INVITATION HOMES : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the information appearing
elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form
10-K. This discussion and analysis contains forward-looking statements based
upon our current expectations that involve risks and uncertainties. Our actual
results may differ materially from those anticipated in these forward-looking
statements as a result of various factors, including those set forth under
Part I. Item 1A. "Risk Factors" in our Annual Report on Form 10-K and Part II.
Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q.
Capitalized terms used without definition have the meaning provided elsewhere in
this Quarterly Report on Form 10-Q.
Overview
Invitation Homes is a leading owner and operator of single-family homes for
lease, offering residents high-quality homes in sought-after neighborhoods
across America. With approximately 80,000 homes for lease in 16 markets across
the country as of June 30, 2020, Invitation Homes is meeting changing lifestyle
demands by providing residents access to updated homes with features they value,
such as close proximity to jobs and access to good schools. Our mission
statement, "Together with you, we make a house a home," reflects our commitment
to high-touch service that continuously enhances residents' living experiences
and provides homes where individuals and families can thrive.
We operate in markets with strong demand drivers, high barriers to entry, and
high rent growth potential, primarily in the Western United States, Florida, and
the Southeast United States. Through disciplined market and asset selection, as
well as through strategic mergers and acquisitions, we designed our portfolio to
capture the operating benefits of local density as well as economies of scale
that we believe cannot be readily replicated. Since our founding in 2012, we
have built a proven, vertically integrated operating platform that enables us to
effectively and efficiently acquire, renovate, lease, maintain, and manage our
homes.
We invest in markets that we expect will exhibit lower new supply, stronger job
and household formation growth, and superior net operating income ("NOI") growth
relative to the broader United States housing and rental markets. Within our 16
markets, we target attractive neighborhoods in in-fill locations with multiple
demand drivers, such as proximity to major employment centers, desirable
schools, and transportation corridors. Our homes average approximately 1,870
square feet with three bedrooms and two bathrooms, appealing to a resident base
that we believe is less transitory than the typical multifamily resident. We
invest in the upfront renovation of homes in our portfolio in order to address
capital needs, reduce ongoing maintenance costs, and drive resident demand. The
in-fill locations and high quality of our homes and service further
differentiate our resident experience, which we continue to refine.
COVID-19
The outbreak of COVID-19 in many countries, including the United States, has had
a significant adverse impact on global and United States economic activity and
has contributed to significant volatility and disruption in financial markets.
The ultimate impacts remain unknown, but could include the potential worsening
of global and United States economic conditions and the continued disruptions
to, and volatility in, the credit and financial markets, consumer spending, and
the market for acquisition and disposition of single-family homes, as well as
other unanticipated consequences. As such, we are closely monitoring the impact
of the ongoing COVID-19 pandemic on all aspects of our business, including
operating, investment management, and capital markets activities.
With the safety and well-being of our residents and associates being our highest
priority, we continue to follow protocols that enable teams to safely continue
providing outstanding service to residents. The safety and service measures
currently in place include: (1) creating and implementing a safety training
program for all associates; (2) maintaining a three-month supply of masks,
gloves, shoe covers, and hand sanitizer for field teams; (3) continuing to
leverage self-show and virtual-tour technology as both safety measures and
competitive advantages; (4) adhering to strict safety protocols for maintenance
service trips; and (5) adapting to offer virtual options for resident move-in
orientations and pre-move-out visits.


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Neither these procedural adjustments nor the overall impact of the COVID-19
pandemic created significant disruptions to our business model during the three
and six months ended June 30, 2020. However, the pandemic did impact our
business, including operating, investment management, and capital markets
activities as more fully described below.
Operations
The direct impacts on our results of operations and key operating metrics from
the effects of the COVID-19 pandemic may include, but are not limited to: (1) a
decrease in gross rental revenues and other property income (before concessions
and bad debt) due to jurisdictional restrictions on rent increases and late
fees; (2) an increase in occupancy due to lower turnover partially driven by
residents' decisions not to relocate during the pandemic, strong demand for
homes that become vacant, and the impact of eviction moratoriums; (3) an
increase in uncollectible revenues (or decline in rent collections percentages)
due to resident hardships and eviction moratoriums; and (4) a decrease in
property operating and maintenance expenses for turnover costs (lower turnover
rates) and property administrative fees (eviction moratoriums).
In March, to act on our core values of "Genuine Care" and "Standout
Citizenship," we began to offer solutions for residents experiencing financial
hardship when requested, including the ongoing creation of payment plans,
without late fees, for residents requiring flexibility to meet rental
obligations over time and a voluntary moratorium on evictions through June 2020.
Additionally, we continue to adhere to federal, state, and local restrictions on
items such as evictions, rent increases, and late fees as appropriate.
The ongoing COVID-19 outbreak in the United States has led certain states and
cities, including those in which we own properties and where our principal
places of business are located, to impose and continue to implement measures
intended to control the spread of COVID-19, including instituting quarantines,
restrictions on travel, "shelter in place" rules, and restrictions on types of
business that may continue to operate. We depend on rental revenues and other
property income from residents for substantially all of our revenues. Overall
revenue collections as a percentage of monthly billings was 94% in April, 96% in
May, 98% in June, and 97% in July, compared to a historical average of 99%.
While collection of revenues has remained near historical levels thus far
through the pandemic, the COVID-19 outbreak, as well as continuing measures
taken by governmental authorities and private actors to limit the spread of this
virus or mitigate its impact, is interfering with the ability of some of our
residents to meet their lease obligations and make their rent payments on time
or at all. In addition, some jurisdictions across the United States have imposed
temporary eviction moratoriums and are allowing residents to defer missed rent
payments without incurring late fees, and such jurisdictions and other local and
national authorities may expand or extend measures imposing restrictions on our
ability to enforce residents' contractual rental obligations and limiting our
ability to increase rents. We cannot predict if states, municipalities, and/or
local authorities will expand existing restrictions, if additional states or
municipalities will implement similar restrictions, or when restrictions
currently in place will expire. Such measures are likely to enable residents to
stay in their homes despite an inability to pay because of financial or other
hardship stemming from the pandemic.
Certain other restrictions imposed by jurisdictions across the United States are
intended to limit operations by businesses not deemed "essential businesses."
While none of the current restrictions have materially impacted our ability to
provide services to our residents or homes, future measures may negatively
impact our ability to access our homes, complete service requests, or make our
homes ready for new residents. Since the pandemic began, we have continued to
complete emergency work orders, and we now schedule non-emergency maintenance
service requests on a case-by-case basis. For all service calls, we work with
residents to ensure they are addressed in a timely and safe manner.
A majority of our homes are located in areas where COVID-19 infection rates are
greater than the national average. As such, the pandemic may disproportionately
impact our ability to lease homes, collect rents, service our homes, and perform
other fundamental property management functions.
While COVID-19 and related containment measures may interfere with the ability
of our associates, suppliers, and other business partners to carry out their
assigned tasks or to supply materials and services at ordinary levels of
performance relative to the conduct of our business in the future, to date we
have not experienced such disruptions. Our office-based associates continue to
work from home and will continue to do so until we determine it is in our and
their best interests to return to our offices. Additionally, changes to the
working environment have not had a material effect on our internal controls over
financial reporting since the pandemic began (see Part I. Item 4. "Controls and
Procedures" for additional information).


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Investment Management
We continue to successfully source and effectuate compelling acquisition and
disposition opportunities. Since the pandemic began, we have continued to sell
homes identified for disposition. We resumed sourcing new acquisitions in
June 2020 after pausing activity from mid-March through May. That said, our
ability to acquire or dispose of properties could be impaired by local rules and
ordinances that could be put in place to mitigate the impact of the COVID-19
pandemic, and a general decline in economic and business activity could
adversely affect the single-family residential housing market and our ability to
acquire and dispose of homes.
Capital Markets
To date, our access to capital markets has not been significantly impacted by
the COVID-19 pandemic. We continue to make scheduled debt service payments and
do not anticipate non-compliance with our key affirmative and negative debt
covenants. (see " - Liquidity and Capital Resources" for additional
information). That said, a severe disruption of, and/or instability in, the
global financial markets or deteriorations in credit and financing conditions
may affect our access to capital necessary to fund business operations,
including acquisitions, or address maturing liabilities on a timely basis.
Current Status
As a result of our differentiated business model and measures taken to maximize
operating and financial results, we have experienced positive trends in many key
performance metrics and maintained a favorable liquidity position during the
COVID-19 pandemic:
•      Resident satisfaction survey scores have continued to climb as we further

refine our COVID-19 response.

• Same Store average occupancy has continued to climb through the summer

reaching record highs of 97.5% in the second quarter of 2020 and 97.8% in

July 2020. Same Store average occupancy was 170 bps higher in July 2020

than in July 2019. Same Store new lease rent growth accelerated during the

three months ended June 30, 2020 and averaged 4.9% in July.

• As of June 30, 2020, total liquidity from unrestricted cash and undrawn

credit facility capacity was $1,571.7 million.

These strong underlying trends in our business and our favorable liquidity position have afforded us the opportunity to pursue or resume pursuing initiatives aimed at generating incremental value for shareholders, including: • Successful issuance and sale of 16.7 million common shares for net

proceeds of $447.5 million to provide capital primarily for acquisition

opportunities.

• Full repayment of the $270.0 million revolving credit facility balance

       that had been drawn in March.


•      Resumption of sourcing new acquisitions in June, returning us to an
       acquisition pace similar to pre-COVID-19 levels.


Ongoing Considerations
The situation surrounding the ongoing COVID-19 pandemic remains fluid, and the
ensuing impact of the COVID-19 pandemic on our rental revenues and other
property income, in particular, cannot be fully be determined at present due to
an inability to estimate actual collection rates, occupancy levels, and
expiration of temporary restrictions on evictions, rent increases, and late
fees. We will continue to actively manage our response in collaboration with our
residents and business partners and to assess potential impacts to our financial
position and operating results, as well as potential adverse developments in our
business.
In addition to the foregoing uncertainties, we are unable to predict the impact
that the COVID-19 pandemic will have on our future financial condition, results
of operations, and cash flows due to numerous uncertainties regarding external
factors. These uncertainties include the scope, severity, and duration of the
pandemic, the extent and duration of actions taken to contain the pandemic or
mitigate its impact, and the direct and indirect economic effects of the
pandemic, containment measures, monetary and/or fiscal policies implemented to
provide support or relief to businesses and/or residents, and other government,
regulatory, and/or legislative changes precipitated by the COVID-19 pandemic,
among others. For further information regarding the impact of COVID-19 on our
Company, see Part II. Item 1A. "Risk Factors."


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Our Portfolio
The following table provides summary information regarding our total and Same
Store portfolios as of and for the three months ended June 30, 2020 as noted
below:
                           Number of      Average      Average Monthly   Average Monthly      % of
Market                     Homes(1)     Occupancy(2)       Rent(3)         Rent PSF(3)     Revenue(4)
Western United States:
Southern California          8,000         97.3%           $2,515             $1.48             13.3 %
Northern California          4,301         96.9%            2,199             1.42               6.5 %
Seattle                      3,555         95.6%            2,302             1.20               5.6 %
Phoenix                      7,861         95.5%            1,454             0.89               7.9 %
Las Vegas                    3,003         95.7%            1,687             0.85               3.4 %
Denver                       2,298         94.9%            2,092             1.16               3.3 %
Western United States
Subtotal                    29,018         96.2%            2,039             1.18              40.0 %

Florida:
South Florida                8,454         95.3%            2,221             1.19              12.4 %
Tampa                        8,107         96.2%            1,710             0.92               9.5 %
Orlando                      6,147         95.6%            1,714             0.92               7.1 %
Jacksonville                 1,858         96.7%            1,721             0.87               2.2 %
Florida Subtotal            24,566         95.8%            1,887             1.01              31.2 %

Southeast United
States:
Atlanta                     12,501         96.5%            1,553             0.75              13.1 %
Carolinas                    4,719         96.4%            1,623             0.75               5.2 %
Southeast United States
Subtotal                    17,220         96.5%            1,572             0.75              18.3 %

Texas:
Houston                      2,190         94.5%            1,583             0.81               2.4 %
Dallas                       2,376         93.5%            1,832             0.87               2.9 %
Texas Subtotal               4,566         94.0%            1,711             0.85               5.3 %

Midwest United States:
Chicago                      2,699         95.4%            2,009             1.24               3.6 %
Minneapolis                  1,129         97.1%            1,933             0.99               1.5 %
Midwest United States
Subtotal                     3,828         95.9%            1,986             1.15               5.1 %

Announced
Market-in-Exit:
Nashville(5)                  58           65.0%            2,157             0.82               0.1 %

Total / Average             79,256         96.0%           $1,869             $1.00            100.0 %
Same Store Total /
Average                     72,261         97.5%           $1,868             $1.00             92.2 %





(1) As of June 30, 2020.

(2) Represents average occupancy for the three months ended June 30, 2020.

(3) Represents average monthly rent for the three months ended June 30, 2020.

(4) Represents the percentage of rental revenues and other property income

generated in each market for the three months ended June 30, 2020.

(5) In December 2019, we announced a plan to fully exit the Nashville market and

    sold 708 homes in Nashville in a bulk transaction. As of June 30, 2020, we
    have 58 remaining homes in the market.




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Factors That Affect Our Results of Operations and Financial Condition
Our results of operations and financial condition are affected by numerous
factors, many of which are beyond our control. See Part I. Item 1A. "Risk
Factors" in our Annual Report on Form 10-K, as updated in Part II. Item 1A.
"Risk Factors" in this Quarterly Report on Form 10-Q, for more information
regarding factors that could materially adversely affect our results of
operations and financial condition. Key factors that impact our results of
operations and financial condition include market fundamentals, rental rates and
occupancy levels, turnover rates and days to re-resident homes, property
improvements and maintenance, property acquisitions and renovations, and
financing arrangements. Sensitivity to many of these factors has been heightened
as a result of the ongoing and numerous adverse impacts of COVID-19.
Market Fundamentals: Our results are impacted by housing market fundamentals and
supply and demand conditions in our markets, particularly in the Western United
States and Florida, which represented 71.2% of our rental revenues and other
property income during the three months ended June 30, 2020. We are actively
monitoring the impact of the COVID-19 outbreak on market fundamentals and are
quickly implementing changes in pricing as market fundamentals shift.
Rental Rates and Occupancy Levels: Rental rates and occupancy levels are primary
drivers of rental revenues and other property income. Our rental rates and
occupancy levels are affected by macroeconomic factors and local and
property-level factors, including market conditions, seasonality, resident
defaults, and the amount of time it takes to prepare a home for its next
resident and re-lease homes when residents vacate. An important driver of rental
rate growth is our ability to increase monthly rents from expiring leases, which
typically have a term of one to two years. The ongoing COVID-19 pandemic has
negatively impacted our ability to increase rents and may impact our ability to
maintain occupancy levels.
Collection Rates: Our rental revenues and other property income is impacted by
the rate at which we collect such revenues from our residents. We routinely work
with residents facing financial hardships who need flexibility to fulfill their
lease obligations, but the ongoing COVID-19 pandemic has increased the number of
such residents. When requested, we work with these residents to create payment
plans, without late fees, and then actively manage these receivables. However, a
portion of these amounts may not ultimately be collected, and our estimate of
amounts billed to residents that may ultimately be uncollectible decreases our
rental revenues and other property income.
Turnover Rates and Days to Re-Resident: Other drivers of rental revenues and
property operating and maintenance expense include the length of stay of our
residents, resident turnover rates, and the number of days a home is unoccupied
between residents. Our operating results are also impacted by the amount of time
it takes to market and lease a property, which is a component of the number of
days a home is unoccupied between residents. The period of time to market and
lease a property can vary greatly and is impacted by local demand, our marketing
techniques, the size of our available inventory, and both current economic
conditions and future economic outlook, both of which are impacted by the
ongoing COVID-19 pandemic. Days to re-resident may be negatively affected by
homes potentially remaining vacant while prospective residents remain in their
current housing. Our turnover rate may be affected by the current COVID-19
pandemic as a result of delayed eviction proceedings and/or move outs
potentially being canceled by residents who have not secured their next housing
plans. Increases in turnover rates and the average number of days to re-resident
reduce rental revenues as the homes are not generating income during this period
of vacancy.
Property Improvements and Maintenance: Property improvements and maintenance
impact capital expenditures, property operating and maintenance expense, and
rental revenues. We actively manage our homes on a total portfolio basis to
determine what capital and maintenance needs may be required, and what
opportunities we may have to generate additional revenues or expense savings
from such expenditures. Due to our size and scale both nationally and locally,
we believe we are able to purchase goods and services at favorable prices.
While the COVID-19 outbreak has required us to modify our property improvement
and maintenance procedures to accommodate resident preferences, as a currently
designated "essential business" we are presently continuing to complete all
emergency maintenance work orders. Additionally, as of June 2020, we resumed
completion of non-emergency work orders on a case-by-case basis and began
addressing our backlog of deferred work orders. However, future potential
governmental measures may restrict our ability to function as an "essential
business."


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Property Acquisitions and Renovations: Future growth in rental revenues and
other property income may be impacted by our ability to identify and acquire
homes, our pace of property acquisitions, and the time and cost required to
renovate and lease a newly acquired home. Our ability to identify and acquire
single-family homes that meet our investment criteria is impacted by home prices
in targeted acquisition locations, the inventory of homes available for sale
through our acquisition channels, and competition for our target assets. All of
these factors may be negatively impacted by the COVID-19 outbreak, potentially
reducing the number of homes we acquire.
The acquisition of homes involves expenditures in addition to payment of the
purchase price, including payments for acquisition fees, property inspections,
closing costs, title insurance, transfer taxes, recording fees, broker
commissions, property taxes, and HOA fees (when applicable). Additionally, we
typically incur costs to renovate a home to prepare it for rental. The scope of
renovation work varies, but may include paint, flooring, carpeting, cabinetry,
appliances, plumbing hardware, roof replacement, HVAC replacement, and other
items required to prepare the home for rental. The time and cost involved in
accessing our homes and preparing them for rental can significantly impact our
financial performance. The time to renovate a newly acquired property can vary
significantly among homes for several reasons, including the property's
acquisition channel, the condition of the property, whether the property was
vacant when acquired, and whether there are any state or local restrictions on
our ability to complete renovations as an essential business function.
Additionally, COVID-19 and related containment measures may interfere with the
ability of our suppliers and other business partners to carry out their assigned
tasks and/or source labor or supply materials at ordinary levels of performance
relative to the conduct of our business. Due to our size and scale both
nationally and locally, we believe we are able to purchase goods and services at
favorable prices.
Financing Arrangements: Financing arrangements directly impact our interest
expense, mortgage loans, secured term loan, term loan facility, revolving
facility, and convertible debt, as well as our ability to acquire and renovate
homes. We have historically utilized indebtedness to fund the acquisition and
renovation of new homes. Our current financing arrangements contain financial
covenants, and certain financing arrangements contain variable interest rate
terms. Interest rates are impacted by market conditions and the terms of the
underlying financing arrangements. Inability by our residents to meet their
lease obligations due to the COVID-19 pandemic could reduce our cash flows,
which could impact our ability to make all required debt service payments.
Furthermore, the COVID-19 pandemic has resulted in a widespread health crisis
adversely affecting the economy and financial markets of many countries
resulting in an economic downturn that could negatively affect our ability to
access financial markets as well as our business, results of operations, and
financial condition. See Part I. Item 3. "Quantitative and Qualitative
Disclosures about Market Risk" for further discussion regarding interest rate
risk. Our future financing arrangements may not have similar terms with respect
to amounts, interest rates, financial covenants, and durations.
Components of Revenues and Expenses
The following is a description of the components of our revenues and expenses.
Revenues
Rental Revenues and Other Property Income
Rental revenues, net of any concessions and bad debt (including write-offs,
credit reserves, and uncollectible amounts), consist of rents collected under
lease agreements related to our single-family homes for lease. We enter into
leases directly with our residents, and the leases typically have a term of one
to two years.
Other property income is comprised of: (i) resident reimbursements for
utilities, HOA fines, and other charge-backs; (ii) rent and non-refundable
deposits associated with pets; and (iii) various other fees, including late fees
and lease termination fees, among others.
Expenses
Property Operating and Maintenance
Once a property is available for its initial lease, which we refer to as
"rent-ready," we incur ongoing property-related expenses, which consist
primarily of property taxes, insurance, HOA fees (when applicable), market-level
personnel


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expenses, utility expenses, repairs and maintenance, leasing costs, marketing
expenses, and property administration. Prior to a property being "rent-ready,"
certain of these expenses are capitalized as building and improvements. Once a
property is "rent-ready," expenditures for ordinary repairs and maintenance
thereafter are expensed as incurred, and we capitalize expenditures that improve
or extend the life of a home.
Property Management Expense
Property management expense represents personnel and other costs associated with
the oversight and management of our portfolio of homes. All of our homes are
managed through our internal property manager.
General and Administrative
General and administrative expense represents personnel costs, professional
fees, and other costs associated with our day-to-day activities. General and
administrative expense also includes merger and transaction-related expenses,
among other things, that are of a non-recurring nature.
Share-Based Compensation Expense
All share-based compensation expense is recognized in our condensed consolidated
statements of operations as components of general and administrative expense and
property management expense. We issue share-based awards to align our employees'
interests with those of our investors.
Interest Expense
Interest expense includes interest payable on our debt instruments, payments and
receipts related to our interest rate swap agreements, amortization of discounts
and deferred financing costs, unrealized gains (losses) on non-designated
hedging instruments, and non-cash interest expense related to our interest rate
swap agreements.
Depreciation and Amortization
We recognize depreciation and amortization expense associated with our homes and
other capital expenditures over their expected useful lives.
Impairment and Other
Impairment and other represents provisions for impairment when the carrying
amount of our single-family residential properties is not recoverable and
casualty losses, net of any insurance recoveries.
Other, net
Other, net includes interest income, third party management fee income, equity
in earnings from an unconsolidated joint venture, unrealized gains from
investments in equity securities, and other miscellaneous income and expenses.
Gain on Sale of Property, net of tax
Gain on sale of property, net of tax consists of net gains and losses resulting
from sales of our homes.
Results of Operations
Portfolio Information
As of June 30, 2020 and 2019, we owned 79,256 and 80,322 single-family rental
homes, respectively, in our total portfolio. During the three months ended
June 30, 2020 and 2019, we acquired 147 and 740 homes, respectively, and sold
416 and 779 homes, respectively. During the three months ended June 30, 2020 and
2019, we owned an average of 79,449 and 80,455 single-family rental homes,
respectively. During the six months ended June 30, 2020 and 2019, we acquired
651 and 948 homes, respectively, and sold 900 and 1,433 homes, respectively.
During the six months ended June 30, 2020 and 2019, we owned an average of
79,475 and 80,559 single-family rental homes, respectively.


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We believe presenting information about the portion of our total portfolio that
has been fully operational for the entirety of both 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. To do so, we provide information regarding the
performance of our Same Store portfolio.
As of June 30, 2020, our Same Store portfolio consisted of 72,261 single-family
rental homes.
Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019
The following table sets forth a comparison of the results of operations for the
three months ended June 30, 2020 and 2019:
                                     For the Three Months
                                        Ended June 30,
($ in thousands)                      2020           2019         $ Change       % Change
Rental revenues and other
property income                   $   449,755     $ 441,582     $     8,173          1.9  %

Expenses:
Property operating and
maintenance                           167,002       166,574             428          0.3  %
Property management expense            14,529        16,021          (1,492 )       (9.3 )%
General and administrative             14,426        15,956          (1,530 )       (9.6 )%
Interest expense                       86,071        95,706          (9,635 )      (10.1 )%
Depreciation and amortization         137,266       133,031           4,235          3.2  %
Impairment and other                     (180 )       1,671          (1,851 )     (110.8 )%
Total expenses                        419,114       428,959          (9,845 )       (2.3 )%

Other, net                              1,370           610             760        124.6  %
Gain on sale of property, net
of tax                                 11,167        26,172         (15,005 )      (57.3 )%

Net income                        $    43,178     $  39,405     $     3,773          9.6  %


Rental Revenues and Other Property Income
For the three months ended June 30, 2020 and 2019, total portfolio rental
revenues and other property income totaled $449.8 million and $441.6 million,
respectively, an increase of 1.9%, driven by an increase in average occupancy,
average monthly rent per occupied home, and utilities reimbursements, partially
offset by an increase in bad debt, reduced fee income, and a 1,006 home decrease
between periods in the average number of homes owned.
Average occupancy for the three months ended June 30, 2020 and 2019 for the
total portfolio was 96.0% and 94.6%, respectively. Average monthly rent per
occupied home for the total portfolio for the three months ended June 30, 2020
and 2019 was $1,869 and $1,800, respectively, a 3.8% increase. For our Same
Store portfolio, average occupancy was 97.5% and 96.5% for the three months
ended June 30, 2020 and 2019, respectively, and average monthly rent per
occupied home for the three months ended June 30, 2020 and 2019 was $1,868 and
$1,801, respectively, a 3.7% increase.
The annualized turnover rate for the Same Store portfolio for the three months
ended June 30, 2020 and 2019 was 27.7% and 32.9%, respectively. For the Same
Store portfolio, an average home remained unoccupied for 37 and 42 days between
residents for the three months ended June 30, 2020 and 2019, respectively. The
decreases in these two metrics contributed to our increase in occupancy on a
year over year basis. Furthermore, we believe the decrease in turnover is
partially attributable to the effects of the COVID-19 pandemic (e.g., eviction
moratoriums and residents who are not inclined to relocate during this period).
We cannot predict how long eviction moratoriums will remain in place nor when
the general effects of the pandemic will subside and how those items may affect
our turnover and occupancy rates.


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To monitor prospective changes in average monthly rent per occupied home, we
compare the monthly rent from an expiring lease to the monthly rent from the
next lease for the same home, in each case, net of any amortized non-service
concessions, to calculate net effective rental rate growth. Leases are either
renewal leases, where our current resident stays for a subsequent lease term, or
new leases, where our previous resident moves out and a new resident signs a
lease to occupy the same home.
Renewal lease net effective rental rate growth for the total portfolio averaged
3.5% and 5.4% for the three months ended June 30, 2020 and 2019, respectively,
and new lease net effective rental rate growth for the total portfolio averaged
2.9% and 5.3% for the three months ended June 30, 2020 and 2019, respectively.
For our Same Store portfolio, renewal lease net effective rental rate growth
averaged 3.5% and 5.3% for the three months ended June 30, 2020 and 2019,
respectively, and new lease net effective rental rate growth averaged 2.7% and
5.2% for the three months ended June 30, 2020 and 2019, respectively.
The COVID-19 pandemic has negatively impacted our rental revenues and other
property income in three notable ways: (1) lower collection rates, which caused
our bad debt to increase from 0.4% of gross rental income for the three months
ended June 30, 2019 to 1.9% of gross rental income for the three months ended
June 30, 2020; (2) non-enforcement of late fees during the three months ended
June 30, 2020, which was a primary driver of a decrease in fee income year over
year; and (3) lower reimbursements of move out and other costs as a result of
lower turnover and eviction moratoriums. The decreases in fee income and
reimbursements were partially offset by continued increases in utilities
reimbursements as more utilities remained in our name compared to the prior
year.
The COVID-19 pandemic is likely to continue to affect our collection rates and
ability to raise rents and charge fees, and the impact of jurisdictional
restrictions on rental rates, late fees, payment deferral programs, and eviction
moratoriums is likely to affect our ability to increase rental revenues and
other operating income.
Expenses
For the three months ended June 30, 2020 and 2019, total expenses were
$419.1 million and $429.0 million, respectively. Set forth below is a discussion
of changes in the individual components of total expenses.
For the three months ended June 30, 2020, property operating and maintenance
expense increased to $167.0 million from $166.6 million for the three months
ended June 30, 2019. This 0.3% net increase resulted from an overall increase in
fixed expenses (e.g., property taxes), net of decreases in controllable expenses
such as turnover and property administrative costs that declined to due lower
turnover and eviction moratoriums. The 1,006 home decrease between periods in
the average number of homes owned also offset the increases in fixed expenses.
The COVID-19 pandemic is likely to continue to impact our turnover rates, and
thus turnover costs, and other property operating and maintenance expense may
continue to be affected by the ongoing impacts of the pandemic.
Property management expense and general and administrative expense decreased to
$29.0 million from $32.0 million for the three months ended June 30, 2020 and
2019, respectively, primarily due to decreases in merger and transaction-related
expenses of $1.6 million, share-based compensation expense of $1.5 million, and
offering related expenses of $0.5 million for the three months ended June 30,
2020 as compared to the three months ended June 30, 2019. To date, the COVID-19
pandemic has not had a material impact on our property management and general
and administrative expenses.
Interest expense was $86.1 million and $95.7 million for the three months ended
June 30, 2020 and 2019, respectively. The decrease in interest expense was
primarily driven by a decrease in the average debt balance outstanding during
the three months ended June 30, 2020 as compared to the three months ended
June 30, 2019 due to various prepayments and redemption of a portion of our
convertible debt for common equity subsequent to June 30, 2019. Debt
outstanding, net of deferred financing costs and discounts, decreased to
$8,351.6 million as of June 30, 2020 from $8,965.0 million as of June 30, 2019.
Depreciation and amortization expense increased to $137.3 million for the three
months ended June 30, 2020 from $133.0 million for the three months ended
June 30, 2019, due to an increase in cumulative capital expenditures. This was
partially offset by a decrease in the average number of homes owned during
the three months ended three months ended June 30, 2020 compared to the three
months ended June 30, 2019.


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Impairment and other expenses were $(0.2) million and $1.7 million for the three
months ended June 30, 2020 and 2019, respectively. During the three months ended
June 30, 2020, impairment and other expenses were primarily comprised of
impairment losses of $1.4 million on our single-family residential properties
and net gains on casualty losses of $1.7 million. During the three months ended
June 30, 2019, impairment and other expenses were primarily comprised of
impairment losses of $4.1 million on our single-family residential properties,
partially offset by net gains on casualty losses of $2.4 million. The impairment
costs recognized during the three months ended June 30, 2020 were not a direct
result of the COVID-19 pandemic.
Other, net
Other, net increased to $1.4 million for the three months ended June 30, 2020
from $0.6 million for the three months ended June 30, 2019, due to changes in
the components of our miscellaneous income and expenses between periods.
Gain on Sale of Property, net of tax
Gain on sale of property, net of tax was $11.2 million and $26.2 million for the
three months ended June 30, 2020 and 2019, respectively. The primary driver of
the decrease was a decrease in the number of homes sold from 779 during the
three months ended June 30, 2019 to 416 during the three months ended June 30,
2020.
Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019
The following table sets forth a comparison of the results of operations for the
six months ended June 30, 2020 and 2019:
                                               For the Six Months
                                                 Ended June 30,
($ in thousands)                               2020          2019       $ 

Change % Change Rental revenues and other property income $ 899,544 $ 877,082 $ 22,462 2.6 %

Expenses:

Property operating and maintenance             333,918      326,920       6,998        2.1  %
Property management expense                     28,901       31,181      (2,280 )     (7.3 )%
General and administrative                      28,654       42,494     (13,840 )    (32.6 )%
Interest expense                               170,828      189,689     (18,861 )     (9.9 )%
Depreciation and amortization                  272,293      266,640       5,653        2.1  %
Impairment and other                             2,947        7,063      (4,116 )    (58.3 )%
Total expenses                                 837,541      863,987     (26,446 )     (3.1 )%

Other, net                                       5,084        3,735       1,349       36.1  %
Gain on sale of property, net of tax            26,367       43,744     (17,377 )    (39.7 )%

Net income                                  $   93,454    $  60,574    $ 32,880       54.3  %


Rental Revenues and Other Property Income
For the six months ended June 30, 2020 and 2019, total portfolio rental revenues
and other property income totaled $899.5 million and $877.1 million,
respectively, an increase of 2.6%, driven by an increase in average occupancy,
average monthly rent per occupied home, and utilities reimbursements, partially
offset by an increase in bad debt, reduced fee income, and a 1,084 home decrease
between periods in the average number of homes owned.
Average occupancy for the six months ended June 30, 2020 and 2019 for the total
portfolio was 95.2% and 94.7%, respectively. Average monthly rent per occupied
home for the total portfolio for the six months ended June 30, 2020 and 2019 was
$1,860 and $1,791, respectively, a 3.9% increase. For our Same Store portfolio,
average occupancy was 97.1% and 96.5% for the six months ended June 30, 2020 and
2019, respectively, and average monthly rent per occupied home for the six
months ended June 30, 2020 and 2019 was $1,860 and $1,792, respectively, a 3.8%
increase.


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The annualized turnover rate for the Same Store portfolio for the six months
ended June 30, 2020 and 2019 was 26.3% and 29.0%, respectively. For the Same
Store portfolio, an average home remained unoccupied for 44 and 47 days between
residents for the six months ended June 30, 2020 and 2019, respectively. The
decreases in these two metrics contributed to our increase in occupancy on a
year over year basis. Furthermore, we believe the decrease in turnover is
partially attributable to the effects of the COVID-19 pandemic (e.g., eviction
moratoriums and residents who are not inclined to relocate during this period).
We cannot predict how long eviction moratoriums will remain in place nor when
the general effects of the pandemic will subside and how those items may affect
our turnover and occupancy rates.
To monitor prospective changes in average monthly rent per occupied home, we
compare the monthly rent from an expiring lease to the monthly rent from the
next lease for the same home, in each case, net of any amortized non-service
concessions, to calculate net effective rental rate growth. Leases are either
renewal leases, where our current resident stays for a subsequent lease term, or
new leases, where our previous resident moves out and a new resident signs a
lease to occupy the same home.
Renewal lease net effective rental rate growth for the total portfolio averaged
3.9% and 5.3% for the six months ended June 30, 2020 and 2019, respectively, and
new lease net effective rental rate growth for the total portfolio averaged 2.5%
and 4.5% for the six months ended June 30, 2020 and 2019, respectively. For our
Same Store portfolio, renewal lease net effective rental rate growth averaged
3.9% and 5.3% for the six months ended June 30, 2020 and 2019, respectively, and
new lease net effective rental rate growth averaged 2.3% and 4.6% for the six
months ended June 30, 2020 and 2019, respectively.
The COVID-19 pandemic has negatively impacted our rental revenues and other
property income in three notable ways: (1) lower collection rates, which caused
our bad debt to increase from 0.5% of gross rental income for the six months
ended June 30, 2019 to 1.1% of gross rental income for the six months ended
June 30, 2020; (2) non-enforcement of late fees during the six months ended
June 30, 2020, which was a primary driver of a decrease in fee income year over
year; and (3) lower reimbursements of move out and other costs as a result of
lower turnover and eviction moratoriums. The decreases in fee income and
reimbursements were partially offset by continued increases in utilities
reimbursements as more utilities remained in our name compared to the prior
year.
The COVID-19 pandemic is likely to continue to affect our collection rates and
ability to raise rents and charge fees, and the impact of jurisdictional
restrictions on rental rates, late fees, payment deferral programs, and eviction
moratoriums is likely to affect our ability to increase rental revenues and
other operating income.
Expenses
For the six months ended June 30, 2020 and 2019, total expenses were
$837.5 million and $864.0 million, respectively. Set forth below is a discussion
of changes in the individual components of total expenses.
For the six months ended June 30, 2020, property operating and maintenance
expense increased to $333.9 million from $326.9 million for the six months ended
June 30, 2019. This 2.1% net increase resulted from an increase in property
taxes, repairs and maintenance, and utilities, partially offset by decreases in
turnover and property administrative costs that declined to due lower turnover
and eviction moratoriums and savings in personnel and other costs. The 1,084
home decrease between periods in the average number of homes owned also offset
the increases in expenses. The COVID-19 pandemic is likely to continue to impact
our turnover rates, and thus turnover costs, and other property operating and
maintenance expense may continue to be affected by the ongoing impacts of the
pandemic.
Property management expense and general and administrative expense decreased to
$57.6 million from $73.7 million for the six months ended June 30, 2020 and
2019, respectively, due to decreases in severance expense of $7.1 million,
merger and transaction-related expenses of $4.3 million, share-based
compensation expense of $3.0 million, and offering related expenses of
$2.0 million for the six months ended June 30, 2020 as compared to the six
months ended June 30, 2019. To date, the COVID-19 pandemic has not had a
material impact on our property management and general and administrative
expenses.
Interest expense was $170.8 million and $189.7 million for the six months ended
June 30, 2020 and 2019, respectively. The decrease in interest expense was
primarily driven by a decrease in the average debt balance outstanding during
the six months ended June 30, 2020 as compared to the six months ended June 30,
2019 due to various prepayments and redemption of a portion of our convertible
debt for common equity subsequent to June 30, 2019. Debt outstanding, net of
deferred financing costs and discounts, decreased to $8,351.6 million as of
June 30, 2020 from $8,965.0 million as of June 30, 2019.


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Depreciation and amortization expense increased to $272.3 million for the six
months ended June 30, 2020 from $266.6 million for the six months ended June 30,
2019 due to an increase in cumulative capital expenditures. This was partially
offset by a decrease in the average number of homes owned during the six months
ended June 30, 2020 compared to the six months ended June 30, 2019.
Impairment and other expenses were $2.9 million and $7.1 million for the six
months ended June 30, 2020 and 2019, respectively. During the six months ended
June 30, 2020, impairment and other expenses was comprised of impairment losses
of $3.9 million on our single-family residential properties and net gains on
casualty losses of $1.0 million. During the six months ended June 30, 2019,
impairment and other expenses was comprised of impairment losses of $7.3 million
on our single-family residential properties, partially offset by net gains on
casualty losses of $0.2 million. The impairment costs recognized during the six
months ended June 30, 2020 were not a direct result of the COVID-19 pandemic.
Other, net
Other, net increased to $5.1 million for the six months ended June 30, 2020 from
$3.7 million for the six months ended June 30, 2019, due to changes in the
components of our miscellaneous income and expenses.
Gain on Sale of Property, net of tax
Gain on sale of property, net of tax was $26.4 million and $43.7 million for the
six months ended June 30, 2020 and 2019, respectively. The primary driver of the
decrease was a decrease in the number of homes sold from 1,433 during the six
months ended June 30, 2019 to 900 during the six months ended June 30, 2020.
Liquidity and Capital Resources
Our liquidity and capital resources as of June 30, 2020 and December 31, 2019
include unrestricted cash and cash equivalents of $571.7 million and
$92.3 million, respectively, a 519.7% increase. In May 2020, we used cash on
hand to repay $120.0 million of the $270.0 million revolving facility (the
"Revolving Facility") that had previously been outstanding. In June 2020, we
completed an underwritten public offering to sell 16,675,000 shares of our
common stock and generated net proceeds of $447.5 million, and $150.0 million of
the proceeds were used to fully repay the balance outstanding on our Revolving
Facility. The remaining proceeds are expected to be used primarily for
acquisitions. As of June 30, 2020, our $1,000.0 million Revolving Facility
remains undrawn. Additionally, there are no restrictions on our ability to draw
additional funds from the Revolving Facility, provided we remain in compliance
with all covenants; and we have no debt maturing before 2022, provided all
extension options are exercised.
Our ability to access capital as well as to use cash from operations to continue
to meet our liquidity needs, all of which are highly uncertain and cannot be
predicted, could be affected by various risks and uncertainties, including, but
not limited to, the effects of the COVID-19 pandemic, as detailed in Part II.
Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q and in the risk
factors identified in other reports we have filed with the SEC, including
without limitation our Annual Report on Form 10-K for the year ended
December 31, 2019.
Through June 30, 2020, disposition channels remained healthy in our markets, and
we continued to sell homes that had been designated for disposition.
Additionally, we have limited cash commitments outside of debt service as we do
not engage in any development activity, and the pipeline of acquisitions to
which we are committed is $47.5 million as of June 30, 2020. However, the
ongoing impact of the COVID-19 pandemic may impact the acquisition and
disposition of single-family homes in ways that we are unable to predict.
Liquidity is a measure of our ability to meet potential cash requirements,
maintain our assets, fund our operations, make dividend payments to our
stockholders, and meet other general requirements of our business. Our
liquidity, to a certain extent, is subject to general economic, financial,
competitive, and other factors beyond our control. Our near-term liquidity
requirements consist primarily of: (i) renovating newly-acquired homes;
(ii) funding HOA fees (as applicable), property taxes, insurance premiums, and
the ongoing maintenance of our homes; (iii) interest expense; and (iv) payment
of dividends to our equity investors. We believe our rental income, net of total
expenses, will generally provide cash flow sufficient to fund operations and
dividend payments on a near-term basis.


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However, the COVID-19 pandemic may negatively impact our operating cash flow
such that we are unable to make required debt service payments, which would
result in an event of default for any such loan agreement under which payments
were not made. Specifically, the collateral within individual borrower entities
may underperform, resulting in cash flow shortfalls for debt service while
consolidated cash flows are sufficient to fund our operations. If an event of
default occurs for a specific mortgage loan or for our secured term loan, our
loan agreements provide certain remedies, including our ability to fund
shortfalls from consolidated cash flow; and such an event of default would not
result in an immediate acceleration of the loan.
Our real estate assets are illiquid in nature. A timely liquidation of assets
may not be a viable source of short-term liquidity should a cash flow shortfall
arise, and we may need to source liquidity from other financing sources, such as
the Revolving Facility, which had an undrawn balance of $1,000.0 million as of
June 30, 2020.
Our long-term liquidity requirements consist primarily of funds necessary to pay
for the acquisition of, and non-recurring capital expenditures for, our homes
and principal payments on our indebtedness.
We intend to satisfy our long-term liquidity needs through cash provided by
operations, long-term secured and unsecured borrowings, the issuance of debt and
equity securities, and property dispositions. As a REIT, we are required to
distribute to our stockholders at least 90% of our taxable income, excluding net
capital gain, on an annual basis. Therefore, as a general matter, it is unlikely
that we will be able to retain substantial cash balances from our annual taxable
income that could be used to meet our liquidity needs. Instead, we will need to
meet these needs from external sources of capital and amounts, if any, by which
our cash flow generated from operations exceeds taxable income.
On August 22, 2019, we entered into distribution agreements with a syndicate of
banks (the "Agents"), pursuant to which we may sell, from time to time, up to an
aggregate sales price of $800.0 million of our common stock through the Agents
(the "ATM Equity Program"). During the three and six months ended June 30, 2020,
we sold 15,400 and 1,887,466 shares of our common stock under our ATM Equity
Program, respectively, generating net proceeds of $0.3 million and
$56.3 million, respectively, after giving effect to Agent commissions and other
costs totaling $0.1 million and $1.0 million, respectively. As of June 30, 2020,
$685.8 million remains available for future offerings under the ATM Equity
Program.
Certain Securitizations, the Secured Term Loan, the Term Loan Facility (all
defined below), and the Revolving Facility (collectively, the "LIBOR-Based
Loans") use London Interbank Offer Rate ("LIBOR") as a benchmark for
establishing interest rates. Our derivative instruments are also indexed to
LIBOR. The Financial Conduct Authority in the United Kingdom, the governing body
responsible for regulating LIBOR, announced that it will no longer compel or
persuade financial institutions and panel banks to make LIBOR submissions after
2021. Once LIBOR is phased out, the interest rates for our LIBOR-Based Loans
will be based on a comparable or successor rate as provided for in our loan
agreements. We will work with the counterparties to our swap and cap agreements
to adjust each floating rate to a comparable or successor rate. While we do not
expect that the transition from LIBOR and risks related thereto will have a
material adverse effect on our financing costs, the ultimate outcome of this
change is uncertain at this time, and significant management time and attention
may be required to transition to using the new benchmark rates and to implement
necessary changes to our financial models.
The following describes the key terms of our current indebtedness.
Mortgage Loans
Our securitization transactions (the "Securitizations" or the "mortgage loans")
are collateralized by certain homes owned by wholly owned subsidiaries of
INVH LP that were formed to facilitate certain of our financing arrangements
(the "Borrower Entities"). We utilize the proceeds from our securitizations to
fund: (i) repayments of then-outstanding indebtedness; (ii) initial deposits
into Securitization reserve accounts; (iii) closing costs in connection with the
mortgage loans; and (iv) general costs associated with our operations.


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The following table sets forth a summary of our mortgage loan indebtedness as of June 30, 2020 and December 31, 2019:

                                                                                        Outstanding Principal Balance(5)
                       Maturity       Maturity Date if    Interest    Range of          June 30,
($ in thousands)       Date(1)        Fully Extended(2)   Rate(3)    Spreads(4)           2020             December 31, 2019
IH 2017-1(6)         June 9, 2027       June 9, 2027       4.23%         N/A       $        994,606       $         995,520
SWH 2017-1(7)      October 9, 2020     January 9, 2023     1.73%     102-347 bps            736,208                 744,092
IH 2017-2(7)       December 9, 2020   December 9, 2024     1.31%     91-186 bps             616,429                 624,475
IH 2018-1(7)        March 9, 2021       March 9, 2025      1.28%     76-206 bps             780,718                 793,720
IH 2018-2(7)         June 9, 2021       June 9, 2025       1.50%     95-230 bps             934,426                 957,135

IH 2018-3(7)(8) July 9, 2020 July 9, 2025 1.51% 105-230 bps 1,143,986

               1,213,035

IH 2018-4(7) January 9, 2021 January 9, 2026 1.58% 115-225 bps

            928,533                 938,430
Total Securitizations                                                                     6,134,906               6,266,407
Less: deferred financing costs, net                                                         (16,331 )               (27,946 )
Total                                                                              $      6,118,575       $       6,238,461

(1) The maturity dates above reflect all extension options that have been

exercised.

(2) Represents the maturity date if we exercise each of the remaining one year

extension options available, which are subject to certain conditions being

met.

(3) Except for IH 2017-1, interest rates are based on a weighted average spread

over LIBOR, plus applicable servicing fees; as of June 30, 2020, LIBOR was

0.16%. Our IH 2017-1 mortgage loan bears interest at a fixed rate of 4.23%

per annum, equal to the market determined pass-through rate payable on the

certificates including applicable servicing fees.

(4) Range of spreads is based on outstanding principal balances as of June 30,

2020.

(5) Outstanding principal balance is net of discounts and does not include

deferred financing costs, net.

(6) Net of unamortized discount of $2.5 million and $2.6 million as of June 30,

2020 and December 31, 2019, respectively.

(7) The initial maturity term of each of these mortgage loans is two years,

individually subject to three to five, one year extension options at the

Borrower Entity's discretion (provided that there is no continuing event of

default under the mortgage loan agreement and the Borrower Entity obtains and

delivers a replacement interest rate cap agreement from an approved

counterparty within the required timeframe to the lender). Our SWH 2017-1,

IH 2017-2, IH 2018-1 and IH 2018-2 mortgage loans have exercised the first

extension option. The maturity dates above reflect all extensions that have

been exercised.

(8) On July 9, 2020, the extension of the maturity date of the IH 2018-3 mortgage

loan from July 9, 2020 to July 9, 2021 was approved by the lender.

Securitization Transactions
For each Securitization transaction, the Borrower Entity executed a loan
agreement with a third party lender. Except for IH 2017-1, each outstanding
mortgage loan originally consisted of six floating rate components. The two year
initial terms are individually subject to three to five, one year extension
options at the Borrower Entity's discretion. Such extensions are available
provided there is no continuing event of default under the respective mortgage
loan agreement and the Borrower Entity obtains and delivers a replacement
interest rate cap agreement from an approved counterparty within the required
timeframe to the lender. IH 2017-1 is a 10 year, fixed rate mortgage loan
comprised of two components. Certificates issued by the trust in connection with
Component A of IH 2017-1 benefit from the Federal National Mortgage
Association's guaranty of timely payment of principal and interest.


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Each mortgage loan is secured by a pledge of the equity in the assets of the
respective Borrower Entities, as well as first-priority mortgages on the
underlying properties and a grant of security interests in all of the related
personal property. As of June 30, 2020 and December 31, 2019, a total of 35,786
and 37,040 homes, respectively, with a net book value of $6,862.2 million and
$7,137.6 million, respectively, are pledged pursuant to the mortgage loans. Each
Borrower Entity has the right, subject to certain requirements and limitations
outlined in the respective loan agreements, to substitute properties. We are
obligated to make monthly payments of interest for each mortgage loan.
Transactions with Trusts
Concurrent with the execution of each mortgage loan agreement, the respective
third party lender sold each loan it originated to individual depositor entities
(the "Depositor Entities") who subsequently transferred each loan to
Securitization-specific trust entities (the "Trusts"). The Depositor Entities
for our currently outstanding Securitizations are wholly owned subsidiaries.
As consideration for the transfer of each loan to the Trusts, the Trusts issued
classes of certificates which mirror the components of the individual loans
(collectively, the "Certificates") to the Depositor Entities, except that
Class R certificates do not have related loan components as they represent
residual interests in the Trusts. The Certificates represent the entire
beneficial interest in the Trusts. Following receipt of the Certificates, the
Depositor Entities sold the Certificates to investors and used the proceeds as
consideration for the loans sold to the Depositor Entities by the lenders. These
transactions had no effect on our condensed consolidated financial statements
other than with respect to Certificates we retained in connection with
Securitizations or purchased at a later date.
The Trusts are structured as pass-through entities that receive interest
payments from the Securitizations and distribute those payments to the holders
of the Certificates. The assets held by the Trusts are restricted and can only
be used to fulfill the obligations of those entities. The obligations of the
Trusts do not have any recourse to the general credit of any entities in these
condensed consolidated financial statements. We have evaluated our interests in
certain certificates of the Trusts held by us (discussed below) and determined
that they do not create a more than insignificant variable interest in the
Trusts. Additionally, the retained certificates do not provide us with any
ability to direct activities that could impact the Trusts' economic performance.
Therefore, we do not consolidate the Trusts.
Retained Certificates
As the Trusts made Certificates available for sale to both domestic and foreign
investors, sponsors of the mortgage loans are required to retain a portion of
the risk that represents a material net economic interest in each loan pursuant
to Regulation RR (the "Risk Retention Rules") under the Securities Exchange Act
of 1934, as amended. As such, loan sponsors are required to retain a portion of
the credit risk that represents not less than 5% of the aggregate fair value of
the loan as of the closing date.
IH 2017-1 issued Class B certificates, which are restricted certificates that
were made available exclusively to INVH LP in order to comply with the Risk
Retention Rules. The Class B certificates bear a stated annual interest rate of
4.23%, including applicable servicing fees.
For SWH 2017-1, IH 2017-2, IH 2018-1, IH 2018-2, IH 2018-3, and IH 2018-4, we
retain 5% of each class of certificates to meet the Risk Retention Rules. These
retained certificates accrue interest at a floating rate of LIBOR plus a spread
ranging from 0.76% to 3.47%.
The retained certificates total $310.4 million and $317.0 million as of June 30,
2020 and December 31, 2019, respectively, and are classified as held to maturity
investments and recorded in other assets, net on the condensed consolidated
balance sheets.


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Loan Covenants
The general terms that apply to all of the mortgage loans require each Borrower
Entity to maintain compliance with certain affirmative and negative covenants.
Affirmative covenants include each Borrower Entity's, and certain of their
respective affiliates', compliance with (i) licensing, permitting and legal
requirements specified in the mortgage loan agreements, (ii) organizational
requirements of the jurisdictions in which they are organized, (iii) federal and
state tax laws, and (iv) books and records requirements specified in the
respective mortgage loan agreements. Negative covenants include each Borrower
Entity's, and certain of their affiliates', compliance with limitations
surrounding (i) the amount of each Borrower Entity's indebtedness and the nature
of their investments, (ii) the execution of transactions with affiliates,
(iii) the Manager, (iv) the nature of each Borrower Entity's business
activities, and (v) the required maintenance of specified cash reserves. As of
June 30, 2020, and through the date our condensed consolidated financial
statements were issued, we believe each Borrower Entity is in compliance with
all affirmative and negative covenants.
Prepayments
For the mortgage loans, prepayments of amounts owed by us are generally not
permitted under the terms of the respective mortgage loan agreements unless such
prepayments are made pursuant to the voluntary election or mandatory provisions
specified in such agreements. The specified mandatory provisions become
effective to the extent that a property becomes characterized as a disqualified
property, a property is sold, and/or upon the occurrence of a condemnation or
casualty event associated with a property. To the extent either a voluntary
election is made, or a mandatory prepayment condition exists, in addition to
paying all interest and principal, we must also pay certain breakage costs as
determined by the loan servicer and a spread maintenance premium if prepayment
occurs before the month following the one or two year anniversary of the closing
dates of each of the mortgage loans except for IH 2017-1. For IH 2017-1,
prepayments on or before December 2026 will require a yield maintenance premium.
For the six months ended June 30, 2020 and 2019, we made voluntary and mandatory
prepayments of $131.7 million and $709.4 million, respectively, under the terms
of the mortgage loan agreements. During the six months ended June 30, 2019,
prepayments included the full repayment of the CSH 2016-2 mortgage loan.
Secured Term Loan
On June 7, 2019, 2019-1 IH Borrower LP, a consolidated subsidiary ("2019-1 IH
Borrower" and one of our Borrower Entities), entered into a 12 year loan
agreement with a life insurance company (the "Secured Term Loan"). The Secured
Term Loan bears interest at a fixed rate of 3.59%, including applicable
servicing fees, for the first 11 years and bears interest at a floating rate
based on a spread of 147 bps, including applicable servicing fees, over one
month LIBOR (subject to certain adjustments as outlined in the loan agreement)
for the twelfth year. The Secured Term Loan is secured by first priority
mortgages on a portfolio of single-family rental properties as well as a first
priority pledge of the equity interests of 2019-1 IH Borrower. We utilized the
proceeds from the Secured Term Loan to fund: (i) repayments of then-outstanding
indebtedness; (ii) initial deposits into the Secured Term Loan's reserve
accounts; (iii) transaction costs related to the closing of the Secured Term
Loan; and (iv) general corporate purposes.


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The following table sets forth a summary of our Secured Term Loan indebtedness as of June 30, 2020 and December 31, 2019:

                      Maturity     Interest    June 30,
($ in thousands)        Date       Rate(1)       2020        December 31, 2019
Secured Term Loan   June 9, 2031    3.59%     $ 403,363     $         403,464
Deferred financing costs, net                    (2,377 )              (2,486 )
Secured Term Loan, net                        $ 400,986     $         400,978

(1) The Secured Term Loan bears interest at a fixed rate of 3.59% per annum

including applicable servicing fees for the first 11 years and for the

twelfth year bears interest at a floating rate based on a spread of 147 bps

over one month LIBOR (or a comparable or successor rate as provided for in

our loan agreement), including applicable servicing fees, subject to certain

adjustments as outlined in the loan agreement. Interest payments are made

    monthly.

Collateral

The Secured Term Loan's collateral pool contains 3,332 and 3,333 homes,
respectively, as of June 30, 2020 and December 31, 2019, with a net book value
of $727.5 million and $734.8 million, respectively. 2019-1 IH Borrower has the
right, subject to certain requirements and limitations outlined in the loan
agreement, to substitute properties representing up to 20% of the collateral
pool annually, and to substitute properties representing up to 100% of the
collateral pool over the life of the Secured Term Loan. In addition, four times
after the first anniversary of the closing date, 2019-1 IH Borrower has the
right, subject to certain requirements and limitations outlined in the loan
agreement, to execute a special release of collateral representing up to 15% of
the then-outstanding principal balance of the Secured Term Loan in order to
bring the loan-to-value ratio back in line with the Secured Term Loan's
loan-to-value ratio as of the closing date. Any such special release of
collateral would not change the then-outstanding principal balance of the
Secured Term Loan, but rather would reduce the number of single-family rental
homes included in the collateral pool.
Loan Covenants
The Secured Term Loan requires 2019-1 IH Borrower to maintain compliance with
certain affirmative and negative covenants. Affirmative covenants include
2019-1 IH Borrower's, and certain of its affiliates', compliance with
(i) licensing, permitting and legal requirements specified in the loan
agreement, (ii) organizational requirements of the jurisdictions in which they
are organized, (iii) federal and state tax laws, and (iv) books and records
requirements specified in the loan agreement. Negative covenants include
2019-1 IH Borrower's, and certain of its affiliates', compliance with
limitations surrounding (i) the amount of 2019-1 IH Borrower's indebtedness and
the nature of its investments, (ii) the execution of transactions with
affiliates, (iii) the Manager, (iv) the nature of 2019-1 IH Borrower's business
activities, and (v) the required maintenance of specified cash reserves. As of
June 30, 2020, and through the date our condensed consolidated financial
statements were issued, we believe 2019-1 IH Borrower is in compliance with all
affirmative and negative covenants.
Prepayments
Prepayments of the Secured Term Loan are generally not permitted unless such
prepayments are made pursuant to the voluntary election or mandatory provisions
specified in the loan agreement. The specified mandatory provisions become
effective to the extent that a property becomes characterized as a disqualified
property, a property is sold, and/or upon the occurrence of a condemnation or
casualty event associated with a property. To the extent either a voluntary
election is made, or a mandatory prepayment condition exists, in addition to
paying all interest and principal, we must also pay certain breakage costs as
determined by the loan servicer and a yield maintenance premium if prepayment
occurs before June 9, 2030. For the six months ended June 30, 2020, we made
mandatory prepayments of $0.1 million. No prepayments were made for the six
months ended June 30, 2019.


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Term Loan Facility and Revolving Facility
On February 6, 2017, we entered into a credit agreement with a syndicate of
banks, financial institutions, and institutional lenders for a credit facility
(the "Credit Facility"), which was amended on December 18, 2017 to include all
entities and homes acquired in the Mergers. The Credit Facility provides
$2,500.0 million of borrowing capacity and consists of a $1,000.0 million
Revolving Facility, which will mature on February 6, 2021, with a one year
extension option, and a $1,500.0 million term loan facility (the "Term Loan
Facility"), which will mature on February 6, 2022. The Revolving Facility also
includes borrowing capacity available for letters of credit and for short-term
borrowings referred to as swing line borrowings, in each case subject to certain
sublimits. The Credit Facility provides us with the option to enter into
additional incremental credit facilities (including an uncommitted incremental
facility that provides us with the option to increase the size of the Revolving
Facility and/or the Term Loan Facility by an aggregate amount of up to
$1,500.0 million), subject to certain limitations. Proceeds from the Term Loan
Facility were used to repay then-outstanding indebtedness and for general
corporate purposes. Proceeds from the Revolving Facility are used for general
corporate purposes.
The following table sets forth a summary of the outstanding principal amounts
under the Credit Facility as of June 30, 2020 and December 31, 2019:
                         Maturity       Interest     June 30,
($ in thousands)           Date         Rate(1)        2020         December 31, 2019
Term Loan Facility   February 6, 2022    1.86%     $ 1,500,000     $       1,500,000
Deferred financing costs, net                           (4,809 )              (6,253 )
Term Loan Facility, net                            $ 1,495,191     $       

1,493,747

Revolving Facility February 6, 2021 1.91% $ - $

       -

(1) Interest rates for the Term Loan Facility and the Revolving Facility are

based on LIBOR plus an applicable margin. As of June 30, 2020, the applicable

margins were 1.70% and 1.75%, respectively, and LIBOR was 0.16%.

(2) If we exercise the one year extension option, the maturity date will be

February 6, 2022.

Interest Rate and Fees
Borrowings under the Credit Facility bear interest, at our option, at a rate
equal to a margin over either (a) a LIBOR rate determined by reference to the
Bloomberg LIBOR rate (or a comparable or successor rate as provided for in our
loan agreement) for the interest period relevant to such borrowing, or (b) a
base rate determined by reference to the highest of (1) the administrative
agent's prime lending rate, (2) the federal funds effective rate plus 0.50%, and
(3) the LIBOR rate that would be payable on such day for a LIBOR rate loan with
a one month interest period plus 1.00%. The margin is based on a total leverage
based grid. The margin for the Revolving Facility ranges from 0.75% to 1.30% in
the case of base rate loans, and 1.75% to 2.30% in the case of LIBOR rate loans.
The margin for the Term Loan Facility ranges from 0.70% to 1.30% in the case of
base rate loans, and 1.70% to 2.30% in the case of LIBOR rate loans. In
addition, the Credit Facility provides that, upon receiving an investment grade
rating on its non-credit enhanced, senior unsecured long term debt of BBB- or
better from Standard & Poor's Rating Services, a division of The McGraw-Hill
Companies, Inc., or Baa3 or better from Moody's Investors Service, Inc. (an
"Investment Grade Rating Event"), we may elect to convert to a credit rating
based pricing grid.
In addition to paying interest on outstanding principal under the Credit
Facility, we are required to pay a facility fee to the lenders under the
Revolving Facility in respect of the unused commitments thereunder. The facility
fee rate is based on the daily unused amount of the Revolving Facility and is
either 0.35% or 0.20% per annum based on the unused facility amount. Upon
converting to a credit rating pricing based grid, the unused facility fee will
no longer apply and we will be required to pay a facility fee ranging from
0.125% to 0.300%. We are also required to pay customary letter of credit fees.


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Prepayments and Amortization
No principal reductions are required under the Credit Facility. We are permitted
to voluntarily repay amounts outstanding under the Term Loan Facility at any
time without premium or penalty, subject to certain minimum amounts and the
payment of customary "breakage" costs with respect to LIBOR loans. Once repaid,
no further borrowings will be permitted under the Term Loan Facility.
Loan Covenants
The Credit Facility contains certain customary affirmative and negative
covenants and events of default. Such covenants will, among other things,
restrict, subject to certain exceptions, our ability and that of the Subsidiary
Guarantors (as defined below) and their respective subsidiaries to (i) engage in
certain mergers, consolidations or liquidations, (ii) sell, lease or transfer
all or substantially all of their respective assets, (iii) engage in certain
transactions with affiliates, (iv) make changes to our fiscal year, (v) make
changes in the nature of our business and our subsidiaries, and (vi) incur
additional indebtedness that is secured on a pari passu basis with the Credit
Facility.
The Credit Facility also requires us, on a consolidated basis with our
subsidiaries, to maintain a (i) maximum total leverage ratio, (ii) maximum
secured leverage ratio, (iii) maximum unencumbered leverage ratio, (iv) minimum
fixed charge coverage ratio, (v) minimum unencumbered fixed charge coverage
ratio, and (vi) minimum tangible net worth. If an event of default occurs, the
lenders under the Credit Facility are entitled to take various actions,
including the acceleration of amounts due under the Credit Facility and all
actions permitted to be taken by a secured creditor. As of June 30, 2020, and
through the date our condensed consolidated financial statements were issued, we
believe we were in compliance with all affirmative and negative covenants.
Guarantees and Security
The obligations under the Credit Facility are guaranteed on a joint and several
basis by each of our direct and indirect domestic wholly owned subsidiaries that
own, directly or indirectly, unencumbered assets (the "Subsidiary Guarantors"),
subject to certain exceptions. The guarantee provided by any Subsidiary
Guarantor will be automatically released upon the occurrence of certain events,
including if it no longer has a direct or indirect interest in an unencumbered
asset or as a result of certain non-recourse refinancing transactions pursuant
to which such Subsidiary Guarantor becomes contractually prohibited from
providing its guaranty of the Credit Facility. In addition, INVH may be required
to provide a guarantee of the Credit Facility under certain circumstances,
including if INVH does not maintain its qualification as a REIT.
The Credit Facility is collateralized by first priority or equivalent security
interests in all the capital stock of, or other equity interests in, any
Subsidiary Guarantor held by us and each of the Subsidiary Guarantors. The
security interests granted under the Credit Facility will be automatically
released upon the occurrence of certain events, including upon an Investment
Grade Rating Event or if the total net leverage ratio is less than or equal to
8.00:1.00 for four consecutive fiscal quarters.
Convertible Senior Notes
In connection with the Mergers, we assumed SWH's convertible senior notes. In
July 2014, SWH issued $230.0 million in aggregate principal amount of 3.00%
convertible senior notes due 2019 (the "2019 Convertible Notes"). Interest on
the 2019 Convertible Notes was payable semiannually in arrears on January 1st
and July 1st of each year. The notes matured on July 1, 2019, and we settled
substantially all of the outstanding balance of the 2019 Convertible Notes
through the issuance of 12,553,864 shares of our common stock.
In January 2017, SWH issued $345.0 million in aggregate principal amount of
3.50% convertible senior notes due 2022 (the "2022 Convertible Notes" and
together with the 2019 Convertible Notes, the "Convertible Senior Notes").
Interest on the 2022 Convertible Notes is payable semiannually in arrears on
January 15th and July 15th of each year. The 2022 Convertible Notes will mature
on January 15, 2022.


                                       58

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The following table summarizes the terms of the Convertible Senior Notes outstanding as of June 30, 2020 and December 31, 2019:

                                                                                                Principal Amount
                                                                          Remaining
                   Coupon    Effective   Conversion       Maturity       Amortization    June 30,
($ in thousands)    Rate      Rate(1)     Rate(2)           Date            Period         2020        December 31, 2019
2022 Convertible
Notes               3.50%      5.12%      43.7694     January 15, 2022     1.54 years   $ 345,000     $         345,000
Net unamortized fair value adjustment                                                      (8,180 )             (10,701 )
Total                                                                                   $ 336,820     $         334,299

(1) Effective rate includes the effect of the adjustment to the fair value of the

debt as of the Merger Date, the value of which reduced the initial liability

recorded to $324.3 million for the 2022 Convertible Notes.

(2) The conversion rate as of June 30, 2020 represents the number of shares of

common stock issuable per $1,000 principal amount (actual $) of the 2022

Convertible Notes converted on such date, as adjusted in accordance with the

indenture as a result of cash dividend payments and the effects of previous

mergers. As of June 30, 2020, the 2022 Convertible Notes do not meet the

criteria for conversion. We have the option to settle the 2022 Convertible

Notes in cash, common stock, or a combination thereof.

Terms of Conversion
On July 1, 2019, we settled substantially all of the outstanding balance of the
2019 Convertible Notes with the issuance of 12,553,864 shares of our common
stock. At the settlement date, the conversion rate applicable to the 2019
Convertible Notes was 54.5954 shares of our common stock per $1,000 principal
amount (actual $) of the 2019 Convertible Notes (equivalent to a conversion
price of approximately $18.32 per common share - actual $). For the three and
six months ended June 30, 2019, interest expense for the 2019 Convertible Notes,
including non-cash amortization of discounts, was $2.8 million and $5.6 million,
respectively.
As of June 30, 2020, the conversion rate applicable to the 2022 Convertible
Notes is 43.7694 shares of our common stock per $1,000 principal amount (actual
$) of the 2022 Convertible Notes (equivalent to a conversion price of
approximately $22.85 per common share - actual $). The conversion rate for the
2022 Convertible Notes is subject to adjustment in some events, but will not be
adjusted for any accrued and unpaid interest. In addition, following certain
events that occur prior to the maturity date, we will adjust the conversion rate
for a holder who elects to convert its 2022 Convertible Notes in connection with
such an event in certain circumstances. At any time prior to July 15, 2021,
holders may convert the 2022 Convertible Notes at their option only under
specific circumstances as defined in the indenture agreement, dated as of
January 10, 2017, between us and our trustee, Wilmington Trust National
Association (the "Convertible Notes Trustee"). On or after July 15, 2021 and
until maturity, holders may convert all or any portion of the 2022 Convertible
Notes at any time. Upon conversion, we will pay or deliver, as the case may be,
cash, common stock, or a combination of cash and common stock, at our election.
The "if-converted" value of the 2022 Convertible Notes exceeds the principal
amount by $70.7 million as of June 30, 2020 as the closing market price of our
common stock of $27.53 per common share (actual $) exceeds the implicit
conversion price. For the three months ended June 30, 2020 and 2019, interest
expense for the 2022 Convertible Notes, including non-cash amortization of
discounts, was $4.3 million and $4.2 million, respectively. For the six months
ended June 30, 2020 and 2019, interest expense for the 2022 Convertible Notes,
including non-cash amortization of discounts, was $8.6 million and $8.4 million,
respectively.
General Terms
We may not redeem the 2022 Convertible Notes prior to their maturity date except
to the extent necessary to preserve our status as a REIT for United States
federal income tax purposes, as further described in the indenture. If we
undergo a fundamental change as defined in the indenture, holders may require us
to repurchase for cash all or any portion of their 2022 Convertible Notes at a
fundamental change repurchase price equal to 100% of the principal amount of the
2022 Convertible Notes to be repurchased, plus accrued and unpaid interest up
to, but excluding, the fundamental change repurchase date.


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The indenture contains customary terms and covenants and events of default. If
an event of default occurs and is continuing, the Convertible Notes Trustee, by
notice to us, or the holders of at least 25% in aggregate principal amount of
the outstanding 2022 Convertible Notes, by notice to us and the Convertible
Notes Trustee, may, and the Convertible Notes Trustee at the request of such
holders shall, declare 100% of the principal of and accrued and unpaid interest
on all the 2022 Convertible Notes to be due and payable. In the case of an event
of default arising out of certain events of bankruptcy, insolvency or
reorganization in respect to us (as set forth in the indenture), 100% of the
principal of and accrued and unpaid interest on the 2022 Convertible Notes will
automatically become due and payable.
Certain Hedging Arrangements
From time to time, we enter into derivative instruments to manage the economic
risk of changes in interest rates. We do not enter into derivative transactions
for speculative or trading purposes. Designated hedges are derivatives that meet
the criteria for hedge accounting and that we have elected to designate as
hedges. Non-designated hedges are derivatives that do not meet the criteria for
hedge accounting or that we did not elect to designate as hedges.
Designated Hedges
We have entered into various interest rate swap agreements, which are used to
hedge the variable cash flows associated with variable-rate interest payments.
Currently, each of our swap agreements is indexed to LIBOR and is designated for
hedge accounting purposes. LIBOR is set to expire at the end of 2021, and we
will work with the counterparties to our swap agreements to adjust each floating
rate to a comparable or successor rate. Changes in the fair value of these swaps
are recorded in other comprehensive income and are subsequently reclassified
into earnings in the period in which the hedged forecasted transactions affect
earnings.
The table below summarizes our interest rate swap instruments as of June 30,
2020 ($ in thousands):
                         Forward            Maturity         Strike                         Notional
Agreement Date       Effective Date           Date            Rate          Index            Amount
December 21, 2016   February 28, 2017   January 31, 2022     1.97%     One month LIBOR   $     750,000
December 11, 2019   February 28, 2017   December 31, 2024    1.74%     One month LIBOR         750,000
January 12, 2017    February 28, 2017    August 7, 2020      1.59%     One month LIBOR       1,100,000
April 19, 2018      January 31, 2019    January 31, 2025     2.86%     One month LIBOR         400,000
February 15, 2019    March 15, 2019      March 15, 2022      2.23%     One month LIBOR         800,000
April 19, 2018       March 15, 2019     November 30, 2024    2.85%     One month LIBOR         400,000
April 19, 2018       March 15, 2019     February 28, 2025    2.86%     One month LIBOR         400,000
June 3, 2016          July 15, 2019       July 15, 2020      1.30%     One month LIBOR         450,000
January 10, 2017    January 15, 2020    January 15, 2021     2.13%     One month LIBOR         550,000
May 8, 2018           March 9, 2020       June 9, 2025       2.99%     One month LIBOR         325,000
May 8, 2018           June 9, 2020        June 9, 2025       2.99%     One month LIBOR         595,000
June 3, 2016          July 15, 2020       July 15, 2021      1.47%     One month LIBOR         450,000
June 28, 2018        August 7, 2020       July 9, 2025       2.90%     One month LIBOR       1,100,000
January 10, 2017    January 15, 2021      July 15, 2021      2.23%     One month LIBOR         550,000
December 9, 2019      July 15, 2021     November 30, 2024    2.90%     One month LIBOR         400,000
November 7, 2018     March 15, 2022       July 31, 2025      3.14%     One month LIBOR         400,000
November 7, 2018     March 15, 2022       July 31, 2025      3.16%     One month LIBOR         400,000



During the three and six months ended June 30, 2020 and 2019, such derivatives
were used to hedge the variable cash flows associated with existing
variable-rate interest payments. Amounts reported in accumulated other
comprehensive income related to derivatives will be reclassified to interest
expense as interest payments are made on our variable-rate debt. During the next
12 months, we estimate that $153.2 million will be reclassified to earnings as
an increase in interest expense.


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Non-Designated Hedges
Concurrent with entering into certain of the mortgage loan agreements and in
connection with previous mergers, we entered into or acquired and maintain
interest rate cap agreements with terms and notional amounts equivalent to the
terms and amounts of the mortgage loans made by the third party lenders.
Currently, each of our cap agreements is indexed to LIBOR, which is set to
expire at the end of 2021. We will work with the counterparties to our cap
agreements to adjust each floating rate to a comparable or successor rate. To
the extent that the maturity date of one or more of the mortgage loans is
extended through an exercise of one or more extension options, replacement or
extension interest rate cap agreements must be executed with terms similar to
those associated with the initial interest rate cap agreements and strike prices
equal to the greater of the interest rate cap strike price and the interest rate
at which the debt service coverage ratio (as defined) is not less than 1.2 to
1.0. The interest rate cap agreements, including all of our rights to payments
owed by the counterparties and all other rights, have been pledged as additional
collateral for the mortgage loans. Additionally, in certain instances, in order
to minimize the cash impact of purchasing required interest rate caps, we
simultaneously sell interest rate caps (which have identical terms and notional
amounts) such that the purchase price and sales proceeds of the related interest
rate caps are intended to offset each other. The purchased and sold interest
rate caps have strike prices ranging from approximately 3.24% to 5.31%.
Purchase of Outstanding Debt Securities or Loans
As market conditions warrant, we, our equity investors, our and their respective
affiliates, and members of our management, may from time to time seek to
purchase our outstanding debt, including borrowings under our credit facilities
and mortgage loans or debt securities that we may issue in the future, in
privately negotiated or open market transactions, by tender offer or otherwise.
Subject to any applicable limitations contained in the agreements governing our
indebtedness, any purchases made by us may be funded by the use of cash on our
condensed consolidated balance sheet or the incurrence of new secured or
unsecured debt, including borrowings under our credit facility and mortgage
loans. The amounts involved in any such purchase transactions, individually or
in the aggregate, may be material. Any such purchases may be with respect to a
substantial amount of a particular class or series of debt, with the attendant
reduction in the trading liquidity of such class or series. In addition, any
such purchases made at prices below the "adjusted issue price" (as defined for
United States federal income tax purposes) may result in taxable cancellation of
indebtedness income to us, which amounts may be material, and in related adverse
tax consequences to us.
Cash Flows
Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019
The following table summarizes our cash flows for the six months ended June 30,
2020 and 2019:
                                           For the Six Months
                                             Ended June 30,
($ in thousands)                           2020          2019        $ Change      % Change
Net cash provided by operating
activities                              $ 395,935     $ 375,342     $  20,593         5.5  %
Net cash provided by (used in)
investing activities                      (89,504 )      39,191      (128,695 )    (328.4 )%
Net cash provided by (used in)
financing activities                      202,937      (455,069 )     658,006       144.6  %
Change in cash, cash equivalents, and
restricted cash                         $ 509,368     $ (40,536 )   $ 549,904         N/M


Operating Activities
Our cash flows provided by operating activities depend on numerous factors,
including the occupancy level of our homes, the rental rates achieved on our
leases, the collection of rent from our residents, and the amount of our
operating and other expenses. Net cash provided by operating activities was
$395.9 million and $375.3 million for the six months ended June 30, 2020 and
2019, respectively, an increase of 5.5%. The increase in cash provided by
operating activities was driven by improved operational profitability, which was
partially offset by changes in operating assets and liabilities.


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Investing Activities
Net cash provided by (used in) investing activities consists primarily of the
acquisition costs of homes, capital improvements, and proceeds from property
sales. Net cash provided by (used in) investing activities was $(89.5) million
and $39.2 million for the six months ended June 30, 2020 and 2019, respectively,
a decrease of $128.7 million. The decrease in net cash provided by (used in)
investing activities primarily resulted from the combined effect of the
following changes in cash flows during the six months ended June 30, 2020
compared to the six months ended June 30, 2019: (1) a decrease in proceeds from
the sale of homes; (2) an increase in cash used for the initial renovation of
homes; (3) a decrease in cash provided by repayment proceeds from retained debt
securities; all offset by (4) a decrease in cash used for the acquisition of
homes. More specifically, proceeds from sales of homes decreased $107.8 million
from the six months ended June 30, 2019 to the six months ended June 30, 2020
due to a significant decrease in the number of homes sold from 1,433 to 900,
respectively, partially offset by an increase in proceeds per home. Initial
renovation spend increased $42.9 million from the six months ended June 30, 2019
compared to the six months ended June 30, 2020 due to a significant increase in
the number of homes undergoing their initial renovation and an increase in the
cost per home. Proceeds from repayment of retained debt securities decreased
$28.9 million from the six months ended June 30, 2019 to the six months ended
June 30, 2020 due to a decrease in prepayments of mortgage loans. Acquisition
spend decreased $66.4 million due to a significant decrease in the number of
homes acquired from 948 homes during the six months ended June 30, 2019 to 651
homes during the six months ended June 30, 2020.
Financing Activities
Net cash provided by (used in) financing activities was $202.9 million and
$(455.1) million for the six months ended June 30, 2020 and 2019, respectively.
During the six months ended June 30, 2020, issuances and sales of stock under
our public offering and ATM Equity Program resulted in $503.8 million of
proceeds, and we repaid $131.7 million of our mortgage loans, including partial
repayments of IH 2018-2 and IH 2018-3, and funded $163.5 million of dividend and
distribution payments. For the six months ended June 30, 2019, proceeds from our
Secured Term Loan of $403.5 million, along with proceeds from home sales and
operating cash flows were used to repay $709.4 million of our mortgage loans,
including full repayment of CSH 2016-2 and partial repayments of IH 2017-2 and
IH 2018-1, and for dividend payments which totaled $136.3 million.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements as defined in Item 303(a)(4)
of Regulation S-K.


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Contractual Obligations Our contractual obligations as of June 30, 2020, consist of the following: ($ in thousands)

                  Total          2020(1)        2021-2022       2023-2024      Thereafter
Mortgage loans, net(2)(3)     $  6,786,956     $   60,298     $   239,914     $ 1,566,729     $ 4,920,015
Secured Term Loan                  561,661          7,236          28,944          28,944         496,537
Term Loan Facility, net(2)       1,545,415         14,260       1,531,155               -               -
Revolving Facility(2)(3)(4)          5,697          1,789           3,908               -               -

2022 Convertible Notes(5) 369,151 6,038 363,113

             -               -

Derivative instruments(6) 674,299 73,682 283,588

       272,767          44,262
Purchase commitments(7)             47,482         47,482               -               -               -
Operating leases                    15,716          2,353           7,963           4,304           1,096
Finance leases                      10,088          1,533           5,465           3,090               -
Total                         $ 10,016,465     $  214,671     $ 2,464,050     $ 1,875,834     $ 5,461,910

(1) Includes estimated payments for the remaining six months of 2020.

(2) Includes estimated interest payments on the respective debt based on amounts

outstanding as of June 30, 2020 at rates in effect as of such date; as of

June 30, 2020, LIBOR was 0.16%.

(3) Represents the maturity date if we exercise each of the remaining one year

extension options available, which are subject to certain conditions being

met. See Part I. Item 1. "Financial Statements - Note 6 of Notes to Condensed

Consolidated Financial Statements" for a description of maturity dates

without consideration of extension options.

(4) Includes the related unused commitment fee.

(5) Represents the principal amount and interest obligation of the 2022

Convertible Notes which is calculated using the notes' coupon rate.

(6) Includes interest rate swap and interest rate cap obligations calculated

using LIBOR as of June 30, 2020, or 0.16%.

(7) Represents commitments to acquire 165 single-family rental homes as of

June 30, 2020.

Critical Accounting Policies and Estimates
Critical accounting policies are those accounting policies that management
believes are important to the portrayal of our financial condition and results
and require management's most difficult, subjective or complex judgments, often
as a result of the need to make estimates about the effect of matters that are
inherently uncertain. We believe that our critical accounting policies pertain
to the following: (i) our investments in single-family residential properties,
including acquisition of real estate assets, related cost capitalization,
provisions for impairment, and single-family residential properties held for
sale; and (ii) derivative financial instruments. These critical policies and
estimates are summarized in Part II. Item 7. "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our Annual Report
on Form 10-K. There were no material changes to our critical accounting policies
during the six months ended June 30, 2020.
For a discussion of recently adopted accounting standards, see Part I. Item 1.
"Financial Statements - Note 2 of Notes to Condensed Consolidated Financial
Statements."
Segment Reporting
Operating segments are defined as components of an enterprise for which discrete
financial information is available that is evaluated regularly by the CODM in
deciding how to allocate resources and in assessing performance. Our CODM is the
Chief Executive Officer.
Under the provision of ASC 280, Segment Reporting, we have determined that we
have one reportable segment related to acquiring, renovating, leasing, and
operating single-family homes as rental properties. The CODM evaluates operating


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performance and allocates resources on a total portfolio basis. The CODM
utilizes NOI as the primary measure to evaluate performance of the total
portfolio. The aggregation of individual homes constitutes the total portfolio.
Decisions regarding acquisitions and dispositions of homes are made at the
individual home level with a focus on growing accretively in high-growth
locations where we have greater scale and density.
Non-GAAP Measures
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 GAAP before the
following items: interest expense; income tax expense; and depreciation and
amortization. The 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; merger and transaction-related expenses; severance;
casualty losses, 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.
Our management uses EBITDA, EBITDAre, and Adjusted EBITDAre in a number of ways
to assess our condensed consolidated financial and operating performance, and we
believe these measures are helpful to management and external users in
identifying trends in our performance. EBITDA, EBITDAre, and Adjusted EBITDAre
help management identify controllable expenses and make decisions designed to
help us meet our current financial goals and optimize our financial performance,
while neutralizing the impact of capital structure on results. Accordingly, we
believe these metrics measure our financial performance based on operational
factors that management can impact in the short-term, namely our cost structure
and expenses.
We believe that the presentation of EBITDA, EBITDAre, and Adjusted EBITDAre
provides information useful to investors in assessing our financial condition
and results of operations. 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.


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The following table presents a reconciliation of net income (as determined in
accordance with GAAP) to EBITDA, EBITDAre, and Adjusted EBITDAre for each of the
periods indicated:
                                              For the Three Months         For the Six Months
                                                 Ended June 30,              Ended June 30,
($ in thousands)                               2020          2019          2020          2019
Net income available to common
stockholders                               $   42,784     $  38,833     $  92,638     $  59,549
Net income available to participating
securities                                        119           109           221           215
Non-controlling interests                         275           463           595           810
Interest expense                               86,071        95,706       170,828       189,689
Depreciation and amortization                 137,266       133,031       272,293       266,640
EBITDA                                        266,515       268,142       536,575       516,903
Gain on sale of property, net of tax          (11,167 )     (26,172 )     (26,367 )     (43,744 )
Impairment on depreciated real estate
investments                                     1,442         4,076         3,913         7,329
EBITDAre                                      256,790       246,046       514,121       480,488
Share-based compensation expense(1)             2,106         3,615         6,207         9,222
Merger and transaction-related
expenses(2)                                         -         1,552             -         4,347
Severance                                         255           375           255         7,344
Casualty losses, net                           (1,622 )      (2,405 )        (966 )        (266 )
Other, net(3)                                  (1,370 )        (610 )      (5,084 )      (3,735 )
Adjusted EBITDAre                          $  256,159     $ 248,573     $ 514,533     $ 497,400

(1) For the three months ended June 30, 2020 and 2019, $447 and $820 was recorded

in property management expense, respectively, and $1,659 and $2,795 was

recorded in general and administrative expense, respectively. For the six

months ended June 30, 2020 and 2019, $1,280 and $1,507 was recorded in

property management expense, respectively, and $4,927 and $7,715 was recorded

in general and administrative expense, respectively.

(2) Includes merger and transaction-related expenses included within general and

administrative.

(3) Includes interest income, unrealized gains from investments in equity

securities, and other miscellaneous income and expenses.

Net Operating Income
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; and other income and
expenses.
We consider NOI to be a meaningful supplemental financial measure of our
performance when considered with the financial statements determined in
accordance with GAAP. We believe NOI is helpful to investors in understanding
the core performance of our real estate operations. 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.


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The following table presents a reconciliation of net income (as determined in
accordance with GAAP) to NOI for our total portfolio and NOI for our Same Store
portfolio for each of the periods indicated:
                                              For the Three Months         For the Six Months
                                                 Ended June 30,              Ended June 30,
($ in thousands)                               2020          2019          2020          2019
Net income available to common
stockholders                               $   42,784     $  38,833     $  92,638     $  59,549
Net income available to participating
securities                                        119           109           221           215
Non-controlling interests                         275           463           595           810
Interest expense                               86,071        95,706       170,828       189,689
Depreciation and amortization                 137,266       133,031       272,293       266,640
Property management expense(1)                 14,529        16,021        28,901        31,181
General and administrative(2)                  14,426        15,956        28,654        42,494
Impairment and other                             (180 )       1,671         2,947         7,063
Gain on sale of property, net of tax          (11,167 )     (26,172 )     (26,367 )     (43,744 )
Other, net(3)                                  (1,370 )        (610 )      (5,084 )      (3,735 )
NOI (total portfolio)                         282,753       275,008       565,626       550,162
Non-Same Store NOI                            (21,233 )     (19,379 )     (38,556 )     (39,422 )
NOI (Same Store portfolio)(4)              $  261,520     $ 255,629     $ 527,070     $ 510,740

(1) Includes $447 and $820 of share-based compensation expense for the three

months ended June 30, 2020 and 2019, respectively. Includes $1,280 and $1,507

of share-based compensation expense for the six months ended June 30, 2020

and 2019, respectively.

(2) Includes $1,659 and $2,795 of share-based compensation expense for the three

months ended June 30, 2020 and 2019, respectively. Includes $4,927 and $7,715

of share-based compensation expense for the six months ended June 30, 2020

and 2019, respectively.

(3) Includes interest income, unrealized gains from investments in equity

securities, and other miscellaneous income and expenses.

(4) The Same Store portfolio totaled 72,261 homes for the six months ended

June 30, 2020 and 2019.




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Funds from Operations, Core Funds from Operations, and Adjusted Funds from
Operations
Funds From Operations ("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 partnerships and joint
ventures.
We believe that FFO is a meaningful supplemental measure of the operating
performance of our business because historical cost accounting for real estate
assets in accordance with GAAP assumes that the value of real estate assets
diminishes predictably over time, as reflected through depreciation and
amortization. Because real estate values have historically risen or fallen with
market conditions, management considers FFO an appropriate supplemental
performance measure as it excludes historical cost depreciation and
amortization, impairment on depreciated real estate investments, gains or losses
related to sales of previously depreciated homes, as well non-controlling
interests, from net income or loss (computed in accordance with GAAP). By
excluding depreciation and amortization and gains or losses on sales of real
estate, management uses FFO to measure returns on its investments in homes.
However, because FFO excludes depreciation and amortization and captures neither
the changes in the value of the homes that result from use or market conditions
nor the level of capital expenditures to maintain the operating performance of
the homes, all of which have real economic effect and could materially affect
our results from operations, the utility of FFO as a measure of our performance
is limited.
Management also believes that FFO, combined with the required GAAP
presentations, is useful to investors in providing more meaningful comparisons
of the operating performance of a company's real estate between periods or as
compared to other companies. The GAAP measure most directly comparable to FFO is
net income or loss. FFO is not used as a measure of our liquidity and should not
be considered an alternative to net income or loss or any other measure of
financial performance presented in accordance with GAAP. Our FFO may not be
comparable to the FFO of other companies due to the fact that not all companies
use the same definition of FFO. Accordingly, there can be no assurance that our
basis for computing this non-GAAP measures is comparable with that of other
companies.
We believe that Core FFO and Adjusted FFO are also meaningful supplemental
measures of our operating performance for the same reasons as FFO and are
further helpful to investors as they provide a more consistent measurement of
our performance across reporting periods by removing the impact of certain items
that are not comparable from period to period. We define Core FFO as FFO
adjusted for the following: non-cash interest expense related to amortization of
deferred financing costs, loan discounts, and non-cash interest expense for
derivatives; share-based compensation expense; offering related expenses; merger
and transaction-related expenses; severance expense; unrealized gains on
investments in equity securities; and casualty losses, net, as applicable. We
define Adjusted FFO as Core FFO less recurring capital expenditures that are
necessary to help preserve the value, and maintain the functionality, of our
homes. The GAAP measure most directly comparable to Core FFO and Adjusted FFO is
net income or loss. Core FFO and Adjusted FFO are not used as measures of our
liquidity and should not be considered alternatives to net income or loss or any
other measure of financial performance presented in accordance with GAAP. Our
Core FFO and Adjusted FFO may not be comparable to the Core FFO and Adjusted FFO
of other companies due to the fact that not all companies use the same
definition of Core FFO and Adjusted FFO. No adjustments were made to the Core
FFO and Adjusted FFO per common share - diluted computations for potential
shares of common stock related to the Convertible Senior Notes. Accordingly,
there can be no assurance that our basis for computing this non-GAAP measures is
comparable with that of other companies.


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The following table presents a reconciliation of net income (as determined in
accordance with GAAP) to FFO, Core FFO, and Adjusted FFO for each of the periods
indicated:
                                                  For the Three Months                 For the Six Months
                                                     Ended June 30,                      Ended June 30,
(in thousands, except shares and per
share data)                                      2020              2019              2020              2019
Net income available to common
stockholders                               $       42,784     $      38,833     $      92,638     $      59,549
Add (deduct) adjustments from net income
to derive FFO:
Net income available to participating
securities                                            119               109               221               215
Non-controlling interests                             275               463               595               810
Depreciation and amortization on real
estate assets                                     135,647           131,782           269,561           264,302
Impairment on depreciated real estate
investments                                         1,442             4,076             3,913             7,329
Net gain on sale of previously
depreciated investments in real estate            (11,167 )         (26,172 )         (26,367 )         (43,744 )
FFO                                               169,100           149,091           340,561           288,461
Non-cash interest expense related to
amortization of deferred financing
costs, loan discounts, and non-cash
interest expense from derivatives                   9,366            12,172            19,757            27,037
Share-based compensation expense(1)                 2,106             3,615             6,207             9,222
Offering related expenses(2)                            -               476                 -             2,019
Merger and transaction-related
expenses(3)                                             -             1,552                 -             4,347
Severance expense                                     255               375               255             7,344
Unrealized gains on investments in
equity securities(4)                                    -                 -               (34 )               -
Casualty losses, net                               (1,622 )          (2,405 )            (966 )            (266 )
Core FFO                                          179,205           164,876           365,780           338,164
Recurring capital expenditures                    (27,617 )         (31,799 )         (53,605 )         (56,910 )
Adjusted FFO                               $      151,588     $     133,077

$ 312,175 $ 281,254

Net income available to common
stockholders
Weighted average common shares
outstanding - diluted(5)(6)(7)                549,920,213       525,933,643 

546,836,809 524,190,469

Net income per common share -
diluted(5)(6)(7)                           $         0.08     $        0.07     $        0.17     $        0.11

FFO
Numerator for FFO per common share -
diluted(5)                                 $      173,379     $     151,874     $     349,119     $     294,047
Weighted average common shares and OP
Units outstanding - diluted(4)(5)(6)          568,769,738       544,335,990 

565,753,742 544,365,617

FFO per common share - diluted(5)(6)(7) $ 0.30 $ 0.28

$ 0.62 $ 0.54

Core FFO and Adjusted FFO
Weighted average common shares and OP
Units outstanding - diluted(5)(6)(7)          553,669,295       531,782,126 

550,653,299 531,811,753

Core FFO per common share -
diluted(5)(6)(7)                           $         0.32     $        0.31     $        0.66     $        0.64
AFFO per common share - diluted(5)(6)(7)   $         0.27     $        0.25     $        0.57     $        0.53

(1) For the three months ended June 30, 2020 and 2019, $447 and $820 was recorded

in property management expense, respectively, and $1,659 and $2,795 was

recorded in general and administrative expense, respectively. For the six

months ended June 30, 2020 and 2019, $1,280 and $1,507 was recorded in

property management expense, respectively, and $4,927 and $7,715 was recorded

    in general and administrative expense, respectively.




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(2) Includes expenses associated with secondary offerings of common stock

completed during the three and six months ended June 30, 2019 included within

other, net.

(3) Includes merger and transaction-related expenses included within general and

administrative.

(4) Includes unrealized gains on our investments in equity securities during the

six months ended June 30, 2020 included within other, net. There were no

unrealized gains or losses on our investments in equity securities in any

other period.

(5) On July 1, 2019, we settled the full outstanding balance of the 2019

Convertible Notes with the issuance of 12,553,864 shares of common stock, and

these shares of common stock are included within all net income, FFO, Core

FFO, and AFFO per common share calculations subsequent to that date. The

impact of the 2019 Convertible Notes in the period prior to conversion is

reflected in the FFO per common share - diluted computation above in

accordance with the "if-converted" method consistent with Nareit's guidance

for calculating FFO per share. For the three and six months ended June 30,

2019, the numerator for FFO per common share - diluted is adjusted for $2,783

and $5,586, respectively, of interest expense on the 2019 Convertible Notes,

including non-cash amortization of discounts. The denominator is adjusted for

12,553,864 shares of common stock issued on July 1, 2019 upon the conversion

of the 2019 Convertible Notes. No such adjustments were made to Core FFO and

AFFO per common share - diluted.

With respect to the 2022 Convertible Notes, for the three and six months ended
June 30, 2020, the numerator for FFO per common share - diluted is adjusted for
$4,279 and $8,558, respectively, of interest expense, including non-cash
amortization of discounts, and the denominator is adjusted for 15,100,443
potential shares of common stock issuable upon the conversion of the 2022
Convertible Notes. No such adjustments were made to Core FFO and AFFO per common
share -diluted. For the three and six months ended June 30, 2019, 15,100,443
potential shares of common stock issuable upon the conversion of the 2022
Convertible Notes are excluded from the computation of net income or loss and
FFO per common share - diluted as they are anti-dilutive, and are excluded from
Core FFO and AFFO per common share - diluted.
(6) Incremental shares attributed to non-vested share-based awards totaling

1,108,245 and 863,607 shares for the three months ended June 30, 2020 and

2019, respectively, and 1,156,069 and 925,014 for the six months ended

June 30, 2020 and 2019, respectively, are included in the denominator for net

income per common share - diluted. For the computations of FFO, Core FFO, and

AFFO per common share - diluted, common share equivalents of 1,394,042 and

1,248,805 for the three months ended June 30, 2020 and 2019, respectively,

and 1,509,274 and 1,479,272 for the six months ended June 30, 2020 and 2019,

respectively, related to incremental shares attributed to non-vested

share-based awards are included in the denominator.

(7) Vested units of partnership interests in INVH LP ("OP Units") have been

excluded from the computation of net income per common share - diluted for

the periods above because all net income attributable to the vested OP Units

has been recorded as non-controlling interest and thus excluded from net

income available to common stockholders. Weighted average vested OP Units of

3,463,285 and 5,463,285 for the three months ended June 30, 2020 and 2019,

respectively, and 3,463,285 and 7,067,026 for the six months ended June 30,

    2020 and 2019, respectively, are included in the denominator for the
    computations of FFO, Core FFO, and AFFO per common share - diluted.




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