fees from single-family properties	2,099					313					431					2,843					2,001					753					2,754
Bad debt expense	(1,755		)			(195		)			(349		)			(2,299		)			(1,183		)			(433		)			(1,616		)
Core revenues	158,835					18,889					30,310					208,034					172,784					55,565					228,349

Property tax expense	28,011			17.6	%	3,290			17.4	%	5,317			17.5	%	36,618			17.6	%	29,880			17.3	%	10,131			18.1	%	40,011			17.5	%
HOA fees, net (2)	3,117			2.0	%	398			2.1	%	731			2.4	%	4,246			2.0	%	3,521			2.0	%	1,324			2.4	%	4,845			2.1	%
R&M and turnover costs, net (2)	13,720			8.6	%	1,764			9.4	%	2,482			8.2	%	17,966			8.6	%	13,958			8.1	%	4,755			8.6	%	18,713			8.2	%
Insurance	1,450			0.9	%	231			1.2	%	300			1.0	%	1,981			1.0	%	1,527			0.9	%	419			0.8	%	1,946			0.9	%
Property management expenses, net (3)	12,041			7.6	%	1,431			7.6	%	2,298			7.6	%	15,770			7.6	%	12,669			7.3	%	4,319			7.8	%	16,988			7.4	%
Core property operating expenses	58,339			36.7	%	7,114			37.7	%	11,128			36.7	%	76,581			36.8	%	61,555			35.6	%	20,948			37.7	%	82,503			36.1	%

Core NOI	$	100,496		63.3	%	$	11,775		62.3	%	$	19,182		63.3	%	$	131,453		63.2	%	$	111,229		64.4	%	$	34,617		62.3	%	$	145,846		63.9	%


	For the Three Months Ended September 30, 2016																				For the Three Months Ended June 30, 2017
	Same-Home Properties (1)			% of Core Revenue		Non-Same- Home and Other Properties			% of Core Revenue		Former ARPI Properties			% of Core Revenue		Total Properties			% of Core Revenue		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	$	154,610				$	13,122				$	29,405				$	197,137				$	165,541				$	39,107				$	204,648
Fees from single-family properties	2,228					265					405					2,898					2,054					636					2,690
Bad debt expense	(1,805		)			(457		)			(347		)			(2,609		)			(1,035		)			(298		)			(1,333		)
Core revenues	155,033					12,930					29,463					197,426					166,560					39,445					206,005

Property tax expense	27,755			17.9	%	2,656			20.5	%	5,460			18.5	%	35,871			18.2	%	28,873			17.4	%	7,799			19.7	%	36,672			17.8	%
HOA fees, net (2)	3,046			2.0	%	242			1.9	%	743			2.5	%	4,031			2.0	%	3,207			1.9	%	892			2.3	%	4,099			2.0	%
R&M and turnover costs, net (2)	13,947			8.9	%	1,525			11.9	%	2,907			9.8	%	18,379			9.3	%	12,339			7.4	%	3,348			8.5	%	15,687			7.6	%
Insurance	1,667			1.1	%	187			1.4	%	372			1.3	%	2,226			1.1	%	1,530			0.9	%	394			1.0	%	1,924			0.9	%
Property management expenses, net (3)	12,948			8.4	%	1,079			8.3	%	2,461			8.4	%	16,488			8.4	%	12,683			7.6	%	3,192			8.1	%	15,875			7.7	%
Core property operating expenses	59,363			38.3	%	5,689			44.0	%	11,943			40.5	%	76,995			39.0	%	58,632			35.2	%	15,625			39.6	%	74,257			36.0	%

Core NOI	$	95,670		61.7	%	$	7,241		56.0	%	$	17,520		59.5	%	$	120,431		61.0	%	$	107,928		64.8	%	$	23,820		60.4	%	$	131,748		64.0	%


(1)	Includes ~~36,682~~38,400 properties that have been stabilized longer than 90 days prior to January 1, ~~2016.~~2017.


(2)	Presented net of tenant charge-backs. ~~In-house maintenance costs, which were previously presented separately, are included in R&M and turnover costs, net.~~


(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, 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 ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (amounts in thousands):


	For the Three Months Ended September 30,						For the Three Months Ended June 30,
	2017			2016			2018			2017
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Core revenues
Total revenues	$	246,836		$	236,057		$	264,483		$	237,008
Tenant charge-backs	(36,094		)	(30,808		)	(32,917		)	(27,382		)
Bad debt expense	(2,299		)	(2,609		)	(1,616		)	(1,333		)
Other revenues	(409		)	(5,214		)	(1,601		)	(2,288		)
Core revenues	$	208,034		$	197,426		$	228,349		$	206,005


Core property operating expenses
Property operating expenses	$	97,944		$	92,488		$	98,843		$	85,954
Property management expenses	17,447			18,335			18,616			17,442
Noncash share-based compensation - property management	(417		)	(411		)	(423		)	(424		)
Expenses reimbursed by tenant charge-backs	(36,094		)	(30,808		)	(32,917		)	(27,382		)
Bad debt expense	(2,299		)	(2,609		)	(1,616		)	(1,333		)
Core property operating expenses	$	76,581		$	76,995		$	82,503		$	74,257


Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures	Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures						Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures
Net income (loss)	$	19,097		$	(167	)
Net income							$	25,898		$	15,066
Remeasurement of participating preferred shares	(8,391		)	2,490			—			1,640
Loss on early extinguishment of debt	—			13,408			1,447			6,555
Hurricane-related charges, net	10,136			—
Gain on sale of single-family properties and other, net	(1,895		)	(11,682		)	(3,240		)	(2,454		)
Depreciation and amortization	74,790			75,392			78,319			72,716
Acquisition fees and costs expensed	1,306			1,757			1,321			1,412
Noncash share-based compensation - property management	417			411			423			424
Interest expense	26,592			32,851			31,978			28,392
General and administrative expense	8,525			8,043			9,677			8,926
Other expenses	1,285			3,142			1,624			1,359
Other revenues	(409		)	(5,214		)	(1,601		)	(2,288		)
Tenant charge-backs	36,094			30,808			32,917			27,382
Expenses reimbursed by tenant charge-backs	(36,094		)	(30,808		)	(32,917		)	(27,382		)
Bad debt expense excluded from operating expenses	2,299			2,609			1,616			1,333
Bad debt expense included in revenues	(2,299		)	(2,609		)	(1,616		)	(1,333		)
Core NOI	131,453			120,431			145,846			131,748
Less: Non-Same-Home Core NOI	30,957			24,761			34,617			23,820
Same-Home Core NOI	100,496			95,670			111,229			107,928
Less: Same-Home capital expenditures	8,968			8,949
Less: Same-Home recurring capital expenditures							6,711			6,907
Same-Home Core NOI After Capital Expenditures	$	91,528		$	86,721		$	104,518		$	101,021

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties for the three months ended ~~September~~June 30, ~~2017,~~2018, increased ~~$3.8~~$6.2 million, or ~~2.5%~~3.7%, to ~~$158.8~~$172.8 million from ~~$155.0~~$166.6 million for the three months ended ~~September~~June 30, ~~2016.~~2017. This ~~rise~~increase was primarily attributable to higher average monthly realized rental rates, which increased to ~~$1,535~~$1,565 per month ~~as of September~~for the three months ended June 30, 2018, compared to $1,512 per month for the three months ended June 30, 2017, as well as a rise in average occupied days percentage, which increased to 95.4% for the three months ended June 30, 2018, compared to ~~$1,490 per month as of September~~95.0% for the three months ended June 30, ~~2016.~~2017.

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 excluding noncash share-based compensation expense. Core property operating

expenses from Same-Home properties for the three months ended ~~September~~June 30, ~~2017, decreased $1.1~~2018, increased $3.0 million, or ~~1.7%~~5.0%, to ~~$58.3~~$61.6 million from ~~$59.4~~$58.6 million for the three months ended ~~September~~June 30, ~~2016.~~2017. Same-Home core property operating expenses as a percentage of total Same-Home core revenues ~~decreased~~increased to ~~36.7%~~35.6% for the three months ended ~~September~~June 30, ~~2017,~~2018, from ~~38.3%~~35.2% for the three months ended ~~September~~June 30, ~~2016.~~2017. This ~~decrease~~increase was primarily attributable to ~~reduced property management expenses, net~~temporarily elevated turnover costs incurred from the beginning of ~~tenant charge-backs and higher core revenues from Same-Home properties.~~the year through April 2018 as part of the Company's strategic initiative to strengthen occupancy.

General and Administrative Expense

~~General~~For the three months ended June 30, 2018 and 2017, general and administrative expense, which primarily consists of corporate payroll and personnel costs, state taxes, trustees’ and officers’ insurance expense, audit and tax fees, ~~state taxes,~~ trustee fees and other expenses associated with our corporate and administrative functions, was ~~$8.5~~$9.7 million ~~for the three months ended September 30, 2017, compared to $8.0~~and $8.9 million, ~~for the same period in 2016. This increase was primarily related to higher rent~~respectively, which included $0.5 million and ~~technology costs. Also included in general and administrative expense was~~ $0.7 million, ~~and $0.5 million~~respectively, of noncash share-based compensation expense related to corporate administrative ~~employees for the three months ended September 30, 2017~~employees. The increase in general and ~~2016, respectively.~~administrative expense was primarily related to higher personnel costs.

Interest Expense

Interest expense was ~~$26.6~~$32.0 million and ~~$32.9~~$28.4 million for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively. This ~~decrease~~increase was primarily ~~due~~related to the ~~payoff of the ARP 2014-SFR1 asset-backed securitization~~unsecured senior notes issued in ~~the third quarter of 2016,~~February 2018, partially offset by the payoff of the AH4R 2014-SFR1 asset-backed securitization in April 2017, a $100.0 million paydown on the ~~second quarter of 2017~~term loan facility in June 2018 and increased capitalized ~~interest, partially offset by higher interest expense on the credit facilities.~~interest.

Acquisition Fees and Costs Expensed

All costs of our internal acquisition function are expensed in accordance with GAAP. For the three months ended ~~September~~June 30, 2018 and 2017, acquisition fees and costs expensed totaled $1.3 million and $1.4 million, respectively, which ~~was~~were related to costs associated with ~~the~~ purchases of single-family properties. For the three months ended September 30, 2016, acquisition fees and costs expensed totaled $1.8 million, including $0.5 million of transaction costs related to the ARPI Merger and $1.3 million of other acquisition fees and costs expensed.

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 3 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 ~~$74.8~~$78.3 million and ~~$75.4~~$72.7 million for the three months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively. This ~~decrease~~increase was primarily attributable ~~to lower amortization related to in-place leases, partially offset by an increase in depreciation expense related~~ to growth in our average number of depreciable properties.

Other Revenues

Other revenues totaled ~~$0.4~~$1.6 million for the three months ended ~~September~~June 30, ~~2017,~~2018, which included ~~$0.1~~$0.6 million of interest income on short-term investments, $0.3 million of equity in earnings from unconsolidated joint ventures, $0.2 million of management fee income related to ~~residential mortgage assets~~joint ventures and ~~$0.6~~$0.5 million of other ~~income, partially offset by $0.3 million of loss in equity from unconsolidated joint ventures.~~income. Other revenues totaled ~~$5.2~~$2.3 million for the three months ended ~~September~~June 30, ~~2016,~~2017, which included ~~$4.2 million of income and gain related to residential mortgage assets, $0.4~~$1.4 million of equity in earnings from unconsolidated joint ventures, $0.3 million of management fee income related to joint ventures and $0.6 million of other income.

Other Expenses

Other expenses totaled ~~$1.3~~$1.6 million for the three months ended ~~September~~June 30, ~~2017,~~2018, which included $1.3 million related to impairments on properties held for sale and $0.2 million of expenses related to residential mortgage assets, partially offset by a $0.2 million net recovery of previously accrued expenses. Other expenses totaled $3.1 million for the three months ended September 30, 2016, which included $2.4 million of expenses related to residential mortgage assets, $0.6$1.5 million related to impairments on properties held for sale and $0.1 million of other expenses.

~~Hurricane-Related Charges, net~~

~~and limits. During the three months ended September 30, 2017, the Company recognized a $12.6~~ Other expenses totaled $1.4 million impairment charge to write down the net book values of the impacted properties, of which we believe it is probable that we will recover an estimated $11.0 million through insurance claims, and accrued $8.5 million of additional repair, remediation and other costs. The $10.1 million of net charges were included in hurricane-related charges, net within the condensed consolidated statement of operations for the three months ended ~~September~~June 30, ~~2017. Of the $10.1 million of net hurricane-related charges recorded in the period, $5.8~~2017, which included $1.6 million related to ~~homes in the current Same-Home portfolio. The~~impairments on properties held for sale and $0.3 million of expenses related to a joint venture, partially offset by a $0.5 million net recovery of previously ~~reported Same-Home portfolio has been revised to exclude approximately 100 homes that sustained major damages.~~accrued expenses.

Comparison of the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017,~~2018, to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2017

The following table presents a summary of Core NOI for our Same-Home properties, Non-Same-Home and Other properties, ~~Former ARPI properties~~ and total properties for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (in thousands):


	For the Nine Months Ended September 30, 2017																				For the Six Months Ended June 30, 2018
	Same-Home Properties (1)			% of Core Revenue		Non-Same- Home and Other Properties			% of Core Revenue		Former ARPI Properties			% of Core Revenue		Total Properties			% of Core Revenue		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	$	473,441				$	49,242				$	90,562				$	613,245				$	341,496				$	103,738				$	445,234
Fees from single-family properties	5,948					920					1,269					8,137					3,970					1,617					5,587
Bad debt expense	(3,947		)			(467		)			(728		)			(5,142		)			(2,688		)			(928		)			(3,616		)
Core revenues	475,442					49,695					91,103					616,240					342,778					104,427					447,205

Property tax expense	84,245			17.7	%	9,502			19.1	%	16,305			17.9	%	110,052			17.9	%	59,362			17.2	%	19,739			18.9	%	79,101			17.6	%
HOA fees, net (2)	9,071			1.9	%	995			2.0	%	2,165			2.4	%	12,231			2.0	%	6,850			2.0	%	2,472			2.4	%	9,322			2.1	%
R&M and turnover costs, net (2)	35,240			7.4	%	4,334			8.7	%	6,374			6.9	%	45,948			7.4	%	27,383			8.0	%	10,068			9.6	%	37,451			8.4	%
Insurance	4,423			0.9	%	615			1.2	%	807			0.9	%	5,845			0.9	%	3,045			0.9	%	948			0.9	%	3,993			0.9	%
Property management expenses, net (3)	36,455			7.7	%	3,805			7.7	%	6,985			7.7	%	47,245			7.7	%	25,895			7.6	%	8,531			8.2	%	34,426			7.7	%
Core property operating expenses	169,434			35.6	%	19,251			38.7	%	32,636			35.8	%	221,321			35.9	%	122,535			35.7	%	41,758			40.0	%	164,293			36.7	%

Core NOI	$	306,008		64.4	%	$	30,444		61.3	%	$	58,467		64.2	%	$	394,919		64.1	%	$	220,243		64.3	%	$	62,669		60.0	%	$	282,912		63.3	%


	For the Nine Months Ended September 30, 2016																				For the Six Months Ended June 30, 2017
	Same-Home Properties (1)			% of Core Revenue		Non-Same- Home and Other Properties			% of Core Revenue		Former ARPI Properties (4)			% of Core Revenue		Total Properties			% of Core Revenue		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	$	458,279				$	32,595				$	67,749				$	558,623				$	329,502				$	76,253				$	405,755
Fees from single-family properties	6,156					812					851					7,819					4,028					1,266					5,294
Bad debt expense	(3,907		)			(657		)			(528		)			(5,092		)			(2,224		)			(619		)			(2,843		)
Core revenues	460,528					32,750					68,072					561,350					331,306					76,900					408,206

Property tax expense	83,269			18.1	%	6,756			20.6	%	12,284			18.0	%	102,309			18.2	%	57,979			17.4	%	15,455			20.1	%	73,434			18.0	%
HOA fees, net (2)	8,955			1.9	%	669			2.0	%	1,653			2.4	%	11,277			2.0	%	6,286			1.9	%	1,699			2.2	%	7,985			2.0	%
R&M and turnover costs, net (2)	35,953			7.8	%	3,537			10.9	%	6,145			9.0	%	45,635			8.1	%	21,828			6.6	%	6,154			8.0	%	27,982			6.9	%
Insurance	5,185			1.1	%	551			1.7	%	854			1.3	%	6,590			1.2	%	3,150			1.0	%	714			0.9	%	3,864			0.9	%
Property management expenses, net (3)	39,446			8.6	%	2,792			8.5	%	5,780			8.5	%	48,018			8.6	%	25,195			7.6	%	6,280			8.2	%	31,475			7.7	%
Core property operating expenses	172,808			37.5	%	14,305			43.7	%	26,716			39.2	%	213,829			38.1	%	114,438			34.5	%	30,302			39.4	%	144,740			35.5	%

Core NOI	$	287,720		62.5	%	$	18,445		56.3	%	$	41,356		60.8	%	$	347,521		61.9	%	$	216,868		65.5	%	$	46,598		60.6	%	$	263,466		64.5	%


(1)	Includes ~~36,682~~38,400 properties that have been stabilized longer than 90 days prior to January 1, ~~2016.~~2017.


(2)	Presented net of tenant charge-backs. ~~In-house maintenance costs, which were previously presented separately, are included in R&M and turnover costs, net.~~


(3)	Presented net of tenant charge-backs and excludes noncash share-based compensation expense related to centralized and field property management employees.


~~(4)~~	~~Former ARPI properties includes the operating activity of properties acquired through the ARPI Merger from the acquisition date of February 29, 2016, through September 30, 2016.~~

The following are reconciliations of core revenues, 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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016~~2017 (amounts in thousands):


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2017			2016			2018			2017
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Core revenues
Total revenues	$	717,598		$	651,330		$	522,487		$	470,762
Tenant charge-backs	(91,849		)	(72,077		)	(68,724		)	(55,755		)
Bad debt expense	(5,142		)	(5,092		)	(3,616		)	(2,843		)
Other revenues	(4,367		)	(12,811		)	(2,942		)	(3,958		)
Core revenues	$	616,240		$	561,350		$	447,205		$	408,206


Core property operating expenses
Property operating expenses	$	267,203		$	238,987		$	199,830		$	169,259
Property management expenses	52,367			53,177			37,603			34,920
Noncash share-based compensation - property management	(1,258		)	(1,166		)	(800		)	(841		)
Expenses reimbursed by tenant charge-backs	(91,849		)	(72,077		)	(68,724		)	(55,755		)
Bad debt expense	(5,142		)	(5,092		)	(3,616		)	(2,843		)
Core property operating expenses	$	221,321		$	213,829		$	164,293		$	144,740

													Core NOI, Same-Home Core NOI and Same-Home Core NOI After Capital Expenditures
Net income	$	45,959		$	1,108		$	47,423		$	26,862
Remeasurement of participating preferred shares	(1,341		)	2,940			(1,212		)	7,050
Gain on conversion of Series E units	—			(11,463		)
Loss on early extinguishment of debt	6,555			13,408			1,447			6,555
Hurricane-related charges, net	10,136			—
Gain on sale of single-family properties and other, net	(6,375		)	(12,574		)	(5,496		)	(4,480		)
Depreciation and amortization	221,459			224,513			157,622			146,669
Acquisition fees and costs expensed	3,814			10,899			2,632			2,508
Noncash share-based compensation - property management	1,258			1,166			800			841
Interest expense	86,873			99,309			61,279			60,281
General and administrative expense	26,746			24,544			18,908			18,221
Other expenses	4,202			6,482			2,451			2,917
Other revenues	(4,367		)	(12,811		)	(2,942		)	(3,958		)
Tenant charge-backs	91,849			72,077			68,724			55,755
Expenses reimbursed by tenant charge-backs	(91,849		)	(72,077		)	(68,724		)	(55,755		)
Bad debt expense excluded from operating expenses	5,142			5,092			3,616			2,843
Bad debt expense included in revenues	(5,142		)	(5,092		)	(3,616		)	(2,843		)
Core NOI	394,919			347,521			282,912			263,466
Less: Non-Same-Home Core NOI	88,911			59,801			62,669			46,598
Same-Home Core NOI	306,008			287,720			220,243			216,868
Less: Same-Home capital expenditures	21,077			22,223
Less: Same-Home recurring capital expenditures							12,633			12,177
Same-Home Core NOI After Capital Expenditures	$	284,931		$	265,497		$	207,610		$	204,691

Core Revenues from Same-Home Properties

Core revenues from Same-Home properties for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, increased ~~$14.9~~$11.5 million, or ~~3.2%~~3.5%, to ~~$475.4~~$342.8 million from ~~$460.5~~$331.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. This rise was primarily attributable to higher average monthly realized rental rates, which increased to ~~$1,535~~$1,559 per month ~~as of September~~for the six months ended June 30, ~~2017,~~2018, compared to ~~$1,490~~$1,504 per month ~~as of September~~for the six months ended June 30, ~~2016.~~

2017.

Core Property Operating Expenses from Same-Home Properties

expenses from Same-Home properties for the ~~nine~~six months ended ~~September~~June 30, ~~2017, decreased $3.4~~2018, increased $8.1 million, or ~~2.0%~~7.1%, to ~~$169.4~~$122.5 million from ~~$172.8~~$114.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. Same-Home core property operating expenses as a percentage of total Same-Home core revenues ~~decreased~~increased to ~~35.6%~~35.7% for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, from ~~37.5%~~34.5% for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2017. This ~~decrease~~increase was primarily attributable to ~~lower property management expenses,~~temporarily elevated turnover costs incurred from the beginning of the year through April 2018 as ~~well as~~part of the Company's strategic initiative to ~~higher core revenues from Same-Home properties.~~strengthen occupancy.

General and Administrative Expense

~~General~~For the six months ended June 30, 2018 and 2017, general and administrative expense, which primarily consists of corporate payroll and personnel costs, state taxes, trustees’ and officers’ insurance expense, audit and tax fees, ~~state taxes,~~ trustee fees and other expenses associated with our corporate and administrative functions, was ~~$26.7~~$18.9 million ~~for the nine months ended September 30, 2017, compared~~and $18.2 million, respectively, which included $1.1 million and $1.2 million, respectively, of noncash share-based compensation expense related to ~~$24.5 million for the same period~~corporate administrative employees. The increase in ~~2016. This increase~~general and administrative expense was primarily ~~related~~attributable to higher legal and personnel costs, partially offset by nonrecurring rating agency fees incurred during 2017 associated with the Company receiving inaugural investment grade corporate credit ratings, as well as higher nonrecurring legal costs related to our outstanding securitizations and technology costs. Also included in general and administrative expense was $1.9 million and $1.6 million of noncash share-based compensation expense related to corporate administrative employees for the nine months ended September 30, 2017 and 2016, respectively.ratings.

Interest Expense

Interest expense was ~~$86.9~~$61.3 million and ~~$99.3~~$60.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively. This ~~decrease~~increase was primarily ~~due~~related to the ~~payoff of the ARP 2014-SFR1 asset-backed securitization~~unsecured senior notes issued in ~~the third quarter of 2016,~~February 2018, partially offset by the payoff of the AH4R 2014-SFR1 asset-backed securitization in April 2017, a $100.0 million paydown on the ~~second quarter of 2017~~term loan facility in June 2018 and increased capitalized ~~interest, partially offset by an increase in discount amortization on the exchangeable senior notes.~~interest.

Acquisition Fees and Costs Expensed

All costs of our internal acquisition function are expensed in accordance with GAAP. For the ~~nine~~six months ended ~~September~~June 30, 2018, acquisition fees and costs expensed totaled $2.6 million, which were related to costs associated with the purchases of single-family properties. For the six months ended June 30, 2017, acquisition fees and costs expensed totaled ~~$3.8~~$2.5 million, including ~~$3.4~~$2.1 million of costs associated with the purchases of single-family properties and $0.4 million of other acquisition fees and costs expensed. For the nine months ended September 30, 2016, acquisition fees and costs expensed totaled $10.9 million, including $6.1 million of transaction costs related to the ARPI Merger and $4.8 million of other acquisition fees and costs expensed.

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 3 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 ~~$221.5~~$157.6 million and ~~$224.5~~$146.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2018 and ~~2016,~~2017, respectively. This ~~decrease~~increase was primarily attributable ~~to lower amortization related to in-place leases, partially offset by an increase in depreciation expense related~~ to growth in our average number of depreciable properties.

Other Revenues

Other revenues totaled ~~$4.4~~$2.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, which included ~~$1.4~~$1.0 million of interest income on short-term investments, $0.6 million of equity in earnings from unconsolidated joint ventures, ~~$1.0~~$0.4 million of management fee income related to ~~residential mortgage assets~~joint ventures and ~~$2.0~~$0.9 million of other income. Other revenues totaled ~~$12.8~~$4.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, which included ~~$10.6 million of income and gain related to residential mortgage assets, $0.4~~$1.6 million of equity in earnings from unconsolidated joint ventures, $0.9 million of management fee income related to joint ventures and ~~$1.8~~$1.5 million of other income.

Other Expenses

Other expenses totaled ~~$4.2~~$2.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, which included ~~$3.8~~$2.2 million related to impairments on properties held for sale and ~~$1.0~~$0.3 million of ~~expenses related to residential mortgage assets, partially offset by a $0.6 million net recovery of previously accrued~~other expenses. Other expenses totaled ~~$6.5~~$2.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, which included ~~$5.1 million of expenses related to residential mortgage assets and $1.5~~$2.5 million related to impairments on properties held for sale and $0.9 million of expenses related to a joint venture, partially offset by a ~~$0.1~~$0.5 million net recovery of previously accrued expenses.

~~Hurricane-Related Charges, net~~

Hurricanes Harvey and Irma impacted certain properties in our Houston, Florida and Southeast markets during the third quarter of 2017. Approximately 140 homes sustained major damage and nearly 3,400 homes incurred minor damage, consisting primarily of downed trees and damaged roofs and fences. The Company’s property and casualty insurance policies provide coverage for wind and flood damage, as well as business interruption costs, during the period of remediation and repairs, subject to deductibles and limits. During the nine months ended September 30, 2017, the Company recognized a $12.6 million impairment charge to write down the net book values of the impacted properties, of which we believe it is probable that we will recover an estimated $11.0 million through insurance claims, and accrued $8.5 million of additional repair, remediation and other costs. The $10.1 million of net charges were included in hurricane-related charges, net within the condensed consolidated statement of operations for the nine months ended September 30, 2017. Of the $10.1 million of net hurricane-related charges recorded in the period, $5.8 million related to homes in the current Same-Home portfolio. The previously reported Same-Home portfolio has been revised to exclude approximately 100 homes that sustained major damages.

Critical Accounting Policies and Estimates

Our critical accounting policies are included in 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, ~~2016.~~2017. There have been no significant changes to our policies during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018. For a discussion of recent accounting pronouncements, see ~~“Note 2—Significant Accounting Policies.”~~Note 2.

Income Taxes

~~Income Taxes~~

~~The Company~~AH4R has elected to be taxed as a REIT under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the “Code”), which commenced 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, provided that we qualify as a REIT and our distributions to our shareholders equal or exceed our REIT taxable income.

However, qualification and taxation as a REIT depends 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 income would be subject to U.S. federal income tax and state income tax (including any applicable alternative minimum ~~tax)~~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 taxable income, if any. Our taxable REIT subsidiaries ~~("TRS"~~(our "TRSs") will be subject to federal, state and local taxes on their income at regular corporate rates. The tax years from ~~2012~~2013 through ~~2016~~2017 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 federal income tax purposes. As a partnership, the Operating Partnership is not subject to federal income tax on our income. Instead, each of our 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 federal income taxes has been included for the Operating Partnership.

ASC 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 ~~authority~~knowledge 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 ~~September~~June 30, ~~2017,~~2018, 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.

Liquidity and Capital Resources

Our liquidity and capital resources as of ~~September~~June 30, ~~2017,~~2018, included cash and cash equivalents of ~~$243.5~~$53.5 million. Additionally, as of ~~September~~June 30, ~~2017,~~2018, we had no outstanding borrowings under our revolving credit facility, which provides for maximum borrowings of $800.0 ~~million, and $200.0 million of outstanding borrowings under our term loan facility, which provides for maximum borrowings of $200.0~~ million.

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, renovation, maintenance and ~~maintenance~~development 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 ~~Class A~~ common ~~shareholders.~~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 and acquisitions to date through the issuance of equity securities, borrowings under our credit facilities, asset-backed securitizations and ~~asset-backed securitizations.~~unsecured senior notes. 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.

To qualify as a REIT, ~~the Company~~AH4R 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~~AH4R's net taxable income in the relevant year.

Cash Flows

The following table summarizes the Company's cash flows for the ~~nine~~six months ended ~~September~~June 30, 2018 and 2017 ~~and 2016:~~(in thousands):


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2017			2016			2018			2017
Net cash provided by operating activities	$	349,375		$	254,980		$	249,965		$	225,206
Net cash used for investing activities	(486,896		)	(444,009		)	(325,627		)	(222,516		)
Net cash provided by financing activities	250,401			257,736
Net increase in cash, cash equivalents and restricted cash	$	112,880		$	68,707
Net cash provided by (used for) financing activities							105,353			(57,082		)
Net increase (decrease) in cash, cash equivalents and restricted cash							$	29,691		$	(54,392	)

Our cash flows provided by operating activities 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 ~~operating~~ expenses and general and administrative expenses.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, net cash provided by operating activities was ~~$349.4~~$250.0 million, which included cash from operations of ~~$296.0~~$212.5 million and ~~$53.4~~$37.5 million from other changes in operating assets and liabilities. Net cash used for investing activities was ~~$486.9~~$325.6 million, which primarily consisted of cash outflows of ~~$465.6~~$210.5 million related to the acquisition of properties, ~~$38.1~~$95.4 million related to purchases of productive assets and ~~$31.2~~$33.0 million of initial renovation costs to prepare our properties for rental, partially offset by cash inflows of ~~$68.6~~$30.1 million ofin net proceeds received from ~~the~~ sales of single-family properties and other assets. Renovation costs typically include paint, flooring, appliances, landscaping and other improvements. Net cash provided by financing activities was ~~$250.4~~$105.4 million, which primarily consisted of cash inflows of $497.2 million in proceeds from the issuance of unsecured senior notes, net of a discount, partially offset by cash outflows including ~~$472.5 million for payments on our asset-backed securitizations, $125.0~~$240.0 million of net payments on our revolving and term loan credit facilities, ~~and $85.0~~$63.4 million for distributions, ~~to common~~$49.4 million for payments on our secured note payable and ~~preferred shareholders, partially offset by cash inflows of $684.3~~$35.0 million ~~of net proceeds from the issuance of Class A common shares related to~~for Class A common share offerings during the first and third quarters of 2017 and the "at the market" offering program and $260.8 million of net proceeds from the issuance of the Series F and Series G perpetual preferred shares.repurchases. The net increase in cash, cash equivalents and restricted cash during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, was ~~$112.9~~$29.7 million.

During the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, net cash provided by operating activities was ~~$255.0~~$225.2 million, which included cash from operations of ~~$231.2~~$194.5 million and ~~$23.8~~$30.7 million from other changes in operating assets and liabilities. Net cash used

for investing activities was ~~$444.0~~$222.5 million, which primarily consisted of cash outflows of ~~$350.0 million related to the payoff of the credit facility in connection with the ARPI Merger, $188.7~~$228.6 million related to the acquisition of properties, ~~$27.1~~$18.4 million ~~for the purchase~~ of ~~commercial real estate and $21.7 million of~~initial renovation costs to prepare our properties for rental and $16.9 million related to purchases of productive assets, partially offset by cash inflows of ~~$71.9~~$54.2 million ofin net proceeds received from ~~the~~ sales of single-family properties and other ~~and $44.5 million of net proceeds received from the sales of non-performing loans.~~assets. Net cash ~~provided by~~used for financing activities was ~~$257.7~~$57.1 million, which primarily consisted of cash outflows including $466.8 million for payments on our asset-backed securitizations, $59.6 million for distributions and $33.0 million of net payments on our revolving and term loan credit facilities, partially offset by cash inflows ~~including $482.8~~of $355.2 million of net proceeds from issuances of Class A common shares and $149.8 million of net proceeds from the issuance of perpetual preferred shares and $325.0 million of net borrowings against our revolving credit facilities and term loan facility, partially offset by cash outflows of $374.0 million for payments on our asset-backed securitizations and $96.1 million for repurchases of our Class A common shares. The net ~~increase~~decrease in cash, cash equivalents and restricted cash during the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2017, was ~~$68.7~~$54.4 million.

~~Credit Facilities~~Early Extinguishment of Debt

During ~~2016,~~the second quarter of 2018, the Company ~~entered into a $1.0 billion credit agreement, which was subsequently amended in June 2017. The amendment expanded our borrowing capacity~~paid off the outstanding principal on the ~~revolving credit facility to $800.0~~secured note payable of approximately $48.4 million, which resulted in $0.5 million of charges that were included in loss on early extinguishment of debt within the condensed consolidated statements of operations. The payoff of the secured note payable also resulted in the release of the 572 homes pledged as collateral and ~~reduced~~$2.1 million of restricted cash for lender requirements. Also during the second quarter of 2018, the Company paid down $100.0 million on our term loan facility, which resulted in $0.9 million of charges related to ~~$200.0 million. The amendment also lowered our cost~~the write-off of ~~borrowing and provides a more flexible borrowing structure. The interest rate~~unamortized deferred financing costs that were included in loss on early extinguishment of debt within the ~~revolving credit facility is, at~~condensed consolidated statements of operations. During the Company’s election, 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%. Borrowings under the term loan facility accrue interest, at the Company’s election, at either a LIBOR rate plus a margin ranging from 0.90% to 1.75% or a base rate plus a margin ranging from 0.00% to 0.75%. In each case, the actual margin is determined based on the Company's credit ratings in effect from time to time. Based on current corporate ratings for LIBOR-based borrowings assecond quarter of September 30, 2017, the revolving credit facility bears interest at 1-month LIBOR plus 1.20%, and the term loan facility bears interest at 1-month LIBOR plus 1.35%. The revolving credit facility matures on June 30, 2021, with two six-month extension options at the Company's election upon payment of an extension fee, and the term loan facility matures on June 30, 2022. The credit agreement requires that we maintain certain financial covenants. As of September 30, 2017, the Company ~~had no~~paid off the outstanding ~~borrowings against~~principal on the ~~revolving credit facility, $200.0~~AH4R 2014-SFR1 asset-backed securitization of approximately $455.4 million, which resulted in $6.6 million of ~~outstanding borrowings against~~charges primarily related to the ~~term loan facility~~write-off of unamortized deferred financing costs that were included in loss on early extinguishment of debt within the condensed consolidated statements of operations. The payoff of the AH4R 2014-SFR1 asset-backed securitization also resulted in the release of the 3,799 homes pledged as collateral and ~~was in compliance with all loan covenants.~~$9.4 million of restricted cash for lender requirements.

~~Exchangeable Senior Notes, Net~~

~~The exchangeable~~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 $1.9 million. The net proceeds from this issuance were used 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 ~~senior unsecured obligations of~~ the Operating ~~Partnership~~Partnership's unsecured and unsubordinated obligation and rank equally in right of payment with all ~~other~~of the Operating Partnership’s existing and future ~~senior~~ unsecured ~~indebtedness~~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. The Operating Partnership’s obligations under~~Partnership, but such guarantee will be automatically released at the ~~exchangeable senior notes are fully and unconditionally guaranteed by~~time that the ~~Company.~~ 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, ~~bear interest at a rate of 3.25% per annum and~~ 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 of ~~September~~June 30, ~~2017,~~2018, was ~~55.1453~~55.5443 of ~~our~~the Company's Class A common shares per $1,000 principal amount of the notes. The exchange rate is adjusted based on ~~our~~the Company's Class A common share price and distributions to common shareholders.

~~Early Extinguishment of Debt~~

During the second quarter of 2017, the Company paid off the outstanding principal on the AH4R 2014-SFR1 asset-backed securitization of approximately $455.4 million using proceeds from the Class A common share offering in the first quarter of 2017 and available cash, which resulted in $6.6 million of charges primarily related to the write-off of unamortized deferred financing costs that were included in loss on early extinguishment of debt within the condensed consolidated statements of operations. The payoff of the AH4R 2014-SFR1 asset-backed securitization also resulted in the release of the 3,799 homes pledged as collateral and $9.4 million of restricted cash for lender requirements.

~~Class A Common Share Offering~~

~~equivalent number of corresponding Class A units to the Company in exchange for the net proceeds from the issuance.~~

At-the-Market Common Share Offering Program

In November 2016, the Company established ~~an at-the-market common share offering program~~the Original At-the-Market Program under which we were able to issue Class A common shares from time to time through various sales agents up to an aggregate of $400.0 ~~million (the "Original At-the-Market Program"), which~~million. The program was ~~replaced~~established in ~~August 2017~~order to use the net proceeds from share issuances to repay borrowings against the Company’s revolving credit and term loan facilities, to acquire and renovate single-family properties and for related activities in accordance with ~~an at-the-market common share offering~~the Company’s business strategy, and for working capital and general corporate purposes. The program ~~with a $500.0 million capacity on~~may be suspended or terminated by the ~~same terms (the "At-the-Market Program").~~Company at any time. During the ~~nine~~six months ended ~~September~~June 30, 2017, the Company issued and sold ~~2.0~~0.9 million Class A common shares under the Original At-the-Market Program for gross proceeds of ~~$46.2~~$19.4 million, or ~~$22.74~~$22.75 per share, and net proceeds of ~~$45.6~~$19.1 million, after commissions and other expenses of approximately ~~$0.6~~$0.3 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 ~~September~~June 30, ~~2017, $500.0~~2018, no shares have been issued under the At-the-Market Program and $500.0 million remained available for future share ~~issuances under the At-the-Market Program (see Note 9).~~issuances.

~~Perpetual Preferred~~ Share ~~Offerings~~ Repurchase Program

~~During~~In February 2018, the ~~second quarter~~Company's board of ~~2017,~~trustees re-authorized our existing share repurchase program, authorizing the ~~Company issued 6,200,000 5.875% Series F cumulative redeemable perpetual~~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 ~~underwritten public offering, raising gross proceeds of $155.0 million before offering costs of approximately $5.3 million, with a liquidation preference of $25.00 per share.~~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 ~~issued~~funds the repurchases and constructively retires an equivalent number of ~~the same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.~~

corresponding Class A units. During the ~~third quarter of 2017,~~six months ended June 30, 2018, the Company ~~issued 4,600,000 5.875% Series G cumulative redeemable perpetual~~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. We did not repurchase and retire any of our shares during the six months ended June 30, 2017. As of June 30, 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 in an underwritten public offering, raising gross proceeds of $115.0 million before offering costs of approximately $4.1 million, with a liquidation preference of $25.00 per share. The Operating Partnership issued an equivalent number ofunder the ~~same class of perpetual preferred units to AH4R in exchange for the net proceeds from the share issuance.~~program.

~~Conversion~~Redemption of Series ~~A and B~~C Participating Preferred ~~Shares into Class A Common~~ Shares

On ~~October 3, 2017,~~April 5, 2018, the Company ~~converted~~redeemed all ~~5,060,000~~7,600,000 shares of the outstanding ~~5.0%~~5.5% Series AC participating preferred shares ~~and all 4,400,000 shares~~through a conversion of ~~the outstanding 5.0% Series B~~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 ~~12,398,276 total~~10,848,827 Class A common shares issued from the conversion, based on a conversion ratio of ~~1.3106~~1.4275 Class A common shares issued per Series ~~A and B~~C participating preferred share. The Operating Partnership also ~~converted~~redeemed its corresponding Series ~~A and B~~C participating preferred units through a conversion into Class A units on ~~October 3, 2017~~April 5, 2018. As a result of the redemption, the Company recorded 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 (see Note 9)10).

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements.

Additional Non-GAAP Measures

Funds from Operations ("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 FFO 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 adjustment for unconsolidated partnerships and joint ventures.

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 costs expensed incurred with ~~recent~~ business combinations and the acquisition of individual properties, (2) noncash share-based compensation expense, (3) noncash interest expense related to acquired debt, (4) hurricane-related charges, net, (5) gain or loss on early

extinguishment of debt, (6) noncash gain or loss on redemption or conversion of ~~convertible~~shares or units and (7) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value.

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) actual leasing costs incurred during the period. As a portion of our homes are recently acquired ~~and /~~ and/or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual recurring capital expenditures per Same-Home property by (b) our total number of properties, excluding non-stabilized properties and properties to be disposed, which are comprised of properties identified for future sale as part of the Company's disposition program and properties classified as held for ~~sale properties.~~sale.

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 ~~is a helpful measure of a REIT’s performance since~~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 ~~are helpful~~provide useful information to investors ~~as supplemental measures of the operating performance of the Company as~~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 cash flow provided by operating activities, 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's net income ~~(loss)~~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 and ~~nine~~six months ended ~~September~~June 30, 2018 and 2017 ~~and 2016 (amounts in~~(in thousands):


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income (loss) attributable to common shareholders	$	1,535		$	(21,152	)	$	(141	)	$	(35,933	)
Net loss attributable to common shareholders													$	(15,151	)	$	(186	)	$	(9,337	)	$	(1,676	)
Adjustments:
Noncontrolling interests in the Operating Partnership	340			7,542			(30		)	10,838			(2,902		)	(31		)	(1,777		)	(370		)
Net (gain) on sale / impairment of single-family properties and other	(596		)	(11,115		)	(2,589		)	(11,107		)	(1,704		)	(896		)	(3,260		)	(1,993		)
Depreciation and amortization of real estate assets	73,037			73,790			215,409			220,168
Depreciation and amortization													78,319			72,716			157,622			146,669
Less: depreciation and amortization of non-real estate assets													(1,787		)	(1,748		)	(3,617		)	(4,297		)
FFO attributable to common share and unit holders	$	74,316		$	49,065		$	212,649		$	183,966		$	56,775		$	69,855		$	139,631		$	138,333
Adjustments:
Acquisition fees and costs expensed	1,306			1,757			3,814			10,899			1,321			1,412			2,632			2,508
Noncash share-based compensation - general and administrative	699			480			1,917			1,578			520			697			1,118			1,218
Noncash share-based compensation - property management	417			411			1,258			1,166			423			424			800			841
Noncash interest expense related to acquired debt	910			1,474			2,624			3,699			937			874			1,837			1,714
Hurricane-related charges, net	10,136			—			10,136			—
Loss on early extinguishment of debt	—			13,408			6,555			13,408			1,447			6,555			1,447			6,555
Gain on conversion of Series E units	—			—			—			(11,463		)
Remeasurement of participating preferred shares	(8,391		)	2,490			(1,341		)	2,940			—			1,640			(1,212		)	7,050
Redemption of participating preferred shares													32,215			—			32,215			—
Core FFO attributable to common share and unit holders	$	79,393		$	69,085		$	237,612		$	206,193		$	93,638		$	81,457		$	178,468		$	158,219
Recurring capital expenditures (1)	(11,600		)	(10,411		)	(27,140		)	(25,183		)	(8,489		)	(8,342		)	(15,875		)	(14,739		)
Leasing costs	(1,960		)	(2,119		)	(5,361		)	(6,199		)	(3,111		)	(1,919		)	(5,834		)	(3,401		)
Adjusted FFO attributable to common share and unit holders	$	65,833		$	56,555		$	205,111		$	174,811		$	82,038		$	71,196		$	156,759		$	140,079


~~(1)~~	As a portion of our homes are recently acquired and / or renovated, we estimate recurring capital expenditures for our entire portfolio by multiplying (a) current period actual capital expenditures per Same-Home property by (b) our total number of properties, excluding non-stabilized and held for sale properties.

(1) As a portion of our homes are recently 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 property by (b) our total number of properties, excluding 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 EBITDA / Adjusted EBITDA 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 EBITDA is a supplemental non-GAAP financial measure calculated by adjusting EBITDA for (1) acquisition fees and costs expensed incurred with ~~recent~~ business combinations and the acquisition of individual properties, (2) net gain or loss on sales / impairment of single-family properties and other, (3) noncash share-based compensation expense, (4) hurricane-related charges, net, (5) gain or loss on early extinguishment of debt, (6) gain or loss on conversion of ~~convertible~~shares and units and (7) noncash fair value adjustments associated with remeasuring our participating preferred shares derivative liability to fair value. ~~We consider~~ Adjusted EBITDA ~~to be~~after Capex and Leasing Costs is a ~~meaningful~~supplemental non-GAAP financial measure ~~of operating performance~~calculated by adjusting Adjusted EBITDA for (1) recurring capital expenditures and (2) leasing costs. We believe these metrics provide useful information to investors because ~~it excludes~~they exclude the impact of various income and expense items that are not indicative of operating performance.

The following is a reconciliation of net income or loss, determined in accordance with GAAP, to EBITDA, Adjusted EBITDA and Adjusted EBITDA after Capex and Leasing Costs for the three and ~~nine~~six months ended ~~September~~June 30, 2018 and 2017 ~~and 2016 (amounts in~~(in thousands):


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016			2018			2017			2018			2017
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income (loss)	$	19,097		$	(167	)	$	45,959		$	1,108
Net income													$	25,898		$	15,066		$	47,423		$	26,862
Interest expense	26,592			32,851			86,873			99,309			31,978			28,392			61,279			60,281
Depreciation and amortization	74,790			75,392			221,459			224,513			78,319			72,716			157,622			146,669
EBITDA	$	120,479		$	108,076		$	354,291		$	324,930		$	136,195		$	116,174		$	266,324		$	233,812

Noncash share-based compensation - general and administrative	699			480			1,917			1,578			520			697			1,118			1,218
Noncash share-based compensation - property management	417			411			1,258			1,166			423			424			800			841
Acquisition fees and costs expensed	1,306			1,757			3,814			10,899			1,321			1,412			2,632			2,508
Net (gain) on sale / impairment of single-family properties and other	(596		)	(11,115		)	(2,589		)	(11,107		)	(1,704		)	(896		)	(3,260		)	(1,993		)
Hurricane-related charges, net	10,136			—			10,136			—
Loss on early extinguishment of debt	—			13,408			6,555			13,408			1,447			6,555			1,447			6,555
Gain on conversion of Series E units	—			—			—			(11,463		)
Remeasurement of participating preferred shares	(8,391		)	2,490			(1,341		)	2,940			—			1,640			(1,212		)	7,050
Adjusted EBITDA	$	124,050		$	115,507		$	374,041		$	332,351		$	138,202		$	126,006		$	267,849		$	249,991

Recurring capital expenditures (1)													(8,489		)	(8,342		)	(15,875		)	(14,739		)
Leasing costs													(3,111		)	(1,919		)	(5,834		)	(3,401		)
Adjusted EBITDA after Capex and Leasing Costs													$	126,602		$	115,745		$	246,140		$	231,851

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

The primary market risk to which we believe we are exposed is interest 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. 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.

~~As of September 30, 2017, and December 31, 2016, our~~The Company's variable-rate debt was comprised of borrowings on our ~~revolving credit facility of zero, our~~ term loan facility of $100.0 million as of June 30, 2018, and comprised of borrowings on our revolving credit facility and term loan facility of $140.0 million and $200.0 million, ~~and $325.0 million,~~ respectively, ~~and the outstanding balance on the AH4R 2014-SFR1 securitization~~as of ~~zero and $456.1 million, respectively.~~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. ~~The AH4R 2014-SFR1 securitization, which was paid off in full during the second quarter of 2016, had a duration-weighted blended interest rate of 1-month LIBOR plus 1.54%.~~ Assuming no change in the outstanding balance of our existing variable-rate debt, the following table illustrates the effect of a 100 basis point increase or decrease in the LIBOR rate on our projected annual interest expense as of ~~September~~June 30, ~~2017,~~2018, and December 31, ~~2016~~2017 (in thousands):


	September 30, 2017			December 31, 2016				June 30, 2018			December 31, 2017
Impact to future earnings due to variable rate debt, before the effect of capitalization:
Rate increase of 1%	$	2,000		$	7,813		(1)	$	1,000		$	3,400
Rate decrease of 1% ~~(2)~~(1)	$	(2,000	)	$	(4,087	)		$	(1,000	)	$	(3,400	)


(1)	~~Calculation of additional projected annual interest expense as a result of a 100 basis point increase reflects the potential impact of our interest rate cap agreement as of December 31, 2016.~~


~~(2)~~	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.

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.

ITEM 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's internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2017,~~2018, that have materially affected, or are reasonably likely to materially affect, ~~our~~the Company'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's management, including the Operating Partnership's 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, the Operating Partnership'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's management, including its Chief Executive Officer and Chief Financial Officer, 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 concluded that the Operating Partnership'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's internal control over financial reporting during the quarter ended June 30, 2018, that have materially affected, or are reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

For a description of the Company's legal proceedings, see Note 12.

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 Annual Report on Form 10-K filed for the year ended December 31, ~~2016,~~2017, in Part I, Item 1A, Risk ~~Factors; in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, in Part II, Item 1A, Risk Factors;~~Factors 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 have been no material changes to our risk factors from those disclosed in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016, and our Quarterly Report on Form 10-Q for the quarter ended June 30,~~ 2017.

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

On ~~September 21, 2015,~~February 22, 2018, the ~~Company announced that~~Company's board of trustees re-authorized our ~~Board of Trustees approved a~~existing share repurchase program, authorizing ~~us to~~the repurchase of up to ~~$300.0~~$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. WeDuring the three months ended June 30, 2018, the Company did not repurchase any of our ~~Class A~~ common ~~shares during the three months ended September 30, 2017.~~or preferred shares. As of ~~September~~June 30, ~~2017,~~2018, we had a remaining repurchase authorization of ~~$146.7~~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 upon 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

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, dated July 1, 2014, by and among American Homes 4 Rent, AMH Portfolio One, LLC, Beazer Pre-Owned Rental Homes, Inc. and KKR Fund Holdings L.P. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed July 7, 2014.)

2.8‡		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.,~~OP, 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)~~2015.)

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		First Articles of Amendment to Articles of Amendment and Restatement of Declaration of Trust of American Homes 4 Rent (Incorporated by reference to Exhibit 3.2 to Amendment No. 2 to the Company’s Registration Statement on Form S-11 (Registration Number 333-189103) filed July 19, 2013.)

3.3		Articles Supplementary for American Homes 4 Rent 5.000% Series A Participating Preferred Shares (Incorporated by reference to Exhibit 3.3 to Post-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-191015) filed October 18, 2013.)

~~3.4~~		Articles Supplementary for American Homes 4 Rent 5.000% Series B Participating Preferred Shares (Incorporated by reference to Exhibit 3.4 to Post-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-192592) filed December 20, 2013.)

~~3.5~~		Articles Supplementary for American Homes 4 Rent 5.500% Series C Participating Preferred Shares (Incorporated by reference to Exhibit 3.5 to Post-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11 (Registration Number 333-195575) filed April 24, 2014.)

~~3.6~~		~~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.)

~~3.7~~3.4		Articles Supplementary for American Homes 4 Rent 6.350% Series E Cumulative Redeemable Perpetual Preferred Shares (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 22, 2016.)

~~3.8~~3.5		Articles Supplementary for American Homes 4 Rent 5.875% Series F Cumulative Redeemable Perpetual Preferred Shares (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 21, 2017.)

~~3.9~~3.6		Articles Supplementary for American Homes 4 Rent 5.875% Series G Cumulative Redeemable Perpetual Preferred Shares (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 12, 2017.)



~~Exhibit~~ ~~Number~~		~~Exhibit Document~~

~~3.10~~3.7		Amended and Restated Bylaws of American Homes 4 Rent (Incorporated by reference to Exhibit 3.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 2016 filed February 24, 2017.)

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.)



Exhibit Number		Exhibit Document


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 4.2 to the Company's Current Report on Form 8-K filed March 4, 2016.)

4.3		Form of Global Note representing American Residential Properties OP, L.P.’s 3.25% Exchangeable Senior Notes due 2018 (Incorporated by reference to Exhibit 4.1 to American Residential Properties, Inc.’s Current Report on Form 8-K filed November 27, 2013.)

~~10.1~~4.4		~~Amendment No.~~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 ~~Credit Agreement,~~Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 7, 2018.)

4.6		First Supplemental Indenture, dated ~~June 30, 2017, by and~~as of February 7, 2018, among American Homes 4 Rent, L.P., ~~as Borrower,~~ American ~~Homes 4 Rent, as Parent, Wells Fargo~~Residential Properties OP, L.P. and U.S. Bank National Association, as ~~Agent, and the other lending institutions that are parties thereto, as Lenders.~~trustee (Incorporated by reference to Exhibit ~~10.1~~4.2 to the ~~Company’s~~Company's Current Report on Form 8-K filed February 7, 2018.)

4.7		Form of Global Note representing the Notes (Incorporated by reference to Exhibit 4.3 to the Company's Current Report on ~~July 6, 2017.~~Form 8-K filed February 7, 2018.)

12.1		Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Distributions of American Homes 4 Rent. Filed herewith.

12.2		Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Distributions of American Homes 4 Rent, L.P. Filed herewith.

31.1		Certification of Chief Executive Officer of American Homes 4 Rent pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. Filed herewith.

31.2		Certification of Chief Financial Officer of American Homes 4 Rent pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. Filed herewith.

31.3		Certification of Chief Executive Officer of American Homes 4 Rent, L.P. pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. Filed herewith.

31.4		Certification of Chief Financial Officer of American Homes 4 Rent, L.P. pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. Filed herewith.

32.1		Certification of Chief Executive Officer and Chief Financial Officer of American Homes 4 Rent pursuant to 18 U.S.C. 1350. Filed herewith.

32.2		Certification of Chief Executive Officer and Chief Financial Officer of American Homes 4 Rent, L.P. pursuant to 18 U.S.C. 1350. Filed herewith.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document


‡	The schedules 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.

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

/s/ ~~Diana M. Laing~~Christopher C. Lau

~~Diana M. Laing~~Christopher C. Lau

Chief Financial Officer

(Principal Financial Officer and duly authorized signatory of registrant)

Date: ~~November~~August 3, ~~2017~~2018

AMERICAN HOMES 4 RENT, L.P.

/s/ Christopher C. Lau

Christopher C. Lau

Chief Financial Officer

(Principal Financial Officer and duly authorized signatory of registrant)

Date: August 3, 2018

5059



Description	January 1, 2016		Conversions			Gain and remeasurement included in earnings			September 30, 2016
Liabilities:
Contingently convertible Series E units liability	$	69,957	$	(58,494	)	$	(11,463	)	$	—
Participating preferred shares derivative liability	$	62,790	$	—		$	2,940		$	65,730