INVITATION HOMES INC. DALLAS, Aug. 10, 2017 /PRNewswire/ -- Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the "Company"), a leading owner and operator of single-family homes for lease in the United States, today announced its second quarter 2017 financial and operating results.
Second Quarter 2017 Highlights
-- Year-over-year, total revenues increased 5.1% to $242 million, total
property operating and maintenance expenses increased 1.7% to $93
million, net income increased to $6 million, and total NOI increased
7.3% to $149 million.
-- Same Store NOI grew 6.3% year-over-year on 4.6% Same Store revenue
growth and 1.9% Same Store operating expense growth. Excluding the
impact of property taxes attributable to first quarter 2017 that were
booked in second quarter 2017 when California property tax reassessments
related to the IPO became estimable, Same Store NOI growth in second
quarter 2017 would have been 6.9%.
-- Same Store Core NOI margin increased to 62.9% in the second quarter of
2017 from 61.5% in the second quarter of 2016. Excluding the impact of
property taxes attributable to first quarter 2017 that were booked in
second quarter 2017 when California property tax reassessments related
to the IPO became estimable, Same Store Core NOI margin in second
quarter 2017 would have been 63.2%.
-- Same Store blended net effective rental rate growth was 5.1% on leases
signed in the second quarter of 2017.
-- Same Store average occupancy was 95.9%.
-- Same Store other property income grew 22.4% year-over-year.
-- Closed on a $1.0 billion, ten-year, 4.2% fixed rate mortgage loan, with
principal and interest payments guaranteed by Fannie Mae.
-- Prepaid $930 million of mortgage debt with Fannie Mae proceeds, and an
additional $100 million with excess cash flow.
Chief Executive Officer John Bartling comments: "Invitation Homes continued to achieve strong internal NOI growth in the second quarter of 2017. As expected, new lease rental rate growth accelerated seasonally from the first quarter to the second quarter. In addition, we continued to make progress on our strategic operational initiatives related to lease expiration optimization, other income opportunities, and cost efficiency."
"Supply/demand fundamentals remain favorable, particularly in the Western US, and we believe our differentiated locations, product, service, and professionals position us well to capitalize on these industry tailwinds. We remain on track to achieve 6.5% to 7.5% Same Store NOI growth for the full year."
Financial Results
Net Income (Loss), FFO, Core FFO, and AFFO Per Share - Diluted
Q2 2017 YTD 2017
------- --------
Net
income
(loss)
(1) $0.02 $(0.06)
FFO
(2) 0.20 0.23
Core
FFO
(2) 0.25 0.50
AFFO
(2) 0.21 0.43
(1) No shares of common stock were
outstanding prior to the close of
the Company's initial public
offering. As such, net loss per
share for YTD 2017 has been
calculated based on operating
results for the period February 1,
2017 through June 30, 2017, and the
weighted average number of shares
outstanding during that period, in
accordance with GAAP.
(2) FFO, Core FFO, and AFFO per share
for YTD 2017 have been calculated
based on operating results for the
full period from January 1, 2017
through June 30, 2017, and as if
weighted average shares outstanding
from February 1, 2017 through June
30, 2017 were outstanding for the
full period from January 1, 2017
through June 30, 2017.
Net Income (Loss)
Net income for the three months ended June 30, 2017 was $5.5 million, an increase of $25.2 million from the prior year's net loss. The increase in net income (loss) was primarily due to higher revenues, lower interest expense, and an increase in net gain on sale of property, partially offset by higher total operating expenses. The increase in total operating expenses included a $4.1 million increase in non-recurring G&A and property management expense items including share-based compensation, IPO costs, and severance expense. Exclusive of these non-recurring G&A and property management items, net income (loss) improved by $29.3 million from the prior year.
Net loss for the six months ended June 30, 2017 was $36.9 million, an increase of $7.2 million from the prior year. The increase in net loss was primarily due to a $51.0 million increase in non-recurring or non-cash general and administrative and property management items including share-based compensation, IPO costs, and severance expense. Exclusive of non-recurring G&A and property management items, net income (loss) improved by $43.7 million from the prior year, primarily due to higher revenues, lower interest expense, and an increase in net gain on sale. For details, see the Condensed Consolidated Statements of Operations in this press release.
Core FFO
Year-over-year, Core FFO for the three months ended June 30, 2017 increased 17.9% to $77.2 million, primarily due to an increase in NOI, driven by higher revenues. Revenue growth was driven by an increase in average rental rate per home that more than offset a slight decline in home count. Lower interest expense, net of non-cash interest, also contributed to the increase in Core FFO. For a reconciliation of net income (loss) to Core FFO, see the Glossary and Reconciliations section of this press release.
Core FFO for the six months ended June 30, 2017 increased 19.7% to $155.4 million, primarily due to an increase in NOI, driven by higher revenues. Revenue growth was driven by an increase in average rental rate per home and higher occupancy that more than offset a slight decline in home count. Lower interest expense, net of non-cash interest, also contributed to the increase in Core FFO. For a reconciliation of net income (loss) to Core FFO, see Schedule 1 of the Supplemental Financial Information.
AFFO
Year-over-year, AFFO for the three months ended June 30, 2017 increased 21.5% to $65.6 million, primarily driven by the increase in Core FFO described above.
AFFO for the six months ended June 30, 2017 increased 25.9% to $134.5 million, primarily driven by the increase in Core FFO described above, as well as a 9.0% decline in recurring capital expenditures. For a reconciliation of net income (loss) to AFFO per share, see Schedule 1 of the Supplemental Financial Information.
Operating Results
Same Store Operating Results Snapshot
Number of homes in Same
Store portfolio: 42,904
Q2 2017 Q2 2016 YTD 2017 YTD 2016
------- ------- -------- --------
Revenue growth (year-
over-year) (1) 4.6% 5.1% 4.7% 5.1%
Operating Expense growth
(year-over-year) (1) 1.9% 0.4% 2.4% 1.5%
NOI growth (year-over-
year) (1) 6.3% 8.4% 6.1% 7.4%
Core NOI margin 62.9% 61.5% 63.6% 62.4%
Average occupancy (2) 95.9% 96.4% 95.8% 96.4%
Turnover rate (annualized) 38.7% 38.8% 35.2% 34.9%
Net effective rental rate
growth (lease-over-
lease):
New leases 4.9% 7.2% 4.2% 6.1%
Renewals 5.1% 5.4% 5.2% 5.3%
Blended 5.1% 6.2% 4.8% 5.6%
(1) Same Store revenue, operating
expense, and NOI growth for
Q2 2016 and YTD 2016 are for
the prior year's same store
pool of 36,469 homes.
(2) For the total portfolio,
occupancy decreased to 95.0%
in Q2 2017 from 95.1% in Q2
2016, and increased to 95.0%
in YTD 2017 from 94.8% in
YTD 2016.
Same Store NOI
For the Same Store portfolio of 42,904 homes, second quarter 2017 Same Store NOI increased 6.3% year-over-year on Same Store revenue growth of 4.6% and Same Store expense growth of 1.9%. As a result, Core NOI margin increased to 62.9% in the second quarter of 2017 from 61.5% in the second quarter of 2016. Excluding the impact of property taxes attributable to first quarter 2017 that were booked in second quarter 2017 when California property tax reassessments related to the IPO became estimable, Same Store NOI growth in second quarter 2017 would have been 6.9%, and Same Store Core NOI margin would have been 63.2%.
YTD 2017 Same Store NOI increased 6.1% year-over-year on Same Store revenue growth of 4.7% and Same Store expense growth of 2.4%. As a result, Core NOI margin increased to 63.6% in YTD 2017 from 62.4% in YTD 2016.
Same Store Revenues
Second quarter 2017 Same Store revenue growth of 4.6% was driven by a 4.3% increase in average monthly rent and a 22.4% increase in other property income, partially offset by a 0.5% decline in average occupancy to 95.9%.
YTD 2017 Same Store revenue growth of 4.7% was driven by a 4.4% increase in average monthly rent and a 22.3% increase in other property income, partially offset by a 0.6% decline in average occupancy to 95.8%.
Same Store Expenses
Second quarter 2017 Same Store expenses increased 1.9% year-over-year, driven primarily by 11.3% higher property taxes. California property tax reassessments related to the IPO became estimable in second quarter 2017, and the incremental taxes accrued in the first six months of 2017 for expected reassessments were booked entirely in second quarter 2017. Excluding the impact of property taxes attributable to first quarter 2017 that were booked in second quarter 2017, Same Store property taxes in second quarter 2017 would have increased by 9.1%, and Same Store expenses would have increased by 1.0%. Controllable expenses were 3.9% lower year-over-year, driven primarily by an 18.8% decline in personnel expense. Insurance expense was also lower by 23.8% year-over-year.
YTD 2017 Same Store expenses increased 2.4% year-over-year, driven primarily by 9.2% higher property taxes. Controllable expenses were 1.9% lower year-over-year, driven primarily by a 17.4% decline in personnel costs. Insurance expense was also lower by 17.8% year-over-year.
Investment Management Activity
In the second quarter of 2017, the Company acquired 229 homes for $64.1 million, including estimated renovation cost, and sold 422 homes for gross proceeds of $58.7 million, resulting in total portfolio home count at June 30, 2017 of 47,725 homes. Dispositions in the second quarter of 2017 resulted in a gain on sale, net of tax, of approximately $10.2 million.
Year-to-date, the Company acquired 350 homes for $95.3 million, including estimated renovation cost, and sold 923 homes for gross proceeds of $136.4 million. Dispositions year-to-date resulted in a gain on sale, net of tax, of approximately $24.5 million.
Balance Sheet and Capital Markets Activity
At June 30, 2017, the Company had $1,159 million in availability through a combination of unrestricted cash and undrawn capacity on its credit facility.
The Company's total indebtedness at June 30, 2017 was $5,681 million, consisting of $4,181 million of secured debt and $1,500 million of unsecured debt. Weighted average years to maturity at quarter end was 4.5 years, with no debt scheduled to mature before September 2019. 80% of debt at quarter end was fixed rate or swapped to fixed rate, and the weighted average interest rate on total debt during the quarter was 3.7%.
During the quarter, as previously announced, the Company closed a ten-year fixed rate securitization loan with a total principal amount of $1,000 million. The securitization loan is comprised of two components. Class A certificates representing an indirect interest in the Class A component of the loan, which totaled $944.5 million and represented the entirety of the gross proceeds to the Company, were offered to investors, and feature principal and interest payments that benefit from a guaranty by Fannie Mae. Class B certificates representing an interest in the Class B component of the loan, which totaled $55.5 million, were retained by the Company to comply with the United States risk retention requirements. The total cost of funds for the loan is fixed at 4.23%. Structural features of the transaction include the right to substitute properties (subject to certain loan to value, debt service coverage, and geographic concentration tests being met), as well as the right to release properties from the loan by prepaying the loan in an amount equal to 105% to 120% of the allocated loan amount associated with any properties released (subject to certain loan to value, debt service coverage, and geographic concentration tests being met, as well as the payment of any yield maintenance amounts required). Additionally, twice during the first five years of the loan, the Company will have the ability to exercise special release rights to release properties from the collateral pool (without any prepayment of the underlying loan) to reset the size of the collateral pool based on asset appreciation and cash flow growth. Following any such special release, the allocated loan amounts related to the remaining homes in the collateral pool will be resized based on loan-level loan to value and debt service coverage tests, and the remaining collateral pool must continue to meet certain geographic concentration tests. Net proceeds of approximately $930 million were used to repay the remaining outstanding balance of the IH1 2014-1 securitization and to voluntarily prepay $510 million of the IH1 2014-3 securitization.
In addition, as previously announced, the Company repaid an additional $100 million of the IH1 2014-3 securitization with cash on hand in June 2017.
Full Year 2017 Guidance
2017 Guidance (1)
FY 2017
Guidance
--------
Core FFO per share -
diluted (2) $0.96 - $1.04
AFFO per share - diluted
(2) $0.80 - $0.88
Same Store revenue growth 4.75% - 5.25%
Same Store operating
expense growth 1.50% - 2.00%
Same Store NOI growth 6.50% - 7.50%
Same Store Core NOI
margin 63.0% - 64.0%
(1) Guidance excludes any
potential impact from
investment activity.
(2) Core FFO and AFFO guidance is
for operating results for the
full year from January 1,
2017 through December 31,
2017, and assumes that
estimated weighted average
shares outstanding from
February 1, 2017 through
December 31, 2017 were
outstanding for the full year
2017.
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, or a reconciliation of
the forward-looking non-GAAP financial
measures of Core FFO per share, AFFO per
share, Same Store revenue growth, Same
Store operating expense growth, Same
Store NOI growth, and Same Store Core NOI
margin to the comparable GAAP financial
Supplemental Information
The full text of the Earnings Release and Supplemental Information are available on Invitation Homes' Investor Relations website at ir.invitationhomes.com.
Glossary & Reconciliations of Non-GAAP Financial Operating Measures
Financial and operating measures found in the Earnings Release and the 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 in 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 in desirable neighborhoods across America. With nearly 50,000 homes for lease in 13 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 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 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 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"), 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.
Condensed Consolidated Balance Sheets
($ in thousands, except per share amounts)
June 30, December 31,
2017 2016
---- ----
(unaudited)
Assets:
Investments in single-family residential
properties:
Land $2,716,934 $2,703,388
Building and improvements 7,116,587 7,091,457
--------- ---------
9,833,521 9,794,845
Less: accumulated depreciation (917,961) (792,330)
-------- --------
Investments in single-family residential
properties, net 8,915,560 9,002,515
Cash and cash equivalents 158,934 198,119
Restricted cash 138,264 222,092
Other assets, net 306,568 309,625
Total assets $9,519,326 $9,732,351
========== ==========
Liabilities:
Mortgage loans, net $4,158,666 $5,254,738
Term loan facility, net 1,486,529 -
Credit facilities, net - 2,315,541
Accounts payable and accrued expenses 110,919 88,052
Resident security deposits 88,781 86,513
Other liabilities 30,460 30,084
Total liabilities 5,875,355 7,774,928
--------- ---------
Equity:
Shareholders' equity
Preferred stock, $0.01 par value per share,
900,000,000 shares authorized, none
outstanding at June 30, 2017 - -
Common stock, $0.01 par value per share,
9,000,000,000 shares authorized, 310,376,634
outstanding at June 30, 2017 3,104 -
Additional paid-in-capital 3,675,094 -
Accumulated deficit (38,799) -
Accumulated other comprehensive income 4,572 -
----- ---
Total shareholders' equity 3,643,971 -
Combined equity - 1,957,423
--- ---------
Total equity 3,643,971 1,957,423
Total liabilities and equity $9,519,326 $9,732,351
========== ==========
Condensed Consolidated Statements of Operations
($ in thousands, except per share amounts) (unaudited)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
------- ------- -------- --------
Revenues:
Rental revenues $228,504 $219,354 $454,600 $433,677
Other property income 13,712 11,142 26,366 21,321
------ ------ ------ ------
Total revenues 242,216 230,496 480,966 454,998
------- ------- ------- -------
Operating expenses:
Property operating and
maintenance 92,840 91,281 181,008 176,248
Property management
expense 9,135 7,530 20,584 14,923
General and
administrative 18,426 15,408 76,692 30,768
Depreciation and
amortization 67,515 66,079 135,092 131,781
Impairment and other 706 546 1,910 363
--- --- ----- ---
Total operating expenses 188,622 180,844 415,286 354,083
------- ------- ------- -------
Operating income 53,594 49,652 65,680 100,915
------ ------ ------ -------
Other income (expenses):
Interest expense (57,358) (70,523) (125,930) (140,800)
Other, net (869) 185 (1,095) 32
---- --- ------ ---
Total other income
(expenses) (58,227) (70,338) (127,025) (140,768)
------- ------- -------- --------
Loss from continuing
operations (4,633) (20,686) (61,345) (39,853)
Gain on sale of
property, net of tax 10,162 1,020 24,483 10,212
------ ----- ------ ------
Net income (loss) $5,529 $(19,666) $(36,862) $(29,641)
====== ======== ======== ========
February 1, 2017
through
Q2 2017 June 30, 2017
------- -------------
Net income (loss)
available to common
shareholders -basic
and diluted $5,420 $(20,092)
====== ========
Weighted average common
shares outstanding -
basic 311,771,221 311,723,463
=========== ===========
Weighted average common
shares outstanding -
diluted 312,271,578 311,723,463
=========== ===========
Net income (loss) per
common share -basic $0.02 $(0.06)
===== ======
Net income (loss) per
common share -diluted $0.02 $(0.06)
===== ======
Dividends declared per
common share $0.06 $0.06
===== =====
Glossary and Reconciliations
Glossary:
Average Estimated Invested Basis
Average estimated cost basis on acquisition represents the sum of purchase price, any closing adjustments, and estimated upfront renovation expense for an acquired home or population of homes.
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 relevant period and reflects rent concessions amortized over the life of the related lease.
Average Occupancy
Average occupancy for an identified population of homes represents (i) the number of days that the homes available for lease in such population were occupied, divided by (ii) the total number of available days in the measurement period for the homes in that population.
Core NOI Margin
Core NOI margin for an identified population of homes is calculated by dividing NOI by total revenues, net of resident recoveries 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, offering related expenses, 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.
Please see "Reconciliation of Non-GAAP measures" below for a reconciliation of GAAP net income (loss) to FFO, Core FFO, and Adjusted FFO.
Net Effective Rental Rate Growth
Net effective 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, in each case, net of any amortized concessions. 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 net effective rental rate growth represents the blended average of net effective rental rate growth for both new and renewal leases.
Net Operating Income (NOI)
NOI is a non-GAAP measure often used to evaluate the performance of real estate companies. We define NOI for an identified population of homes as rental revenues and other property income less property operating and maintenance expense (which consists primarily of property taxes, insurance, HOA fees (when applicable), market-level personnel expenses, repairs and maintenance, leasing costs and marketing). NOI excludes: interest expense; depreciation and amortization; general and administrative expense; property management expense; impairment and other; acquisition costs; (gain) loss on sale of property, net of tax; and interest income and other miscellaneous income and expenses.
The GAAP measure most directly comparable to NOI is net income or loss. NOI is not used as a measure of liquidity and should not be considered as an alternative to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our NOI may not be comparable to the NOI of other companies due to the fact that not all companies use the same definition of NOI. Accordingly, there can be no assurance that our basis for computing this non-GAAP measure is comparable with that of other companies.
We believe that Same Store NOI is also a meaningful supplemental measure of our operating performance for the same reasons as NOI and is further helpful to investors as it provides a more consistent measurement of our performance across reporting periods by reflecting NOI for homes in our Same Store portfolio.
See "Reconciliation of Non-GAAP Measures" below for a reconciliation of GAAP net income (loss) to NOI for our total portfolio and NOI for our Same Store portfolio.
Same Store / Same Store Portfolio
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. Same Store portfolios are established as of January 1st of each calendar year. Therefore, any home included in the 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.
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. To the extent the measurement period shown is less than 12 months, the turnover rate will be reflected on an annualized basis.
Reconciliation of Non-GAAP Measures:
Reconciliation of Net Income (Loss) to FFO, Core FFO, and AFFO
($ in thousands, except per share amounts) (unaudited)
FFO Reconciliation Q2 2017 Q2 2016 YTD 2017 YTD 2016
------------------ ------- ------- -------- --------
Net income (loss)
available to common
shareholders $5,420 $(19,666) $(36,971) $(29,641)
Net income (loss)
available to
participating
securities 109 - 109 -
Depreciation and
amortization on real
estate assets 66,699 64,775 133,352 129,184
Impairment on
depreciated real
estate investments 95 519 1,132 519
Net gain on sale of
previously depreciated
investments in real
estate (10,162) (1,020) (24,483) (10,212)
FFO $62,161 $44,608 $73,139 $89,850
======= ======= ======= =======
Core FFO Reconciliation Q2 2017 Q2 2016 YTD 2017 YTD 2016
----------------------- ------- ------- -------- --------
FFO $62,161 $44,608 $73,139 $89,850
Noncash interest
expense 5,137 15,622 20,271 29,816
Share-based
compensation expense 8,216 4,106 52,460 8,312
Offering related
expenses 656 - 8,287 -
Severance expense 392 1,102 437 1,908
Casualty losses, net 611 27 778 (156)
Acquisition costs - 7 - 42
Core FFO $77,173 $65,472 $155,372 $129,772
======= ======= ======== ========
AFFO Reconciliation Q2 2017 Q2 2016 YTD 2017 YTD 2016
------------------- ------- ------- -------- --------
Core FFO $77,173 $65,472 $155,372 $129,772
Recurring capital
expenditures (11,605) (11,495) (20,834) (22,907)
AFFO $65,568 $53,977 $134,538 $106,865
======= ======= ======== ========
Weighted average common
shares outstanding -
diluted (1) 312,271,578 311,723,463
FFO per share -diluted
(1) $0.20 $0.23
Core FFO per share -
diluted (1) $0.25 $0.50
AFFO per share -
diluted (1) $0.21 $0.43
(1) No shares of common stock were
outstanding prior to the
close of the Company's
initial public offering. For
YTD 2017, FFO, Core FFO, and
AFFO per share have been
calculated based on operating
results for the full period
from January 1, 2017 through
June 30, 2017, and as if
weighted average shares
outstanding from February 1,
2017 through June 30, 2017
were outstanding for the full
period from January 1, 2017
through June 30, 2017.
Reconciliation of Total Revenues to Same Store Total Revenues and Same Store Core Revenues
(in thousands) (unaudited)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
------- ------- -------- --------
Total revenues
(total portfolio) $242,216 $230,496 $480,966 $454,998
Non-Same Store
total revenues (22,578) (20,482) (45,456) (38,886)
Total revenues
(Same Store
portfolio) 219,638 210,014 435,510 416,112
Resident
recoveries (Same
Store portfolio) (3,873) (2,446) (7,336) (4,877)
------ ------ ------ ------
Core revenues
(Same Store
portfolio) $215,765 $207,568 $428,174 $411,235
======== ======== ======== ========
Reconciliation of Property Operating and Maintenance to Same Store Operating Expenses and Same Store Core Operating Expenses
(in thousands) (unaudited)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
------- ------- -------- --------
Property operating
and maintenance
expenses (total
portfolio) $92,840 $91,281 $181,008 $176,248
Non-Same Store
operating
expenses (8,855) (8,841) (17,884) (16,937)
Operating expenses
(Same Store
portfolio) 83,985 82,440 163,124 159,311
Resident
recoveries (Same
Store portfolio) (3,873) (2,446) (7,336) (4,877)
------ ------ ------ ------
Core operating
expenses (Same
Store portfolio) $80,112 $79,994 $155,788 $154,434
======= ======= ======== ========
Reconciliation of Net Income (Loss) to NOI, Same Store NOI, and Same Store Core NOI Margin
(in thousands) (unaudited)
Q2 2017 Q2 2016 YTD 2017 YTD 2016
------- ------- -------- --------
Net income (loss)
available to
common
shareholders $5,420 $(19,666) $(36,971) $(29,641)
Net income (loss)
available to
participating
securities 109 - 109 -
Interest expense 57,358 70,523 125,930 140,800
Depreciation and
amortization 67,515 66,079 135,092 131,781
General and
administrative 18,426 15,408 76,692 30,768
Property management
expense 9,135 7,530 20,584 14,923
Impairment and
other 706 546 1,910 363
Acquisition costs - 7 - 42
Gain on sale of
property, net of
tax (10,162) (1,020) (24,483) (10,212)
Other 869 (192) 1,095 (74)
NOI (total
portfolio) 149,376 139,215 299,958 278,750
Non-Same Store NOI (13,723) (11,641) (27,572) (21,949)
------- ------- ------- -------
NOI (Same Store
portfolio) $135,653 $127,574 $272,386 $256,801
======== ======== ======== ========
Core revenues (Same
Store portfolio) $215,765 $207,568 $428,174 $411,235
======== ======== ======== ========
Core NOI margin
(Same Store
portfolio) 62.9% 61.5% 63.6% 62.4%
==== ==== ==== ====
View original content with multimedia:http://www.prnewswire.com/news-releases/invitation-homes-reports-second-quarter-2017-results-300502285.html
SOURCE Invitation Homes
