Extra Space Storage Inc. Reports 2023 Second Quarter Results
- Same-store revenue increased by 2.7% and same-store NOI increased by 2.6% compared to Q2 2022.
- The company acquired one operating store and two C of O stores for $32.8 million.
- Extra Space Storage completed a public bond offering, issuing $450.0 million of senior unsecured notes due 2030.
- The company paid a quarterly dividend of $1.62 per share.
- The merger with Life Storage increased the company's portfolio to over 3,500 locations and over 270.0 million net rentable square feet.
- Net income attributable to common stockholders decreased by 13.3% compared to Q2 2022.
- FFO and Core FFO decreased by 3.3% compared to Q2 2022.
- Same-store occupancy decreased from 95.8% in Q2 2022 to 94.5% in Q2 2023.
- Lower than expected new customer rates in June and July led to a revised outlook for the back half of the year.
Highlights for the three months ended June 30, 2023:
- Achieved net income attributable to common stockholders of
per diluted share, representing a$1.50 13.3% decrease compared to the same period in the prior year, which included a one-time gain of .$14.2 million - Achieved funds from operations attributable to common stockholders and unit holders ("FFO") of
per diluted share. FFO, excluding adjustments ("Core FFO"), was also$2.06 per diluted share, representing a$2.06 3.3% decrease compared to the same period in the prior year. - Increased same-store revenue by
2.7% and same-store net operating income ("NOI") by2.6% compared to the same period in the prior year. - Reported ending same-store occupancy of
94.5% as of June 30, 2023, compared to95.8% as of June 30, 2022. - Acquired one operating store and two stores at completion of construction (a "Certificate of Occupancy store" or "C of O store") for a total cost of approximately
.$32.8 million - Originated
in mortgage and mezzanine bridge loans and sold$68.6 million in mortgage bridge loans.$24.1 million - Completed a public bond offering issuing
of$450.0 million 5.5% senior unsecured notes due 2030. - Completed a convertible preferred equity investment in Strategic Storage Trust VI, Inc., an affiliate of SmartStop Self Storage REIT, Inc. of
with dividend rate of$150.0 million 8.35% . - Added 54 stores (47 stores net) to the Company's third-party management platform. As of June 30, 2023, the Company managed 978 stores for third parties and 323 stores in unconsolidated joint ventures, for a total of 1,301 managed stores.
- Paid a quarterly dividend of
per share.$1.62
Highlights for the six months ended June 30, 2023:
- Achieved net income attributable to common stockholders of
per diluted share, representing a$2.95 9.0% decrease compared to the same period in the prior year, which included a one-time gain of .$14.2 million - Achieved FFO of
per diluted share, and Core FFO was also$4.08 per diluted share, representing a$4.08 1.4% decrease compared to the same period in the prior year. - Increased same-store revenue by
5.0% and same-store NOI by5.5% compared to the same period in the prior year. - Acquired one operating store and three C of O stores for a total cost of approximately
.$45.9 million - In conjunction with joint venture partners, acquired five operating stores for a total cost of approximately
, of which the Company invested$101.2 million .$20.2 million - Originated
in mortgage and mezzanine bridge loans and sold$121.6 million in mortgage bridge loans.$58.3 million - Added 102 stores (91 stores net) to the Company's third-party management platform.
Joe Margolis, CEO of Extra Space Storage Inc., commented: "We maintained strong occupancy of
We remain confident in the durable nature of self-storage, and the strength of the Extra Space platform, which was enhanced through our recent merger with Life Storage. The strategic combination increases the diversification and scale of our portfolio and our balance sheet as recognized in our recent upgrade to BBB+ by S&P. We expect to create at least
FFO Per Share:
The following table (unaudited) outlines the Company's FFO and Core FFO for the three and six months ended June 30, 2023 and 2022. The table also provides a reconciliation to GAAP net income attributable to common stockholders and earnings per diluted share for each period presented (amounts shown in thousands, except share and per share data):
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(per share)1 | (per share)1 | (per share)1 | (per share)1 | ||||||||||||
Net income attributable to | $ 202,410 | $ 1.50 | $ 232,130 | $ 1.73 | $ 398,714 | $ 2.95 | $ 435,709 | $ 3.24 | |||||||
Impact of the difference in | (0.09) | (0.12) | (0.17) | (0.20) | |||||||||||
Adjustments: | |||||||||||||||
Real estate depreciation | 72,385 | 0.50 | 63,765 | 0.45 | 143,633 | 1.00 | 126,457 | 0.89 | |||||||
Amortization of intangibles | 3,609 | 0.03 | 2,696 | 0.02 | 7,779 | 0.05 | 5,462 | 0.04 | |||||||
Gain on real estate transactions | — | — | (14,249) | (0.10) | — | — | (14,249) | (0.10) | |||||||
Unconsolidated joint venture real | 4,722 | 0.03 | 4,115 | 0.03 | 9,661 | 0.07 | 7,968 | 0.06 | |||||||
Distributions paid on Series A | — | — | (572) | — | (159) | — | (1,144) | (0.01) | |||||||
Income allocated to Operating | 12,902 | 0.09 | 15,704 | 0.11 | 25,476 | 0.18 | 29,842 | 0.21 | |||||||
FFO | $ 296,028 | $ 2.06 | $ 303,589 | $ 2.12 | $ 585,104 | $ 4.08 | $ 590,045 | $ 4.13 | |||||||
Adjustments: | |||||||||||||||
Transaction related costs | — | — | 1,465 | 0.01 | — | — | 1,465 | 0.01 | |||||||
CORE FFO | $ 296,028 | $ 2.06 | $ 305,054 | $ 2.13 | $ 585,104 | $ 4.08 | $ 591,510 | $ 4.14 | |||||||
Weighted average number of | 143,752,935 | 142,921,716 | 143,555,781 | 142,858,481 |
(1) | Per share amounts may not recalculate due to rounding. |
(2) | Adjustment to account for the difference between the number of shares used to calculate earnings per share and the number of shares used to calculate FFO per share. Earnings per share is calculated using the two-class method, which uses a lower number of shares than the calculation for FFO per share and Core FFO per share, which are calculated assuming full redemption of all OP units as described in note (3). |
(3) | Extra Space Storage LP (the "Operating Partnership") has outstanding preferred and common Operating Partnership units ("OP units"). These OP units can be redeemed for cash or, at the Company's election, shares of the Company's common stock. Redemption of all OP units for common stock has been assumed for purposes of calculating the weighted average number of shares — diluted, as presented above. The computation of weighted average number of shares — diluted, for FFO per share and Core FFO per share also includes the effect of share-based compensation plans. |
Operating Results and Same-Store Performance:
The following table (unaudited) outlines the Company's same-store performance for the three and six months ended June 30, 2023 and 2022 (amounts shown in thousands, except store count data)1:
For the Three Months | Percent | For the Six Months | Percent | ||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Same-store property revenues2 | |||||||||||
Net rental income | $ 374,845 | $ 366,195 | 2.4 % | $ 745,474 | $ 712,070 | 4.7 % | |||||
Other income | 14,609 | 13,204 | 10.6 % | 28,071 | 24,952 | 12.5 % | |||||
Total same-store revenues | $ 389,454 | $ 379,399 | 2.7 % | $ 773,545 | $ 737,022 | 5.0 % | |||||
Same-store operating expenses2 | |||||||||||
Payroll and benefits | $ 20,785 | $ 20,657 | 0.6 % | $ 41,628 | $ 40,717 | 2.2 % | |||||
Marketing | 6,698 | 6,128 | 9.3 % | 12,870 | 11,688 | 10.1 % | |||||
Office expense3 | 11,969 | 11,233 | 6.6 % | 23,947 | 21,914 | 9.3 % | |||||
Property operating expense4 | 7,914 | 8,028 | (1.4) % | 17,777 | 16,856 | 5.5 % | |||||
Repairs and maintenance | 5,774 | 6,254 | (7.7) % | 12,191 | 13,740 | (11.3) % | |||||
Property taxes | 34,269 | 33,576 | 2.1 % | 68,615 | 68,366 | 0.4 % | |||||
Insurance | 3,966 | 2,867 | 38.3 % | 7,588 | 5,580 | 36.0 % | |||||
Total same-store operating expenses | $ 91,375 | $ 88,743 | 3.0 % | $ 184,616 | $ 178,861 | 3.2 % | |||||
Same-store net operating income2 | $ 298,079 | $ 290,656 | 2.6 % | $ 588,929 | $ 558,161 | 5.5 % | |||||
Same-store square foot occupancy as of quarter end | 94.5 % | 95.8 % | 94.5 % | 95.8 % | |||||||
Average same-store square foot occupancy | 94.2 % | 95.2 % | 93.9 % | 94.7 % | |||||||
Properties included in same-store | 914 | 914 | 914 | 914 |
(1) | A reconciliation of net income to same-store net operating income is provided later in this release, entitled "Reconciliation of GAAP Net Income to Total Same-Store Net Operating Income." |
(2) | Same-store revenues, operating expenses and net operating income do not include tenant reinsurance revenue or expense. |
(3) | Includes general office expenses, computer, bank fees, and credit card merchant fees. |
(4) | Includes utilities and miscellaneous other store expenses. |
Same-store revenues for the three and six months ended June 30, 2023 increased compared to the same periods in 2022 due to higher average rates to existing customers and higher other operating income partially offset by lower occupancy.
Details related to the same-store performance of stores by metropolitan statistical area ("MSA") for the three and six months ended June 30, 2023 are provided in the supplemental financial information published on the Company's Investor Relations website at https://ir.extraspace.com/.
Investment and Property Management Activity:
Life Storage Merger:
On July 20, 2023, the Company closed its merger with Life Storage, Inc. ("Life Storage" or "LSI") in an all-stock transaction (the "Life Storage Merger"). Under the terms of the Life Storage Merger, Life Storage stockholders received 0.895 of a share of common stock of the Company for each issued and outstanding share of Life Storage they owned for an estimated total consideration of
At closing, the Company retired
Additional information related to Life Storage's second quarter 2023 performance, including details related to the same-store pool, can be found in supplemental financial information published on the Company's Investor Relations website at https://ir.extraspace.com/.
Other Acquisitions:
The following table (unaudited) outlines the Company's other acquisitions and developments that are closed, completed or under agreement (dollars in thousands). Totals in the table do not include the stores or values associated with the Life Storage Merger.
Closed/Completed | Closed/Completed | Scheduled to Still | Total 2023 | To Close/Complete | ||||||||||||||||
Wholly-Owned Investment | Stores | Price | Stores | Price | Stores | Price | Stores | Price | Stores | Price | ||||||||||
Operating Stores | 1 | $ 4,650 | 1 | $ 5,300 | 2 | 4 | $ 23,150 | — | $ — | |||||||||||
C of O and Development | 3 | 41,234 | — | — | 2 | 29,731 | 5 | 70,965 | 7 | 86,214 | ||||||||||
EXR Investment in Wholly- | 4 | 45,884 | 1 | 5,300 | 4 | 42,931 | 9 | 94,115 | 7 | 86,214 | ||||||||||
Joint Venture Investment | ||||||||||||||||||||
EXR Investment in JV | 5 | 20,243 | — | — | 2 | 4,189 | 7 | 24,432 | — | — | ||||||||||
EXR Investment in JV | — | — | — | — | 4 | 41,710 | 4 | 41,710 | 8 | 107,502 | ||||||||||
EXR Investment in Joint | 5 | 20,243 | — | — | 6 | 45,899 | 11 | 66,142 | 8 | 107,502 | ||||||||||
Total EXR Investment | 9 | $ 66,127 | 1 | $ 5,300 | 10 | 20 | 15 | $ 193,716 |
(1) | The locations of C of O and development stores and joint venture ownership interest details are included in the supplemental financial information published on the Company's Investor Relations website at https://ir.extraspace.com/. |
The projected developments and acquisitions under agreement described above are subject to customary closing conditions and no assurance can be provided that these developments and acquisitions will be completed on the terms described, or at all.
Preferred Stock Investment:
As previously announced, during the three months ended June 30, 2023, the Company invested
Bridge Loans:
During the three months ended June 30, 2023, the Company originated
Property Management:
As of June 30, 2023, the Company managed 978 stores for third-party owners and 323 stores owned in unconsolidated joint ventures, for a total of 1,301 stores under management. The Company is the largest self-storage management company in
Balance Sheet:
During the three months ended June 30, 2023, the Company completed a public bond offering issuing
During the three months ended June 30, 2023, the Company did not issue any shares on its ATM program, and it currently has
As of June 30, 2023, the Company's percentage of fixed-rate debt to total debt was
On July 25, 2023, S&P Global upgraded all of its ratings on the Company to BBB+ stable.
Dividends:
On June 30, 2023, the Company paid a second quarter common stock dividend of
On July 19, 2023, the Company paid a dividend of
Outlook:
Due to the proximity of the July 20, 2023 Life Storage merger closing to this earnings release, the following table outlines the Company's initial and revised Core FFO estimates and annual assumptions for the year ending December 31, 20231, excluding any impact from the Life Storage Merger.
Ranges for 2023 Annual Assumptions | Prior Ranges for 2023 Annual Assumptions | Notes | |||||||
(August 3, 2023) | (May 2, 2023) | ||||||||
Low | High | Low | High | ||||||
Core FFO | Excluding impact of LSI | ||||||||
Dilution per share from C of O and | |||||||||
Same-store revenue growth | 2.50 % | 3.50 % | 3.75 % | 5.25 % | Same-store pool of 914 | ||||
Same-store expense growth | 3.50 % | 4.50 % | 5.00 % | 6.00 % | Same-store pool of 914 | ||||
Same-store NOI growth | 2.00 % | 3.50 % | 3.00 % | 5.50 % | Same-store pool of 914 | ||||
Weighted average one-month SOFR | 5.05 % | 5.05 % | 4.57 % | 4.57 % | |||||
Net tenant reinsurance income | |||||||||
Management fees and other income | |||||||||
Interest income | Includes interest from | ||||||||
General and administrative expenses | Includes non-cash | ||||||||
Average monthly cash balance | |||||||||
Equity in earnings of real estate | Includes dividends from | ||||||||
Interest expense | |||||||||
Income Tax Expense | Taxes associated with the | ||||||||
Acquisitions | Represents the Company's | ||||||||
Bridge loans outstanding | Represents the Company's | ||||||||
Weighted average share count | 144,000,000 | 144,000,000 | 144,000,000 | 144,000,000 | Assumes redemption of all |
(1) A reconciliation of net income outlook to same-store net operating income outlook is provided later in this release entitled "Reconciliation of Estimated GAAP Net Income to Estimated Same-Store Net Operating Income." The reconciliation includes details related to same-store revenue and same-store expense outlooks. A reconciliation of net income per share outlook to funds from operations per share outlook is provided later in this release entitled "Reconciliation of the Range of Estimated GAAP Fully Diluted Earnings Per Share to Estimated Fully Diluted FFO Per Share." |
FFO estimates for the year are fully diluted for an estimated average number of shares and OP units outstanding during the year. The Company's estimates are forward-looking and based on management's view of current and future market conditions. The Company's actual results may differ materially from these estimates.
In addition to the Company's estimates and assumptions excluding the Life Storage Merger, the Company presents the net anticipated dilution to Core FFO from the merger in the year ending December 31, 2023, and other information related to the merger. Full estimates and assumptions for the combined company will be provided at a later date.
Assumptions and | Notes | ||||
(July 20, 2023) | |||||
Low | High | ||||
Anticipated dilution to Core FFO per share from | |||||
Revised Core FFO including anticipated | Assumes dilutive impact of merger in 2023 until | ||||
Closing Costs of Life Storage Merger | Includes costs paid by EXR and LSI. All costs to be | ||||
Transitional Costs of Life Storage Merger | To be added back to 2023 Core FFO | ||||
Rebranding Costs | Assumes rebranding of 142 stores | ||||
Term Loan to pay off Life Storage LOC/ | SOFR + | ||||
LOC Draws for closing costs and to pay off | SOFR + | ||||
Life Storage Debt Remaining in Place | Existing interest rates and maturities remain in place | ||||
EXR Shares Issued with Life Storage Merger | 77,900,000 | 77,900,000 | Includes Operating Partnership Units |
Supplemental Financial Information:
Supplemental unaudited financial information regarding the Company's performance can be found on the Company's website at www.extraspace.com. Under the "Company Info" navigation menu on the home page, click on "Investor Relations," then under the "Financials & Stock Information" navigation menu click on "Quarterly Earnings." This supplemental information provides additional detail on items that include store occupancy and financial performance by portfolio and market, debt maturity schedules and performance of lease-up assets.
Conference Call:
The Company will host a conference call at 1:00 p.m. Eastern Time on Friday, August 4, 2023, to discuss its financial results. Telephone participants may avoid any delays in joining the conference call by pre-registering for the call using the following link to receive a special dial-in number and PIN: https://register.vevent.com/register/BI3eb70db729a8472a9aa8005624bf6983.
A live webcast of the call will also be available on the Company's investor relations website at https://ir.extraspace.com. To listen to the live webcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.
A replay of the call will be available for 30 days on the investor relations section of the Company's website beginning at 5:00 p.m. Eastern Time on August 4, 2023.
Forward-Looking Statements:
Certain information set forth in this release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements include statements concerning the benefits of store acquisitions, developments, favorable market conditions, our outlook and estimates for the year, statements concerning the recently completed Life Storage Merger and other statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, the competitive landscape, plans or intentions relating to acquisitions and developments, estimated hurricane-related insurance claims and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as "believes," "estimates," "expects," "may," "will," "should," "anticipates," or "intends," or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this release. Any forward-looking statements should be considered in light of the risks referenced in the "Risk Factors" section included in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such factors include, but are not limited to:
- adverse changes in general economic conditions, the real estate industry and the markets in which we operate;
- failure to realize the expected benefits of the Life Storage Merger;
- the risk that Life Storage's business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected, including our ability to retain and hire key personnel;
- the uncertainty of expected future financial performance and results of the combined company following completion of the Life Storage merger;
- failure to close pending acquisitions and developments on expected terms, or at all;
- the effect of competition from new and existing stores or other storage alternatives, including increased or unanticipated competition for our or Life Storage's properties, which could cause rents and occupancy rates to decline;
- potential liability for uninsured losses and environmental contamination;
- the impact of the regulatory environment as well as national, state and local laws and regulations, including, without limitation, those governing real estate investment trusts ("REITs"), tenant reinsurance and other aspects of our business, which could adversely affect our results;
- our ability to recover losses under our insurance policies;
- disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all, which could impede our ability to grow;
- our reliance on information technologies, which are vulnerable to, among other things, attack from computer viruses and malware, hacking, cyberattacks and other unauthorized access or misuse, any of which could adversely affect our business and results;
- increases in interest rates;
- reductions in asset valuations and related impairment charges;
- our lack of sole decision-making authority with respect to our joint venture investments;
- the effect of recent or future changes to
U.S. tax laws; - the failure to maintain our REIT status for
U.S. federal income tax purposes; - impacts from any outbreak of highly infectious or contagious diseases, including reduced demand for self-storage space and ancillary products, and potential decreases in occupancy and rental rates and staffing levels, which could adversely affect our results; and
- economic uncertainty due to the impact of natural disasters, war or terrorism, which could adversely affect our business plan.
All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management's expectations, beliefs and projections will result or be achieved. All forward-looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.
Definition of FFO:
FFO provides relevant and meaningful information about the Company's operating performance that is necessary, along with net income and cash flows, for an understanding of the Company's operating results. The Company believes FFO is a meaningful disclosure as a supplement to net income. Net income assumes that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions and the Company believes FFO more accurately reflects the value of the Company's real estate assets. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT") as net income computed in accordance with
For informational purposes, the Company also presents Core FFO. Core FFO excludes revenues and expenses not core to our operations and non-cash interest. Although the Company's calculation of Core FFO differs from NAREIT's definition of FFO and may not be comparable to that of other REITs and real estate companies, the Company believes it provides a meaningful supplemental measure of operating performance. The Company believes that by excluding revenues and expenses not core to our operations and non-cash interest charges, stockholders and potential investors are presented with an indicator of our operating performance that more closely achieves the objectives of the real estate industry in presenting FFO. Core FFO by the Company should not be considered a replacement of the NAREIT definition of FFO. The computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income as an indication of the Company's performance, as an alternative to net cash flow from operating activities as a measure of liquidity, or as an indicator of the Company's ability to make cash distributions.
Definition of Same-Store:
The Company's same-store pool for the periods presented consists of 914 stores that are wholly-owned and operated and that were stabilized by the first day of the earliest calendar year presented. The Company considers a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of
About Extra Space Storage Inc.:
Extra Space Storage Inc., headquartered in
With the completed Life Storage Merger on July 20, 2023, Extra Space currently has over 3,500 locations under the Extra Space, Life Storage and Storage Express brands, and it is the largest operator of self-storage properties in the United States. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage.
###
Extra Space Storage Inc. Condensed Consolidated Balance Sheets (In thousands, except share data) | |||
June 30, 2023 | December 31, 2022 | ||
(Unaudited) | |||
Assets: | |||
Real estate assets, net | $ 10,017,351 | $ 9,997,978 | |
Real estate assets - operating lease right-of-use assets | 220,090 | 221,725 | |
Investments in unconsolidated real estate entities | 747,775 | 582,412 | |
Investments in debt securities and notes receivable | 891,190 | 858,049 | |
Cash and cash equivalents | 50,644 | 92,868 | |
Other assets, net | 438,403 | 414,426 | |
Total assets | $ 12,365,453 | $ 12,167,458 | |
Liabilities, Noncontrolling Interests and Equity: | |||
Notes payable, net | $ 1,273,448 | $ 1,288,555 | |
Unsecured term loans, net | 2,248,840 | 2,340,116 | |
Unsecured senior notes, net | 3,695,200 | 2,757,791 | |
Revolving lines of credit | 275,250 | 945,000 | |
Operating lease liabilities | 228,343 | 229,035 | |
Cash distributions in unconsolidated real estate ventures | 69,183 | 67,352 | |
Accounts payable and accrued expenses | 212,416 | 171,680 | |
Other liabilities | 327,366 | 289,655 | |
Total liabilities | 8,330,046 | 8,089,184 | |
Commitments and contingencies | |||
Noncontrolling Interests and Equity: | |||
Extra Space Storage Inc. stockholders' equity: | |||
Preferred stock, | — | — | |
Common stock, | 1,351 | 1,339 | |
Additional paid-in capital | 3,383,303 | 3,345,332 | |
Accumulated other comprehensive income | 47,065 | 48,798 | |
Accumulated deficit | (175,941) | (135,872) | |
Total Extra Space Storage Inc. stockholders' equity | 3,255,778 | 3,259,597 | |
Noncontrolling interest represented by Preferred Operating Partnership units, | 222,940 | 261,502 | |
Noncontrolling interests in Operating Partnership, net and other noncontrolling | 556,689 | 557,175 | |
Total noncontrolling interests and equity | 4,035,407 | 4,078,274 | |
Total liabilities, noncontrolling interests and equity | $ 12,365,453 | $ 12,167,458 |
Consolidated Statement of Operations for the Three and Six Months Ended June 30, 2023 and 2022 (In thousands, except share and per share data) - Unaudited | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Revenues: | |||||||
Property rental | $ 440,747 | $ 408,044 | $ 874,709 | $ 787,852 | |||
Tenant reinsurance | 48,433 | 46,427 | 96,137 | 90,224 | |||
Management fees and other income | 22,206 | 20,517 | 43,590 | 40,474 | |||
Total revenues | 511,386 | 474,988 | 1,014,436 | 918,550 | |||
Expenses: | |||||||
Property operations | 114,637 | 104,252 | 231,803 | 207,794 | |||
Tenant reinsurance | 9,482 | 7,537 | 18,571 | 14,579 | |||
Transaction related costs | — | 1,465 | — | 1,465 | |||
General and administrative | 34,842 | 31,251 | 69,605 | 61,013 | |||
Depreciation and amortization | 79,086 | 69,067 | 157,576 | 136,973 | |||
Total expenses | 238,047 | 213,572 | 477,555 | 421,824 | |||
Gain on real estate transactions | — | 14,249 | — | 14,249 | |||
Income from operations | 273,339 | 275,665 | 536,881 | 510,975 | |||
Interest expense | (86,372) | (47,466) | (166,471) | (90,004) | |||
Interest income | 21,077 | 15,060 | 40,515 | 34,049 | |||
Income before equity in earnings and dividend income from unconsolidated real estate | 208,044 | 243,259 | 410,925 | 455,020 | |||
Equity in earnings and dividend income from unconsolidated real estate entities | 13,254 | 10,190 | 23,559 | 19,287 | |||
Income tax expense | (5,986) | (5,615) | (10,294) | (8,756) | |||
Net income | 215,312 | 247,834 | 424,190 | 465,551 | |||
Net income allocated to Preferred Operating Partnership noncontrolling interests | (2,254) | (4,491) | (4,508) | (8,824) | |||
Net income allocated to Operating Partnership and other noncontrolling interests | (10,648) | (11,213) | (20,968) | (21,018) | |||
Net income attributable to common stockholders | $ 202,410 | $ 232,130 | $ 398,714 | $ 435,709 | |||
Earnings per common share | |||||||
Basic | $ 1.50 | $ 1.73 | $ 2.96 | $ 3.24 | |||
Diluted | $ 1.50 | $ 1.73 | $ 2.95 | $ 3.24 | |||
Weighted average number of shares | |||||||
Basic | 134,832,232 | 134,192,540 | 134,672,672 | 134,186,426 | |||
Diluted | 143,529,817 | 142,737,909 | 143,337,522 | 141,600,206 | |||
Cash dividends paid per common share | $ 1.62 | $ 1.50 | $ 3.24 | $ 3.00 |
Reconciliation of GAAP Net Income to Total Same-Store Net Operating Income — for the Three and Six Months Ended | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net Income | $ 215,312 | $ 247,834 | $ 424,190 | $ 465,551 | |||
Adjusted to exclude: | |||||||
Gain on real estate transactions | — | (14,249) | — | (14,249) | |||
Equity in earnings and dividend income from unconsolidated real | (13,254) | (10,190) | (23,559) | (19,287) | |||
Interest expense | 86,372 | 47,466 | 166,471 | 90,004 | |||
Depreciation and amortization | 79,086 | 69,067 | 157,576 | 136,973 | |||
Income tax expense | 5,986 | 5,615 | 10,294 | 8,756 | |||
Transaction related costs | — | 1,465 | — | 1,465 | |||
General and administrative | 34,842 | 31,251 | 69,605 | 61,013 | |||
Management fees, other income and interest income | (43,283) | (35,577) | (84,105) | (74,523) | |||
Net tenant insurance | (38,951) | (38,890) | (77,566) | (75,645) | |||
Non same-store rental revenue | (51,293) | (28,645) | (101,164) | (50,830) | |||
Non same-store operating expense | 23,262 | 15,509 | 47,187 | 28,933 | |||
Total same-store net operating income | $ 298,079 | $ 290,656 | $ 588,929 | $ 558,161 | |||
Same-store rental revenues | 389,454 | 379,399 | 773,545 | 737,022 | |||
Same-store operating expenses | 91,375 | 88,743 | 184,616 | 178,861 | |||
Same-store net operating income | $ 298,079 | $ 290,656 | $ 588,929 | $ 558,161 |
Reconciliation of the Range of Estimated GAAP Fully Diluted Earnings Per Share to Estimated Fully Diluted FFO Per | ||||
For the Year Ending December 31, 2023 | ||||
Low End | High End | |||
Net income attributable to common stockholders per diluted share | $ 5.54 | $ 5.74 | ||
Income allocated to noncontrolling interest - Preferred Operating | 0.37 | 0.37 | ||
Net income attributable to common stockholders for diluted computations | 5.91 | 6.11 | ||
Adjustments: | ||||
Real estate depreciation | 2.01 | 2.01 | ||
Amortization of intangibles | 0.10 | 0.10 | ||
Unconsolidated joint venture real estate depreciation and amortization | 0.13 | 0.13 | ||
Funds from operations attributable to common stockholders | 8.15 | 8.35 | ||
Adjustments: | ||||
Core funds from operations attributable to common stockholders | $ 8.15 | $ 8.35 |
Reconciliation of Estimated GAAP Net Income to Estimated Same-Store Net Operating Income | |||
For the Year Ending December 31, 2023 | |||
Low | High | ||
Net Income | $ 854,200 | $ 885,800 | |
Adjusted to exclude: | |||
Equity in earnings of unconsolidated joint ventures | (53,000) | (54,000) | |
Interest expense | 342,500 | 339,500 | |
Depreciation and amortization | 316,000 | 316,000 | |
Income tax expense | 24,000 | 23,000 | |
General and administrative | 139,500 | 138,500 | |
Management fees and other income | (89,000) | (90,000) | |
Interest income | (83,000) | (84,000) | |
Net tenant reinsurance income | (158,500) | (159,500) | |
Non same-store rental revenues | (209,000) | (209,000) | |
Non same-store operating expenses | 93,000 | 93,000 | |
Total same-store net operating income1 | $ 1,176,700 | $ 1,199,300 | |
Same-store rental revenues1 | 1,555,000 | 1,574,000 | |
Same-store operating expenses1 | 378,300 | 374,700 | |
Total same-store net operating income1 | $ 1,176,700 | $ 1,199,300 |
(1) | Estimated same-store rental revenues, operating expenses and net operating income are for the Company's 2023 same-store pool of 914 stores. |
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SOURCE Extra Space Storage Inc.
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