Conference Call Rescheduled for Friday, February 24, 2023, at
8:00 a.m. Eastern Time
Life Storage, Inc. (NYSE:LSI), a leading national owner and
operator of self-storage properties, reported operating results for
the quarter and year ended December 31, 2022.
Highlights for the Fourth Quarter
Included:
- Generated net income attributable to common shareholders of
$93.8 million, or $1.10 per fully diluted common share.
- Achieved adjusted funds from operations (“FFO”)(1) per fully
diluted common share of $1.69, a 19.9% increase over the same
period in 2021.
- Increased same store revenue by 11.8% and same store net
operating income (“NOI”)(2) by 13.3%, year-over-year.
- Acquired seven wholly owned stores in Arizona and Minnesota for
$142.4 million.
- With joint venture partners, acquired seven stores for a total
cost of approximately $126.5 million, of which the Company invested
$25.8 million.
- Added 40 stores (39 stores net) to the Company’s third-party
management platform. Of these 40 stores, 29 were transitioned from
REIT peers.
Highlights for the Full Year
Included:
- Generated net income attributable to common shareholders of
$358.1 million, or $4.22 per fully diluted common share.
- Achieved adjusted FFO(1) per fully diluted common share of
$6.51, a 28.4% increase over the same period in 2021.
- Increased same store revenue by 15.2% and same store NOI(2) by
19.4%, year-over-year.
- Acquired 49 wholly owned stores for $974.0 million and one
consolidated joint venture store for $29.0 million of which the
Company’s net investment is $24.1 million. Eleven of these stores
were added from the Company’s third-party management platform.
- With joint venture partners, acquired 25 stores for a total
cost of approximately $446.1 million, of which the Company invested
$89.3 million.
- Added 107 stores (73 stores net) to the Company’s third-party
management platform; the Company grew its third-party management
portfolio 20% in 2022 despite acquiring 11 previously managed
stores. Of the 107 stores, 32 were transitioned from our REIT
peers.
Joe Saffire, the Company’s Chief Executive Officer, stated, “The
Life Storage team delivered another strong, double-digit year in
2022. With these results, we have surpassed one billion in annual
revenue on a consolidated basis for the first time, nearly double
what Life Storage reported only five years ago. We completed our
third most acquisitive year, investing more than one billion in
acquisitions across key existing markets and adding another 107
stores to our third-party management platform. With solid pricing
power, disciplined expense management, and the continued expansion
of our footprint, we further improved our net-operating margins 250
basis points, year-over-year. Our strong performance and growing
footprint have led to sector-leading returns. Over the last five
years Life Storage has delivered total-shareholder-returns of
approximately 150%, the best performance of any Self-Storage REIT.
Since March of 2019, we are proud to have increased the Company’s
dividend six times for a total quarterly dividend increase of 80%.
We remain focused on providing superior value for all Life Storage
shareholders.”
FINANCIAL RESULTS:
In the fourth quarter of 2022, the Company generated net income
attributable to common shareholders of $93.8 million or $1.10 per
fully diluted common share, compared to net income attributable to
common shareholders of $74.1 million, or $0.90 per fully diluted
common share, in the fourth quarter of 2021.
For the year ended December 31, 2022, the Company achieved
$358.1 million of net income attributable to common shareholders,
or $4.22 per fully diluted common share, as compared to $249.3
million, or $3.17 per fully diluted common share, for the year
ended December 31, 2021.
Funds from operations and adjusted funds from operations for the
quarter were $1.69 per fully diluted common share compared to $1.41
for the same period last year.
For the year ended December 31, 2022, FFO per fully diluted
common share was $6.55 compared to $5.08 for the year ended
December 31, 2021. Adjusted FFO per fully diluted common share for
the year was $6.51 after adjusting for a net total of $3.2 million
related to a gain on sale of non-real estate assets, uninsured
damages related to natural disasters, costs related to officer’s
retirement, and acquisition fees, compared to $5.07 for the year
ended December 31, 2021.
OPERATIONS:
Revenues for the 576 stabilized stores wholly owned by the
Company since December 31, 2020 increased 11.8% in the fourth
quarter of 2022 compared to the same quarter of 2021. The increase
largely resulted from the net impact of a 14.7% increase in
realized rental rates per square foot.
Same store operating expenses, excluding real estate taxes,
increased 4.1% for the fourth quarter of 2022 compared to the prior
year period, the result of increased utilities, repairs and
maintenance, and internet marketing. The 15.7% increase in same
store property tax expense as compared to the prior year quarter
reflects the impact of large tax rebates received in the fourth
quarter of 2021 that reduced the comparable expense in the prior
year quarter. Same store property taxes for the full year ended
December 31, 2022 increased 5.2% which is less than had been
anticipated. The quarterly expense increases were partially offset
by decreases in payroll and benefits, and insurance as compared to
the same quarter of 2021. Same store NOI increased 13.3% in the
fourth quarter of 2022 as compared to the fourth quarter of
2021.
General and administrative expenses for the quarter ended
December 31, 2022 were impacted by $2.5 million of costs related to
terminated acquisition activity.
During the fourth quarter of 2022, the Company achieved
double-digit same store revenue growth in 21 of its 33 major
markets. Overall, the markets with the strongest positive revenue
impact were Miami, FL; Los Angeles, CA; Orlando, FL; Tampa FL; and
Dallas, TX.
PORTFOLIO TRANSACTIONS:
Wholly Owned Portfolio
During the quarter, the Company acquired seven stores in Arizona
(6) and Minnesota (1) for a total purchase price of $142.4
million.
As of December 31, 2022, the Company was under contract to
acquire four self-storage facilities in California (3) and Illinois
(1) for an aggregate purchase price of $70.8 million. Additionally,
a consolidated joint venture of the Company was under contract to
acquire one store in New Jersey for $22.5 million, of which the
Company’s net investment would be approximately $4.5 million. The
purchases of the remaining facilities are subject to customary
conditions to closing, and there is no assurance that any of these
facilities will be acquired.
THIRD-PARTY MANAGEMENT:
The Company continues to grow its third-party management
platform aggressively and profitably. During the quarter, the
Company added 40 stores (gross). As of quarter end, the Company
managed 440 facilities in total, including those in which it owns a
noncontrolling interest.
FINANCIAL POSITION:
At December 31, 2022, the Company had approximately $24.4
million of cash on hand, and approximately $655 million available
on its line of credit.
Below are key financial ratios at December 31, 2022:
-- Debt to Enterprise Value (at
$98.50/share)
28.5%
-- Debt to Book Cost of Storage
Facilities
41.7%
-- Debt to Recurring Annualized EBITDA
4.8x
-- Debt Service Coverage
5.2x
COMMON STOCK DIVIDEND:
Subsequent to quarter end, the Company’s Board of Directors
approved an 11% increase to its quarterly dividend to $1.20 per
share, or $4.80 annualized. The dividend was paid on January 26,
2023 to shareholders of record on January 13, 2023.
YEAR 2023 EARNINGS GUIDANCE:
The following assumptions covering operations have been utilized
in formulating guidance for 2023:
Year 2023 Earnings
Guidance
Current Guidance Range
(1)
Same Store Revenue
4.00%
-
5.50%
Same Store Operating Costs (excluding
property taxes)
4.00%
-
5.00%
Same Store Property Taxes
6.25%
-
7.25%
Total Same Store Operating Expenses
4.75%
-
6.25%
Same Store Net Operating Income
3.75%
-
5.25%
General & Administrative
$76M
-
$78M
Expansions & Enhancements
$65M
-
$75M
Capital Expenditures
$30M
-
$35M
Wholly Owned Acquisitions
$150M
-
$250M
Joint Venture Investments
$50M
-
$100M
Adjusted Funds from Operations per
Share
$6.75
-
$6.95
Reconciliation of Guidance
1Q 2023 Range or Value
FY 2023 Range or Value
Earnings per share attributable to common
shareholders - diluted
$0.96 - $1.00
$4.42 - $4.62
Plus: real estate depreciation and
amortization
0.59 -
0.59
2.33 -
2.33
Adjusted FFO per share
$1.55 -
$1.59
$6.75 -
$6.95
(1)
Guidance does not reflect the impact of fees and other costs
incurred or expected to be incurred by the Company in connection
with its response to Public Storage’s unsolicited proposal to
acquire the Company.
The Company’s 2023 same store pool consists of 664 stabilized
stores wholly owned since December 31, 2021. Forty-four of the
stores purchased through December 31, 2022 at certificate of
occupancy or that were in the early stages of lease-up are not
included, regardless of their current occupancies. The Company
believes that occupancy levels achieved during the lease-up period,
using discounted rates, are not truly indicative of a new store’s
performance, and therefore do not result in a meaningful
year-over-year comparison in future years. The Company will include
such stores in its same store pool in the second year after the
stores achieve 80% sustained occupancy using market rates and
incentives.
UNSOLICITED PROPOSAL FROM PUBLIC STORAGE:
On February 5, 2023, Public Storage publicly announced an
unsolicited taxable, all-stock, non-binding proposal to acquire all
of the outstanding shares and units of Life Storage. Following a
comprehensive review in consultation with its independent financial
and legal advisors, on February 16, 2023, Life Storage announced
that its Board of Directors concluded that the proposal is not in
the best interests of the Company and Life Storage shareholders,
and unanimously rejected Public Storage’s unsolicited proposal. The
Board remains open-minded to opportunities to enhance shareholder
value and is confident that Life Storage is well positioned to
continue delivering profitable growth and superior returns for
investors.
FORWARD LOOKING STATEMENTS:
When used herein, the words “intends,” “believes,” “expects,”
“anticipates,” and similar expressions are intended to identify
“forward-looking statements” within the meaning of that term in
Section 27A of the Securities Act of 1933 and in Section 21E of the
Securities Exchange Act of 1934.
All forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause our actual
results, performance or achievements of the Company to be
materially different from those expressed or implied by such
forward-looking statements. 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. 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.
There are a number of risks and uncertainties that could cause
our actual results to differ materially from the forward-looking
statements contained herein. 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 in the markets in which we operate;
- the effect of competition from new self-storage facilities or
other storage alternatives, which would cause rents and occupancy
rates to decline;
- impacts from the COVID-19 pandemic or the future outbreak of
other highly infectious or contagious diseases on the U.S.,
regional and global economies and our financial condition and
results of operations;
- 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;
- loss of key personnel;
- the Company’s ability to evaluate, finance and integrate
acquired self-storage facilities on expected terms into the
Company’s existing business and operations;
- costs incurred by the Company in response to Public Storage’s
unsolicited efforts to acquire the Company;
- the Company’s ability to effectively compete in the industry in
which it does business;
- 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;
- the Company’s existing indebtedness may mature in an
unfavorable credit environment, preventing refinancing or forcing
refinancing of the indebtedness on terms that are not as favorable
as the existing terms;
- interest rates may increase, impacting costs associated with
the Company’s outstanding floating rate debt, if any, and impacting
the Company’s ability to comply with debt covenants;
- exposure to litigation or other claims;
- risks associated with breaches of our data security;
- the regional concentration of the Company's business may
subject the Company to economic downturns in the states of Florida
and Texas;
- the Company’s cash flow may be insufficient to meet required
payments of operating expenses, principal, interest and dividends;
and
- failure to maintain our REIT status for U.S. federal income
purposes, including tax law changes that may change the taxability
of future income.
The forward-looking statements are based on our beliefs,
assumptions and expectations of our future performance, taking into
account all information currently available to us. These beliefs,
assumptions and expectations are subject to risks and uncertainties
and can change as a result of many possible events or factors, not
all of which are known to us. If a change occurs, our business,
financial condition, liquidity and results of operations may vary
materially from those expressed in our forward-looking statements.
You should carefully consider these risks before you make an
investment decision with respect to our securities.
CONFERENCE CALL:
Life Storage will hold its Fourth Quarter Earnings Release
Conference Call at 8:00 a.m. Eastern Time on Friday, February 24,
2023. To help avoid connection delays, participants are encouraged
to pre-register using this link. Anyone unable to pre-register may
access the conference call at 888.506.0062 (domestic), or
973.528.0011 (international); passcode 747655 or request to be
joined into the Life Storage call. Management will accept questions
from registered financial analysts after prepared remarks; all
others are encouraged to listen to the call via webcast by
accessing the investor relations tab at lifestorage.com. The
webcast will be archived for a period of 90 days; a telephone
replay will also be available for 14 days by calling 877.481.4010
and entering passcode 47608.
ABOUT LIFE STORAGE, INC:
Life Storage, Inc. is a self-administered and self-managed
equity REIT that is in the business of acquiring and managing
self-storage facilities. Located in Buffalo, New York, the Company
operates more than 1,150 storage facilities in 37 states and the
District of Columbia. The Company serves both residential and
commercial storage customers with storage units rented by month.
Life Storage consistently provides responsive service to more than
675,000 customers, making it a leader in the industry. For more
information visit http://invest.lifestorage.com.
Life Storage, Inc. Balance Sheet Data
(unaudited) December 31, December 31,
(dollars in thousands)
2022
2021
Assets Investment in storage facilities: Land
$
1,307,425
$
1,185,976
Building, equipment and construction in progress
6,864,381
5,904,481
8,171,806
7,090,457
Less: accumulated depreciation
(1,170,520
)
(1,007,650
)
Investment in storage facilities, net
7,001,286
6,082,807
Cash and cash equivalents
24,406
171,865
Accounts receivable
24,153
17,784
Receivable from joint ventures
1,562
333
Investment in joint ventures
275,190
213,003
Prepaid expenses
10,363
9,918
Intangible asset - in-place customer leases
4,212
13,966
Trade name
16,500
16,500
Other assets
30,058
30,421
Total Assets
$
7,387,730
$
6,556,597
Liabilities Line of credit
$
595,000
$
-
Term notes, net
2,751,632
2,747,838
Accounts payable and accrued liabilities
148,130
131,778
Deferred revenue
33,192
27,277
Mortgages payable
36,258
37,030
Total Liabilities
3,564,212
2,943,923
Noncontrolling redeemable Preferred Operating Partnership
Units at redemption value
89,077
90,783
Noncontrolling redeemable Common Operating Partnership Units
107,074
142,892
Equity Common stock
850
836
Additional paid-in capital
3,886,317
3,697,000
Accumulated deficit
(261,510
)
(314,713
)
Accumulated other comprehensive loss
(3,207
)
(4,124
)
Total Shareholders' Equity
3,622,450
3,378,999
Noncontrolling interest in consolidated subsidiary
4,917
-
Total Equity
3,627,367
3,378,999
Total Liabilities and Equity
$
7,387,730
$
6,556,597
Life Storage, Inc. Consolidated Statements
of Operations (unaudited) October 1, 2022 October 1,
2021 January 1, 2022 January 1, 2021 to to to to (dollars in
thousands, except share data) December 31, 2022 December 31, 2021
December 31, 2022 December 31, 2021
Revenues Rental
income
$
243,134
$
194,441
$
917,143
$
690,758
Tenant reinsurance
19,238
16,294
73,805
58,103
Other operating income
5,003
4,387
20,028
17,577
Management and acquisition fee income
7,300
6,037
27,190
22,127
Total operating revenues
274,675
221,159
1,038,166
788,565
Expenses Property operations and maintenance
47,027
40,129
179,760
143,648
Tenant reinsurance
6,919
6,448
29,280
22,882
Real estate taxes
24,129
18,067
99,710
79,861
General and administrative
24,206
17,210
77,201
62,617
Depreciation and amortization
45,597
36,817
172,717
134,754
Amortization of in-place customer leases
4,118
4,014
20,185
12,365
Total operating expenses
151,996
122,685
578,853
456,127
Gain on sale of non-real estate assets
744
-
5,550
-
Income from operations
123,423
98,474
464,863
332,438
Other income (expense) Interest expense
(A)
(31,485
)
(24,316
)
(109,240
)
(86,786
)
Interest and dividend income
8
39
32
827
Gain on sale of investments in joint ventures
1,572
-
1,572
-
Equity in income of joint ventures
2,403
1,570
9,235
5,696
Net income
95,921
75,767
366,462
252,175
Net income attributable to noncontrolling preferred interests in
the Operating Partnership
(999
)
(1,018
)
(4,001
)
(1,494
)
Net income attributable to noncontrolling common interests in the
Operating Partnership
(1,145
)
(604
)
(4,331
)
(1,364
)
Net loss (income) attributable to noncontrolling common interests
in consolidated subsidiary
7
-
(2
)
-
Net income attributable to common shareholders
$
93,784
$
74,145
$
358,128
$
249,317
Earnings per common share attributable to common
shareholders - basic
$
1.10
$
0.90
$
4.25
$
3.18
Earnings per common share attributable to common
shareholders - diluted
$
1.10
$
0.90
$
4.22
$
3.17
Common shares used in basic earnings per share calculation
84,900,387
82,293,536
84,322,043
78,424,956
Common shares used in diluted earnings per share calculation
85,874,176
82,522,589
84,884,168
78,608,151
Dividends declared per common share
$
1.0800
$
0.8600
$
4.1600
$
3.0800
(A) Interest expense for the period ending
December 31 consists of the following Interest expense
$
30,540
$
23,586
$
105,898
$
84,248
Amortization of debt issuance costs
945
730
3,342
2,538
Total interest expense
$
31,485
$
24,316
$
109,240
$
86,786
Life Storage, Inc. Computation of Funds
From Operations (FFO) (1) (unaudited) October 1, 2022
October 1, 2021 January 1, 2022 January 1, 2021 to to to to
(dollars in thousands, except share data) December 31, 2022
December 31, 2021 December 31, 2022 December 31, 2021 Net
income attributable to common shareholders
$
93,784
$
74,145
$
358,128
$
249,317
Noncontrolling common interests in the Operating Partnership
1,145
604
4,331
1,364
Noncontrolling preferred interests in the Operating Partnership
during conversion period
999
-
1,998
-
Depreciation of real estate and amortization of intangible assets
exclusive of debt issuance costs
49,320
40,287
190,962
144,978
Depreciation and amortization from unconsolidated joint ventures
2,941
1,988
8,956
6,227
Gain on sale of investments in joint ventures
(1,572
)
-
(1,572
)
-
Funds from operations allocable to noncontrolling interest in
Operating Partnership
(1,769
)
(945
)
(6,718
)
(2,177
)
Funds from operations available to common shareholders
144,848
116,079
556,085
399,709
FFO per share - diluted
$
1.69
$
1.41
$
6.55
$
5.08
Adjustments to FFO Gain on sale of non-real estate
assets
(744
)
-
(5,550
)
-
Uninsured damages related to natural disasters
-
-
2,598
-
Acquisition fee
(505
)
(472
)
(1,685
)
(1,752
)
Costs related to officer's retirement
1,351
465
1,351
620
Funds from operations resulting from non-recurring items allocable
to noncontrolling interest in Operating Partnership
(1
)
(1
)
39
5
Adjusted funds from operations available to common shareholders
144,949
116,071
552,838
398,582
Adjusted FFO per share - diluted
$
1.69
$
1.41
$
6.51
$
5.07
Common shares - diluted
85,874,176
82,522,589
84,884,168
78,608,151
Life Storage, Inc. Computation of Net
Operating Income (2) (unaudited) October 1, 2022 October
1, 2021 January 1, 2022 January 1, 2021 to to to to (dollars in
thousands) December 31, 2022 December 31, 2021 December 31, 2022
December 31, 2021 Net Income
$
95,921
$
75,767
$
366,462
$
252,175
General and administrative
24,206
17,210
77,201
62,617
Depreciation and amortization
49,715
40,831
192,902
147,119
Interest expense
31,485
24,316
109,240
86,786
Interest and dividend income
(8
)
(39
)
(32
)
(827
)
Gain on sale of investments in joint ventures
(1,572
)
-
(1,572
)
-
Equity in income of joint ventures
(2,403
)
(1,570
)
(9,235
)
(5,696
)
Net operating income
$
197,344
$
156,515
$
734,966
$
542,174
Same store (4)
$
140,065
$
123,624
$
535,151
$
448,111
Net operating income related to tenant reinsurance
12,319
9,846
44,525
35,221
Other stores, management fee income, and gain on sale of non-real
estate assets
44,960
23,045
155,290
58,842
Total net operating income
$
197,344
$
156,515
$
734,966
$
542,174
Life Storage, Inc. Quarterly Same Store
Data (3) (4) 576 mature stores owned since 12/31/20
(unaudited) October 1, 2022 October 1, 2021 to to Percentage
(dollars in thousands) December 31, 2022 December 31, 2021 Change
Change
Revenues: Rental income
$
188,441
$
168,074
$
20,367
12.1
%
Other operating income
1,698
1,935
(237
)
-12.2
%
Total operating revenues
190,139
170,009
20,130
11.8
%
Expenses: Payroll and benefits
10,479
10,945
(466
)
-4.3
%
Real estate taxes
17,807
15,389
2,418
15.7
%
Utilities
4,131
3,753
378
10.1
%
Repairs and maintenance
6,638
5,659
979
17.3
%
Office and other operating expense
5,277
5,158
119
2.3
%
Insurance
1,786
1,898
(112
)
-5.9
%
Advertising
37
75
(38
)
-50.7
%
Internet marketing
3,919
3,508
411
11.7
%
Total operating expenses
50,074
46,385
3,689
8.0
%
Net operating income (2)
$
140,065
$
123,624
$
16,441
13.3
%
QTD Same store move ins
52,437
51,758
679
QTD Same store move outs
55,681
53,458
2,223
Other Comparable Quarterly Same Store Data (4)
(unaudited) October 1, 2022 October 1, 2021 to to Percentage
December 31, 2022 December 31, 2021 Change Change
2021 Same
store pool (526 stores) Revenues
$
172,085
$
154,292
$
17,793
11.5
%
Expenses
45,429
42,578
2,851
6.7
%
Net operating income
$
126,656
$
111,714
$
14,942
13.4
%
2020 Same store pool (510 stores) Revenues
$
166,766
$
149,454
$
17,312
11.6
%
Expenses
44,676
41,048
3,628
8.8
%
Net operating income
$
122,090
$
108,406
$
13,684
12.6
%
Life Storage, Inc. Year to Date Same Store
Data (3) (4) 576 mature stores owned since 12/31/20
(unaudited) January 1, 2022 January 1, 2021 to to Percentage
(dollars in thousands) December 31, 2022 December 31, 2021 Change
Change
Revenues: Rental income
$
730,567
$
632,664
$
97,903
15.5
%
Other operating income
7,417
7,923
(506
)
-6.4
%
Total operating revenues
737,984
640,587
97,397
15.2
%
Expenses: Payroll and benefits
41,981
42,638
(657
)
-1.5
%
Real estate taxes
77,129
73,313
3,816
5.2
%
Utilities
17,533
15,978
1,555
9.7
%
Repairs and maintenance
22,615
19,910
2,705
13.6
%
Office and other operating expense
19,913
18,294
1,619
8.8
%
Insurance
7,109
7,065
44
0.6
%
Advertising
192
230
(38
)
-16.5
%
Internet marketing
16,361
15,048
1,313
8.7
%
Total operating expenses
202,833
192,476
10,357
5.4
%
Net operating income (2)
$
535,151
$
448,111
$
87,040
19.4
%
YTD Same store move ins
220,036
213,018
7,018
YTD Same store move outs
225,569
206,495
19,074
Life Storage, Inc. Other Data -
unaudited Same Store (3) All Stores (5)
2022
2021
2022
2021
Weighted average quarterly occupancy
91.5
%
94.1
%
90.8
%
93.7
%
Occupancy at December 31
91.4
%
93.8
%
90.6
%
93.0
%
Rent per occupied square foot
$
19.51
$
17.01
$
19.39
$
16.84
Life Storage, Inc. Other Data - unaudited
(continued) Investment in Storage
Facilities: (unaudited) The following summarizes activity in
storage facilities during the twelve months ended December 31,
2022: Beginning balance
$
7,090,457
Wholly owned property acquisitions
963,800
Consolidated joint venture acquisition
28,813
Improvements and equipment additions: Expansions
57,939
Roofing, paving, and equipment: Stabilized stores
32,960
Recently acquired stores
12,958
Change in construction in progress (Total CIP $43.2 million)
(1,361
)
Dispositions and Impairments
(13,760
)
Storage facilities at cost at period end
$
8,171,806
Comparison of Selected G&A
Costs (unaudited) Quarter Ended Year Ended
December 31, 2022 December
31, 2021 December 31, 2022
December 31, 2021 Management and
administrative salaries and benefits
$
11,702
$
10,238
$
44,753
$
39,218
Training
121
337
683
680
Call center
1,291
854
4,197
3,151
Life Storage Solutions costs
358
463
1,320
1,272
Income taxes
181
(193
)
2,151
1,679
Legal, accounting and professional
1,094
1,180
4,556
4,048
Costs related to officer's retirement
1,351
465
1,351
620
Terminated transaction costs
2,500
-
2,500
-
Other administrative expenses (6)
5,608
3,866
15,690
11,949
$
24,206
$
17,210
$
77,201
$
62,617
Net rentable square feet
December 31, 2022 Wholly owned
properties
55,204,562
Joint venture properties
10,557,051
Third party managed properties
22,611,239
88,372,852
December 31, 2022
December 31, 2021 Common shares
outstanding
85,019,884
83,565,710
Common Operating Partnership Units outstanding
1,041,259
960,708
(1) We believe that Funds from Operations (“FFO”) provides relevant
and meaningful information about our operating performance that is
necessary, along with net earnings and cash flows, for an
understanding of our operating results. FFO adds back historical
cost depreciation, which assumes the value of real estate assets
diminishes predictably in the future. In fact, real estate asset
values increase or decrease with market conditions. Consequently,
we believe FFO is a useful supplemental measure in evaluating our
operating performance by disregarding (or adding back) historical
cost depreciation. Funds from operations is defined by the
National Association of Real Estate Investment Trusts, Inc.
(“NAREIT”) as net income available to common shareholders computed
in accordance with generally accepted accounting principles
(“GAAP”), excluding gains or losses on sales of properties, plus
impairment of real estate assets, plus depreciation and
amortization and after adjustments to record unconsolidated
partnerships and joint ventures on the same basis. We believe that
to further understand our performance, FFO should be compared with
our reported net income and cash flows in accordance with GAAP, as
presented in our consolidated financial statements. Our
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
(determined in accordance with GAAP) as an indication of our
performance, as an alternative to net cash flows from operating
activities (determined in accordance with GAAP) as a measure of our
liquidity, or as an indicator of our ability to make cash
distributions. (2) Net operating income or "NOI" is a
non-GAAP (generally accepted accounting principles) financial
measure that we define as total continuing revenues less continuing
property operating expenses. NOI also can be calculated by adding
back to net income: interest expense, impairment and casualty
losses, operating lease expenses, depreciation and amortization
expense, any losses on sale of real estate, acquisition related
costs, general and administrative expense, and deducting from net
income: income from discontinued operations, interest income, any
gains on sale of real estate, and equity in income of joint
ventures. We believe that NOI is a meaningful measure to investors
in evaluating our operating performance, because we utilize NOI in
making decisions with respect to capital allocations, in
determining current property values, and in comparing
period-to-period and market-to-market property operating results.
Additionally, NOI is widely used in the real estate industry and
the self-storage industry to measure the performance and value of
real estate assets without regard to various items included in net
income that do not relate to or are not indicative of operating
performance, such as depreciation and amortization, which can vary
depending on accounting methods and book value of assets. NOI
should be considered in addition to, but not as a substitute for,
other measures of financial performance reported in accordance with
GAAP, such as total revenues, operating income and net income.
(3) Includes the stores owned and/or managed by the Company
for the entire periods presented that are consolidated in our
financial statements. Does not include unconsolidated joint
ventures or other stores managed by the Company. (4)
Revenues and expenses do not include items related to tenant
reinsurance. (5) Does not include unconsolidated joint
venture stores or other stores managed by the Company. (6)
Other administrative expenses include office rent, travel expense,
investor relations and miscellaneous other expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230223005877/en/
Life Storage, Inc. Brent Maedl (716) 328-9756
bmaedl@lifestorage.com
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