CANADA SELF STORAGE CENTRES
About StorageVault Canada Inc.
StorageVault is Canada’s largest storage provider and is dedicated to safeguarding
the belongings of Canadian families and businesses - owning and operating 238
storage locations across Canada. StorageVault owns 206 of these locations plus over
4,500 portable storage units representing over 11.4 million rentable square feet on
over 665 acres of land. StorageVault is represented regionally under the following
brands: Access Storage, Sentinel Storage, Depotium Mini-Entrepôt and Cubeit
Portable Storage. StorageVault also provides last mile storage and logistics solutions
through FlexSpace Logistics and professional records management services, such as
document and media storage, imaging and shredding services through RecordXpress.
To learn more about us, please visit www.storagevaultcanada.com.
Corporate Information
Email:
Phone:
Address:
ir@storagevaultcanada.com
1-877-622-0205
100 Canadian Road, Toronto, ON, M1R 4Z5
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LETTER TO OUR SHAREHOLDERS
2022 HIGHLIGHTS
OUR NATIONAL FOOTPRINT
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
OUR BOARD MEMBERS
FINANCIAL STATEMENTS
MANAGEMENT DISCUSSION AND ANALYSIS
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CANADA SELF STORAGE CENTRES
SVI’S MANAGEMENT
TEAM IS KNOWN FOR
ITS EXECUTION AND
DISCIPLINE RESULTING
IN PERFORMANCE
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Dear Fellow Shareholders,
After an exceptional 2021, our business continued to
show strength in 2022 achieving 28% AFFO, 27% NOI
and 26% Revenue growth, while closing $241 million of
strategic acquisitions. We moved to the TSX from the
Venture Exchange in January 2022 and were included
in the TSX Index in December 2022. In addition to
supporting over 200 community organizations and
charities across Canada, we were again recognized as
one of the country’s most gender diverse companies.
Operations
Our same stores results showed continued strength
achieving 12.5% NOI and 11.4% Revenue growth.
While housing transactions have slowed, immigration
continues to accelerate which should provide us a
significant tailwind for years to come. With COVID
hopefully in the rear-view mirror, we expect to see
business return to a more normalized seasonal tempo.
Our FlexSpace Logistics brand and last mile solutions
continue to flourish and should continue to grow well
into the future.
Platform Strength and Scale
Our platform continues to benefit from additional
scale and best in class systems. With the acquisition of
11 stores in 2022, we have extended our lead over the
competition, and are now over 3 times the size of our
closest competitor. Our bespoke acquisition pipeline
is substantial and we expect to acquire $70 to $100
million of assets in 2023. We are confident that the
$750 million of assets acquired over the last 3 years
will continue to improve efficiencies, synergies and
pricing power well into the future. With over 450,000
square feet of expansion projects in entitlement
and permitting, we expect to add 50,000 square
feet of expansion space annually for years to come.
ESG
StorageVault continues to focus on having best in
class ESG practices in the country with a focus on
sustainable environmental and social responsibilities,
and consistent with our sound governance policies.
Some highlights include:
• The largest solar, motion sensored and LED lighting
and in floor radiant heating installations in the
Canadian storage industry
• Paperless systems in our Self, Portable and back
office
• Our paper shredding and recycling segment within
RecordXpress saved over 260,000 trees in 2022
• Recognized once again in The Globe and Mail’s
Report on Business, Women Lead Here list
• Support of over 200 charity and community
programs across the country
• Offering personal health and wellness seminars
within our organization known as Wellness
Wednesdays
• Our ongoing
in our diverse team
continues to foster merit based growth and
advancement in all levels of our organization, as well
as tolerance, personal well being and safety
investment
We appreciate your continued support and expect
2023 to be another successful year focused on growing
cash flow and increasing stakeholder value while
continuing to support our team and communities.
Steven Scott
Chief Executive Officer
February 22, 2023
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CANADA SELF STORAGE CENTRES
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+26%
REVENUE
+27%
NOI
+28%
AFFO
2014
10
STORES
2016
49
STORES
2018
105
STORES
2020
167
STORES
2022*
206
STORES
* SVI Owned
2015
29
STORES
2017
90
STORES
2019
151
STORES
2021
196
STORES
NOI
$180 MM
$160 MM
$140 MM
$120 MM
$100 MM
$80 MM
$60 MM
$40 MM
$20 MM
$90 MM
$80 MM
$70 MM
$60 MM
$50 MM
$40 MM
$30 MM
$20 MM
$10 MM
2014
2015
2016
2017
2018
2019
2020
2021
2022
AFFO
2014
2015
2016
2017
2018
2019
2020
2021
2022
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CANADA SELF STORAGE CENTRES
WE GREW TO OVER
11.4 MILLION SQFT
OF RENTABLE SPACE
IN 101,000 STORAGE
UNITS
$241.1 MILLION IN
ACQUISITIONS
RESULTING IN
11 STORES BEING
ADDED IN 2022
REVENUE GROWTH
OF 26% TO $261.8
MILLION FROM
$208.7 MILLION
NOI GROWTH
OF 27% TO $176.0
MILLION FROM
$139.0 MILLION
EXPECTING $70 - $100
MILLION IN
ACQUISITIONS
1,227% 8 YEAR
TOTAL SHAREHOLDER
RETURN
7 | Annual Report 2022
CANADA SELF STORAGE CENTRES OUR NATIONAL
FOOTPRINT
230+ locations owned and managed
across Canada and growing!
18
OUR BRANDS
CANADA SELF STORAGE CENTRES
44
11
12
5
26
122
CONTAINERS
D O C U M E N TI S T O R A G E
R E T R I E V A LI S E R V I C E S
A Division of Storagevault Canada Inc.
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CANADA SELF STORAGE CENTRES ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE
Annual Report 2022 | 9
CANADA SELF STORAGE CENTRES StorageVault embraces
the
responsibility of environmental
stewardship and social responsibility which aligns with our sound
corporate governance practices. Together with our business
objectives, these core values ensure we continuously deliver strong
and sustainable results.
We remain focused on reducing the inherently low environmental
impact of our stores, while continuing to improve team engagement
and supporting the over 100 communities in which we operate. Our
Board and Management are committed to maintaining the highest
standards of corporate governance practices to ensure our continued
success.
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While the self storage industry has an intrinsically light environmental footprint,
StorageVault acknowledges that everyone must contribute to implementing green
solutions and, as such, we continuously strive to improve and increase our efforts.
At the end of 2022, StorageVault operated 36 stores with solar panels and solar
walls and are committed to expanding similar installations across our portfolio. The
solar program allows us to utilize existing and otherwise unexploited roof and wall
space to generate electricity for consumption, while providing a solid financial return.
These initiatives demonstrate that sustainability efforts benefit the environment,
our communities, our shareholders, the broader self storage industry and future
generations.
For energy conservation, we offer a strategic mix of square footage that is non-climate
controlled and temperature controlled, with non-climate controlled space having
minimal environmental impact. For properties that do offer temperature controlled
storage, we closely regulate and moderate temperatures to safeguard contents while
minimizing energy required for heating or cooling. Water usage at our properties is
also very low. Lastly, the minimal daily client activity and traffic, helps to minimize our
carbon footprint within our communities.
The self storage industry has the lowest environmental impact in the areas of energy
consumption, water consumption and waste production in comparison to all the
other real estate asset classes.
81%
LESS
89%
LESS
79%
LESS
ENERGY CONSUMPTION
(KWh/SqFt)
WATER CONSUMPTION
(L/SqFt)
CARBON EMISSIONS
(MT CO2E/SqFt)
STORAGE
OTHER REAL ESTATE ASSET CLASSES
Source: Urban Land Institute, Greenprint Performance Report, Volume 12.
Other property types include Industrial, Multifamily, Office and Retail.
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CANADA SELF STORAGE CENTRES
Energy Reduction and Generation
Water Reduction and Conservation
motion sensored lighting, allowing for
on average, one washroom per property
usage only where and when required
given low occupant levels at our
LED lighting (internal and external) used
properties
in all new buildings and retrofitting light
energy efficient plumbing systems and
fixtures in existing buildings
appliances
solar power generation using solar roof
low-water irrigation systems
top and solar walls
landscaping using native and drought-
modern energy efficient HVAC systems
tolerant species
automated and self-adjusting internal
water run-off controls
thermostat temperature controls
storm water retention
all new roofs installed are reflective
“cool” roofs that help minimize energy
consumption
in floor radiant heating
Waste Reduction and Recycling
Green Building Design and
through our paper shredding and recycling
Construction Practices
segment within RecordXpress, we saved
energy efficient windows
260,000 trees, diverted 58,000 cubic
use of SolarWall systems or insulated
meters from landfill and saved 116,000
metal panels used in construction of
barrels of oil that would otherwise be used
new and retrofitted buildings
to harvest raw product
replacing standard exterior storage
sale of moving and packaging supplies
doors with energy efficient doors
made from recycled materials
insulated foundation walls to help maintain
waste recycling program at our stores
and keep the foundation slab warm
and corporate offices
all proposed acquisitions are subject to
reduced paper usage through more
environmental site assessments prior to
efficient technology options including
the closing
a paperless rental process
e-waste reduction and electronic
recycling program for decommissioned
computer equipment by either donating
refurbished equipment to local charities
or recycling equipment that cannot be
repurposed
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StorageVault is committed to providing stability and support for the health and
wellness of our more than 800 colleagues and the over 100 communities in which
we live and work across Canada. Giving back and working together contributes to
the benefit of all, and through our efforts we hope to create meaningful and lasting
impacts for future generations.
Our colleagues are at the heart of our business and are key to our success. We
believe that investing in our diverse team is investing in our future. As a meritocracy,
our culture of continuous improvement fosters growth and promotes advancement
within our organization. We have a dedicated team that supports our colleagues with
comprehensive training and professional development programs, as well as offers
personal health and wellbeing seminars known as “Wellness Wednesdays”.
In 2022, StorageVault continued to align with grassroots organizations in communities
from coast to coast – this is core to our community involvement. We remain passionate
about supporting needs within our communities, such as healthcare, food security, the
arts, sports, and education. This past year we expanded our community partnership
base to support more than 200 local, provincial and national organizations resulting in
immediate and positive impacts within communities throughout Canada.
We are incredibly thankful to be able to support our colleagues, communities and
clients across Canada.
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CANADA SELF STORAGE CENTRES E
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StorageVault’s Board and Management recognize the importance of equality,
diversity and is dedicated to maintaining the highest governance standards, which
is exemplified through the following:
• Diverse Board and Management team
• Annual Board review and vote to approve executive compensation
• Annual election by shareholders of Directors at AGM
• Independent Director led Audit, Acquisition and Governance, Nominating and
Compensation Committees
• Acquisition Committee Mandate to review, approve and recommend
transactions to the Board
• Regular review, update and reapproval of all Corporate Governance mandates,
principles and policies:
- Charter of the Audit Committee
- Charter of the Board of Directors
- Charter of the Governance, Nominating and Compensation Committee
- Code of Business Conduct (mandatory for all employees)
- Disclosure and Confidentiality Policy
- Diversity Policy
- Insider Trading and Reporting Policy
- Majority Voting Policy
- Whistleblower Policy
We are extremely proud to once again have been recognized in The Globe and Mail’s
2022 Report on Business Women Lead Here list. This annual editorial benchmark
identifies best-in-class executive gender diversity in corporate Canada. This award
recognizes StorageVault’s shared vision for equity and inclusion among the other
honorees. It is StorageVault’s continued desire to promote strong leadership in our
workplace and within communities across Canada.
With StorageVault’s graduation to the TSX in 2022, we have adopted more stringent
compliance requirements which include but are not limited to additional audit
scrutiny and testing to ensure that our corporate policies, practices and accounting
standards are met. To ensure good governance practices and transparency for all
our stakeholders, StorageVault’s corporate policies, mandates and charters are
publicly accessible on our corporate website.
StorageVault is committed to supporting and providing stability to assure the long-
term interests of all stakeholders through strong corporate governance practices.
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In 1999, Ms. Fleming founded Storage For Your Life which was sold to the Corporation in September
2015. She now serves the Corporation as a director and as a member of the Audit Committee,
Acquisition Committee and is the Chair of the Governance, Nominating and Compensation
Committee. Ms. Fleming is the President and CEO of CVL Investments Ltd., a private investment
entity. Throughout her career, she has been continuously active in private commercial real estate.
She holds a Business Certificate from Capilano University received in 1991.
Mr. Harris has more than 20 years of real estate investment and management experience. Mr. Harris
is the founder and CEO of Pinedale Capital Partners, a privately held investment management
firm focused on the acquisition, development and operation of industrial properties across the
United States. Mr. Harris is a graduate of Dalhousie University and the University of Kings College
in Canada where he received joint Science degrees in Economics. Mr. Harris also serves on the
board of Rippowam Cisqua School in Bedford, New York and on the boards of Sonida Senior Living
(NYSE:SNDA) and Outerspace Ops Inc., a third party logistics firm focused on the e-commerce
industry.
Chief Financial Officer of the Corporation. Mr. Khan is a Principal and Chief Financial Officer of The
Access Group of Companies focusing on the ownership, acquisition and development of storage,
multi-residential and commercial real estate in Canada, and prior to the internalization into the
Corporation, President of RecordXpress, a records management company. Mr. Khan is the Chief
Executive Officer and a director of Parkit Enterprise Inc. (TSX-V: PKT). He is the Chairperson of the
Canadian Self Storage Association Tax Committee.
Chair and Chief Executive Officer of the Corporation. Mr. Scott is currently a director and Audit
Committee Chair of Park Lawn Corporation (TSX: PLC). Mr. Scott is also a director and Chair of
Parkit Enterprise Inc. (TSX-V: PKT). Mr. Scott is a Principal and Chief Executive Officer of The Access
Group of Companies focusing on the ownership, acquisition and development of storage, multi-
residential and commercial real estate in Canada. Mr. Scott is also a Director and Treasurer of the
Canadian Self Storage Association.
In 2007, Mr. Simpson co-founded the Corporation and was President and Chief Executive Officer
until April 2015. He now serves the Corporation as a director and Acquisition Committee Chair. In
2000, Mr. Simpson co-founded Hospitality Network Canada now operating as HealthHub Patient
Engagement Solutions Inc. and was President and Chief Executive Officer until 2005 and Chair from
2011 to 2017. Recently, Mr. Simpson co-founded Proton Capital Corp., a capital pool corporation
trading on the TSX Venture Exchange. Mr. Simpson is also a member of the Saskatchewan
Government House Board of Trustees.
Annual Report 2022 | 16
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Annual Report 2022 | 17
CANADA SELF STORAGE CENTRES
Annual Report 2022 | 18
CANADA SELF STORAGE CENTRES Annual Report 2022 | 19
CANADA SELF STORAGE CENTRES Annual Report 2022 | 20
CANADA SELF STORAGE CENTRES Annual Report 2022 | 21
CANADA SELF STORAGE CENTRES StorageVault Canada Inc.
Consolidated Statements of Financial Position
As at December 31
Assets
Real estate and equipment, net (Note 5)
Goodwill and intangible assets, net (Note 6)
Cash and short term deposits
Prepaid expenses and other current assets
Unrealized fair value of derivative assets (Note 10)
Accounts receivable
Liabilities and Shareholders' Equity
Debt (Note 7)
Hybrid debentures (Note 8)
Lease liability (Note 15)
Deferred tax liability (Note 11)
Unrealized fair value of derivative liabilities (Notes 7, 10)
Accounts payable and accrued liabilities
Unearned revenue
Shareholders' Equity
Share capital (Note 9)
Dividends paid (Note 9)
Contributed surplus (Note 9)
Deficit
Commitments and Contingencies (Note 15)
Subsequent Events (Note 16)
The accompanying notes are an integral part of these consolidated financial statements.
2022
2021
$
1,854,904,102
122,026,220
22,534,826
9,946,492
4,700,494
6,640,026
$
1,680,464,788
113,922,750
25,143,600
6,381,806
6,142,747
4,100,518
$
2,020,752,160
$
1,836,156,209
$
1,526,719,769
128,682,883
80,518,572
40,468,430
2,222,058
20,860,268
14,125,077
1,813,597,057
$
1,332,474,745
127,551,885
77,094,742
45,377,007
-
18,507,714
12,943,600
1,613,949,693
424,954,374
(24,741,001)
38,451,552
(231,509,822)
207,155,103
406,565,894
(20,510,231)
26,418,718
(190,267,865)
222,206,516
$
2,020,752,160
$
1,836,156,209
Approved on behalf of the Board:
"signed" Steven Scott
Director
"signed" Iqbal Khan
Director
____________________________________________________________________________________
Annual Report 2022 | 22
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Consolidated Statements of Changes in Equity
For the Years Ended December 31
Share Capital
Balance, beginning of the period
Common shares issued, net of issuance costs (Note 9)
Share options, RSU and DSU redemptions (Note 9)
Common shares repurchased (Note 9)
Balance, end of the period
Dividends Paid
Balance, beginning of the period
Dividends paid during the period (Note 9)
Balance, end of the period
Contributed Surplus
Balance, beginning of the period
Redemption of stock options and warrants (Note 9)
Stock based compensation (Note 9)
Balance, end of the period
Deficit
Balance, beginning of the period
Net loss and comprehensive loss
Balance, end of the period
The accompanying notes are an integral part of these consolidated financial statements.
2022
2021
$
406,565,894
28,829,905
184,139
(10,625,564)
424,954,374
$
365,886,912
44,632,340
-
(3,953,358)
406,565,894
(20,510,231)
(4,230,770)
(24,741,001)
(16,439,355)
(4,070,876)
(20,510,231)
26,418,718
(1,598,194)
13,631,028
38,451,552
15,130,383
-
11,288,335
26,418,718
(190,267,865)
(41,241,957)
(231,509,822)
$
(154,402,773)
(35,865,092)
(190,267,865)
$
____________________________________________________________________________________
Annual Report 2022 | 23
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Consolidated Statements of Income (Loss) & Comprehensive Income (Loss)
For the Years Ended December 31
Revenue
Storage and related services
Management fees
Expenses
Operating costs
Acquisition and integration costs
Selling, general and administrative
Stock based compensation (Note 9)
Depreciation and amortization (Notes 5,6)
Interest (Notes 7,15)
Unrealized loss (gain) on derivative financial instruments (Note 7)
Net loss and comprehensive loss before tax
Deferred tax recovery (Note 11)
Net loss and comprehensive loss after tax
Net loss per common share
Basic
Diluted
Weighted average number of common shares outstanding
Basic
Diluted
The accompanying notes are an integral part of these consolidated financial statements.
2022
2021
$
259,933,061
1,895,228
261,828,289
$
206,625,933
2,034,745
208,660,678
85,794,347
9,587,840
21,048,950
13,631,028
104,126,661
74,801,847
3,664,312
312,654,985
69,660,346
8,027,373
17,817,594
11,288,335
93,189,387
58,508,492
(6,142,747)
252,348,780
(50,826,696)
9,584,739
(41,241,957)
$
(43,688,102)
7,823,010
(35,865,092)
$
$
$
(0.109)
(0.109)
$
$
(0.097)
(0.097)
378,051,496
378,051,496
370,267,629
370,267,629
____________________________________________________________________________________
Annual Report 2022 | 24
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Consolidated Statements of Cash Flows
For the Years Ended December 31
Cash from (used for) the following activities:
Operating activities
Net loss and comprehensive loss after tax
Adjustment for non-cash items:
Deferred tax recovery (Note 11)
Depreciation, amortization (Notes 5,6)
Amortization of deferred financing costs
Accretion of lease liabilities (Note 15)
Stock based compensation (Note 9)
Unrealized (gain) loss on derivative financial instruments (Note 7)
(Gain) loss on disposal of real estate and equipment (Note 5)
Cash flow from operations before non-cash working capital balances
Net change in non-cash working capital balances
Accounts receivable
Prepaid expenses and other current assets
Accounts payable and accrued liabilities
Unearned revenue
Cash flows from operating activities
Financing activities
Common shares issued, net of issuance costs (Note 9)
Dividends paid (Note 9)
Payments of lease obligation (Note 15)
Debt issuance costs
Cash advances from long term debt (Note 7)
Cash repayment of long term debt (Note 7)
Cancellation of share options (Note 9)
Proceeds from debenture issuance, net of issuance costs (Note 8)
Repurchase of common shares (Note 9)
Cash flows from financing activities
Investing activities
Cash additions to real estate and equipment (Note 5)
Cash paid in business combinations (Note 4)
Proceeds on disposal of real estate and equipment (Note 5)
Cash flows used for investing activities
Decrease in cash and short term deposits
Cash and short term deposits balance, beginning of year
Cash and short term deposits balance, end of year
The accompanying notes are an integral part of these consolidated financial statements.
2022
2021
$
(41,241,957)
$
(35,865,092)
(9,584,739)
104,126,661
2,919,741
3,035,180
13,631,028
3,664,312
(183,669)
76,366,557
(9,025,972)
(3,564,686)
2,352,553
1,181,477
67,309,929
448,659
(2,370,421)
(6,181,239)
(1,735,302)
610,341,010
(409,662,963)
(632,798)
-
(10,625,564)
179,581,382
(35,600,294)
(214,085,000)
185,209
(249,500,085)
(7,823,010)
93,189,387
2,136,717
2,218,901
11,288,335
(6,142,747)
39,062
59,041,553
(2,070,809)
(2,935,221)
(125,760)
3,114,518
57,024,281
-
(2,390,708)
(4,311,912)
(2,194,140)
309,110,285
(152,953,282)
-
54,943,494
(3,953,358)
198,250,379
(29,011,528)
(226,667,000)
19,935
(255,658,593)
(2,608,774)
(383,933)
25,143,600
25,527,533
$
22,534,826
$
25,143,600
____________________________________________________________________________________
Annual Report 2022 | 25
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
1. Description of Business
The consolidated financial statements of StorageVault Canada Inc. and its subsidiaries (the “Corporation”) as at and for
the year ended December 31, 2022, were authorized for issuance by the Board of Directors of the Corporation on February
22, 2023. The Corporation is incorporated under the Business Corporations Act of Alberta and is domiciled in Canada. Its
shares are publicly traded on the Toronto Stock Exchange (“Exchange”). The address of its registered office is 1000 – 250
2nd Street SW, Calgary, AB, T2P 0C1.
The Corporation’s primary business is owning, managing and renting self storage and portable storage space to individual
and commercial customers. The Corporation also stores, shreds, and manages documents and records for customers.
2. Basis of Presentation
These consolidated financial statements and the notes thereto present the Corporation’s financial results of operations
and financial position under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting
Standards Board (“IASB”) as at January 1, 2022. They have been prepared in accordance with International Accounting
Standard (“IAS”) 34 “ Financial Reporting” and accordingly these consolidated financial statements do not include all the
necessary annual disclosures in accordance with IFRS.
The consolidated financial statements have been prepared under the historical cost method, except for the revaluation
of certain financial assets and financial liabilities to fair value. The consolidated financial statements were prepared on a
going concern basis, and are presented in Canadian dollars, which is the Corporation’s functional currency.
3. Accounting Policies
Basis of Consolidation
The consolidated financial statements include the accounts of StorageVault Canada Inc. and its wholly owned subsidiary
Spyhill Ltd., both of which are headquartered in Toronto, Ontario. On January 1, 2020, the Corporation completed a
vertical amalgamation with its wholly owned subsidiary, Sentinel Self-Storage Corporation. Additionally, on January 1,
2021, the Corporation completed a vertical amalgamation with its wholly owned subsidiary, Spyhill Ltd. to form
StorageVault Canada Inc. The financial statements for the consolidated entities are prepared for the same reporting
period as StorageVault Canada Inc. using consistent accounting policies. All intercompany transactions and balances have
been eliminated in the preparation of these consolidated financial statements.
Revenue Recognition
Revenue from the rendering of services and sale of goods is recognized at the fair value of consideration received or
receivable after the deduction of any trade discounts and excluding sales taxes.
The Corporation’s revenue comprises the renting of storage units to customers, information and records management,
managing storage facilities on behalf of third parties and sale of merchandise, including locks, boxes, packing supplies and
equipment.
Revenue earned from the renting of storage units is accounted for under IFRS 16 – Leases. Storage units are rented to
customers pursuant to rental agreements which provide for weekly or monthly rental terms with non-refundable rental
payments. The rental agreements may be terminated by the customer without further obligation or cost upon vacating
the storage unit. Revenue from rental agreements is recognized over the rental term pursuant to the rental agreement.
Non-refundable customer deposits, which are received to hold a unit for rent at a future date, are deferred and recognized
as revenue upon commencement of the rental agreement. Receipts of rental fees for future periods are deferred and
recognized as revenue when each respective monthly period commences.
Notes: 1
Annual Report 2022 | 26
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 3 – Continued
The Corporation earns a management fee based on a percentage of gross revenues of the operations for managing
storage facilities for third parties. Revenue is recognized over time when the services are rendered.
Revenue for other storage related services is recognized in the month the respective services are provided. Receipts of
fees for other storage related services for future periods are deferred and recognized as revenue when each respective
monthly period commences. A provision is made for expected credit losses.
Revenue from the sale of merchandise, including locks, boxes, packing supplies and equipment, is recognized at the point
in time when the merchandise is delivered to the customer.
Business Combinations
All business combinations are accounted for by applying the acquisition method. Upon acquisition, the assets (including
intangible assets), liabilities and contingent liabilities acquired are measured at their fair value. The Corporation
recognizes intangible assets as part of business combinations at fair value at the date of acquisition. The determination
of these fair values is based upon management’s judgment and includes assumptions on the timing and amount of future
cash flows generated by the assets acquired and the selection of an appropriate discount rate. Acquisition and integration
costs are recognized in profit or loss as incurred.
Goodwill represents the excess of the identifiable cost of an acquisition over the fair value of the Corporation's share of
the net assets acquired at the date of acquisition. If the identifiable cost of acquisition is less than the fair value of the
Corporation's share of the net assets acquired (i.e. a discount on acquisition) the difference is credited to the
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) in the period of acquisition. At the
acquisition date, goodwill acquired is recognized as an asset and allocated to each cash-generating unit (“CGU”) expected
to benefit from the business combination’s synergies, and to the lowest level at which management monitors the
goodwill.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Corporation reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted retrospectively during the measurement period, or additional assets or liabilities
are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date
that, if known, would have affected the amounts recognized as of that date. The measurement period is the period from
the date of acquisition to the date the Corporation obtains complete information about facts and circumstances that
existed as of the acquisition date, up to a maximum of one year.
Cash and Short Term Deposits
Cash and short term deposits on the Consolidated Statements of Financial Position are comprised of cash at bank and on
hand, and short term, highly liquid deposits with an original maturity of three months or less. For the purpose of the
Consolidated Statements of Cash Flows, cash and short term deposits are defined as above, net of outstanding bank
overdrafts, except where no right of set-off exists.
Real Estate and Equipment
Real estate and equipment are stated at historical cost less accumulated depreciation and any impairment in value.
Historical cost includes expenditures that are directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Corporation and the cost of the item
can be measured reliably. The carrying amount of a replaced part is derecognized. All other repairs and maintenance are
charged to the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) during the financial period
in which they are incurred.
Notes: 2
Annual Report 2022 | 27
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 3 – Continued
Once an asset is available for use in the location and condition intended by management, it is depreciated to its residual
value using the appropriate depreciation rate set forth by management. Land is not depreciated.
Depreciation is calculated using the declining balance method to depreciate the cost of real estate and equipment to their
residual values over their estimated useful lives, as follows:
Land, Yards, Buildings & Improvements -
Buildings
Leasehold improvements
Business operating equipment
Fences and parking lots
Storage Containers -
Storage containers
4%
20%
10%
8%
10%
Vehicles -
Vehicles
Truck decks and cranes
30% to 40%
20%
Office and Computer Equipment -
Furniture and equipment
Computer equipment
20%
45%
The residual value and useful lives of real estate and equipment are reviewed, and adjusted if appropriate, at each
Consolidated Statement of Financial Position date. An asset’s carrying value is written down to its recoverable amount if
the asset’s carrying amount is greater than its estimated recoverable amount. These impairment losses are recognized in
the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Following the recognition of an
impairment loss, the depreciation charge applicable to the asset is adjusted prospectively in order to systematically
allocate the revised carrying amount, net of any residual value, over the remaining useful life.
Goodwill and Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets and liabilities
acquired at the date of acquisition. Goodwill is carried at cost less accumulated impairment losses.
Finite life intangible assets are carried at cost less accumulated amortization and accumulated impairment losses.
Amortization begins when an asset is available for use and is calculated on a straight-line basis to allocate the cost of
assets over their estimated useful lives as follows: Tenant Relationships – 22 to 180 months, Websites – 3 years,
Trademarks – 10 years.
Indefinite life intangible assets, consisting of management contracts, are carried at cost and are not amortized. The useful
lives of indefinite life intangible assets are reviewed at each Consolidated Statements of Financial Position date.
Goodwill and indefinite life intangibles are reviewed for impairment annually by assessing the recoverable amount of
each CGU to which it relates. The recoverable amount is the higher of fair value less costs of disposal, and value in use.
When the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognized. Any
impairment is recognized immediately in the Consolidated Statements of Income (Loss) and Comprehensive Income
(Loss). Any impairment recognized on goodwill is not subsequently reversed.
Income Taxes
Income tax is comprised of current tax and deferred tax. Income tax is recognized in the Consolidated Statements of
Income (Loss) and Comprehensive Income (Loss) except to the extent that it relates to items recognized directly in equity,
in which case it is recognized in equity.
Notes: 3
Annual Report 2022 | 28
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 3 – Continued
Current tax is the tax expected to be payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the liability method, providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination. In addition,
deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred
tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes
levied by the same tax authority on the same taxable entity, or on different taxable entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realized.
Stock Based Compensation
The fair value of stock options issued to directors, officers and consultants under the Corporation’s stock option plan is
estimated at the date of issue using the Black-Scholes option pricing model and charged to the Consolidated Statements
of Income (Loss) and Comprehensive Income (Loss) and contributed surplus. Each tranche in an award is considered a
separate award with its own vesting period and grant date fair value. On the exercise of options, the cash consideration
received and the fair value of the option previously credited to contributed surplus are credited to share capital.
The fair value of options issued to advisors in conjunction with financing transactions is estimated at the date of issue
using the fair value of the goods and services received first, if determinable, then by the Black-Scholes option pricing
model, and charged to share capital and contributed surplus over the vesting period. On the exercise of agent options,
the cash consideration received and the fair value of the option previously credited to contributed surplus are credited
to share capital.
When stock options are cancelled, it is treated as if the stock options had vested on the date of cancellation and any
expense not yet recognized for the award is recognized immediately. However, if a new option is substituted for the
cancelled option and is designated as a replacement option on the date that it is granted, the cancelled and the new
options are treated as if they were a modification of the original option.
Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes
in these assumptions can materially affect the fair value estimate, therefore, the existing models do not necessarily
provide a reliable single measure of the fair value of the Corporation’s share purchase options. Forfeitures are estimated
for each reporting period and adjusted as required to reflect actual forfeitures that have occurred in the period.
Income (Loss) per Share
Basic income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of
common shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing the net
earnings by the weighted average number of shares outstanding as adjusted for the potential dilution that would occur
if outstanding stock options, subordinated debentures, preferred shares or other potentially dilutive financial instruments
were exercised or converted to common shares. The weighted average number of diluted shares is calculated in
accordance with the treasury stock method. The treasury stock method assumes that the proceeds received from the
exercise of all potentially dilutive instruments are used to repurchase common shares at the average market price.
Notes: 4
Annual Report 2022 | 29
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 3 – Continued
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of shares are shown in
equity as a deduction from the proceeds received.
Segment Reporting
An operating segment is a component of the Corporation that engages in business activities from which it may earn
revenues and incur expenses. All operating segments’ operating results are reviewed regularly by the Corporation’s CEO
and/or CFO in order to make decisions regarding the allocation of resources to the segment. Segment results include
items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Financial Instruments
a) Financial assets - Pursuant to IFRS 9, the classification of financial assets is based on the Corporation’s assessment of
its business model for holding financial assets. The classification categories are as follows:
-
-
-
Financial assets measured at amortized cost: assets that are held within a business model whose
objective is to hold assets to collect contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. The Corporation classifies the following financial assets as measured at amortized cost:
cash and short term deposits, and accounts receivable.
Financial assets at fair value through other comprehensive income: assets that are held within a
business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets, and its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. The Corporation has no
financial assets classified in this category.
Financial assets at fair value through profit or loss: assets that do not meet the criteria for amortized
cost or fair value through other comprehensive income. The Corporation classifies its total return swaps
as financial assets at fair value through profit or loss.
Financial assets measured at amortized cost are measured at cost using the effective interest method. When
assessing impairment of financial assets measured at amortized cost, the Corporation applied the simplified
approach and has calculated expected credit losses based on lifetime expected credit losses. Under the simplified
method the Corporation uses a provision matrix to calculate expected credit losses for accounts receivable which is
based on the Corporation’s historical credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment. Loss allowances for financial assets measured at amortized cost are
deducted from the gross carrying amounts of the assets and the loss is recognized in the Consolidated Statements
of Income (Loss) and Comprehensive Income (Loss). When a trade receivable is uncollectible, it is written off against
the allowance for expected credit losses.
Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or
when the contractual rights to those assets are transferred.
b) Financial liabilities - The classification of financial liabilities is determined by the Corporation at initial recognition.
The classification categories are as follows:
-
-
Financial liabilities measured at amortized cost: financial liabilities initially measured at fair value less
directly attributable transaction costs are subsequently measured at amortized cost using the effective
interest method. Interest expense is recognized in the Consolidated Statements of Income (Loss) and
Comprehensive Income (Loss). The Corporation classifies the following financial liabilities as measured
at amortized cost: certain debt facilities, and accounts payable and accrued liabilities.
Financial liabilities measured at fair value through profit or loss: financial liabilities measured at fair
value with changes in fair value and interest expense recognized in the Consolidated
Notes: 5
Annual Report 2022 | 30
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 3 – Continued
Statements of Income (Loss) and Comprehensive Income (Loss). The Corporation classifies the
following financial liabilities as measured at fair value: certain debt facilities and interest rate swaps.
Financial liabilities are derecognized when the obligation is discharged, cancelled or expired.
Hybrid Debentures
When a contract contains an embedded derivative, the economic and risk characteristics of both the embedded derivative
and host contract are analyzed to understand whether or not they are closely related and to decide whether the
embedded derivative should be accounted for separately from the host contract.
The embedded features in the financial instrument issued by the Corporation are identified at inception. Each feature is
evaluated separately and classified either as part of the host liability, as a separate embedded liability or as an equity
instrument in accordance with the substance of the contractual arrangement.
Significant Accounting Estimates and Judgments
The preparation of the consolidated financial statements requires management to make judgments, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income, and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis of making judgments about carrying values
of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
Estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year include, but are not necessarily limited to:
-
-
-
-
-
Real estate and equipment - The Corporation determines the carrying value of its real estate and equipment
based on policies that incorporate estimates, assumptions, and judgments relative to the useful lives and
residual values of the assets.
Impairment of non-financial assets - Impairment exists when the carrying value of an asset or CGU exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value
less costs of disposal calculation is based on available data from binding sales transactions in an arm’s length
transaction of similar assets or observable market prices less incremental costs for the disposal of the asset. The
value in use calculation is based on a discounted cash flow model. The estimated future cash flows are derived
from management estimates, budgets, and past performance, and do not include activities to which the
Corporation is not yet committed or significant future investments that will enhance the asset’s performance in
the CGU being tested. The recoverable amount is sensitive to the discount rate used for the discounted cash
flow model as well as the expected future cash flows and the growth rate used for extrapolation purposes.
Purchase price allocations - Estimates are made in determining the fair value of assets and liabilities, including
the valuation of separately identifiable intangibles acquired as part of a business combination. These estimates
may be further based on management’s best assessment of the related inputs used in valuation models, such
as future cash flows and discount rates.
Income taxes - Income taxes are subject to measurement uncertainty due to the possibility of changes in tax
legislation or changes in the characterization of income sources.
Stock based compensation - Compensation costs accrued for stock based compensation plans are subject to the
estimation of the ultimate payout using pricing models such as the Black-Scholes model which is based on
significant assumptions such as volatility, dividend yield and expected term.
Notes: 6
Annual Report 2022 | 31
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 3 – Continued
Management judgments that may affect reported amounts of assets and liabilities, income and expenses include but are
not necessarily limited to:
-
-
For the purpose of assessing impairment of tangible and intangible assets, assets are grouped at the lowest level
of separately identified cash inflows which make up the CGU. Determination of what constitutes a CGU is subject
to management’s judgment. Management has identified each location as a separate CGU. The asset composition
of the CGU can directly impact the recoverability of the assets included within the CGU.
The determination of which entities require consolidation is subject to management’s judgment regarding levels
of control, assumptions of risk and other factors that may ultimately include or exclude an entity from the
classification of a subsidiary or other entity requiring consolidation. For the purpose of recording asset
acquisitions, management must exercise judgment to determine if the acquisition meets the definition of a
business. Such determinations may affect the recorded amounts of specific assets and liabilities, goodwill and/or
transaction costs.
- Management has applied judgment in assessing that the management contracts acquired have an indefinite
useful life because the Corporation purchased a complete system to operationally manage its own business and
that of other self storage businesses. The Corporation has acquired substantial know-how and expertise in
managing stores owned by third parties, including long term relationships, of which the Corporation will have
the benefit for an indefinite period of time. The management contracts have therefore been deemed to have
an indefinite useful life.
Notes: 7
Annual Report 2022 | 32
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
4. Acquisitions
During the year ended December 31, 2022, the Corporation completed the below transactions that met the definition of
a business under IFRS 3 - Business Combinations. These acquisitions have been accounted for using the acquisition
method with the results of the operations being included in the Consolidated Financial Statements of the Corporation
since the date of acquisition. Details of the acquisitions are:
First Quarter Acquisition:
During the first quarter, the Corporation completed the acquisition of one self storage location for $45,000,000 (subject
to customary adjustments). This acquisition was a non-arm’s length transactions. The purchase was paid for by the
issuance of common shares and cash on hand.
A summary of the acquisition is as follows:
Acquisition date:
Land, Yards, Buildings & Improvements
Tenant Relationships
Deferred tax
Goodwill
Net assets acquired
One Self Storage
Location
January 24, 2022
$
42,172,039
2,827,961
45,000,000
(3,659,608)
3,659,608
45,000,000
Consideration paid for the net assets acquired was obtained from the following:
Issuance of common shares
Cash
22,000,000
23,000,000
45,000,000
Revenue
Operating costs
Selected information for the acquisition, since its acquisition date:
1,794,422
769,770
1,024,652
1,916,354
929,840
(1,821,542)
Amortization
Interest
Net income (loss)
$
Notes: 8
Annual Report 2022 | 33
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 4 – Continued
Second Quarter Acquisitions:
During the second quarter, the Corporation completed the acquisition of seven self storage locations for $169,075,000
(subject to customary adjustments). These acquisitions consisted of both arm’s length and non-arm’s length*
transactions. The purchases were paid for by advances from debt, the issuance of common shares and cash on hand.
A summary of the acquisitions are as follows:
Acquisition date:
April 13, 2022
June 1, 2022
June 28, 2022
June 30, 2022
One Self Storage
Four Self Storage
One Self Storage
One Self Storage
Location
Locations
Location
Location*
Total
Land, Yards, Buildings & Improvements
Tenant Relationships
Net assets acquired
$
1,050,000
-
1,050,000
$
134,062,949
10,937,051
145,000,000
$
7,706,157
793,843
8,500,000
$
12,509,456
2,015,544
14,525,000
$
155,328,562
13,746,438
169,075,000
Consideration paid for the net assets acquired was obtained from the following:
Issuance of common shares
Cash
Debt
-
1,050,000
-
1,050,000
-
45,238,381
99,761,619
145,000,000
-
5,000,000
8,500,000
-
8,500,000
-
9,525,000
14,525,000
5,000,000
54,788,381
109,286,619
169,075,000
Selected information for the acquisitions, since their acquisition date:
Revenue
Operating costs
Amortization
Interest
Net income (loss)
4,301
6,140
(1,839)
24,724
-
(26,563)
$
4,313,580
936,494
3,377,086
4,230,445
3,015,022
(3,868,381)
$
243,837
68,508
175,329
181,062
$
-
(5,733)
753,996
219,904
534,092
554,489
574,154
(594,551)
$
5,315,714
1,231,046
4,084,668
4,990,720
3,589,176
(4,495,228)
$
Notes: 9
Annual Report 2022 | 34
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 4 – Continued
Third Quarter Acquisition:
During the third quarter, the Corporation completed the acquisition of one records management location for $4,100,000
(subject to customary adjustments). This acquisition was an arm’s length transaction. The purchase was paid for by cash
on hand.
A summary of the acquisition is as follows:
Acquisition date:
Land, Yards, Buildings & Improvements
Tenant Relationships
Net assets acquired
One Records
Management
Location
August 15, 2022
$
3,650,000
450,000
4,100,000
Consideration paid for the net assets acquired was obtained from the following:
Cash
4,100,000
Selected information for the acquisition, since its acquisition date:
Revenue
Operating costs
Amortization
Net income (loss)
118,471
93,075
25,396
109,596
(84,200)
$
Notes: 10
Annual Report 2022 | 35
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 4 – Continued
Fourth Quarter Acquisitions:
During the fourth quarter, the Corporation completed the acquisition of two self storage locations and two shredding
businesses for $22,910,000 (subject to customary adjustments). These acquisitions were arm’s length transactions. The
purchases were paid for by advances from debt and cash on hand.
A summary of the acquisitions are as follows:
Two Self Storage
Two Shredding
Locations
Businesses
Total
Acquisition date:
October 20, 2022
Land, Yards, Buildings & Improvements
Tenant Relationships
Trademarks
Deferred Tax
Goodwill
Net assets acquired
$
13,094,912
1,065,088
-
14,160,000
-
-
14,160,000
November 1, 2022
December 16, 2022
$
2,278,988
3,030,326
326,868
5,636,182
(1,018,845)
4,132,663
8,750,000
$
15,373,900
4,095,414
326,868
19,796,182
(1,018,845)
4,132,663
22,910,000
Consideration paid for the net assets acquired was obtained from the following:
Cash
Debt
4,984,200
9,175,800
14,160,000
8,750,000
-
8,750,000
13,734,200
9,175,800
22,910,000
Selected information for the acquisition, since its acquisition date:
Revenue
Operating costs
Amortization
Interest
Net income (loss)
247,755
98,365
149,390
168,446
112,240
(131,296)
$
819,284
454,992
364,292
332,819
14,281
17,192
$
1,067,039
553,357
513,682
501,265
126,521
(114,104)
$
Notes: 11
Annual Report 2022 | 36
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
5. Real Estate and Equipment
Land, Yards,
Buildings &
Improvements
Storage
Containers
Intangible
Tenant
Relationships
COST
December 31, 2020
Additions
Disposals
Business acquisitions
December 31, 2021
Additions
Disposals
$
1,549,064,746
58,959,840
(6,420)
236,938,621
1,844,956,787
32,526,371
(124,645)
Business acquisitions
December 31, 2022
216,524,501
2,093,883,014
$
$
18,765,994
905,498
-
-
19,671,492
2,215,261
(84,180)
-
$
21,802,573
$
146,350,556
-
-
33,303,379
179,653,935
-
-
21,119,813
200,773,748
$
Office &
Computer
Equipment
$
5,983,767
3,032,943
(7,533)
-
9,009,177
3,665,779
(28,625)
-
Vehicles
$
5,715,934
625,814
(256,190)
-
6,085,558
2,679,712
(197,690)
-
$
8,567,580
$
12,646,331
Total
$
1,725,880,997
63,524,095
(270,143)
270,242,000
2,059,376,949
41,087,123
(435,140)
237,644,314
2,337,673,246
$
ACCUMULATED DEPRECIATION
December 31, 2020
$
Depreciation
Disposals
December 31, 2021
Depreciation
Disposals
December 31, 2022
NET BOOK VALUE
December 31, 2021
December 31, 2022
171,056,045
65,776,211
(86)
236,832,170
76,249,193
(21,224)
313,060,139
$
7,875,922
1,100,702
$
100,323,449
24,512,435
-
8,976,624
1,102,639
(44,216)
10,035,047
$
-
124,835,884
24,564,623
-
$
149,400,507
$
4,213,008
560,282
(210,151)
4,563,139
739,120
(182,351)
5,119,908
2,491,754
1,213,332
(742)
3,704,344
1,449,337
(138)
5,153,543
$
$
$
$
$
$
285,960,178
93,162,962
(210,979)
378,912,161
104,104,912
(247,929)
482,769,144
1,608,124,617
1,780,822,875
10,694,868
11,767,526
54,818,051
51,373,241
1,522,419
3,447,672
5,304,833
7,492,788
1,680,464,788
1,854,904,102
Included in Land, Yards, Buildings & Improvements is Land at a carrying value of $660,211,893 (December 31, 2021 -
$549,001,859).
Included in Land, Yards, Buildings & Improvements is $31,812,900 (December 31, 2021 - $28,730,915) of construction in
process that is not being depreciated.
Included in Land, Yards, Buildings & Improvements are right-of-use assets at a carrying value of $75,282,052 (December
31, 2021 - $73,478,491), net of accumulated depreciation of $10,425,278 (December 31, 2021 - $5,872,467). The
continuity of the right-of-use assets is as follows:
Self Storage Properties
Balance, December 31, 2020
Additions
Depreciation charge for the period
Balance, December 31, 2021
Additions
Depreciation charge for the period
Balance, December 31, 2022
$
$
$
41,641,031
35,152,703
(3,315,243)
73,478,491
6,356,372
(4,552,811)
75,282,052
During the fourth quarter, the Corporation received a notice of expropriation for one of its properties from a government
agency. As of the date of the issuance of the financial statements, the Corporation has not received an offer for
compensation and therefore the impact of the expropriation on the Consolidated Financial Statements cannot be
reasonably estimated.
Notes: 12
Annual Report 2022 | 37
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
6. Goodwill and Intangible Assets
COST
December 31, 2020
Additions
Goodw ill
Managem ent
Contracts
$
97,527,924
$
16,300,000
-
-
December 31, 2021
97,527,924
16,300,000
Additions
Business acquisitions
December 31, 2022
-
7,792,271
105,320,195
$
-
-
$
16,300,000
Tradem arks
Website
Total
$
$
$
31,478
23,402
54,880
6,080
326,868
387,828
66,371
-
66,371
-
-
66,371
113,925,773
23,402
113,949,175
6,080
8,119,139
122,074,394
$
$
$
ACCUMULATED AMORTIZATION
December 31, 2020
Amortization
December 31, 2021
Amortization
December 31, 2022
NET BOOK VALUE
December 31, 2021
December 31, 2022
-
$
-
-
-
$
-
-
$
-
-
-
$
-
-
$
4,302
4,302
6,949
11,251
$
-
$
22,123
22,123
14,800
36,923
$
-
$
26,425
26,425
21,749
48,174
$
97,527,924
105,320,195
16,300,000
16,300,000
50,578
376,577
44,248
29,448
113,922,750
122,026,220
At December 31, 2022, the Corporation performed its annual impairment test on goodwill and its indefinite life intangible
assets. Goodwill is allocated to the group of CGUs that benefited from the synergies of the business combination on which
the goodwill arose. The Corporation used the fair value less costs of disposal method to determine the recoverable
amount of the CGUs. Based on the impairment test performed, the Corporation concluded that no impairment exists on
its goodwill and indefinite life intangible assets.
Information regarding each impairment test is as follows:
Manitoba and Saskatchewan group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 2% which is consistent with management’s knowledge of the local market and
is lower than the CGUs recent historical growth rate.
Cash flows were discounted at a pre-tax rate of 5.33% based on management’s judgement in this geographic
region.
Kamloops, BC group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 4%. The Corporation has seven stores in the region and is able to distribute
costs and operate more efficiently.
Cash flows were discounted at a pre-tax rate of 6.78% based on management’s experience in this geographic
region and the fact that the properties are on leased land.
London, ON group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of the property, with a net
operating income growth rate of 2% which is consistent with management’s knowledge of the local market.
Cash flows were discounted at a pre-tax rate of 5.00% based on management’s experience in this geographic
region.
Notes: 13
Annual Report 2022 | 38
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 6 – Continued
Sentinel Self-Storage group of CGUs
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 3.75%.
- Given the location of the stores in this portfolio, over 20 stores in major markets and highly desirable locations
in Canada, management believes that this growth rate is sustainable, and is consistent with the CGUs historical
growth rate.
Cash flows were discounted at a pre-tax rate of 4.18% based on management’s experience and the superior
quality and location of these properties.
-
Portable Storage group of CGUs
-
-
The cash flow projection includes specific estimates based on the expected life of storage containers, with a net
operating income growth rate of 3% based on management’s experience and the exclusive marketing channels
the Corporation has for this product type.
Cash flows were discounted at a pre-tax rate of 6.64% based on management’s experience in these markets.
Real Storage group of CGUs
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 4%.
- Given the location of the stores in this portfolio and with the Corporation already operating in many of the 27
-
markets in which these stores are located, management believes that this growth rate is sustainable.
Cash flows were discounted at a pre-tax rate of 4.48% based on management’s experience and location of these
properties.
Management Division CGU
-
-
The cash flow projection includes specific estimates for five years with a terminal growth rate of 4%, which
management feels would be representative of the future indefinite cash flows from these assets.
Cash flows were discounted at a pre-tax rate of 20% based on what management deemed appropriate for the
nature of this type of revenue stream.
RecordXpress Division CGU
-
-
The cash flow projection includes specific estimates for five years with a growth rate of 6%, which management
feels would be representative of the future cash flows from these assets.
Cash flows were discounted at a pre-tax rate of 6.90% based on management’s experience in the records
management business.
Toronto - Danforth CGU
-
-
The cash flow projection includes specific estimates based on the expected life of the properties, with a net
operating income growth rate of 30% during the first four years and 5% thereafter, which is consistent with
management’s knowledge of the local market.
Cash flows were discounted at a pre-tax rate of 4.75% based on management’s experience in this geographic
region.
Best Shredding Division CGU
-
-
The cash flow projection includes specific estimates for five years with a growth rate of 5%, which management
feels would be representative of the future cash flows from these assets.
Cash flows were discounted at a pre-tax rate of 9.00% based on management’s experience in the records
management business.
Notes: 14
Annual Report 2022 | 39
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 6 – Continued
The most sensitive inputs to the value in use model used for these groups of CGUs are the growth rate and the discount
rate:
-
-
A 1% increase or decrease in the growth rate would not result in an impairment of these groups of CGUs.
A 1% increase or decrease in the discount rate would not result in an impairment of these groups of CGUs.
Group of CGUs
Goodwill
Carrying Value
Goodwill
Carrying Value
Manitoba and Saskatchewan
$
2,621,716
$
27,238,439
$
2,621,716
$
24,248,580
December 31, 2022
December 31, 2021
Kamloops, BC
London, ON
Sentinel Self-Storage
Portable Storage
Real Storage
Management Division
RecordXpress Division
Toronto - Danforth
Best Shredding Division
76,470
142,807
52,442,159
2,578,968
33,622,150
3,364,706
2,678,948
3,659,608
4,132,663
6,029,878
1,967,836
358,530,620
15,649,269
206,517,809
19,364,705
18,034,988
43,335,304
8,250,000
76,470
142,807
52,442,159
2,578,968
33,622,150
3,364,706
2,678,948
-
-
6,295,157
1,377,977
371,507,906
13,528,056
235,478,729
19,364,705
8,953,332
-
-
$
105,320,195
$
704,918,848
$
97,527,924
$
680,754,442
Notes: 15
Annual Report 2022 | 40
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
7. Debt
December 31, 2022
Weighted
Average
Rate
Range
Balance
December 31, 2021
Weighted
Average
Rate
Range
Balance
Mortgages
At amortized cost - Fixed
2.84% to 4.98%
Maturity: Apr 2023 to Dec 2029
4.48%
251,048,897
2.84% to 5.5%
4.21%
338,546,891
Maturity: Jan 2022 to Apr 2028
At amortized cost - Variable
7.45% to 8.6%
8.08%
84,653,250
3% to 3.95%
3.30%
108,144,132
Maturity: Feb 2023 to Jul 2024
Maturity: Oct 2022 to Nov 2024
At FVTPL - Variable
- Fixed via interest rate swap
783,891,417
(32,836,542)
751,054,875
4.31%
455,173,279
9,873,937
465,047,216
3.82%
Maturity: Jan 2024 to Jan 2031
Maturity: Jan 2024 to Dec 2030
4.65%
1,086,757,022
3.91%
911,738,239
Lines of Credit and Promissory Notes
At amortized cost - Fixed
3.50%
4,000,000
3.95%
38,536,200
Maturity: Dec 2023
Maturity: Apr 2022 to Dec 2023
At amortized cost - Variable
7.28%
140,618,468
3.53%
86,909,468
Maturity: Jun 2023 to Oct 2025
Maturity: May 2024 to Dec 2024
At FVTPL - Variable
- Fixed via interest rate swap
314,288,134
(14,288,134)
300,000,000
3.88%
296,048,729
3,951,271
300,000,000
3.94%
Maturity: Feb 2025
Maturity: Feb 2025
4.95%
444,618,468
3.86%
425,445,668
Deferred financing costs, net of accretion
(4,655,721)
(4,709,162)
4.73%
1,526,719,769
3.89%
1,332,474,745
Reconciliation of Debt
The following table reconciles the changes in cash flows from financing activities for the Corporation's debt:
Debt, beginning of period
$
1,332,474,745
$
1,179,739,132
December 31, 2022
December 31, 2021
Advances from debt
Repayment of debt
Amounts offset against accounts receivable
Change in fair value of debt measured at FVTPL
Change in fair value of interest rate swaps
Total cash flow from debt financing activities
Change in deferred financing costs
610,341,010
(409,662,963)
(6,486,464)
(60,949,884)
60,949,884
194,191,583
53,441
309,110,285
(152,953,282)
(2,529,521)
37,842,949
(37,842,949)
153,627,482
(891,869)
Debt, end of period
$
1,526,719,769
$
1,332,474,745
Notes: 16
Annual Report 2022 | 41
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 7 – Continued
The bank prime rate at December 31, 2022 was 6.45% (December 31, 2021 – 2.45%).
Mortgages are secured by a first mortgage charge on the real estate and equipment of the Corporation, general security
agreements covering all assets of the Corporation, general assignment of rents and leases, and assignments of insurance
coverage over all assets of the Corporation. The Corporation must maintain certain financial ratios to comply with the
facilities. These covenants include debt service coverage ratios, a fixed charge coverage ratio, a tangible net worth ratio,
and a loan to value ratio. As of December 31, 2022, the Corporation is in compliance with all covenants.
The deferred financing costs consist of fees and costs incurred to obtain the related mortgage financing, less accumulated
amortization.
Principal repayments on mortgages, lines of credit, and promissory notes in each of the next five years are estimated as
follows:
Year 1
Year 2
Year 3
Year 4
Year 5
Thereafter
$
$
$
$
$
$
560,892,801 (includes lines of credit and promissory note of $444.6 million)
185,404,122
151,099,297
39,202,009
141,244,089
453,533,172
The Corporation entered into interest rate swap contracts in order to fix the interest rate on $1.1 billion of debt at a
weighted average rate of 4.19%. On $447 million of this debt, the bank entered into interest rate swap cancellation
agreements, allowing them to cancel the original swap agreements between April 8, 2024 and October 27, 2025.
At December 31, 2022, the Corporation recognized a derivative liability of $2.2 million (December 31, 2021 – $nil). During
the year ended December 31, 2022, the Corporation recognized an unrealized (gain) loss on derivative financial
instruments of $3.7 million (December 31, 2021 – ($6.1 million)). These derivative financial instruments mature between
January 2024 and January 2031.
8. Hybrid Debentures
2020 Hybrid Debentures
On July 20, 2020, $75 million of unsecured senior hybrid debentures were issued at a price of $1,000 per debenture with
a term of sixty-six months, due January 31, 2026. These debentures bear a fixed interest rate of 5.75% per annum, payable
semi-annually in arrears on January 31 and July 31 of each year, commencing January 31, 2021. The intended use of the
net proceeds of the debentures is to pay down the credit facility and fund anticipated capital expenditures.
On and after January 31, 2024 and prior to January 31, 2025, the debentures will be redeemable in whole or in part from
time to time at the Corporation’s option at a redemption price equal to 102.875% of the principal amount of the
debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and
after January 31, 2025 and prior to the maturity date, the debentures will be redeemable, in whole or in part, from time
to time at the Corporation’s option at par plus accrued and unpaid interest, if any, up to but excluding the date set for
redemption.
On redemption or at maturity on January 31, 2026, the Corporation may elect to, in whole or part, convert the debentures
into freely tradable common shares. In such event, payment will be satisfied by delivering for each $1,000 due, that
number of freely tradable shares obtained by dividing $1,000 by 95% of the current market price on the date fixed for
redemption or maturity, as the case may be. Any accrued and unpaid interest will be paid in cash.
Notes: 17
Annual Report 2022 | 42
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 8 – Continued
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $75 million net
of deferred financing costs of $3.5 million. Each embedded feature was evaluated separately and it was determined that
the economic and risk characteristics are closely related to the host contract and therefore were not accounted for as
separate financial instruments.
2021 Hybrid Debentures
On July 19, 2021, $57.5 million of unsecured senior hybrid debentures were issued at a price of $1,000 per debenture
with a term of sixty-six months, due September 30, 2026. These debentures bear a fixed interest rate of 5.5% per annum,
payable semi-annually in arrears on March 31 and September 30 of each year, commencing September 30, 2021. The
intended use of the net proceeds of the debentures is to fund potential future opportunities and for general corporate
purposes.
On and after September 30, 2024 and prior to September 30, 2025, the debentures will be redeemable in whole or in part
from time to time at the Corporation’s option at a redemption price equal to 102.750% of the principal amount of the
debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for redemption. On and
after September 30, 2025 and prior to the maturity date, the debentures will be redeemable, in whole or in part, from
time to time at the Corporation’s option at par plus accrued and unpaid interest, if any, up to but excluding the date set
for redemption.
On redemption or at maturity on September 30, 2026, the Corporation may elect to, in whole or part, convert the
debentures into freely tradable common shares. In such event, payment will be satisfied by delivering for each $1,000
due, that number of freely tradable shares obtained by dividing $1,000 by 95% of the current market price on the date
fixed for redemption or maturity, as the case may be. Any accrued and unpaid interest will be paid in cash.
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $57.5 million
net of deferred financing costs of $2.5 million. Each embedded feature was evaluated separately and it was determined
that the economic and risk characteristics are closely related to the host contract and therefore were not accounted for
as separate financial instruments.
The debentures are subsequently measured at amortized cost using the effective interest method over the life of the
debenture. The balance of the hybrid debentures is:
December 31, 2022
December 31, 2021
Opening balance
$
127,551,885
Additions during period
Issuance costs
Accretion during period
Ending balance
-
-
1,130,998
128,682,883
$
$
71,765,725
57,500,000
(2,556,506)
842,666
127,551,885
$
Notes: 18
Annual Report 2022 | 43
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
9. Share Capital
Authorized: Unlimited number of common, voting shares of no par value.
Authorized: Unlimited number of preferred non-voting shares issuable in series at an issuance price of $1 per share.
Common shares issued:
Balance, December 31, 2020
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
Share issuance costs
Common shares repurchased
Balance, December 31, 2021
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
RSU/DSU redemption
Common shares repurchased
Balance, December 31, 2022
Number of Shares
Amount
366,254,826
$
365,886,912
8,810,925
363,507
-
-
(792,815)
43,575,000
1,637,248
(548,300)
(31,608)
(3,953,358)
374,636,443
406,565,894
4,171,246
306,499
661,151
94,421
(1,852,400)
27,000,000
1,829,905
(448,659)
632,798
(10,625,564)
378,017,360
$
424,954,374
The Corporation will, from time to time, issue common shares to the public or to vendors to fund the purchase of storage
assets. Future issuances will be dependent upon financing needs, acquisition opportunities, expansion plans, equity
market conditions and transaction pricing.
The Corporation may from time to time purchase its’ common shares in accordance with the rules prescribed by the
Exchange or regulatory policies.
Dividend Reinvestment Plan
Represents common shares issued under the Corporation’s dividend reinvestment plan (“DRIP") for holders of common
shares. Under the terms of the DRIP, eligible registered holders of a minimum of 10,000 Common Shares (the
"Shareholders") may elect to automatically reinvest their cash dividends, payable in respect to the common shares, to
acquire additional common shares, which will be issued from treasury or purchased on the open market. The Corporation
may initially issue up to 5,000,000 common shares under the DRIP, which may be increased upon Board of Directors
approval, acceptance of the increase by the Exchange, and upon public disclosure of the increase.
Contributed surplus:
Opening balance
Stock based compensation
Share option, RSU/DSU redemptions
Ending balance
December 31, 2022
December 31, 2021
$
$
26,418,718
13,631,028
(1,598,194)
38,451,552
$
15,130,383
11,288,335
-
$
26,418,718
Notes: 19
Annual Report 2022 | 44
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 9 – Continued
Stock Options
The Board of Directors of the Corporation may from time to time, at its discretion, and in accordance with the Exchange
requirements, grant to directors, officers, employees and technical consultants of the Corporation, non-transferable
options to purchase common shares provided that: i) the number of common shares reserved for issuance will not exceed
10% of the issued and outstanding common shares; ii) the options are exercisable for a period of up to 10 years from the
date of grant; iii) the number of common shares reserved for issuance to any individual director or officer will not exceed
5% of the issued and outstanding common shares; and iv) the number of common shares reserved for issuance to all
technical consultants, if any, will not exceed 2% of the issued and outstanding shares. The exercise price for purchasing
these shares cannot be less than the minimum exercise price as provided by Exchange rules.
The following table summarizes information about stock options outstanding and exercisable as at:
December 31, 2022
Weighted Average
Exercise Price
Options
December 31, 2021
Weighted Average
Exercise Price
Options
Opening
Exercised/Expired
Granted
Closing and Exercisable
30,319,650
(949,650)
$3.34
1.48
6,972,000
36,342,000
5.94
$3.88
23,639,650
(155,000)
6,835,000
30,319,650
$2.47
1.80
6.31
$3.34
The fair value of options granted was estimated on the date of the grant, as determined by using the Black-Scholes option
pricing model with the following assumptions:
Dividend Yield
Risk-Free Interest Rate
Expected Life of Options
Expected Volatility of the Corporation's Common Shares
Stock options exercisable and outstanding are as follows:
2022
0.01%
3.11%
4 Years
30.15%
2021
0.01%
1.15%
4 Years
29.44%
Exercise Price
$
0.33
$
0.41
$
0.50
$
1.36
$
1.78
$
2.52
$
2.90
$
3.98
$
6.31
$
5.94
Options exercisable and outstanding
Vesting Date
Jun. 19, 2014
Apr. 28, 2015
Sep. 14, 2015
Dec. 21, 2016
Mar. 16, 2017
May 4, 2018
May 28, 2019
Dec. 15, 2020
Dec. 20, 2021
Dec. 19, 2022
Expiry Date
Jun. 19, 2024
Apr. 28, 2025
Sep. 14, 2025
Dec. 21, 2026
Mar. 16, 2027
May 4, 2028
May 28, 2029
Dec. 15, 2030
Dec. 20, 2031
Dec. 19, 2032
-
December 31, 2022 December 31, 2021
140,000
1,560,650
1,550,000
2,785,000
2,810,000
2,825,000
5,854,000
5,975,000
6,820,000
1,125,500
1,480,000
2,770,000
2,795,000
2,810,000
5,764,000
5,858,000
6,767,500
6,972,000
36,342,000
-
30,319,650
Notes: 20
Annual Report 2022 | 45
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 9 – Continued
Equity Incentive Plan
Under the Corporation’s Equity Incentive Plan passed on May 30, 2018 (the “Plan”), directors, employees and consultants
are eligible to receive awards, in the form of Restricted Share Units (“RSUs”), Deferred Share Units (“DSUs”) and Named
Executive Officer Restricted Share Units (“Neo RSUs”), as and when granted by the Board, at its sole discretion. The
maximum number of awards that may be issued under the Plan is 17,545,677. The maximum number of shares that may
be reserved for issuance under the Plan, together with any of the Corporation’s other share-based compensation
arrangements, may not exceed 10% of the issued shares of the Corporation.
The RSUs and DSUs granted vest in equal annual amounts over three years. The Neo RSUs vest three years after the date
of grant. RSUs, DSUs and Neo RSUs are entitled to be credited with dividend equivalents in the form of additional RSUs,
DSUs and Neo RSUs, respectively.
With certain exceptions, the Plan provides that (i) the maximum number of awards that may be granted to any one
participant together with any other share-based compensation arrangements, in any 12 month period, may not exceed
5% of the issued shares, and, in the case of any consultant, may not exceed 2% of the issued shares; and (ii) the total
value of all securities that may be issued to any non-employee director under all of the Corporation’s security based
compensation arrangements may not exceed $150,000 per annum.
The Corporation entered into Total Return Swaps (“TRS”) as economic hedges of the Corporation’s DSUs and RSUs. Under
the terms of the TRS, a bank has the right to purchase the Corporation’s shares in the marketplace as a hedge against the
returns in the TRS. At December 31, 2022, 3,081,360 TRS were outstanding at a value of $4,700,494 (December 31, 2021
– 1,533,556 TRS were outstanding at a value of $6,142,747).
At December 31, 2022, 100% of the combined DSU and RSU exposures were economically hedged. Hedge accounting is
not applied for the DSU/RSU hedging program.
During the year ended December 31, 2022, the Corporation issued 266,268 common shares at a value of $1,786,852
(December 31, 2021 – 282,906 common shares at a value of $1,131,624) under the Plan. A total of 1,123,429 common
shares at a value of $5,069,112 were outstanding at December 31, 2022 (December 31, 2021 – 857,161 common shares
at a value of $3,282,260).
Dividends
A cash dividend of $0.002775 per common share was declared on March 15, 2022, and paid to shareholders of record on
March 31, 2022.
A cash dividend of $0.002789 per common share was declared on June 15, 2022, and paid to shareholders of record on
June 30, 2022.
A cash dividend of $0.002803 per common share was declared on September 15, 2022, and paid to shareholders of record
on September 29, 2022.
A cash dividend of $0.002817 per common share was declared on December 15, 2022, and paid to shareholders of record
on December 30, 2022.
Notes: 21
Annual Report 2022 | 46
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
10. Financial Risk Management and Fair Value
The Corporation is required to disclose certain information concerning its financial instruments. The fair values of the
Corporation’s cash and short term deposits, accounts receivable and, accounts payable and accrued liabilities
approximate their carrying amount due to the relatively short periods to maturity of these financial instruments. The fair
value of the Corporation’s debt obligations is estimated based on discounted future cash flows using discount rates that
reflect current market conditions for instruments with similar terms and risks. Such fair value estimates are not necessarily
indicative of the amounts the Corporation might pay or receive in actual market transactions.
IFRS establishes a three tier fair value hierarchy to reflect the significance of the inputs used in measuring the fair value
of the Corporation’s financial instruments. The three levels are:
Level 1 – This level includes assets and liabilities measured at fair market value based on unadjusted quoted
prices for identical assets and liabilities in active markets that the Corporation can access on the measurement
date.
Level 2 – This level includes measurements based on directly or indirectly observable inputs other than quoted
prices included in Level 1. Financial instruments in this category are measured using valuation models or other
standard valuation techniques that rely on observable market inputs.
Level 3 – The measurements used in this level rest on inputs that are unobservable, unavailable, or whose
observable inputs do not justify the largest part of the fair value instrument.
The fair value of financial instruments was as follows:
December 31, 2022
Fair Value
Hierarchy
Carrying
Amount
Fair
Value
December 31, 2021
Fair
Value
Carrying
Amount
Financial instruments:
Debt - at amortized cost
Debt - at FVTPL
Interest rate swaps
Derivative assets - at FVTPL
Derivative liabilities - at FVTPL
Level 2
Level 2
Level 2
Level 2
Level 2
(475,664,894)
(467,190,719)
(567,427,529)
(569,622,751)
(1,098,179,551)
47,124,676
4,700,494
(2,222,058)
(1,098,179,551)
47,124,676
4,700,494
(2,222,058)
(751,222,008)
(13,825,208)
6,142,747
(751,222,008)
(13,825,208)
6,142,747
-
-
Financial instruments may expose the Corporation to a number of financial risks including interest rate risk, credit risk
and environmental risk.
a) Interest rate risk – Interest rate risk arises from changes in market interest rates that may affect the fair
value of future cash flows from the Corporation’s financial assets or liabilities. Interest rate risk may be
partially mitigated by holding both fixed and floating rate debt, or by staggering the maturities of fixed rate
debt. The Corporation is exposed to interest rate risk primarily relating to its long term debt. The
Corporation will manage interest rate risk by utilizing fixed interest rates on its mortgages where possible,
entering into interest rate swap contracts, staggering maturities over a number of years to mitigate
exposure to any single year, and by attempting to ensure access to diverse sources of funding. There is
interest rate risk associated with variable rate mortgages and lines of credit as interest expense is impacted
by changes in the prime rate. The impact on the Consolidated Statements of Income (Loss) and
Comprehensive Income (Loss) if interest rates on variable rate debt had been 1% higher or lower for the
year ended December 31, 2022 would have been approximately $2,252,717, respectively (December 31,
2021 - $1,950,536).
Notes: 22
Annual Report 2022 | 47
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 10 – Continued
b) Credit risk – Credit risk arises from the possibility that customers may experience financial difficulty and be
unable to fulfill their financial obligations to the Corporation. The risk of incurring bad debts often arises if
storage customers relocate and cannot be found to enforce payment, or if storage customers abandon their
possessions. The extent of bad debts can be mitigated by quickly following up on any unpaid amounts
shortly after the due date, enforcing late fees, denying access to any customers with delinquent accounts,
and ultimately seizing the possessions of the customer. Additionally, the Corporation typically rents to
numerous customers, each of which constitutes significantly less than 1% of the Corporation’s monthly
revenue. This diversification in the customer base reduces credit risk from any given tenant.
The Corporation has $847,000 of receivables from related parties at December 31, 2022. Management
believes there is low credit risk associated with related party balances due to the nature of the relationships
and the historical loss rates.
Change in the Corporation’s allowance for expected credit losses is as follows:
Balance December 31, 2020
Charges or adjustments during the period
Balance December 31, 2021
Charges or adjustments during the period
Balance December 31, 2022
$
413,491
321,905
735,396
(235,860)
499,536
$
The creation and release of the allowance for expected credit losses has been included in operating costs
in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Amounts charged to
the allowance account are generally written off when there is no expectation of recovering additional cash.
c) Liquidity risk – Liquidity risk is the risk that the Corporation will be unable to meet its financial obligations
as they fall due. The Corporation manages liquidity risk through cash flow forecasting and regular
monitoring of cash requirements including anticipated investing and financing activities. Typically, the
Corporation ensures that it has sufficient cash or liquid investments available to meet expected operating
expenses for a period of 30 days, excluding the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters. For the foreseeable future, the Corporation anticipates
that cash flows from operations, working capital, and other sources of financing will be sufficient to meet
its operating requirements, debt repayment obligations and will provide sufficient funding for anticipated
capital expenditures. It is the Corporation’s intention to renew any debt coming due in the next fiscal year.
The maturities of long term financial liabilities are summarized in Note 7.
d) Environmental risk – Environmental risk is inherent in the ownership of property. Various municipal,
provincial, and federal regulations can result in penalties or potential liability for remediation should
hazardous materials enter the environment. The presence of hazardous substances could also impair the
Corporation’s ability to finance or sell the property, or it may expose the Corporation to civil lawsuits. To
mitigate such risk, the Corporation will procure recent or updated environmental reports for all acquisitions.
It also prohibits the storage of hazardous substances as a condition of the rental contract signed by
customers.
Unless otherwise noted, it is management’s opinion that the Corporation is not exposed to significant currency risk.
Notes: 23
Annual Report 2022 | 48
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
11.
Income Tax
Loss before taxes
Combined federal and provincial statutory income tax rate
Income tax recovery calculated at statutory rate
Non-deductible items
Change in tax rate and other items
Income tax expense (recovery)
2022
2021
(50,826,696)
26.50%
(13,469,074)
3,549,770
334,565
(9,584,739)
(43,688,102)
26.50%
(11,577,348)
2,997,960
756,378
(7,823,010)
Movements in deferred tax assets (liabilities) related to temporary differences during the year are as
follows:
December 31,
2021
Recognized in
earnings
Acquired in Business
Combination
December 31,
2022
Property, plant and equipment
Goodwill and intangible assets
Long term debt
Unrealized fair value of derivatives
Lease liability
Deferred financing costs
Non-capital loss carry forwards
Deferred tax asset (liability)
(121,739,559)
8,008,226
(2,505,299)
(1,593,557)
19,999,987
2,219,754
50,233,441
(45,377,007)
(4,762,930)
4,551,645
298,816
948,127
968,535
(380,180)
7,960,726
9,584,739
(3,454,847)
(1,505,046)
-
-
-
-
283,731
(4,676,162)
(129,957,336)
11,054,825
(2,206,483)
(645,430)
20,968,522
1,839,574
58,477,898
(40,468,430)
12. Related Party Transactions
The Corporation holds a Master Franchise Agreement from Canadian PUPS Franchises Inc. (CPFI) which provides the
Corporation with the exclusive Canadian franchise rights for the development and operation of portable storage
throughout Canada. CPFI is a corporation related to Iqbal Khan and Steven Scott who are directors of the Corporation.
The Corporation pays a monthly royalty of 3.5% on the gross sales. During the year ended December 31, 2022, the
Corporation paid $405,196, respectively (December 31, 2021 - $382,592) for royalties and $3,046,665, (December 31,
2021 - $1,014,360) for storage containers and other equipment under the Master Franchise Agreement.
Included in accounts payable and accrued liabilities, relating to the previously noted transactions, at December 31, 2022
was $58,225, (December 31, 2021 - $33,087) payable to CPFI.
The Corporation has management agreements with Access Self Storage Inc. and related companies (“Access Group”).
These companies are related to Iqbal Khan and Steven Scott who are directors of the Corporation. The Corporation
invoices the Access Group for management fees as well as additional services it provides as part of the management
agreements. The Access Group will also invoice the Corporation for construction, maintenance and other services related
to its day-to-day operations.
During the year ended December 31, 2022, the Corporation received $8,471,116 (December 31, 2021 - $6,856,964) in
payments and reimbursements related to the management agreements. During the year ended December 31, 2022, the
Corporation also incurred $32,508,783 (December 31, 2021 - $24,658,103) in expenditures related to construction,
maintenance and other services related to its day-to-day operations.
Notes: 24
Annual Report 2022 | 49
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 12 – Continued
Included in accounts payable and accrued liabilities as at December 31, 2022 was $522,072 (December 31, 2021 -
$1,503,979) payable to the Access Group. Included in accounts receivable as at December 31, 2022 was $846,587
(December 31, 2021 - $491,942) receivable from the Access Group.
Key management personnel are those persons having authority and responsibility for planning, directly and indirectly
directing, and controlling the activities of the Corporation. Key management personnel are defined as officers and
Directors of the Corporation. The remuneration of key management personnel for employment services rendered are as
follows:
December 31, 2022
December 31, 2021
Wages, management fees, bonuses and directors fees
Stock based compensation
13. Capital Risk Management
$
$
610,212
6,065,672
6,675,884
$
$
612,497
5,469,478
6,081,975
The Corporation’s objectives when managing capital are to safeguard the Corporation’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders. The Corporation defines capital
as shareholders’ equity excluding contributed surplus and long term debt. The Corporation manages the capital structure
and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying
assets. To maintain or adjust the capital structure, the Corporation may attempt to issue new shares, issue new debt,
acquire or dispose of assets, and adjust the amount of cash and short term deposits. The Board of Directors does not
establish a quantitative return on capital criteria, but rather promotes year over year sustainable growth.
The Corporation reviews and assesses its capital structure on an ongoing basis. The Corporation determines the
appropriate mortgage debt to be placed on properties at the time a particular property is acquired or when an existing
mortgage financing matures. Consideration is given to various factors including, but not limited to: interest rates,
financing costs, the term of the mortgage and the strength of cash flow arising from the underlying asset. Mortgage debt
is usually only secured by the underlying asset. The Corporation monitors its capital using a debt to fair value ratio. Except
for the debt covenants described in Note 7, the Corporation is not subject to any externally imposed capital requirements.
14. Segmented Information
The Corporation operates three reportable business segments. Each segment is a component of the Corporation for which
separate discrete financial information is available for evaluation by the chief decision makers of the Corporation.
-
-
Self Storage – involves the customer leasing space at the Corporation’s property for short or long term storage.
Self storage also includes customers utilizing space for inventory storage for last mile delivery, small commercial
operations, and vehicles.
Portable Storage – involves delivering a portable storage unit to the customer. The customer can opt to keep
the portable storage unit at their location, or have it moved to another location for further storage.
- Management Division – involves revenues generated from the management of stores owned by third parties.
The Corporation evaluates performance and allocates resources based on earnings before interest, taxes, depreciation
and amortization, and stock based compensation. Corporate costs are not allocated to the segments and are shown
separately.
Notes: 25
Annual Report 2022 | 50
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 14 – Continued
For the Year Ended December 31, 2022
Self
Storage
Portable
Storage
Management
Division
Corporate
Total
Revenue
Operating costs
Net operating income
$
248,624,166
$
11,308,895
$
1,895,228
$
-
$
261,828,289
78,000,948
170,623,218
7,793,399
3,515,496
-
1,895,228
-
-
85,794,347
176,033,942
Acquisition and integration
Selling, general and admin.
Stock based compensation
-
-
-
-
-
-
Depreciation and amortization
101,624,227
1,658,206
Interest
74,801,847
Unrealized loss (gain) on
derivative financial instruments
Deferred tax recovery
-
-
-
-
-
-
-
-
-
-
-
-
9,587,840
9,587,840
21,048,950
21,048,950
13,631,028
13,631,028
844,228
104,126,661
-
74,801,847
3,664,312
3,664,312
(9,584,739)
(9,584,739)
Net income (loss)
$
(5,802,856)
$
1,857,290
$
1,895,228
$
(39,191,619)
$
(41,241,957)
Additions:
Real estate and equipment
275,662,009
2,797,573
-
271,855
278,731,437
For the Year Ended December 31, 2021
Self
Storage
Portable
Storage
Management
Division
Corporate
Total
Revenue
Operating costs
Net operating income
$
196,105,888
$
10,520,045
$
2,034,745
$
-
$
208,660,678
62,465,194
133,640,694
7,195,152
3,324,893
-
2,034,745
-
-
69,660,346
139,000,332
Acquisition and integration
Selling, general and admin.
Stock based compensation
-
-
-
-
-
-
Depreciation and amortization
90,646,506
1,558,229
Interest
58,508,492
Unrealized loss (gain) on
derivative financial instruments
Deferred tax recovery
-
-
-
-
-
-
-
-
-
-
-
-
8,027,373
8,027,373
17,817,594
17,817,594
11,288,335
11,288,335
984,652
93,189,387
-
58,508,492
(6,142,747)
(6,142,747)
(7,823,010)
(7,823,010)
Net income (loss)
$
(15,514,304)
$
1,766,664
$
2,034,745
$
(24,152,197)
$
(35,865,092)
Additions:
Real estate and equipment
331,877,816
1,418,431
-
469,848
333,766,095
Notes: 26
Annual Report 2022 | 51
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
Note 14 – Continued
Self
Storage
Portable
Storage
Management
Division
Corporate
Total
As at December 31, 2021
$
1,771,591,274
$
16,145,932
$
17,844,756
$
30,574,247
$
1,836,156,209
As at December 31, 2022
$
1,963,914,228
$
18,003,918
$
16,564,940
$
22,269,074
$
2,020,752,160
15. Commitments and Contingencies
Lease Liabilities
The Corporation leases buildings and land in British Columbia, Alberta, Manitoba, Ontario and Quebec. The leases expire
between 2023 and 2057, with the leases expiring in 2023 and 2027 having up to 15 years and 20 years of renewals,
respectively, which are expected to be exercised by the Corporation.
The lease liabilities are measured at the present value of the lease payments that are not paid at the balance sheet date.
Lease payments are apportioned between interest expense and a reduction of the lease liability using the Corporation’s
incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the liability.
For the year ended December 31, 2022, the Corporation recognized $3,035,180 (December 31, 2021 - $2,054,942) in
interest expense related to its lease liabilities.
A reconciliation of the lease liabilities associated with self storage properties as at December 31, 2022 is as follows:
December 31, 2022
December 31, 2021
Balance, beginning of period
Additions
Cash payments
Interest
Capitalized interest
Balance, end of period
$
$
77,094,742
6,356,372
(6,181,239)
3,035,180
213,517
80,518,572
44,035,050
35,152,703
(4,311,912)
2,054,942
163,959
77,094,742
$
$
Contingency
The Corporation has no legal contingency provisions at December 31, 2022 or December 31, 2021.
16. Subsequent Events
On January 9, 2023, the Corporation announced that it has completed the closing of $150 million financing of 5.00%
Convertible Senior Unsecured Debentures. The Debentures mature on March 31, 2028 and are convertible into freely
tradeable common shares at the option of the holder at a conversion price of $8.65 per share.
On February 22, 2023, the Corporation approved the increase to the quarterly dividend for Q1 2023 by 0.5% to $0.002831
per common share.
Notes: 27
Annual Report 2022 | 52
CANADA SELF STORAGE CENTRES
StorageVault Canada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2022 and 2021
StorageVault Canada Inc.
OFFICERS
Steven Scott
Chief Executive Officer
Iqbal Khan
Chief Financial Officer
DIRECTORS
Jay Lynne Fleming
Vancouver, BC
Ben Harris
Bedford, NY
Iqbal Khan
Toronto, ON
Steven Scott
Toronto, ON
Alan Simpson
Regina, SK
LEGAL COUNSEL
AUDITORS
DLA Piper (Canada LLP)
Livingston Place
1000 – 250 2nd St S.W.
Calgary, AB T2P 0C1
Telephone 403-296-4470
Facsimile 403-296-4474
MNP LLP
1500, 640 – 5th Avenue S.W.
Calgary, AB T2P 3G4
Telephone 403-263-3385
Facsimile 403-269-8450
HEAD OFFICE
REGISTRAR & TRANSFER AGENT
StorageVault Canada Inc.
100 Canadian Rd
Toronto, ON M1R 4Z5
Telephone 1-877-622-0205
Email: ir@storagevaultcanada.com
TSX LISTING:
SVI
TSX Trust
300-5th Avenue S.W., 10th Floor
Calgary, AB T2P 3C4
Telephone 403-218-2800
Facsimile 403-265-0232
Notes: 28
Annual Report 2022 | 53
CANADA SELF STORAGE CENTRES
SSttoorraaggeeVVaauulltt CCaannaaddaa IInncc..
((tthhee ““CCoorrppoorraattiioonn””))
FFoorrmm 5511--110022FF11
MMaannaaggeemmeenntt’’ss DDiissccuussssiioonn aanndd AAnnaallyyssiiss
FFoorr tthhee TThhrreeee MMoonntthhss aanndd FFiissccaall YYeeaarr EEnnddeedd DDeecceemmbbeerr 3311,, 22002222
The following Management’s Discussion and Analysis (“MD&A”) provides a review of corporate and market
developments, results of operations and the financial position of StorageVault Canada Inc. (“SVI” or “the
Corporation”) for the three months and fiscal year ended December 31, 2022. This MD&A should be read in
conjunction with the audited fiscal 2022 consolidated financial statements and accompanying notes contained
therein, which have been prepared in Canadian dollars and in accordance with International Financial Reporting
Standards (“IFRS”). This MD&A is based on information available to Management as of February 22, 2023.
FFOORRWWAARRDD LLOOOOKKIINNGG SSTTAATTEEMMEENNTTSS
This MD&A contains forward-looking information. All statements, other than statements of historical fact, included
in this MD&A, may be forward-looking information. Generally, forward-looking information may be identified by
the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is
expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”,
or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain
actions, events or results may, could, would, or might occur or be achieved. In particular, forward-looking
information included in this MD&A includes statements with respect to: the Corporation’s outlook as to the market
for self storage and portable storage; economic conditions; the availability of credit; the expectation of cash flows;
the Corporation’s strategic objectives, growth strategies, goals and plans; potential sources of financing including
issuing additional common shares as a source of financing, generally, and as a source of financing for potential
acquisitions; future expansion of existing SVI Stores; the size of potential future acquisitions the Corporation may
make in 2023; the annualized net operating income (NOI), a non-IFRS measure, and annualized funds from
operations (FFO), a non-IFRS measure, assumes acquisitions that occurred in fiscal 2022 were purchased on
January 1, 2022; and the general outlook for the Corporation. This forward-looking information is contained in
“Nature of Business”, “Business and General Corporate Strategy”, “Outlook”, “Financial Results Overview” and
“Working Capital, Long Term Debt and Share Capital” and other sections of this MD&A.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause
the actual results, level of activity, performance or achievements of the Corporation to be materially different from
those expressed or implied by such forward-looking information. Certain of such risks are discussed in the “Risks
and Uncertainties” section of this MD&A.
Although the Corporation has attempted to identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking information, there may be other factors that
cause actions, events or results to be not as anticipated, estimated or intended. There can be no assurance that
forward-looking information will prove to be accurate, as actual results and future events could differ materially
from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-
looking information. The factors identified above are not intended to represent a complete list of the factors that
could affect the Corporation.
The forward-looking information in this MD&A should not be relied upon as representing the Corporation’s views
as of any date subsequent to the date of this MD&A. Such forward-looking information is based on a number of
assumptions which may prove to be incorrect, including, but not limited to: the ability of the Corporation to obtain
sufficient or necessary financing, satisfy conditions under previously announced acquisition agreements, or satisfy
any requirements of the TSX with respect to these acquisitions and any related private placement; the level of
activity in the storage business and the economy generally; consumer interest in the Corporation’s services and
1
Annual Report 2022 | 54
CANADA SELF STORAGE CENTRES
products; competition and SVI’s competitive advantages; trends in the storage industry, including, increased
growth in self storage, portable storage and management segments; the availability of attractive and financially
competitive asset acquisitions in the future; the revenue from acquisitions completed in fiscal 2022 being
extrapolated to the entire period for 2022 and being consistent with, and reproducible as, revenue in future
periods; and anticipated and unanticipated costs. A description of additional assumptions used to develop such
forward-looking information and a description of additional risk factors that may cause actual results to differ
materially from forward-looking information can be found in the Corporation’s disclosure documents on the SEDAR
website at www.sedar.com. The Corporation undertakes no obligation to publicly update or review any forward-
looking information, except in accordance with applicable securities laws. Historical results of operations and
trends that may be inferred from this MD&A may not necessarily indicate future results from operations.
The amount of potential future acquisitions by the Corporation in fiscal 2023 and revenue and NOI growth for
2023 may be considered a financial outlook, as defined by applicable securities legislation, contained in this MD&A
and the accompanying news release. Such information and any other financial outlooks or future-oriented financial
information has been approved by management of the Corporation as of the date hereof. Such financial outlook
or future-oriented financial information is provided for the purpose of presenting information about management's
current expectations and goals relating to the future business of the Corporation. Readers are cautioned that
reliance on such information may not be appropriate for other purposes.
Additional information relating to StorageVault Canada Inc. can be found at www.sedar.com.
2
Annual Report 2022 | 55
CANADA SELF STORAGE CENTRES
TTAABBLLEE OOFF CCOONNTTEENNTTSS
GLOSSARY OF TERMS
NATURE OF OUR BUSINESS
BUSINESS AND GENERAL CORPORATE STRATEGY
OUTLOOK
DESCRIPTION OF OUR OPERATIONS
FINANCIAL RESULTS OVERVIEW
WORKING CAPITAL, DEBT AND SHARE CAPITAL
CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS
RELATED PARTY TRANSACTIONS
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
ACQUISITION COMMITTEE AND ACQUISITION COMMITTEE MANDATE
ACCOUNTING POLICIES
RISKS AND UNCERTAINTIES
CORPORATE CONTACT INFORMATION
5577
5588
5599
6611
6622
6644
7711
7766
7766
7777
7799
8800
8811
8844
3
Annual Report 2022 | 56
CANADA SELF STORAGE CENTRES
GGLLOOSSSSAARRYY OOFF TTEERRMMSS
The following abbreviated terms are used in the Management’s Discussion & Analysis and have the following
respective meanings:
““AAFFFFOO”” means FFO plus acquisition and integration costs. Acquisition and integration costs are one time in
nature to the specific assets purchased in the current period or pending and are expensed under IFRS; AFFO is a
non-IFRS measure – see Accounting Policies Non-IFRS Measures;
““EExxiissttiinngg SSeellff SSttoorraaggee”” means stabilized stores that the Corporation has owned or leased since the beginning of
the previous fiscal year; Existing Self Storage is a non-IFRS measure – see Accounting Policies Non-IFRS Measures;
““FFFFOO”” means net income (loss) excluding gains or losses from the sale of depreciable real estate, plus
depreciation and amortization, stock based compensation expenses, unrealized gains or losses on interest rate
swaps, unrealized gains or losses on derivative financial instruments and deferred income taxes; and after
adjustments for equity accounted entities and non-controlling interests;
““IIFFRRSS”” means International Financial Reporting Standards;
““MMDD && AA”” means this Management’s Discussion and Analysis disclosure document;
““NNeeww SSeellff SSttoorraaggee”” means non-stabilized stores that have not been owned or leased continuously since the
beginning of the previous fiscal year; New Self Storage is a non-IFRS measure – see Accounting Policies Non-IFRS
Measures;
““NNOOII”” means net operating income, calculated as revenue from storage and related services less related property
operating costs; NOI is a non-IFRS measure – see Accounting Policies Non-IFRS Measures;
““NNoonn--IIFFRRSS MMeeaassuurreess”” means operating and performance metrics that are not always calculated with reference
to IFRS, but are used commonly in the storage industry to measure operating results for assets owned or leased;
““QQ11,, QQ22,, QQ33 oorr QQ44”” means a three month fiscal quarter of the Company, ending on March 31, June 30,
September 30 and December 31 respectively;
““RReevveennuuee MMaannaaggeemmeenntt”” means the operating principle of achieving optimal revenue through a combination of
rental rate increases on existing customers (increases the existing revenue base and rent per square foot) and
dynamic pricing of available inventory;
““SSttoorree”” means self storage property or location or facility or site;
““SSuubbsseeqquueenntt EEvveennttss”” means material transactions that have occurred from January 1, 2023 to February 22, 2023;
““SSVVII”” means StorageVault Canada Inc.;
““TThhee CCoommppaannyy”” or ““TThhee CCoorrppoorraattiioonn” or ““WWee”” or ““OOuurr”” or “SSttoorraaggeeVVaauulltt” means StorageVault Canada Inc.
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CANADA SELF STORAGE CENTRES
NNAATTUURREE OOFF OOUURR BBUUSSIINNEESSSS
BBuussiinneessss OOvveerrvviieeww
The Corporation’s primary business is owning, managing and renting self storage and portable storage space to
individuals and commercial customers. The Corporation also stores, shreds, and manages documents and records
for its customers. As of January 26, 2022, the common shares of the Company are publicly traded on the TSX,
prior to that on the TSX Venture Exchange, under the symbol ‘SVI’.
As of December 31, 2022, SVI owned 206 stores and 4,527 portable storage units across Canada, for a total of
11,422,068 square feet of rentable storage space in 101,303 rental units. The stores operate under the Access
Storage, Depotium Mini-Entrepots and Sentinel Storage brands. Our portable storage business operates under
the Cubeit and PUPS brands. Our records management business operates under the RecordXpress brand.
In addition to our owned stores, SVI manages 32 stores that are owned by third parties for a management fee,
bringing the total number of stores owned and managed to 238.
We are able to leverage our national storage presence to offer last-mile storage solutions, such as personal
protective equipment handling for health care organizations across the country. Through our portable storage and
records management businesses, we offer mobilization solutions to move items from our locations directly to the
end user.
SVI’s objective is to own and manage storage assets in Canada’s top markets. The Corporation will focus on
acquiring storage assets with strong existing cash flows, in strategic markets, preferably with excess capacity and
land allowing for future development and expansion of our self, portable and information and records
management storage businesses. Financing for this growth is intended to come from a combination of free cash
flow from operations, mortgage financing and the issuance of debt or equity securities.
TThhee SSttoorraaggee LLaannddssccaappee
The significant growth in demand for storage space in Canada over the past decade has largely been driven by the
following factors: population growth, change of circumstances, smaller living areas and workspaces, business
incubation, e
mile solutions, lack of warehouse space, immigration, downsizing, renovations,
moving, death, divorce, insurance, etc. We expect these trends to continue in 2023 and beyond.
commerce, last
‐
‐
Market Size
The Canadian storage market is estimated to be 90 million square feet across 3,000 stores, with the top 10
operators owning less than 15% of these stores; by comparison, the US market is estimated at over 2 billion square
feet across 51,000 plus stores, suggesting that Canada is an under-stored nation.
The market fragmentation of the Canadian storage industry combined with the low square foot per capita provides
significant opportunities for consolidation, expansion and development. Our existing platform, relationships,
reputation and knowledge of the storage industry allows us to identify and take advantage of accretive and
strategic acquisition opportunities.
Pricing and Occupancy
A store’s rental rates and level of occupancy are dependent upon factors such as lead generation, population
density and growth, the local economy, pricing, customer service and curb appeal. We believe in managing our
inventory (units) through pricing. Since our rentals are either weekly or monthly, we are able to react to market
demand and inflationary pressures quickly. Our objective is to maximize revenue by increasing rent per square
foot first, and maximizing occupancy second.
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CANADA SELF STORAGE CENTRES
Competition
New development in a market impacts the occupancy and the ability to raise rates at existing stores until the
market absorbs the new space. New entrants tend to offer significant move-in specials to achieve rapid occupancy
gains. Once the new space has leased up, promotions are reduced or eliminated and the focus switches to
maximizing revenue through price increases. This can result in short term fluctuations in occupancy and revenue
per square foot at existing stores.
Seasonality
The storage business is subject to seasonality. There is naturally more activity in the warmer months and less
activity in the colder months. As a result, occupancies and revenue per square foot tend to be highest in Q2 and
Q3 and lowest in Q1 and Q4. This trend is consistent with what is experienced in the Northern US. This seasonality
is more significant in the portable storage business as all of our portable units are non-climate controlled. Also,
operating costs tend to be higher during the winter months in Canada due to heating and snow removal costs
resulting in lower NOI margins in Q1 and Q4 versus Q2 and Q3.
BBUUSSIINNEESSSS AANNDD GGEENNEERRAALL CCOORRPPOORRAATTEE SSTTRRAATTEEGGYY
SVI owns and manages storage locations offering both self storage and portable storage for rent on a weekly or
monthly basis, for personal and commercial use. We are focused on owning and operating locations in the top
markets in Canada with a plan to have multiple stores, where possible, in each market we operate.
GGrroowwtthh SSttrraatteeggiieess
Our growth strategy is described in the following six segments: acquisitions, organic growth through improved
performance of existing stores, expansion of our existing stores to meet pent up demand, and expansion of our
portable storage, records management and FlexSpace Logistics business segments.
Acquisitions
The combination of our corporate platform, our track record of closing transactions, our industry relationships and
our storage experience provides SVI with a unique advantage in the Canadian marketplace. This advantage allows
us to identify accretive and strategic purchasing opportunities at attractive prices that provide synergies in
operations, marketing and revenue maximization.
We intend to be a disciplined purchaser, with a focus on Canada’s top markets. As there is more competition to
acquire existing stores, especially from US purchasers, we may find it difficult to acquire assets that meet our
criteria.
Organic Growth
Scale is important and the increased size of SVI provides a significant advantage in negotiating better rates on:
marketing, insurance, software, office supplies, resale retail products, merchant services, technical support and
long distance transport of portable units. These economies of scale translate into improved margins and better
results.
Efficiencies are also gained through cross promotion and marketing of the self storage and portable storage
platforms, and our records management services due to our national footprint, and offering different but
complementary product choices at various price points to our customers.
The most significant evolution in the storage industry has been in the area of revenue management. Revenue
management is the principle of achieving optimal revenue through a combination of rental rate increases on
existing customers (increases the existing revenue base and rent per square foot) and dynamic pricing of available
inventory so that we are selling the right space, to the right customer, at the right time, for the right price. With a
focus on providing the best value to the customer and on revenue management, stores are able to achieve
significant top and bottom line growth, even when occupancies are stable.
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CANADA SELF STORAGE CENTRES
Existing Store Expansion
There is over 1,500,000 square feet of development potential on excess land currently owned and operated by
SVI. When market conditions are suitable and high occupancies and leads indicate pent up demand, we expect
to expand a number of our existing locations. We currently have plans to complete 25,000 to 50,000 square feet
of expansion within the next 12 months. In addition, we have another 450,000 rentable square feet of expansions
projects in the entitlement and permitting stage.
Expansion of Portable Storage Business
The portable storage business continues to complement our overall business, providing additional synergies and
efficiencies to our platform. While margins in portable storage are not as high as they are in self storage, they are
still very attractive, and with the larger geographic and operating footprint achieved through our growth strategy,
we believe that margins will continue to improve.
Expansion of Information and Records Management Business
The records management business is a complementary vertical in the storage space, much like portable storage,
and fills up excess space, delivering strong "sticky" cash flows. RecordXpress is one of the largest records
management companies in Canada and is the only Canadian owned company that can provide a national platform.
This provides significant competitive advantage as government organizations, such as hospitals and charities, do
not want their confidential information under foreign ownership.
Expansion of FlexSpace Logistics Business
The FlexSpace Logistics business is a technology platform that focuses on providing end to end solutions for
business clients with our storage, logistics, and inventory management offerings. Services are provided across
Canada through SVI’s existing portfolio of businesses and our extensive network of partners, allowing us to offer
everything from warehousing and storage to last mile delivery to inventory management. A true one-stop shop for
businesses, especially small to medium sized companies who were previously underserved in the space.
FFiinnaanncciinngg SSttrraatteeggyy
We anticipate funding the capital requirements of our growth strategy through excess operating cash flow,
utilization of suitable leverage and from the issuance of equity and debt securities.
Financing With Secured Debt and Lines of Credit
The Corporation will partially fund the purchase of storage assets with debt. A number of factors are considered
when evaluating the level of debt in our capital structure, as well as the amount of debt that will be fixed or variable
rate. In making financing decisions, the factors that we consider include, but are not limited to: interest rate,
amortization period, covenants and restrictions, security requirements, prepayment rights and costs, overall debt
level, maturity date in relation to existing debt, overall percentage of fixed and variable rate debt and expected
store performance.
Issuance of Common Shares
The Corporation will, from time to time, issue common shares to the public or to vendors to fund the purchase of
storage assets or pay down debt. SVI will consider issuances of additional common shares for cash proceeds or
as consideration in the purchase of storage assets in the upcoming fiscal year if accretive to shareholders. Future
issuances will be dependent upon financing needs, acquisitions and expansion, equity market conditions at the
time and transaction pricing.
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CANADA SELF STORAGE CENTRES
OOUUTTLLOOOOKK
The Corporation’s update and outlook for acquisitions, share capital, results from operations and subsequent
events are:
AAccqquuiissiittiioonnss
In 2023, we expect to acquire $70 million to $100 million of assets.
Historically we have been successful in meeting our acquisition targets; however, as there is uncertainty in the
Canadian economy, and more competition to acquire existing stores, especially from foreign purchasers, we may
not be able to find acquisitions that meet our criteria.
SShhaarree CCaappiittaall
The Corporation will, from time to time, issue common shares to the public or to vendors to fund the purchase of
storage assets. Future issuances will be dependent upon financing needs, acquisition opportunities, expansion
plans, equity market conditions and transaction pricing.
The Corporation may from time to time purchase its’ common shares in accordance with the rules prescribed under
the TSX or regulatory policies.
RReessuullttss ffrroomm OOppeerraattiioonnss
We expect growth in revenue and NOI in 2023 as we continue to streamline and integrate operations, implement
our revenue management system and continue to control costs on the recently purchased assets. We also expect
contributions from the acquisitions made in 2022, in fiscal 2021 as well as those we completed in late fiscal 2020
that are now stabilizing.
The Corporation may use discounts in select markets to match competitive forces and retain its customer base as
a result of competitors trying to jump-start their lease up periods by offering significant discounts to new
customers. This can result in short term fluctuations in occupancy and rent per square foot at existing stores. The
effect on overall revenues is not expected to be significant, but it may be enough to slow the rate of growth in
revenues experienced in past years.
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CANADA SELF STORAGE CENTRES
SSuubbsseeqquueenntt EEvveennttss
The following items have been announced by the Corporation:
• On January 9, 2023, announced that it completed the closing of $150 million financing of 5.00%
Convertible Senior Unsecured Debentures. The Debentures mature on March 31, 2028 and are
convertible into freely tradeable of the Corporation’s common shares at the option of the holder at a
conversion price of $8.65 per share.
• On February 22, 2023, approved the increase to the quarterly dividend for Q1 2023 by 0.5% to $0.002831
per common share.
DDEESSCCRRIIPPTTIIOONN OOFF OOUURR OOPPEERRAATTIIOONNSS
As at December 31, 2022, the Corporation owned the following self storage and portable storage operations:
LLooccaattiioonn
AAccrreess
NNuummbbeerr ooff
SSttoorreess
UUnniittss
RReennttaabbllee
SSqquuaarree FFeeeett
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
Nova Scotia
Portable Storage Units
45
153
34
36
348
37
16
18
43
11
12
97
20
5
9,627
21,690
2,715
4,846
46,870
9,373
1,655
4,527
932,960
2,497,912
356,554
490,057
5,556,282
887,201
179,454
521,648
TToottaall
666699
220066
110011,,330033
1111,,442222,,006688
Management is focused on increasing value and increasing NOI as follows:
RReevveennuuee MMaannaaggeemmeenntt
In today’s competitive climate, revenue per square foot is the greatest driver in increasing NOI and creating value.
Our management platform has intelligent software, supported by dedicated personnel, that understands the
nuances of each local market. Our in-depth knowledge of our customer base and the competition allows us to
implement strategic rate increases and optimize proven promotions to attract clientele that will become long-term
customers, repeat renters and strong referral sources.
PPrrooffeessssiioonnaall MMaannaaggeemmeenntt
The management team at SVI has extensive experience in all aspects of the storage industry including:
• delivering superior results
• management of over 230 storage locations throughout Canada
•
• over 200 years of combined experience in the storage industry by senior management
acquisition, development and management of over 16 million square feet of storage space
MMaarrkkeettiinngg
We implement specific marketing plans for the different localities, stages and seasons of our business with
emphasis on maximizing return on investment for every dollar spent. Our strategies to attract customers include
strong search engine marketing, user friendly online presence and no-contact “self serve” rental processes,
community connection programs and development of large national accounts to fulfill their last-mile storage
needs. We conduct specific store and market analysis to determine how, when and where to focus our marketing
dollars with the goal of efficiently and consistently increasing the value of our stores.
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CANADA SELF STORAGE CENTRES
CCoossttccoo SSuupppplliieerr
Our storage business is the exclusive supplier to Costco Wholesale Canada Ltd. (Costco) members across Canada.
This relationship provides exclusive access to Costco’s vast membership base as a marketing channel.
RReesseerrvvaattiioonn CCeennttrree
Our management platform includes a Reservation Centre (call centre) that provides call management services
designed to increase reservations and move-ins, increase productivity at the store level and improve our corporate
image through professionalism, consistency of messaging and willingness to resolve issues. Our Reservation
Centre agents have training in the storage business and understand the need to introduce and greet professionally,
establish rapport with customers, build trust, listen, ask the right questions, ask for the business and close the sale.
The overall result is an increased close rate leading to improved financial performance.
TTeecchhnnoollooggyy aanndd SSooffttwwaarree
SVI stores utilize modern and intelligent software, technology and security systems. We work with vendors and
developers, who have knowledge of the storage business, to take advantage of developing trends, including: (i)
exception reports that allow management to monitor key performance and indicators ensuring that management’s
time is more effectively spent preventing and resolving issues than identifying them; and (ii) web-based software
reporting that allows authorized individuals to view specific store information in real time. The user can choose to
see daily rental rates achieved and the number of customers moving-in or moving-out. This tool allows us to adjust
quickly to opportunities and threats in each marketplace.
EEccoonnoommiieess ooff SSccaallee
The size and scope of our management platform, combined with the growing size of our own operations, translates
into higher gross margins through the centralization of many functions such as revenue management, property
management, employee compensation and benefits programs, as well as the development and documentation of
standardized operating procedures and best practices.
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CANADA SELF STORAGE CENTRES
FFIINNAANNCCIIAALL RREESSUULLTTSS OOVVEERRVVIIEEWW
As of December 31, 2022, SVI acquired 10 stores, 1 adjacent property and 3 records management operations for
$241.1 million. In fiscal 2021, SVI acquired 29 stores for $270.2 million. The timing of these acquisitions affects
the comparative results.
SSeelleecctteedd FFiinnaanncciiaall IInnffoorrmmaattiioonn
(unaudited)
TThhrreeee MMoonntthhss EEnnddeedd DDeecceemmbbeerr 3311
(audited)
FFiissccaall
22002222
2021
$$
%
22002222
2021
$$
%
CChhaannggee
CChhaannggee
Storage revenue and related services
$$
6688,,660055,,999922
$
56,364,795
$
12,241,197
21.7%
$$
225599,,993333,,006611
$
206,625,933
$
53,307,128
Management fees
448833,,886611
480,494
3,367
Operating costs
Net operating income 1
Less:
6699,,008899,,885533
56,845,289
12,244,564
2233,,006688,,999911
19,026,111
4466,,002200,,886622
37,819,178
4,042,880
8,201,684
0.7%
21.5%
21.2%
21.7%
11,,889955,,222288
2,034,745
(139,517)
226611,,882288,,228899
208,660,678
53,167,611
8855,,779944,,334477
69,660,346
16,134,001
117766,,003333,,994422
139,000,332
37,033,610
Acquisition and integration costs
Selling, general and administrative
Interest
11,,666666,,556655
55,,446611,,663300
2,700,306
4,859,670
2211,,332211,,005511
15,623,975
Stock based compensation
1122,,558877,,226622
10,750,687
(1,033,741)
-38.3%
601,960
5,697,076
1,836,575
12.4%
36.5%
17.1%
99,,558877,,884400
2211,,004488,,995500
7744,,880011,,884477
1133,,663311,,002288
8,027,373
17,817,594
1,560,467
3,231,356
58,508,492
16,293,355
11,288,335
2,342,693
25.8%
-6.9%
25.5%
23.2%
26.6%
19.4%
18.1%
27.8%
20.8%
Unrealized (gain) loss on derivative
financial instruments
((442222,,556666))
(6,142,747)
5,720,181
-93.1%
33,,666644,,331122
(6,142,747)
9,807,059
-159.7%
Depreciation and amortization
3344,,112244,,996622
24,521,938
9,603,024
39.2%
110044,,112266,,666611
93,189,387
10,937,274
11.7%
7744,,773388,,990044
52,313,829
22,425,075
42.9%
222266,,886600,,663388
182,688,434
44,172,204
24.2%
Net income (loss) before taxes
((2288,,771188,,004422))
(14,494,651)
(14,223,391)
98.1%
((5500,,882266,,669966))
(43,688,102)
(7,138,594)
16.3%
Deferred tax recovery
55,,445522,,554499
1,489,191
3,963,358
266.1%
99,,558844,,773399
7,823,010
1,761,729
22.5%
Net income (loss)
$$
((2233,,226655,,449933))
$
(13,005,460)
$
(10,260,033)
78.9%
$$
((4411,,224411,,995577))
$
(35,865,092)
$
(5,376,865)
15.0%
Weighted average number of common shares outstanding
Basic
Diluted
337777,,996622,,887799
373,567,193
337777,,996622,,887799
373,567,193
4,395,686
4,395,686
1.2%
1.2%
337788,,005511,,449966
370,267,629
337788,,005511,,449966
370,267,629
7,783,867
7,783,867
2.1%
2.1%
Net income (loss) per common share
Basic
Diluted
1 Non-IFRS Measure.
$$
((00..006622))
$
(0.035)
$$
((00..006622))
$
(0.035)
$$
((00..110099))
$
(0.097)
$$
((00..110099))
$
(0.097)
Storage revenue and related services
For the three months ended December 31, 2022, the Corporation had revenues of $68.6 million (December 31,
2021 - $56.4 million), an increase of 21.7% for the quarter and contributing to a $53.3 million or 25.8% increase
for the fiscal year. This increase is attributable to incremental revenue from organic revenue growth and from the
stores acquired in the current and prior fiscal year. For additional information, see “Segmented, Existing and New
Self Storage and Portable Storage Results.”
Management fees
For the three months ended December 31, 2022, management fees have slightly increased by 0.7% over the same
prior year period. For the fiscal year, management fee have decreased 6.9% over the same prior year period. The
decrease is a result of the Corporation acquiring managed stores, reducing the number of stores in our third party
management platform.
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CANADA SELF STORAGE CENTRES
Operating costs
Operating costs for the three months ended December 31, 2022 were $23.1 million (December 31, 2021 - $19.0
million). The increase relates to stores acquired in 2022 and 2021 and mainly increases in advertising, property
taxes, repairs and maintenance and wages.
Net income (loss)
Our net loss of $23.3 million for the three months ended December 31, 2022 results from non-cash items of $34.1
million of depreciation and amortization, $12.6 million in stock based compensation, and offset by $0.4 million in
unrealized gain on derivative instruments and the recovery of $5.5 million of deferred tax.
Net operating income
For the three months ended December 31, 2022, the Corporation had net operating income (NOI), a non-IFRS
measure, of $46.0 million (December 31, 2021 - $37.8 million), an increase of 21.7% for the quarter and
contributing to a $37.0 million or 26.6% increase for the fiscal year. The increase was due to increased rates
through our revenue management systems, increased occupancy year over year, controlling costs, NOI from assets
purchased in throughout fiscal 2022 and 2021 and from streamlining and integration of operations.
Acquisition and integration costs
Acquisition and integration costs include costs and professional fees incurred to identify, qualify, close and
integrate the assets purchased and pending, as well as transactions that we elected not to pursue. SVI closed
$241.1 million in acquisitions in fiscal 2022, following closing $270.2 million of acquisitions in fiscal 2021 and
closing $232.7 million in acquisitions in fiscal 2020.
Selling, general and administrative
Selling, general and administrative expenses include all expenses not related to the stores including corporate
office overhead and payroll, operations platform innovation and professional fees. These costs have increased as
a result of increased activity associated with the growth and anticipated future growth of the business.
Stock based compensation
Relates RSUs, DSUs and to stock options issued to directors, officers and consultants under the Corporation’s stock
option plan and expense is estimated at the date of issue using the Black-Scholes option pricing model. The fair
value of options granted was estimated on the date of the grant using the following assumptions:
Dividend Yield
Risk-Free Interest Rate
Expected Life of Options
Expected Volatility of the Corporation's Common Shares
2022
0.01%
3.11%
4 Years
30.15%
2021
0.01%
1.15%
4 Years
29.44%
Interest
Interest expense increased as the total amount of debt outstanding increased with the current and prior year
acquisitions and increase in interest rates on our variable rate debt. As of December 31, 2022, variable rate debt
represented 14.7% of our debt or $225.3 million. Our variable rate debt was further reduced after the closing of
the $150 million 5.00% Convertible Senior Unsecured Debentures on January 9, 2023 – see Subsequent Events.
This will decrease our interest expense in Q1 2023. As at December 31, 2022, our debt was $1.5 billion compared
to $1.3 billion at December 31, 2021.
Depreciation and amortization
The increase in depreciation and amortization expense is primarily due to depreciating the additional assets
acquired in fiscal 2022 and throughout fiscal 2021.
Unrealized (gain) loss on derivative financial instruments
The unrealized (gain) loss on derivative financial instruments occurs as result of both the Interest Rate Swaps and
the Total Return Swaps which are held to hedge the Corporation’s debt, and DSUs and RSUs, respectively. A gain
or loss is recorded as a result of the fluctuations in the market interest rates and the Corporation’s share price.
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FFuunnddss ffrroomm OOppeerraattiioonnss ((FFFFOO)) aanndd AAddjjuusstteedd FFuunnddss ffrroomm OOppeerraattiioonnss ((AAFFFFOO))
FFO and AFFO are non-IFRS measures. They allow management and investors to evaluate the financial results of
an entity without taking into consideration the impact of non-cash items and non-recurring acquisition and
integration costs on the Consolidated Statement of Income (Loss) and Comprehensive Income (Loss). Net income
(loss) assumes that the values of our assets diminish over time through depreciation and amortization, irrespective
of the value of our real estate assets in the open market. Other non-cash and non-recurring capital items include
stock based compensation costs, deferred income tax expenses (recoveries), unrealized gain or loss on interest
rate swap contracts, unrealized gain or loss on derivative financial instruments and acquisition and integration
costs, if any. Acquisition and integration costs, adjusted for in our AFFO, are one time in nature to the specific
assets purchased or pending. While the specific acquisition and integration costs may vary from period to period,
given that the Corporation is planning to continue to complete acquisitions as part of its growth strategy, these
costs will continue to be included as an adjustment in determining AFFO (i.e. the amount of the costs are "non-
recurring" but the actual adjustment for these types of costs is "recurring").
FFO for the three months and fiscal year ended December 31, 2022 was $17.6 million and $70.6 million versus
$14.6 million and $54.6 million for the same period in 2021, a 20.1% and 29.2% increase. On a per common share
outstanding basis, the increase was 18.7% for the quarter and 26.5% for the fiscal year. These increases, while
muted by higher interest expense mainly on our variable rate debt, are the result of contributions from strong
operational performance and from assets purchased.
AFFO for the three months and fiscal year ended December 31, 2022 was $19.2 million and $80.2 million versus
$17.3 million and $62.7 million for the same period in 2021, an 11.0% and 27.9% increase. On a per common
share outstanding basis, the increase was 9.7% for the quarter and 25.3% for the fiscal year. These increases, while
muted by higher interest expense mainly on our variable rate debt, are the result of contributions from strong
operational performance and from assets purchased.
The FFO and AFFO for the three months and fiscal year ended December 31, 2022 and 2021 are:
(unaudited)
TThhrreeee MMoonntthhss EEnnddeedd DDeecceemmbbeerr 3311
(audited)
FFiissccaall
22002222
22002211
CChhaannggee
22002222
22002211
CChhaannggee
$
%
$
%
Net income (loss)
$$
((2233,,226655,,449933))
$
(13,005,460)
$
(10,260,033)
78.9%
$$
((4411,,224411,,995577))
$
(35,865,092)
$
(5,376,865)
15.0%
Adjustments:
Stock based compensation
1122,,558877,,226622
10,750,687
1,836,575
17.1%
1133,,663311,,002288
11,288,335
2,342,693
20.8%
Unrealized (gain) loss on derivative
financial instruments
((442222,,556666))
(6,142,747)
5,720,181
-93.1%
33,,666644,,331122
(6,142,747)
9,807,059
-159.7%
Deferred tax recovery
((55,,445522,,554499))
(1,489,191)
(3,963,358)
266.1%
((99,,558844,,773399))
(7,823,010)
(1,761,729)
22.5%
Depreciation and amortization
3344,,112244,,996622
24,521,938
9,603,024
39.2%
110044,,112266,,666611
93,189,387
10,937,274
11.7%
FFO 1
Adjustments:
4400,,883377,,110099
27,640,687
13,196,422
47.7%
111111,,883377,,226622
90,511,965
21,325,297
23.6%
$$
1177,,557711,,661166
$
14,635,227
$
2,936,389
20.1%
$$
7700,,559955,,330055
$
54,646,873
$
15,948,432
29.2%
Acquisition and integration costs
11,,666666,,556655
2,700,306
(1,033,741)
-38.3%
99,,558877,,884400
8,027,373
1,560,467
19.4%
AFFO 1
1 Non-IFRS Measure.
$$
1199,,223388,,118811
$
17,335,533
$
1,902,648
11.0%
$$
8800,,118833,,114455
$
62,674,246
$
17,508,899
27.9%
FFO and AFFO Per Basic Common Share Outstanding
FFO
AFFO
$$
00..004466
$
0.039
$
0.007
18.7%
$$
00..118877
$
0.148
$
0.039
26.5%
$$
00..005511
$
0.046
$
0.004
9.7%
$$
00..221122
$
0.169
$
0.043
25.3%
13
Annual Report 2022 | 66
CANADA SELF STORAGE CENTRES
AAnnnnuuaalliizzeedd NNeett OOppeerraattiinngg IInnccoommee aanndd FFuunnddss ffrroomm OOppeerraattiioonnss
The Company completed the purchase of 10 stores, 1 adjacent property and 3 records management operations
and the revenues and operating expenses from each acquisition are reflected in the statements from the date of
acquisition forward for these stores. In order to understand a full year of operations with the acquired assets,
utilizing historical data, we have prepared an annualized NOI, FFO and AFFO (all non-IFRS measures) statement
annualizing the revenues and expenses as if the stores purchased in fiscal 2022, were purchased as of January 1,
2022 and owned for the entire 12-month period.
The results of this annualized statement show that NOI, FFO and AFFO would be higher by $5.1 million, $2.6
million and $2.6 million, respectively. NOI would have been $181.2 million, FFO would be $73.2 million and the
AFFO would be $82.7 million.
FFoorr tthhee YYeeaarr EEnnddeedd DDeecceemmbbeerr 3311,, 22002222
Actual
AAnnnnuuaalliizzeedd RReessuullttss
Incremental
Notes
Storage revenue and related services
$
259,933,061
$$
226699,,226655,,119911
$
9,332,130
1
Management fees
Property operating costs
NNeett ooppeerraattiinngg iinnccoommee
Adjustments:
Acquisition and integration costs
Selling, general and administrative
Interest
1,895,228
261,828,289
85,794,347
176,033,942
9,587,840
21,048,950
74,801,847
11,,889955,,222288
227711,,116600,,441199
8899,,999999,,995555
118811,,116600,,446644
99,,558877,,884400
2211,,442222,,223355
7766,,999999,,444477
105,438,637
110088,,000099,,552222
FFuunnddss ffrroomm OOppeerraattiioonnss
70,595,305
7733,,115500,,994422
Adjustment:
-
9,332,130
4,205,608
5,126,522
-
373,285
2,197,600
2,570,885
2,555,637
1
2
3
4
Acquisition and integration costs
9,587,840
99,,558877,,884400
-
2
AAddjjuusstteedd FFuunnddss ffrroomm OOppeerraattiioonnss
$
80,183,145
$$
8822,,773388,,778822
$
2,555,637
Note 1 – the results from all stores acquired in fiscal 2022, have been adjusted as if the purchase occurred on
January 1, 2022. For revenues, we assumed achieved occupancies and rent per square foot were repeated from
the period prior to acquisition. Information regarding expenses incurred during 2022 and prior to acquisition, has
been sourced from due diligence materials received during the acquisition process to determine a full year of
operating costs.
Note 2 – these costs are one time in nature and do not change based on acquisition date.
Note 3 – based on existing scale and management infrastructure.
Note 4 – annualized amount determined based on interest rate and debt outstanding at December 31, 2022.
14
Annual Report 2022 | 67
CANADA SELF STORAGE CENTRES
SSeeggmmeenntteedd,, EExxiissttiinngg aanndd NNeeww SSeellff SSttoorraaggee aanndd PPoorrttaabbllee SSttoorraaggee RReessuullttss
The Corporation operates three reportable business segments - self storage, portable storage and management
fees. Self storage involves customers renting space at the Corporation’s property for short or long term storage.
Portable storage involves delivering a storage unit to the customer. The customer can choose to keep the portable
storage unit at their location or have it moved to one of our locations. Management fees are revenues generated
from the management of stores owned by third parties.
Revenue, operating costs and net operating income
(unaudited)
TThhrreeee MMoonntthhss EEnnddeedd DDeecceemmbbeerr 3311
(audited)
FFiissccaall
22002222
22002211
CChhaannggee
22002222
22002211
CChhaannggee
$$
%
$$
%
$$
4455,,441199,,556655
$
41,980,296
$
3,439,269
8.2%
$$
117799,,448800,,113344
$
161,105,286
$
18,374,848
RReevveennuuee
Existing Self Storage 1
New Self Storage 1
2200,,555544,,992299
11,617,246
8,937,683
Total Self Storage
6655,,997744,,449944
53,597,542
12,376,952
Portable Storage
22,,663311,,449988
2,767,253
(135,755)
Management Fees
448833,,886611
480,494
3,367
Combined
6699,,008899,,885533
56,845,289
12,244,564
OOppeerraattiinngg CCoossttss
Existing Self Storage
1133,,227766,,558833
12,307,024
969,559
New Self Storage
77,,889999,,006666
4,810,360
3,088,706
Total Self Storage
2211,,117755,,664499
17,117,384
4,058,265
Portable Storage
11,,889933,,334411
1,908,727
(15,386)
Combined
2233,,006688,,999900
19,026,111
4,042,879
NNeett OOppeerraattiinngg IInnccoommee 1
Existing Self Storage
3322,,114422,,998822
29,673,272
2,469,710
New Self Storage
1122,,665555,,886633
6,806,886
5,848,977
Total Self Storage
4444,,779988,,884455
36,480,158
8,318,687
76.9%
23.1%
-4.9%
0.7%
21.5%
7.9%
64.2%
23.7%
-0.8%
21.2%
8.3%
85.9%
22.8%
6699,,114444,,003322
35,000,602
34,143,430
224488,,662244,,116666
196,105,888
52,518,278
1111,,330088,,889955
10,520,045
11,,889955,,222288
2,034,745
788,850
(139,517)
226611,,882288,,228899
208,660,678
53,167,611
5511,,442255,,778833
47,299,126
4,126,657
2266,,557755,,116655
15,166,068
11,409,097
7788,,000000,,994488
62,465,194
15,535,754
77,,779933,,339999
7,195,152
598,247
8855,,779944,,334477
69,660,346
16,134,001
11.4%
97.6%
26.8%
7.5%
-6.9%
25.5%
8.7%
75.2%
24.9%
8.3%
23.2%
112288,,005544,,335511
113,806,160
14,248,191
12.5%
4422,,556688,,886677
19,834,534
22,734,333
114.6%
117700,,662233,,221188
133,640,694
36,982,524
27.7%
Portable Storage
Management Fees
773388,,115577
448833,,886611
858,526
480,494
(120,369)
-14.0%
3,367
0.7%
33,,551155,,449966
11,,889955,,222288
3,324,893
2,034,745
190,603
(139,517)
Combined
$$
4466,,002200,,886633
$
37,819,178
$
8,201,685
21.7%
$$
117766,,003333,,994422
$
139,000,332
$
37,033,610
5.7%
-6.9%
26.6%
1 Non -IFRS Measure.
Existing Self Storage
For the three months ended December 31, 2022, revenue and NOI increased by 8.2% and 8.3%, respectively,
resulting in a full year same store revenue and NOI growth of 11.4% and 12.5%. These results were achieved on
the same pool of stores as fiscal 2021, when we achieved NOI growth of 20.2% for the fiscal year. Revenue and
NOI increases are a result from the continued execution of our revenue management program and increased
occupancy year over year. For operating costs, we continue to control costs through operational efficiencies,
however we experienced increases in advertising, property taxes and wages.
New Self Storage
Increase is a result of our 2022 acquisitions and acquisitions throughout 2021 and 2020 resulting in revenue,
operating costs and NOI growth as we commenced reporting results.
Portable Storage
Decline in Revenue and NOI for the quarter was due to a decline in occupancy.
15
Annual Report 2022 | 68
CANADA SELF STORAGE CENTRES
Quarterly net operating income
The Corporation’s quarterly results are affected by the timing of acquisitions, both in the current year and prior
year. SVI also incurs non-recurring initial expenses when a new location is acquired. These costs may include
labor, severance, training, travel, advertising and or office expenses.
The storage business is subject to seasonality. There is naturally more activity in the warmer months and less
activity in the colder months. Operating costs are higher during the winter months due to heating and snow
removal costs resulting in lower NOI margins in Q1 and Q4, versus Q2 and Q3. This is consistent with results
experienced in the Northern US.
Fiscal 2022 ('000)
Fiscal 2021 ('000)
Q4
Q3
Q2
Q1
Total
Q4
Q3
Q2
Q1
Total
NOI 1
Existing Self Storage
$
32,143
$
34,789
$
32,975
$
28,148
$
128,054
$
29,673
$
31,276
$
29,022
$
23,835
$
113,806
New Self Storage
12,656
12,447
9,896
7,570
42,569
Total Self Storage
44,799
47,236
42,871
35,718
170,623
Portable Storage
Management Fees
738
484
1,326
481
959
517
493
413
3,515
1,895
6,807
36,480
859
480
5,825
4,622
2,581
19,835
37,101
33,644
26,416
133,641
1,169
536
844
529
454
490
3,325
2,035
$
46,021
$
49,043
$
44,346
$
36,624
$
176,034
$
37,819
$
38,805
$
35,017
$
27,359
$
139,000
1 Non-IFRS Measure
Existing Self Storage
The increase in Q4 2022 over Q4 2021 was driven from continued execution of our revenue management program
and controlling costs through operational efficiencies.
New Self Storage
SVI has acquired 10 stores, 1 adjacent property and 3 records management operations in fiscal 2022 and 29 stores
in fiscal 2021. These additions have resulted in NOI growth quarter over quarter as we commenced reporting
results.
Portable Storage
Increase in revenue and NOI was generally due to occupancy increases and cost savings.
16
Annual Report 2022 | 69
CANADA SELF STORAGE CENTRES
SSuummmmaarryy ooff QQuuaarrtteerrllyy RReessuullttss (unaudited)
PPeerriioodd
22002222 –– QQ44
22002222 –– QQ33
22002222 –– QQ22
22002222 –– QQ11
RReevveennuuee
$69,089,853
$69,323,716
$65,959,444
$57,455,276
NNeett IInnccoommee //
((LLoossss))
($23,265,493)
($2,120,375)
($7,278,364)
($8,577,725)
NNeett IInnccoommee
// ((LLoossss)) ppeerr
sshhaarree
($0.062)
($0.006)
($0.019)
($0.023)
FFuullllyy ddiilluutteedd
NNeett IInnccoommee //
((LLoossss)) ppeerr
sshhaarree
($0.062)
($0.006)
($0.019)
($0.023)
TToottaall AAsssseettss
$2,020,752,160
$2,014,223,967
$2,019,833,429
$1,874,780,768
TToottaall LLiiaabbiilliittiieess
$1,813,597,057
$1,793,844,969
$1,793,878,037
$1,640,438,694
DDiivviiddeennddss
$1,064,875
$1,059,674
$1,055,547
$1,050,674
TToottaall 22002222
$$226611,,882288,,228899
(($$4411,,224411,,995577))
NN//AA
NN//AA
NN//AA
NN//AA
$$44,,223300,,777700
22002211 –– QQ44
22002211 –– QQ33
22002211 –– QQ22
22002211 –– QQ11
$56,845,289
($13,005,460)
$56,854,002
($4,286,770)
$51,701,291
($7,172,789)
$43,260,095
($11,400,073)
($0.035)
($0.012)
($0.019)
($0.031)
TToottaall 22002211
$$220088,,666600,,667788
(($$3355,,886655,,009922))
NN//AA
22002200 -- QQ44
22002200 -- QQ33
22002200 -- QQ22
22002200 -- QQ11
$42,150,289
($9,987,848)
$40,053,371
($6,276,846)
$37,425,908
($8,651,142)
$35,834,354
($8,366,386)
($0.027)
($0.017)
($0.024)
($0.023)
TToottaall 22002200
$$115555,,446633,,992222
(($$3333,,228822,,222222))
NN//AA
22001199 -- QQ44
22001199 -- QQ33
22001199 -- QQ22
22001199 -- QQ11
$37,174,365
($11,563,878)
$37,310,765
($9,399,776)
$34,255,855
($16,310,988)
$26,222,055
($8,843,827)
($0.032)
($0.026)
($0.045)
($0.025)
TToottaall 22001199
$$113344,,996633,,004400
(($$4466,,111188,,446699))
NN//AA
22001188 -- QQ44
22001188 -- QQ33
22001188 -- QQ22
22001188 -- QQ11
$26,562,429
($843,810)
$25,733,852
($6,355,654)
$23,173,856
($9,158,368)
$20,913,462
($7,793,463)
($0.002)
($0.018)
($0.026)
($0.022)
TToottaall 22001188
$$9966,,338833,,559999
(($$2244,,115511,,229955))
NN//AA
22001177 -- QQ44
22001177 -- QQ33 11
22001177 -- QQ22
22001177 -- QQ11 11
$20,744,110
$15,343,505
$18,453,960
($15,402,377)
$12,557,306
($2,995,895)
$10,133,138
($10,797,865)
$0.044
($0.046)
($0.010)
($0.037)
TToottaall 22001177
$$6611,,888888,,551144
(($$1133,,885522,,663322))
NN//AA
22001166 -- QQ44
22001166 -- QQ33
22001166 -- QQ22
22001166 -- QQ11
$8,900,182
($18,657,288)
$7,307,070
$6,320,322
$5,296,970
($537,379)
($663,764)
($1,331,005)
($0.070)
($0.022)
($0.004)
($0.008)
TToottaall 22001166
$$2277,,882244,,554444
(($$2211,,118899,,443366))
NN//AA
22001155 -- QQ44
22001155 -- QQ33
22001155 -- QQ22
22001155 -- QQ11
$4,795,266
$3,137,527
$2,111,281
$1,096,513
($2,702,281)
($821,330)
($677,127)
($374,472)
($0.026)
($0.012)
($0.012)
($0.010)
TToottaall 22001155
$$1111,,114400,,558877
(($$44,,557755,,221100))
NN//AA
($0.035)
($0.012)
($0.019)
($0.031)
NN//AA
($0.027)
($0.017)
($0.024)
($0.023)
NN//AA
($0.032)
($0.026)
($0.045)
($0.025)
NN//AA
($0.002)
($0.018)
($0.026)
($0.022)
NN//AA
$0.044
($0.046)
($0.010)
($0.037)
NN//AA
($0.070)
($0.022)
($0.004)
($0.008)
NN//AA
($0.026)
($0.012)
($0.012)
($0.010)
NN//AA
$1,836,156,209
$1,613,949,693
$1,034,371
$1,710,707,686
$1,503,314,182
$1,021,120
$1,693,800,047
$1,487,413,665
$1,012,517
$1,610,798,998
$1,403,279,361
$1,002,868
NN//AA
NN//AA
$$44,,007700,,887766
$1,587,379,939
$1,377,204,772
$1,354,801,560
$1,149,197,801
$1,369,097,150
$1,155,700,318
$1,371,022,824
$1,151,432,603
$991,452
$978,240
$973,985
$966,317
NN//AA
NN//AA
$$33,,990099,,999944
$1,392,865,962
$1,162,117,984
$1,377,237,690
$1,134,721,033
$1,385,491,977
$1,132,963,923
$1,044,914,091
$794,584,280
$961,654
$958,230
$952,321
$930,288
NN//AA
NN//AA
$$33,,880022,,449933
$1,022,791,417
$761,864,860
$990,262,630
$731,939,098
$959,256,102
$694,025,713
$922,656,903
$661,214,665
$925,235
$920,981
$920,562
$889,786
NN//AA
NN//AA
$$33,,665566,,556644
$895,496,381
$627,421,264
$839,525,204
$585,777,091
$400,216,946
$237,005,503
$404,743,767
$238,025,850
$880,328
$879,376
$765,016
$749,946
NN//AA
NN//AA
$$33,,227744,,666666
$342,803,581
$187,115,587
$253,955,856
$131,931,530
$179,885,223
$118,343,352
$724,931
$630,309
$440,398
$176,728,097
$114,010,014
-
NN//AA
NN//AA
$$11,,779955,,663388
$171,486,477
$112,922,559
$108,865,822
$85,594,955
$54,449,748
$25,372,609
$27,910,360
$25,033,929
NN//AA
NN//AA
-
-
-
-
--
Note 1:
The Corporation reversed $12,420,000 of goodwill impairment taken in Q1 2017 and Q3 2017.
The Q1 2017 goodwill impairment that was recorded was $5,361,176, and as a result, Q1 2017 previously reported net loss of $10,797,865, would have been
$5,436,689 without such goodwill impairment. The Q3 2017 goodwill impairment that was recorded was $7,058,823, and as a result, Q3 2017 reported net loss of
$15,402,377 would have been $8,343,553 without such goodwill impairment.
The previously reported Total Assets for Q1 2017 of $404,743,767 would have been $410,104,943. The previously reported Total Assets for Q2 2017 of
$400,216,946 would have been $405,578,122. The previously reported Total Assets for Q3 2017 of $839,525,204 would have been $851,945,204.
17
Annual Report 2022 | 70
CANADA SELF STORAGE CENTRES
WWOORRKKIINNGG CCAAPPIITTAALL,, DDEEBBTT AANNDD SSHHAARREE CCAAPPIITTAALL
WWoorrkkiinngg CCaappiittaall
Cash provided by operating activities was $76.4 million for the fiscal year ended December 31, 2022, compared
to $59.0 million for fiscal 2021. The increase arises from increased rates through our revenue management
systems, continued streamlining and integration of operations and controlling costs.
As at December 31, 2022, the Corporation had $22.5 million of cash compared to $25.1 million at December 31,
2021. Despite cash being used to pay down debt, fund acquisitions and expansions and repurchase the
Corporation’s common shares, the Corporation continues to maintain a strong cash balance. The Corporation
expects its cash flow from operations to continue to increase as the full benefit of recently purchased stores are
realized and we continue to execute our operational plans. In addition, the Corporation will borrow against
existing assets to fund acquisitions and its expansion plans.
DDeebbtt
As at December 31, 2022 and December 31, 2021, the Corporation held the following debt:
DDeecceemmbbeerr 3311,, 22002222
WWeeiigghhtteedd
AAvveerraaggee
RRaattee
RRaannggee
BBaallaannccee
December 31, 2021
Weighted
Average
Rate
Range
Balance
MMoorrttggaaggeess
At amortiz ed cos t - Fixed
2.84% to 4.98%
Maturity: Apr 2023 to Dec 2029
4.48%
225511,,004488,,889977
2.84% to 5.5%
4.21%
338,546,891
Maturity: Jan 2022 to Apr 2028
At amortiz ed cos t - Variable
7.45% to 8.6%
8.08%
8844,,665533,,225500
3% to 3.95%
3.30%
108,144,132
Maturity: Feb 2023 to Jul 2024
Maturity: Oct 2022 to Nov 2024
At FVTP L - Variable
- Fixed via interes t rate s wap
778833,,889911,,441177
((3322,,883366,,554422))
775511,,005544,,887755
4.31%
455,173,279
9,873,937
465,047,216
3.82%
Maturity: Jan 2024 to Jan 2031
Maturity: Jan 2024 to Dec 2030
4.65%
11,,008866,,775577,,002222
3.91%
911,738,239
LL iinneess ooff CCrreeddiitt aanndd PP rroommiissssoorryy NNootteess
At amortiz ed cos t - Fixed
3.50%
44,,000000,,000000
3.95%
38,536,200
Maturity: Dec 2023
Maturity: Apr 2022 to Dec 2023
At amortiz ed cos t - Variable
7.28%
114400,,661188,,446688
3.53%
86,909,468
Maturity: Jun 2023 to Oct 2025
Maturity: May 2024 to Dec 2024
At FVTP L - Variable
- Fixed via interes t rate s wap
331144,,228888,,113344
((1144,,228888,,113344))
330000,,000000,,000000
3.88%
296,048,729
3,951,271
300,000,000
3.94%
Maturity: Feb 2025
Maturity: Feb 2025
4.95%
444444,,661188,,446688
3.86%
425,445,668
Deferred financing cos ts , net of accretion
((44,,665555,,772211))
(4,709,162)
4.73%
11,,552266,,771199,,776699
3.89%
11,,333322,,447744,,774455
18
Annual Report 2022 | 71
CANADA SELF STORAGE CENTRES
RReeccoonncciilliiaattiioonn ooff DDeebbtt
The following table reconciles the changes in cas h flows from financing activities for the Corporation's debt:
Debt, beginning of period
$$
11,,333322,,447744,,774455
$
1,179,739,132
DDeecceemmbbeerr 3311,, 22002222
December 31, 2021
Advances from debt
Repayment of debt
Amounts offs et agains t accounts receivable
Change in fair value of debt meas ured at FVTP L
Change in fair value of interes t rate s waps
Total cas h flow from debt financing activities
Change in deferred financing cos ts
661100,,334411,,001100
((440099,,666622,,996633))
((66,,448866,,446644))
((6600,,994499,,888844))
6600,,994499,,888844
119944,,119911,,558833
5533,,444411
309,110,285
(152,953,282)
(2,529,521)
37,842,949
(37,842,949)
153,627,482
(891,869)
Debt, end of period
$$
11,,552266,,771199,,776699
$
1,332,474,745
The bank prime rate at December 31, 2022 was 6.45% (December 31, 2021 - 2.45%). The weighted average cost
of debt at December 31, 2022 is 4.73% (December 31, 2021 - 3.89%). The Corporation’s variable interest rate
exposure is limited with only 14.7% of debt being variable (further reduced after the closing of the $150 million
5.00% Convertible Senior Unsecured Debentures on January 9, 2023 – see Subsequent Events) and the balance
being fixed interest rate debt.
The weighted years to maturity, excluding lines of credit, at December 31, 2022 is 4.26 years (December 31, 2021
– 4.09 years).
Mortgages are secured by a first mortgage charge on the real estate and equipment of the Corporation, general
security agreements, assignment of rents and leases and assignments of insurance coverages. The Corporation
must maintain certain financial ratios to comply with the facilities. These covenants include debt service coverage
ratios, a tangible net worth ratio, and a loan to value ratio. As of December 31, 2022 and December 31, 2021, the
Corporation is in compliance with all covenants.
The deferred financing costs are made up of fees and costs incurred to obtain the related mortgage financing, less
accumulated amortization into income of these costs.
Principal repayments on mortgages, lines of credit and promissory notes in each of the next five years are
estimated as follows:
Year 1
Year 2
Year 3
Year 4
Year 5
Thereafter
$
$
$
$
$
$
560,892,801 (includes lines of credit and promissory note of $444.6 million)
185,404,122
151,099,297
39,202,009
141,244,089
453,533,172
Of the repayments shown in Year 1, $20.7 million are required under our amortizing term debt mortgages, $95.6
million relates to loans due in the upcoming twelve months that are expected to be refinanced, and $444.6 million
relates to our lines of credit. Our lines of credit are covenant based (debt service coverage ratios, tangible net
worth ratios, and loan to value ratios) and do not require repayment as long as the covenants are met. As of
December 31, 2022 and December 31, 2021, the Corporation is in compliance with all covenants.
The Corporation terms out assets on our lines of credit when deemed appropriate, which includes determination
that the Corporation has been able to implement its operating systems to increase the value of the assets and that
the Corporation has an appropriate mix of assets supporting our lines of credit. The Corporation’s detailed debt
maturity profile as at December 31, 2022 is:
19
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CANADA SELF STORAGE CENTRES
Contractual Mortgage Maturities and Interest Rates
Year of
Debt
Maturity
Mortgages
Payable
2023
2024
2025
2026
2027
Thereafter
$
95,558,728
165,035,155
133,284,061
20,808,759
138,540,673
533,529,646
1,086,757,022
$
Weighted
Average
Interest
Rate
7.00%
4.24%
5.14%
3.49%
4.75%
4.25%
4.65%
Weighted
Average
Interest Rate
6.57%
7.26%
4.04%
0.00%
0.00%
0.00%
4.95%
Lines of Credit
$
18,005,000
111,409,468
315,204,000
-
-
-
$
444,618,468
Deferred financing costs net of accretion
Balance
Weighted
Average
Interest
Rate
6.93%
5.45%
4.37%
3.49%
4.75%
4.25%
4.73%
Total Debt
$
113,563,728
276,444,623
448,488,061
20,808,759
138,540,673
533,529,646
1,531,375,490
(4,655,721)
$
1,526,719,769
The Corporation entered into interest rate swap contracts in order to fix the interest rate on $1.1 billion of debt at
a weighted average rate of 4.19%. The swaps mature between January 2024 and January 2031.
HHyybbrriidd DDeebbeennttuurreess
2020 Hybrid Debentures
On July 20, 2020, $75 million of unsecured senior hybrid debentures were issued at a price of $1,000 per
debenture with a term of sixty-six months, due January 31, 2026. These debentures bear a fixed interest rate of
5.75% per annum, payable semi-annually in arrears on January 31 and July 31 of each year, commencing January
31, 2021. The intended use of the net proceeds of the debentures is to pay down the credit facility and fund
anticipated capital expenditures.
On and after January 31, 2024 and prior to January 31, 2025, the debentures will be redeemable in whole or in
part from time to time at the Corporation’s option at a redemption price equal to 102.875% of the principal amount
of the debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for
redemption. On and after January 31, 2025 and prior to the maturity date, the debentures will be redeemable, in
whole or in part, from time to time at the Corporation’s option at par plus accrued and unpaid interest, if any, up
to but excluding the date set for redemption.
On redemption or at maturity on January 31, 2026, the Corporation may elect to, in whole or part, convert the
debentures into freely tradable common shares. In such event, payment will be satisfied by delivering for each
$1,000 due, that number of freely tradable shares obtained by dividing $1,000 by 95% of the current market price
on the date fixed for redemption or maturity, as the case may be. Any accrued and unpaid interest will be paid in
cash.
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $75
million net of deferred financing costs of $3.5 million. Each embedded feature was evaluated separately and it was
determined that the economic and risk characteristics are closely related to the host contract and therefore were
not accounted for as separate financial instruments.
2021 Hybrid Debentures
On July 19, 2021, $57.5 million of unsecured senior hybrid debentures were issued at a price of $1,000 per
debenture with a term of sixty-six months, due September 30, 2026. These debentures bear a fixed interest rate
of 5.5% per annum, payable semi-annually in arrears on March 31 and September 30 of each year, commencing
September 30, 2021. The intended use of the net proceeds of the debentures is to fund potential future
opportunities and for general corporate purposes.
20
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CANADA SELF STORAGE CENTRES
On and after September 30, 2024 and prior to September 30, 2025, the debentures will be redeemable in whole
or in part from time to time at the Corporation’s option at a redemption price equal to 102.750% of the principal
amount of the debentures redeemed plus accrued and unpaid interest, if any, up to but excluding the date set for
redemption. On and after September 30, 2025 and prior to the maturity date, the debentures will be redeemable,
in whole or in part, from time to time at the Corporation’s option at par plus accrued and unpaid interest, if any,
up to but excluding the date set for redemption.
On redemption or at maturity on September 30, 2026, the Corporation may elect to, in whole or part, convert the
debentures into freely tradable common shares. In such event, payment will be satisfied by delivering for each
$1,000 due, that number of freely tradable shares obtained by dividing $1,000 by 95% of the current market price
on the date fixed for redemption or maturity, as the case may be. Any accrued and unpaid interest will be paid in
cash.
The debentures were recorded as a financial instrument. The debentures were recorded at a fair value of $57.5
million net of deferred financing costs of $2.5 million. Each embedded feature was evaluated separately and it was
determined that the economic and risk characteristics are closely related to the host contract and therefore were
not accounted for as separate financial instruments.
The debentures are subsequently measured at amortized cost using the effective interest method over the life of
the debenture. The balance of the hybrid debentures are:
DDeecceemmbbeerr 3311,, 22002222
December 31, 2021
Opening balance
$$
112277,,555511,,888855
Additions during period
Issuance costs
Accretion during period
Ending balance
--
--
11,,113300,,999988
112288,,668822,,888833
$$
SShhaarree CCaappiittaall
The common shares issued are:
Balance, December 31, 2020
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
Share issuance costs
Common shares repurchased
Balance, December 31, 2021
Issued on acquisitions
Dividend reinvestment plan
Share option redemption
R SU/DSU redemption
Common shares repurchased
Balance, December 31, 2022
$
71,765,725
57,500,000
(2,556,506)
842,666
127,551,885
$
Number of Shares
Amount
366,254,826
$
365,886,912
8,810,925
363,507
-
-
(792,815)
43,575,000
1,637,248
(548,300)
(31,608)
(3,953,358)
374,636,443
406,565,894
4,171,246
306,499
661,151
94,421
(1,852,400)
27,000,000
1,829,905
(448,659)
632,798
(10,625,564)
378,017,360
$
424,954,374
21
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CANADA SELF STORAGE CENTRES
Dividend Reinvestment Plan
Represents common shares issued under the Corporation’s dividend reinvestment plan (“DRIP") for holders of
common shares. Under the terms of the DRIP, eligible registered holders of a minimum of 10,000 Common Shares
(the "Shareholders") may elect to automatically reinvest their cash dividends, payable in respect to the common
shares, to acquire additional common shares, which will be issued from treasury or purchased on the open market.
The Corporation may initially issue up to 5,000,000 common shares under the DRIP, which may be increased upon
Board of Directors approval, acceptance of the increase by the Exchange, and upon public disclosure of the
increase.
Stock Options
A total of 36,342,000 options were outstanding as at December 31, 2022 (December 31, 2021 – 30,319,650). Of
the outstanding amount, 36,342,000 options were exercisable (December 31, 2021 – 30,319,650). The details
are as follows:
Exercise Price
$
0.33
$
0.41
$
0.50
$
1.36
$
1.78
$
2.52
$
2.90
$
3.98
$
6.31
$
5.94
Options exercisable and outstanding
Vesting Date
Jun. 19, 2014
Apr. 28, 2015
S ep. 14, 2015
Dec. 21, 2016
Mar. 16, 2017
May 4, 2018
May 28, 2019
Dec. 15, 2020
Dec. 20, 2021
Dec. 19, 2022
Expiry Date
Jun. 19, 2024
Apr. 28, 2025
S ep. 14, 2025
Dec. 21, 2026
Mar. 16, 2027
May 4, 2028
May 28, 2029
Dec. 15, 2030
Dec. 20, 2031
Dec. 19, 2032
--
DDeecceemmbbeerr 3311,, 22002222 December 31, 2021
140,000
1,560,650
1,550,000
2,785,000
2,810,000
2,825,000
5,854,000
5,975,000
6,820,000
11,,112255,,550000
11,,448800,,000000
22,,777700,,000000
22,,779955,,000000
22,,881100,,000000
55,,776644,,000000
55,,885588,,000000
66,,776677,,550000
66,,997722,,000000
3366,,334422,,000000
-
30,319,650
The Board of Directors of the Corporation may from time to time, at its discretion, and in accordance with the
Exchange requirements, grant to directors, officers, employees and consultants of the Corporation, non-
transferable options to purchase common shares.
Equity Incentive Plan
Under the Corporation’s Equity Incentive Plan passed on May 30, 2018 (the “Plan”), directors, employees and
consultants are eligible to receive awards, in the form of Restricted Share Units (“RSUs”), Deferred Share Units
(“DSUs”) and Named Executive Officer Restricted Share Units (“Neo RSUs”), as and when granted by the Board,
at its sole discretion. The maximum number of awards that may be issued under the Plan is 17,545,677. The
maximum number of shares that may be reserved for issuance under the Plan, together with any of the
Corporation’s other share-based compensation arrangements, may not exceed 10% of the issued shares of the
Corporation.
The RSUs and DSUs granted vest in equal annual amounts over three years. The Neo RSUs vest three years after
the date of grant. RSUs, DSUs and Neo RSUs are entitled to be credited with dividend equivalents in the form of
additional RSUs, DSUs and Neo RSUs, respectively.
With certain exceptions, the Plan provides that (i) the maximum number of awards that may be granted to any one
participant together with any other share-based compensation arrangements, in any 12 month period, may not
exceed 5% of the issued shares, and, in the case of any consultant, may not exceed 2% of the issued shares; and
(ii) the total value of all securities that may be issued to any non-employee director under all of the Corporation’s
security based compensation arrangements may not exceed $150,000 per annum.
The Corporation entered into Total Return Swaps (“TRS”) as economic hedges of the Corporation’s DSUs and
RSUs. Under the terms of the TRS, a bank has the right to purchase the Corporation’s shares in the marketplace as
a hedge against the returns in the TRS. At December 31, 2022, 3,081,360 TRS were outstanding at a value of
$4,700,494 (December 31, 2021 – 1,533,556 TRS were outstanding at a value of $6,142,747).
22
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CANADA SELF STORAGE CENTRES
At December 31, 2022, 100% of the combined DSU and RSU exposures were economically hedged. Hedge
accounting is not applied for the DSU/RSU hedging program.
CCOONNTTRRAACCTTUUAALL OOBBLLIIGGAATTIIOONNSS AANNDD OOFFFF--BBAALLAANNCCEE SSHHEEEETT AARRRRAANNGGEEMMEENNTTSS
LLeeaassee LLiiaabbiilliittiieess
The Corporation leases buildings and land in British Columbia, Alberta, Manitoba, Ontario and Quebec. The
leases expire between 2023 and 2057, with the leases expiring in 2023 and 2027 having up to 15 years and 20
years of renewals, respectively, which are expected to be exercised by the Corporation.
The lease liabilities are measured at the present value of the lease payments that are not paid at the balance sheet
date. Lease payments are apportioned between interest expense and a reduction of the lease liability using the
Corporation’s incremental borrowing rate to achieve a constant rate of interest on the remaining balances of the
liability.
For the year ended December 31, 2022, the Corporation recognized $3,035,180 (December 31, 2021 - $2,054,942)
in interest expense related to its lease liabilities.
A reconciliation of the lease liabilities associated with self storage properties from the date of adoption of IFRS 16
to December 31, 2022 is as follows:
DDeecceemmbbeerr 3311,, 22002222
December 31, 2021
Balance, beginning of period
Additions
Cash payments
Interest
Capitalized interest
Balance, end of period
7777,,009944,,774422
66,,335566,,337722
((66,,118811,,223399))
33,,003355,,118800
221133,,551177
8800,,551188,,557722
$$
$
$$
$
44,035,050
35,152,703
(4,311,912)
2,054,942
163,959
77,094,742
CCoonnttiinnggeennccyy
The Corporation has no legal contingency provisions at December 31, 2022 or December 31, 2021.
OOffff--BBaallaannccee SShheeeett AArrrraannggeemmeennttss
The Corporation is not party to any industry contracts or arrangements other than those disclosed in the
consolidated financial statements.
RREELLAATTEEDD PPAARRTTYY TTRRAANNSSAACCTTIIOONNSS
The Corporation holds a Master Franchise Agreement from Canadian PUPS Franchises Inc. (CPFI) which provides
the Corporation with the exclusive Canadian franchise rights for the development and operation of portable
storage throughout Canada. CPFI is a corporation related to Iqbal Khan and Steven Scott who are directors of the
Corporation. The Corporation pays a monthly royalty of 3.5% on the gross sales. During the year ended December
31, 2022, the Corporation paid $405,196, respectively (December 31, 2021 - $382,592) for royalties and
$3,046,665, (December 31, 2021 - $1,014,360) for storage containers and other equipment under the Master
Franchise Agreement.
Included in accounts payable and accrued liabilities, relating to the previously noted transactions, at December
31, 2022 was $58,225, (December 31, 2021 - $33,087) payable to CPFI.
The Corporation has management agreements with Access Self Storage Inc. and related companies (“Access
Group”). These companies are related to Iqbal Khan and Steven Scott who are directors of the Corporation. The
Corporation invoices the Access Group for management fees as well as additional services it provides as part of
23
Annual Report 2022 | 76
CANADA SELF STORAGE CENTRES
the management agreements. The Access Group will also invoice the Corporation for construction, maintenance
and other services related to its day-to-day operations.
During the year ended December 31, 2022, the Corporation received $8,471,116 (December 31, 2021 -
$6,856,964) in payments and reimbursements related to the management agreements. During the year ended
December 31, 2022, the Corporation also incurred $32,508,783 (December 31, 2021 - $24,658,103) in
expenditures related to construction, maintenance and other services related to its day-to-day operations.
Included in accounts payable and accrued liabilities as at December 31, 2022 was $522,072 (December 31, 2021
- $1,503,979) payable to the Access Group. Included in accounts receivable as at December 31, 2022 was $846,587
(December 31, 2021 - $491,942) receivable from the Access Group.
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the Corporation, directly and indirectly, and include directors. The remuneration of key
management personnel for employment services rendered are as follows:
DDeecceemmbbeerr 3311,, 22002222
December 31, 2021
Wages, management fees, bonuses and directors fees
S tock based compensation
$$
$$
661100,,221122
66,,006655,,667722
66,,667755,,888844
$
$
612,497
5,469,478
6,081,975
EENNVVIIRROONNMMEENNTTAALL,, SSOOCCIIAALL AANNDD GGOOVVEERRNNAANNCCEE ((EESSGG))
StorageVault embraces the responsibility of environmental stewardship and social responsibility which aligns with
our sound corporate governance practices. Together with our business objectives, these core values ensure we
continuously deliver strong and sustainable results.
We remain focused on reducing the inherently low environmental impact of our stores, while continuing to improve
team engagement and supporting the over 100 communities in which we operate. Our Board and Management
are committed to maintaining the highest standards of corporate governance practices to ensure our continued
success.
EEnnvviirroonnmmeennttaall
While the self storage industry has an intrinsically light environmental footprint, StorageVault acknowledges that
everyone must contribute to implementing green solutions and, as such, we continuously strive to improve and
increase our efforts.
At the end of 2022, StorageVault operated 36 stores with solar panels and solar walls and are committed to
expanding similar installations across our portfolio. The solar program allows us to utilize existing and otherwise
unexploited roof and wall space to generate electricity for consumption, while providing a solid financial return.
These initiatives demonstrate that sustainability efforts benefit the environment, our communities, our
shareholders, the broader self storage industry and future generations.
For energy conservation, we offer a strategic mix of square footage that is non-climate controlled and temperature
controlled, with non-climate controlled space having minimal environmental impact. For properties that do offer
temperature controlled storage, we closely regulate and moderate temperatures to safeguard contents while
minimizing energy required for heating or cooling. Water usage at our properties is also very low. Lastly, the
minimal daily client activity and traffic, helps to minimize our carbon footprint within our communities.
The self storage industry has the lowest environmental impact in the areas of energy consumption, water
consumption and waste production in comparison to all the other real estate asset classes.
24
Annual Report 2022 | 77
CANADA SELF STORAGE CENTRES
Energy Reduction and Generation
• motion sensored lighting, allowing for usage only where and when required
•
LED lighting (internal and external) used in all new buildings and retrofitting light fixtures in existing
buildings
solar power generation using roof top solar walls
•
• modern energy efficient HVAC systems
•
•
•
automated and self-adjusting internal thermostat temperature controls
all new roofs installed are reflective “cool” roofs that help minimize energy consumption
in floor radiant heating
Water Reduction and Conservation
• on average, one washroom per property given low occupant levels at our properties
• energy efficient plumbing systems and appliances
•
•
• water run-off controls
•
storm water retention
low-water irrigation systems
landscaping using native and drought-tolerant species
Waste Reduction and Recycling
•
through our paper shredding and recycling segment within RecordXpress, we saved 260,000 trees,
diverted 58,000 cubic meters from landfill and saved 116,000 barrels of oil that would otherwise be used
to harvest raw product
sale of moving and packaging supplies made from recycled materials
•
• waste recycling program at our stores and corporate offices
•
reduced paper usage through more efficient technology options including a paperless rental process
• e-waste reduction and electronic recycling program for decommissioned computer equipment by either
donating refurbished equipment to local charities or recycling equipment that cannot be repurposed
Green Building Design and Construction Practices
• energy efficient windows
• use of SolarWall systems or insulated metal panels used in construction of new and retrofitted buildings
•
•
•
replacing standard exterior storage doors with energy efficient doors
insulated foundation walls to help maintain and keep the foundation slab warm
all proposed acquisitions are subject to environmental site assessments prior to the closing
SSoocciiaall
StorageVault is committed to providing stability and support for the health and wellness of our more than 800
colleagues and the over 100 communities in which we live and work across Canada. Giving back and working
together contributes to the benefit of all, and through our efforts we hope to create meaningful and lasting impacts
for future generations.
Our colleagues are at the heart of our business and are key to our success. We believe that investing in our diverse
team is investing in our future. As a meritocracy, our culture of continuous improvement fosters growth and
promotes advancement within our organization. We have a dedicated team that supports our colleagues with
comprehensive training and professional development programs, as well as offers personal health and wellbeing
seminars known as “Wellness Wednesdays”.
In 2022, StorageVault continued to align with grassroots organizations in communities from coast to coast – this is
core to our community involvement. We remain passionate about supporting needs within our communities, such
as healthcare, food security, the arts, sports, and education. This past year we expanded our community
partnership base to support more than 200 local, provincial and national organizations resulting in immediate and
positive impacts within communities throughout Canada.
We are incredibly thankful to be able to support our colleagues, communities and clients across Canada.
25
Annual Report 2022 | 78
CANADA SELF STORAGE CENTRES
GGoovveerrnnaannccee
StorageVault’s Board and Management recognize the importance of equality, diversity and is dedicated to
maintaining the highest governance standards, which is exemplified through the following:
• Diverse Board and Management team
• Annual Board review and vote to approve executive compensation
• Annual election by shareholders of Directors at AGM
•
Independent Director led Audit, Acquisition and Governance, Nominating and Compensation
Committees
• Acquisition Committee Mandate to review, approve and recommend transactions to the Board
• Regular review, update and re-approval of all Corporate Governance mandates, principles and policies:
o Charter of the Audit Committee
o Charter of the Board of Directors
o Charter of the Governance, Nominating and Compensation Committee
o Code of Business Conduct (mandatory for all employees)
o Disclosure and Confidentiality Policy
o Diversity Policy
o
o Majority Voting Policy
o Whistleblower Policy
Insider Trading and Reporting Policy
We are extremely proud to once again have been recognized in The Globe and Mail’s 2022 Report on Business
Women Lead Here list. This annual editorial benchmark identifies best-in-class executive gender diversity in
corporate Canada. This award recognizes StorageVault’s shared vision for equity and inclusion among the other
honorees. It is StorageVault’s continued desire to promote strong leadership in our workplace and within
communities across Canada.
With StorageVault’s graduation to the TSX in 2022, we have adopted more stringent compliance requirements
which include but are not limited to additional audit scrutiny and testing to ensure that our corporate policies,
practices and accounting standards are met. To ensure good governance practices and transparency for all our
stakeholders, StorageVault’s corporate policies, mandates and charters are publicly accessible on our corporate
website.
StorageVault is committed to supporting and providing stability to assure the long-term interests of all
stakeholders through strong corporate governance practices.
AACCQQUUIISSIITTIIOONN CCOOMMMMIITTTTEEEE AANNDD AACCQQUUIISSIITTIIOONN CCOOMMMMIITTTTEEEE MMAANNDDAATTEE
The Corporation may, from time to time, purchase assets from parties related to the Corporation, and in particular,
assets or shares owned or controlled by management of the Corporation or Access Self Storage Inc. (Access) or
any of its subsidiaries or affiliates. To govern such potential related party transactions, the Corporation has
established an Acquisition Committee and an Acquisition Committee Mandate.
The Acquisition Committee is comprised of six voting members, four members being independently appointed
and independent of management and two of which are appointed by Access. Acquisition Committee members
who are deemed to be in a conflict of interest position with respect to related party transactions are required to
abstain from voting on such related party transactions.
The mandate of the Corporation’s Acquisition Committee is to review, evaluate, and approve the terms of
proposed acquisitions in the context of the current strategic direction of the Corporation. In particular, and with
respect to related party property acquisitions, the Acquisition Committee has the authority to appoint appraisers,
environmental consultants, and professional advisors to evaluate and report to the Acquisition Committee on the
suitability of such transactions. Thereafter, the Acquisition Committee provides its recommendation as to whether
the Board of Directors should approve an acquisition.
26
Annual Report 2022 | 79
CANADA SELF STORAGE CENTRES
The Board of Directors of the Corporation must accept the recommendations that the Acquisition Committee
makes with respect to any related party transaction, and in particular, an acquisition involving assets or shares of
Access or any of its subsidiaries or affiliates.
AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS
The Corporation’s significant accounting policies are summarized in Note 3 to the December 31, 2022 annual
audited consolidated financial statements. There has been no change in significant accounting policies from the
Corporation’s audited consolidated annual financial statements from December 31, 2021. In addition, there has
been no change in the Company’s financial instrument risks.
NNoonn--IIFFRRSS FFiinnaanncciiaall MMeeaassuurreess
Management uses both IFRS and Non-IFRS measures to assess the Corporation’s operating performance. In this
MD&A, management uses the following terms and ratios which do not have a standardized meaning under IFRS
and are unlikely to be comparable to similar measures presented by other companies:
i. Net Operating Income (“NOI”) – NOI is defined as storage and related services less operating costs. NOI
does not include interest expense or income, depreciation and amortization, selling, general and
administrative costs, acquisition and integration costs, stock based compensation costs or taxes. NOI
assists management in assessing profitability and valuation from principal business activities.
ii.
iii.
iv.
Funds from Operations (“FFO”) – FFO is defined as net income (loss) excluding gains or losses from the
sale of depreciable real estate, plus depreciation and amortization, unrealized (gain) or loss on derivative
financial instruments, stock based compensation expenses, and deferred income taxes; and after
adjustments for equity accounted entities and non-controlling interests. FFO should not be viewed as an
alternative to cash from operating activities, net income, or other measures calculated in accordance with
IFRS. The Corporation believes that FFO can be a beneficial measure, when combined with primary IFRS
measures, to assist in the evaluation of the Corporation’s ability to generate cash and evaluate its return
on investments as it excludes the effects of real estate amortization and gains and losses from the sale of
real estate, all of which are based on historical cost accounting and which may be of limited significance
in evaluating current performance.
Adjusted Funds from Operations (“AFFO”) – AFFO is defined as FFO plus acquisition and integration
costs. Acquisition and integration costs are one time in nature to the specific assets purchased in the
current period or pending and are expensed under IFRS.
Existing Self Storage and New Self Storage performance – “Existing Self Storage” are stabilized stores
that the Corporation has owned or leased at least since the beginning of the previous fiscal year. “New
Self Storage” are non-stabilized stores that have not been owned or leased continuously since the
beginning of the previous fiscal year. We believe the use of this metric combined with primary IFRS
measures is beneficial in understanding the full operating performance of our operations during a growth
period. Comparative figures for the New Self Storage and Existing Self Storage categories may differ from
amounts reported in previous MD&A reports.
RReecceenntt aanndd FFuuttuurree AAccccoouunnttiinngg PPrroonnoouunncceemmeennttss
The IASB and the International Financial Reporting Interpretations Committee have issued a number of new or
revised standards or interpretations that will become effective for future periods and have a potential implication
for the Corporation. There have been no pronouncements in addition to those disclosed in the December 31,
2022 annual audited consolidated financial statements.
DDiisscclloossuurree CCoonnttrroollss aanndd PPrroocceedduurreess
Pursuant to National Instrument 52-109, which requires certification of disclosure in an issuer’s annual and interim
filings, the Chief Executive Officer and the Chief Financial Officer have evaluated the effectiveness of the
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Corporation’s internal disclosure controls and procedures for the three months and fiscal year ended December
31, 2022, including the design of internal controls over financial reporting, to provide reasonable assurance
regarding the reliability of financial reporting in accordance with IFRS. These officers have concluded that the
Corporation’s disclosure controls and procedures are designed effectively to ensure that information required to
be disclosed in reports that are filed or submitted under Canadian securities legislation are recorded, processed
and reported within the time specified in those rules.
There have been no changes in the Corporation’s internal controls over financial reporting that have materially
affected or are reasonably likely to affect the Corporation’s internal controls over financial reporting for the three
months and fiscal year ended December 31, 2022.
RRIISSKKSS AANNDD UUNNCCEERRTTAAIINNTTIIEESS
As our primary business consists of owning and operating storage real estate, we are exposed to risks related to
such ownership and operations that can adversely impact our business and financial position. The following is a
brief overview of some of the potential risks and the potential impacts these risks and uncertainties may have on
the operations of the Corporation:
RReeaall EEssttaattee IInndduussttrryy
Real estate investments are subject to varying degrees of risk depending on the nature of each property. Such
investments are affected by general economic conditions, local real estate markets, supply and demand for rental
space, competition from others with similar developments, the perceived “attractiveness” of a given property and
various other factors.
LLiiqquuiiddiittyy RRiisskk
Liquidity risk is the risk that the Corporation will be unable to meet its financial obligations as they fall due. The
Corporation manages liquidity risk through cash flow forecasting and regular monitoring of cash requirements
including anticipated investing and financing activities. Typically, the Corporation ensures that it has sufficient
cash or liquid investments available to meet expected operating expenses for a period of 30 days, excluding the
potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. For the
foreseeable future, the Corporation anticipates that cash flows from operations, working capital, and other sources
of financing will be sufficient to meet its operating requirements, debt repayment obligations and will provide
sufficient funding for anticipated capital expenditures.
RReeffiinnaanncciinngg RRiisskk
There is no certainty that financing will be available upon the maturity of any existing mortgage at terms that are
as favorable as the expiring mortgage, or at all. If the Corporation is unable to refinance an existing indebtedness
on favorable terms, the Corporation may need to dispose of one or more properties on disadvantageous terms.
Prevailing interest rates, limited availability of credit or other factors at the time of refinancing could increase
interest expense and ultimately decrease the return to investors.
IInntteerreesstt RRaattee RRiisskk
Interest rate risk arises from changes in market interest rates that may affect the fair value of future cash flows from
the Corporation’s financial assets or liabilities. Interest rate risk may be partially mitigated by holding both fixed
and floating rate debt, or by staggering the maturities of fixed rate debt. The Corporation is exposed to interest
rate risk primarily relating to its long term debt. The Corporation will manage interest rate risk by utilizing fixed
interest rates on its mortgages where possible, entering into floating-to-fixed interest rate swaps, staggering
maturities over a number of years to mitigate exposure to any single year, and by attempting to ensure access to
diverse sources of funding.
EEccoonnoommiicc CCoonnddiittiioonnss
Even though storage is less susceptible to changes in the local economy as storage space is often needed during
times of both growth and recession, downturns in a local economy could negatively affect our revenues and NOI.
A significant portion of storage customers use storage during periods of moving from one residence to another or
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when a residence is being renovated. In times of economic downturn, the level of activity in housing sales and
housing renovation could decrease, thereby decreasing storage rental demand.
CCoonnttaaggiioouuss DDiisseeaasseess
Outbreaks of highly infectious or contagious diseases, such as the COVID-19 pandemic, may impact demand for
our storage space and ancillary products and services, which can result in potential decreases in occupancy, rental
rates and administrative fees, and increases in expenses, which could adversely affect our results.
EEnnvviirroonnmmeennttaall RRiisskk
Environmental risk is inherent in the ownership of property. Various municipal, provincial and federal regulations
can result in penalties or potential liability for remediation, to the extent that hazardous materials enter the
environment. The presence of hazardous substances could also impair the Corporation’s ability to finance or sell
the property, and might expose the Corporation to civil lawsuits. To mitigate such risk, the Corporation procures
recent or updated environmental reports for all acquisitions to ascertain the risk, if any, that exist at a property. It
also prohibits the storage of hazardous substances as a condition of the user agreement signed by customers.
CCrreeddiitt RRiisskk
Credit risk arises from the possibility that customers may experience financial difficulty and be unable to fulfill their
financial obligations to the Corporation. The risk of incurring bad debts often arises if storage customers relocate
and cannot be found to enforce payment, or if storage customers abandon their possessions. The extent of bad
debts can be mitigated by quickly following up on any unpaid amounts shortly after the due date, enforcing late
fees, denying access to any customers with delinquent accounts, and ultimately seizing the possessions of the
customer. Additionally, the Corporation typically rents to numerous customers, each of which constitutes
significantly less than 5% of the Corporation’s monthly revenue. This diversification in the customer base reduces
credit risk from any given customer.
OOtthheerr SSeellff SSttoorraaggee OOppeerraattoorrss oorr SSttoorraaggee AAlltteerrnnaattiivveess
The Corporation competes with other individuals, corporations and institutions which currently own, or are
anticipating owning a similar property in a given region. Competitive forces could have a negative effect on
occupancy levels, rental rates or operating costs such as marketing.
AAccqquuiissiittiioonn ooff FFuuttuurree LLooccaattiioonnss
Competition also exists when the Corporation attempts to grow through acquisitions of storage locations. An
increase in the availability of investment funds in the general market, and a subsequent increase in demand for
storage locations would have a tendency to increase the price for future acquisitions of storage locations and
reduce the yields thereon.
AAnnttiicciippaatteedd RReessuullttss ffrroomm NNeeww AAccqquuiissiittiioonnss
The realization of anticipated results and value from acquisitions can be jeopardized from unexpected
circumstances in integrating stores into our existing operations, from situations we did not detect during our due
diligence, or from increased property tax following reassessment of newly acquired locations.
IInnccrreeaassee iinn OOppeerraattiinngg CCoossttss
Our operating margins can be negatively impacted from increases in operating costs such as property tax, staffing
costs, insurance premiums, repairs and maintenances costs, utility costs and others due to various factors such as
the need for governments to raise funds, natural disasters, and energy prices.
CClliimmaattee aanndd NNaattuurraall DDiissaasstteerrss
The storage industry in Canada can be cyclical. Due to the climate, demand for storage is generally weaker in
winter months with an increase in operating costs resulting in potentially lower NOI during Q1 and Q4.
Natural disasters, such as floods, earthquakes or severe winter storms may result in damage and business
interruption losses that are greater than the aggregate limits of our insurance coverage. We maintain a
comprehensive insurance policy to cover such events, however some insurance coverage may be or become
unavailable or cost prohibitive.
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LLiittiiggaattiioonn
Legal claims may arise from the ordinary course of our business. Resolution of these claims would divert resources
from the Corporation such as cash to pay expenses and damages and the diversion of management’s time and
attention from the Corporation’s business. The impact and results from litigation cannot be predicted with
certainty and can have a material adverse effect on the business.
UUssee aanndd DDeeppeennddeennccyy oonn IInnffoorrmmaattiioonn TTeecchhnnoollooggyy SSyysstteemmss
Our business is heavily dependent on the use of information technology, with the majority of our new customers
communicating and transacting with us electronically or over the phone. Commerce over the internet and the
nature of our business requires us to retain private information about our customers. Significant aspects of these
systems are centrally managed, such as our financial information and some are managed by third party vendors.
These systems may be subject to telecommunication failures, cyber-attacks, computer worms and viruses and
other disruptive security breaches, all of which could materially impact our operations, resulting in additional costs
and or in legal action either by government agencies or private individuals.
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SSttoorraaggeeVVaauulltt CCaannaaddaa IInncc..
OOFFFFIICCEERRSS
Steven Scott
Chief Executive Officer
Iqbal Khan
Chief Financial Officer
DDIIRREECCTTOORRSS
Jay Lynne Fleming
Vancouver, BC
Ben Harris
Bedford, NY
Iqbal Khan
Toronto, ON
Steven Scott
Toronto, ON
Alan Simpson
Regina, SK
LLEEGGAALL CCOOUUNNSSEELL
AAUUDDIITTOORRSS
DLA Piper (Canada) LLP
Livingston Place
1000 – 250 2nd St S.W.
Calgary, AB T2P 0C1
Telephone 403-296-4470
Facsimile 403-296-4474
MNP LLP
1500, 640 – 5th Avenue
Calgary, AB T2P 3G4
Telephone 403-263-3385
Facsimile 403-269-8450
HHEEAADD OOFFFFIICCEE
RREEGGIISSTTRRAARR && TTRRAANNSSFFEERR AAGGEENNTT
StorageVault Canada Inc.
100 Canadian Rd
Toronto, ON M1R 4Z5
Telephone 1-877-622-0205
Email: ir@storagevaultcanada.com
TSX Trust
300-5th Avenue S.W., 10th Floor
Calgary, AB T2P 3C4
Telephone 403-218-2800
Facsimile 403-265-0232
TTSSXX LLIISSTTIINNGG:: SVI
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Corporate Information
Phone:
1-877-622-0205
Web site:
storagevaultcanada.com
Email:
ir@storagevaultcanada.com
Address:
100 Canadian Road, Toronto, Ontario, M1R 4Z5