Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the
"Company"), the nation's premier single-family home leasing
company, today announced its Q4 2020 and FY 2020 financial and
operating results.
Fourth Quarter 2020 and Full Year 2020 Highlights
- Year over year, in Q4 2020, total revenues increased 4.5% to
$464 million, property operating and maintenance costs increased
0.6% to $169 million, net income available to common stockholders
increased 36.0% to $71 million, and net income per diluted common
share increased 30.2% to $0.12. In FY 2020, total revenues
increased 3.3% to $1,823 million, property operating and
maintenance costs increased 1.6% to $681 million, net income
available to common stockholders increased 34.9% to $196 million,
and net income per diluted common share increased 29.4% to
$0.35.
- Year over year, in Q4 2020, Core FFO per share decreased 0.1%
to $0.32, and AFFO per share decreased 1.3% to $0.27. In FY 2020,
Core FFO per share increased 2.7% to $1.28, and AFFO per share
increased 4.6% to $1.08. Excluded from Core FFO and AFFO was a $30
million unrealized gain in Q4 2020 on an investment in
Opendoor.
- In Q4 2020, Same Store NOI grew 4.3% year over year on 2.0%
Same Store Core revenue growth and a 2.4% decrease in Same Store
Core operating expenses. In FY 2020, Same Store NOI grew 3.7% year
over year on 2.8% Same Store Core revenue growth and 1.0% Same
Store Core operating expense growth.
- In Q4 2020, Same Store average occupancy was 98.1%, up 210
basis points year over year. In FY 2020, Same Store average
occupancy was 97.5%, up 130 basis points year over year.
- In Q4 2020, Same Store new lease rent growth of 6.9% and Same
Store renewal rent growth of 3.8% drove Same Store blended rent
growth of 4.9%. In FY 2020, Same Store new lease rent growth of
4.2% and Same Store renewal rent growth of 3.7% drove Same Store
blended rent growth of 3.8%.
- In Q4 2020, revenue collections were approximately 97% of the
Company's historical average collection rate.
- In Q4 2020, the Company began acquiring homes through its
previously announced JV with Rockpoint Group. Invitation Homes owns
a 20% interest in the JV, which is expected to invest over $1
billion in single-family rental homes, diversifying Invitation
Homes' capital sources available to pursue external growth over a
multi-year period.
- In Q4 2020, the Company capitalized on favorable buying
fundamentals to increase its acquisition pace, purchasing 1,197
homes for $361 million, of which 1,057 were added to the
wholly-owned portfolio for $316 million and 140 were added to the
JV for $45 million. Also in Q4 2020, the Company sold 277
wholly-owned homes for $82 million.
- Net debt / TTM adjusted EBITDAre decreased from 8.1x at
December 31, 2019 to 7.3x at December 31, 2020.
- As previously announced, in Q4 2020, the Company closed a $3.5
billion sustainability-linked unsecured credit facility, consisting
of a $1.0 billion revolver and $2.5 billion term loan, to replace
its previous facility and refinance secured debt. As a result, the
Company has no debt (excluding convertible notes) reaching final
maturity until December 2024, and the Company's unsecured debt as a
percentage of total debt increased from 22% to 35%.
President & Chief Executive Officer Dallas Tanner
comments: "Reflecting on 2020, I could not be prouder of the
role Invitation Homes played in helping to provide comfortable
homes and genuine care to residents in a year when the importance
of home has never been greater. While delivering this experience to
our residents, we also achieved another year of financial
performance near the top of the real estate sector. Executing
nimbly to meet strong demand, we increased occupancy in every month
of 2020, and closed the year with record-high Same Store occupancy
of 98.3% in December and our highest blended rent growth of the
year. With a strong and stable resident base, we also continue to
collect rents near historical average levels.
"This momentum positions us well for growth in 2021. In addition
to enjoying favorable industry fundamentals, we are also entering
the new year more active in the acquisition market than we have
been since prior to our 2017 IPO. We'll remain opportunistic in
what we see as a highly accretive environment, and continue to buy
with the same discipline and rigor we have exercised throughout our
history that led to the high-quality portfolio we have today. As we
focus on executing our plan for 2021, we will also continue to
prioritize the safety of our stakeholders, and support our
residents and associates as we have done consistently throughout
these uncertain times. The ever-changing environment of 2020 could
not impede us from executing on strategic initiatives to drive
growth and enhance the resident experience, and we are excited as
we look into 2021 and beyond at strong fundamentals and an
opportunity to raise the bar even higher."
Financial Results
Net Income,
FFO, Core FFO, and AFFO Per Share — Diluted
Q4 2020
Q4 2019
FY 2020
FY 2019
Net income (1)
$
0.12
$
0.10
$
0.35
$
0.27
FFO (1)
0.35
0.29
1.24
1.10
Core FFO (2)
0.32
0.32
1.28
1.25
AFFO (2)
0.27
0.28
1.08
1.03
- In accordance with GAAP and Nareit guidelines, net income per
share and FFO per share are calculated as if the 3.0% Convertible
Notes due July 1, 2019 (the "2019 Convertible Notes") were
converted to common shares at the beginning of 2019, and as if the
3.5% Convertible Notes due January 15, 2022 (the "2022 Convertible
Notes") were converted to common shares at the beginning of each
relevant period in 2019 and 2020, unless such treatment is
anti-dilutive to net income per share or FFO per share. See
"Reconciliation of FFO, Core FFO, and AFFO," footnote (1), for more
detail on the treatment of convertible notes in each specific
period presented in the table.
- Core FFO and AFFO per share reflect the 2019 Convertible Notes
and 2022 Convertible Notes in the form in which they were
outstanding during each period. See "Reconciliation of FFO, Core
FFO, and AFFO," footnote (2), for more detail on the treatment of
convertible notes in each specific period presented in the
table.
Net Income
Net income per share in the fourth quarter of 2020 was $0.12,
compared to net income per share of $0.10 in the fourth quarter of
2019. Total revenues and total property operating and maintenance
expenses in the fourth quarter of 2020 were $464 million and $169
million, respectively, compared to $444 million and $168 million,
respectively, in the fourth quarter of 2019.
Net income per share in FY 2020 was $0.35, compared to net
income per share of $0.27 in FY 2019. Total revenues and total
property operating and maintenance expenses in FY 2020 were $1,823
million and $681 million, respectively, compared to $1,765 million
and $670 million, respectively, in FY 2019.
Core FFO
Year over year, Core FFO per share in the fourth quarter of 2020
decreased 0.1% to $0.32.
Year over year, Core FFO per share in FY 2020 increased 2.7% to
$1.28, primarily due to growth in Same Store NOI.
AFFO
Year over year, AFFO per share in the fourth quarter of 2020
decreased 1.3% to $0.27.
Year over year, AFFO per share in FY 2020 increased 4.6% to
$1.08, primarily due to the increase in Core FFO per share
described above and lower recurring capital expenditures.
Operating Results
Same Store
Operating Results Snapshot
Number of homes in Same Store
portfolio:
71,433
Q4 2020
Q4 2019
FY 2020
FY 2019
Core revenue growth (year-over-year)
2.0
%
2.8
%
Core operating expense growth
(year-over-year)
(2.4)
%
1.0
%
NOI growth (year-over-year)
4.3
%
3.7
%
Average occupancy
98.1
%
96.0
%
97.5
%
96.2
%
Bad debt % of gross rental revenues
(1)
2.5
%
0.3
%
1.7
%
0.4
%
Turnover rate
5.6
%
6.4
%
26.1
%
29.7
%
Rental rate growth (lease-over-lease):
Renewals
3.8
%
4.6
%
3.7
%
5.0
%
New leases
6.9
%
1.3
%
4.2
%
3.7
%
Blended
4.9
%
3.3
%
3.8
%
4.6
%
- Invitation Homes reserves residents' accounts receivables
balances that are aged greater than 30 days as bad debt, 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.
Revenue
Collections Update
Q4 2020
Q3 2020
Q2 2020
Pre-COVID Average (2)
Revenues collected % of revenues due:
(1)
Revenues collected in same month
billed
91
%
92
%
92
%
96
%
Late collections of prior month
billings
5
%
5
%
4
%
3
%
Total collections
96
%
97
%
96
%
99
%
- 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.
See "Same Store Operating Results Snapshot," footnote (1), for
detail on the Company's bad debt policy.
- Represents the period from October 2019 to March 2020.
Same Store NOI
For the Same Store portfolio of 71,433 homes, fourth quarter
2020 Same Store NOI increased 4.3% year over year on Same Store
Core revenue growth of 2.0% and a 2.4% decrease in Same Store Core
operating expenses.
FY 2020 Same Store NOI increased 3.7% year over year on Same
Store Core revenue growth of 2.8% and Same Store Core operating
expense growth of 1.0%.
Same Store Core Revenues
Fourth quarter 2020 Same Store Core revenue growth of 2.0% year
over year was driven by a 3.3% increase in average monthly rent and
a 210 basis point increase in average occupancy to 98.1%. As a
result of the increases in average monthly rent and average
occupancy, Same Store rental revenues increased 5.7% year over year
on a gross basis before bad debt. With respect to Same Store Core
revenue growth, two factors related to COVID-19 partially offset
the favorable increases in average rent and average occupancy: 1)
an increase in bad debt from 0.3% of gross rental revenues in Q4
2019 to 2.5% of gross rental revenues in Q4 2020, which was a 221
basis point drag on Same Store Core revenue growth, all else equal;
and 2) a 35.3% decrease in other property income, net of resident
recoveries, which was a 125 basis point drag on Same Store Core
revenue growth, all else equal, due primarily to non-enforcement
and non-collection of almost all late fees in the quarter.
FY 2020 Same Store Core revenue growth of 2.8% year over year
was driven by a 3.5% increase in average monthly rent and a 130
basis point increase in average occupancy to 97.5%. Bad debt
increased from 0.4% of gross rental revenues in FY 2019 to 1.7% of
gross rental revenues in FY 2020, which was a 133 basis point drag
on Same Store Core revenue growth, all else equal. Other property
income, net of resident recoveries, decreased 21.1% year over year,
which was a 72 basis point drag on Same Store Core revenue growth,
all else equal.
Same Store Core Operating Expenses
Fourth quarter 2020 Same Store Core operating expenses decreased
2.4% year over year, driven by a 7.9% decline in Same Store
controllable expenses, net of resident recoveries.
FY 2020 Same Store Core operating expenses increased 1.0% year
over year, primarily due to higher property taxes that were
partially offset by a 2.8% decrease in controllable expenses, net
of resident recoveries, as well as lower insurance and HOA
expenses.
Investment Management Activity
In Q4 2020, Invitation Homes increased its pace of acquisitions
to its highest level since the second quarter of 2014, leveraging
the advantages of its in-house local teams in conjunction with
proprietary "AcquisitionIQ" technology to source $361 million of
acquisitions through multiple channels. Fourth quarter wholly-owned
acquisitions totaled 1,057 homes for $316 million, including
estimated renovation costs. In addition, 140 homes were purchased
for $45 million through the Company's unconsolidated joint venture
with Rockpoint Group (the "Rockpoint JV"), of which Invitation
Homes owns 20%.
Included in the Company's wholly-owned acquisition activity in
Q4 2020 was a previously announced bulk acquisition of 273 homes in
Dallas and a bulk acquisition of 54 homes in Phoenix that overlap
closely with Invitation Homes' existing footprints in those two
markets. In total, the homes in these transactions were acquired
for $75 million at a 5.5% NOI yield based on in-place rents, and
the Company sees upside to NOI in the portfolios by bringing them
onto its platform.
Dispositions in the fourth quarter of 2020 totaled 277
wholly-owned homes for gross proceeds of $82 million.
In FY 2020, in its wholly-owned portfolio, the Company closed on
acquisitions of 2,252 homes for $691 million, including estimated
renovation costs, and sold 1,580 homes for gross proceeds of $443
million, resulting in a total wholly-owned portfolio home count of
80,177 homes as of December 31, 2020. In the Rockpoint JV, 140
homes were purchased for $45 million in FY 2020, resulting in a
Rockpoint JV home count of 140 homes as of December 31, 2020.
Opendoor Investment Update
In Q4 2020, Invitation Homes' private investment in Opendoor
converted to approximately 2 million public shares of Opendoor
common stock (NASDAQ: OPEN) as a result of Opendoor's merger with a
special purpose acquisition company. Invitation Homes' original
Series E private investment in Opendoor was made in March 2018 and
consisted of $10 million of convertible notes. That investment,
which has since converted to common shares of OPEN, was valued at
$46 million as of December 31, 2020. In addition to being a
successful investment for Invitation Homes, Opendoor has been and
continues to be a valued partner for Invitation Homes in the
growing iBuyer channel of the single-family home transaction
market.
The investment in OPEN is now carried on Invitation Homes'
balance sheet at its estimated fair market value and is included in
Other Assets, net. The unrealized gain on investment that
Invitation Homes recorded in Q4 2020 to mark the value of its OPEN
investment to fair value is included in net income under GAAP and
FFO as defined by Nareit, but is excluded from Core FFO and
AFFO.
Balance Sheet and Capital Markets Activity
As of December 31, 2020, the Company had $1,213 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 December 31, 2020 was $8,083 million,
consisting of $5,238 million of secured debt and $2,845 million of
unsecured debt. Net debt / TTM Adjusted EBITDAre at December 31,
2020 was 7.3x, down from 8.1x at December 31, 2019.
In Q4 2020, the Company issued 6,525,758 shares of common stock
under its at-the-market equity agreement ("ATM Equity Program"), at
an average price of $28.47 per share, for gross proceeds of $186
million. Proceeds were used primarily to acquire homes. $500
million of capacity remained under the ATM Equity Program as of
December 31, 2020.
As previously announced, in Q4 2020, the Company closed a $3,500
million sustainability-linked senior unsecured credit facility (the
“Credit Facility”), consisting of an undrawn $1,000 million
revolving line of credit (the “Revolver”) and a fully funded $2,500
million term loan (the “Term Loan”). Initial maturities of the
Revolver and Term Loan are in January 2025, with each carrying two
6-month extension options. The new $1,000 million Revolver replaced
the Company’s previous $1,000 million revolver, which had no
balance drawn at the time the Credit Facility closed. Proceeds from
the new $2,500 million Term Loan were used to: 1) fully repay the
Company’s previous $1,500 million unsecured term loan facility that
was due to reach final maturity in February 2022; 2) fully repay
the $731 million principal balance of the SWH 2017-1 securitization
that was due to reach final maturity in January 2023; and 3)
voluntarily prepay higher-cost classes of certificates of various
securitizations due to reach final maturity between March 2025 and
January 2026. For both the Revolver and Term loan, spreads at
closing, based on the Company's total leverage ratio, were 5 bps
lower than the spreads most recently in effect for the Company's
previous credit facility. Based on improvement in total leverage
ratio from September 30, 2020 to December 31, 2020, the Company
expects the interest rates applicable to its Term Loan and used
portion of its Revolver both to decrease by another 10 bps,
effective February 2021, to LIBOR + 155 bps for the Term Loan and
LIBOR + 160 bps for the Revolver.
As a result of these transactions, the Company has no debt
reaching final maturity until December 2024, with the exception of
$345 million of convertible notes maturing in January 2022. In
addition, the Company’s unsecured debt as a percentage of total
debt increased from 22% as of September 30, 2020 to 35% as of
December 31, 2020, and the percentage of homes in the Company’s
portfolio that are unencumbered increased from 51% as of September
30, 2020 to 57% as of December 31, 2020.
Dividend
As previously announced on January 29, 2021, the Company's Board
of Directors declared a quarterly cash dividend of $0.17 per share
of common stock, representing a 13.3% increase over the prior
quarterly dividend of $0.15 per share. The dividend will be paid on
or before February 26, 2021 to stockholders of record as of the
close of business on February 10, 2021.
FY 2021 Guidance
FY 2021
Guidance
FY 2021
FY 2020
Guidance
Actual
Core FFO per share — diluted
$1.30 - $1.40
$1.28
AFFO per share — diluted
$1.09 - $1.19
$1.08
Same Store Core revenue growth
3.5% - 4.5%
2.8%
Same Store Core operating expense
growth
4.5% - 5.5%
1.0%
Same Store NOI growth
3.0% - 4.0%
3.7%
Note: 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, or a
reconciliation of the forward-looking non-GAAP financial measures
of Core FFO per share, AFFO per share, Same Store Core revenue
growth, Same Store Core operating expense growth, and Same Store
NOI growth to the comparable GAAP financial measures because it 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 our GAAP results for the guidance period.
Earnings Conference Call Information
Invitation Homes has scheduled a conference call at 11:00 a.m.
Eastern Time on February 17, 2021 to discuss results for the fourth
quarter of 2020. The domestic dial-in number is 1-888-317-6003, and
the international dial-in number is 1-412-317-6061. The passcode is
3180201. An audio webcast may be accessed at www.invh.com. A replay
of the call will be available through March 17, 2021 and can be
accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088
(international) and using the replay passcode 10151712, 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.
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 in the Glossary and
Reconciliations section of this press release and in the
Supplemental Information and, as applicable, reconciled to the most
comparable GAAP measures.
About Invitation Homes
Invitation Homes 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
(“HOA”) and insurance costs, the Company's dependence on third
parties for key services, risks related to the evaluation of
properties, poor resident selection and defaults and non-renewals
by the Company's residents, performance of the Company's
information technology systems, risks related to the Company's
indebtedness, and risks related to the potential negative impact of
the ongoing COVID-19 pandemic 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. Moreover, many of these
factors have been heightened as a result of the ongoing and
numerous adverse impacts of COVID-19. The Company believes these
factors include, but are not limited to, those described under Part
I. Item 1A. “Risk Factors” of the Annual Report on Form 10-K for
the fiscal year ended December 31, 2019 and in the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2020, filed with the Securities and Exchange
Commission (the "SEC"), as such factors may be updated from time to
time in the Company's periodic filings with the SEC, which are
accessible on the SEC’s website at http://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 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)
December 31, 2020
December 31, 2019
(unaudited)
Assets:
Investments in single-family residential
properties, net
$
16,288,693
$
16,243,192
Cash and cash equivalents
213,422
92,258
Restricted cash
198,346
193,987
Goodwill
258,207
258,207
Investments in unconsolidated joint
ventures
69,267
54,778
Other assets, net
478,287
550,488
Total assets
$
17,506,222
$
17,392,910
Liabilities:
Mortgage loans, net
$
4,820,098
$
6,238,461
Secured term loan, net
401,095
400,978
Term loan facility, net
2,470,907
1,493,747
Revolving facility
—
—
Convertible senior notes, net
339,404
334,299
Accounts payable and accrued expenses
149,299
186,110
Resident security deposits
157,936
147,787
Other liabilities
611,410
325,450
Total liabilities
8,950,149
9,126,832
Equity:
Stockholders' equity
Preferred stock, $0.01 par value per
share, 900,000,000 shares authorized, none outstanding as of
December 31, 2020 and December 31, 2019
—
—
Common stock, $0.01 par value per share,
9,000,000,000 shares authorized, 567,117,666 and 541,642,725
outstanding as of December 31, 2020 and December 31, 2019,
respectively
5,671
5,416
Additional paid-in capital
9,707,258
9,010,194
Accumulated deficit
(661,162
)
(524,588
)
Accumulated other comprehensive loss
(546,942
)
(276,600
)
Total stockholders' equity
8,504,825
8,214,422
Non-controlling interests
51,248
51,656
Total equity
8,556,073
8,266,078
Total liabilities and equity
$
17,506,222
$
17,392,910
Consolidated
Statements of Operations
($ in thousands, except shares and per
share amounts)
Q4 2020
Q4 2019
FY 2020
FY 2019
(unaudited)
(unaudited)
(unaudited)
Revenues:
Rental revenues
$
429,866
$
410,578
$
1,687,724
$
1,633,799
Other property income
34,234
33,699
135,104
130,886
Rental revenues and other property
income
464,100
444,277
1,822,828
1,764,685
Expenses:
Property operating and maintenance
168,628
167,576
680,543
669,987
Property management expense
14,888
14,561
58,613
61,614
General and administrative
16,679
15,375
63,305
74,274
Interest expense
95,382
88,417
353,923
367,173
Depreciation and amortization
142,090
133,764
552,530
533,719
Impairment and other
(3,974
)
6,940
696
18,743
Total expenses
433,693
426,633
1,709,610
1,725,510
Unrealized gains on investments in equity
securities
29,689
—
29,723
6,480
Other, net
(2,087
)
3,130
(86
)
5,120
Gain on sale of property, net of tax
13,121
31,780
54,594
96,336
Net income
71,130
52,554
197,449
147,111
Net income attributable to non-controlling
interests
(431
)
(562
)
(1,237
)
(1,648
)
Net income attributable to common
stockholders
70,699
51,992
196,212
145,463
Net income available to participating
securities
(113
)
(89
)
(448
)
(395
)
Net income available to common
stockholders — basic and diluted
$
70,586
$
51,903
$
195,764
$
145,068
Weighted average common shares
outstanding — basic
563,968,010
540,218,045
553,993,321
531,235,962
Weighted average common shares
outstanding — diluted
565,541,098
541,505,031
555,458,607
532,499,787
Net income per common share —
basic
$
0.13
$
0.10
$
0.35
$
0.27
Net income per common share —
diluted
$
0.12
$
0.10
$
0.35
$
0.27
Dividends declared per common
share
$
0.15
$
0.13
$
0.60
$
0.52
Glossary and Reconciliations
Glossary:
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.
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. We
define 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; and depreciation and amortization. National Association of
Real Estate Investment Trusts ("Nareit") recommends as a best
practice that REITs that report an EBITDA performance measure also
report EBITDAre. We define EBITDAre, consistent with the Nareit
definition, as EBITDA, further adjusted for gain on sale of
property, net of tax and impairment on depreciated real estate
investments. Adjusted EBITDAre is defined as EBITDAre before the
following items: share-based compensation expense; merger and
transaction-related expenses; severance; casualty (gains) losses,
net; unrealized gains on investments in equity securities; and
other income and expenses. EBITDA, EBITDAre, and Adjusted EBITDAre
are used as supplemental financial performance measures by
management and by external users of our 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 our liquidity and
should not be considered alternatives to net income or loss or any
other measure of financial performance presented in accordance with
GAAP. Our 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 our basis for computing
these non-GAAP measures is comparable with that of other companies.
See "Reconciliation of Non-GAAP Measures" 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 partnerships and joint ventures. In calculating per
share amounts, Core FFO and AFFO reflect convertible debt
securities in the form in which they were outstanding during the
period.
We believe that FFO is a meaningful supplemental measure of the
operating performance of our 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 our liquidity and should not be considered
alternatives to net income or loss or any other measure of
financial performance presented in accordance with GAAP. Our 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 our basis for computing
this non-GAAP measures is comparable with that of other companies.
See "Reconciliation of Non-GAAP measures" below 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. We
define 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; and other income
and expenses.
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.
Our 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 our basis for computing
this non-GAAP measure is comparable with that of other
companies.
We believe that Same Store NOI is also a meaningful supplemental
measure of our operating performance for the same reasons as NOI
and is further helpful to investors as it provides a more
consistent measurement of our performance across reporting periods
by reflecting NOI for homes in our Same Store portfolio. See
"Reconciliation of Non-GAAP Measures" below for a reconciliation of
GAAP net income (loss) to NOI for our total portfolio and NOI for
our 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 our current resident chooses to stay
for a subsequent lease term, or a new lease, where our previous
resident moves out and a new resident signs a lease to occupy the
same home.
Revenue Collections as a Percentage of Billings Revenue
collections as a percentage of billings represents 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, 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.
We believe presenting information about the portion of our
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 our comparable homes across periods and about trends
in our 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.
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 Non-GAAP Measures:
Reconciliation of FFO, Core FFO, and
AFFO
($ in thousands, except shares and per
share amounts) (unaudited)
FFO Reconciliation
Q4 2020
Q4 2019
FY 2020
FY 2019
Net income available to common
stockholders
$
70,586
$
51,903
$
195,764
$
145,068
Net income available to participating
securities
113
89
448
395
Non-controlling interests
431
562
1,237
1,648
Depreciation and amortization on real
estate assets
140,341
132,637
546,419
529,205
Impairment on depreciated real estate
investments
376
2,921
4,578
14,210
Net gain on sale of previously depreciated
investments in real estate
(13,121
)
(31,780
)
(54,594
)
(96,336
)
FFO
$
198,726
$
156,332
$
693,852
$
594,190
Core FFO Reconciliation
Q4 2020
Q4 2019
FY 2020
FY 2019
FFO
$
198,726
$
156,332
$
693,852
$
594,190
Non-cash interest expense
13,775
11,093
40,415
48,515
Share-based compensation expense
4,797
4,311
17,090
18,158
Offering related expenses
—
119
—
2,267
Merger and transaction-related
expenses
—
—
—
4,347
Severance expense
213
240
601
8,465
Unrealized gains on investment in equity
securities
(29,689
)
—
(29,723
)
(6,480
)
Casualty (gains) losses, net
(4,350
)
4,019
(3,882
)
4,533
Core FFO
$
183,472
$
176,114
$
718,353
$
673,995
AFFO Reconciliation
Q4 2020
Q4 2019
FY 2020
FY 2019
Core FFO
$
183,472
$
176,114
$
718,353
$
673,995
Recurring capital expenditures
(28,485
)
(25,425
)
(115,951
)
(118,988
)
Adjusted FFO
$
154,987
$
150,689
$
602,402
$
555,007
Net income available to common
stockholders
Weighted average common shares outstanding
— diluted (1)
565,541,098
541,505,031
555,458,607
532,499,787
Net income per common share — diluted
(1)
$
0.12
$
0.10
$
0.35
$
0.27
FFO
Numerator for FFO per common share —
diluted(1)
$
203,037
$
160,580
$
711,033
$
599,776
Weighted average common shares and OP
Units outstanding — diluted (1)
584,506,076
561,243,645
574,408,346
545,150,847
FFO per share — diluted (1)
$
0.35
$
0.29
$
1.24
$
1.10
Core FFO and Adjusted FFO
Weighted average common shares and OP
Units outstanding — diluted (2)
569,405,633
546,143,202
559,307,903
538,925,506
Core FFO per share — diluted (2)
$
0.32
$
0.32
$
1.28
$
1.25
AFFO per share — diluted (2)
$
0.27
$
0.28
$
1.08
$
1.03
- In accordance with GAAP and Nareit guidelines, net income per
share and FFO per share are calculated as if the 2019 Convertible
Notes were converted to common shares at the beginning of 2019, and
as if the 2022 Convertible Notes were converted to common shares at
the beginning of each relevant period in 2019 and 2020, unless such
treatment is anti-dilutive to net income per share or FFO per
share.
In Q4 2020, treatment of the 2022 Convertible Notes as if
converted would be anti-dilutive to net income per share and
dilutive to FFO per share. As such, Q4 2020 net income per share
does not treat the 2022 Convertible Notes as converted. Q4 2020 FFO
per share treats the 2022 Convertible Notes as if converted,
thereby adjusting FFO in the numerator to remove the interest
expense associated with the 2022 Convertible Notes and adjusting
shares outstanding in the denominator to include shares issuable on
conversion of the 2022 Convertible Notes.
In Q4 2019, treatment of the 2022 Convertible Notes as if
converted would be anti-dilutive to both net income per share and
FFO per share. As such, Q4 2019 net income per share and FFO per
share do not treat the 2022 Convertible Notes as if converted.
In FY 2020, treatment of the 2022 Convertible Notes as if
converted would be anti-dilutive to net income per share and
dilutive to FFO per share. As such, FY 2020 net income per share
does not treat the 2022 Convertible Notes as if converted. FY 2020
FFO per share treats the 2022 Convertible Notes as if converted,
thereby adjusting FFO in the numerator to remove the interest
expense associated with the 2022 Convertible Notes and adjusting
shares outstanding in the denominator to include shares issuable on
conversion of the 2022 Convertible Notes.
In FY 2019, treatment of the 2019 Convertible Notes as if
converted for the period in which they were outstanding, from
January 1, 2019 through June 30, 2019, would be anti-dilutive to
net income per share and dilutive to FFO per share. Treatment of
the 2022 Convertible Notes as if converted would be anti-dilutive
to both net income per share and FFO per share in FY 2019. As such,
FY 2019 net income per share reflects the conversion of the 2019
Convertible Notes for the period from July 1, 2019 through December
31, 2019, but does not treat the 2019 Convertible Notes as if
converted for the period from January 1, 2019 through June 30,
2019, and does not treat the 2022 Convertible Notes as if
converted. FY 2019 FFO per share does not treat the 2022
Convertible Notes as if converted, but treats the 2019 Convertible
Notes as if converted on January 1, 2019, thereby adjusting FFO in
the numerator to remove the interest expense associated with the
2019 Convertible Notes and adjusting shares outstanding in the
denominator to include shares issuable on conversion of the 2019
Convertible Notes.
- Core FFO and AFFO per share reflect the 2019 Convertible Notes
and 2022 Convertible Notes in the form in which they were
outstanding during each period.
As such, Q4 2020, Q4 2019, and FY 2020 Core FFO and AFFO per
share reflect the conversion of the 2019 Convertible Notes, but do
not treat the 2022 Convertible Notes as if converted.
FY 2019 Core FFO and AFFO per share reflect the conversion of
the 2019 Convertible Notes for the period from July 1, 2019 through
December 31, 2019, but do not treat the 2019 Convertible Notes as
if converted for the period from January 1, 2019 through June 30,
2019. For the period from January 1, 2019 through June 30, 2019,
cash interest expense associated with the 2019 Convertible Notes
has been included in Core FFO and AFFO in the numerators, and
shares issued upon conversion of the 2019 Convertible Notes have
not been included as shares outstanding in the denominators. The
2022 Convertible Notes are not treated as if converted.
Reconciliation of Total Revenues to Same Store Total
Revenues and Same Store Core Revenues, Quarterly
(in thousands) (unaudited)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Total revenues (total
portfolio)
$
464,100
$
459,184
$
449,755
$
449,789
$
444,277
Non-Same Store revenues
(44,699
)
(42,054
)
(39,818
)
(36,308
)
(37,268
)
Same Store revenues
419,401
417,130
409,937
413,481
407,009
Same Store resident recoveries
(21,555
)
(21,476
)
(18,396
)
(18,407
)
(16,968
)
Same Store Core revenues
$
397,846
$
395,654
$
391,541
$
395,074
$
390,041
Reconciliation of Total Revenues to Same Store Total
Revenues and Same Store Core Revenues, Full Year
(in thousands) (unaudited)
FY 2020
FY 2019
Total revenues (total
portfolio)
$
1,822,828
$
1,764,685
Non-Same Store revenues
(162,879
)
(161,013
)
Same Store revenues
1,659,949
1,603,672
Same Store resident recoveries
(79,834
)
(65,903
)
Same Store Core revenues
$
1,580,115
$
1,537,769
Reconciliation of Property Operating and Maintenance
to Same Store Operating Expenses and Same Store Core Operating
Expenses, Quarterly
(in thousands) (unaudited)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Property operating and maintenance
expenses (total portfolio)
$
168,628
$
177,997
$
167,002
$
166,916
$
167,576
Non-Same Store operating expenses
(16,439
)
(16,151
)
(15,762
)
(15,706
)
(16,814
)
Same Store operating expenses
152,189
161,846
151,240
151,210
150,762
Same Store resident recoveries
(21,555
)
(21,476
)
(18,396
)
(18,407
)
(16,968
)
Same Store Core operating
expenses
$
130,634
$
140,370
$
132,844
$
132,803
$
133,794
Reconciliation of Property Operating and Maintenance
to Same Store Operating Expenses and Same Store Core Operating
Expenses, Full Year
(in thousands) (unaudited)
FY 2020
FY 2019
Property operating and maintenance
expenses (total portfolio)
$
680,543
$
669,987
Non-Same Store operating expenses
(64,058
)
(72,995
)
Same Store operating expenses
616,485
596,992
Same Store resident recoveries
(79,834
)
(65,903
)
Same Store Core operating
expenses
$
536,651
$
531,089
Reconciliation of Net Income to NOI and Same Store
NOI, Quarterly
(in thousands) (unaudited)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Net income available to common
stockholders
$
70,586
$
32,540
$
42,784
$
49,854
$
51,903
Net income available to participating
securities
113
114
119
102
89
Non-controlling interests
431
211
275
320
562
Interest expense
95,382
87,713
86,071
84,757
88,417
Depreciation and amortization
142,090
138,147
137,266
135,027
133,764
Property management expense
14,888
14,824
14,529
14,372
14,561
General and administrative
16,679
17,972
14,426
14,228
15,375
Impairment and other
(3,974
)
1,723
(180
)
3,127
6,940
Gain on sale of property, net of tax
(13,121
)
(15,106
)
(11,167
)
(15,200
)
(31,780
)
Unrealized gains on investments in equity
securities
(29,689
)
—
—
(34
)
—
Other, net
2,087
3,049
(1,370
)
(3,680
)
(3,130
)
NOI (total portfolio)
295,472
281,187
282,753
282,873
276,701
Non-Same Store NOI
(28,260
)
(25,903
)
(24,056
)
(20,602
)
(20,454
)
Same Store NOI
$
267,212
$
255,284
$
258,697
$
262,271
$
256,247
Reconciliation of Net Income to NOI and Same Store
NOI, Full Year
(in thousands) (unaudited)
FY 2020
FY 2019
Net income available to common
stockholders
$
195,764
$
145,068
Net income available to participating
securities
448
395
Non-controlling interests
1,237
1,648
Interest expense
353,923
367,173
Depreciation and amortization
552,530
533,719
Property management expense
58,613
61,614
General and administrative
63,305
74,274
Impairment and other
696
18,743
Gain on sale of property, net of tax
(54,594
)
(96,336
)
Unrealized gains on investments in equity
securities
(29,723
)
(6,480
)
Other, net
86
(5,120
)
NOI (total portfolio)
1,142,285
1,094,698
Non-Same Store NOI
(98,821
)
(88,018
)
Same Store NOI
$
1,043,464
$
1,006,680
Reconciliation of Net Income to EBITDA, EBITDAre, and
Adjusted EBITDAre
(in thousands, unaudited)
Q4 2020
Q4 2019
FY 2020
FY 2019
Net income available to common
stockholders
$
70,586
$
51,903
$
195,764
$
145,068
Net income available to participating
securities
113
89
448
395
Non-controlling interests
431
562
1,237
1,648
Interest expense
95,382
88,417
353,923
367,173
Depreciation and amortization
142,090
133,764
552,530
533,719
EBITDA
308,602
274,735
1,103,902
1,048,003
Gain on sale of property, net of tax
(13,121
)
(31,780
)
(54,594
)
(96,336
)
Impairment on depreciated real estate
investments
376
2,921
4,578
14,210
EBITDAre
295,857
245,876
1,053,886
965,877
Share-based compensation expense
4,797
4,311
17,090
18,158
Merger and transaction-related
expenses
—
—
—
4,347
Severance
213
240
601
8,465
Casualty (gains) losses, net
(4,350
)
4,019
(3,882
)
4,533
Unrealized gains on investments in equity
securities
(29,689
)
—
(29,723
)
(6,480
)
Other, net
2,087
(3,130
)
86
(5,120
)
Adjusted EBITDAre
$
268,915
$
251,316
$
1,038,058
$
989,780
Reconciliation of Net Debt / TTM Adjusted
EBITDAre
(in thousands, except for ratio)
(unaudited)
As of
As of
December 31, 2020
December 31, 2019
Mortgage loans, net
$
4,820,098
$
6,238,461
Secured term loan, net
401,095
400,978
Term loan facility, net
2,470,907
1,493,747
Revolving facility
—
—
Convertible senior notes, net
339,404
334,299
Total Debt per Balance Sheet
8,031,504
8,467,485
Retained and repurchased certificates
(247,526
)
(319,632
)
Cash, ex-security deposits and letters of
credit (1)
(250,204
)
(138,059
)
Deferred financing costs, net
43,396
36,685
Unamortized discounts on note payable
7,885
13,342
Net Debt (A)
$
7,585,055
$
8,059,821
For the Trailing
Twelve
For the Trailing
Twelve
Months (TTM) Ended
Months (TTM) Ended
December 31, 2020
December 31, 2019
Adjusted EBITDAre (B)
$
1,038,058
$
989,780
Net Debt / TTM Adjusted EBITDAre (A /
B)
7.3
x
8.1
x
- 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/20210216006021/en/
Investor Relations Contact Greg Van Winkle Phone:
844.456.INVH (4684) Email: IR@InvitationHomes.com
Media Relations Contact Kristi DesJarlais Phone:
972.421.3587 Email: Media@InvitationHomes.com
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