Invitation Homes Inc. (NYSE: INVH) (“Invitation Homes” or the
“Company”), the nation's premier single-family home leasing
company, today announced its Q3 2023 financial and operating
results, along with the Company's updated 2023 full year
guidance.
Third Quarter 2023 Highlights
- Year over year, total revenues increased 8.6% to $618 million,
property operating and maintenance costs increased 12.6% to $229
million, net income available to common stockholders increased
66.6% to $132 million, and net income per diluted common share
increased 66.3% to $0.21.
- Year over year, Core FFO per share increased 4.7% to $0.44, and
AFFO per share increased 3.7% to $0.36.
- Same Store NOI increased 4.0% year over year on 6.0% Same Store
Core Revenues growth and 10.2% Same Store Core Operating Expenses
growth.
- Revenue collections were approximately 99% of the Company's
historical average collection rate. Same Store Bad Debt was 1.3% of
gross rental revenue, indicating a year over year improvement of
approximately 20 basis points.
- Same Store Average Occupancy was 96.9%, down 60 basis points
year over year.
- Same Store renewal rent growth of 6.6% and Same Store new lease
rent growth of 5.2% drove Same Store blended rent growth of
6.2%.
- Acquisitions by the Company and the Company's joint ventures
totaled 2,291 homes for $854 million, including 1,870 homes from
the Company's previously announced portfolio acquisition in July
2023, the purchase of 387 wholly owned homes through the Company's
various acquisition channels, in addition to 34 homes in the
Company's joint ventures. Dispositions by the Company and the
Company's joint ventures totaled 416 homes for $160 million.
- As previously announced, Fitch Ratings revised its rating
outlook for the Company to “Positive” from “Stable” and affirmed
the Company’s ratings, including the “BBB” Long-Term Issuer Default
Ratings. The Company has no debt reaching final maturity until
2026, and in addition, over 99% of its total debt is fixed rate or
swapped to fixed rate and over 75% of its total debt is
unsecured.
- As previously announced, on August 2, 2023, the Company closed
a public offering of $450 million aggregate principal amount of
5.450% Senior Notes due 2030 and $350 million aggregate principal
amount of 5.500% Senior Notes due 2033.
Chief Executive Officer Dallas Tanner comments:
“We're pleased to announce another strong quarter for Invitation
Homes, with third quarter Same Store leasing results that well
exceed those achieved pre-pandemic. I extend my thanks to all of
our associates for their continuous commitment to providing Genuine
Care and a premier resident experience to the tens of thousands of
individuals and families who choose to make a house a home with
us.”
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
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Net income
$
0.21
$
0.13
$
0.64
$
0.46
FFO
0.40
0.35
1.23
1.12
Core FFO
0.44
0.42
1.32
1.24
AFFO
0.36
0.34
1.12
1.05
Net Income
Net income per common share — diluted for Q3 2023 was $0.21,
compared to net income per common share — diluted of $0.13 for Q3
2022. Total revenues and total property operating and maintenance
expenses for Q3 2023 were $618 million and $229 million,
respectively, compared to $569 million and $204 million,
respectively, in Q3 2022.
Net income per common share — diluted YTD 2023 was $0.64,
compared to net income per common share — diluted of $0.46 for YTD
2022. Total revenues and total property operating and maintenance
expenses for YTD 2023 were $1,808 million and $652 million,
respectively, compared to $1,658 million and $577 million,
respectively, for YTD 2022.
Core FFO
Year over year, Core FFO per share for Q3 2023 increased 4.7% to
$0.44, primarily due to NOI growth. Year over year, Core FFO per
share for YTD 2023 increased 6.5% to $1.32, primarily due to NOI
growth.
AFFO
Year over year, AFFO per share for Q3 2023 increased 3.7% to
$0.36, primarily due to the increase in Core FFO per share
described above. Year over year, AFFO per share for YTD 2023
increased 6.5% to $1.12, 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:
76,138
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Core Revenues growth (year over year)
6.0
%
6.6
%
Core Operating Expenses growth (year over
year)
10.2
%
11.7
%
NOI growth (year over year)
4.0
%
4.4
%
Average Occupancy
96.9
%
97.5
%
97.5
%
97.9
%
Bad Debt % of gross rental revenue
1.3
%
1.5
%
1.5
%
1.2
%
Turnover Rate
6.8
%
6.3
%
18.5
%
16.9
%
Rental Rate Growth (lease-over-lease):
Renewals
6.6
%
10.1
%
7.1
%
10.0
%
New Leases
5.2
%
15.2
%
6.0
%
15.4
%
Blended
6.2
%
11.4
%
6.8
%
11.3
%
Revenue Collections Update
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Pre-COVID Average (2)
Revenues collected % of revenues due:
(1)
Revenues collected in same month
billed
94
%
93
%
93
%
91
%
96
%
Late collections of prior month
billings
4
%
5
%
5
%
6
%
3
%
Total collections
98
%
98
%
98
%
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 76,138 homes, Same Store NOI for
Q3 2023 increased 4.0% year over year on Same Store Core Revenues
growth of 6.0% and Same Store Core Operating Expenses growth of
10.2%. YTD 2023 Same Store NOI increased 4.4% year over year on
Same Store Core Revenues growth of 6.6% and Same Store Core
Operating Expenses growth of 11.7%.
Same Store Core Revenues
Same Store Core Revenues growth for Q3 2023 of 6.0% year over
year was primarily driven by a 6.2% increase in Average Monthly
Rent, a 20 basis point year over year improvement in Bad Debt as a
percentage of gross rental revenue, and a 13.5% increase in other
income, net of resident recoveries, partially offset by a 60 basis
point year over year decline in Average Occupancy.
YTD 2023 Same Store Core Revenues growth of 6.6% year over year
was primarily driven by a 7.3% increase in Average Monthly Rent and
a 9.7% increase in other income, net of resident recoveries,
partially offset by a 40 basis point year over year decline in
Average Occupancy and a 30 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 Q3 2023 increased 10.2%
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 11.7% year
over year, primarily driven by the year over year increases
described above.
Investment Management Activity
Acquisitions for Q3 2023 totaled 2,291 homes for $854 million.
This included 2,257 wholly owned homes for $842 million from the
Company's previously announced portfolio acquisition in July 2023
of 1,870 homes as well as the purchase of 387 wholly owned homes
through the Company's various acquisition channels, in addition to
34 homes for $12 million in the Company's joint ventures.
Dispositions for Q3 2023 included 397 wholly owned homes for gross
proceeds of $151 million and 19 homes for gross proceeds of $9
million in the Company's joint ventures.
Year to date through September 30, 2023, the Company acquired
2,761 homes for $1,009 million, including 2,626 wholly owned homes
for $965 million and 135 homes for $44 million in the Company's
joint ventures. The company also sold 1,091 homes for $401 million,
including 1,042 wholly owned homes for $379 million and 49 homes
for $22 million in the Company's joint ventures.
Balance Sheet and Capital Markets Activity
As of September 30, 2023, the Company had $1,763 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 September 30, 2023 was $8,618 million,
consisting of $6,575 million of unsecured debt and $2,043 million
of secured debt. Net debt / TTM adjusted EBITDAre was 5.5x at
September 30, 2023, down from 5.7x as of December 31, 2022. The
Company has no debt reaching final maturity until 2026, and in
addition, over 99% of its total debt is fixed rate or swapped to
fixed rate and over 75% of its total debt is unsecured. As
previously announced, Fitch Ratings revised its rating outlook for
the Company to “Positive” from “Stable” and affirmed the Company’s
ratings, including the “BBB” Long-Term Issuer Default Ratings.
As previously announced, on August 2, 2023, the Company closed a
public offering of $450 million aggregate principal amount of
5.450% Senior Notes due 2030 and $350 million aggregate principal
amount of 5.500% Senior Notes due 2033.
Dividend
As previously announced on October 20, 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 November
22, 2023, to stockholders of record as of the close of business on
November 7, 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 $1.79
$1.75 to $1.81
AFFO per share — diluted
$1.46 to $1.50
$1.45 to $1.51
Same Store Core Revenues growth
6.25% to 6.75%
5.75% to 6.75%
Same Store Core Operating Expenses
growth
10.25% to 10.75%
8.5% to 9.5%
Same Store NOI growth
4.5% to 5.0%
4.5% to 5.5%
Wholly owned acquisitions
$1.0 billion to $1.1 billion
$800 million to $900 million
JV acquisitions
$50 million to $100 million
$100 million to $300 million
Wholly owned dispositions
$475 million to $525 million
$425 million to $475 million
The Company's revised FY 2023 guidance includes tightened
expectations for Same Store Core Revenues growth in a range of
6.25% to 6.75% based on the Company's strong performance to date
and expectations for the remainder of the year. Revised FY 2023
guidance also anticipates higher Same Store Core Operating Expenses
growth in a range of 10.25% to 10.75%, primarily attributable to
higher Same Store property tax expense expectations in Florida and
Georgia as a result of larger than anticipated property tax bills
received or expected during the fourth quarter. These revised
assumptions result in tightened Same Store NOI growth expectations
for FY 2023 in a range of 4.5% to 5.0%.
Earnings Conference Call Information
Invitation Homes has scheduled a conference call at 11:00 a.m.
Eastern Time on October 26, 2023, to discuss results for the third
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
November 26, 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 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)
September 30, 2023
December 31, 2022
(unaudited)
Assets:
Investments in single-family residential
properties, net
$
17,400,036
$
17,030,374
Cash and cash equivalents
762,638
262,870
Restricted cash
217,253
191,057
Goodwill
258,207
258,207
Investments in unconsolidated joint
ventures
258,030
280,571
Other assets, net
570,034
513,629
Total assets
$
19,466,198
$
18,536,708
Liabilities:
Mortgage loans, net
$
1,631,973
$
1,645,795
Secured term loan, net
401,460
401,530
Unsecured notes, net
3,304,082
2,518,185
Term loan facilities, net
3,209,725
3,203,567
Revolving facility
—
—
Accounts payable and accrued expenses
368,065
198,423
Resident security deposits
180,111
175,552
Other liabilities
101,236
70,025
Total liabilities
9,196,652
8,213,077
Equity:
Stockholders' equity
Preferred stock, $0.01 par value per
share, 900,000,000 shares authorized, none outstanding as of
September 30, 2023 and December 31, 2022
—
—
Common stock, $0.01 par value per share,
9,000,000,000 shares authorized, 611,958,239 and 611,411,382
outstanding as of September 30, 2023 and December 31, 2022,
respectively
6,120
6,114
Additional paid-in capital
11,149,732
11,138,463
Accumulated deficit
(1,039,782
)
(951,220
)
Accumulated other comprehensive income
119,728
97,985
Total stockholders' equity
10,235,798
10,291,342
Non-controlling interests
33,748
32,289
Total equity
10,269,546
10,323,631
Total liabilities and equity
$
19,466,198
$
18,536,708
Consolidated Statements of
Operations
($ in thousands, except shares and per
share amounts) (unaudited)
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Revenues:
Rental revenues
$
555,270
$
514,670
$
1,633,672
$
1,504,601
Other property income
59,021
50,721
164,058
145,530
Management fee revenues
3,404
3,284
10,227
8,154
Total revenues
617,695
568,675
1,807,957
1,658,285
Expenses:
Property operating and maintenance
229,488
203,787
651,793
576,736
Property management expense
23,399
22,385
70,563
65,166
General and administrative
22,714
20,123
59,957
57,104
Interest expense
86,736
76,454
243,408
225,683
Depreciation and amortization
170,696
160,428
501,128
474,796
Impairment and other
2,496
20,004
5,527
22,874
Total expenses
535,529
503,181
1,532,376
1,422,359
Gains (losses) on investments in equity
securities, net
(499
)
(796
)
113
(4,000
)
Other, net
(2,533
)
(8,372
)
(7,968
)
(11,605
)
Gain on sale of property, net of tax
57,989
23,952
134,448
69,486
Losses from investments in unconsolidated
joint ventures
(4,902
)
(849
)
(11,087
)
(5,870
)
Net income
132,221
79,429
391,087
283,937
Net income attributable to non-controlling
interests
(403
)
(250
)
(1,163
)
(1,180
)
Net income attributable to common
stockholders
131,818
79,179
389,924
282,757
Net income available to participating
securities
(181
)
(147
)
(518
)
(515
)
Net income available to common
stockholders — basic and diluted
$
131,637
$
79,032
$
389,406
$
282,242
Weighted average common shares
outstanding — basic
612,000,811
610,845,820
611,849,302
609,212,132
Weighted average common shares
outstanding — diluted
613,580,042
612,647,588
613,155,041
610,741,723
Net income per common share —
basic
$
0.22
$
0.13
$
0.64
$
0.46
Net income per common share —
diluted
$
0.21
$
0.13
$
0.64
$
0.46
Dividends declared per common
share
$
0.26
$
0.22
$
0.78
$
0.66
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
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Net income available to common
stockholders
$
131,637
$
79,032
$
389,406
$
282,242
Net income available to participating
securities
181
147
518
515
Non-controlling interests
403
250
1,163
1,180
Depreciation and amortization on real
estate assets
167,921
158,199
493,027
468,272
Impairment on depreciated real estate
investments
83
101
342
238
Net gain on sale of previously depreciated
investments in real estate
(57,989
)
(23,952
)
(134,448
)
(69,486
)
Depreciation and net gain on sale of
investments in unconsolidated joint ventures
2,111
1,440
6,425
2,856
FFO
$
244,347
$
215,217
$
756,433
$
685,817
Core FFO Reconciliation
Q3 2023
Q3 2022
YTD 2023
YTD 2022
FFO
$
244,347
$
215,217
$
756,433
$
685,817
Non-cash interest expense related to
amortization of deferred financing costs, loan discounts, and
non-cash interest expense from derivatives (1)
9,561
4,539
25,875
17,507
Share-based compensation expense
8,929
7,930
21,493
22,565
Legal settlements
2,000
7,400
2,000
7,400
Severance expense
392
46
916
253
Casualty losses, net (1)
2,429
19,903
5,214
22,636
(Gains) losses on investments in equity
securities, net
499
796
(113
)
4,000
Core FFO
$
268,157
$
255,831
$
811,818
$
760,178
AFFO Reconciliation
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Core FFO
$
268,157
$
255,831
$
811,818
$
760,178
Recurring capital expenditures (1)
(49,007
)
(44,683
)
(122,700
)
(115,057
)
AFFO
$
219,150
$
211,148
$
689,118
$
645,121
Net income available to common
stockholders
Weighted average common shares outstanding
— diluted
613,580,042
612,647,588
613,155,041
610,741,723
Net income per common share — diluted
$
0.21
$
0.13
$
0.64
$
0.46
FFO, Core FFO, and AFFO
Weighted average common shares and OP
Units outstanding — diluted
615,699,631
615,172,460
615,208,781
613,497,425
FFO per share — diluted
$
0.40
$
0.35
$
1.23
$
1.12
Core FFO per share — diluted
$
0.44
$
0.42
$
1.32
$
1.24
AFFO per share — diluted
$
0.36
$
0.34
$
1.12
$
1.05
(1)
Includes the Company's share from
unconsolidated joint ventures.
Reconciliation of Total Revenues to
Same Store Core Revenues, Quarterly
(in thousands) (unaudited)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Total revenues (Total
Portfolio)
$
617,695
$
600,372
$
589,890
$
579,836
$
568,675
Management fee revenues
(3,404
)
(3,448
)
(3,375
)
(3,326
)
(3,284
)
Total portfolio resident recoveries
(36,641
)
(32,776
)
(31,966
)
(32,639
)
(31,260
)
Total Core Revenues (Total
Portfolio)
577,650
564,148
554,549
543,871
534,131
Non-Same Store Core Revenues
(51,734
)
(43,581
)
(43,238
)
(40,922
)
(38,062
)
Same Store Core Revenues
$
525,916
$
520,567
$
511,311
$
502,949
$
496,069
Reconciliation of Total Revenues to
Same Store Core Revenues, YTD
(in thousands) (unaudited)
YTD 2023
YTD 2022
Total revenues (Total
Portfolio)
$
1,807,957
$
1,658,285
Management fee revenues
(10,227
)
(8,154
)
Total portfolio resident recoveries
(101,383
)
(89,416
)
Total Core Revenues (Total
Portfolio)
1,696,347
1,560,715
Non-Same Store Core Revenues
(138,553
)
(99,863
)
Same Store Core Revenues
$
1,557,794
$
1,460,852
Reconciliation of Property Operating
and Maintenance Expenses to Same Store Core Operating Expenses,
Quarterly
(in thousands) (unaudited)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Property operating and maintenance
expenses (Total Portfolio)
$
229,488
$
213,808
$
208,497
$
209,615
$
203,787
Total Portfolio resident recoveries
(36,641
)
(32,776
)
(31,966
)
(32,639
)
(31,260
)
Core Operating Expenses (Total
Portfolio)
192,847
181,032
176,531
176,976
172,527
Non-Same Store Core Operating Expenses
(17,486
)
(14,445
)
(14,242
)
(12,407
)
(13,456
)
Same Store Core Operating
Expenses
$
175,361
$
166,587
$
162,289
$
164,569
$
159,071
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)
$
651,793
$
576,736
Total Portfolio resident recoveries
(101,383
)
(89,416
)
Core Operating Expenses (Total
Portfolio)
550,410
487,320
Non-Same Store Core Operating Expenses
(46,173
)
(36,025
)
Same Store Core Operating
Expenses
$
504,237
$
451,295
Reconciliation of Net Income to Same
Store NOI, Quarterly
(in thousands) (unaudited)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Net income available to common
stockholders
$
131,637
$
137,698
$
120,071
$
100,426
$
79,032
Net income available to participating
securities
181
166
171
146
147
Non-controlling interests
403
418
342
290
250
Interest expense
86,736
78,625
78,047
78,409
76,454
Depreciation and amortization
170,696
165,759
164,673
163,318
160,428
Property management expense
23,399
23,580
23,584
22,770
22,385
General and administrative
22,714
19,791
17,452
16,921
20,123
Impairment and other (1)
2,496
1,868
1,163
5,823
20,004
Gain on sale of property, net of tax
(57,989
)
(46,788
)
(29,671
)
(21,213
)
(23,952
)
(Gains) losses on investments in equity
securities, net
499
(524
)
(88
)
(61
)
796
Other, net (2)
2,533
3,941
1,494
(344
)
8,372
Management fee revenues
(3,404
)
(3,448
)
(3,375
)
(3,326
)
(3,284
)
Losses from investments in unconsolidated
joint ventures
4,902
2,030
4,155
3,736
849
NOI (Total Portfolio)
384,803
383,116
378,018
366,895
361,604
Non-Same Store NOI
(34,248
)
(29,136
)
(28,996
)
(28,515
)
(24,606
)
Same Store NOI
$
350,555
$
353,980
$
349,022
$
338,380
$
336,998
Reconciliation of Net Income to Same
Store NOI, YTD
(in thousands) (unaudited)
YTD 2023
YTD 2022
Net income available to common
stockholders
$
389,406
$
282,242
Net income available to participating
securities
518
515
Non-controlling interests
1,163
1,180
Interest expense
243,408
225,683
Depreciation and amortization
501,128
474,796
Property management expense
70,563
65,166
General and administrative
59,957
57,104
Impairment and other
5,527
22,874
Gain on sale of property, net of tax
(134,448
)
(69,486
)
(Gains) losses on investments in equity
securities, net
(113
)
4,000
Other, net (2)
7,968
11,605
Management fee revenues
(10,227
)
(8,154
)
Losses from investments in unconsolidated
joint ventures
11,087
5,870
NOI (Total Portfolio)
1,145,937
1,073,395
Non-Same Store NOI
(92,380
)
(63,838
)
Same Store NOI
$
1,053,557
$
1,009,557
(1)
Includes $5.0 million and $19.0 million of
net estimated losses and damages related to Hurricanes Nicole and
Ian 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)
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Net income available to common
stockholders
$
131,637
$
79,032
$
389,406
$
282,242
Net income available to participating
securities
181
147
518
515
Non-controlling interests
403
250
1,163
1,180
Interest expense
86,736
76,454
243,408
225,683
Interest expense in unconsolidated joint
ventures
5,051
(613
)
12,774
838
Depreciation and amortization
170,696
160,428
501,128
474,796
Depreciation and amortization of
investments in unconsolidated joint ventures
2,690
1,714
7,686
3,466
EBITDA
397,394
317,412
1,156,083
988,720
Gain on sale of property, net of tax
(57,989
)
(23,952
)
(134,448
)
(69,486
)
Impairment on depreciated real estate
investments
83
101
342
238
Net gain on sale of investments in
unconsolidated joint ventures
(554
)
(251
)
(1,188
)
(567
)
EBITDAre
338,934
293,310
1,020,789
918,905
Share-based compensation expense
8,929
7,930
21,493
22,565
Severance
392
46
916
253
Casualty losses, net (1)
2,429
19,903
5,214
22,636
(Gains) losses on investments in equity
securities, net
499
796
(113
)
4,000
Other, net (2)
2,533
8,372
7,968
11,605
Adjusted EBITDAre
$
353,716
$
330,357
$
1,056,267
$
979,964
Trailing Twelve Months
(TTM) Ended
September 30, 2023
December 31, 2022
Net income available to common
stockholders
$
489,832
$
382,668
Net income available to participating
securities
664
661
Non-controlling interests
1,453
1,470
Interest expense
321,817
304,092
Interest expense in unconsolidated joint
ventures
15,517
3,581
Depreciation and amortization
664,446
638,114
Depreciation and amortization of
investments in unconsolidated joint ventures
10,058
5,838
EBITDA
1,503,787
1,336,424
Gain on sale of property, net of tax
(155,661
)
(90,699
)
Impairment on depreciated real estate
investments
414
310
Net gain on sale of investments in
unconsolidated joint ventures
(1,486
)
(865
)
EBITDAre
1,347,054
1,245,170
Share-based compensation expense
27,890
28,962
Severance
977
314
Casualty losses, net (1)
11,063
28,485
(Gains) losses on investments in equity
securities, net
(174
)
3,939
Other, net (2)
7,624
11,261
Adjusted EBITDAre
$
1,394,434
$
1,318,131
(1)
Includes the Company's share from
unconsolidated joint ventures.
(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
September 30, 2023
December 31, 2022
Mortgage loans, net
$
1,631,973
$
1,645,795
Secured term loan, net
401,460
401,530
Unsecured notes, net
3,304,082
2,518,185
Term loan facility, net
3,209,725
3,203,567
Revolving facility
—
—
Total Debt per Balance Sheet
8,547,240
7,769,077
Retained and repurchased certificates
(87,937
)
(88,564
)
Cash, ex-security deposits and letters of
credit (1)
(796,829
)
(275,989
)
Deferred financing costs, net
48,962
51,076
Unamortized discounts on note payable
22,039
13,518
Net Debt (A)
$
7,733,475
$
7,469,118
For the TTM Ended
For the TTM Ended
September 30, 2023
December 31, 2022
Adjusted EBITDAre (B)
$
1,394,434
$
1,318,131
Net Debt / TTM Adjusted EBITDAre (A /
B)
5.5x
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/20231025983610/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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