DALLAS–(BUSINESS WIRE)–Invitation Homes Inc. (NYSE: INVH) (“Invitation Homes” or the “Company”), the nation’s premier single-family home leasing company, today announced its Q2 2022 financial and operating results.
Second Quarter 2022 Highlights
Year over year, total revenues increased 13.4% to $557 million, property operating and maintenance costs increased 8.7% to $191 million, net income available to common stockholders increased 83.9% to $111 million, and net income per diluted common share increased 71.2% to $0.18.
Year over year, Core FFO per share increased 13.2% to $0.42, and AFFO per share increased 11.9% to $0.36.
Same Store NOI increased 12.4% year over year on 10.4% Same Store Core Revenues growth and 6.2% Same Store Core Operating Expenses growth.
Same Store Average Occupancy was 98.0%, down 40 basis points year over year.
Same Store new lease rent growth of 16.7% and Same Store renewal rent growth of 10.2% drove Same Store blended rent growth of 11.8%, up 380 basis points year over year.
Acquisitions by the Company and the Company’s joint ventures totaled 955 homes for $426 million while dispositions totaled 183 homes for $74 million.
As previously announced, the Company entered into a new $725 million seven-year unsecured term loan on June 22, 2022. The sustainability-linked term loan bears interest at rates based on the Company’s senior unsecured credit rating, which equated to an interest rate of Adjusted Term SOFR plus 124 basis points at the time of closing based on the Company’s current credit ratings.
As previously announced, the Company closed a public offering on April 5, 2022 of $600 million aggregate principal amount of 4.150% senior notes due in 2032 (the “Notes”). The Notes were priced at 99.739% of the principal amount and will mature on April 15, 2032. Net proceeds were used to voluntarily prepay secured indebtedness.
President & Chief Executive Officer Dallas Tanner comments:
“We’re pleased to deliver another outstanding quarter of resident service and financial results. Strong housing market fundamentals across the country continue to drive year over year new lease and renewal rent growth, while occupancy, resident retention and income-to-rent ratio for new residents remain strong. We’re proud to offer high-quality, professionally managed homes and a valuable housing choice to the increasing share of Americans who want to lease a home. As a result of excellent execution through the first half of the year, and supply and demand fundamentals remaining favorable in our markets, we have increased our guidance expectations for the full year. Our new guidance includes a 100 basis point increase at the midpoint for Same Store NOI to a range of 10.0% to 11.5%, and a $0.03 per share increase at the midpoint for Core FFO to a range of $1.66 to $1.72 per share.”
Financial Results
Net Income, FFO, Core FFO, and AFFO Per Share — Diluted
Q2 2022
Q2 2021
YTD 2022
YTD 2021
Net income
$
0.18
$
0.11
$
0.33
$
0.21
FFO
0.39
0.32
0.77
0.65
Core FFO
0.42
0.37
0.82
0.73
AFFO
0.36
0.32
0.71
0.63
Net Income
Net income per share for Q2 2022 was $0.18, compared to net income per share of $0.11 for Q2 2021. Total revenues and total property operating and maintenance expenses for Q2 2022 were $557 million and $191 million, respectively, compared to $492 million and $175 million, respectively, for Q2 2021.
Net income per share for YTD 2022 was $0.33, compared to net income per share of $0.21 for YTD 2021. Total revenues and total property operating and maintenance expenses for YTD 2022 were $1,090 million and $373 million, respectively, compared to $967 million and $344 million, respectively, for YTD 2021.
Core FFO
Year over year, Core FFO per share for Q2 2022 increased 13.2% to $0.42, primarily due to NOI growth.
Year over year, Core FFO per share for YTD 2022 increased 13.4% to $0.82, primarily due to NOI growth.
AFFO
Year over year, AFFO per share for Q2 2022 increased 11.9% to $0.36, primarily due to the increase in Core FFO per share described above.
Year over year, AFFO per share for YTD 2022 increased 11.9% to $0.71, 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:
75,215
Q2 2022
Q2 2021
YTD 2022
YTD 2021
Core Revenues growth (year over year)
10.4 %
10.0 %
Core Operating Expenses growth (year over year)
6.2 %
5.3 %
NOI growth (year over year)
12.4 %
12.2 %
Average Occupancy
98.0 %
98.4 %
98.1 %
98.4 %
Bad debt % of gross rental revenues (1)
0.7 %
1.7 %
1.2 %
1.9 %
Turnover Rate
5.8 %
6.8 %
10.3 %
12.1 %
Rental Rate Growth (lease-over-lease):
Renewals
10.2 %
5.8 %
10.0 %
5.1 %
New Leases
16.7 %
13.7 %
15.8 %
11.1 %
Blended
11.8 %
8.0 %
11.4 %
6.8 %
(1)
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
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Pre-COVID Average (2)
Revenues collected % of revenues due: (1)
Revenues collected in same month billed
92 %
91 %
92 %
92 %
96 %
Late collections of prior month billings
7 %
6 %
6 %
5 %
3 %
Total collections
99 %
97 %
98 %
97 %
99 %
(1)
Includes both rental revenues and other property income. Rent is considered to be due based on the terms of the original lease, not based on a payment plan if one is in place. Security deposits retained to offset rents due are not included as revenue collected. See “Same Store Operating Results Snapshot,” footnote (1), for detail on the Company’s bad debt policy.
(2)
Represents the period from October 2019 to March 2020.
Same Store NOI
For the Same Store Portfolio of 75,215 homes, Same Store NOI for Q2 2022 increased 12.4% year over year on Same Store Core Revenues growth of 10.4% and Same Store Core Operating Expenses growth of 6.2%.
YTD 2022 Same Store NOI increased 12.2% year over year on Same Store Core Revenues growth of 10.0% and Same Store Core Operating Expenses growth of 5.3%.
Same Store Core Revenues
Same Store Core Revenues growth for Q2 2022 of 10.4% year over year was primarily driven by a 9.4% increase in Average Monthly Rent, a 100 basis points year over year improvement in bad debt as a percentage of gross rental revenue, and a 19.9% increase in other income, net of resident recoveries.
YTD 2022 Same Store Core Revenue growth of 10.0% year over year was primarily driven by an 8.9% increase in average monthly rent, a 70 basis points year over year improvement in bad debt as a percentage of gross rental revenues, and a 31.6% increase in other income, net of resident recoveries.
Same Store Core Operating Expenses
Same Store Core Operating Expenses for Q2 2022 increased 6.2% year over year, primarily driven by a 4.4% increase in Same Store fixed expenses and a 15.2% increase in repairs and maintenance expense, net of resident recoveries.
YTD 2022 Same Store Core operating expenses increased 5.3% year over year, primarily driven by a 4.2% increase in Same Store fixed expenses and a 16.9% increase in repairs and maintenance expense, net of resident recoveries.
Investment Management Activity
Acquisitions for Q2 2022 totaled 955 homes for $426 million through diversified acquisition channels. This included 511 wholly owned homes for $227 million in addition to 444 homes for $199 million in the Company’s joint ventures. Dispositions for Q2 2022 included 176 wholly owned homes for gross proceeds of $70 million and seven homes for gross proceeds of $4 million in the Company’s joint ventures.
Year to date through June 30, 2022, the Company acquired 1,777 homes for $766 million, including 1,029 wholly owned homes for $445 million and 748 homes for $321 million in the Company’s joint ventures. The Company also sold 330 homes for $128 million, including 317 wholly owned homes for $122 million and 13 homes for $6 million in the Company’s joint ventures.
Balance Sheet and Capital Markets Activity
As of June 30, 2022, the Company had $1,848 million in available liquidity through a combination of unrestricted cash and undrawn capacity on its revolving credit facility and term loan. The Company’s total indebtedness as of June 30, 2022 was $7,826 million, consisting of $5,200 million of unsecured debt and $2,626 million of secured debt. Net debt / TTM adjusted EBITDAre was 5.9x at June 30, 2022, down from 6.2x as of December 31, 2021.
As previously announced, the Company entered into a new $725 million seven-year unsecured term loan on June 22, 2022. The sustainability-linked term loan bears interest at rates based on the Company’s senior unsecured credit rating, which equated to an interest rate of Adjusted Term SOFR plus 124 basis points at the time of closing based on the Company’s current credit ratings. Pricing of the term loan benefited from the Company meeting certain ESG performance targets as determined via an independent third-party evaluation, similar to its existing five-year unsecured credit facility. The new seven-year delayed draw term loan allowed the Company to elect to receive a portion of the proceeds at closing, with the opportunity to receive the remaining proceeds in up to three additional draws over a six month period. The Company received proceeds of $150 million in its initial draw at closing, and used these initial proceeds, along with cash on hand, as part of a series of transactions to fully repay its IH 2018-2 securitization.
As previously announced, the Company closed a public offering on April 5, 2022 of $600 million aggregate principal amount of 4.150% senior notes due in 2032. The Notes were priced at 99.739% of the principal amount and will mature on April 15, 2032. Net proceeds were used to voluntarily prepay secured indebtedness.
Dividend
As previously announced on July 22, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.22 per share of common stock. The dividend will be paid on or before August 26, 2022, to stockholders of record as of the close of business on August 9, 2022.
FY 2022 Guidance Update
FY 2022 Guidance
Current
Previous
FY 2022
FY 2022
Guidance
Guidance
Core FFO per share — diluted
$1.66 – $1.72
$1.62 – $1.70
AFFO per share — diluted
$1.41 – $1.47
$1.38 – $1.46
Same Store Core Revenues growth
9.0% – 10.0%
8.0% – 9.0%
Same Store Core Operating Expenses growth
6.0% – 7.0%
5.5% – 6.5%
Same Store NOI growth
10.0% – 11.5%
9.0% – 10.5%
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 Revenues growth, Same Store Core Operating Expenses 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 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 28, 2022, to discuss results for the second quarter of 2022. The domestic dial-in number is 1-844-200-6205, and the international dial-in number is 1-929-526-1599. The access code is 842872. An audio webcast may be accessed at www.invh.com. A replay of the call will be available through August 25, 2022, and can be accessed by calling 1-866-813-9403 (domestic) or 1-929-458-6194 (international) and using the replay access code 769236, 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 herein 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 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 unfavorable global and United States economic conditions (including inflation and interest rates), uncertainty in financial markets, geopolitical tensions, natural disasters, climate change, and public health crises, including 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. 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 year ended December 31, 2021, 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 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, 2022
December 31,
2021
(unaudited)
Assets:
Investments in single-family residential properties, net
$
17,125,185
$
16,935,322
Cash and cash equivalents
272,708
610,166
Restricted cash
206,888
208,692
Goodwill
258,207
258,207
Investments in unconsolidated joint ventures
244,730
130,395
Other assets, net
399,266
395,064
Total assets
$
18,506,984
$
18,537,846
Liabilities:
Mortgage loans, net
$
2,211,739
$
3,055,853
Secured term loan, net
401,421
401,313
Unsecured notes, net
2,516,359
1,921,974
Term loan facilities, net
2,624,412
2,478,122
Revolving facility
—
—
Convertible senior notes, net
—
141,397
Accounts payable and accrued expenses
237,915
193,633
Resident security deposits
171,413
165,167
Other liabilities
61,736
341,583
Total liabilities
8,224,995
8,699,042
Equity:
Stockholders’ equity
Preferred stock, $0.01 par value per share, 900,000,000 shares authorized, none outstanding as
of June 30, 2022 and December 31, 2021
—
—
Common stock, $0.01 par value per share, 9,000,000,000 shares authorized, 610,359,909
and 601,045,438 outstanding as of June 30, 2022 and December 31, 2021, respectively
6,104
6,010
Additional paid-in capital
11,113,146
10,873,539
Accumulated deficit
(860,275
)
(794,869
)
Accumulated other comprehensive loss
(20,285
)
(286,938
)
Total stockholders’ equity
10,238,690
9,797,742
Non-controlling interests
43,299
41,062
Total equity
10,281,989
9,838,804
Total liabilities and equity
$
18,506,984
$
18,537,846
Consolidated Statements of Operations
($ in thousands, except shares and per share amounts)
Q2 2022
Q2 2021
YTD 2022
YTD 2021
(unaudited)
(unaudited)
(unaudited)
Revenues:
Rental revenues
$
505,936
$
449,113
$
989,931
$
887,246
Other property income
48,605
41,505
94,809
77,826
Management fee revenues
2,759
1,015
4,870
1,786
Total revenues
557,300
491,633
1,089,610
966,858
Expenses:
Property operating and maintenance
190,680
175,422
372,949
343,795
Property management expense
21,814
17,696
42,781
33,538
General and administrative
19,342
19,828
36,981
36,778
Interest expense
74,840
80,764
149,229
164,170
Depreciation and amortization
158,572
145,280
314,368
289,781
Impairment and other
1,355
980
2,870
1,336
Total expenses
466,603
439,970
919,178
869,398
Gains (losses) on investments in equity securities, net
(172
)
(7,002
)
(3,204
)
(10,142
)
Other, net
(3,827
)
(1,903
)
(3,233
)
(1,673
)
Gain on sale of property, net of tax
27,508
17,919
45,534
32,403
Income (loss) from investments in unconsolidated joint ventures
(2,701
)
11
(5,021
)
362
Net income
111,505
60,688
204,508
118,410
Net income attributable to non-controlling interests
(542
)
(350
)
(930
)
(705
)
Net income attributable to common stockholders
110,963
60,338
203,578
117,705
Net income available to participating securities
(148
)
(96
)
(368
)
(191
)
Net income available to common stockholders — basic and diluted
$
110,815
$
60,242
$
203,210
$
117,514
Weighted average common shares outstanding — basic
610,331,643
567,931,472
608,381,768
567,655,034
Weighted average common shares outstanding — diluted
611,620,475
569,283,166
609,775,270
569,056,182
Net income per common share — basic
$
0.18
$
0.11
$
0.33
$
0.21
Net income per common share — diluted
$
0.18
$
0.11
$
0.33
$
0.21
Dividends declared per common share
$
0.22
$
0.17
$
0.44
$
0.34
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. 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 and impairment on depreciated real estate investments. Adjusted EBITDAre is defined as EBITDAre before the following items: share-based compensation expense; severance; casualty (gains) 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
Contacts
Investor Relations Contact
Scott McLaughlin
844.456.INVH (4684)
IR@InvitationHomes.com
Media Relations Contact
Kristi DesJarlais
972.421.3587
Media@InvitationHomes.com