# EDGAR Filing Document

**Accession Number:** 0000944314
**File Stem:** 0001157523-23-000351
**Filing Date:** 2023-2
**Character Count:** 46477
**Document Hash:** 90b2e4a53b385cdf7705690f48283694
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001157523-23-000351.hdr.sgml**: 20230223

**ACCESSION NUMBER**: 0001157523-23-000351

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230223

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230223

**DATE AS OF CHANGE**: 20230223

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LIFE STORAGE, INC.
- **CENTRAL INDEX KEY:** 0000944314
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 161194043
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-13820
- **FILM NUMBER:** 23660366

**BUSINESS ADDRESS:**
- **STREET 1:** 6467 MAIN ST
- **CITY:** WILLIAMSVILLE
- **STATE:** NY
- **ZIP:** 14221
- **BUSINESS PHONE:** 7166331850

**MAIL ADDRESS:**
- **STREET 1:** 6467 MAIN ST
- **CITY:** WILLIAMSVILLE
- **STATE:** NY
- **ZIP:** 14221

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SOVRAN SELF STORAGE INC
- **DATE OF NAME CHANGE:** 19950421
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LIFE STORAGE LP
- **CENTRAL INDEX KEY:** 0001060224
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE [6500]
- **IRS NUMBER:** 161481551
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-24071
- **FILM NUMBER:** 23660367

**BUSINESS ADDRESS:**
- **STREET 1:** 6467 MAIN ST
- **CITY:** WILLIAMSVILLE
- **STATE:** NY
- **ZIP:** 14221
- **BUSINESS PHONE:** 7166331850

**MAIL ADDRESS:**
- **STREET 1:** 6467 MAIN ST
- **CITY:** WILLIAMSVILLE
- **STATE:** NY
- **ZIP:** 14221

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SOVRAN ACQUISITION LTD PARTNERSHIP
- **DATE OF NAME CHANGE:** 19980420

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 23, 2023

Life Storage, Inc.

Life Storage LP

  <br> (Exact Name of Registrant as Specified in Charter)

Maryland (Life Storage, Inc.) 001-13820 16-1194043 <br> <u>Delaware (Life Storage LP)</u> <u>000-24071 </u> <u>16-1481551 </u> <br> (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)

6467 Main Street <br> Williamsville, New York 14221 <br> (Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code (716) 633-1850

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Life Storage, Inc.

---

| | | |
|:---|:---|:---|
| **Title of each class**  | **Trading<br> Symbol(s)<br>**  | **Name of each exchange<br> on which registered<br>**  |
| **Common Stock, $.01 par value** | **LSI**  | **New York Stock Exchange** |

---

Life Storage LP:

---

| | | |
|:---|:---|:---|
| **Title of each class**  | **Trading<br> Symbol(s)<br>**  | **Name of each exchange<br> on which registered<br>**  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

Item 2.02 Results of Operations and Financial Condition

On February 23, 2023, Life Storage, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended December 31, 2022. A copy of this press release is attached hereto as Exhibit 99.1. The information in Exhibit 99.1 is being furnished pursuant to this Item 2.02 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or incorporated by reference in any filing thereunder or under the Securities Act of 1933, unless expressly set forth by specific reference in such document.

Item 9.01 Financial Statements and Exhibits

&nbsp;&nbsp;&nbsp;&nbsp; (d) Exhibits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;99.1 Press Release dated February 23, 2023

------

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | LIFE STORAGE, INC. | LIFE STORAGE, INC. |
|  | (Registrant) | (Registrant) |
| Date: February 23, 2023 |  |  |
|  | By: | /s/ Alexander Gress |
|  |  | Alexander Gress, |
|  |  | Chief Financial Officer |
|  | LIFE STORAGE LP | LIFE STORAGE LP |
|  | (Registrant) |  |
| Date: February 23, 2023 |  |  |
|  | By: | /s/ Alexander Gress |
|  |  | Alexander Gress, |
|  |  | Chief Financial Officer |

---

------

Exhibit Index

Exhibit No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description

[Exhibit 99.1](a53342442ex99_1.htm)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [Press Release dated February 23, 2023](a53342442ex99_1.htm)

## Exhibit 99.1

**Exhibit 99.1**<br>

**** 

<br> # **Life Storage, Inc. Reports Fourth Quarter and Full Year 2022 Results** 
 ***Conference Call Rescheduled for Friday, February 24, 2023, at 8:00 a.m. Eastern Time*** 

BUFFALO, N.Y.--(BUSINESS WIRE)--February 23, 2023--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.

 **<u>Highlights for the Fourth Quarter Included</u>:**

* 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")<sup>(1)</sup> 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")<sup>(2)</sup> 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. 

 **<u>Highlights for the Full Year Included:</u>**

* Generated net income attributable to common shareholders of $358.1 million, or $4.22 per fully diluted common share. 

* Achieved adjusted FFO<sup>(1)</sup> 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<sup>(2)</sup> 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:**

 <u>Wholly Owned Portfolio</u>

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 <br> Range <sup>(1)</sup>**  | **Current Guidance <br> Range <sup>(1)</sup>**  |
| 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  |

---

---

| | | |
|:---|:---|:---|
| <br> **Reconciliation of Guidance**  | **1Q 2023 <br> <u>Range or Value</u>**  | **FY 2023 <br> <u>Range or Value</u>**  |
| Earnings per share attributable to common shareholders - diluted  | $0.96 - $1.00  | $4.42 - $4.62  |
| Plus: real estate depreciation and amortization  | <u>0.59 - 0.59</u>  | <u>2.33 - 2.33</u>  |
| Adjusted FFO per share  | <u>$1.55 - $1.59</u>  | <u>$6.75 - $6.95</u>  |

---

(1) <br> 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. <br>

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.**<br>**Balance Sheet Data**<br>**(unaudited)**<br>**(dollars in thousands)** | <br><br>**December 31,**<br> **2022**  | <br><br>**December 31,**<br> **2021**  |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in storage facilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land | $1307425  | $1185976  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Building, equipment and construction in progress | 6864381  | 5904481  |
|  | 8171806  | 7090457  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: accumulated depreciation | (1170520 )  | (1007650 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in storage facilities, net | 7001286  | 6082807  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 24406  | 171865  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 24153  | 17784  |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivable from joint ventures | 1562  | 333  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment in joint ventures | 275190  | 213003  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 10363  | 9918  |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible asset - in-place customer leases | 4212  | 13966  |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade name | 16500  | 16500  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 30058  | 30421  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $7387730  | $6556597  |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Line of credit | $595000  | $-  |
| &nbsp;&nbsp;&nbsp;&nbsp;Term notes, net | 2751632  | 2747838  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 148130  | 131778  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 33192  | 27277  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgages payable | 36258  | 37030  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities | 3564212  | 2943923  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling redeemable Preferred Operating Partnership Units at redemption value | 89077  | 90783  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling redeemable Common Operating Partnership Units | 107074  | 142892  |
| **Equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock | 850  | 836  |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 3886317  | 3697000  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (261510 ) | (314713 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (3207 )  | (4124 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Shareholders' Equity | 3622450  | 3378999  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest in consolidated subsidiary | 4917  | -  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Equity | 3627367  | 3378999  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Liabilities and Equity | $7387730  | $6556597  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **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 | $243134  | $194441  | $917143  | $690758  |
| Tenant reinsurance | 19238  | 16294  | 73805  | 58103  |
| Other operating income | 5003  | 4387  | 20028  | 17577  |
| Management and acquisition fee income | 7300  | 6037  | 27190  | 22127  |
| Total operating revenues | 274675  | 221159  | 1038166  | 788565  |
| **Expenses** |  |  |  |  |
| Property operations and maintenance | 47027  | 40129  | 179760  | 143648  |
| Tenant reinsurance | 6919  | 6448  | 29280  | 22882  |
| Real estate taxes | 24129  | 18067  | 99710  | 79861  |
| General and administrative | 24206  | 17210  | 77201  | 62617  |
| Depreciation and amortization | 45597  | 36817  | 172717  | 134754  |
| Amortization of in-place customer leases | 4118  | 4014  | 20185  | 12365  |
| Total operating expenses | 151996  | 122685  | 578853  | 456127  |
| Gain on sale of non-real estate assets | 744  | -  | 5550  | -  |
| Income from operations | 123423  | 98474  | 464863  | 332438  |
| Other income (expense) |  |  |  |  |
| Interest expense **(A)** | (31485 ) | (24316 ) | (109240 ) | (86786 ) |
| Interest and dividend income | 8  | 39  | 32  | 827  |
| Gain on sale of investments in joint ventures | 1572  | -  | 1572  | -  |
| Equity in income of joint ventures | 2403  | 1570  | 9235  | 5696  |
| **Net income** | 95921  | 75767  | 366462  | 252175  |
| &nbsp;&nbsp;Net income attributable to noncontrolling preferred interests in the Operating Partnership | (999 ) | (1018 ) | (4001 ) | (1494 ) |
| &nbsp;&nbsp;Net income attributable to noncontrolling common interests in the Operating Partnership | (1145 ) | (604 ) | (4331 ) | (1364 ) |
| &nbsp;&nbsp;Net loss (income) attributable to noncontrolling common interests in consolidated subsidiary | 7  | -  | (2 )  | -  |
| **Net income attributable to common shareholders** | $93784  | $74145  | $358128  | $249317  |
| **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 | 84900387  | 82293536  | 84322043  | 78424956  |
| Common shares used in diluted earnings per share calculation | 85874176  | 82522589  | 84884168  | 78608151  |
| **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** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | $30540  | $23586  | $105898  | $84248  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs | 945  | 730  | 3342  | 2538  |
| Total interest expense | $31485  | $24316  | $109240  | $86786  |
| **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** |
| **Computation of Funds From Operations (FFO) <sup>(1)</sup>** | **Computation of Funds From Operations (FFO) <sup>(1)</sup>** | **Computation of Funds From Operations (FFO) <sup>(1)</sup>** | **Computation of Funds From Operations (FFO) <sup>(1)</sup>** | **Computation of Funds From Operations (FFO) <sup>(1)</sup>** |
| **(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 | $93784  | $74145  | $358128  | $249317  |
| Noncontrolling common interests in the Operating Partnership | 1145  | 604  | 4331  | 1364  |
| Noncontrolling preferred interests in the Operating Partnership during conversion period | 999  | -  | 1998  | -  |
| Depreciation of real estate and amortization of intangible |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;assets exclusive of debt issuance costs | 49320  | 40287  | 190962  | 144978  |
| Depreciation and amortization from unconsolidated joint ventures | 2941  | 1988  | 8956  | 6227  |
| Gain on sale of investments in joint ventures | (1572 ) | -  | (1572 ) | -  |
| Funds from operations allocable to noncontrolling |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;interest in Operating Partnership | (1769 )  | (945 )  | (6718 )  | (2177 )  |
| Funds from operations available to common shareholders | 144848  | 116079  | 556085  | 399709  |
| FFO per share - diluted | $1.69  | $1.41  | $6.55  | $5.08  |
| **Adjustments to FFO** |  |  |  |  |
| Gain on sale of non-real estate assets | (744 ) | -  | (5550 ) | -  |
| Uninsured damages related to natural disasters | -  | -  | 2598  | -  |
| Acquisition fee | (505 ) | (472 ) | (1685 ) | (1752 ) |
| Costs related to officer's retirement | 1351  | 465  | 1351  | 620  |
| Funds from operations resulting from non-recurring items |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;allocable to noncontrolling interest in Operating Partnership | (1 )  | (1 )  | 39  | 5  |
| Adjusted funds from operations available to common shareholders | 144949  | 116071  | 552838  | 398582  |
| Adjusted FFO per share - diluted | $1.69  | $1.41  | $6.51  | $5.07  |
| Common shares - diluted | 85874176  | 82522589  | 84884168  | 78608151  |
| **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** |
| **Computation of Net Operating Income <sup>(2)</sup>** | **Computation of Net Operating Income <sup>(2)</sup>** | **Computation of Net Operating Income <sup>(2)</sup>** | **Computation of Net Operating Income <sup>(2)</sup>** | **Computation of Net Operating Income <sup>(2)</sup>** |
| **(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 | $95921  | $75767  | $366462  | $252175  |
| General and administrative | 24206  | 17210  | 77201  | 62617  |
| Depreciation and amortization | 49715  | 40831  | 192902  | 147119  |
| Interest expense | 31485  | 24316  | 109240  | 86786  |
| Interest and dividend income | (8 ) | (39 ) | (32 ) | (827 ) |
| Gain on sale of investments in joint ventures | (1572 ) | -  | (1572 ) | -  |
| Equity in income of joint ventures | (2403 )  | (1570 )  | (9235 )  | (5696 )  |
| Net operating income | $197344  | $156515  | $734966  | $542174  |
| Same store (4) | $140065  | $123624  | $535151  | $448111  |
| Net operating income related to tenant reinsurance | 12319  | 9846  | 44525  | 35221  |
| Other stores, management fee income, and gain on |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;sale of non-real estate assets | 44960  | 23045  | 155290  | 58842  |
| Total net operating income | $197344  | $156515  | $734966  | $542174  |
| **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** | **Life Storage, Inc.** |
| **Quarterly Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Quarterly Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Quarterly Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Quarterly Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Quarterly Same Store Data <sup>(3) (4)</sup> 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:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental income | $188441  | $168074  | $20367  | 12.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating income | 1698  | 1935  | (237 )  | <u>-12.2</u> <br> <u>%</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating revenues | 190139  | 170009  | 20130  | 11.8% |
| **Expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payroll and benefits | 10479  | 10945  | (466 ) | -4.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes | 17807  | 15389  | 2418  | 15.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Utilities | 4131  | 3753  | 378  | 10.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Repairs and maintenance | 6638  | 5659  | 979  | 17.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Office and other operating expense | 5277  | 5158  | 119  | 2.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance | 1786  | 1898  | (112 ) | -5.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;Advertising | 37  | 75  | (38 ) | -50.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Internet marketing | 3919  | 3508  | 411  | <u>11.7</u> <br> <u>%</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 50074  | 46385  | 3689  | <u>8.0</u> <br> <u>%</u>  |
| Net operating income (2) | $140065  | $123624  | $16441  | <u>13.3</u> <br> <u>%</u>  |
| QTD Same store move ins | 52437  | 51758  | 679  |  |
| QTD Same store move outs | 55681  | 53458  | 2223  |  |
| **Other Comparable Quarterly Same Store Data (4)** | **Other Comparable Quarterly Same Store Data (4)** | **Other Comparable Quarterly Same Store Data (4)** | **Other Comparable Quarterly Same Store Data (4)** | **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 | $172085  | $154292  | $17793  | 11.5% |
| Expenses | 45429  | 42578  | 2851  | <u>6.7</u> <br> <u>%</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating income | $126656  | $111714  | $14942  | <u>13.4</u> <br> <u>%</u>  |
| **2020 Same store pool (510 stores)** |  |  |  |  |
| Revenues | $166766  | $149454  | $17312  | 11.6% |
| Expenses | 44676  | 41048  | 3628  | <u>8.8</u> <br> <u>%</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating income | $122090  | $108406  | $13684  | <u>12.6</u> <br> <u>%</u>  |
| **Life Storage, Inc.** |  |  |  |  |
| **Year to Date Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Year to Date Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Year to Date Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Year to Date Same Store Data <sup>(3) (4)</sup> 576 mature stores owned since 12/31/20** | **Year to Date Same Store Data <sup>(3) (4)</sup> 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:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental income | $730567  | $632664  | $97903  | 15.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating income | 7417  | 7923  | (506 )  | <u>-6.4</u> <br> <u>%</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating revenues | 737984  | 640587  | 97397  | 15.2% |
| **Expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payroll and benefits | 41981  | 42638  | (657 ) | -1.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes | 77129  | 73313  | 3816  | 5.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;Utilities | 17533  | 15978  | 1555  | 9.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Repairs and maintenance | 22615  | 19910  | 2705  | 13.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Office and other operating expense | 19913  | 18294  | 1619  | 8.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance | 7109  | 7065  | 44  | 0.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Advertising | 192  | 230  | (38 ) | -16.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Internet marketing | 16361  | 15048  | 1313  | <u>8.7</u> <br> <u>%</u>  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 202833  | 192476  | 10357  | <u>5.4</u> <br> <u>%</u>  |
| Net operating income (2) | $535151  | $448111  | $87040  | <u>19.4</u> <br> <u>%</u>  |
| YTD Same store move ins | 220036  | 213018  | 7018  |  |
| YTD Same store move outs | 225569  | 206495  | 19074  |  |
| **Life Storage, Inc.** |  |  |  |  |
| **Other Data - unaudited** | Same Store (3) | Same Store (3) | All Stores (5) | All Stores (5) |
|  | <u>2022</u>  | <u>2021</u>  | <u>2022</u>  | <u>2021</u>  |
| 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)** |  |  |  |  |
| <u>Investment in Storage Facilities: (unaudited)</u> |  |  |  |  |
| The following summarizes activity in storage facilities during the twelve months ended December 31, 2022: |  |  |  |  |
| Beginning balance | $7090457  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Wholly owned property acquisitions | 963800  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consolidated joint venture acquisition | 28813  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Improvements and equipment additions: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expansions | 57939  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Roofing, paving, and equipment: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stabilized stores | 32960  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recently acquired stores | 12958  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in construction in progress (Total CIP $43.2 million) | (1361 ) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Dispositions and Impairments | (13760 )  |  |  |  |
| Storage facilities at cost at period end | $8171806  |  |  |  |
| <u>Comparison of Selected G&A Costs (unaudited)</u> | Quarter Ended | Quarter Ended | Year Ended | Year Ended |
|  | <u>December 31, 2022</u> | <u>December 31, 2021</u> | <u>December 31, 2022</u> | <u>December 31, 2021</u> |
| Management and administrative salaries and benefits | $11702  | $10238  | $44753  | $39218  |
| Training | 121  | 337  | 683  | 680  |
| Call center | 1291  | 854  | 4197  | 3151  |
| Life Storage Solutions costs | 358  | 463  | 1320  | 1272  |
| Income taxes | 181  | (193 ) | 2151  | 1679  |
| Legal, accounting and professional | 1094  | 1180  | 4556  | 4048  |
| Costs related to officer's retirement | 1351  | 465  | 1351  | 620  |
| Terminated transaction costs | 2500  | -  | 2500  | -  |
| Other administrative expenses (6) | 5608  | 3866  | 15690  | 11949  |
|  | $24206  | $17210  | $77201  | $62617  |
| <u>Net rentable square feet</u> | <u>December 31, 2022</u> |  |  |  |
| Wholly owned properties | 55204562  |  |  |  |
| Joint venture properties | 10557051  |  |  |  |
| Third party managed properties | 22611239  |  |  |  |
|  | 88372852  |  |  |  |
|  | <u>December 31, 2022</u> | <u>December 31, 2021</u> |  |  |
| Common shares outstanding | 85019884  | 83565710  |  |  |
| Common Operating Partnership Units outstanding | 1041259  | 960708  |  |  |

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| |
|:---|
| (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. |

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## Contacts
Life Storage, Inc. <br> Brent Maedl <br> (716) 328-9756 <br> bmaedl@lifestorage.com