Extra Space Storage Inc. EXR

NYS: EXR | ISIN: US30225T1025   28/03/2024
147,00 USD (+0,17%)
(+0,17%)   28/03/2024

Extra Space Storage Inc. Reports 2022 Second Quarter Results

SALT LAKE CITY, Aug. 2, 2022 /PRNewswire/ -- Extra Space Storage Inc. (NYSE: EXR) (the "Company"), a leading owner and operator of self-storage facilities in the United States and a member of the S&P 500, announced operating results for the three and six months ended June 30, 2022.

Highlights for the three months ended June 30, 2022:

  • Achieved net income attributable to common stockholders of $1.73 per diluted share, representing a 38.4% increase compared to the same period in the prior year.

  • Achieved funds from operations attributable to common stockholders and unit holders ("FFO") of $2.12 per diluted share. FFO, excluding adjustments for transaction related costs ("Core FFO"), was $2.13 per diluted share, representing a 29.9% increase compared to the same period in the prior year.

  • Increased same-store revenue by 21.7% and same-store net operating income ("NOI") by 26.0% compared to the same period in the prior year.

  • Reported same-store occupancy of 95.9% as of June 30, 2022, compared to 96.9% as of June 30, 2021.

  • Acquired 12 operating stores and three stores at completion of construction (a "Certificate of Occupancy store" or "C of O store") and completed one development for a total cost of approximately $231.4 million.

  • In conjunction with joint venture partners, acquired 16 operating stores for a total cost of approximately $332.1 million, of which the Company invested $57.6 million.

  • Originated $70.3 million in mortgage and mezzanine bridge loans and sold $44.7 million in mortgage bridge loans.

  • Added 40 stores (gross) to the Company's third-party management platform. As of June 30, 2022, the Company managed 864 stores for third parties and 304 stores in joint ventures, for a total of 1,168 managed stores.

  • Paid a quarterly dividend of $1.50 per share.

 

Highlights for the six months ended June 30, 2022:

  • Achieved net income attributable to common stockholders of $3.24 per diluted share, representing a 16.1% increase compared to the same period in the prior year.

  • Achieved FFO of $4.13 per diluted share. Core FFO was $4.14 per diluted share, representing a 31.8% increase compared to the same period in the prior year.

  • Increased same-store revenue by 21.7% and same-store net NOI by 26.7% compared to the same period in the prior year.

  • Acquired 23 operating stores and six C of O stores and completed one development for a total cost of approximately $456.4 million.

  • In conjunction with joint venture partners, acquired 18 operating stores for a total cost of approximately $374.6 million, of which the Company invested $61.9 million.

  • Originated $208.0 million in mortgage and mezzanine bridge loans and sold $85.7 million in mortgage bridge loans.

  • Added 77 stores (gross) to the Company's third-party management platform.

 

Joe Margolis, CEO of Extra Space Storage Inc., commented: "We had another strong quarter, matching last quarter's record same-store revenue growth of 21.7% and achieving same-store NOI growth of 26.0%.  We were active in all of our external growth channels. We continue to find accretive investments through our deep industry relationships, and expand our diversified portfolio. We achieved FFO growth of 29.9%, allowing us to increase our annual FFO guidance for the second time this year."

FFO Per Share:
The following table (unaudited) outlines the Company's FFO and Core FFO for the three and six months ended June 30, 2022 and 2021.  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,


2022


2021


2022


2021




(per
share)1




(per
share)1




(per
share)1




(per
share)1

Net income attributable to
common stockholders

$     232,130


$       1.73


$     167,948


$       1.25


$     435,709


$       3.24


$     370,946


$      2.79

Impact of the difference in
weighted average number of
shares – diluted2



(0.12)




(0.07)




(0.20)




(0.16)

Adjustments:
















Real estate depreciation

63,765


0.45


56,470


0.40


126,457


0.89


112,285


0.80

Amortization of intangibles

2,696


0.02


1,008



5,462


0.04


1,701


0.01

Gain on real estate
transactions

(14,249)


(0.10)




(14,249)


(0.10)


(63,883)


(0.45)

Unconsolidated joint venture
real estate depreciation and
amortization

4,115


0.03


3,079


0.02


7,968


0.06


5,584


0.04

Unconsolidated joint venture
gain on sale of real estate
assets and purchase of
partner's interest



(6,251)


(0.04)




(6,251)


(0.04)

Distributions paid on Series
A Preferred Operating
Partnership units

(572)



(572)



(1,144)


(0.01)


(1,144)


(0.01)

Income allocated to
Operating Partnership and
other noncontrolling interests

15,704


0.11


10,631


0.08


29,842


0.21


23,134


0.16

FFO

$     303,589


$       2.12


$     232,313


$       1.64


$     590,045


$       4.13


$     442,372


$      3.14

















Adjustments:
















Transaction related costs

1,465


0.01




1,465


0.01



CORE FFO

$     305,054


$       2.13


$     232,313


$       1.64


$     591,510


$       4.14


$     442,372


$      3.14

















Weighted average number of
shares – diluted3

142,921,716




141,463,628




142,858,481




140,730,041





(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, 2022 and 2021 (amounts shown in thousands, except store count data)1:


For the Three Months
Ended June 30,


Percent


For the Six Months
Ended June 30,


Percent


2022


2021


Change


2022


2021


Change

Same-store rental revenues2

$   362,192


$   297,601


21.7 %


$   704,081


$   578,591


21.7 %

Same-store operating expenses2

83,471


76,346


9.3 %


168,328


155,825


8.0 %

Same-store net operating income2

$   278,721


$   221,255


26.0 %


$   535,753


$   422,766


26.7 %













Same-store square foot occupancy as of quarter end

95.9 %


96.9 %




95.9 %


96.9 %















Properties included in same-store

870


870




870


870





(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.

 

Same-store revenues for the three and six months ended June 30, 2022 increased compared to the same periods in 2021 due to higher average rates to existing customers and higher other operating income partially offset by lower occupancy. 

Same-store expenses increased for the three and six months ended June 30, 2022 compared to the same periods in 2021 due to increases in payroll, credit card processing fees, repairs and maintenance, utilities and insurance, partially offset by lower property taxes due to successful appeals of prior period taxes.  

Details related to the same-store performance of stores by metropolitan statistical area ("MSA") for the three and six months ended June 30, 2022 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:

The following table (unaudited) outlines the Company's acquisitions and developments that are closed, completed or under agreement (dollars in thousands):



Closed through
June 30, 2022


Closed/Completed
Subsequent to
June 30, 2022


Scheduled to Still
Close/Complete in
2022


Total 2022


To Close/Complete
in 2023/2024

Wholly-Owned Investment


Stores


Price


Stores


Price


Stores


Price


Stores


Price


Stores


Price

Operating Stores


23


$  384,602


4


$ 69,700


7


$  118,365


34


$  572,667



$        —

C of O and Development Stores1


7


71,789




1


15,400


8


87,189


9


132,628

EXR Investment in Wholly-
Owned Stores


30


456,391


4


69,700


8


133,765


42


659,856


9


132,628






















Joint Venture Investment





















EXR Investment in JV Acquisition
     of Operating Stores1


18


61,898


9


22,308


3


8,320


30


92,526


1


6,031

EXR Investment in JV
     Development and C of O1






2


11,180


2


11,180


2


26,395

EXR Investment in Joint
Ventures


18


61,898


9


22,308


5


19,500


32


103,706


3


$  32,426

Total EXR Investment


48


$  518,289


13


$ 92,008


13


$  153,265


74


$  763,562


12


$  165,054



(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.

Bridge Loans:
During the three months ended June 30, 2022, the Company originated $70.3 million in bridge loans. The Company has an additional $402.9 million in bridge loans that closed subsequent to quarter end or are under agreement to close in 2022.  During the three months ended June 30, 2022, the Company sold $44.7 million in bridge loans.  Additional details related to the Company's loan activity and balances held are included in the supplemental financial information published on the Company's Investor Relations website at https://ir.extraspace.com/.

Other Investments:
On June 1, 2022 the Company completed the acquisition of Bargold Storage Systems, LLC ("Bargold") for a purchase price of approximately $180.0 million.  Bargold leases space in apartment buildings, primarily in New York City and its boroughs, builds out the space as storage units, and subleases the units to resident tenants.  As of June 1, 2022, Bargold had approximately 17,000 storage units.

Dispositions:
The Company disposed of two properties during the three months ended June 30, 2022 for approximately $41.0 million, resulting in a gain of approximately $14.2 million

Property Management:
As of June 30, 2022, the Company managed 864 stores for third-party owners and 304 stores owned in joint ventures, for a total of 1,168 stores under management.  The Company is the largest self-storage management company in the United States.

Balance Sheet:
In conjunction with the Bargold acquisition,  the Company issued 91,743 common OP units at an average price of $174.40 per share (a total value of $16.0 million) and 240,000 preferred OP units at a stated value of $25.00 per share (a total value of $6.0 million).

During the three months ended June 30, 2022, the Company repurchased 381,786 shares of common stock using its stock repurchase program at an average price of $165.01 per share for a total cost of $63.0 million including transaction costs.  As of June 30, 2022, the Company had authorization to purchase up to an additional $337.0 million under the plan. 

As of June 30, 2022, the Company's percentage of fixed-rate debt to total debt was 74.8%. The weighted average interest rates of the Company's fixed and variable-rate debt were 3.1% and 2.9%, respectively. The combined weighted average interest rate was 3.1% with a weighted average maturity of approximately 5.5 years.

Subsequent to quarter end, on July 29, 2022, the Company completed an accordion transaction in its credit facility, and added a $175.0 million unsecured debt tranche maturing January 2028 and a $425.0 million unsecured debt tranche maturing July 2029.  The current interest rates for the tranches are Adjusted Term SOFR/Adjusted Daily Simple SOFR ("SOFR") + 0.95% and SOFR + 1.25%, respectively.

Dividends:
On June 30, 2022, the Company paid a second quarter common stock dividend of $1.50 per share to stockholders of record at the close of business on June 15, 2022.

Outlook:

The following table outlines the Company's current and initial FFO estimates and annual assumptions for the year ending December 31, 20221:


Current Ranges for 2022              

Annual Assumptions


1st Quarter Ranges for
2022  Annual Assumptions


Notes






(May 3, 2022)




Low


High


Low


High



Core FFO

$8.30


$8.50


$8.05


$8.30



Dilution per share from C of O
and value add acquisitions

$0.20


$0.20


$0.20


$0.20



Same-store revenue growth

16.00 %


18.00 %


13.00 %


15.00 %


Same-store pool of 870 stores

Same-store expense growth

7.50 %


9.00 %


6.50 %


8.00 %


Same-store pool of 870 stores

Same-store NOI growth

18.50 %


21.50 %


15.00 %


18.00 %


Same-store pool of 870 stores

Weighted average one-month
LIBOR/SOFR

1.89% / 1.66%


1.89% / 1.66%


1.37% / 1.24%


1.37% / 1.24%













Net tenant reinsurance income

$153,500,000


$155,500,000


$152,500,000


$154,500,000



Management fees and other
income

$82,500,000


$83,500,000


$80,500,000


$81,500,000



Interest income

$60,500,000


$61,500,000


$57,500,000


$58,500,000


Includes dividends from JCAP
preferred investment

General and administrative
expenses

$124,500,000


$125,500,000


$121,500,000


$123,000,000


Includes non-cash compensation

Average monthly cash balance

$70,000,000


$70,000,000


$40,000,000


$40,000,000



Equity in earnings of real estate
ventures

$43,000,000


$44,000,000


$41,500,000


$42,500,000


Includes dividends from
SmartStop preferred investment

Interest expense

$210,000,000


$212,000,000


$  196,500,000


$ 198,500,000



Income Tax Expense

$22,000,000


$23,000,000


$22,000,000


$23,000,000


Taxes associated with the
Company's Taxable REIT
subsidiary

Acquisitions

$1,200,000,000


$1,200,000,000


$  800,000,000


$ 800,000,000


Represents the Company's
investment and includes the
Bargold acquisition

Bridge loans

$200,000,000


$200,000,000


$150,000,000


$150,000,000


Represents the Company's share
of loans net of loan sales

Weighted average share count

143,000,000


143,000,000


143,000,000


143,000,000


Assumes redemption of all OP
units for common stock


(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.

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 Wednesday, August 3, 2022, 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:  Pre-registration Link.

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 3, 2022. 

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 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 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 close pending acquisitions and developments on expected terms, or at all;
  • the effect of competition from new and existing stores or other storage alternatives, 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;
  • 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;
  • impacts from the COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases, including reduced demand for self-storage space and ancillary products and services such as tenant reinsurance, and potential decreases in occupancy and rental rates and staffing levels, which could adversely affect our results;
  • 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; 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 U.S. generally accepted accounting principles ("GAAP"), excluding gains or losses on sales of operating stores and impairment write downs of depreciable real estate assets, plus depreciation and amortization related to real estate and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. The Company believes that to further understand the Company's performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in the Company's consolidated financial statements. FFO should not be considered a replacement of net income computed in accordance with GAAP.

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 870 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 80.0% or more for one calendar year. The Company believes that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to occupancy, rental revenue (growth), operating expenses (growth), net operating income (growth), etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments.  Same-store results should not be used as a basis for future same-store performance or for the performance of the Company's stores as a whole.

About Extra Space Storage Inc.:
Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of June 30, 2022, the Company owned and/or operated 2,177 self-storage stores in 41 states and Washington, D.C. The Company's stores comprise approximately 1.6 million units and approximately 168.0 million square feet of rentable space. 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. The Company is the second largest owner and/or operator of self-storage stores in the United States and is the largest self-storage management company in the United States.

 

Extra Space Storage Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)



June 30, 2022


December 31, 2021


(Unaudited)



Assets: 




Real estate assets, net

$              9,135,464


$             8,834,649

Real estate assets - operating lease right-of-use assets

232,045


227,949

Investments in unconsolidated real estate entities

544,771


457,326

Investments in debt securities and notes receivable

702,354


719,187

Cash and cash equivalents

58,729


71,126

Restricted cash

11,437


5,068

Other assets, net

353,967


159,172

Total assets 

$            11,038,767


$          10,474,477

Liabilities, Noncontrolling Interests and Equity:




Notes payable, net

$              1,288,487


$             1,320,755

Unsecured term loans, net

1,742,995


1,741,926

Unsecured senior notes, net

2,757,158


2,360,066

Revolving lines of credit

599,000


535,000

Operating lease liabilities

238,392


233,356

Cash distributions in unconsolidated real estate ventures

65,377


63,582

Accounts payable and accrued expenses

171,918


142,285

Other liabilities

282,200


291,531

Total liabilities 

7,145,527


6,688,501

Commitments and contingencies




Noncontrolling Interests and Equity:




Extra Space Storage Inc. stockholders' equity:




Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued
or outstanding


Common stock, $0.01 par value, 500,000,000 shares authorized, 133,900,184
and 133,922,305 shares issued and outstanding at June 30, 2022 and December
31, 2021, respectively

1,339


1,339

Additional paid-in capital

3,334,317


3,285,948

Accumulated other comprehensive income (loss)

25,555


(42,546)

Accumulated deficit

(159,091)


(128,245)

Total Extra Space Storage Inc. stockholders' equity

3,202,120


3,116,496

Noncontrolling interest represented by Preferred Operating Partnership units,
net

261,231


259,110

Noncontrolling interests in Operating Partnership, net and other noncontrolling
interests

429,889


410,370

Total noncontrolling interests and equity

3,893,240


3,785,976

Total liabilities, noncontrolling interests and equity

$            11,038,767


$          10,474,477

 

Consolidated Statement of Operations for the Three and Six Months Ended June 30, 2022 and 2021
(In thousands, except share and per share data) - Unaudited



For the Three Months
Ended March 31,


For the Six Months Ended
June 30,


2022


2021


2022


2021

Revenues:








Property rental

$       408,044


$       321,500


$      787,852


$      625,093

Tenant reinsurance

46,427


42,334


90,224


81,953

Management fees and other income

20,517


14,796


40,474


30,441

Total revenues

474,988


378,630


918,550


737,487

Expenses:








Property operations

104,252


89,155


207,794


181,522

Tenant reinsurance

7,537


6,735


14,579


13,896

Transaction related costs

1,465



1,465


General and administrative

31,251


26,341


61,013


49,881

Depreciation and amortization

69,067


59,570


136,973


118,169

Total expenses

213,572


181,801


421,824


363,468

Gain on real estate transactions

14,249



14,249


63,883

Income from operations

275,665


196,829


510,975


437,902

Interest expense

(47,466)


(40,240)


(90,004)


(80,935)

Interest income

15,060


12,838


34,049


25,142

Income before equity in earnings and dividend income from
unconsolidated real estate ventures and income tax expense

243,259


169,427


455,020


382,109

Equity in earnings and dividend income from unconsolidated real estate
entities

10,190


8,322


19,287


15,278

Equity in earnings of unconsolidated real estate ventures - gain on sale
of real estate assets and purchase of joint venture partner's interest


6,251



6,251

Income tax expense

(5,615)


(5,421)


(8,756)


(9,558)

Net income

247,834


178,579


465,551


394,080

Net income allocated to Preferred Operating Partnership noncontrolling
interests

(4,491)


(3,438)


(8,824)


(7,118)

Net income allocated to Operating Partnership and other noncontrolling
interests

(11,213)


(7,193)


(21,018)


(16,016)

Net income attributable to common stockholders

$       232,130


$       167,948


$      435,709


$      370,946

Earnings per common share








Basic

$             1.73


$             1.25


$            3.24


$            2.79

Diluted

$             1.73


$             1.25


$            3.24


$            2.79

Weighted average number of shares








Basic

134,192,540


133,756,610


134,186,426


132,886,933

Diluted

142,737,909


140,407,195


141,600,206


140,428,558

Cash dividends paid per common share

$             1.50


$             1.00


$           3.00


$           2.00

 

Reconciliation of GAAP Net Income to Total Same-Store Net Operating Income — for the Three and Six Months Ended
June 30, 2022 and 2021
 (In thousands) - Unaudited  



For the Three Months Ended
June 30,


For the Six Months Ended
June 30,


2022


2021


2022


2021

Net Income

$         247,834


$         178,579


$         465,551


$         394,080

Adjusted to exclude:








Gain on real estate transactions

(14,249)



(14,249)


(63,883)

Equity in earnings and dividend income from
unconsolidated real estate entities

(10,190)


(8,322)


(19,287)


(15,278)

Equity in earnings of unconsolidated real estate ventures
- gain on sale of real estate assets and purchase of joint
venture partner's interest


(6,251)



(6,251)

Interest expense

47,466


40,240


90,004


80,935

Depreciation and amortization

69,067


59,570


136,973


118,169

Income tax expense

5,615


5,421


8,756


9,558

Transaction related costs

1,465



1,465


General and administrative

31,251


26,341


61,013


49,881

Management fees, other income and interest income

(35,577)


(27,634)


(74,523)


(55,583)

Net tenant insurance

(38,890)


(35,599)


(75,645)


(68,057)

Non same-store rental revenue

(45,852)


(23,899)


(83,771)


(46,502)

Non same-store operating expense

20,781


12,809


39,466


25,697

Total same-store net operating income

$         278,721


$         221,255


$         535,753


$         422,766









Same-store rental revenues

362,192


297,601


704,081


578,591

Same-store operating expenses

83,471


76,346


168,328


155,825

Same-store net operating income

$         278,721


$         221,255


$         535,753


$         422,766

 

Reconciliation of the Range of Estimated GAAP Fully Diluted Earnings Per Share to Estimated Fully Diluted FFO Per
Share — for the Year Ending December 31, 2022
 - Unaudited




For the Year Ending December 31, 2022



Low End


High End

Net income attributable to common stockholders per diluted share


$                         6.01


$                         6.21

Income allocated to noncontrolling interest - Preferred Operating
Partnership and Operating Partnership


0.40


0.40

Fixed component of income allocated to non-controlling interest - Preferred
Operating Partnership


(0.02)


(0.02)

Net income attributable to common stockholders for diluted computations


6.39


6.59






Adjustments:





Real estate depreciation


1.83


1.83

Amortization of intangibles


0.06


0.06

Unconsolidated joint venture real estate depreciation and amortization


0.11


0.11

Gain on real estate transactions


(0.10)


(0.10)

Funds from operations attributable to common stockholders


8.29


8.49






Adjustments:





Transaction related costs


0.01


0.01

Core funds from operations attributable to common stockholders


$                         8.30


$                         8.50

 

Reconciliation of Estimated GAAP Net Income to Estimated Same-Store Net Operating Income —
for the Year Ending December 31, 2022 (In thousands) - Unaudited



For the Year Ending December 31, 2022


 Low


 High





Net Income

$                         899,200


$                         937,600

Adjusted to exclude:




Equity in earnings of unconsolidated joint ventures

(43,000)


(44,000)

Interest expense

212,000


210,000

Depreciation and amortization

279,000


279,000

Income tax expense

23,000


22,000

General and administrative

125,500


124,500

Management fees and other income

(82,500)


(83,500)

Interest income

(60,500)


(61,500)

Net tenant reinsurance income

(153,500)


(155,500)

Non same-store rental revenues

(195,000)


(195,000)

Non same-store operating expenses

84,000


84,000

Total same-store net operating income1

$                     1,088,200


$                     1,117,600





Same-store rental revenues1

1,429,500


1,454,000

Same-store operating expenses1

341,300


336,400

Total same-store net operating income1

$                     1,088,200


$                     1,117,600


(1)     Estimated same-store rental revenues, operating expenses and net operating income are for the Company's 2022 same-store pool of 870 stores.

 

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SOURCE Extra Space Storage Inc.

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