Invitation Homes Reports Second Quarter 2024 Results

Rhea-AI Summary

Invitation Homes Inc. (NYSE: INVH) reported its Q2 2024 financial results, showing total revenues increased 8.8% to $653 million year-over-year. Core FFO per share rose 7.3% to $0.47, while AFFO per share increased 4.1% to $0.40. Same Store NOI grew 3.8% on 4.8% revenue growth and 7.1% expense growth. The company acquired 502 homes for $166 million and sold 266 homes for $117 million. Invitation Homes also entered contracts to build over 1,000 new homes for $274 million and expanded its third-party management business. The company raised its full-year 2024 Core FFO guidance midpoint by $0.01 to $1.87 per share.

Positive

• Total revenues increased 8.8% year-over-year to $653 million
• Core FFO per share rose 7.3% to $0.47
• AFFO per share increased 4.1% to $0.40
• Same Store NOI grew 3.8% year-over-year
• Acquired 502 homes for $166 million
• Entered contracts to build over 1,000 new homes for $274 million
• Expanded third-party management business to 17,261 homes
• Raised full-year 2024 Core FFO guidance midpoint to $1.87 per share
• Credit rating upgraded by Moody's to 'Baa2' from 'Baa3'

Negative

• Net income available to common stockholders decreased 47.0% to $73 million
• Net income per diluted common share decreased 47.0% to $0.12
• Same Store Core Operating Expenses growth of 7.1%
• Property taxes expense increased 10.3% year-over-year in Q2 2024

Insights

Financial Analyst

Invitation Homes' Q2 2024 results demonstrate solid performance despite some challenges. The 8.8% year-over-year increase in total revenues to $653 million is impressive, indicating strong demand for single-family rentals. However, the 47% decrease in net income to $73 million is concerning, largely due to a $59.5 million accrual for legal matters.

On a positive note, Core FFO per share increased by 7.3% to $0.47 and AFFO per share grew by 4.1% to $0.40. These metrics suggest improved operational efficiency and cash flow generation. The Same Store NOI growth of 3.8% is solid, driven by 4.8% revenue growth, although partially offset by a 7.1% increase in operating expenses.

The company's expansion efforts are noteworthy:

• Acquisition of 502 homes for $166 million
• Contracts to construct over 1,000 new homes for $274 million
• Growth in third-party management to 17,261 homes
• $37.5 million investment in Upward America Venture LP

These initiatives should contribute to future growth and diversification of revenue streams.

The upgrade of credit ratings to 'Baa2' by Moody's is a positive sign, potentially leading to lower borrowing costs. However, investors should monitor the company's debt levels, with a net debt to adjusted EBITDAre ratio of 5.3x, which is relatively high for the real estate sector.

Overall, while there are some concerns regarding net income and expense growth, Invitation Homes' strong top-line growth, strategic expansions and improved credit rating paint a generally positive picture for investors.

Real Estate Market Analyst

Invitation Homes' Q2 2024 results offer valuable insights into the single-family rental market. The 5.0% blended rent growth, comprising 5.6% renewal rent growth and 3.6% new lease rent growth, indicates a robust demand for single-family rentals. However, this is a moderation from the 6.8% blended growth seen in Q2 2023, suggesting a potential cooling in the market.

The high average occupancy of 97.5%, despite a slight 10 basis point year-over-year decline, demonstrates the continued strong demand for single-family rentals. This high occupancy, coupled with a low turnover rate of 6.3%, indicates tenant satisfaction and the stability of Invitation Homes' portfolio.

The improvement in Bad Debt to 0.8% of gross rental revenue, down from 1.3% a year ago, is a positive sign. This suggests better tenant quality and improved collection practices, which is important for maintaining steady cash flows.

The company's strategic moves, including the acquisition of 502 homes and contracts for over 1,000 new builds, demonstrate a focus on portfolio growth and quality. The expansion into third-party management services and investment in joint ventures like Upward America JV shows diversification of revenue streams and a broader approach to the single-family rental market.

However, the 10.3% year-over-year increase in property taxes is concerning and could pressure margins if it continues. This highlights the importance of efficient cost management in maintaining profitability in the face of rising expenses.

Overall, these results suggest that the single-family rental market remains strong, but with signs of moderation in growth rates. Invitation Homes' strategic initiatives position it well to navigate potential market shifts, but investors should keep an eye on expense growth and its impact on profitability.

DALLAS--(BUSINESS WIRE)-- Invitation Homes Inc. (NYSE: INVH) (“Invitation Homes” or the “Company”), the nation’s premier single-family home leasing and management company, today announced its Second Quarter 2024 financial and operating results.

Second Quarter 2024 Highlights

• Year over year, total revenues increased 8.8% to $653 million, property operating and maintenance costs increased 9.5% to $234 million, net income available to common stockholders decreased 47.0% to $73 million, inclusive of a $59.5 million accrual for certain legal matters, and net income per diluted common share decreased 47.0% to $0.12.
• Year over year, Core FFO per share increased 7.3% to $0.47 and AFFO per share increased 4.1% to $0.40.
• Same Store NOI increased 3.8% year over year on 4.8% Same Store Core Revenues growth and 7.1% Same Store Core Operating Expenses growth.
• Same Store Bad Debt was 0.8% of gross rental revenue, representing five consecutive quarters of improvement and a year over year improvement of approximately 50 basis points.
• Same Store Average Occupancy was 97.5%, down 10 basis points year over year.
• Same Store renewal rent growth of 5.6% and Same Store new lease rent growth of 3.6% drove Same Store blended rent growth of 5.0%.
• Acquisitions by the Company and the Company's joint ventures totaled 502 homes for approximately $166 million while dispositions totaled 266 homes for approximately $117 million.
• As previously announced on June 3, 2024, the Company entered into contracts during April and May with several of its homebuilder partners to construct over 1,000 newly built homes at a total investment of approximately $274 million. These homes will be located in three of the Company’s core markets of Dallas, Houston, and the Carolinas.
• On May 15, 2024, as previously announced, the Company began providing third-party property and asset management services for a portfolio of approximately 3,000 single-family homes for lease, bringing the Company’s total number of managed-only homes to 17,261 as of June 30, 2024.
• On April 29, 2024, as previously announced, the Company made a $37.5 million investment in Upward America Venture LP (the “Upward America JV”), representing a 7.2% ownership interest in a portfolio of approximately 3,700 single-family homes for lease. The Company also expects to provide property and asset management services to those homes and an additional 700 homes beginning in the third quarter of 2024.
• On April 29, 2024, as previously announced, the Company’s issuer and issue-level credit ratings were upgraded by Moody’s Investors Service to ‘Baa2’ from ‘Baa3’ with a Stable outlook.

Comments from Chief Executive Officer Dallas Tanner

“We’re pleased to announce our second quarter 2024 financial and operating results, which demonstrate the solid performance of our teams and the satisfaction and loyalty of our residents. Millions of families across America rely on the convenience and flexibility of leasing a single-family home, and we’re proud to be the premier choice among many available options. Through our best-in-class operating platform, Genuine Care for our residents, and our strategic approach to growth — including our burgeoning third-party management business and our valuable homebuilder relationships that are developing needed new housing communities — we believe we remain well positioned to continue our industry-leading occupancy, strong growth, and unwavering commitment to further elevating the resident experience.

“As a result of our performance during the first half of this year, and our expectations looking forward, we have raised the midpoint of our full year 2024 Core FFO per share guidance by $0.01 to $1.87.”

Glossary & Reconciliations of Non-GAAP Financial and Other Operating Measures

Financial and operating measures found in the Earnings Release and Supplemental Information include certain measures used by Invitation Homes management that are measures not defined under accounting principles generally accepted in the United States (“GAAP”). These measures are defined herein and, as applicable, reconciled to the most comparable GAAP measures.

Financial Results

Net Income, FFO, Core FFO, and AFFO Per Share - Diluted
		Q2 2024			Q2 2023			YTD 2024			YTD 2023
Net income		$	0.12		$	0.22		$	0.35		$	0.42
FFO			0.34			0.42			0.77			0.83
Core FFO			0.47			0.44			0.94			0.88
AFFO			0.40			0.38			0.81			0.76

Net Income

Net income per common share — diluted for Q2 2024 was $0.12, compared to net income per common share — diluted of $0.22 for Q2 2023. Total revenues and total property operating and maintenance expenses for Q2 2024 were $653 million and $234 million, respectively, compared to $600 million and $214 million, respectively, for Q2 2023.

Net income per common share — diluted for YTD 2024 was $0.35, compared to net income per share — diluted of $0.42 for YTD 2023. Total revenues and total property operating and maintenance expenses for YTD 2024 were $1,299 million and $465 million, respectively, compared to $1,190 million and $422 million, respectively, for YTD 2023.

Core FFO

Year over year, Core FFO per share for Q2 2024 increased 7.3% to $0.47, while Core FFO per share for YTD 2024 increased 6.5% to $0.94, primarily due to NOI growth.

AFFO

Year over year, AFFO per share for Q2 2024 increased 4.1% to $0.40, while AFFO per share for YTD 2024 increased 5.4% to $0.81, 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:		77,994
		Q2 2024			Q2 2023			YTD 2024			YTD 2023
Core Revenues growth (year over year)		4.8	%					5.3	%
Core Operating Expenses growth (year over year)		7.1	%					7.1	%
NOI growth (year over year)		3.8	%					4.5	%
Average Occupancy		97.5	%		97.6	%		97.7	%		97.7	%
Bad Debt % of gross rental revenue		0.8	%		1.3	%		0.9	%		1.5	%
Turnover Rate		6.3	%		6.8	%		11.4	%		12.0	%
Rental Rate Growth (lease-over-lease):
Renewals		5.6	%		6.8	%		5.7	%		7.3	%
New Leases		3.6	%		6.7	%		2.3	%		6.0	%
Blended		5.0	%		6.8	%		4.7	%		6.9	%

Same Store NOI

For the Same Store Portfolio of 77,994 homes, Same Store NOI for Q2 2024 increased 3.8% year over year on Same Store Core Revenues growth of 4.8% and Same Store Core Operating Expenses growth of 7.1%.

YTD 2024 Same Store NOI increased 4.5% year over year on Same Store Core Revenues growth of 5.3% and Same Store Core Operating Expenses growth of 7.1%.

Same Store Core Revenues

Same Store Core Revenues growth for Q2 2024 of 4.8% year over year was primarily driven by a 4.2% increase in Average Monthly Rent, a 50 basis point year over year improvement in Bad Debt as a percentage of gross rental revenue, and a 9.6% increase in other income, net of resident recoveries, partially offset by a 10 basis point year over year decline in Average Occupancy.

YTD 2024 Same Store Core Revenues growth of 5.3% year over year was primarily driven by a 4.4% increase in Average Monthly Rent, a 60 basis point year over year decrease in Bad Debt as a percentage of gross rental revenue, and a 12.8% increase in other income, net of resident recoveries.

Same Store Core Operating Expenses

Same Store Core Operating Expenses for Q2 2024 increased 7.1% year over year, primarily attributable to an 8.3% increase in fixed expenses and a 4.8% increase in controllable expenses. The 8.3% increase in fixed expenses was primarily attributable to property taxes expense, which for Q2 2024 increased 10.3% year over year. As previously disclosed, due to the underaccrual of property taxes expense in the first three quarters of 2023, and the associated catch up in Q4 2023, the Company expects property taxes expense growth for the first three quarters of 2024 to be elevated, prior to a partial offset in Q4 2024 resulting in the Company’s expected guidance range for FY 2024 property taxes expense growth.

YTD 2024 Same Store Core Operating Expenses increased 7.1% year over year, primarily driven by a 10.0% increase in fixed expenses and a 1.8% increase in controllable expenses.

Investment and Property Management Activity

Acquisitions for Q2 2024 included 445 wholly owned homes for approximately $146 million and 57 homes for approximately $19 million in the Company's joint ventures. Dispositions for Q2 2024 included 250 wholly owned homes for gross proceeds of approximately $111 million and 16 homes for gross proceeds of approximately $6 million in the Company's joint ventures.

Year to date through Q2 2024, the Company acquired 700 wholly owned homes for $238 million and 73 homes for $25 million in the Company's joint ventures. The company also sold 627 wholly owned homes for $259 million and 36 homes for $15 million in the Company's joint ventures.

As previously announced on June 3, 2024, the Company entered into contracts during April and May with several of its homebuilder partners to construct over 1,000 newly built homes at a total investment of approximately $274 million. These homes will be located in three of the Company’s core markets of Dallas, Houston, and the Carolinas.

On May 15, 2024, as previously announced, the Company began providing third-party property and asset management services for a portfolio of approximately 3,000 homes, bringing the Company’s total number of managed-only homes to 17,261 as of June 30, 2024.

On April 29, 2024, as previously announced, the Company made a $37.5 million investment in the Upward America JV, representing a 7.2% ownership interest in a portfolio of approximately 3,700 single-family homes for lease. The Company also expects to provide property and asset management services to those homes and an additional 700 homes beginning in the third quarter of 2024.

A summary of the Company’s owned and/or managed homes is included in the following table:

Summary of Homes Owned and/or Managed As Of 6/30/2024
		Number of Homes Owned and/or Managed as of 3/31/2024		Acquired or Added In Q2 2024		Disposed or Subtracted In Q2 2024		Number of Homes Owned and/or Managed as of 6/30/2024
Wholly owned homes		84,445		445		(250)		84,640
Joint venture owned homes		3,844		3,777		(16)		7,605
Managed-only homes		14,278		2,986		(3)		17,261
Total homes owned and/or managed		102,567		7,208		(269)		109,506

Balance Sheet and Capital Markets Activity

As of June 30, 2024, the Company had $1,749 million in available liquidity through a combination of unrestricted cash and undrawn capacity on its revolving credit facility. The Company's total indebtedness as of June 30, 2024 was $8,602 million, consisting of $6,575 million of unsecured debt and $2,027 million of secured debt. Net debt / TTM adjusted EBITDAre was 5.3x at June 30, 2024, down from 5.5x as of December 31, 2023. The Company has no debt reaching final maturity until 2026, and in addition, 99.5% of its total debt was fixed rate or swapped to fixed rate and 83.6% of its wholly owned homes were unencumbered as of June 30, 2024. As previously announced on April 29, 2024, the Company’s issuer and issue-level credit ratings were upgraded by Moody’s Investors Service to ‘Baa2’ from ‘Baa3’ with a Stable outlook.

FY 2024 Guidance Details

The Company has revised its full year 2024 guidance expectations that were originally provided in February 2024 and reaffirmed in April 2024, as outlined in the following table:

FY 2024 Guidance
	FY 2024 Current Guidance Range	FY 2024 Midpoint
		Current			Prior			Change
Core FFO per share — diluted	$1.84 to $1.90	$	1.87		$	1.86		$	0.01
AFFO per share — diluted	$1.55 to $1.61	$	1.58		$	1.58		$	—
Same Store Core Revenues growth (1)	4.50% to 5.25%		4.875	%		5.0	%		(0.125	)%
Same Store Core Operating Expenses growth (2)	5.25% to 6.25%		5.75	%		6.25	%		(0.5	)%
Same Store NOI growth	3.75% to 5.25%		4.5	%		4.5	%		—	%
Wholly owned acquisitions	$600 million to $1,000 million	$800 million			$800 million			$	—
JV acquisitions	$100 million to $300 million	$200 million			$200 million			$	—
Wholly owned dispositions	$400 million to $600 million	$500 million			$500 million			$	—

(1)		Guidance assumes FY 2024 Average Occupancy is similar to FY 2023 Average Occupancy. Guidance assumes average Bad Debt for FY 2024 in a range of 65 to 95 basis points.
(2)		Guidance assumes FY 2024 property taxes expense growth in a range of 8.0% to 9.5% year over year and FY 2024 insurance expense growth of approximately 7.5% year over year.

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.

Earnings Conference Call Information

Invitation Homes has scheduled a conference call at 11:00 a.m. Eastern Time on July 25, 2024, to review second quarter of 2024 results, discuss recent events, and conduct a question-and-answer session. 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.

Listen-only participants are encouraged to join the conference call via a live audio webcast, which is available online from the Company’s investor relations website at www.invh.com. Following the conclusion of the earnings call, the Company will post a replay of the webcast to its website for one year.

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 and management 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, development and use of artificial intelligence, 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, 2023 (the “Annual Report”), as such factors may be updated from time to time in the Company's periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release, in the Annual Report, and in the Company's other periodic filings. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.

Consolidated Balance Sheets
($ in thousands, except shares and per share data)
		June 30, 2024				December 31, 2023
		(unaudited)
Assets:
Investments in single-family residential properties, net		$	17,164,808			$	17,289,214
Cash and cash equivalents			749,398				700,618
Restricted cash			213,780				196,866
Goodwill			258,207				258,207
Investments in unconsolidated joint ventures			268,808				247,166
Other assets, net			584,442				528,896
Total assets		$	19,239,443			$	19,220,967
Liabilities:
Mortgage loans, net		$	1,617,967			$	1,627,256
Secured term loan, net			401,540				401,515
Unsecured notes, net			3,308,276				3,305,467
Term loan facilities, net			3,215,993				3,211,814
Revolving facility			—				—
Accounts payable and accrued expenses			354,307				200,590
Resident security deposits			179,833				180,455
Other liabilities			94,818				103,435
Total liabilities			9,172,734				9,030,532
Equity:
Stockholders’ equity
Preferred stock, $0.01 par value per share, 900,000,000 shares authorized, none outstanding as of June 30, 2024 and December 31, 2023			—				—
Common stock, $0.01 par value per share, 9,000,000,000 shares authorized, 612,594,044 and 611,958,239 outstanding as of June 30, 2024 and December 31, 2023, respectively			6,126				6,120
Additional paid-in capital			11,159,835				11,156,736
Accumulated deficit			(1,198,481	)			(1,070,586	)
Accumulated other comprehensive income			63,981				63,701
Total stockholders’ equity			10,031,461				10,155,971
Non-controlling interests			35,248				34,464
Total equity			10,066,709				10,190,435
Total liabilities and equity		$	19,239,443			$	19,220,967

Consolidated Statements of Operations
($ in thousands, except shares and per share amounts)
		Q2 2024				Q2 2023				YTD 2024				YTD 2023
		(unaudited)				(unaudited)				(unaudited)
Revenues:
Rental revenues		$	576,865			$	543,185			$	1,148,295			$	1,078,402
Other property income			60,610				53,739				121,277				105,037
Management fee revenues			15,976				3,448				29,918				6,823
Total revenues			653,451				600,372				1,299,490				1,190,262
Expenses:
Property operating and maintenance			234,184				213,808				464,581				422,305
Property management expense			32,633				23,580				63,870				47,164
General and administrative			21,498				19,791				44,946				37,243
Interest expense			90,007				78,625				179,852				156,672
Depreciation and amortization			176,622				165,759				351,935				330,432
Impairment and other			10,353				1,868				14,490				3,031
Total expenses			565,297				503,431				1,119,674				996,847
Gains on investments in equity and other securities, net			1,504				524				1,295				612
Other, net			(54,012	)			(3,941	)			(48,039	)			(5,435	)
Gain on sale of property, net of tax			43,267				46,788				93,765				76,459
Losses from investments in unconsolidated joint ventures			(5,482	)			(2,030	)			(10,620	)			(6,185	)
Net income			73,431				138,282				216,217				258,866
Net income attributable to non-controlling interests			(243	)			(418	)			(679	)			(760	)
Net income attributable to common stockholders			73,188				137,864				215,538				258,106
Net income available to participating securities			(207	)			(166	)			(399	)			(337	)
Net income available to common stockholders — basic and diluted		$	72,981			$	137,698			$	215,139			$	257,769
Weighted average common shares outstanding — basic			612,628,758				611,954,347				612,424,139				611,772,406
Weighted average common shares outstanding — diluted			613,823,339				613,316,499				613,815,253				612,941,399
Net income per common share — basic		$	0.12			$	0.23			$	0.35			$	0.42
Net income per common share — diluted		$	0.12			$	0.22			$	0.35			$	0.42
Dividends declared per common share		$	0.28			$	0.26			$	0.56			$	0.52

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 defines Core FFO as FFO adjusted for the following: non-cash interest expense related to amortization of deferred financing costs, loan discounts, and non-cash interest expense from derivatives; share-based compensation expense; legal settlements; severance expense; casualty (gains) losses, net; and (gains) losses on investments in equity and other securities, net, as applicable. The Company defines Adjusted FFO as Core FFO less recurring capital expenditures that are necessary to help preserve the value, and maintain the functionality, of its homes. Where appropriate, FFO, Core FFO, and Adjusted FFO are adjusted for the Company’s share of investments in 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 Company believes that Core FFO and Adjusted FFO are also meaningful supplemental measures of its operating performance for the same reasons as FFO and are further helpful to investors as they provide a more consistent measurement of the Company’s performance across reporting periods by removing the impact of certain items that are not comparable from period to period.

The GAAP measure most directly comparable to Core FFO and Adjusted FFO is net income or loss. FFO, 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 FFO, Core FFO, and Adjusted FFO may not be comparable to the FFO, Core FFO, and Adjusted FFO of other companies due to the fact that not all companies use the same definition of FFO, 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.

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 1^st of the year in which the Same Store portfolio was established.

The Company believes presenting information about the portion of its portfolio that has been fully operational for the entirety of a given reporting period and its prior year comparison period provides investors with meaningful information about the performance of the Company's comparable homes across periods and about trends in its organic business.

Total Homes / Total Portfolio

Total homes or total portfolio refers to the total number of homes owned, whether or not stabilized, and excludes any properties previously acquired in purchases that have been subsequently rescinded or vacated. Unless otherwise indicated, total homes or total portfolio refers to the wholly owned homes and excludes homes owned in joint ventures.

Turnover Rate

Turnover rate represents the number of instances that homes in an identified population become unoccupied in a given period, divided by the number of homes in such population.

Reconciliation of FFO, Core FFO, and AFFO
($ in thousands, except shares and per share amounts) (unaudited)
FFO Reconciliation		Q2 2024				Q2 2023				YTD 2024			YTD 2023
Net income available to common stockholders		$	72,981			$	137,698			$	215,139		$	257,769
Net income available to participating securities			207				166				399			337
Non-controlling interests			243				418				679			760
Depreciation and amortization on real estate assets			173,319				163,022				345,237			325,106
Impairment on depreciated real estate investments			—				81				60			259
Net gain on sale of previously depreciated investments in real estate			(43,267	)			(46,788	)			(93,765	)		(76,459	)
Depreciation and net gain on sale of investments in unconsolidated joint ventures			3,497				2,193				6,016			4,314
FFO		$	206,980			$	256,790			$	473,765		$	512,086
Core FFO Reconciliation		Q2 2024				Q2 2023				YTD 2024			YTD 2023
FFO		$	206,980			$	256,790			$	473,765		$	512,086
Non-cash interest expense related to amortization of deferred financing costs, loan discounts, and non-cash interest expense from derivatives (1)			8,905				7,182				18,122			16,314
Share-based compensation expense			7,492				6,066				15,392			12,564
Legal settlements (2)			59,500				—				59,500			—
Severance expense			89				371				179			524
Casualty losses, net (1)			10,363				1,797				14,445			2,785
Gains on investments in equity and other securities, net			(1,504	)			(524	)			(1,295	)		(612	)
Core FFO		$	291,825			$	271,682			$	580,108		$	543,661
AFFO Reconciliation		Q2 2024				Q2 2023				YTD 2024			YTD 2023
Core FFO		$	291,825			$	271,682			$	580,108		$	543,661
Recurring capital expenditures (1)			(46,635	)			(36,400	)			(83,757	)		(73,693	)
AFFO		$	245,190			$	235,282			$	496,351		$	469,968
Net income available to common stockholders
Weighted average common shares outstanding — diluted			613,823,339				613,316,499				613,815,253			612,941,399
Net income per common share — diluted		$	0.12			$	0.22			$	0.35		$	0.42
FFO, Core FFO, and AFFO
Weighted average common shares and OP Units outstanding — diluted			616,061,403				615,384,953				616,024,305			614,961,840
FFO per share — diluted		$	0.34			$	0.42			$	0.77		$	0.83
Core FFO per share — diluted		$	0.47			$	0.44			$	0.94		$	0.88
AFFO per share — diluted		$	0.40			$	0.38			$	0.81		$	0.76

(1)		Includes the Company's share from unconsolidated joint ventures.
(2)		Represents the Company’s accrued liability, as of June 30, 2024, for certain legal matters and, specifically, includes a $22 million accrual for the legal settlement that resolved the Company’s California qui tam dispute, inclusive of associated costs, as well as a $37.5 million accrual relating to the previously disclosed inquiry from the Federal Trade Commission, which remains ongoing.

Reconciliation of Total Revenues to Same Store Core Revenues, Quarterly
(in thousands) (unaudited)
		Q2 2024				Q1 2024				Q4 2023				Q3 2023				Q2 2023
Total revenues (Total Portfolio)		$	653,451			$	646,039			$	624,321			$	617,695			$	600,372
Management fee revenues			(15,976	)			(13,942	)			(3,420	)			(3,404	)			(3,448	)
Total portfolio resident recoveries			(37,102	)			(37,795	)			(35,050	)			(36,641	)			(32,776	)
Total Core Revenues (Total Portfolio)			600,373				594,302				585,851				577,650				564,148
Non-Same Store Core Revenues			(39,291	)			(37,858	)			(37,267	)			(36,337	)			(28,930	)
Same Store Core Revenues		$	561,082			$	556,444			$	548,584			$	541,313			$	535,218
Reconciliation of Total Revenues to Same Store Core Revenues, YTD
(in thousands) (unaudited)
		YTD 2024				YTD 2023
Total revenues (Total Portfolio)		$	1,299,490			$	1,190,262
Management fee revenues			(29,918	)			(6,823	)
Total portfolio resident recoveries			(74,897	)			(64,742	)
Total Core Revenues (Total Portfolio)			1,194,675				1,118,697
Non-Same Store Core Revenues			(77,149	)			(57,778	)
Same Store Core Revenues		$	1,117,526			$	1,060,919

Reconciliation of Property Operating and Maintenance Expenses to Same Store Core Operating Expenses, Quarterly
(in thousands) (unaudited)
		Q2 2024				Q1 2024				Q4 2023				Q3 2023				Q2 2023
Property operating and maintenance expenses (Total Portfolio)		$	234,184			$	230,397			$	228,542			$	229,488			$	213,808
Total Portfolio resident recoveries			(37,102	)			(37,795	)			(35,050	)			(36,641	)			(32,776	)
Core Operating Expenses (Total Portfolio)			197,082				192,602				193,492				192,847				181,032
Non-Same Store Core Operating Expenses			(15,173	)			(15,540	)			(15,103	)			(14,458	)			(11,112	)
Same Store Core Operating Expenses		$	181,909			$	177,062			$	178,389			$	178,389			$	169,920
Reconciliation of Property Operating and Maintenance Expenses to Same Store Core Operating Expenses, YTD
(in thousands) (unaudited)
		YTD 2024				YTD 2023
Property operating and maintenance expenses (Total Portfolio)		$	464,581			$	422,305
Total Portfolio resident recoveries			(74,897	)			(64,742	)
Core Operating Expenses (Total Portfolio)			389,684				357,563
Non-Same Store Core Operating Expenses			(30,713	)			(22,281	)
Same Store Core Operating Expenses		$	358,971			$	335,282

Reconciliation of Net Income to Same Store NOI, Quarterly
(in thousands) (unaudited)
		Q2 2024				Q1 2024				Q4 2023				Q3 2023				Q2 2023
Net income available to common stockholders		$	72,981			$	142,158			$	129,368			$	131,637			$	137,698
Net income available to participating securities			207				192				178				181				166
Non-controlling interests			243				436				395				403				418
Interest expense			90,007				89,845				90,049				86,736				78,625
Depreciation and amortization			176,622				175,313				173,159				170,696				165,759
Property management expense			32,633				31,237				25,246				23,399				23,580
General and administrative			21,498				23,448				22,387				22,714				19,791
Impairment and other			10,353				4,137				3,069				2,496				1,868
Gain on sale of property, net of tax			(43,267	)			(50,498	)			(49,092	)			(57,989	)			(46,788	)
(Gains) losses on investments in equity securities, net			(1,504	)			209				(237	)			499				(524	)
Other, net (1)			54,012				(5,973	)			(5,533	)			2,533				3,941
Management fee revenues			(15,976	)			(13,942	)			(3,420	)			(3,404	)			(3,448	)
Losses from investments in unconsolidated joint ventures			5,482				5,138				6,790				4,902				2,030
NOI (Total Portfolio)			403,291				401,700				392,359				384,803				383,116
Non-Same Store NOI			(24,118	)			(22,318	)			(22,164	)			(21,879	)			(17,818	)
Same Store NOI		$	379,173			$	379,382			$	370,195			$	362,924			$	365,298
Reconciliation of Net Income to Same Store NOI, YTD
(in thousands) (unaudited)
		YTD 2024				YTD 2023
Net income available to common stockholders		$	215,139			$	257,769
Net income available to participating securities			399				337
Non-controlling interests			679				760
Interest expense			179,852				156,672
Depreciation and amortization			351,935				330,432
Property management expense			63,870				47,164
General and administrative			44,946				37,243
Impairment and other			14,490				3,031
Gain on sale of property, net of tax			(93,765	)			(76,459	)
(Gains) losses on investments in equity securities, net			(1,295	)			(612	)
Other, net (1)			48,039				5,435
Management fee revenues			(29,918	)			(6,823	)
Losses from investments in unconsolidated joint ventures			10,620				6,185
NOI (Total Portfolio)			804,991				761,134
Non-Same Store NOI			(46,436	)			(35,497	)
Same Store NOI		$	758,555			$	725,637

(1) Includes settlement and other costs related to certain litigation and regulatory matters, interest income, and other miscellaneous income and expenses.

Reconciliation of Net Income to Adjusted EBITDAre
(in thousands, unaudited)
		Q2 2024				Q2 2023				YTD 2024				YTD 2023
Net income available to common stockholders		$	72,981			$	137,698			$	215,139			$	257,769
Net income available to participating securities			207				166				399				337
Non-controlling interests			243				418				679				760
Interest expense			90,007				78,625				179,852				156,672
Interest expense in unconsolidated joint ventures			5,549				3,145				10,784				7,723
Depreciation and amortization			176,622				165,759				351,935				330,432
Depreciation and amortization of investments in unconsolidated joint ventures			3,358				2,521				6,285				4,996
EBITDA			348,967				388,332				765,073				758,689
Gain on sale of property, net of tax			(43,267	)			(46,788	)			(93,765	)			(76,459	)
Impairment on depreciated real estate investments			—				81				60				259
Net (gain) loss on sale of investments in unconsolidated joint ventures			167				(304	)			(214	)			(634	)
EBITDAre			305,867				341,321				671,154				681,855
Share-based compensation expense			7,492				6,066				15,392				12,564
Severance			89				371				179				524
Casualty losses, net (1)			10,363				1,797				14,445				2,785
Gains on investments in equity and other securities, net			(1,504	)			(524	)			(1,295	)			(612	)
Other, net (2)			54,012				3,941				48,039				5,435
Adjusted EBITDAre		$	376,319			$	352,972			$	747,914			$	702,551
		Trailing Twelve Months (TTM) Ended
		June 30, 2024				December 31, 2023
Net income available to common stockholders		$	476,144			$	518,774
Net income available to participating securities			758				696
Non-controlling interests			1,477				1,558
Interest expense			356,637				333,457
Interest expense in unconsolidated joint ventures			21,316				18,255
Depreciation and amortization			695,790				674,287
Depreciation and amortization of investments in unconsolidated joint ventures			11,758				10,469
EBITDA			1,563,880				1,557,496
Gain on sale of property, net of tax			(200,846	)			(183,540	)
Impairment on depreciated real estate investments			228				427
Net gain on sale of investments in unconsolidated joint ventures			(1,248	)			(1,668	)
EBITDAre			1,362,014				1,372,715
Share-based compensation expense			32,331				29,503
Severance			632				977
Casualty losses, net (1)			19,860				8,200
Gains on investments in equity and other securities, net			(1,033	)			(350	)
Other, net (2)			45,039				2,435
Adjusted EBITDAre		$	1,458,843			$	1,413,480

(1)	Includes the Company's share from unconsolidated joint ventures.
(2)	Includes settlement and other costs related to certain litigation and regulatory matters, interest income, and other miscellaneous income and expenses.

Reconciliation of Net Debt / Trailing Twelve Months (TTM) Adjusted EBITDAre
(in thousands, except for ratio) (unaudited)
		As of				As of
		June 30, 2024				December 31, 2023
Mortgage loans, net		$	1,617,967			$	1,627,256
Secured term loan, net			401,540				401,515
Unsecured notes, net			3,308,276				3,305,467
Term loan facility, net			3,215,993				3,211,814
Revolving facility			—				—
Total Debt per Balance Sheet			8,543,776				8,546,052
Retained and repurchased certificates			(87,262	)			(87,703	)
Cash, ex-security deposits and letters of credit (1)			(777,483	)			(713,898	)
Deferred financing costs, net			38,580				45,518
Unamortized discounts on note payable			20,059				21,376
Net Debt (A)		$	7,737,670			$	7,811,345
		For the TTM Ended				For the TTM Ended
		June 30, 2024				December 31, 2023
Adjusted EBITDAre (B)		$	1,458,843			$	1,413,480
Net Debt / TTM Adjusted EBITDAre (A / B)		5.3x				5.5x

(1)

Represents cash and cash equivalents and the portion of restricted cash that excludes security deposits and letters of credit

Note: Refer to “Glossary and Reconciliations” for metric definitions and reconciliations of non-GAAP financial measures.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724136339/en/

Investor Relations Contact

Scott McLaughlin

844.456.INVH (4684)

IR@InvitationHomes.com

Media Relations Contact

Kristi DesJarlais

972.421.3587

Media@InvitationHomes.com

Source: Invitation Homes Inc.

FAQ

What was Invitation Homes' (INVH) revenue growth in Q2 2024?

Invitation Homes reported total revenue growth of 8.8% year-over-year to $653 million in Q2 2024.

How did Invitation Homes' (INVH) Core FFO per share change in Q2 2024?

Invitation Homes' Core FFO per share increased 7.3% year-over-year to $0.47 in Q2 2024.

What was Invitation Homes' (INVH) Same Store NOI growth in Q2 2024?

Invitation Homes reported Same Store NOI growth of 3.8% year-over-year in Q2 2024.

How many homes did Invitation Homes (INVH) acquire in Q2 2024?

Invitation Homes acquired 502 homes for approximately $166 million in Q2 2024.

What is Invitation Homes' (INVH) updated Core FFO guidance for full-year 2024?

Invitation Homes raised its full-year 2024 Core FFO guidance midpoint by $0.01 to $1.87 per share.