Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the
"Company"), the nation's premier single-family home leasing
company, today announced its Q2 2023 financial and operating
results, along with an increase to the Company's 2023 full year
guidance.
In addition, Invitation Homes also announced today that on July
18, 2023, the Company acquired a premier portfolio of nearly 1,900
homes for approximately $650 million. The Company funded the
transaction primarily with cash on hand, with the remainder funded
by the Company's previously undrawn revolving credit facility.
Additional details of the transaction will be discussed on
tomorrow's earnings conference call.
Second Quarter 2023 Highlights
- Year over year, total revenues increased 7.7% to $600 million,
property operating and maintenance costs increased 12.1% to $214
million, net income available to common stockholders increased
24.3% to $138 million, and net income per diluted common share
increased 23.9% to $0.22.
- Year over year, Core FFO per share increased 5.3% to $0.44, and
AFFO per share increased 6.8% to $0.38.
- Same Store NOI increased 3.6% year over year on 5.9% Same Store
Core Revenues growth and 11.2% Same Store Core Operating Expenses
growth.
- Revenue collections were approximately 99% of the Company's
historical average collection rate. Same Store Bad Debt was 1.5% of
gross rental revenue, an improvement of approximately 50 basis
points from Q1 2023.
- Same Store Average Occupancy was 97.6%, down 20 basis points
from Q1 2023 as the Company continued to make progress on its lease
compliance backlog.
- Same Store new lease rent growth of 7.3% and Same Store renewal
rent growth of 6.9% drove Same Store blended rent growth of
7.0%.
- Acquisitions by the Company and the Company's joint ventures
totaled 276 homes for $88 million, primarily from the Company's
builder partners, while dispositions totaled 378 homes for $141
million.
Chief Executive Officer Dallas Tanner comments:
"We're pleased to report second quarter results that demonstrate
strong progress for the first half of 2023. Robust demand for our
homes continued into the peak leasing season, with Same Store
Average Occupancy remaining high at 97.6% and Same Store blended
rental rate growth at 7.0% year over year. As a result of solid
year-to-date execution by our teams and our continued expectations
that supply and demand fundamentals will remain favorable, we are
raising our 2023 full year guidance, including an increase of 25
basis points at the midpoint for our Same Store NOI growth guidance
and an increase of $0.01 at the midpoint for our Core FFO per share
and AFFO per share guidance.
"In addition, we're excited by our recent portfolio acquisition
that adds nearly 1,900 homes that are among the best located and
highest quality within our portfolio today. We believe this
acquisition's attractive entry point and high-growth outlook align
well with our disciplined investment approach, providing further
evidence of the benefits of our multichannel acquisition strategy,
industry-leading scale, and best-in-class platform. Looking ahead,
we believe these newly acquired homes will help drive strong NOI
growth and value creation, and we remain committed as ever to
sourcing focused and value-additive external growth
opportunities."
Glossary & Reconciliations of Non-GAAP Financial and
Other Operating Measures
Financial and operating measures found in the Earnings Release
and Supplemental Information include certain measures used by
Invitation Homes management that are measures not defined under
accounting principles generally accepted in the United States
("GAAP"). These measures are defined herein and, as applicable,
reconciled to the most comparable GAAP measures.
Financial Results
Net Income, FFO, Core FFO, and AFFO Per
Share — Diluted
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Net income
$
0.22
$
0.18
$
0.42
$
0.33
FFO
0.42
0.39
0.83
0.77
Core FFO
0.44
0.42
0.88
0.82
AFFO
0.38
0.36
0.76
0.71
Net Income
Net income per share for Q2 2023 was $0.22, compared to net
income per share of $0.18 for Q2 2022. Total revenues and total
property operating and maintenance expenses for Q2 2023 were $600
million and $214 million, respectively, compared to $557 million
and $191 million, respectively, in Q2 2022.
Net income per share YTD 2023 was $0.42, compared to net income
per share of $0.33 for YTD 2022. Total revenues and total property
operating and maintenance expenses for YTD 2023 were $1,190 million
and $422 million, respectively, compared to $1,090 million and $373
million, respectively, for YTD 2022.
Core FFO
Year over year, Core FFO per share for Q2 2023 increased 5.3% to
$0.44, primarily due to NOI growth. Year over year, Core FFO per
share for YTD 2023 increased 7.4% to $0.88, primarily due to NOI
growth.
AFFO
Year over year, AFFO per share for Q2 2023 increased 6.8% to
$0.38, primarily due to the increase in Core FFO per share
described above. Year over year, AFFO per share for YTD 2023
increased 7.9% to $0.76, primarily due to the increase in Core FFO
per share described above.
Operating Results
Same Store Operating Results
Snapshot
Number of homes in Same Store
Portfolio:
76,593
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Core Revenues growth (year over year)
5.9
%
6.9
%
Core Operating Expenses growth (year over
year)
11.2
%
12.5
%
NOI growth (year over year)
3.6
%
4.4
%
Average Occupancy
97.6
%
98.0
%
97.7
%
98.1
%
Bad Debt % of gross rental revenue
1.5
%
0.5
%
1.7
%
1.1
%
Turnover Rate
6.6
%
5.9
%
11.7
%
10.6
%
Rental Rate Growth (lease-over-lease):
Renewals
6.9
%
10.2
%
7.4
%
9.9
%
New Leases
7.3
%
16.2
%
6.5
%
15.5
%
Blended
7.0
%
11.6
%
7.1
%
11.3
%
Revenue Collections Update
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Pre-COVID
Average (2)
Revenues collected % of revenues due:
(1)
Revenues collected in same month
billed
93
%
93
%
91
%
91
%
96
%
Late collections of prior month
billings
5
%
5
%
6
%
6
%
3
%
Total collections
98
%
98
%
97
%
97
%
99
%
(1)
Includes both rental revenues and other
property income. Rent is considered to be due based on the terms of
the original lease, not based on a payment plan if one is in place.
Security deposits retained to offset rents due are not included as
revenue collected.
(2)
Represents the period from October 2019 to
March 2020.
Same Store NOI
For the Same Store Portfolio of 76,593 homes, Same Store NOI for
Q2 2023 increased 3.6% year over year on Same Store Core Revenues
growth of 5.9% and Same Store Core Operating Expenses growth of
11.2%.
YTD 2023 Same Store NOI increased 4.4% year over year on Same
Store Core Revenues growth of 6.9% and Same Store Core Operating
Expenses growth of 12.5%.
Same Store Core Revenues
Same Store Core Revenues growth for Q2 2023 of 5.9% year over
year was primarily driven by a 7.4% increase in Average Monthly
Rent and a 7.3% increase in other income, net of resident
recoveries, partially offset by a 40 basis points year over year
decline in Average Occupancy and a 100 basis points year over year
increase in Bad Debt as a percentage of gross rental revenue. Bad
Debt was 1.5% of gross rental revenue for Q2 2023, an improvement
of approximately 50 basis points from Q1 2023 as a result of
continued progress in working through the Company's lease
compliance backlog.
YTD 2023 Same Store Core Revenues growth of 6.9% year over year
was primarily driven by a 7.9% increase in Average Monthly Rent and
a 7.5% increase in other income, net of resident recoveries,
partially offset by a 40 basis point year over year decline in
Average Occupancy and a 60 basis point year over year increase in
Bad Debt as a percentage of gross rental revenue.
Same Store Core Operating Expenses
Same Store Core Operating Expenses for Q2 2023 increased 11.2%
year over year. The largest contributors to the year over year
increase include an increase in property tax expense due to an
expected year over year increase in property taxes in addition to
the underaccrual of property tax expense in the first three
quarters of 2022, as well as an increase in turnover expenses, net
of resident recoveries, and an increase in utilities and property
administrative expenses, net of resident recoveries. The increases
in the latter two expense categories were expected primarily as a
result of continued progress in working through the Company's lease
compliance backlog.
YTD 2023 Same Store Core Operating Expenses increased 12.5% year
over year, primarily driven by the year over year increases
described above.
Investment Management Activity
Acquisitions for Q2 2023 totaled 276 homes for $88 million,
primarily sourced from the Company's builder partners. This
included 188 wholly owned homes for $61 million in addition to 88
homes for $27 million in the Company's joint ventures. Dispositions
for Q2 2023 included 361 wholly owned homes for gross proceeds of
$134 million and 17 homes for gross proceeds of $7 million in the
Company's joint ventures.
Year to date through June 30, 2023, the Company acquired 470
homes for $155 million, including 369 wholly owned homes for $123
million and 101 homes for $32 million in the Company's joint
ventures. The company also sold 675 homes for $242 million,
including 645 wholly owned homes for $229 million and 30 homes for
$13 million in the Company's joint ventures.
Subsequent to quarter end on July 18, 2023, the Company acquired
a premier portfolio of nearly 1,900 homes for approximately $650
million (the "Portfolio Acquisition"). Additional details of the
transaction will be discussed on tomorrow's earnings conference
call.
Balance Sheet and Capital Markets Activity
As of June 30, 2023, the Company had $1,414 million in available
liquidity through a combination of unrestricted cash and undrawn
capacity on its revolving credit facility. The Company's total
indebtedness as of June 30, 2023 was $7,823 million, consisting of
$5,775 million of unsecured debt and $2,048 million of secured
debt. Net debt / TTM adjusted EBITDAre was 5.3x at June 30, 2023,
down from 5.7x as of December 31, 2022.
Subsequent to quarter end on July 18, 2023, the Company funded
the Portfolio Acquisition primarily with cash on hand, with the
remainder funded by the Company's previously undrawn revolving
credit facility.
Dividend
As previously announced on July 21, 2023, the Company's Board of
Directors declared a quarterly cash dividend of $0.26 per share of
common stock. The dividend will be paid on or before August 25,
2023, to stockholders of record as of the close of business on
August 8, 2023.
FY 2023 Guidance Update
The Company does not provide guidance for the most comparable
GAAP financial measures of net income (loss), total revenues, and
property operating and maintenance expense. Additionally, a
reconciliation of the forward-looking non-GAAP financial measures
of Core FFO per share, AFFO per share, Same Store Core Revenues
growth, Same Store Core Operating Expenses growth, and Same Store
NOI growth to the comparable GAAP financial measures cannot be
provided without unreasonable effort because the Company is unable
to reasonably predict certain items contained in the GAAP measures,
including non-recurring and infrequent items that are not
indicative of the Company's ongoing operations. Such items include,
but are not limited to, impairment on depreciated real estate
assets, net (gain)/loss on sale of previously depreciated real
estate assets, share-based compensation, casualty loss, non-Same
Store revenues, and non-Same Store operating expenses. These items
are uncertain, depend on various factors, and could have a material
impact on the Company's GAAP results for the guidance period.
Full year 2023 guidance revisions are outlined in the table
below:
FY 2023 Guidance
Current FY 2023
Guidance
Previous FY 2023
Guidance
Core FFO per share — diluted
$1.75 to $1.81
$1.73 to $1.81
AFFO per share — diluted
$1.45 to $1.51
$1.43 to $1.51
Same Store Core Revenues growth
5.75% to 6.75%
5.25% to 6.25%
Same Store Core Operating Expenses
growth
8.5% to 9.5%
7.5% to 9.5%
Same Store NOI growth
4.5% to 5.5%
4.0% to 5.5%
Wholly owned acquisitions
$800 million to $900 million
$250 million to $300 million
JV acquisitions
$100 million to $300 million
$100 million to $300 million
Wholly owned dispositions
$425 million to $475 million
$250 million to $300 million
Earnings Conference Call Information
Invitation Homes has scheduled a conference call at 11:00 a.m.
Eastern Time on July 27, 2023, to discuss results for the second
quarter of 2023. The domestic dial-in number is 1-888-330-2384, and
the international dial-in number is 1-240-789-2701. The conference
ID is 7714113. A live audio webcast may be accessed at
www.invh.com. A replay of the call will be available through August
24, 2023, and can be accessed by calling 1-800-770-2030 (domestic)
or 1-647-362-9199 (international) and using the playback ID
7714113, or by using the link at www.invh.com.
Supplemental Information
The full text of the Earnings Release and Supplemental
Information referenced in this release are available on Invitation
Homes' Investor Relations website at www.invh.com.
About Invitation Homes
Invitation Homes, an S&P 500 company, is the nation's
premier single-family home leasing company, meeting changing
lifestyle demands by providing access to high-quality, updated
homes with valued features such as close proximity to jobs and
access to good schools. The company's mission, "Together with you,
we make a house a home," reflects its commitment to providing homes
where individuals and families can thrive and high-touch service
that continuously enhances residents' living experiences.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), which include, but are not limited
to, statements related to the Company's expectations regarding the
performance of the Company's business, its financial results, its
liquidity and capital resources, and other non-historical
statements. In some cases, you can identify these forward-looking
statements by the use of words such as “outlook,” “guidance,”
“believes,” “expects,” “potential,” “continues,” “may,” “will,”
“should,” “could,” “seeks,” “projects,” “predicts,” “intends,”
“plans,” “estimates,” “anticipates,” or the negative version of
these words or other comparable words. Such forward-looking
statements are subject to various risks and uncertainties,
including, among others, risks inherent to the single-family rental
industry and the Company's business model, macroeconomic factors
beyond the Company's control, competition in identifying and
acquiring properties, competition in the leasing market for quality
residents, increasing property taxes, homeowners’ association and
insurance costs, poor resident selection and defaults and
non-renewals by the Company's residents, the Company's dependence
on third parties for key services, risks related to the evaluation
of properties, performance of the Company's information technology
systems, risks related to the Company's indebtedness, and risks
related to the potential negative impact of unfavorable global and
United States economic conditions (including inflation and rising
interest rates), uncertainty in financial markets (including as a
result of recent bank failures and events affecting financial
institutions), geopolitical tensions, natural disasters, climate
change, and public health crises on the Company’s financial
condition, results of operations, cash flows, business, associates,
and residents. Accordingly, there are or will be important factors
that could cause actual outcomes or results to differ materially
from those indicated in these statements. The Company believes
these factors include, but are not limited to, those described
under Part I. Item 1A. “Risk Factors” of its Annual Report on Form
10-K for the year ended December 31, 2022 (the "Annual Report"), as
such factors may be updated from time to time in the Company's
periodic filings with the Securities and Exchange Commission (the
"SEC"), which are accessible on the SEC’s website at www.sec.gov.
These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are
included in this release, in the Annual Report, and in the
Company's other periodic filings. The forward-looking statements
speak only as of the date of this press release, and the Company
expressly disclaims any obligation or undertaking to publicly
update or review any forward-looking statement, whether as a result
of new information, future developments or otherwise, except to the
extent otherwise required by law.
Consolidated Balance Sheets
($ in thousands, except shares and per
share data)
June 30, 2023
December 31, 2022
(unaudited)
Assets:
Investments in single-family residential
properties, net
$
16,789,641
$
17,030,374
Cash and cash equivalents
414,292
262,870
Restricted cash
205,241
191,057
Goodwill
258,207
258,207
Investments in unconsolidated joint
ventures
267,446
280,571
Other assets, net
607,428
513,629
Total assets
$
18,542,255
$
18,536,708
Liabilities:
Mortgage loans, net
$
1,636,505
$
1,645,795
Secured term loan, net
401,406
401,530
Unsecured notes, net
2,520,017
2,518,185
Term loan facilities, net
3,207,635
3,203,567
Revolving facility
—
—
Accounts payable and accrued expenses
241,129
198,423
Resident security deposits
177,008
175,552
Other liabilities
75,847
70,025
Total liabilities
8,259,547
8,213,077
Equity:
Stockholders' equity
Preferred stock, $0.01 par value per
share, 900,000,000 shares authorized, none outstanding as of June
30, 2023 and December 31, 2022
—
—
Common stock, $0.01 par value per share,
9,000,000,000 shares authorized, 611,956,170 and 611,411,382
outstanding as of June 30, 2023 and December 31, 2022,
respectively
6,120
6,114
Additional paid-in capital
11,141,829
11,138,463
Accumulated deficit
(1,011,060
)
(951,220
)
Accumulated other comprehensive income
112,984
97,985
Total stockholders' equity
10,249,873
10,291,342
Non-controlling interests
32,835
32,289
Total equity
10,282,708
10,323,631
Total liabilities and equity
$
18,542,255
$
18,536,708
Consolidated Statements of Operations
($ in thousands, except shares and per
share amounts) (unaudited)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Revenues:
Rental revenues
$
543,185
$
505,936
$
1,078,402
$
989,931
Other property income
53,739
48,605
105,037
94,809
Management fee revenues
3,448
2,759
6,823
4,870
Total revenues
600,372
557,300
1,190,262
1,089,610
Expenses:
Property operating and maintenance
213,808
190,680
422,305
372,949
Property management expense
23,580
21,814
47,164
42,781
General and administrative
19,791
19,342
37,243
36,981
Interest expense
78,625
74,840
156,672
149,229
Depreciation and amortization
165,759
158,572
330,432
314,368
Impairment and other
1,868
1,355
3,031
2,870
Total expenses
503,431
466,603
996,847
919,178
Gains (losses) on investments in equity
securities, net
524
(172
)
612
(3,204
)
Other, net
(3,941
)
(3,827
)
(5,435
)
(3,233
)
Gain on sale of property, net of tax
46,788
27,508
76,459
45,534
Losses from investments in unconsolidated
joint ventures
(2,030
)
(2,701
)
(6,185
)
(5,021
)
Net income
138,282
111,505
258,866
204,508
Net income attributable to non-controlling
interests
(418
)
(542
)
(760
)
(930
)
Net income attributable to common
stockholders
137,864
110,963
258,106
203,578
Net income available to participating
securities
(166
)
(148
)
(337
)
(368
)
Net income available to common
stockholders — basic and diluted
$
137,698
$
110,815
$
257,769
$
203,210
Weighted average common shares
outstanding — basic
611,954,347
610,331,643
611,772,406
608,381,768
Weighted average common shares
outstanding — diluted
613,316,499
611,620,475
612,941,399
609,775,270
Net income per common share —
basic
$
0.23
$
0.18
$
0.42
$
0.33
Net income per common share —
diluted
$
0.22
$
0.18
$
0.42
$
0.33
Dividends declared per common
share
$
0.26
$
0.22
$
0.52
$
0.44
Glossary and Reconciliations
Average Monthly Rent
Average monthly rent represents average monthly rental income
per home for occupied properties in an identified population of
homes over the measurement period, and reflects the impact of
non-service rental concessions and contractual rent increases
amortized over the life of the lease.
Average Occupancy
Average occupancy for an identified population of homes
represents (i) the total number of days that the homes in such
population were occupied during the measurement period, divided by
(ii) the total number of days that the homes in such population
were owned during the measurement period.
Bad Debt
Bad debt represents the Company's reserves for residents'
accounts receivables balances that are aged greater than 30 days,
under the rationale that a resident's security deposit should cover
approximately the first 30 days of receivables. For all resident
receivables balances aged greater than 30 days, the amount reserved
as bad debt is 100% of outstanding receivables from the resident,
less the amount of the resident's security deposit on hand. For the
purpose of determining age of receivables, charges are considered
to be due based on the terms of the original lease, not based on a
payment plan if one is in place. All rental revenues and other
property income, in both Total Portfolio and Same Store Portfolio
presentations, are reflected net of bad debt.
Core Operating Expenses
Core operating expenses for an identified population of homes
reflect property operating and maintenance expenses, excluding any
expenses recovered from residents.
Core Revenues
Core revenues for an identified population of homes reflects
total revenues, net of any resident recoveries.
EBITDA, EBITDAre, and Adjusted EBITDAre
EBITDA, EBITDAre, and Adjusted EBITDAre are supplemental,
non-GAAP measures often utilized to evaluate the performance of
real estate companies. The Company defines EBITDA as net income or
loss computed in accordance with accounting principles generally
accepted in the United States (“GAAP”) before the following items:
interest expense; income tax expense; depreciation and
amortization; and adjustments for unconsolidated joint ventures.
National Association of Real Estate Investment Trusts ("Nareit")
recommends as a best practice that REITs that report an EBITDA
performance measure also report EBITDAre. The Company defines
EBITDAre, consistent with the Nareit definition, as EBITDA, further
adjusted for gain on sale of property, net of tax, impairment on
depreciated real estate investments, and adjustments for
unconsolidated joint ventures. Adjusted EBITDAre is defined as
EBITDAre before the following items: share-based compensation
expense; severance; casualty losses, net; (gains) losses on
investments in equity securities, net; and other income and
expenses. EBITDA, EBITDAre, and Adjusted EBITDAre are used as
supplemental financial performance measures by management and by
external users of the Company's financial statements, such as
investors and commercial banks. Set forth below is additional
detail on how management uses EBITDA, EBITDAre, and Adjusted
EBITDAre as measures of performance.
The GAAP measure most directly comparable to EBITDA, EBITDAre,
and Adjusted EBITDAre is net income or loss. EBITDA, EBITDAre, and
Adjusted EBITDAre are not used as measures of the Company's
liquidity and should not be considered alternatives to net income
or loss or any other measure of financial performance presented in
accordance with GAAP. The Company's EBITDA, EBITDAre, and Adjusted
EBITDAre may not be comparable to the EBITDA, EBITDAre, and
Adjusted EBITDAre of other companies due to the fact that not all
companies use the same definitions of EBITDA, EBITDAre, and
Adjusted EBITDAre. Accordingly, there can be no assurance that the
Company's basis for computing these non-GAAP measures is comparable
with that of other companies. See below for a reconciliation of
GAAP net income to EBITDA, EBITDAre, and Adjusted EBITDAre.
Funds from Operations (FFO), Core Funds from Operations (Core
FFO), and Adjusted Funds from Operations (AFFO)
FFO, Core FFO, and Adjusted FFO are supplemental, non-GAAP
measures often utilized to evaluate the performance of real estate
companies. FFO is defined by Nareit as net income or loss (computed
in accordance with GAAP) excluding gains or losses from sales of
previously depreciated real estate assets, plus depreciation,
amortization and impairment of real estate assets, and adjustments
for unconsolidated joint ventures.
The Company believes that FFO is a meaningful supplemental
measure of the operating performance of its business because
historical cost accounting for real estate assets in accordance
with GAAP assumes that the value of real estate assets diminishes
predictably over time, as reflected through depreciation and
amortization. Because real estate values have historically risen or
fallen with market conditions, management considers FFO an
appropriate supplemental performance measure as it excludes
historical cost depreciation and amortization, impairment on
depreciated real estate investments, gains or losses related to
sales of previously depreciated homes, as well non-controlling
interests, from GAAP net income or loss.
The GAAP measure most directly comparable to Core FFO and
Adjusted FFO is net income or loss. Core FFO and Adjusted FFO are
not used as measures of the Company's liquidity and should not be
considered alternatives to net income or loss or any other measure
of financial performance presented in accordance with GAAP. The
Company's Core FFO and Adjusted FFO may not be comparable to the
Core FFO and Adjusted FFO of other companies due to the fact that
not all companies use the same definition of Core FFO and Adjusted
FFO. Accordingly, there can be no assurance that the Company's
basis for computing these non-GAAP measures is comparable with that
of other companies. See "Reconciliation of FFO, Core FFO, and
Adjusted FFO" for a reconciliation of GAAP net income to FFO, Core
FFO, and Adjusted FFO.
Net Operating Income (NOI)
NOI is a non-GAAP measure often used to evaluate the performance
of real estate companies. The Company defines NOI for an identified
population of homes as rental revenues and other property income
less property operating and maintenance expense (which consists
primarily of property taxes, insurance, HOA fees (when applicable),
market-level personnel expenses, repairs and maintenance, leasing
costs, and marketing expense). NOI excludes: interest expense;
depreciation and amortization; property management expense; general
and administrative expense; impairment and other; gain on sale of
property, net of tax; (gains) losses on investments in equity
securities, net; other income and expenses; management fee
revenues; and income from investments in unconsolidated joint
ventures.
The GAAP measure most directly comparable to NOI is net income
or loss. NOI is not used as a measure of liquidity and should not
be considered as an alternative to net income or loss or any other
measure of financial performance presented in accordance with GAAP.
The Company's NOI may not be comparable to the NOI of other
companies due to the fact that not all companies use the same
definition of NOI. Accordingly, there can be no assurance that the
Company's basis for computing this non-GAAP measure is comparable
with that of other companies.
The Company believes that Same Store NOI is also a meaningful
supplemental measure of the Company's operating performance for the
same reasons as NOI and is further helpful to investors as it
provides a more consistent measurement of the Company's performance
across reporting periods by reflecting NOI for homes in its Same
Store Portfolio.
See below for a reconciliation of GAAP net income to NOI for the
Company's total portfolio and NOI for its Same Store Portfolio.
Recurring Capital Expenditures or Recurring CapEx
Recurring Capital Expenditures or Recurring CapEx represents
general replacements and expenditures required to preserve and
maintain the value and functionality of a home and its systems as a
single-family rental.
Rental Rate Growth
Rental rate growth for any home represents the percentage
difference between the monthly rent from an expiring lease and the
monthly rent from the next lease, and, in each case, reflects the
impact of any amortized non-service rent concessions and amortized
contractual rent increases. Leases are either renewal leases, where
the Company's current resident chooses to stay for a subsequent
lease term, or a new lease, where the Company's previous resident
moves out and a new resident signs a lease to occupy the same
home.
Revenue Collections
Revenue collections represent the total cash received in a given
period for rental revenues and other property income (including
receipt of late payments that were billed in prior months) divided
by the total amounts billed in that period. When a payment plan is
in place with a resident, amounts are considered to be billed at
the time they would have been billed based on the terms of the
original lease, not the terms of the payment plan. "Historical
average" revenue collections as a percentage of billings refer to
revenue collections as a percentage of billings for the period from
October 2019 through and including March 2020.
Same Store / Same Store Portfolio
Same Store or Same Store portfolio includes, for a given
reporting period, wholly owned homes that have been stabilized and
seasoned, excluding homes that have been sold, homes that have been
identified for sale to an owner occupant and have become vacant,
homes that have been deemed inoperable or significantly impaired by
casualty loss events or force majeure, homes acquired in portfolio
transactions that are deemed not to have undergone renovations of
sufficiently similar quality and characteristics as the existing
Invitation Homes Same Store portfolio, and homes in markets that
the Company has announced an intent to exit where the Company no
longer operates a significant number of homes.
Homes are considered stabilized if they have (i) completed an
initial renovation and (ii) entered into at least one post-initial
renovation lease. An acquired portfolio that is both leased and
deemed to be of sufficiently similar quality and characteristics as
the existing Invitation Homes Same Store portfolio may be
considered stabilized at the time of acquisition.
Homes are considered to be seasoned once they have been
stabilized for at least 15 months prior to January 1st of the year
in which the Same Store portfolio was established.
The Company believes presenting information about the portion of
its portfolio that has been fully operational for the entirety of a
given reporting period and its prior year comparison period
provides investors with meaningful information about the
performance of the Company's comparable homes across periods and
about trends in its organic business.
Total Homes / Total Portfolio
Total homes or total portfolio refers to the total number of
homes owned, whether or not stabilized, and excludes any properties
previously acquired in purchases that have been subsequently
rescinded or vacated. Unless otherwise indicated, total homes or
total portfolio refers to the wholly owned homes and excludes homes
owned in joint ventures.
Turnover Rate
Turnover rate represents the number of instances that homes in
an identified population become unoccupied in a given period,
divided by the number of homes in such population.
Reconciliation of FFO, Core FFO, and AFFO
($ in thousands, except shares and per
share amounts) (unaudited)
FFO Reconciliation
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Net income available to common
stockholders
$
137,698
$
110,815
$
257,769
$
203,210
Net income available to participating
securities
166
148
337
368
Non-controlling interests
418
542
760
930
Depreciation and amortization on real
estate assets
163,022
156,433
325,106
310,073
Impairment on depreciated real estate
investments
81
36
259
137
Net gain on sale of previously depreciated
investments in real estate
(46,788
)
(27,508
)
(76,459
)
(45,534
)
Depreciation and net gain on sale of
investments in unconsolidated joint ventures
2,193
916
4,314
1,416
FFO
$
256,790
$
241,382
$
512,086
$
470,600
Core FFO Reconciliation
Q2 2023
Q2 2022
YTD 2023
YTD 2022
FFO
$
256,790
$
241,382
$
512,086
$
470,600
Non-cash interest expense related to
amortization of deferred financing costs, loan discounts, and
non-cash interest expense from derivatives (1)
7,182
6,498
16,314
12,968
Share-based compensation expense
6,066
7,989
12,564
14,635
Severance expense
371
189
524
207
Casualty losses, net (1)
1,797
1,319
2,785
2,733
(Gains) losses on investments in equity
securities, net
(524
)
172
(612
)
3,204
Core FFO
$
271,682
$
257,549
$
543,661
$
504,347
AFFO Reconciliation
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Core FFO
$
271,682
$
257,549
$
543,661
$
504,347
Recurring capital expenditures (1)
(36,400
)
(37,544
)
(73,693
)
(70,374
)
AFFO
$
235,282
$
220,005
$
469,968
$
433,973
Net income available to common
stockholders
Weighted average common shares outstanding
— diluted
613,316,499
611,620,475
612,941,399
609,775,270
Net income per common share — diluted
$
0.22
$
0.18
$
0.42
$
0.33
FFO, Core FFO, and AFFO
Weighted average common shares and OP
Units outstanding — diluted
615,384,953
614,569,431
614,961,840
612,648,238
FFO per share — diluted
$
0.42
$
0.39
$
0.83
$
0.77
Core FFO per share — diluted
$
0.44
$
0.42
$
0.88
$
0.82
AFFO per share — diluted
$
0.38
$
0.36
$
0.76
$
0.71
(1)
Includes the Company's share from
unconsolidated joint ventures.
Reconciliation of Total Revenues to Same Store Core Revenues,
Quarterly
(in thousands) (unaudited)
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Q2 2022
Total revenues (Total
Portfolio)
$
600,372
$
589,890
$
579,836
$
568,675
$
557,300
Management fee revenues
(3,448
)
(3,375
)
(3,326
)
(3,284
)
(2,759
)
Total portfolio resident recoveries
(32,776
)
(31,966
)
(32,639
)
(31,260
)
(29,394
)
Total Core Revenues (Total
Portfolio)
564,148
554,549
543,871
534,131
525,147
Non-Same Store Core Revenues
(41,117
)
(40,470
)
(38,062
)
(35,232
)
(31,466
)
Same Store Core Revenues
$
523,031
$
514,079
$
505,809
$
498,899
$
493,681
Reconciliation of Total Revenues to Same Store Core Revenues,
YTD
(in thousands) (unaudited)
YTD 2023
YTD 2022
Total revenues (Total
Portfolio)
$
1,190,262
$
1,089,610
Management fee revenues
(6,823
)
(4,870
)
Total portfolio resident recoveries
(64,742
)
(58,156
)
Total Core Revenues (Total
Portfolio)
1,118,697
1,026,584
Non-Same Store Core Revenues
(81,587
)
(56,103
)
Same Store Core Revenues
$
1,037,110
$
970,481
Reconciliation of Property Operating
and Maintenance Expenses to Same Store Core Operating Expenses,
Quarterly
(in thousands) (unaudited)
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Q2 2022
Property operating and maintenance
expenses (Total Portfolio)
$
213,808
$
208,497
$
209,615
$
203,787
$
190,680
Total Portfolio resident recoveries
(32,776
)
(31,966
)
(32,639
)
(31,260
)
(29,394
)
Core Operating Expenses (Total
Portfolio)
181,032
176,531
176,976
172,527
161,286
Non-Same Store Core Operating Expenses
(13,359
)
(13,276
)
(11,409
)
(12,437
)
(10,522
)
Same Store Core Operating
Expenses
$
167,673
$
163,255
$
165,567
$
160,090
$
150,764
Reconciliation of Property Operating
and Maintenance Expenses to Same Store Core Operating Expenses,
YTD
(in thousands) (unaudited)
YTD 2023
YTD 2022
Property operating and maintenance
expenses (Total Portfolio)
$
422,305
$
372,949
Total Portfolio resident recoveries
(64,742
)
(58,156
)
Core Operating Expenses (Total
Portfolio)
357,563
314,793
Non-Same Store Core Operating Expenses
(26,635
)
(20,762
)
Same Store Core Operating
Expenses
$
330,928
$
294,031
Reconciliation of Net Income to Same
Store NOI, Quarterly
(in thousands) (unaudited)
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Q2 2022
Net income available to common
stockholders
$
137,698
$
120,071
$
100,426
$
79,032
$
110,815
Net income available to participating
securities
166
171
146
147
148
Non-controlling interests
418
342
290
250
542
Interest expense
78,625
78,047
78,409
76,454
74,840
Depreciation and amortization
165,759
164,673
163,318
160,428
158,572
Property management expense
23,580
23,584
22,770
22,385
21,814
General and administrative
19,791
17,452
16,921
20,123
19,342
Impairment and other (1)
1,868
1,163
5,823
20,004
1,355
Gain on sale of property, net of tax
(46,788
)
(29,671
)
(21,213
)
(23,952
)
(27,508
)
(Gains) losses on investments in equity
securities, net
(524
)
(88
)
(61
)
796
172
Other, net (2)
3,941
1,494
(344
)
8,372
3,827
Management fee revenues
(3,448
)
(3,375
)
(3,326
)
(3,284
)
(2,759
)
Loss from investments in unconsolidated
joint ventures
2,030
4,155
3,736
849
2,701
NOI (Total Portfolio)
383,116
378,018
366,895
361,604
363,861
Non-Same Store NOI
(27,758
)
(27,194
)
(26,653
)
(22,795
)
(20,944
)
Same Store NOI
$
355,358
$
350,824
$
340,242
$
338,809
$
342,917
Reconciliation of Net Income to Same
Store NOI, YTD
(in thousands) (unaudited)
YTD 2023
YTD 2022
Net income available to common
stockholders
$
257,769
$
203,210
Net income available to participating
securities
337
368
Non-controlling interests
760
930
Interest expense
156,672
149,229
Depreciation and amortization
330,432
314,368
Property management expense
47,164
42,781
General and administrative
37,243
36,981
Impairment and other
3,031
2,870
Gain on sale of property, net of tax
(76,459
)
(45,534
)
(Gains) losses on investments in equity
securities, net
(612
)
3,204
Other, net (2)
5,435
3,233
Management fee revenues
(6,823
)
(4,870
)
Loss from investments in unconsolidated
joint ventures
6,185
5,021
NOI (Total Portfolio)
761,134
711,791
Non-Same Store NOI
(54,952
)
(35,341
)
Same Store NOI
$
706,182
$
676,450
(1)
Includes $5.0 million and $19.0 million of
net estimated losses and damages related to Hurricanes Ian and
Nicole for Q4 2022 and Q3 2022, respectively.
(2)
Includes interest income and other
miscellaneous income and expenses.
Reconciliation of Net Income to
Adjusted EBITDAre
(in thousands, unaudited)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Net income available to common
stockholders
$
137,698
$
110,815
$
257,769
$
203,210
Net income available to participating
securities
166
148
337
368
Non-controlling interests
418
542
760
930
Interest expense
78,625
74,840
156,672
149,229
Interest expense in unconsolidated joint
ventures
3,145
859
7,723
1,451
Depreciation and amortization
165,759
158,572
330,432
314,368
Depreciation and amortization of
investments in unconsolidated joint ventures
2,521
1,114
4,996
1,752
EBITDA
388,332
346,890
758,689
671,308
Gain on sale of property, net of tax
(46,788
)
(27,508
)
(76,459
)
(45,534
)
Impairment on depreciated real estate
investments
81
36
259
137
Net gain on sale of investments in
unconsolidated joint ventures
(304
)
(186
)
(634
)
(316
)
EBITDAre
341,321
319,232
681,855
625,595
Share-based compensation expense
6,066
7,989
12,564
14,635
Severance
371
189
524
207
Casualty losses, net (1)
1,797
1,319
2,785
2,733
(Gains) losses on investments in equity
securities, net
(524
)
172
(612
)
3,204
Other, net (2)
3,941
3,827
5,435
3,233
Adjusted EBITDAre
$
352,972
$
332,728
$
702,551
$
649,607
Trailing Twelve Months
(TTM)
Ended
June 30, 2023
December 31, 2022
Net income available to common
stockholders
$
437,227
$
382,668
Net income available to participating
securities
630
661
Non-controlling interests
1,300
1,470
Interest expense
311,535
304,092
Interest expense in unconsolidated joint
ventures
9,853
3,581
Depreciation and amortization
654,178
638,114
Depreciation and amortization of
investments in unconsolidated joint ventures
9,082
5,838
EBITDA
1,423,805
1,336,424
Gain on sale of property, net of tax
(121,624
)
(90,699
)
Impairment on depreciated real estate
investments
432
310
Net gain on sale of investments in
unconsolidated joint ventures
(1,183
)
(865
)
EBITDAre
1,301,430
1,245,170
Share-based compensation expense
26,891
28,962
Severance
631
314
Casualty losses, net (1)
28,537
28,485
Losses on investments in equity
securities, net
123
3,939
Other, net (2)
13,463
11,261
Adjusted EBITDAre
$
1,371,075
$
1,318,131
(1)
Includes the Company's share from
unconsolidated joint ventures, and includes $24.0 million of net
estimated losses and damages related to Hurricanes Ian and Nicole
for the TTM ended June 30, 2023 and December 31, 2022.
(2)
Includes interest income and other
miscellaneous income and expenses.
Reconciliation of Net Debt / Trailing
Twelve Months (TTM) Adjusted EBITDAre
(in thousands, except for ratio)
(unaudited)
As of
As of
June 30, 2023
December 31, 2022
Mortgage loans, net
$
1,636,505
$
1,645,795
Secured term loan, net
401,406
401,530
Unsecured notes, net
2,520,017
2,518,185
Term loan facility, net
3,207,635
3,203,567
Revolving facility
—
—
Total Debt per Balance Sheet
7,765,563
7,769,077
Retained and repurchased certificates
(88,229
)
(88,564
)
Cash, ex-security deposits and letters of
credit (1)
(439,306
)
(275,989
)
Deferred financing costs, net
45,074
51,076
Unamortized discounts on note payable
12,715
13,518
Net Debt (A)
$
7,295,817
$
7,469,118
For the TTM Ended
For the TTM Ended
June 30, 2023
December 31, 2022
Adjusted EBITDAre (B)
$
1,371,075
$
1,318,131
Net Debt / TTM Adjusted EBITDAre (A /
B)
5.3x
5.7x
(1)
Represents cash and cash equivalents and
the portion of restricted cash that excludes security deposits and
letters of credit
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726844458/en/
Investor Relations Contact Scott McLaughlin 844.456.INVH
(4684) IR@InvitationHomes.com
Media Relations Contact Kristi DesJarlais 972.421.3587
Media@InvitationHomes.com
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