Invitation Homes Inc. (NYSE:INVH) ("Invitation Homes" or the "Company"), the nation's premier single-family home leasing company, today announced its Q2 2021 financial and operating results.

Second Quarter 2021 Highlights

Year over year, total revenues increased 9.3% to $492 million, property operating and maintenance costs increased 5.0% to $175 million, net income available to common stockholders increased 40.8% to $60 million, and net income per diluted common share increased 36.0% to $0.11.
Year over year, Core FFO per share increased 14.4% to $0.37, and AFFO per share increased 16.9% to $0.32.
Same Store NOI grew 8.4% year over year on 5.9% Same Store Core revenue growth and 0.9% Same Store Core operating expenses growth.
Same Store average occupancy was 98.3%, up 80 basis points year over year.
Same Store new lease rent growth of 13.8% and Same Store renewal rent growth of 5.8% drove Same Store blended rent growth of 8.0%, up 470 basis points year over year.
Revenue collections were approximately 99% of the Company's historical average collection rate.
Acquisitions by the Company and the Company's joint ventures totaled 879 homes for $337 million while dispositions totaled 218 homes for $73 million.
As previously announced in May 2021, the Company issued and sold $300 million of privately placed senior unsecured notes at a weighted average coupon of 2.82%. Proceeds were primarily used to voluntarily prepay the highest-cost classes of various securitizations due to reach final maturity between December 2024 and January 2026.
Subsequent to quarter end, as previously announced, the Company gave notice of its intent to settle conversions of its 3.5% convertible notes due January 15, 2022 (the "2022 Convertible Notes"), with common stock.
Subsequent to quarter end, as previously announced, the Company and PulteGroup Inc., the nation's third largest homebuilder, have formed an innovative strategic relationship in which Invitation Homes expects to purchase approximately 7,500 new homes over the next five years that PulteGroup will design and build expressly for this purpose.
Subsequent to quarter end and in conjunction with this release, the Company is raising its full year 2021 guidance for Same Store Core Revenue growth by 50 basis points at the midpoint to 5.5%, and Same Store NOI growth by 100 basis points at the midpoint to 7.0%. The Company is also raising its full year 2021 guidance for Core FFO per share and AFFO per share by $0.02 at the midpoint to $1.44 and $1.24, respectively.

President & Chief Executive Officer Dallas Tanner comments:

"Invitation Homes had a strong second quarter, driven by solid execution from our teams, our commitment to an outstanding resident experience, and positive market fundamentals. With notable year over year new lease and renewal rent growth, along with high occupancy, we remain focused on realizing prudent growth and enhanced efficiencies in the second half of the year. We believe our people, locations, scale, and service are second to none, and that the long-term demographic trends and our best-in-class platform have together created a long runway for outsized NOI and Core FFO growth."

Financial Results

Net Income, FFO, Core FFO, and AFFO Per Share — Diluted

	Q2 2021		Q2 2020		YTD 2021		YTD 2020
Net income ⁽¹⁾	$	0.11	$	0.08	$	0.21	$	0.17
FFO ⁽¹⁾	0.32		0.30		0.65		0.62
Core FFO ⁽²⁾	0.37		0.32		0.73		0.66
AFFO ⁽²⁾	0.32		0.27		0.63		0.57

(1)

In accordance with GAAP and Nareit guidelines, net income per share and FFO per share are calculated as if the 3.5% Convertible Notes due January 15, 2022 (the "2022 Convertible Notes"), were converted to common shares at the beginning of each relevant period in 2020 and 2021, unless such treatment is anti-dilutive to net income per share or FFO per share. See "Reconciliation of FFO, Core FFO, and AFFO," footnote (1), for more detail on the treatment of convertible notes in each specific period presented in the table.

(2)

Core FFO and AFFO per share reflect the 2022 Convertible Notes in the form in which they were outstanding during each period. See "Reconciliation of FFO, Core FFO, and AFFO," footnote (2), for more detail on the treatment of convertible notes in each specific period presented in the table.

Net Income

Net income per share in the second quarter of 2021 was $0.11, compared to net income per share of $0.08 in the second quarter of 2020. Total revenues and total property operating and maintenance expenses in the second quarter of 2021 were $492 million and $175 million, respectively, compared to $450 million and $167 million, respectively, in the second quarter of 2020.

Net income per share in YTD 2021 was $0.21, compared to net income per share of $0.17 in YTD 2020. Total revenues and total property operating and maintenance expenses in YTD 2021 were $967 million and $344 million, respectively, compared to $900 million and $334 million, respectively, in YTD 2020.

Core FFO

Year over year, Core FFO per share in the second quarter of 2021 increased 14.4% to $0.37, primarily due to NOI growth and interest expense savings.

Year over year, Core FFO per share in YTD 2021 increased 9.3% to $0.73, primarily due to NOI growth and interest expense savings.

AFFO

Year over year, AFFO per share in the second quarter of 2021 increased 16.9% to $0.32, primarily due to the increase in Core FFO per share described above.

Year over year, AFFO per share in YTD 2021 increased 11.7% to $0.63, 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:	72,658

	Q2 2021		Q2 2020		YTD 2021		YTD 2020
Core revenue growth (year over year)	5.9	%			4.0	%
Core operating expense growth (year over year)	0.9	%			(0.7)	%
NOI growth (year over year)	8.4	%			6.4	%

Average occupancy	98.3	%	97.5	%	98.4	%	97.1	%
Bad debt % of gross rental revenues ⁽¹⁾	1.8	%	1.8	%	2.0	%	1.1	%
Turnover rate	6.7	%	7.0	%	12.0	%	13.3	%

Rental rate growth (lease-over-lease):
Renewals	5.8	%	3.5	%	5.1	%	3.8	%
New leases	13.8	%	2.7	%	11.1	%	2.3	%
Blended	8.0	%	3.3	%	6.8	%	3.3	%

(1)

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

Revenue Collections Update

	Q2 2021		Q1 2021		Q4 2020		Q3 2020		Pre-COVID Average ⁽²⁾
Revenues collected % of revenues due: ⁽¹⁾
Revenues collected in same month billed	92	%	91	%	91	%	92	%	96	%
Late collections of prior month billings	6	%	6	%	5	%	5	%	3	%
Total collections	98	%	97	%	96	%	97	%	99	%

(1)	Includes both rental revenues and other property income. Rent is considered to be due based on the terms of the original lease, not based on a payment plan if one is in place. Security deposits retained to offset rents due are not included as revenue collected. See "Same Store Operating Results Snapshot," footnote (1), for detail on the Company's bad debt policy.
(2)	Represents the period from October 2019 to March 2020.

Q2 2021 Earnings Release and Supplemental Information - page

Same Store NOI

For the Same Store portfolio of 72,658 homes, second quarter 2021 Same Store NOI increased 8.4% year over year on Same Store Core revenue growth of 5.9% and Same Store Core operating expenses growth of 0.9%.

YTD 2021 Same Store NOI increased 6.4% year over year on Same Store Core revenue growth of 4.0% and a 0.7% decrease in Same Store Core operating expense.

Same Store Core Revenues

Second quarter 2021 Same Store Core revenue growth of 5.9% year over year was driven by a 3.9% increase in average monthly rent, an 80 basis point increase in average occupancy to 98.3%, and a 48.4% increase in Other income, net of resident recoveries. Bad debt as a percentage of gross rental revenues in Q2 2021 was in line with Q2 2020.

YTD 2021 Same Store Core revenue growth of 4.0% year over year was driven by a 3.7% increase in average monthly rent and a 130 basis point increase in average occupancy to 98.4%. As a result of the increases in average monthly rent and average occupancy, Same Store rental revenues increased 5.1% year over year on a gross basis before bad debt. Bad debt increased from 1.1% of gross rental revenues in YTD 2020 to 2.0% of gross rental revenues in YTD 2021, which was a 97 basis point drag on Same Store Core revenue growth, all else equal.

Same Store Core Operating Expenses

Second quarter 2021 Same Store Core operating expenses increased 0.9% year over year, driven by a 2.0% increase in Same Store fixed expenses, partially offset by a 1.1% decline in Same Store controllable expenses, net of resident recoveries.

YTD 2021 Same Store Core operating expenses decreased 0.7% year over year, driven by a 6.1% decline in Same Store controllable expenses, net of resident recoveries, partially offset by a 2.4% increase in Same Store fixed expenses.

Investment Management Activity

Second quarter 2021 acquisitions totaled 879 homes for $337 million through multiple acquisition channels. This included 494 wholly owned homes for $195 million and 385 homes for $142 million in the Company's unconsolidated joint venture with Rockpoint Group (the "Rockpoint JV"). Invitation Homes owns 20% of the Rockpoint JV, which owned a total of 820 homes as of June 30, 2021.

Dispositions in the second quarter of 2021 included 212 wholly owned homes for gross proceeds of $71 million and 6 homes for gross proceeds of $2 million in the Company's unconsolidated joint venture with the Federal National Mortgage Association (the "FNMA JV").

Year to date through June 30, 2021, the Company acquired 1,575 homes for $569 million, including 895 wholly owned homes for $333 million and 680 homes for $236 million in the Rockpoint JV. The Company also sold 483 homes for $155 million, including 460 wholly owned homes for $146 million and 23 homes for $8 million in the FNMA JV.

Subsequent to quarter end in July, the Company and PulteGroup Inc., the nation's third largest homebuilder, announced they have formed an innovative strategic relationship. As part of their agreement, Invitation Homes expects to purchase approximately 7,500 new homes over the next five years that PulteGroup will design and build expressly for this purpose. The companies have identified the first 1,000 homes across seven communities to be built in select markets within Florida, Georgia, Southern California, North Carolina and Texas.

Balance Sheet and Capital Markets Activity

As of June 30, 2021, the Company had $1,126 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, 2021, was $8,059 million, consisting of $4,914 million of secured debt and $3,145 million of unsecured debt.

As previously announced, in May 2021, the Company issued and sold $300 million of privately placed fixed rate senior unsecured notes (the "Unsecured Notes") at a weighted average coupon of 2.82%. The Unsecured Notes are comprised of two tranches: a $150 million 7-year tranche with a coupon of 2.46% maturing in 2028, and a $150 million 15-year tranche with a coupon of 3.18% maturing in 2036. Proceeds were used to voluntarily prepay the highest-cost classes of various securitizations due to reach final maturity between December 2024 and January 2026. The private placement jumpstarted the diversification of the balance sheet toward more unsecured debt and improved the laddering of maturity schedule.

In July 2021, the Company gave notice of its intent to settle conversions of its 3.5% convertible notes due January 15, 2022 (the "2022 Convertible Notes"), with common stock. For holders electing conversion on or before January 15, 2022, the 2022 Convertible Notes will be exchanged for common stock according to a conversion ratio that is fixed other than for adjustments related to dividends paid to common stockholders and other potential transactions. Based on the June 30, 2021, conversion ratio of 43.9448 shares per $1,000 principal amount of the 2022 Convertible Notes, settlement of the $345 million (par value) of the 2022 Convertible Notes would result in the issuance of approximately 15 million common shares and a reduction in cash interest expense of approximately $12 million on an annualized basis. On a pro forma basis, whereby net debt is reduced for the impact of the conversion of 2022 Convertible Notes, Net Debt / Trailing Twelve Months Adjusted EBITDAre at June 30, 2021, would have been 6.7x, down from 7.0x on an as-reported basis and from 7.3x at the end of 2020 on an as-reported basis, with no debt reaching final maturity until December 2024. As of July 28, 2021, $177 million of principal was converted into approximately 8 million shares of common stock at the election of the note holders.

Dividend

As previously announced on July 23, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per share of common stock. The dividend will be paid on or before August 27, 2021, to stockholders of record as of the close of business on August 10, 2021.

FY 2021 Guidance Update

FY 2021 Guidance
	Current	Previous
	FY 2021	FY 2021
	Guidance	Guidance
Core FFO per share — diluted	$1.40 - $1.48	$1.38 - $1.46
AFFO per share — diluted	$1.20 - $1.28	$1.18 - $1.26

Same Store Core revenue growth	5.0% - 6.0%	4.5% - 5.5%
Same Store Core operating expense growth	2.5% - 3.5%	2.5% - 3.5%
Same Store NOI growth	6.5% - 7.5%	5.5% - 6.5%

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 revenue growth, Same Store Core operating expense 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 our GAAP results for the guidance period.

Earnings Conference Call Information

Invitation Homes has scheduled a conference call at 11:00 a.m. Eastern Time on July 29, 2021, to discuss results for the second quarter of 2021. The domestic dial-in number is 1-888-317-6003, and the international dial-in number is 1-412-317-6061. The passcode is 2915574. An audio webcast may be accessed at www.invh.com. A replay of the call will be available through August 29, 2021, and can be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using the replay passcode 10157679, or by using the link at www.invh.com.

Supplemental Information

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

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

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

About Invitation Homes

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

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which include, but are not limited to, statements related to the Company's expectations regarding the performance of the Company's business, its financial results, its liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "guidance," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the single-family rental industry and the Company's business model, macroeconomic factors beyond the Company's control, competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners' association ("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 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. Moreover, many of these factors have been heightened as a result of the ongoing and numerous adverse impacts of COVID-19. 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, 2020, 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.


Consolidated Balance Sheets
($ in thousands, except shares and per share data)

	June 30, 2021			December 31, 2020
	(unaudited)
Assets:
Investments in single-family residential properties, net	$	16,333,324		$	16,288,693
Cash and cash equivalents	126,168			213,422
Restricted cash	241,976			198,346
Goodwill	258,207			258,207
Investments in unconsolidated joint ventures	77,523			69,267
Other assets, net	447,413			478,287
Total assets	$	17,484,611		$	17,506,222

Liabilities:
Mortgage loans, net	$	4,498,289		$	4,820,098
Secured term loan, net	401,204			401,095
Unsecured notes, net	298,399			—
Term loan facility, net	2,474,495			2,470,907
Revolving facility	—			—
Convertible senior notes, net	342,050			339,404
Accounts payable and accrued expenses	217,394			149,299
Resident security deposits	162,225			157,936
Other liabilities	470,879			611,410
Total liabilities	8,864,935			8,950,149

Equity:
Stockholders' equity
Preferred stock, $0.01 par value per share, 900,000,000 shares authorized, none outstanding as of June 30, 2021 and December 31, 2020	—			—
Common stock, $0.01 par value per share, 9,000,000,000 shares authorized, 568,718,544 and 567,117,666 outstanding as of June 30, 2021 and December 31, 2020, respectively	5,687			5,671
Additional paid-in capital	9,725,480			9,707,258
Accumulated deficit	(737,444		)	(661,162		)
Accumulated other comprehensive loss	(413,684		)	(546,942		)
Total stockholders' equity	8,580,039			8,504,825
Non-controlling interests	39,637			51,248
Total equity	8,619,676			8,556,073
Total liabilities and equity	$	17,484,611		$	17,506,222

Consolidated Statements of Operations
($ in thousands, except shares and per share amounts) (unaudited)

	Q2 2021			Q2 2020			YTD 2021			YTD 2020

Revenues:
Rental revenues	$	449,113		$	419,201		$	887,246		$	833,667
Other property income	41,505			30,554			77,826			65,877
Joint venture management fees	1,015			—			1,786			—
Total revenues	491,633			449,755			966,858			899,544

Expenses:
Property operating and maintenance	175,422			167,002			343,795			333,918
Property management expense	17,696			14,529			33,538			28,901
General and administrative	19,828			14,426			36,778			28,654
Interest expense	80,764			86,071			164,170			170,828
Depreciation and amortization	145,280			137,266			289,781			272,293
Impairment and other	980			(180		)	1,336			2,947
Total expenses	439,970			419,114			869,398			837,541

Gains (losses) on investments in equity securities, net	(7,002		)	—			(10,142		)	34
Other, net	(1,903		)	1,370			(1,673		)	5,050
Gain on sale of property, net of tax	17,919			11,167			32,403			26,367
Income from investments in unconsolidated joint ventures	11			—			362			—

Net income	60,688			43,178			118,410			93,454
Net income attributable to non-controlling interests	(350		)	(275		)	(705		)	(595		)

Net income attributable to common stockholders	60,338			42,903			117,705			92,859
Net income available to participating securities	(96		)	(119		)	(191		)	(221		)

Net income available to common stockholders — basic and diluted	$	60,242		$	42,784		$	117,514		$	92,638

Weighted average common shares outstanding — basic	567,931,472			548,811,968			567,655,034			545,680,740
Weighted average common shares outstanding — diluted	569,283,166			549,920,213			569,056,182			546,836,809

Net income per common share — basic	$	0.11		$	0.08		$	0.21		$	0.17
Net income per common share — diluted	$	0.11		$	0.08		$	0.21		$	0.17

Dividends declared per common share	$	0.17		$	0.15		$	0.34		$	0.30

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.

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. We define 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. We define 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 our 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 our liquidity and should not be considered alternatives to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our 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 our basis for computing these non-GAAP measures is comparable with that of other companies. See "Reconciliation of Non-GAAP Measures" 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.

We believe that FFO is a meaningful supplemental measure of the operating performance of our business because historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization. Because real estate values have historically risen or fallen with market conditions, management considers FFO an appropriate supplemental performance measure as it excludes historical cost depreciation and amortization, impairment on depreciated real estate investments, 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 our liquidity and should not be considered alternatives to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our Core FFO and Adjusted FFO may not be comparable to the Core FFO and Adjusted FFO of other companies due to the fact that not all companies use the same definition of Core FFO and Adjusted FFO. Accordingly, there can be no assurance that our basis for computing this non-GAAP measures is comparable with that of other companies. See "Reconciliation of 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. We define NOI for an identified population of homes as rental revenues and other property income less property operating and maintenance expense (which consists primarily of property taxes, insurance, HOA fees (when applicable), market-level personnel expenses, repairs and maintenance, leasing costs, and marketing 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. Our NOI may not be comparable to the NOI of other companies due to the fact that not all companies use the same definition of NOI. Accordingly, there can be no assurance that our basis for computing this non-GAAP measure is comparable with that of other companies.

We believe that Same Store NOI is also a meaningful supplemental measure of our operating performance for the same reasons as NOI and is further helpful to investors as it provides a more consistent measurement of our performance across reporting periods by reflecting NOI for homes in our Same Store portfolio.

See "Reconciliation of Non-GAAP Measures" below for a reconciliation of GAAP net income to NOI for our total portfolio and NOI for our 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 our current resident chooses to stay for a subsequent lease term, or a new lease, where our previous resident moves out and a new resident signs a lease to occupy the same home.

Revenue Collections as a Percentage of Billings

Revenue collections as a percentage of billings represents 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.

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

Total Homes / Total Portfolio

Total homes or total portfolio refers to the total number of homes 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.

Reconciliation of FFO, Core FFO, and AFFO
($ in thousands, except shares and per share amounts) (unaudited)

FFO Reconciliation	Q2 2021			Q2 2020			YTD 2021			YTD 2020
Net income available to common stockholders	$	60,242		$	42,784		$	117,514		$	92,638
Net income available to participating securities	96			119			191			221
Non-controlling interests	350			275			705			595
Depreciation and amortization on real estate assets	143,607			135,647			286,391			269,561
Impairment on depreciated real estate investments	93			1,442			524			3,913
Net gain on sale of previously depreciated investments in real estate	(17,919		)	(11,167		)	(32,403		)	(26,367		)
Depreciation and net gain on sale of investments in unconsolidated joint ventures	142			—			(90		)	—
FFO	$	186,611		$	169,100		$	372,832		$	340,561

Core FFO Reconciliation	Q2 2021			Q2 2020			YTD 2021			YTD 2020
FFO	$	186,611		$	169,100		$	372,832		$	340,561
Non-cash interest expense, including our share from unconsolidated joint ventures	8,169			9,366			16,787			19,757
Share-based compensation expense	9,206			2,106			15,020			6,207
Severance expense	160			255			274			255
Casualty (gains) losses, net	887			(1,622		)	812			(966		)
(Gains) losses on investments in equity securities, net	7,002			—			10,142			(34		)
Core FFO	$	212,035		$	179,205		$	415,867		$	365,780

AFFO Reconciliation	Q2 2021			Q2 2020			YTD 2021			YTD 2020
Core FFO	$	212,035		$	179,205		$	415,867		$	365,780
Recurring capital expenditures, including our share from unconsolidated joint ventures	(28,714		)	(27,617		)	(53,189		)	(53,605		)
Adjusted FFO	$	183,321		$	151,588		$	362,678		$	312,175

Net income available to common stockholders
Weighted average common shares outstanding — diluted ⁽¹⁾	569,283,166			549,920,213			569,056,182			546,836,809

Net income per common share — diluted ⁽¹⁾	$	0.11		$	0.08		$	0.21		$	0.17

FFO
Numerator for FFO per common share — diluted⁽¹⁾	$	190,955		$	173,379		$	381,520		$	349,119
Weighted average common shares and OP Units outstanding — diluted ⁽¹⁾	587,982,707			568,769,738			587,906,276			565,753,742

FFO per share — diluted ⁽¹⁾	$	0.32		$	0.30		$	0.65		$	0.62

Core FFO and Adjusted FFO
Weighted average common shares and OP Units outstanding — diluted ⁽²⁾	572,822,015			553,669,295			572,745,584			550,653,299

Core FFO per share — diluted ⁽²⁾	$	0.37		$	0.32		$	0.73		$	0.66
AFFO per share — diluted ⁽²⁾	$	0.32		$	0.27		$	0.63		$	0.57

(1)	In accordance with GAAP and Nareit guidelines, net income per share and FFO per share are calculated as if the 2022 Convertible Notes were converted to common shares at the beginning of each relevant period in 2020 and 2021, unless such treatment is anti-dilutive to net income per share or FFO per share.

	Treatment of the 2022 Convertible Notes as if converted would be anti-dilutive to net income per share and dilutive to FFO per share for each of the periods presented in the table. As such, net income per share does not treat the 2022 Convertible Notes as if converted. FFO per share does treat the 2022 Convertible Notes as if converted, thereby adjusting FFO in the numerator to remove the interest expense associated with the 2022 Convertible Notes and adjusting shares outstanding in the denominator to include shares issuable on conversion of the 2022 Convertible Notes.

(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 does not treat the 2022 Convertible Notes as if converted for each of the periods presented in the table.

Reconciliation of Total Revenues to Same Store Total Revenues and Same Store Core Revenues, Quarterly
(in thousands) (unaudited)

	Q2 2021			Q1 2021			Q4 2020			Q3 2020			Q2 2020			.
Total revenues (total portfolio)	$	491,633		$	475,225		$	464,100		$	459,184		$	449,755
Joint venture management fees	(1,015		)	(771		)	—			—			—
Total portfolio resident recoveries	(26,076		)	(24,740		)	(23,885		)	(23,675		)	(20,157		)
Total Core revenues (total portfolio)	464,542			449,714			440,215			435,509			429,598
Non-Same Store Core revenues	(42,612		)	(38,635		)	(34,991		)	(32,686		)	(31,017		)
Same Store Core revenues	$	421,930		$	411,079		$	405,224		$	402,823		$	398,581



Reconciliation of Total Revenues to Same Store Total Revenues and Same Store Core Revenues, YTD
(in thousands) (unaudited)

	YTD 2021			YTD 2020
Total revenues (total portfolio)	$	966,858		$	899,544
Joint venture management fees	(1,786		)	—
Total portfolio resident recoveries	(50,816		)	(40,198		)
Total Core revenues (total portfolio)	914,256			859,346
Non-Same Store Core revenues	(81,247		)	(58,668		)
Same Store Core revenues	$	833,009		$	800,678

Reconciliation of Property Operating and Maintenance to Same Store Operating Expenses and Same Store Core Operating Expenses, Quarterly
(in thousands) (unaudited)

	.	Q2 2021			Q1 2021			Q4 2020			Q3 2020			Q2 2020
Property operating and maintenance expenses (total portfolio)		$	175,422		$	168,373		$	168,628		$	177,997		$	167,002
Total portfolio resident recoveries		(26,076		)	(24,740		)	(23,885		)	(23,675		)	(20,157		)
Core Property operating and maintenance expenses (total portfolio)		149,346			143,633			144,743			154,322			146,845
Non-Same Store Core operating expenses		(13,284		)	(12,057		)	(12,120		)	(11,909		)	(11,974		)
Same Store Core operating expenses		$	136,062		$	131,576		$	132,623		$	142,413		$	134,871


Reconciliation of Property Operating and Maintenance to Same Store Operating Expenses and Same Store Core Operating Expenses, YTD
(in thousands) (unaudited)

		YTD 2021			YTD 2020
Property operating and maintenance expenses (total portfolio)		$	343,795		$	333,918
Total portfolio resident recoveries		(50,816		)	(40,198		)
Core Property operating and maintenance expenses (total portfolio)		292,979			293,720
Non-Same Store Core operating expenses		(25,341		)	(24,212		)
Same Store Core operating expenses		$	267,638		$	269,508

Reconciliation of Net Income to NOI and Same Store NOI, Quarterly
(in thousands) (unaudited)

	Q2 2021			Q1 2021			Q4 2020			Q3 2020			Q2 2020
Net income available to common stockholders	$	60,242		$	57,272		$	70,586		$	32,540		$	42,784
Net income available to participating securities	96			95			113			114			119
Non-controlling interests	350			355			431			211			275
Interest expense	80,764			83,406			95,382			87,713			86,071
Depreciation and amortization	145,280			144,501			142,090			138,147			137,266
Property management expense	17,696			15,842			14,888			14,824			14,529
General and administrative	19,828			16,950			16,679			17,972			14,426
Impairment and other	980			356			(3,974		)	1,723			(180		)
Gain on sale of property, net of tax	(17,919		)	(14,484		)	(13,121		)	(15,106		)	(11,167		)
(Gains) losses on investments in equity securities, net	7,002			3,140			(29,689		)	—			—
Other, net	1,903			(230		)	2,087			3,049			(1,370		)
Joint venture management fees	(1,015		)	(771		)	—			—			—
Income from investments in unconsolidated joint ventures	(11		)	(351		)	—			—			—
NOI (total portfolio)	315,196			306,081			295,472			281,187			282,753
Non-Same Store NOI	(29,328		)	(26,578		)	(22,871		)	(20,777		)	(19,043		)
Same Store NOI	$	285,868		$	279,503		$	272,601		$	260,410		$	263,710


Reconciliation of Net Income to NOI and Same Store NOI, YTD
(in thousands) (unaudited)

	YTD 2021			YTD 2020
Net income available to common stockholders	$	117,514		$	92,638
Net income available to participating securities	191			221
Non-controlling interests	705			595
Interest expense	164,170			170,828
Depreciation and amortization	289,781			272,293
Property management expense	33,538			28,901
General and administrative	36,778			28,654
Impairment and other	1,336			2,947
Gain on sale of property, net of tax	(32,403		)	(26,367		)
(Gains) losses on investments in equity securities, net	10,142			(34		)
Other, net	1,673			(5,050		)
Joint venture management fees	(1,786		)	—
Income from investments in unconsolidated joint ventures	(362		)	—
NOI (total portfolio)	621,277			565,626
Non-Same Store NOI	(55,906		)	(34,456		)
Same Store NOI	$	565,371		$	531,170

Reconciliation of Net Income to EBITDA, EBITDAre, and Adjusted EBITDAre
(in thousands, unaudited)

	Q2 2021			Q2 2020			YTD 2021			YTD 2020
Net income available to common stockholders	$	60,242		$	42,784		$	117,514		$	92,638
Net income available to participating securities	96			119			191			221
Non-controlling interests	350			275			705			595
Interest expense	80,764			86,071			164,170			170,828
Interest expense in unconsolidated joint ventures	225			—			299			—
Depreciation and amortization	145,280			137,266			289,781			272,293
Depreciation and amortization of real estate assets in unconsolidated joint ventures	246			—			350			—
EBITDA	287,203			266,515			573,010			536,575
Gain on sale of property, net of tax	(17,919		)	(11,167		)	(32,403		)	(26,367		)
Impairment on depreciated real estate investments	93			1,442			524			3,913
Net gain on sale of investments in unconsolidated joint ventures	(104		)	—			(440		)	—
EBITDAre	269,273			256,790			540,691			514,121
Share-based compensation expense	9,206			2,106			15,020			6,207
Severance	160			255			274			255
Casualty (gains) losses, net	887			(1,622		)	812			(966		)
(Gains) losses on investments in equity securities, net	7,002			—			10,142			(34		)
Other, net	1,903			(1,370		)	1,673			(5,050		)
Adjusted EBITDAre	$	288,431		$	256,159		$	568,612		$	514,533

	Trailing Twelve Months (TTM) Ended
	June 30, 2021			December 31, 2020
Net income available to common stockholders	$	220,640		$	195,764
Net income available to participating securities	418			448
Non-controlling interests	1,347			1,237
Interest expense	347,265			353,923
Interest expense in unconsolidated joint ventures	299			—
Depreciation and amortization	570,018			552,530
Depreciation and amortization of real estate assets in unconsolidated joint ventures	350			—
EBITDA	1,140,337			1,103,902
Gain on sale of property, net of tax	(60,630		)	(54,594		)
Impairment on depreciated real estate investments	1,189			4,578
Net gain on sale of investments in unconsolidated joint ventures	(440		)	—
EBITDAre	1,080,456			1,053,886
Share-based compensation expense	25,903			17,090
Severance	620			601
Casualty (gains) losses, net	(2,104		)	(3,882		)
(Gains) losses on investments in equity securities, net	(19,547		)	(29,723		)
Other, net	6,809			86
Adjusted EBITDAre	$	1,092,137		$	1,038,058

Reconciliation of Net Debt / Trailing Twelve Months (TTM) Adjusted EBITDAre
(in thousands, except for ratio) (unaudited)

	As of			As of
	June 30, 2021			December 31, 2020
Mortgage loans, net	$	4,498,289		$	4,820,098
Secured term loan, net	401,204			401,095
Unsecured notes, net	298,399			—
Term loan facility, net	2,474,495			2,470,907
Revolving facility	—			—
Convertible senior notes, net	342,050			339,404
Total Debt per Balance Sheet	8,014,437			8,031,504
Retained and repurchased certificates	(231,315		)	(247,526		)
Cash, ex-security deposits and letters of credit ⁽¹⁾	(201,779		)	(250,204		)
Deferred financing costs, net	39,930			43,396
Unamortized discounts on note payable	5,057			7,885
Net Debt (A)	$	7,626,330		$	7,585,055
2022 convertible senior notes, net	(342,050		)
Unamortized discounts related to 2022 convertible senior notes	(2,944		)
Pro Forma Net Debt (B) ⁽²⁾	$	7,281,336

	For the Trailing Twelve			For the Trailing Twelve
	Months (TTM) Ended			Months (TTM) Ended
	June 30, 2021			December 31, 2020
Adjusted EBITDAre (C)	$	1,092,137		$	1,038,058

Net Debt / TTM Adjusted EBITDAre (A / C)	7.0		x	7.3		x

Pro Forma Net Debt / TTM Adjusted EBITDAre (B / C) ⁽²⁾	6.7		x

(1)	Represents cash and cash equivalents and the portion of restricted cash that excludes security deposits and letters of credit
(2)	In July 2021, the Company gave notice of intent to settle conversions of its 3.5% Convertible Notes due January 15, 2022, with common stock. Pro Forma Net Debt and Pro Forma Net Debt / Trailing Twelve Months Adjusted EBITDAre assume the net debt is reduced for the impact of the full conversion of the $345 million (par value) 2022 Convertible Notes.

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Invitation Homes Reports Second Quarter 2021 Results