Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 1
Earnings Press Release
Invitation Homes Reports First Quarter 2022 Results
Dallas, TX, April 27, 2022 — Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the "Company"), the nation's premier single-family home leasing company, today announced its Q1 2022 financial and operating results.
First Quarter 2022 Highlights
•Year over year, total revenues increased 12.0% to $532 million, property operating and maintenance costs increased 8.3% to $182 million, net income available to common stockholders increased 61.3% to $92 million, and net income per diluted common share increased 51.0% to $0.15.
•Year over year, Core FFO per share increased 13.5% to $0.40, and AFFO per share increased 11.9% to $0.35.
•Same Store NOI increased 11.7% year over year on 9.4% Same Store Core Revenues growth and 4.5% Same Store Core Operating Expenses growth.
•Same Store Average Occupancy was 98.1%, down 30 basis points year over year.
•Same Store new lease rent growth of 14.8% and Same Store renewal rent growth of 9.7% drove Same Store blended rent growth of 10.9%, up 550 basis points year over year.
•Acquisitions by the Company and the Company's joint ventures totaled 822 homes for $341 million while dispositions totaled 147 homes for $54 million.
•As previously announced, the Company priced a public offering on March 25, 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. The offering closed subsequent to quarter end on April 5, 2022, with net proceeds used primarily to voluntarily prepay secured indebtedness and for general corporate purposes.
•As previously announced, the Company entered into an agreement with Rockpoint Group, L.L.C. (“Rockpoint”) in March 2022 to form a new joint venture partnership that will acquire homes in premium locations and at higher price points relative to the homes currently targeted by the Company and its previous venture with Rockpoint. As of March 31, 2022, the new joint venture had not yet acquired any homes.
President & Chief Executive Officer Dallas Tanner comments:
"Our solid momentum continued through the start of this year with strong operating results and growth. Demand for our high-quality, well-located homes remains robust and continues to outpace available supply in our markets. These factors, combined with our premier resident experience, have contributed to record-high retention across our portfolio, and demonstrate to us that the choice and flexibility we offer our residents is highly desired. We believe our 10-year history of offering best-in-class service and continuously improving the resident experience has contributed significantly toward our outperformance, and we remain confident in our outlook and ability to execute throughout the year.”
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 2
Financial Results
Net Income, FFO, Core FFO, and AFFO Per Share — Diluted(1)
Q1 2022
Q1 2021
Net income
$
0.15
$
0.10
FFO
0.38
0.32
Core FFO
0.40
0.36
AFFO
0.35
0.31
(1)See "Reconciliation of FFO, Core FFO, and AFFO," footnotes (1) and (2), for details on the treatment of convertible notes in each specific period presented in the table.
Net Income
Net income per share for Q1 2022 was $0.15, compared to net income per share of $0.10 for Q1 2021. Total revenues and total property operating and maintenance expenses for Q1 2022 were $532 million and $182 million, respectively, compared to $475 million and $168 million, respectively, for Q1 2021.
Core FFO
Year over year, Core FFO per share for Q1 2022 increased 13.5% to $0.40, primarily due to NOI growth and interest expense savings.
AFFO
Year over year, AFFO per share for Q1 2022 increased 11.9% to $0.35, 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:
75,493
Q1 2022
Q1 2021
Core Revenues growth (year over year)
9.4
%
Core Operating Expenses growth (year over year)
4.5
%
NOI growth (year over year)
11.7
%
Average Occupancy
98.1
%
98.4
%
Bad debt % of gross rental revenues (1)
1.9
%
2.2
%
Turnover Rate
4.6
%
5.4
%
Rental Rate Growth (lease-over-lease):
Renewals
9.7
%
4.3
%
New leases
14.8
%
8.0
%
Blended
10.9
%
5.4
%
(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.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 3
Revenue Collections Update
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Pre-COVID Average (2)
Revenues collected % of revenues due: (1)
Revenues collected in same month billed
91
%
92
%
92
%
92
%
96
%
Late collections of prior month billings
6
%
6
%
5
%
6
%
3
%
Total collections
97
%
98
%
97
%
98
%
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 75,493 homes, Same Store NOI for Q1 2022 increased 11.7% year over year on Same Store Core Revenues growth of 9.4% and Same Store Core Operating Expenses growth of 4.5%.
Same Store Core Revenues
Same Store Core Revenues growth for Q1 2022 of 9.4% year over year was driven by a 8.3% increase in Average Monthly Rent, a 30 basis points year over year improvement in bad debt as a percentage of gross rental revenue, and a 47.1% increase in other income, net of resident recoveries.
Same Store Core Operating Expenses
Same Store Core Operating Expenses for Q1 2022 increased 4.5% year over year, driven by a 4.1% increase in Same Store fixed expense, an 18.9% increase in repairs and maintenance expense, net of resident recoveries, and a 11.8% increase in utilities and property administrative expenses, net of resident recoveries, partially offset by a 12.4% decline in turnover expenses, net of resident recoveries.
Investment Management Activity
Acquisitions for Q1 2022 totaled 822 homes for $341 million through diversified acquisition channels. This included 518 wholly owned homes for $218 million in addition to 304 homes for $123 million in the Company's joint ventures. Dispositions for Q1 2022 included 141 wholly owned homes for gross proceeds of $52 million and six homes for gross proceeds of $2 million in one of the Company's joint ventures.
As previously announced, the Company entered into an agreement with Rockpoint to form a new joint venture partnership (the "2022 Rockpoint JV") that will acquire homes in premium locations and at higher price points relative to the homes currently targeted by the Company and its previous venture with Rockpoint that the two companies announced in October 2020 (the "2020 Rockpoint JV"). The 2022 Rockpoint JV will be capitalized with a total equity commitment of $300 million, of which $50 million (16.7%) will be committed by Invitation Homes and $250 million (83.3%) will be committed by Rockpoint. A total of approximately $750 million (including debt) is expected to be deployed by the 2022 Rockpoint JV to acquire and renovate single-family homes in premium neighborhoods that command price points and rents that average 30%-60% higher than those targeted by Invitation Homes’ traditional investment strategy. The 2022 Rockpoint JV will focus on top-quality submarkets within the Western US, Southeast US, Florida, and Texas. Invitation Homes will provide investment, asset management, and property management services, for which it will earn asset management and property management fees and have the opportunity to earn a promoted interest subject to certain performance thresholds. As of March 31, 2022, the 2022 Rockpoint JV had not yet acquired any homes.
As previously announced, the Company has agreed to invest $250 million with Pathway Homes, a new real estate company that provides unique opportunities for customers to identify and purchase a home whereby they are able to first lease and then, if they choose, purchase the home in the future. In addition to investing in the technology platform and homes for the startup and its real estate fund, Invitation Homes is providing maintenance and other services to all Pathway Homes. As of March 31, 2022, Invitation Homes had fully funded its $25 million capital commitment to the operating company and invested $29.7 million of its $225 million capital commitment in the real estate fund, which owned 46 homes at quarter end.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 4
Balance Sheet and Capital Markets Activity
As of March 31, 2022, the Company had $1,467 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 March 31, 2022 was $7,916 million, consisting of $4,450 million of unsecured debt and $3,466 million of secured debt. Net debt / TTM adjusted EBITDAre was 6.0x at March 31, 2022, down from 6.2x as of December 31, 2021.
During Q1 2022, the Company issued approximately 2.1 million shares of common stock under its at the market equity program at an average price of $41.02 per share. Total gross proceeds of approximately $85 million were used primarily to acquire homes. Subsequent to March 31, 2022, the Company issued approximately 0.4 million shares of common stock, generating gross proceeds of approximately $15 million in settlement of transactions in place as of March 31, 2022.
As previously announced, the Company settled on January 18, 2022, the remaining $141 million principal balance of its 3.5% Convertible Notes due January 15, 2022 (the "2022 Convertible Notes") with the issuance of an additional 6,216,261 shares of its common stock.
As previously announced, the Company priced a public offering on March 25, 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. The offering closed subsequent to quarter end on April 5, 2022, with net proceeds used primarily to voluntarily prepay secured indebtedness and for general corporate purposes.
Dividend
As previously announced on April 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 May 27, 2022, to stockholders of record as of the close of business on May 10, 2022.
FY 2022 Guidance
Full year 2022 guidance remains unchanged from initial guidance provided in February 2022, as outlined in the table below:
FY 2022 Guidance
FY 2022
Guidance
Core FFO per share — diluted
$1.62 - $1.70
AFFO per share — diluted
$1.38 - $1.46
Same Store Core Revenues growth
8.0% - 9.0%
Same Store Core Operating Expenses growth
5.5% - 6.5%
Same Store NOI growth
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 April 28, 2022, to discuss results for the first 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 196062. An audio webcast may be accessed at www.invh.com. A replay of the call will be available through May 26, 2022, and can be accessed by calling 1-866-813-9403 (domestic) or 1-929-458-6194 (international) and using the replay access code 479065, or by using the link at www.invh.com.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 5
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.
Investor Relations Contact
Scott McLaughlin 844.456.INVH (4684) IR@InvitationHomes.com
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include, but are not limited to, statements related to the Company's expectations regarding the performance of the Company's business, its financial results, its liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the single-family rental industry and the Company's business model, macroeconomic factors beyond the Company's control, competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association (“HOA”) fees, and insurance costs, the Company's dependence on third parties for key services, risks related to the evaluation of properties, poor resident selection and defaults and non-renewals by the Company's residents, performance of the Company's information technology systems, risks related to the Company's indebtedness, and risks related to the potential negative impact of the ongoing COVID-19 pandemic and geopolitical events 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 fiscal year ended December 31, 2021, 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 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.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 6
Consolidated Balance Sheets
($ in thousands, except shares and per share data)
March 31, 2022
December 31, 2021
(unaudited)
Assets:
Investments in single-family residential properties, net
$
17,025,640
$
16,935,322
Cash and cash equivalents
467,457
610,166
Restricted cash
215,692
208,692
Goodwill
258,207
258,207
Investments in unconsolidated joint ventures
162,433
130,395
Other assets, net
414,793
395,064
Total assets
$
18,544,222
$
18,537,846
Liabilities:
Mortgage loans, net
$
3,051,590
$
3,055,853
Secured term loan, net
401,367
401,313
Unsecured notes, net
1,922,716
1,921,974
Term loan facility, net
2,479,935
2,478,122
Revolving facility
—
—
Convertible senior notes, net
—
141,397
Accounts payable and accrued expenses
175,553
193,633
Resident security deposits
168,008
165,167
Other liabilities
119,921
341,583
Total liabilities
8,319,090
8,699,042
Equity:
Stockholders' equity
Preferred stock, $0.01 par value per share, 900,000,000 shares authorized, none outstanding as of March 31, 2022 and December 31, 2021
—
—
Common stock, $0.01 par value per share, 9,000,000,000 shares authorized, 609,844,461 and 601,045,438 outstanding as of March 31, 2022 and December 31, 2021, respectively
6,098
6,010
Additional paid-in capital
11,093,786
10,873,539
Accumulated deficit
(836,494)
(794,869)
Accumulated other comprehensive loss
(80,534)
(286,938)
Total stockholders' equity
10,182,856
9,797,742
Non-controlling interests
42,276
41,062
Total equity
10,225,132
9,838,804
Total liabilities and equity
$
18,544,222
$
18,537,846
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 7
Consolidated Statements of Operations
($ in thousands, except shares and per share amounts)
Q1 2022
Q1 2021
(unaudited)
(unaudited)
Revenues:
Rental revenues
$
483,995
$
438,133
Other property income
46,204
36,321
Joint venture management fees
2,111
771
Total revenues
532,310
475,225
Expenses:
Property operating and maintenance
182,269
168,373
Property management expense
20,967
15,842
General and administrative
17,639
16,950
Interest expense
74,389
83,406
Depreciation and amortization
155,796
144,501
Impairment and other
1,515
356
Total expenses
452,575
429,428
Gains (losses) on investments in equity securities, net
(3,032)
(3,140)
Other, net
594
230
Gain on sale of property, net of tax
18,026
14,484
Income (loss) from investments in unconsolidated joint ventures
(2,320)
351
Net income
93,003
57,722
Net income attributable to non-controlling interests
(388)
(355)
Net income attributable to common stockholders
92,615
57,367
Net income available to participating securities
(220)
(95)
Net income available to common stockholders — basic and diluted
$
92,395
$
57,272
Weighted average common shares outstanding — basic
606,410,225
567,375,502
Weighted average common shares outstanding — diluted
607,908,398
568,826,104
Net income per common share — basic
$
0.15
$
0.10
Net income per common share — diluted
$
0.15
$
0.10
Dividends declared per common share
$
0.22
$
0.17
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 8
Supplemental Schedule 1
Reconciliation of FFO, Core FFO, and AFFO
($ in thousands, except shares and per share amounts) (unaudited)
FFO Reconciliation
Q1 2022
Q1 2021
Net income available to common stockholders
$
92,395
$
57,272
Net income available to participating securities
220
95
Non-controlling interests
388
355
Depreciation and amortization on real estate assets
153,640
142,784
Impairment on depreciated real estate investments
101
431
Net gain on sale of previously depreciated investments in real estate
(18,026)
(14,484)
Depreciation and net gain on sale of investments in unconsolidated joint ventures
500
(232)
FFO
$
229,218
$
186,221
Core FFO Reconciliation
Q1 2022
Q1 2021
FFO
$
229,218
$
186,221
Non-cash interest expense, including the Company's share from unconsolidated joint ventures
6,470
8,618
Share-based compensation expense
6,646
5,814
Severance expense
18
114
Casualty (gains) losses, net
1,414
(75)
Losses on investments in equity securities, net
3,032
3,140
Core FFO
$
246,798
$
203,832
AFFO Reconciliation
Q1 2022
Q1 2021
Core FFO
$
246,798
$
203,832
Recurring capital expenditures, including the Company's share from unconsolidated joint ventures
(32,830)
(24,475)
Adjusted FFO
$
213,968
$
179,357
Net income available to common stockholders
Weighted average common shares outstanding — diluted (1)
607,908,398
568,826,104
Net income per common share — diluted (1)
$
0.15
$
0.10
FFO
Numerator for FFO per common share — diluted(1)
$
229,218
$
190,565
Weighted average common shares and OP Units outstanding — diluted (1)
610,704,093
587,813,663
FFO per share — diluted (1)
$
0.38
$
0.32
Core FFO and Adjusted FFO
Weighted average common shares and OP Units outstanding — diluted (2)
610,704,093
572,667,335
Core FFO per share — diluted (2)
$
0.40
$
0.36
AFFO per share — diluted (2)
$
0.35
$
0.31
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 9
Supplemental Schedule 1 (Continued)
(1)On January 18, 2022, the Company settled the remaining $141 million principal balance of its 2022 Convertible Notes with the issuance of an additional 6,216,261 shares of its common stock. For the period subsequent to conversion, shares issued in connection with any settled conversions of the 2022 Convertible Notes are included within weighted shares outstanding and therefore impact diluted per share information. For the period prior to conversion, and in accordance with GAAP and Nareit guidelines, net income per share — diluted and FFO per share — diluted include the effect of shares issuable in respect of the 2022 Convertible Notes if such shares are dilutive to the calculation.
For Q1 2021 and Q1 2022, the effect of the shares issuable in respect of the 2022 Convertible Notes was anti-dilutive to net income per share and dilutive to FFO per share. As such, Q1 2021 and Q1 2022 net income per share are not adjusted for conversion of the 2022 Convertible Notes. Q1 2021 FFO per share considers the dilutive effect of the 2022 Convertible Notes by removing the related interest expense from the numerator and increasing the denominator to include shares issuable on conversion of the 2022 Convertible Notes. The effect of the 2022 Convertible Notes is not material to FFO per share for Q1 2022.
(2)Core FFO and AFFO per share reflect the 2022 Convertible Notes in the form in which they were outstanding during each period. As such, Core FFO and AFFO per share do not treat the outstanding 2022 Convertible Notes as if converted for the period prior to the January 18, 2022 conversion date.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 10
Supplemental Schedule 2(a)
Diluted Shares Outstanding
(unaudited)
Weighted Average Amounts for Net Income (1)
Q1 2022
Q1 2021
Common shares — basic
606,410,225
567,375,502
Shares potentially issuable from vesting/conversion of equity-based awards
1,498,173
1,450,602
Total common shares — diluted
607,908,398
568,826,104
Weighted average amounts for FFO (1)
Q1 2022
Q1 2021
Common shares — basic
606,410,225
567,375,502
OP units — basic
2,538,285
3,463,285
Shares potentially issuable from vesting/conversion of equity-based awards
1,755,583
1,828,548
Shares issuable from the 2022 Convertible Notes
—
15,146,328
Total common shares and units — diluted
610,704,093
587,813,663
Weighted average amounts for Core and AFFO (2)
Q1 2022
Q1 2021
Common shares — basic
606,410,225
567,375,502
OP units — basic
2,538,285
3,463,285
Shares potentially issuable from vesting/conversion of equity-based awards
1,755,583
1,828,548
Total common shares and units — diluted
610,704,093
572,667,335
Period end amounts for Core FFO, and AFFO
March 31, 2022
Common shares
609,844,461
OP units
2,538,285
Shares potentially issuable from vesting/conversion of equity-based awards
1,455,663
Total common shares and units — diluted
613,838,409
(1)See "Supplemental Schedule 1," footnote (1), for details on the treatment of the 2022 Convertible Notes in each specific period presented in the table.
(2)See "Supplemental Schedule 1," footnote (2), for details on the treatment of the 2022 Convertible Notes in each specific period presented in the table.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 11
Supplemental Schedule 2(b)
Debt Structure and Leverage Ratios — As of March 31, 2022
($ in thousands) (unaudited)
Wtd Avg
Wtd Avg
Interest
Years to
Debt Structure
Balance
% of Total
Rate (1)
Maturity (2)(7)
Secured:
Fixed (3)
$
1,398,508
17.7
%
4.0
%
6.3
Floating — swapped to fixed
1,320,000
16.7
%
4.0
%
3.3
Floating (7)
747,577
9.4
%
1.5
%
3.3
Total secured (7)
3,466,085
43.8
%
3.5
%
4.5
Unsecured:
Fixed (7)
1,950,000
24.6
%
2.4
%
9.2
Floating — swapped to fixed
2,500,000
31.6
%
3.9
%
3.8
Floating
—
—
%
—
%
—
Total unsecured (7)
4,450,000
56.2
%
3.2
%
6.2
Total Debt:
Fixed + floating swapped to fixed (3)
7,168,508
90.6
%
3.5
%
5.7
Floating
747,577
9.4
%
1.5
%
3.3
Total debt
7,916,085
100.0
%
3.3
%
5.5
Unamortized discounts on notes payable
(13,143)
Deferred financing costs, net
(47,334)
Total Debt per Balance Sheet
7,855,608
Retained and repurchased certificates
(158,908)
Cash, ex-security deposits and letters of credit (4)
(511,490)
Deferred financing costs, net
47,334
Unamortized discounts on notes payable
13,143
Net debt
$
7,245,687
Leverage Ratios
March 31, 2022
Net Debt / TTM Adjusted EBITDAre
6.0
x
Credit Ratings
Ratings
Outlook
Fitch Ratings, Inc.
BBB
Stable
Moody's Investor Services
Baa3
Stable
Standard & Poor's Rating Services
BBB-
Stable
Unsecured Facility Covenant Compliance (5)
Unsecured Public Bond Covenant Compliance (6)
Actual
Requirement
Actual
Requirement
Total leverage ratio
32.6
%
≤ 60%
Aggregate debt ratio
36.5
%
≤ 65%
Secured leverage ratio
14.1
%
≤ 45%
Secured debt ratio
15.5
%
≤ 40%
Unencumbered leverage ratio
28.8
%
≤ 60%
Unencumbered assets ratio
321.2
%
≥ 150%
Fixed charge coverage ratio
4.2x
≥ 1.5x
Debt service ratio
4.2x
≥ 1.5x
Unsecured interest coverage ratio
5.9x
≥ 1.75x
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 12
Supplemental Schedule 2(b) (Continued)
(1)Includes the impact of interest rate swaps in place and effective as of March 31, 2022.
(2)Assumes all extension options are exercised.
(3)For the purposes of this table, IH 2019-1, a twelve-year secured term loan reaching final maturity in 2031 that bears interest at a fixed rate for the first 11 years and a floating rate in the twelfth year, is reflected as fixed rate debt.
(4)Represents cash and cash equivalents and the portion of restricted cash that excludes security deposits and letters of credit.
(5)Covenant calculations are specifically defined in the Company's Amended and Restated Revolving Credit and Term Loan Agreement, and summarized in the "Glossary and Reconciliations" section of this report. For the purpose of calculating property value in applicable covenant metrics, properties owned for at least one year are valued by dividing NOI by a 6% capitalization rate (the market standard for residential loans), and properties owned for less than one year are valued at either their gross book value or by dividing NOI by a 6% capitalization rate.
(6)Covenant calculations are specifically defined in the Company's First, Second, and Third Supplemental Indentures to the Base Indenture for its Senior Notes due November 2028, August 2031, and January 2034, which are summarized in the "Glossary and Reconciliations" section of this report. Property values for the purpose of applicable covenant metrics are calculated based on undepreciated book value.
(7)Subsequent to quarter end on April 5, 2022, the Company closed a public offering of $600 million aggregate principal amount of 4.150% senior notes due in 2032, which were priced at 99.739% of the principal amount and mature on April 15, 2032. Proceeds from the offering were used to prepay secured debt. On a pro forma basis, the refinancing activity has the following impact to our debt structure:
a.Secured floating rate debt balance as a percentage of total debt balance decreases from 9.4% to 1.9%.
b.Total secured debt balance decreases from $3,466,085 to $2,866,202.
c.Total fixed unsecured debt balance increases from $1,950,000 to $2,550,000.
d.Total unsecured debt balance increases from $4,450,000 to $5,050,000.
e.Weighted average years to maturity for total debt increases from 5.5 to 6.0 years.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 13
Supplemental Schedule 2(c)
Debt Maturity Schedule — As of March 31, 2022
($ in thousands) (unaudited)
Revolving
Secured
Unsecured
Credit
% of
Debt Maturities, with Extensions (1)(2)
Debt
Debt
Facility
Balance
Total
2022
$
—
$
—
$
—
$
—
—
%
2023
—
—
—
—
—
%
2024
—
—
—
—
—
%
2025
1,399,631
—
—
1,399,631
17.6
%
2026
667,947
2,500,000
—
3,167,947
40.0
%
2027
995,144
—
—
995,144
12.6
%
2028
—
750,000
—
750,000
9.5
%
2029
—
—
—
—
—
%
2030
—
—
—
—
—
%
2031
403,363
650,000
—
1,053,363
13.3
%
2032
—
—
—
—
—
%
2033
—
—
—
—
—
%
2034
—
400,000
—
400,000
5.1
%
2035
—
—
—
—
—
%
2036
—
150,000
—
150,000
1.9
%
3,466,085
4,450,000
—
7,916,085
100.0
%
Unamortized discounts on notes payable
(1,849)
(11,294)
—
(13,143)
Deferred financing costs
(11,279)
(36,055)
—
(47,334)
Total per Balance Sheet
$
3,452,957
$
4,402,651
$
—
$
7,855,608
(1)Assumes all extension options are exercised.
(2)Subsequent to quarter end on April 5, 2022, the Company closed a public offering of $600 million aggregate principal amount of 4.150% senior notes due in 2032, which were priced at 99.739% of the principal amount and mature on April 15, 2032. Proceeds from the offering were used to prepay secured debt. On a pro forma basis, the refinancing activity has the following impact to our debt structure:
a.The amount of secured debt maturing in 2025 declines from $1,399,631 to $799,747.
b.The amount of unsecured debt maturing in 2032 increases from $0 to $600,000.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 14
Supplemental Schedule 3(a)
Summary of Operating Information by Home Portfolio
($ in thousands) (unaudited)
Number of Homes, period-end
Q1 2022
Total Portfolio
82,758
Same Store Portfolio
75,493
Same Store % of Total
91.2
%
Core Revenues
Q1 2022
Q1 2021
Change YoY
Total Portfolio
$
501,437
$
449,714
11.5
%
Same Store Portfolio
467,868
427,598
9.4
%
Core Operating Expenses
Q1 2022
Q1 2021
Change YoY
Total Portfolio
$
153,507
$
143,633
6.9
%
Same Store Portfolio
142,089
136,028
4.5
%
Net Operating Income
Q1 2022
Q1 2021
Change YoY
Total Portfolio
$
347,930
$
306,081
13.7
%
Same Store Portfolio
325,779
291,570
11.7
%
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 15
Supplemental Schedule 3(b)
Same Store Portfolio Core Operating Detail
($ in thousands) (unaudited)
Change
Change
Q1 2022
Q1 2021
YoY
Q4 2021
Seq
Revenues:
Rental revenues (1)
$
452,107
$
416,884
8.4
%
$
446,594
1.2
%
Other property income, net (1)(2)(3)
15,761
10,714
47.1
%
14,774
6.7
%
Core Revenues
467,868
427,598
9.4
%
461,368
1.4
%
Fixed Expenses:
Property taxes
77,060
73,913
4.3
%
74,399
3.6
%
Insurance expenses
8,557
8,139
5.1
%
8,450
1.3
%
HOA expenses
8,654
8,515
1.6
%
8,630
0.3
%
Controllable Expenses:
Repairs and maintenance, net (4)
20,036
16,856
18.9
%
20,134
(0.5)
%
Personnel, leasing and marketing
18,013
18,365
(1.9)
%
19,437
(7.3)
%
Turnover, net (4)
6,064
6,925
(12.4)
%
6,597
(8.1)
%
Utilities and property administrative, net (4)
3,705
3,315
11.8
%
3,427
8.1
%
Core Operating Expenses
142,089
136,028
4.5
%
141,074
0.7
%
Net Operating Income
$
325,779
$
291,570
11.7
%
$
320,294
1.7
%
(1)All rental revenues and other property income are reflected net of bad debt. 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. Bad debt as a percentage of gross rental revenue in Q1 2022 decreased by 30 basis points from Q1 2021.
(2)In light of the COVID-19 pandemic, almost all late fees typically enforced in accordance with lease agreements were not enforced or collected between Q2 2020 and Q1 2021, which resulted in lower other property income, net, during this time period. Since Q2 2021, enforcement and collection of late fees have generally recommenced in all markets where permissible.
(3)Represents other property income net of all resident recoveries, which are reimbursements of charges for which residents are responsible. Same Store resident recoveries totaled $26,975, $23,557, and $25,448 for Q1 2022, Q1 2021 and Q4 2021, respectively.
(4)Expenses are presented net of applicable resident recoveries.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 16
Supplemental Schedule 3(c)
Same Store Quarterly Operating Trends
(unaudited)
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
Average Occupancy
98.1
%
98.1
%
98.1
%
98.3
%
98.4
%
Turnover Rate
4.6
%
4.7
%
6.3
%
6.7
%
5.4
%
Trailing four quarters Turnover Rate
22.3
%
23.1
%
N/A
N/A
N/A
Average Monthly Rent
$
2,074
$
2,034
$
1,989
$
1,942
$
1,915
Rental Rate Growth (lease-over-lease):
Renewals
9.7
%
9.0
%
7.7
%
5.7
%
4.3
%
New leases
14.8
%
17.1
%
18.3
%
13.7
%
8.0
%
Blended
10.9
%
11.1
%
10.5
%
7.9
%
5.4
%
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 17
Supplemental Schedule 4
Wholly Owned Portfolio Characteristics — As of and for the Quarter Ended March 31, 2022 (1)
(unaudited)
Average
Number of
Average
Average
Monthly
Percent of
Homes
Occupancy
Monthly Rent
Rent PSF
Revenue
Western United States:
Southern California
7,857
97.8
%
$
2,744
$
1.62
12.1
%
Northern California
4,442
93.7
%
2,423
1.56
6.0
%
Seattle
4,059
91.0
%
2,541
1.32
5.7
%
Phoenix
8,792
95.2
%
1,749
1.05
9.1
%
Las Vegas
3,155
94.7
%
1,960
0.99
3.5
%
Denver
2,677
87.0
%
2,311
1.27
3.4
%
Western US Subtotal
30,982
94.3
%
2,274
1.31
39.8
%
Florida:
South Florida
8,303
98.0
%
2,481
1.33
12.3
%
Tampa
8,508
96.6
%
1,934
1.04
9.8
%
Orlando
6,397
97.0
%
1,910
1.02
7.3
%
Jacksonville
1,914
96.9
%
1,913
0.96
2.2
%
Florida Subtotal
25,122
97.2
%
2,109
1.12
31.6
%
Southeast United States:
Atlanta
12,685
96.9
%
1,749
0.85
13.1
%
Carolinas
5,308
94.2
%
1,803
0.84
5.5
%
Southeast US Subtotal
17,993
96.1
%
1,764
0.85
18.6
%
Texas:
Houston
2,129
97.2
%
1,684
0.87
2.2
%
Dallas
2,858
94.5
%
1,967
0.96
3.3
%
Texas Subtotal
4,987
95.6
%
1,844
0.92
5.5
%
Midwest United States:
Chicago
2,555
98.5
%
2,116
1.31
3.1
%
Minneapolis
1,119
96.8
%
2,086
1.07
1.4
%
Midwest US Subtotal
3,674
98.0
%
2,107
1.23
4.5
%
Total / Average
82,758
95.8
%
$
2,078
$
1.11
100.0
%
Same Store Total / Average
75,493
98.1
%
$
2,074
$
1.11
93.3
%
(1)All data is for the total wholly owned portfolio, unless otherwise noted.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 18
Supplemental Schedule 5(a)
Same Store Core Revenues Growth Summary — YoY Quarter
($ in thousands, except avg. monthly rent) (unaudited)
Avg. Monthly Rent
Average Occupancy
Core Revenues
YoY, Q1 2022
# Homes
Q1 2022
Q1 2021
Change
Q1 2022
Q1 2021
Change
Q1 2022
Q1 2021
Change
Western United States:
Southern California
7,603
$
2,745
$
2,593
5.9
%
98.6
%
98.8
%
(0.2)
%
$
59,728
$
55,152
8.3
%
Northern California
3,933
2,408
2,257
6.7
%
98.5
%
99.1
%
(0.6)
%
27,270
25,503
6.9
%
Seattle
3,509
2,526
2,313
9.2
%
98.0
%
98.7
%
(0.7)
%
26,209
23,523
11.4
%
Phoenix
7,645
1,717
1,535
11.9
%
98.4
%
98.7
%
(0.3)
%
40,290
35,833
12.4
%
Las Vegas
2,699
1,951
1,753
11.3
%
98.3
%
98.6
%
(0.3)
%
15,789
13,977
13.0
%
Denver
2,036
2,287
2,147
6.5
%
98.2
%
97.6
%
0.6
%
13,942
13,182
5.8
%
Western US Subtotal
27,425
2,270
2,098
8.2
%
98.4
%
98.7
%
(0.3)
%
183,228
167,170
9.6
%
Florida:
South Florida
7,865
2,490
2,274
9.5
%
98.7
%
97.8
%
0.9
%
59,643
53,246
12.0
%
Tampa
7,881
1,916
1,751
9.4
%
98.1
%
98.1
%
—
%
46,028
41,679
10.4
%
Orlando
5,967
1,897
1,757
8.0
%
98.1
%
97.8
%
0.3
%
34,623
31,750
9.0
%
Jacksonville
1,840
1,903
1,762
8.0
%
97.9
%
98.8
%
(0.9)
%
10,677
9,940
7.4
%
Florida Subtotal
23,553
2,103
1,928
9.1
%
98.3
%
98.0
%
0.3
%
150,971
136,615
10.5
%
Southeast United States:
Atlanta
11,991
1,744
1,600
9.0
%
97.6
%
98.4
%
(0.8)
%
62,467
57,081
9.4
%
Carolinas
4,655
1,790
1,661
7.8
%
97.8
%
98.4
%
(0.6)
%
25,364
23,269
9.0
%
Southeast US Subtotal
16,646
1,757
1,617
8.7
%
97.7
%
98.4
%
(0.7)
%
87,831
80,350
9.3
%
Texas:
Houston
1,939
1,690
1,605
5.3
%
97.8
%
98.0
%
(0.2)
%
9,943
9,286
7.1
%
Dallas
2,269
1,988
1,867
6.5
%
97.1
%
98.1
%
(1.0)
%
13,419
12,568
6.8
%
Texas Subtotal
4,208
1,850
1,747
5.9
%
97.4
%
98.0
%
(0.6)
%
23,362
21,854
6.9
%
Midwest United States:
Chicago
2,547
2,117
2,018
4.9
%
98.7
%
98.8
%
(0.1)
%
15,585
15,093
3.3
%
Minneapolis
1,114
2,087
1,970
5.9
%
97.2
%
98.0
%
(0.8)
%
6,891
6,516
5.8
%
Midwest US Subtotal
3,661
2,108
2,003
5.2
%
98.3
%
98.5
%
(0.2)
%
22,476
21,609
4.0
%
Same Store Total / Average
75,493
$
2,074
$
1,915
8.3
%
98.1
%
98.4
%
(0.3)
%
$
467,868
$
427,598
9.4
%
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 19
Supplemental Schedule 5(a) (Continued)
Same Store Core Revenues Growth Summary — Sequential Quarter
($ in thousands, except avg. monthly rent) (unaudited)
Avg. Monthly Rent
Average Occupancy
Core Revenues
Seq, Q1 2022
# Homes
Q1 2022
Q4 2021
Change
Q1 2022
Q4 2021
Change
Q1 2022
Q4 2021
Change
Western United States:
Southern California
7,603
$
2,745
$
2,701
1.6
%
98.6
%
98.8
%
(0.2)
%
$
59,728
$
60,369
(1.1)
%
Northern California
3,933
2,408
2,378
1.3
%
98.5
%
98.5
%
—
%
27,270
27,603
(1.2)
%
Seattle
3,509
2,526
2,458
2.8
%
98.0
%
97.1
%
0.9
%
26,209
25,298
3.6
%
Phoenix
7,645
1,717
1,672
2.7
%
98.4
%
98.3
%
0.1
%
40,290
38,739
4.0
%
Las Vegas
2,699
1,951
1,906
2.4
%
98.3
%
98.3
%
—
%
15,789
15,371
2.7
%
Denver
2,036
2,287
2,263
1.1
%
98.2
%
97.8
%
0.4
%
13,942
13,901
0.3
%
Western US Subtotal
27,425
2,270
2,226
2.0
%
98.4
%
98.3
%
0.1
%
183,228
181,281
1.1
%
Florida:
South Florida
7,865
2,490
2,429
2.5
%
98.7
%
98.5
%
0.2
%
59,643
58,057
2.7
%
Tampa
7,881
1,916
1,872
2.4
%
98.1
%
98.2
%
(0.1)
%
46,028
44,956
2.4
%
Orlando
5,967
1,897
1,861
1.9
%
98.1
%
98.1
%
—
%
34,623
34,123
1.5
%
Jacksonville
1,840
1,903
1,866
2.0
%
97.9
%
97.6
%
0.3
%
10,677
10,385
2.8
%
Florida Subtotal
23,553
2,103
2,055
2.3
%
98.3
%
98.2
%
0.1
%
150,971
147,521
2.3
%
Southeast United States:
Atlanta
11,991
1,744
1,709
2.0
%
97.6
%
97.9
%
(0.3)
%
62,467
61,734
1.2
%
Carolinas
4,655
1,790
1,763
1.5
%
97.8
%
98.1
%
(0.3)
%
25,364
24,626
3.0
%
Southeast US Subtotal
16,646
1,757
1,724
1.9
%
97.7
%
97.9
%
(0.2)
%
87,831
86,360
1.7
%
Texas:
Houston
1,939
1,690
1,671
1.1
%
97.8
%
97.7
%
0.1
%
9,943
9,899
0.4
%
Dallas
2,269
1,988
1,957
1.6
%
97.1
%
96.9
%
0.2
%
13,419
13,442
(0.2)
%
Texas Subtotal
4,208
1,850
1,825
1.4
%
97.4
%
97.3
%
0.1
%
23,362
23,341
0.1
%
Midwest United States:
Chicago
2,547
2,117
2,098
0.9
%
98.7
%
98.4
%
0.3
%
15,585
15,829
(1.5)
%
Minneapolis
1,114
2,087
2,064
1.1
%
97.2
%
96.7
%
0.5
%
6,891
7,036
(2.1)
%
Midwest US Subtotal
3,661
2,108
2,088
1.0
%
98.3
%
97.9
%
0.4
%
22,476
22,865
(1.7)
%
Same Store Total / Average
75,493
$
2,074
$
2,034
2.0
%
98.1
%
98.1
%
—
%
$
467,868
$
461,368
1.4
%
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 20
Supplemental Schedule 5(b)
Same Store NOI Growth and Margin Summary — YoY Quarter
($ in thousands) (unaudited)
Core Revenues
Core Operating Expenses
Net Operating Income
Core NOI Margin
YoY, Q1 2022
Q1 2022
Q1 2021
Change
Q1 2022
Q1 2021
Change
Q1 2022
Q1 2021
Change
Q1 2022
Q1 2021
Western United States:
Southern California
$
59,728
$
55,152
8.3
%
$
16,976
$
16,843
0.8
%
$
42,752
$
38,309
11.6
%
71.6
%
69.5
%
Northern California
27,270
25,503
6.9
%
7,426
7,098
4.6
%
19,844
18,405
7.8
%
72.8
%
72.2
%
Seattle
26,209
23,523
11.4
%
7,090
6,537
8.5
%
19,119
16,986
12.6
%
72.9
%
72.2
%
Phoenix
40,290
35,833
12.4
%
7,778
7,812
(0.4)
%
32,512
28,021
16.0
%
80.7
%
78.2
%
Las Vegas
15,789
13,977
13.0
%
3,097
3,072
0.8
%
12,692
10,905
16.4
%
80.4
%
78.0
%
Denver
13,942
13,182
5.8
%
2,269
2,613
(13.2)
%
11,673
10,569
10.4
%
83.7
%
80.2
%
Western US Subtotal
183,228
167,170
9.6
%
44,636
43,975
1.5
%
138,592
123,195
12.5
%
75.6
%
73.7
%
Florida:
South Florida
59,643
53,246
12.0
%
22,187
21,731
2.1
%
37,456
31,515
18.9
%
62.8
%
59.2
%
Tampa
46,028
41,679
10.4
%
16,425
15,638
5.0
%
29,603
26,041
13.7
%
64.3
%
62.5
%
Orlando
34,623
31,750
9.0
%
11,670
10,673
9.3
%
22,953
21,077
8.9
%
66.3
%
66.4
%
Jacksonville
10,677
9,940
7.4
%
3,501
3,342
4.8
%
7,176
6,598
8.8
%
67.2
%
66.4
%
Florida Subtotal
150,971
136,615
10.5
%
53,783
51,384
4.7
%
97,188
85,231
14.0
%
64.4
%
62.4
%
Southeast United States:
Atlanta
62,467
57,081
9.4
%
18,273
17,171
6.4
%
44,194
39,910
10.7
%
70.7
%
69.9
%
Carolinas
25,364
23,269
9.0
%
6,638
6,223
6.7
%
18,726
17,046
9.9
%
73.8
%
73.3
%
Southeast US Subtotal
87,831
80,350
9.3
%
24,911
23,394
6.5
%
62,920
56,956
10.5
%
71.6
%
70.9
%
Texas:
Houston
9,943
9,286
7.1
%
4,547
4,174
8.9
%
5,396
5,112
5.6
%
54.3
%
55.1
%
Dallas
13,419
12,568
6.8
%
5,181
4,567
13.4
%
8,238
8,001
3.0
%
61.4
%
63.7
%
Texas Subtotal
23,362
21,854
6.9
%
9,728
8,741
11.3
%
13,634
13,113
4.0
%
58.4
%
60.0
%
Midwest United States:
Chicago
15,585
15,093
3.3
%
6,898
6,597
4.6
%
8,687
8,496
2.2
%
55.7
%
56.3
%
Minneapolis
6,891
6,516
5.8
%
2,133
1,937
10.1
%
4,758
4,579
3.9
%
69.0
%
70.3
%
Midwest US Subtotal
22,476
21,609
4.0
%
9,031
8,534
5.8
%
13,445
13,075
2.8
%
59.8
%
60.5
%
Same Store Total / Average
$
467,868
$
427,598
9.4
%
$
142,089
$
136,028
4.5
%
$
325,779
$
291,570
11.7
%
69.6
%
68.2
%
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 21
Supplemental Schedule 5(b) (Continued)
Same Store NOI Growth and Margin Summary — Sequential Quarter
($ in thousands) (unaudited)
Core Revenues
Core Operating Expenses
Net Operating Income
Core NOI Margin
Seq, Q1 2022
Q1 2022
Q4 2021
Change
Q1 2022
Q4 2021
Change
Q1 2022
Q4 2021
Change
Q1 2022
Q4 2021
Western United States:
Southern California
$
59,728
$
60,369
(1.1)
%
$
16,976
$
17,383
(2.3)
%
$
42,752
$
42,986
(0.5)
%
71.6
%
71.2
%
Northern California
27,270
27,603
(1.2)
%
7,426
7,302
1.7
%
19,844
20,301
(2.3)
%
72.8
%
73.5
%
Seattle
26,209
25,298
3.6
%
7,090
6,994
1.4
%
19,119
18,304
4.5
%
72.9
%
72.4
%
Phoenix
40,290
38,739
4.0
%
7,778
7,718
0.8
%
32,512
31,021
4.8
%
80.7
%
80.1
%
Las Vegas
15,789
15,371
2.7
%
3,097
3,158
(1.9)
%
12,692
12,213
3.9
%
80.4
%
79.5
%
Denver
13,942
13,901
0.3
%
2,269
2,575
(11.9)
%
11,673
11,326
3.1
%
83.7
%
81.5
%
Western US Subtotal
183,228
181,281
1.1
%
44,636
45,130
(1.1)
%
138,592
136,151
1.8
%
75.6
%
75.1
%
Florida:
South Florida
59,643
58,057
2.7
%
22,187
22,296
(0.5)
%
37,456
35,761
4.7
%
62.8
%
61.6
%
Tampa
46,028
44,956
2.4
%
16,425
16,809
(2.3)
%
29,603
28,147
5.2
%
64.3
%
62.6
%
Orlando
34,623
34,123
1.5
%
11,670
11,068
5.4
%
22,953
23,055
(0.4)
%
66.3
%
67.6
%
Jacksonville
10,677
10,385
2.8
%
3,501
3,515
(0.4)
%
7,176
6,870
4.5
%
67.2
%
66.2
%
Florida Subtotal
150,971
147,521
2.3
%
53,783
53,688
0.2
%
97,188
93,833
3.6
%
64.4
%
63.6
%
Southeast United States:
Atlanta
62,467
61,734
1.2
%
18,273
17,735
3.0
%
44,194
43,999
0.4
%
70.7
%
71.3
%
Carolinas
25,364
24,626
3.0
%
6,638
6,448
2.9
%
18,726
18,178
3.0
%
73.8
%
73.8
%
Southeast US Subtotal
87,831
86,360
1.7
%
24,911
24,183
3.0
%
62,920
62,177
1.2
%
71.6
%
72.0
%
Texas:
Houston
9,943
9,899
0.4
%
4,547
4,621
(1.6)
%
5,396
5,278
2.2
%
54.3
%
53.3
%
Dallas
13,419
13,442
(0.2)
%
5,181
5,047
2.7
%
8,238
8,395
(1.9)
%
61.4
%
62.5
%
Texas Subtotal
23,362
23,341
0.1
%
9,728
9,668
0.6
%
13,634
13,673
(0.3)
%
58.4
%
58.6
%
Midwest United States:
Chicago
15,585
15,829
(1.5)
%
6,898
6,210
11.1
%
8,687
9,619
(9.7)
%
55.7
%
60.8
%
Minneapolis
6,891
7,036
(2.1)
%
2,133
2,195
(2.8)
%
4,758
4,841
(1.7)
%
69.0
%
68.8
%
Midwest US Subtotal
22,476
22,865
(1.7)
%
9,031
8,405
7.4
%
13,445
14,460
(7.0)
%
59.8
%
63.2
%
Same Store Total / Average
$
467,868
$
461,368
1.4
%
$
142,089
$
141,074
0.7
%
$
325,779
$
320,294
1.7
%
69.6
%
69.4
%
\
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 22
Supplemental Schedule 5(c)
Same Store Lease-Over-Lease Rent Growth
(unaudited)
Rental Rate Growth
Q1 2022
Renewal
New
Blended
Leases
Leases
Average
Western United States:
Southern California
7.4
%
12.2
%
8.3
%
Northern California
8.3
%
10.7
%
8.8
%
Seattle
10.2
%
10.3
%
10.2
%
Phoenix
12.3
%
23.4
%
14.9
%
Las Vegas
12.0
%
19.1
%
14.0
%
Denver
6.4
%
8.6
%
7.0
%
Western US Subtotal
9.4
%
14.6
%
10.6
%
Florida:
South Florida
12.1
%
20.9
%
13.7
%
Tampa
11.2
%
19.7
%
13.3
%
Orlando
7.9
%
17.0
%
10.3
%
Jacksonville
8.7
%
11.2
%
9.5
%
Florida Subtotal
10.6
%
18.5
%
12.5
%
Southeast United States:
Atlanta
10.5
%
15.3
%
11.6
%
Carolinas
9.1
%
8.7
%
8.9
%
Southeast US Subtotal
10.1
%
13.1
%
10.8
%
Texas:
Houston
7.3
%
8.3
%
7.5
%
Dallas
8.0
%
10.4
%
8.7
%
Texas Subtotal
7.7
%
9.7
%
8.2
%
Midwest United States:
Chicago
6.3
%
6.1
%
6.3
%
Minneapolis
7.6
%
3.8
%
6.4
%
Midwest US Subtotal
6.6
%
5.2
%
6.3
%
Same Store Total / Average
9.7
%
14.8
%
10.9
%
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 23
Supplemental Schedule 6
Same Store Cost to Maintain, net (1)
($ in thousands, except per home amounts) (unaudited)
Total ($ 000)
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
R&M OpEx, net
$
20,036
$
20,134
$
23,994
$
20,016
$
16,856
Turn OpEx, net
6,064
6,597
8,570
8,394
6,925
Total recurring operating expenses, net
$
26,100
$
26,731
$
32,564
$
28,410
$
23,781
R&M CapEx
$
23,546
$
23,938
$
25,727
$
19,323
$
16,891
Turn CapEx
7,229
7,790
8,004
7,107
5,970
Total recurring capital expenditures
$
30,775
$
31,728
$
33,731
$
26,430
$
22,861
R&M OpEx, net + R&M CapEx
$
43,582
$
44,072
$
49,721
$
39,339
$
33,747
Turn OpEx, net + Turn CapEx
13,293
14,387
16,574
15,501
12,895
Total Cost to Maintain, net
$
56,875
$
58,459
$
66,295
$
54,840
$
46,642
Per Home ($)
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
Total Cost to Maintain, net
$
753
$
774
$
878
$
726
$
618
(1)Recurring R&M OpEx and Turn OpEx are presented net of applicable resident recoveries.
Total Wholly Owned Portfolio Capital Expenditure Detail
($ in thousands) (unaudited)
Total ($ 000)
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
Recurring CapEx
$
32,762
$
33,921
$
36,215
$
28,693
$
24,454
Value Enhancing CapEx
6,670
9,024
12,302
9,039
8,945
Initial Renovation CapEx
34,226
26,890
20,254
16,635
19,320
Disposition CapEx
1,306
676
682
1,557
1,748
Total Capital Expenditures
$
74,964
$
70,511
$
69,453
$
55,924
$
54,467
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 24
Supplemental Schedule 7
Adjusted Property Management and G&A Reconciliation
($ in thousands) (unaudited)
Adjusted Property Management Expense
Q1 2022
Q1 2021
Property management expense (GAAP)
$
20,967
$
15,842
Adjustments:
Share-based compensation expense
(1,426)
(1,174)
Adjusted property management expense
$
19,541
$
14,668
Adjusted G&A Expense
Q1 2022
Q1 2021
G&A expense (GAAP)
$
17,639
$
16,950
Adjustments:
Share-based compensation expense
(5,220)
(4,640)
Severance expense
(18)
(114)
Adjusted G&A expense
$
12,401
$
12,196
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 25
Supplemental Schedule 8(a)
Acquisitions and Dispositions
(unaudited)
12/31/2021
Q1 2022 Acquisitions (1)
Q1 2022 Dispositions (2)
3/31/2022
Homes
Homes
Avg. Estimated
Homes
Average
Homes
Owned
Acq.
Cost Basis
Sold
Sales Price
Owned
Wholly Owned Portfolio
Western United States:
Southern California
7,876
—
$
—
19
$
669,737
7,857
Northern California
4,404
47
598,245
9
394,983
4,442
Seattle
4,027
32
542,876
—
—
4,059
Phoenix
8,744
56
452,510
8
310,563
8,792
Las Vegas
3,100
57
443,119
2
354,500
3,155
Denver
2,667
30
486,877
20
410,100
2,677
Western US Subtotal
30,818
222
498,623
58
477,161
30,982
Florida:
South Florida
8,250
78
325,246
25
365,740
8,303
Tampa
8,446
69
393,727
7
293,129
8,508
Orlando
6,369
36
411,564
8
209,750
6,397
Jacksonville
1,903
12
420,343
1
138,000
1,914
Florida Subtotal
24,968
195
371,265
41
317,351
25,122
Southeast United States:
Atlanta
12,661
34
335,583
10
335,571
12,685
Carolinas
5,253
59
359,048
4
183,694
5,308
Southeast US Subtotal
17,914
93
350,469
14
292,178
17,993
Texas:
Houston
2,134
2
321,627
7
182,429
2,129
Dallas
2,856
6
324,728
4
287,322
2,858
Texas Subtotal
4,990
8
323,953
11
220,572
4,987
Midwest United States:
Chicago
2,567
—
—
12
249,300
2,555
Minneapolis
1,121
—
—
2
274,500
1,119
Midwest US Subtotal
3,688
—
—
14
252,900
3,674
Announced Market-in-Exit:
Nashville (3)
3
—
—
3
558,333
—
Total / Average
82,381
518
$
421,383
141
$
371,767
82,758
Joint Venture Portfolio
2020 Rockpoint JV (4)
2,004
258
$
411,100
—
$
—
2,262
FNMA JV (5)
522
—
—
6
401,833
516
Pathway Homes (6)
—
46
355,081
—
—
46
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 26
Supplemental Schedule 8(a) (Continued)
(1)Estimated stabilized cap rates on wholly owned acquisitions during the quarter averaged 5.3%. Stabilized cap rate represents forecast nominal NOI for the 12 months following stabilization, divided by estimated cost basis.
(2)Cap rates on wholly owned dispositions during the quarter averaged 1.7%. Disposition cap rate represents actual NOI recognized in the 12 months prior to the month of disposition, divided by sales price.
(3)In December 2019, Invitation Homes announced a plan to fully exit the Nashville market, and sold 708 homes in Nashville in a bulk transaction. During the quarter ended March 31, 2022, the Company sold its last three homes in the market.
(4)Represents portfolio owned by the 2020 Rockpoint JV, of which Invitation Homes owns 20%; there were no homes acquired by the 2022 Rockpoint JV as of March 31, 2022.
(5)Represents portfolio owned by the FNMA JV, of which Invitation Homes owns 10%.
(6)Represents portfolio owned by Pathway Homes, of which Invitation Homes owned 100% of the property portfolio as of March 31, 2022.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 27
Supplemental Schedule 8(b)
Expected Acquisition Pipeline of New Homes from Third-Party Homebuilders
(unaudited)
Pipeline as of March 31, 2022 (1)(2)
Estimated Deliveries in Q2-Q4 2022
Estimated Deliveries in 2023
Estimated Deliveries Thereafter
Avg. Estimated Cost Basis Per Home
Southern California
127
—
54
73
$
510,000
Phoenix
75
—
23
52
410,000
Tampa
480
125
36
319
300,000
Orlando
569
163
56
350
360,000
Atlanta
193
43
41
109
310,000
Carolinas
240
—
29
211
410,000
South Florida
152
152
—
—
340,000
Dallas
96
—
32
64
310,000
Total / Average
1,932
483
271
1,178
$
350,000
(1)Represents the number of new homes under contract as of March 31, 2022, that are expected to be built, sold and delivered to the Company by various third-party homebuilders during a future period.
(2)Pipeline rollforward:
Pipeline as of December 31, 2021
1,724
Q1 2022 additions
453
Q1 2022 cancellations
(167)
Q1 2022 deliveries
(78)
Pipeline as of March 31, 2022
1,932
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 28
Glossary and Reconciliations
Average Estimated Cost Basis
Average estimated cost basis on acquisition represents the sum of purchase price, any closing adjustments, and estimated initial renovation expenditure for an acquired home or population of homes.
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 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 from residents.
Core Revenues
Core revenues for an identified population of homes reflects total revenues, net of any resident recoveries.
Cost to Maintain, net
Cost to maintain, net a home represents the sum of the expensed and capitalized portions of recurring repairs & maintenance and turn spend, net of resident reimbursements, as indicated in tables presented, not including the internal labor associated with such work.
Disposition CapEx
Disposition CapEx represents expenditures related to the preparation of a home for disposition after the prior tenant has moved out of the home.
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.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 29
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. In calculating per share amounts, Core FFO and AFFO reflect convertible debt securities in the form in which they were outstanding during the period.
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 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 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 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 the Company's basis for computing this 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.
Initial Renovation CapEx
Initial renovation CapEx represents expenditures related to the first post-acquisition renovation of a home to bring the home to Invitation Homes standards and specifications.
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; joint venture management fees; 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.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 30
See below for a reconciliation of GAAP net income to NOI for the Company's total portfolio and NOI for its Same Store Portfolio.
PSF
PSF means per square foot.
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.
Revenue Collections
Revenue collections represent the total cash received in a given period for rental revenues and other property income (including receipt of late payments that were billed in prior months) divided by the total amounts billed in that period. When a payment plan is in place with a resident, amounts are considered to be billed at the time they would have been billed based on the terms of the original lease, not the terms of the payment plan. "Historical average" revenue collections as a percentage of billings refer to revenue collections as a percentage of billings for the period from October 2019 through and including March 2020.
Same Store / Same Store Portfolio
Same Store or Same Store portfolio includes, for a given reporting period, 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 1st 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.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 31
Unsecured Facility Covenants
Unsecured facility covenants refer to financial and operating requirements that the Company must meet with respect to its $1,000 million revolving credit facility (the "Revolving Facility") and its $2,500 million term loan facility (the "Term Loan Facility") (together, the "Credit Facility"), as set forth in the Company's Amended and Restated Revolving Credit and Term Loan Agreement dated December 8, 2020 (the "Unsecured Credit Agreement"). The metrics provided under the "Unsecured Facility Covenant Compliance" heading on Supplemental Schedule 2(b) show the Company's compliance with certain covenants that the Company believes are its most restrictive financial covenants, including: total leverage ratio, secured leverage ratio, unencumbered leverage ratio, fixed charge coverage ratio, and unsecured interest coverage ratio.
Total leverage ratio represents (i) total outstanding indebtedness (including the Company's pro rata share of debt in unconsolidated entities), as defined by the Unsecured Credit Agreement, divided by (ii) total asset value (including the Company's pro rata share of assets in unconsolidated entities), as defined in the Unsecured Credit Agreement. For the purpose of calculating total asset value under the terms of the Unsecured Credit Agreement, properties owned for at least one year are valued by dividing NOI by a 6% capitalization rate (the market standard for residential loans), and properties owned for less than one year are valued at either their gross book value or by dividing NOI by a 6% capitalization rate.
Secured leverage ratio represents (i) total outstanding secured indebtedness (including the Company's pro rata share of secured debt in unconsolidated entities), as defined by the Unsecured Credit Agreement, divided by (ii) total asset value (including the Company's pro rata share of assets in unconsolidated entities), as defined in the Unsecured Credit Agreement. For the purpose of calculating total asset value under the terms of the Unsecured Credit Agreement, properties owned for at least one year are valued by dividing NOI by a 6% capitalization rate (the market standard for residential loans), and properties owned for less than one year are valued at either their gross book value or by dividing NOI by a 6% capitalization rate.
Unencumbered leverage ratio represents (i) total outstanding unsecured indebtedness (including the Company's pro rata share of unsecured debt in unconsolidated entities), as defined by the Unsecured Credit Agreement, divided by (ii) unencumbered asset value, as defined in the Unsecured Credit Agreement. For the purpose of calculating unencumbered asset value under the terms of the Unsecured Credit Agreement, properties owned for at least one year are valued by dividing NOI by a 6% capitalization rate (the market standard for residential loans), and properties owned for less than one year are valued at either their gross book value or by dividing NOI by a 6% capitalization rate.
Fixed charge coverage ratio represents (i) the trailing four quarters' EBITDA (including the Company's pro rata share of EBITDA from unconsolidated entities), as defined by the Unsecured Credit Agreement, divided by (ii) the trailing four quarters' fixed charges (including the Company's pro rata share of fixed charges in unconsolidated entities), as defined in the Unsecured Credit Agreement. Fixed charges include cash interest expense, regularly scheduled principal payments, and preferred stock or preferred OP unit dividends.
Unsecured interest coverage ratio represents (i) the trailing four quarters' unencumbered NOI, as defined by the Unsecured Credit Agreement, divided by (ii) the trailing four quarters' total unsecured interest expense (including the Company's pro rata share of interest expense from unsecured debt in unconsolidated entities), as defined in the Unsecured Credit Agreement.
The metrics set forth under the "Unsecured Facility Covenant Compliance" heading on Supplemental Schedule 2(b), and described above, are provided only to show the Company's compliance with these covenants. These metrics should not be used for any other purpose, including without limitation to evaluate the Company's financial condition or results of operations, nor do they indicate the Company's covenant compliance as of any other date or for any other period. These metrics, or components of these metrics described above, may be defined differently in the Unsecured Credit Agreement than similarly named metrics are defined by the Company in its Earnings Release and Supplemental Information for the purposes of evaluating its financial conditions or results of operations. For a more complete and detailed description of the covenants contained in the Company's Unsecured Credit Agreement, see Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-38004) filed on December 9, 2020.
The breach of any of the covenants set forth in the Unsecured Credit Agreement could result in a default of the Company's indebtedness related to its Revolving Facility and Term Loan Facility, which could cause those obligations to become due and payable. The Company's ability to comply with these covenants may be affected by changes in the Company's operating and financial performance, changes in general business and economic conditions, adverse regulatory developments, or other events adversely impacting it. If any of the Company's indebtedness is accelerated, the Company may not be able to repay it. For risks related to failure to comply with
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 32
covenants, see Part I. Item 1A. “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as such factors may be updated from time to time in its periodic filings with the SEC.
Unsecured Public Bond Covenants
Unsecured public bond covenants refer to financial and operating requirements that the Company must meet with respect to its senior notes due November 2028, August 2031 and January 2034, as set forth in the Company's First, Second, and Third Supplemental Indentures to the Base Indenture for its Senior Notes (together, the "Indenture"). The metrics provided under the "Unsecured Public Bond Covenant Compliance" heading on Supplemental Schedule 2(b) show the Company's compliance with certain covenants that the Company believes are its most restrictive financial covenants, including: aggregate debt ratio, secured debt ratio, unencumbered assets ratio, and debt service ratio.
Aggregate debt ratio represents (i) total debt, as defined by the Indenture, divided by (ii) total assets, including the undepreciated book value of real estate assets and some tangible non-real estate assets, as defined by the Indenture.
Secured debt ratio represents (i) secured debt, as defined by the Indenture, divided by (ii) total assets, including the undepreciated book value of real estate assets and some tangible non-real estate assets, as defined by the Indenture.
Unencumbered assets ratio represents (i) total unencumbered assets, not including investments in unconsolidated joint ventures, as defined in the Indenture, divided by (ii) unsecured debt, as defined by the Indenture.
Debt service ratio represents (i) consolidated income available for debt service, as defined by the Indenture, divided by (ii) annual service charge for the trailing four quarters, calculated on a pro forma basis as if transactions during the period had occured at the beginning of the period, as defined in the Indenture. Annual service charge includes interest expense and amortization of original issue discounts on debt, and excludes funded interest reserves, amortization of DFCs, and select nonrecurring charges.
The metrics set forth under the "Unsecured Public Bond Covenant Compliance" heading on Supplemental Schedule 2(b), and described above, are provided only to show the Company's compliance with these covenants. These metrics should not be used for any other purpose, including without limitation to evaluate the Company's financial condition or results of operations, nor do they indicate the Company's covenant compliance as of any other date or for any other period. These metrics, or components of these metrics described above, may be defined differently in the Indenture than similarly named metrics are defined by the Company in its Earnings Release and Supplemental Information for the purposes of evaluating its financial conditions or results of operations. For a more complete and detailed description of the covenants contained in the Company's Unsecured Public Bond Agreements, see Exhibit 4.2 and/or 4.3 to the Company’s Current Report on Form 8-K (File No. 001-38004) filed on August 6, 2021, and on November 5, 2021.
The breach of any of the covenants set forth in the Indenture could result in a default of the Company's indebtedness related to its senior notes due 2031, which could cause those obligations to become due and payable. The Company's ability to comply with these covenants may be affected by changes in the Company's operating and financial performance, changes in general business and economic conditions, adverse regulatory developments, or other events adversely impacting it. If any of the Company's indebtedness is accelerated, the Company may not be able to repay it. For risks related to failure to comply with covenants, see Part I. Item 1A. “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as such factors may be updated from time to time in its periodic filings with the SEC.
Value Enhancing CapEx
Value enhancing CapEx represents re-investment in stabilized homes, above and beyond general replacements to preserve and maintain the value and functionality of a home, for the purpose of enhancing expected risk-adjusted returns.
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 33
Reconciliation of Total Revenues to Same Store Core Revenues, Quarterly
(in thousands) (unaudited)
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
Total revenues (Total Portfolio)
$
532,310
$
520,225
$
509,532
$
491,633
$
475,225
Joint venture management fees
(2,111)
(1,753)
(1,354)
(1,015)
(771)
Total portfolio resident recoveries
(28,762)
(26,967)
(27,972)
(26,076)
(24,740)
Total Core Revenues (Total Portfolio)
501,437
491,505
480,206
464,542
449,714
Non-Same Store Core Revenues
(33,569)
(30,137)
(27,818)
(25,429)
(22,116)
Same Store Core Revenues
$
467,868
$
461,368
$
452,388
$
439,113
$
427,598
Reconciliation of Property Operating and Maintenance Expenses to Same Store Core Operating Expenses, Quarterly
(in thousands) (unaudited)
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
Property operating and maintenance expenses (Total Portfolio)
$
182,269
$
177,883
$
184,484
$
175,422
$
168,373
Total Portfolio resident recoveries
(28,762)
(26,967)
(27,972)
(26,076)
(24,740)
Core Operating Expenses (Total Portfolio)
153,507
150,916
156,512
149,346
143,633
Non-Same Store Core Operating Expenses
(11,418)
(9,842)
(8,737)
(8,673)
(7,605)
Same Store Core Operating Expenses
$
142,089
$
141,074
$
147,775
$
140,673
$
136,028
Reconciliation of Net Income to Same Store NOI, Quarterly
(in thousands) (unaudited)
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
Net income available to common stockholders
$
92,395
$
74,476
$
69,108
$
60,242
$
57,272
Net income available to participating securities
220
67
69
96
95
Non-controlling interests
388
328
318
350
355
Interest expense
74,389
79,121
79,370
80,764
83,406
Depreciation and amortization
155,796
151,660
150,694
145,280
144,501
Property management expense
20,967
20,173
17,886
17,696
16,950
General and administrative
17,639
19,668
19,369
19,828
15,842
Impairment and other
1,515
3,046
4,294
980
356
Gain on sale of property, net of tax
(18,026)
(14,558)
(13,047)
(17,919)
(14,484)
Losses on investments in equity securities, net
3,032
3,597
(4,319)
7,002
3,140
Other, net
(594)
2,654
1,508
1,903
(230)
Joint venture management fees
(2,111)
(1,753)
(1,354)
(1,015)
(771)
(Income) loss from investments in unconsolidated joint ventures
2,320
2,110
(202)
(11)
(351)
NOI (Total Portfolio)
347,930
340,589
323,694
315,196
306,081
Non-Same Store NOI
(22,151)
(20,295)
(19,081)
(16,756)
(14,511)
Same Store NOI
$
325,779
$
320,294
$
304,613
$
298,440
$
291,570
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 34
Reconciliation of Net Income to EBITDA, EBITDAre, and Adjusted EBITDAre
(in thousands, unaudited)
Trailing Twelve Months (TTM) Ended
Q1 2022
Q1 2021
March 31, 2022
December 31, 2021
Net income available to common stockholders
$
92,395
$
57,272
$
296,221
$
261,098
Net income available to participating securities
220
95
452
327
Non-controlling interests
388
355
1,384
1,351
Interest expense
74,389
83,406
313,644
322,661
Interest expense in unconsolidated joint ventures
592
74
1,727
1,209
Depreciation and amortization
155,796
144,501
603,430
592,135
Depreciation and amortization of real estate assets in unconsolidated joint ventures
638
104
1,838
1,304
EBITDA
324,418
285,807
1,218,696
1,180,085
Gain on sale of property, net of tax
(18,026)
(14,484)
(63,550)
(60,008)
Impairment on depreciated real estate investments
101
431
320
650
Net gain on sale of investments in unconsolidated joint ventures
(130)
(336)
(844)
(1,050)
EBITDAre
306,363
271,418
1,154,622
1,119,677
Share-based compensation expense
6,646
5,814
28,002
27,170
Severance
18
114
961
1,057
Casualty (gains) losses, net
1,414
(75)
9,515
8,026
(Gains) losses on investments in equity securities, net
3,032
3,140
9,312
9,420
Other, net
(594)
(230)
5,471
5,835
Adjusted EBITDAre
$
316,879
$
280,181
$
1,207,883
$
1,171,185
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 35
Reconciliation of Net Debt / Trailing Twelve Months (TTM) Adjusted EBITDAre
(in thousands, except for ratio) (unaudited)
As of
As of
March 31, 2022
December 31, 2021
Mortgage loans, net
$
3,051,590
$
3,055,853
Secured term loan, net
401,367
401,313
Unsecured notes, net
1,922,716
1,921,974
Term loan facility, net
2,479,935
2,478,122
Revolving facility
—
—
Convertible senior notes, net
—
141,397
Total Debt per Balance Sheet
7,855,608
7,998,659
Retained and repurchased certificates
(158,908)
(159,110)
Cash, ex-security deposits and letters of credit (1)
(511,490)
(649,722)
Deferred financing costs, net
47,334
50,146
Unamortized discounts on note payable
13,143
13,605
Net Debt (A)
$
7,245,687
$
7,253,578
For the Trailing Twelve
For the Trailing Twelve
Months (TTM) Ended
Months (TTM) Ended
March 31, 2022
December 31, 2021
Adjusted EBITDAre (B)
$
1,207,883
$
1,171,185
Net Debt / TTM Adjusted EBITDAre (A / B)
6.0
x
6.2
x
(1)Represents cash and cash equivalents and the portion of restricted cash that excludes security deposits and letters of credit
Components of Non-Cash Interest Expense (Wholly Owned)
(in thousands) (unaudited)
Q1 2022
Q1 2021
Amortization of discounts on notes payable
$
462
$
1,414
Amortization of deferred financing costs
3,538
3,510
Change in fair value of interest rate derivatives
(20)
31
Amortization of swap fair value at designation
2,420
3,591
Total non-cash interest expense
$
6,400
$
8,546
Note: Refer to "Glossary and Reconciliations" for metric definitions and reconciliations of non-GAAP financial measures.
Q1 2022 Earnings Release and Supplemental Information — page 36
