Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the "Company"), the nation's premier single-family home leasing company, today announced its Q2 2023 financial and operating results, along with an increase to the Company's 2023 full year guidance.

In addition, Invitation Homes also announced today that on July 18, 2023, the Company acquired a premier portfolio of nearly 1,900 homes for approximately $650 million. The Company funded the transaction primarily with cash on hand, with the remainder funded by the Company's previously undrawn revolving credit facility. Additional details of the transaction will be discussed on tomorrow's earnings conference call.

Second Quarter 2023 Highlights

• Year over year, total revenues increased 7.7% to $600 million, property operating and maintenance costs increased 12.1% to $214 million, net income available to common stockholders increased 24.3% to $138 million, and net income per diluted common share increased 23.9% to $0.22.
• Year over year, Core FFO per share increased 5.3% to $0.44, and AFFO per share increased 6.8% to $0.38.
• Same Store NOI increased 3.6% year over year on 5.9% Same Store Core Revenues growth and 11.2% Same Store Core Operating Expenses growth.
• Revenue collections were approximately 99% of the Company's historical average collection rate. Same Store Bad Debt was 1.5% of gross rental revenue, an improvement of approximately 50 basis points from Q1 2023.
• Same Store Average Occupancy was 97.6%, down 20 basis points from Q1 2023 as the Company continued to make progress on its lease compliance backlog.
• Same Store new lease rent growth of 7.3% and Same Store renewal rent growth of 6.9% drove Same Store blended rent growth of 7.0%.
• Acquisitions by the Company and the Company's joint ventures totaled 276 homes for $88 million, primarily from the Company's builder partners, while dispositions totaled 378 homes for $141 million.

Chief Executive Officer Dallas Tanner comments:

"We're pleased to report second quarter results that demonstrate strong progress for the first half of 2023. Robust demand for our homes continued into the peak leasing season, with Same Store Average Occupancy remaining high at 97.6% and Same Store blended rental rate growth at 7.0% year over year. As a result of solid year-to-date execution by our teams and our continued expectations that supply and demand fundamentals will remain favorable, we are raising our 2023 full year guidance, including an increase of 25 basis points at the midpoint for our Same Store NOI growth guidance and an increase of $0.01 at the midpoint for our Core FFO per share and AFFO per share guidance.

"In addition, we're excited by our recent portfolio acquisition that adds nearly 1,900 homes that are among the best located and highest quality within our portfolio today. We believe this acquisition's attractive entry point and high-growth outlook align well with our disciplined investment approach, providing further evidence of the benefits of our multichannel acquisition strategy, industry-leading scale, and best-in-class platform. Looking ahead, we believe these newly acquired homes will help drive strong NOI growth and value creation, and we remain committed as ever to sourcing focused and value-additive external growth opportunities."

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

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

Financial Results

Net Income

Net income per share for Q2 2023 was $0.22, compared to net income per share of $0.18 for Q2 2022. Total revenues and total property operating and maintenance expenses for Q2 2023 were $600 million and $214 million, respectively, compared to $557 million and $191 million, respectively, in Q2 2022.

Net income per share YTD 2023 was $0.42, compared to net income per share of $0.33 for YTD 2022. Total revenues and total property operating and maintenance expenses for YTD 2023 were $1,190 million and $422 million, respectively, compared to $1,090 million and $373 million, respectively, for YTD 2022.

Core FFO

Year over year, Core FFO per share for Q2 2023 increased 5.3% to $0.44, primarily due to NOI growth. Year over year, Core FFO per share for YTD 2023 increased 7.4% to $0.88, primarily due to NOI growth.

AFFO

Year over year, AFFO per share for Q2 2023 increased 6.8% to $0.38, primarily due to the increase in Core FFO per share described above. Year over year, AFFO per share for YTD 2023 increased 7.9% to $0.76, primarily due to the increase in Core FFO per share described above.

Operating Results

Same Store NOI

For the Same Store Portfolio of 76,593 homes, Same Store NOI for Q2 2023 increased 3.6% year over year on Same Store Core Revenues growth of 5.9% and Same Store Core Operating Expenses growth of 11.2%.

YTD 2023 Same Store NOI increased 4.4% year over year on Same Store Core Revenues growth of 6.9% and Same Store Core Operating Expenses growth of 12.5%.

Same Store Core Revenues

Same Store Core Revenues growth for Q2 2023 of 5.9% year over year was primarily driven by a 7.4% increase in Average Monthly Rent and a 7.3% increase in other income, net of resident recoveries, partially offset by a 40 basis points year over year decline in Average Occupancy and a 100 basis points year over year increase in Bad Debt as a percentage of gross rental revenue. Bad Debt was 1.5% of gross rental revenue for Q2 2023, an improvement of approximately 50 basis points from Q1 2023 as a result of continued progress in working through the Company's lease compliance backlog.

YTD 2023 Same Store Core Revenues growth of 6.9% year over year was primarily driven by a 7.9% increase in Average Monthly Rent and a 7.5% increase in other income, net of resident recoveries, partially offset by a 40 basis point year over year decline in Average Occupancy and a 60 basis point year over year increase in Bad Debt as a percentage of gross rental revenue.

Same Store Core Operating Expenses

Same Store Core Operating Expenses for Q2 2023 increased 11.2% year over year. The largest contributors to the year over year increase include an increase in property tax expense due to an expected year over year increase in property taxes in addition to the underaccrual of property tax expense in the first three quarters of 2022, as well as an increase in turnover expenses, net of resident recoveries, and an increase in utilities and property administrative expenses, net of resident recoveries. The increases in the latter two expense categories were expected primarily as a result of continued progress in working through the Company's lease compliance backlog.

YTD 2023 Same Store Core Operating Expenses increased 12.5% year over year, primarily driven by the year over year increases described above.

Investment Management Activity

Acquisitions for Q2 2023 totaled 276 homes for $88 million, primarily sourced from the Company's builder partners. This included 188 wholly owned homes for $61 million in addition to 88 homes for $27 million in the Company's joint ventures. Dispositions for Q2 2023 included 361 wholly owned homes for gross proceeds of $134 million and 17 homes for gross proceeds of $7 million in the Company's joint ventures.

Year to date through June 30, 2023, the Company acquired 470 homes for $155 million, including 369 wholly owned homes for $123 million and 101 homes for $32 million in the Company's joint ventures. The company also sold 675 homes for $242 million, including 645 wholly owned homes for $229 million and 30 homes for $13 million in the Company's joint ventures.

Subsequent to quarter end on July 18, 2023, the Company acquired a premier portfolio of nearly 1,900 homes for approximately $650 million (the "Portfolio Acquisition"). Additional details of the transaction will be discussed on tomorrow's earnings conference call.

Balance Sheet and Capital Markets Activity

As of June 30, 2023, the Company had $1,414 million in available liquidity through a combination of unrestricted cash and undrawn capacity on its revolving credit facility. The Company's total indebtedness as of June 30, 2023 was $7,823 million, consisting of $5,775 million of unsecured debt and $2,048 million of secured debt. Net debt / TTM adjusted EBITDAre was 5.3x at June 30, 2023, down from 5.7x as of December 31, 2022.

Subsequent to quarter end on July 18, 2023, the Company funded the Portfolio Acquisition primarily with cash on hand, with the remainder funded by the Company's previously undrawn revolving credit facility.

Dividend

As previously announced on July 21, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.26 per share of common stock. The dividend will be paid on or before August 25, 2023, to stockholders of record as of the close of business on August 8, 2023.

FY 2023 Guidance Update

The Company does not provide guidance for the most comparable GAAP financial measures of net income (loss), total revenues, and property operating and maintenance expense. Additionally, a reconciliation of the forward-looking non-GAAP financial measures of Core FFO per share, AFFO per share, Same Store Core Revenues growth, Same Store Core Operating Expenses growth, and Same Store NOI growth to the comparable GAAP financial measures cannot be provided without unreasonable effort because the Company is unable to reasonably predict certain items contained in the GAAP measures, including non-recurring and infrequent items that are not indicative of the Company's ongoing operations. Such items include, but are not limited to, impairment on depreciated real estate assets, net (gain)/loss on sale of previously depreciated real estate assets, share-based compensation, casualty loss, non-Same Store revenues, and non-Same Store operating expenses. These items are uncertain, depend on various factors, and could have a material impact on the Company's GAAP results for the guidance period.

Full year 2023 guidance revisions are outlined in the table below:

Earnings Conference Call Information

Invitation Homes has scheduled a conference call at 11:00 a.m. Eastern Time on July 27, 2023, to discuss results for the second quarter of 2023. The domestic dial-in number is 1-888-330-2384, and the international dial-in number is 1-240-789-2701. The conference ID is 7714113. A live audio webcast may be accessed at www.invh.com. A replay of the call will be available through August 24, 2023, and can be accessed by calling 1-800-770-2030 (domestic) or 1-647-362-9199 (international) and using the playback ID 7714113, or by using the link at www.invh.com.

Supplemental Information

The full text of the Earnings Release and Supplemental Information referenced in this release are available on Invitation Homes' Investor Relations website at www.invh.com.

About Invitation Homes

Invitation Homes, an S&P 500 company, is the nation's premier single-family home leasing company, meeting changing lifestyle demands by providing access to high-quality, updated homes with valued features such as close proximity to jobs and access to good schools. The company's mission, "Together with you, we make a house a home," reflects its commitment to providing homes where individuals and families can thrive and high-touch service that continuously enhances residents' living experiences.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include, but are not limited to, statements related to the Company's expectations regarding the performance of the Company's business, its financial results, its liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the single-family rental industry and the Company's business model, macroeconomic factors beyond the Company's control, competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association and insurance costs, poor resident selection and defaults and non-renewals by the Company's residents, the Company's dependence on third parties for key services, risks related to the evaluation of properties, performance of the Company's information technology systems, risks related to the Company's indebtedness, and risks related to the potential negative impact of unfavorable global and United States economic conditions (including inflation and rising interest rates), uncertainty in financial markets (including as a result of recent bank failures and events affecting financial institutions), geopolitical tensions, natural disasters, climate change, and public health crises on the Company’s financial condition, results of operations, cash flows, business, associates, and residents. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The Company believes these factors include, but are not limited to, those described under Part I. Item 1A. “Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2022 (the "Annual Report"), as such factors may be updated from time to time in the Company's periodic filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release, in the Annual Report, and in the Company's other periodic filings. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.

Glossary and Reconciliations

Average Monthly Rent

Average monthly rent represents average monthly rental income per home for occupied properties in an identified population of homes over the measurement period, and reflects the impact of non-service rental concessions and contractual rent increases amortized over the life of the lease.

Average Occupancy

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

Bad Debt

Bad debt represents the Company's reserves for residents' accounts receivables balances that are aged greater than 30 days, under the rationale that a resident's security deposit should cover approximately the first 30 days of receivables. For all resident receivables balances aged greater than 30 days, the amount reserved as bad debt is 100% of outstanding receivables from the resident, less the amount of the resident's security deposit on hand. For the purpose of determining age of receivables, charges are considered to be due based on the terms of the original lease, not based on a payment plan if one is in place. All rental revenues and other property income, in both Total Portfolio and Same Store Portfolio presentations, are reflected net of bad debt.

Core Operating Expenses

Core operating expenses for an identified population of homes reflect property operating and maintenance expenses, excluding any expenses recovered from residents.

Core Revenues

Core revenues for an identified population of homes reflects total revenues, net of any resident recoveries.

EBITDA, EBITDAre, and Adjusted EBITDAre

EBITDA, EBITDAre, and Adjusted EBITDAre are supplemental, non-GAAP measures often utilized to evaluate the performance of real estate companies. The Company defines EBITDA as net income or loss computed in accordance with accounting principles generally accepted in the United States (“GAAP”) before the following items: interest expense; income tax expense; depreciation and amortization; and adjustments for unconsolidated joint ventures. National Association of Real Estate Investment Trusts ("Nareit") recommends as a best practice that REITs that report an EBITDA performance measure also report EBITDAre. The Company defines EBITDAre, consistent with the Nareit definition, as EBITDA, further adjusted for gain on sale of property, net of tax, impairment on depreciated real estate investments, and adjustments for unconsolidated joint ventures. Adjusted EBITDAre is defined as EBITDAre before the following items: share-based compensation expense; severance; casualty losses, net; (gains) losses on investments in equity securities, net; and other income and expenses. EBITDA, EBITDAre, and Adjusted EBITDAre are used as supplemental financial performance measures by management and by external users of the Company's financial statements, such as investors and commercial banks. Set forth below is additional detail on how management uses EBITDA, EBITDAre, and Adjusted EBITDAre as measures of performance.

The GAAP measure most directly comparable to EBITDA, EBITDAre, and Adjusted EBITDAre is net income or loss. EBITDA, EBITDAre, and Adjusted EBITDAre are not used as measures of the Company's liquidity and should not be considered alternatives to net income or loss or any other measure of financial performance presented in accordance with GAAP. The Company's EBITDA, EBITDAre, and Adjusted EBITDAre may not be comparable to the EBITDA, EBITDAre, and Adjusted EBITDAre of other companies due to the fact that not all companies use the same definitions of EBITDA, EBITDAre, and Adjusted EBITDAre. Accordingly, there can be no assurance that the Company's basis for computing these non-GAAP measures is comparable with that of other companies. See below for a reconciliation of GAAP net income to EBITDA, EBITDAre, and Adjusted EBITDAre.

Funds from Operations (FFO), Core Funds from Operations (Core FFO), and Adjusted Funds from Operations (AFFO)

FFO, Core FFO, and Adjusted FFO are supplemental, non-GAAP measures often utilized to evaluate the performance of real estate companies. FFO is defined by Nareit as net income or loss (computed in accordance with GAAP) excluding gains or losses from sales of previously depreciated real estate assets, plus depreciation, amortization and impairment of real estate assets, and adjustments for unconsolidated joint ventures.

The Company 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 these non-GAAP measures is comparable with that of other companies. See "Reconciliation of FFO, Core FFO, and Adjusted FFO" for a reconciliation of GAAP net income to FFO, Core FFO, and Adjusted FFO.

Net Operating Income (NOI)

NOI is a non-GAAP measure often used to evaluate the performance of real estate companies. The Company defines NOI for an identified population of homes as rental revenues and other property income less property operating and maintenance expense (which consists primarily of property taxes, insurance, HOA fees (when applicable), market-level personnel expenses, repairs and maintenance, leasing costs, and marketing expense). NOI excludes: interest expense; depreciation and amortization; property management expense; general and administrative expense; impairment and other; gain on sale of property, net of tax; (gains) losses on investments in equity securities, net; other income and expenses; management fee revenues; and income from investments in unconsolidated joint ventures.

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

The Company believes that Same Store NOI is also a meaningful supplemental measure of the Company's operating performance for the same reasons as NOI and is further helpful to investors as it provides a more consistent measurement of the Company's performance across reporting periods by reflecting NOI for homes in its Same Store Portfolio.

See below for a reconciliation of GAAP net income to NOI for the Company's total portfolio and NOI for its Same Store Portfolio.

Recurring Capital Expenditures or Recurring CapEx

Recurring Capital Expenditures or Recurring CapEx represents general replacements and expenditures required to preserve and maintain the value and functionality of a home and its systems as a single-family rental.

Rental Rate Growth

Rental rate growth for any home represents the percentage difference between the monthly rent from an expiring lease and the monthly rent from the next lease, and, in each case, reflects the impact of any amortized non-service rent concessions and amortized contractual rent increases. Leases are either renewal leases, where the Company's current resident chooses to stay for a subsequent lease term, or a new lease, where the Company's previous resident moves out and a new resident signs a lease to occupy the same home.

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

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

Total Homes / Total Portfolio

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

Turnover Rate

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