Invitation Homes : Reports Fourth Quarter and Full Year 2017 Results

DALLAS, Feb. 21, 2018 /PRNewswire/ -- Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes," "IH," or the "Company"), a leading owner and operator of single-family homes for lease in the United States, today announced its fourth quarter and full year 2017 financial and operating results. 

As previously announced, Invitation Homes completed its merger with Starwood Waypoint Homes ("Legacy SWH") on November 16, 2017.  Information presented for the fourth quarter and full year 2017 includes the impact of the merger.

Fourth Quarter 2017 and Full Year 2017 Highlights

• In Q4 2017, total revenues increased 40.7% year-over-year to $330 million, and net loss attributable to common shareholders increased to $46 million. FY 2017 total revenues increased 14.3% to $1,054 million, and net loss attributable to common shareholders increased to $105 million.
• IH Same Store revenue grew 4.8% year-over-year in Q4 2017 and 4.7% in FY 2017. Legacy SWH Same Store Core revenue grew 5.4% year-over-year in Q4 2017 and 4.8% in FY 2017.
• IH Same Store NOI grew 9.3% year-over-year in Q4 2017 and 7.4% in FY 2017. Legacy SWH Same Store NOI grew 4.7% year-over-year in Q4 2017 and 6.4% in FY 2017, or 5.2% in Q4 2017 and 6.5% in FY 2017 when removing the impact of increased real estate taxes triggered by the Company's merger due to California's Proposition 13.
• IH Same Store NOI margin was 66.1% in Q4 2017 and 64.0% in FY 2017. Legacy SWH Same Store NOI margin was 66.5% in Q4 2017 and 65.5% in FY 2017.
• In February 2018, Invitation Homes closed a $917 million, seven-year (inclusive of extension options) mortgage loan with total cost of funds of LIBOR + 124 basis points. Net proceeds were used to repay in full all remaining 2019 secured maturities. Together with the previously announced November 2017 refinancing, total refinancing activity in Q4 2017 and February 2018 is expected to result in net annual interest expense savings of $9.1 million.

Guidance Highlights

• The Company has identified $45 - $50 million of annual run-rate cost synergies related to its merger with Starwood Waypoint Homes, and remains on track to realize 75% of those synergies on a run-rate basis by the end of 2018. Additional upside remains a possibility as best practices are implemented across the organization.

Chief Executive Officer Fred Tuomi comments:  "We are pleased that we finished an eventful 2017 stronger than expected, with 7.4% NOI growth in the Invitation Homes Same Store portfolio, and 6.4% NOI growth in the Legacy Starwood Waypoint Homes Same Store portfolio for the full year.  Supply and demand fundamentals in our markets remain supportive, and consumers continue to choose the attractive housing option provided by our first-class resident service and high quality homes in desirable locations.  Against this backdrop, we expect another year of outsized growth and margin expansion in 2018."

"We are also excited after the close of our merger to enter 2018 as one combined company, leading the single-family rental sector with unparalleled quality of service, locations, scale, and operating efficiency.  We continue to believe this merger creates significant value for both residents and shareholders, and we have a clearly defined integration plan in place to deliver that value.  Our teams across the company are energized and intensely focused on execution in 2018, with respect to customer service, core operations, and integration.  We are currently on track with our integration plan and remain confident in our ability to achieve the expected synergies."

Financial Results

Net Loss

Net loss attributable to common shareholders for the three months ended December 31, 2017 was $46.0 million, an increase of $19.3 million from the prior year.  The increase in net loss attributable to common shareholders was primarily due to higher operating expenses, partially offset by an increase in revenues, resulting from the Company's merger with Starwood Waypoint Homes.  The increase in operating expenses included a $47.1 million increase in non-recurring expenses related to share-based compensation, IPO costs, merger costs, and severance, as well as a $5.5 million accrual for Hurricane Irma damage.  Exclusive of these non-recurring items, net income (loss) attributable to common shareholders improved by $33.2 million from the prior year.

Net loss attributable to common shareholders for the twelve months ended December 31, 2017 was $105.3 million, an increase of $27.1 million from the prior year.  The increase in net loss attributable to common shareholders was primarily due to higher operating expenses resulting from the Company's merger with Starwood Waypoint Homes, partially offset by an increase in revenues, lower interest expense, and higher gain on sale.  The increase in operating expenses included a $105.8 million increase in non-recurring expenses related to share-based compensation, IPO costs, merger costs, and severance, as well as a $21.5 million accrual for Hurricane Irma damage.  Exclusive of these non-recurring items, net income (loss) attributable to common shareholders improved by $100.2 million from the prior year.  For details, see the Consolidated Statements of Operations in this press release.

Core FFO

Year-over-year, Core FFO for the three months ended December 31, 2017 increased $57.3 million to $120.3 million, primarily due to an increase in NOI, driven by higher home count from the Company's merger with Starwood Waypoint Homes and an increase in Invitation Homes Same Store NOI of 9.3%.

Core FFO for the twelve months ended December 31, 2017 increased $95.6 million to $351.1 million, primarily due to an increase in NOI, driven by higher home count from the Company's merger with Starwood Waypoint Homes and an increase in Invitation Homes Same Store NOI of 7.4%.  For a reconciliation of net loss to Core FFO, see the Glossary and Reconciliations section of this press release.

AFFO

Year-over-year, AFFO for the three months ended December 31, 2017 increased $47.7 million to $100.1 million, primarily driven by the increase in Core FFO described above.

AFFO for the twelve months ended December 31, 2017 increased $89.0 million to $296.6 million, primarily driven by the increase in Core FFO described above.  For a reconciliation of net loss to AFFO, see the Glossary and Reconciliations section of this press release.

Operating Results — Invitation Homes

Note:  All IH Same Store data follows Invitation Homes' metric definitions as they have been defined historically.  Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.

Same Store NOI

For the Same Store portfolio of 42,689 homes, fourth quarter 2017 Same Store NOI increased 9.3% year-over-year on Same Store revenue growth of 4.8% and a 2.6% decrease in Same Store operating expenses.  As a result, Core NOI margin increased to 66.1% in the fourth quarter of 2017 from 63.1% in the fourth quarter of 2016.

FY 2017 Same Store NOI increased 7.4% year-over-year on Same Store revenue growth of 4.7% and Same Store operating expense growth of 0.5%.  As a result, Core NOI margin increased to 64.0% in FY 2017 from 62.1% in FY 2016.

Same Store Revenues

Fourth quarter 2017 Same Store revenue growth of 4.8% was driven by a 3.8% increase in average monthly rent, a 0.2% increase in average occupancy to 95.6%, and a 20.5% increase in other property income.

FY 2017 Same Store revenue growth of 4.7% was driven by a 4.2% increase in average monthly rent and a 20.6% increase in other property income, partially offset by a 0.4% decline in average occupancy to 95.7%.

Same Store Operating Expenses

Fourth quarter 2017 Same Store operating expenses decreased 2.6% year-over-year, driven by 13.1% lower repairs and maintenance expense, 8.7% lower personnel expense, 10.9% lower leasing and marketing expense, and 6.2% lower turnover expense.

FY 2017 Same Store operating expenses increased 0.5% year-over-year, driven primarily by 5.3% higher property taxes.  Insurance expense was lower by 11.0% year-over-year, and controllable expenses were 3.5% lower, driven by a 14.8% decline in personnel expense and an 11.8% decline in leasing and marketing expense.

Operating Results — Legacy Starwood Waypoint Homes

Note:  Legacy SWH refers to the homes owned by Starwood Waypoint Homes prior to its merger with Invitation Homes.  All Legacy SWH Same Store data follows Legacy SWH' metric definitions, and reflects results for the full three months of the quarters presented and full twelve months of the annual periods presented.  Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.

Same Store NOI

For the Same Store portfolio of 27,198 homes, fourth quarter 2017 Same Store NOI increased 4.7% year-over-year on Same Store Core revenue growth of 5.4% and a 6.7% increase in Same Store Core operating expenses.  As a result, Core NOI margin decreased to 66.5% in the fourth quarter of 2017 from 66.9% in the fourth quarter of 2016.

FY 2017 Same Store NOI increased 6.4% year-over-year on Same Store Core revenue growth of 4.8% and Same Store Core operating expense growth of 1.8%.  As a result, Core NOI margin increased to 65.5% in FY 2017 from 64.5% in FY 2016.

Same Store Core Revenues

Fourth quarter 2017 Same Store Core revenue growth of 5.4% was driven by a 4.3% increase in period average monthly rent and lower bad debt and concessions, partially offset by a 0.2% decrease in period average occupancy to 95.0%.

FY 2017 Same Store Core revenue growth of 4.8% was driven by a 4.4% increase in period average monthly rent, and a 0.1% increase in period average occupancy to 95.1%.

Same Store Core Operating Expenses

Fourth quarter 2017 Same Store Core operating expenses increased 6.7% year-over-year, driven primarily by 11.8% higher property taxes.  Excluding the impact of accruals for estimated reassessments triggered by the merger due to California's Proposition 13, Same Store Core operating expenses would have increased 5.8% year-over-year, resulting in Same Store NOI growth of 5.2%.  Core controllable expenses were 3.2% higher year-over-year.

FY 2017 Same Store Core operating expenses increased 1.8% year-over-year, driven primarily by 6.8% higher property taxes.  Excluding the impact of accruals for estimated reassessments triggered by the merger due to California's Proposition 13, Same Store Core operating expenses would have increased 1.6% year-over-year, resulting in Same Store NOI growth of 6.5%.  HOA expenses were 6.0% lower, insurance expenses were 5.0% lower, and Core controllable expenses declined by 2.1%, driven by lower repairs & maintenance and turn costs and other expenses.

Investment Management Activity

Invitation Homes acquired 34,670 homes as a result of its merger with Starwood Waypoint Homes that closed on November 16, 2017.  In addition to the homes acquired in the merger, Invitation Homes acquired 290 homes for $80.5 million in the fourth quarter of 2017, including estimated renovation costs, and sold 257 homes for gross proceeds of $57.9 million, resulting in total portfolio home count at December 31, 2017 of 82,570 homes.

Update on Hurricane Impact

As previously announced, Invitation Homes' and Starwood Waypoint Homes' portfolios experienced damage related to Hurricane Harvey and Hurricane Irma in the third quarter of 2017.  Additional homes that experienced hurricane damage were identified in the fourth quarter.  The Company has revised its estimate of total damages, and increased its casualty loss accrual by an incremental $5.5 million.

Merger and Integration Update

As previously announced, on November 16, 2017, Invitation Homes completed its merger with Starwood Waypoint Homes, bringing together the best practices, technology, and personnel from both firms to create the premier single-family rental company in the United States.  Integration efforts are progressing well and remain on track.  Current and prospective residents experienced a seamless transition and are already enjoying benefits including a new and improved resident website and further enhancements to the Company's unique ProCare service model.  In addition, all corporate and field leadership personnel and key operating strategy decisions have been made.  A plan has been put into place to roll out the unified operating strategy and platform to all markets over the next several quarters.

In-line with its initial estimate, the Company has identified $45 million to $50 million of projected annual run-rate cost synergies, and expects to realize 75% of those synergies on a run-rate basis by the end of 2018.  Furthemore, the Company believes there could be additional upside from the implementation of best practices across the organization.  As of February 21, 2018, approximately $20 million of annualized run-rate synergy savings had been realized, which includes approximately $9 million of share-based compensation expense.

Balance Sheet and Capital Markets Activity

At December 31, 2017, the Company had $1,145 million in availability through a combination of unrestricted cash and undrawn capacity on its credit facility.  The Company's total indebtedness at December 31, 2017 was $9,722 million, consisting of $7,612 million of secured debt and $2,110 million of unsecured debt.

During the fourth quarter of 2017, as previously announced, the Company closed a seven-year (inclusive of extension options), floating rate securitization loan (IH 2017-2) with total principal amount of $865 million, of which the Company retained $43 million to comply with risk retention requirements.  Total cost of funds for the loan was LIBOR + 150 basis points.  Net proceeds were used to repay in full IH 2014-2 and IH 2014-3.  The securitization transaction and associated repayments are expected to result in net annual interest expense savings of $4.9 million.

Subsequent to year end, the Company closed a seven-year (inclusive of extension options), floating rate securitization loan (IH 2018-1) with principal amount of $917 million, of which the Company retained $46 million to comply with risk retention requirements.  Total cost of funds for the loan is LIBOR + 124 basis points.  Net proceeds were used to repay in full the Company's last remaining 2019 secured debt maturities, CAH 2014-1 and CAH 2014-2.  The securitization transaction and associated repayments are expected to result in net annual interest expense savings of $4.2 million.

After giving effect to the IH 2018-1 securitization and associated repayment activity, weighted average years to maturity at December 31, 2017 would have been 4.7 years.  79% of debt would have been fixed rate or swapped to fixed rate, and the weighted average interest rate on total debt during the quarter would have been 3.33%.

Dividend

As previously announced on February 2, 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.11 per common share and operating partnership ("OP") unit, representing a 38% increase from the prior quarterly dividend.  The dividend will be paid on or before February 28, 2018 to shareholders and OP unit holders of record as of the close of business on February 13, 2018.

Full Year 2018 Guidance Details

2018 Same Store Presentation

In 2018, the presentation of Legacy SWH Same Store results will be discontinued.  In order to provide what the Company believes to be the most relevant operating metrics in 2018, results will be reported for one Same Store pool, and the Same Store definition will be modified to include homes acquired via the Starwood Waypoint Homes merger that were stabilized within the Legacy SWH portfolio prior to October 1, 2016, in addition to homes acquired and stabilized by Invitation Homes prior to October 1, 2016.

Merger Synergy Impact

Guidance is inclusive of anticipated synergy savings resulting from Invitation Homes' merger with Starwood Waypoint Homes.  Of identifiable total cost synergies of $45 to $50 million, the Company expects 75% to be realized on a run-rate basis by the end of 2018, consistent with initial expectations.  The majority of synergies, including those impacting NOI, are expected to be realized after transitioning to one operating platform for the Company's field and corporate teams, which the Company remains on track to complete later in the second half of 2018.  As a result, the Company anticipates that synergy realization in 2018 will be almost entirely related to property management and G&A savings rather than NOI increases, and weighted towards the second half of the year.  Synergies are expected to be more impactful to earnings growth in 2019 than in 2018, consistent with initial expectations.

Earnings Conference Call Information

Invitation Homes has scheduled a conference call at 11:00 a.m. Eastern Time on Thursday, February 22, 2018 to discuss results for the three months and the year ended December 31, 2017.  The domestic dial-in number is 1-888-317-6003, and the international dial-in number is 1-412-317-6061.  The passcode is 8873589.  An audio webcast may be accessed at www.invh.com.  A replay of the call will be available through March 22, 2018, and can be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using the replay passcode 10116270, 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 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 the Supplemental Information, and as applicable, reconciled to the most comparable GAAP measures.

About Invitation Homes

Invitation Homes is a leading owner and operator of single-family homes for lease, offering residents high-quality homes across America. With more than 80,000 homes for lease in 17 markets across the country, Invitation Homes is meeting changing lifestyle demands by providing residents access to updated homes with features they value, 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 high-touch service that continuously enhances residents' living experiences and provides homes where individuals and families can thrive.

Investor Relations Contact

Greg Van Winkle
Phone: 844.456.INVH (4684)
Email: IR@InvitationHomes.com

Media Relations Contact

Claire Parker
Phone: 202.257.2329
Email: Media@InvitationHomes.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") 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 anticipated benefits of the merger with Starwood Waypoint Homes, 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," "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 associated with achieving expected revenue synergies or cost savings, risks inherent to the single-family rental industry sector and the Company's business model, macroeconomic factors beyond the Company's  control, competition in identifying and acquiring the Company's properties, competition in the leasing market for quality residents, increasing property taxes, homeowners' association fees and insurance costs, the Company's dependence on third parties for key services, risks related to evaluation of properties, poor resident selection and defaults and non-renewals by the Company's residents, performance of the Company's information technology systems, and risks related to the Company's indebtedness. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements.  Additional factors that could cause the Company's results to differ materially from those described in the forward-looking statements can be found under (i) the section entitled "Part I-Item 1A. Risk Factors," of the Annual Report on Form 10-K for the fiscal year ended December 31,  2016, filed with the Securities and Exchange Commission (the "SEC") and (ii) the caption entitled "Risk Factors" in the Company's definitive joint proxy statement/information statement and prospectus filed with the SEC under Rule 424(b)(3), 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 filings with the SEC. The forward-looking statements speak only as of the date of this press release, and we expressly disclaim 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.

Glossary and Reconciliations

Glossary:

Average Monthly Rent

Average monthly rent represents the average of the contracted monthly rent for occupied properties in an identified population of homes for the period indicated.  Rents for the Total Portfolio and IH Same Store portfolio are reflected net of concessions, and rents for the Legacy SWH Same Store portfolio are presented gross of concessions, consistent with prior metric definitions.

Core NOI Margin

Core NOI margin for an identified population of homes is calculated by dividing NOI by Core revenues attributable to such population.

Core Operating Expenses

Core operating expenses for an identified population of homes reflect property operating and maintenance expenses, excluding any expenses recovered by residents and/or bad debt attributable to such population.

Core Revenues

Core revenues for an identified population of homes reflects total revenues, net of any resident recoveries and/or bad debt attributable to such population.

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 the National Association of Real Estate Investment Trusts ("NAREIT") as net income or loss (computed in accordance with GAAP) excluding net 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.

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, as well as gains or losses related to sales of previously depreciated homes, from GAAP net income or loss.

The GAAP measure most directly comparable to FFO is net income or loss. FFO is not used as a measure of our liquidity and should not be considered an alternative to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our FFO may not be comparable to the FFO of other companies due to the fact that not all companies use the same definition of FFO. Accordingly, there can be no assurance that our basis for computing this non-GAAP measures is comparable with that of other companies.

We believe that Core FFO and Adjusted FFO are also meaningful supplemental measures of our operating performance for the same reasons as FFO and are further helpful to investors as they provides a more consistent measurement of our performance across reporting periods by removing the impact of certain items that are not comparable from period to period. We define Core FFO as FFO adjusted for noncash interest expense related to amortization of deferred financing costs and discounts related to our financing arrangements, noncash interest expense for derivatives, share-based compensation expense, IPO related expenses, merger and transaction-related costs, severance expenses, casualty losses, net, and acquisition costs, as applicable. We define Adjusted FFO as Core FFO less recurring capital expenditures that are necessary to help preserve the value of and maintain functionality of our homes.

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 (loss) to FFO, Core FFO, and Adjusted FFO.

Legacy Starwood Waypoint Homes (Legacy SWH)

Legacy Starwood Waypoint Homes refers to the homes owned by Starwood Waypoint Homes prior to its merger with Invitation Homes, and the metric definitions used by Starwood Waypoint Homes prior to its merger with Invitation Homes.

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.

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 portfolios.  For both the IH Same Store portfolio and the SWH Same Store portfolio, Same Store NOI is defined as rental revenues and other property income less property operating and maintenance expense, with those revenues and expenses defined in line with IH definitions for the IH Same Store portfolio and with Legacy SWH definitions for the Legacy SWH 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 portfolios.

Occupancy (Period Average)

Period average occupancy for an identified population of homes represents (i) the number of days that the homes in such population were occupied, divided by (ii) the total number of owned days in the measurement period for the homes in that population.

Occupancy (Period End)

Period end occupancy for an identified population of homes represents (i) the number of occupied homes as of the last day of the measurement period divided by (ii) the number of homes in that population as of the last day of the measurement period.

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 difference between the monthly rent from an expiring lease and the monthly rent from the next lease.  For these calculations, rents for the Total Portfolio and IH Same Store portfolio are reflected net of concessions, and rents for the Legacy SWH Same Store portfolio are presented gross of concessions, consistent with prior metric definitions.

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.  Blended rental rate growth represents the blended average of net effective rental rate growth for both new and renewal leases.

Same Store / Same Store Portfolio

For Invitation Homes (IH), Same Store or Same Store portfolio includes, for a given reporting period, homes that have been stabilized (defined as homes that have (i) completed an upfront renovation and (ii) entered into at least one post-renovation Invitation Homes lease) for at least 90 days prior to the first day of the prior-year measurement period and excludes homes that have been sold and homes that have been designated for sale but have not yet entered into a written sale agreement during such reporting period. IH Same Store portfolios are established as of January 1st of each calendar year. Therefore, any home included in the IH Same Store portfolio will have satisfied the conditions described in clauses (i) and (ii) above prior to October 3rd of the year prior to the first year of the comparison period. 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.

For Legacy Starwood Waypoint Homes, Same Store or Same Store portfolio includes, for a given reporting period, homes that have been stabilized for at least fifteen (15) months prior to the start of the current measurement period, excluding any homes that have been disposed of, removed from service or returned to the development period for significant renovation.

Total Homes / Total Portfolio

Total homes or total portfolio refers to the total number of homes we own, 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 for Invitation Homes, and the number of homes that had completed initial renovation/rehabilitation and were leasable during the specific period for Legacy Starwood Waypoint Homes, consistent with prior metric definitions.

Reconciliation of Non-GAAP Measures: