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Extra Space Storage(EXR) - 2023 Q4 - Annual Results
EXRExtra Space Storage(EXR)2024-02-26 16:00

Financial Performance - Achieved net income attributable to common stockholders of 1.02perdilutedshare,a32.91.02 per diluted share, a 32.9% decrease year-over-year, primarily due to 30.6 million in transition costs related to the Life Storage Merger[5] - Funds from operations (FFO) attributable to common stockholders was 1.89perdilutedshare,withCoreFFOat1.89 per diluted share, with Core FFO at 2.02 per diluted share, representing a 3.3% decrease compared to the same period last year[5] - Total revenues for Q4 2023 reached 797.774million,a57.3797.774 million, a 57.3% increase from 506.718 million in Q4 2022[35] - Net income attributable to common stockholders for Q4 2023 was 216.134million,comparedto216.134 million, compared to 204.260 million in Q4 2022, reflecting a 5.4% increase[35] - Same-store net operating income for the year ended December 31, 2023, was 1,186.120million,upfrom1,186.120 million, up from 1,153.795 million in 2022, indicating a growth of 2.8%[36] - The company expects fully diluted earnings per share for the year ending December 31, 2024, to range between 3.84and3.84 and 4.14[37] Revenue and Occupancy - Same-store revenue increased by 0.8%, while same-store net operating income (NOI) decreased by 0.1% year-over-year[5] - Ending same-store occupancy was reported at 93.0% as of December 31, 2023, down from 94.1% a year earlier[5] - Same-store property revenues for Q4 2023 were 391,753,000,a0.8391,753,000, a 0.8% increase from 388,629,000 in Q4 2022; for the year, revenues were 1,562,286,000,up3.11,562,286,000, up 3.1% from 1,515,365,000[11] - Estimated same-store rental revenues for 2024 are projected to be between 1,640.500millionand1,640.500 million and 1,683.000 million[38] Costs and Expenses - Total expenses for Q4 2023 were 464.306million,asignificantincreasefrom464.306 million, a significant increase from 237.148 million in Q4 2022, primarily due to higher property operations and depreciation costs[35] - The company reported interest expense of 129.665millionforQ42023,comparedto129.665 million for Q4 2023, compared to 72.922 million in Q4 2022, marking an increase of 77.5%[35] - The company incurred 66.732millionintransitioncostsrelatedtotheLifeStorageMergerfortheyearendedDecember31,2023[35]MergersandAcquisitions−ThecompanycloseditsmergerwithLifeStorage,Inc.inan66.732 million in transition costs related to the Life Storage Merger for the year ended December 31, 2023[35] Mergers and Acquisitions - The company closed its merger with Life Storage, Inc. in an 11.6 billion all-stock transaction, adding over 1,200 stores to its platform[7] - The company reported a total cost of approximately 147.1millionfortheacquisitionofsevenoperatingstoresandsevenCertificateofOccupancystores[7]−ThecompanyemphasizestheimportanceofFundsFromOperations(FFO)asakeyperformancemetric,whichexcludesgainsorlossesonsalesofoperatingstoresandimpairmentwrite−downs[28]−CoreFFOispresentedtoexcludenon−corerevenuesandexpenses,includingcertaincostsassociatedwiththeLifeStorageMerger[29]ManagementandOperations−Added225stores(189storesnet)tothethird−partymanagementplatform,totaling1,809managedstoresasofDecember31,2023[7]−Thecompanymanagedatotalof1,809storesasofDecember31,2023,including1,337storesforthird−partyownersand472storesinunconsolidatedjointventures[17]−Thecompanyoriginated147.1 million for the acquisition of seven operating stores and seven Certificate of Occupancy stores[7] - The company emphasizes the importance of Funds From Operations (FFO) as a key performance metric, which excludes gains or losses on sales of operating stores and impairment write-downs[28] - Core FFO is presented to exclude non-core revenues and expenses, including certain costs associated with the Life Storage Merger[29] Management and Operations - Added 225 stores (189 stores net) to the third-party management platform, totaling 1,809 managed stores as of December 31, 2023[7] - The company managed a total of 1,809 stores as of December 31, 2023, including 1,337 stores for third-party owners and 472 stores in unconsolidated joint ventures[17] - The company originated 329.6 million in mortgage and mezzanine bridge loans and sold 181.0millioninmortgagebridgeloansduringtheyear[7]−Thecompanyoriginated181.0 million in mortgage bridge loans during the year[7] - The company originated 129.2 million in bridge loans during Q4 2023, with outstanding balances of approximately 594.7millionatquarterend[16]FinancialPosition−Totalassetsincreasedto594.7 million at quarter end[16] Financial Position - Total assets increased to 27,456,262,000 in 2023 from 12,167,458,000in2022,reflectingagrowthofapproximately12612,167,458,000 in 2022, reflecting a growth of approximately 126%[34] - Real estate assets, net, rose to 24,555,873,000 in 2023, compared to 9,997,978,000in2022,indicatingagrowthofabout1459,997,978,000 in 2022, indicating a growth of about 145%[34] - The company reported total liabilities of 12,042,313,000 in 2023, up from 8,089,184,000in2022,whichisanincreaseofapproximately498,089,184,000 in 2022, which is an increase of approximately 49%[34] - The company's additional paid-in capital surged to 14,750,388,000 in 2023 from 3,345,332,000in2022,markinganincreaseofaround3413,345,332,000 in 2022, marking an increase of around 341%[34] - The company’s accumulated deficit increased to (379,015,000) in 2023 from (135,872,000)in2022[34]FutureOutlook−AnticipatesstrongerrevenuegrowthfromLifeStorageassetsin2024,despiteexpectedheadwindsfromlowernewcustomerrates[6]−ThecompanyexpectsCoreFFOfor2024torangebetween(135,872,000) in 2022[34] Future Outlook - Anticipates stronger revenue growth from Life Storage assets in 2024, despite expected headwinds from lower new customer rates[6] - The company expects Core FFO for 2024 to range between 7.85 and 8.15pershare,withsame−storerevenuegrowthprojectedbetween−2.008.15 per share, with same-store revenue growth projected between -2.00% and 0.50%[22] - The company anticipates net tenant reinsurance income between 248 million and 251millionfor2024[22]DebtandFinancing−Thepercentageoffixed−ratedebttototaldebtwas73.4251 million for 2024[22] Debt and Financing - The percentage of fixed-rate debt to total debt was 73.4% as of December 31, 2023, with an effective fixed-rate debt ratio of 78.6% after accounting for variable rate receivables[20] - The company completed a public bond offering of 600.0 million in Q4 2023, with a weighted average interest rate of 4.6% and a maturity of approximately 4.8 years[18][20] - The company has 800.0millionavailableforissuanceunderitsATMprogramand800.0 million available for issuance under its ATM program and 500.0 million authorized for stock repurchases as of December 31, 2023[19] Risks - The company faces risks including adverse changes in economic conditions and the potential failure to realize expected benefits from the Life Storage Merger[30] - The company’s same-store pool consists of 913 stores that are wholly-owned and stabilized, providing a clearer view of operating performance[31]