Extra Space Storage(US:EXR)2024-11-04 21:50Store Operations and Management - As of September 30, 2024, the company owned or had ownership interests in 2,401 operating stores, with 1,934 being wholly-owned[129]. - The company manages an additional 1,461 stores for third parties, bringing the total number of stores owned and/or managed to 3,862[129]. - The company operated 3,862 stores as of September 30, 2024, compared to 3,651 stores as of September 30, 2023[139]. - The company managed 1,921 stores for unconsolidated joint ventures and third parties as of September 30, 2024, up from 1,755 stores in the same period last year[140]. - The company acquired 771 wholly-owned stores in 2023 and an additional 20 wholly-owned stores during the nine months ended September 30, 2024[138]. Revenue and Financial Performance - For the three months ended September 30, 2024, total revenues increased by 10.3% to $824,804,000 compared to $748,034,000 for the same period in 2023[138]. - For the nine months ended September 30, 2024, total revenues increased by 38.2% to $2,435,006,000 compared to $1,762,470,000 for the same period in 2023[138]. - Property rental revenues for the nine months ended September 30, 2024 increased by 37.4% to $2,096,018,000, primarily due to the Life Storage Merger and other acquisitions[138]. - Tenant reinsurance revenues increased by 50.7% to $249,100,000 for the nine months ended September 30, 2024, driven by an increase in the number of stores operated[138][139]. - Management fees and other income rose by 25.5% to $89,888,000 for the nine months ended September 30, 2024, attributed to an increase in the number of stores managed[140]. Rental Rates and Occupancy - Approximately 2,245,000 tenants were leasing storage units at the company's operating stores, primarily on a month-to-month basis[130]. - The average annual rent per square foot for existing customers at stabilized stores was $20.55 for the three months ended September 30, 2024, down from $20.73 for the same period in 2023[131]. - Average annual rent per square foot for new leases was $13.49 for the three months ended September 30, 2024, compared to $15.63 for the same period in 2023[131]. - The average discounts as a percentage of rental revenues at all stabilized properties were 2.2% for the three months ended September 30, 2024, compared to 2.7% for the same period in 2023[131]. - Same-store rental revenues for the three months ended September 30, 2024, were $424,037, a decrease of 0.3% compared to $425,262 for the same period in 2023[162]. Expenses and Financial Metrics - Property operations expenses increased by $23,841 (12.9%) to $209,035 for the three months ended September 30, 2024, compared to $185,194 for the same period in 2023[142]. - General and administrative expenses rose by $2,344 (6.3%) to $39,750 for the three months ended September 30, 2024, compared to $37,406 for the same period in 2023[146]. - Depreciation and amortization expenses increased by $42,708 (28.0%) to $195,046 for the three months ended September 30, 2024, compared to $152,338 for the same period in 2023[147]. - Interest expense increased by $19,956 (16.2%) to $(142,855) for the three months ended September 30, 2024, compared to $(122,899) for the same period in 2023, primarily due to higher outstanding debt[150]. - Funds from operations (FFO) attributable to common stockholders and unit holders was $388,831 for the three months ended September 30, 2024, compared to $348,459 for the same period in 2023[159]. Debt and Financing - The total face value of debt increased to approximately $11.8 billion as of September 30, 2024, from approximately $11.3 billion a year earlier, reflecting additional debt issued in connection with the Life Storage Merger[150]. - The weighted average interest rate of total fixed- and variable-rate debt was 4.5% as of September 30, 2024[170]. - The company has approximately $11.8 billion in total face value of debt, with about $2.6 billion subject to variable interest rates[179]. - A 100 basis point change in SOFR would impact future earnings and cash flows by approximately $25.7 million annually on the variable-rate debt[179]. - The company may issue and sell shares of common stock with an aggregate offering price of up to $800 million under the Equity Distribution Agreement[174]. Seasonal Trends and Market Conditions - The company operates in competitive markets, with seasonal fluctuations in occupancy levels, generally higher in summer months due to increased moving activity[128]. - The self-storage business experiences seasonal fluctuations, with higher revenues and profits typically from May through September[176]. - The highest level of occupancy historically occurs at the end of July, while the lowest is in late February and early March[176]. Strategic Initiatives and Future Outlook - The company has increased its scale in many core markets through acquisitions, enhancing its presence in previously unrepresented markets[129]. - The company is pursuing additional sources of financing based on anticipated funding needs and growth assumptions[171]. - The company evaluates strategic acquisitions and may use Operating Partnership units as currency for funding acquisitions[173]. - The company intends to manage its balance sheet to maintain its credit ratings[172]. - The company expects to generate positive cash flow from operations in 2024, primarily from rents paid by tenants[168]. Cash Flow and Net Income - Cash flows from operating activities increased to $1,479,151 for the nine months ended September 30, 2024, compared to $1,037,959 for the same period in 2023[167]. - The company reported net income of $622,431 for the nine months ended September 30, 2024, slightly down from $623,046 in the same period of 2023[167]. - As of September 30, 2024, the company had $88,931 in cash and cash equivalents, with no loss of access reported during 2024 and 2023[169]. Asset Management - The company holds a BBB+/Stable rating from S&P, upgraded from BBB/Stable in July 2023, and a Baa2 rating from Moody's[172]. - As of September 30, 2024, the company had a total of 1,705 unencumbered stores, with an unencumbered asset value of $29,442,214 and a total asset value of $34,958,852[172]. - The total face value of debt as of September 30, 2024, was $11,827,208, resulting in a debt to total enterprise value ratio of 22.8%[170].