Public Storage (NYSE:PSA) announced today operating results for
the three and nine months ended September 30, 2019.
Operating Results for the Three Months
Ended September 30, 2019
For the three months ended September 30, 2019, net income
allocable to our common shareholders was $337.4 million or $1.93
per diluted common share, compared to $322.7 million or $1.85 per
diluted common share in 2018 representing an increase of $14.7
million or $0.08 per diluted common share. The increase is due
primarily to (i) a $13.0 million increase in foreign currency
exchange gains associated with our euro denominated debt, (ii) a
$4.4 million increase in self-storage net operating income
(described below), and (iii) a reduction in general and
administrative expense attributable to $7.1 million in incremental
share-based compensation expense in the three months ended
September 30, 2018 for the planned retirement of our former CEO and
CFO. These increases were offset partially by (iv) a $9.1 million
allocation to our preferred shareholders associated with our
preferred share redemption activities in the three months ended
September 30, 2019.
The $4.4 million increase in self-storage net operating income
is a result of an $8.2 million increase in our non-Same Store
Facilities (Same Store Facilities, as defined below), offset
partially by a $3.8 million decrease in our Same Store Facilities.
The increase in net operating income of $8.2 million for the
non-Same Store Facilities is due primarily to the impact of
facilities acquired in 2018 and 2019 and the fill-up of recently
developed and expanded facilities. Revenues for the Same Store
Facilities increased 1.1% or $6.5 million in the three months ended
September 30, 2019 as compared to 2018, due to higher realized
annual rent per occupied square foot and higher occupancy. Cost of
operations for the Same Store Facilities increased by 6.4% or $10.3
million in the three months ended September 30, 2019 as compared to
2018, due primarily to a 69.5% ($5.7 million) increase in marketing
expenses and a 4.9% ($3.1 million) increase in property taxes.
Operating Results for the Nine Months
Ended September 30, 2019
For the nine months ended September 30, 2019, net income
allocable to our common shareholders was $945.5 million or $5.42
per diluted common share, compared to $958.8 million or $5.50 per
diluted common share in 2018 representing a decrease of $13.3
million or $0.08 per diluted common share. The decrease is due
primarily to (i) our $34.9 million equity share of gains recorded
by PS Business Parks in the nine months ended September 30, 2018
and (ii) a $26.5 million allocation to our preferred shareholders
associated with our preferred share redemption activities in the
nine months ended September 30, 2019. These decreases were offset
partially by (iii) a $19.8 million increase in self-storage net
operating income (described below) and (iv) a reduction in general
and administrative expense attributable to $22.7 million in
incremental share-based compensation expense in the nine months
ended September 30, 2018 for the planned retirement of our former
CEO and CFO.
The $19.8 million increase in self-storage net operating income
is a result of a $2.0 million increase in our Same Store Facilities
and a $17.8 million increase in our non-Same Store Facilities.
Revenues for the Same Store Facilities increased 1.5% or $26.7
million in the nine months ended September 30, 2019 as compared to
2018, due primarily to higher realized annual rent per occupied
square foot. Cost of operations for the Same Store Facilities
increased by 5.1% or $24.7 million in the nine months ended
September 30, 2019 as compared to 2018, due primarily to a 50.1%
($11.6 million) increase in marketing expenses as well as a 5.0%
($9.3 million) increase in property taxes. The increase in net
operating income of $17.8 million for the non-Same Store Facilities
is due primarily to the impact of facilities acquired in 2018 and
2019 and the fill-up of recently developed and expanded
facilities.
Funds from Operations
For the three months ended September 30, 2019, funds from
operations (“FFO”) was $2.76 per diluted common share, as compared
to $2.66 in the same period in 2018, representing an increase of
3.8%. FFO is a non-GAAP measure defined by the National Association
of Real Estate Investment Trusts and generally represents net
income before depreciation and amortization expense, gains and
losses and impairment charges with respect to real estate assets. A
reconciliation of GAAP diluted net income per share to FFO per
share, and additional descriptive information regarding this
non-GAAP measure, is attached.
For the nine months ended September 30, 2019, FFO was $7.86 per
diluted common share, as compared to $7.68 in the same period in
2018, representing an increase of 2.3%.
We also present “Core FFO per share,” a non-GAAP measure that
represents FFO per share excluding the impact of (i) foreign
currency exchange gains, (ii) EITF D-42 charges related to the
redemption of preferred securities, (iii) accelerations of accruals
or reductions in accruals due to the departure of senior executives
and (iv) certain other non-cash and/or nonrecurring income or
expense items. We review Core FFO per share to evaluate our ongoing
operating performance, and we believe it is used by investors and
REIT analysts in a similar manner. However, Core FFO per share is
not a substitute for net income per share. Because other REITs may
not compute Core FFO per share in the same manner as we do, may not
use the same terminology or may not present such a measure, Core
FFO per share may not be comparable among REITs.
The following table reconciles from FFO per share to Core FFO
per share (unaudited):
Three Months Ended September
30,
Nine Months Ended September
30,
Percentage
Percentage
2019
2018
Change
2019
2018
Change
FFO per share
$
2.76
$
2.66
3.8
%
$
7.86
$
7.68
2.3
%
Eliminate the per share impact of items
excluded from Core FFO, including our equity share from
investments:
Foreign currency exchange gain
(0.09
)
(0.01
)
(0.10
)
(0.07
)
Application of EITF D-42
0.05
-
0.15
-
(Forfeiture)/Acceleration of share-based
compensation expense due to the departure of senior executives
-
0.04
(0.01
)
0.13
Other items
0.01
0.01
-
0.01
Core FFO per share
$
2.73
$
2.70
1.1
%
$
7.90
$
7.75
1.9
%
Property Operations – Same Store
Facilities
The Same Store Facilities consist of facilities that have been
owned and operated on a stabilized level of occupancy, revenues and
cost of operations since January 1, 2017. Accordingly, our Same
Store Facilities exclude (i) facilities acquired after December 31,
2016, (ii) newly developed or expanded facilities, (iii) facilities
where expansion is under construction or that we expect to commence
by December 31, 2019, (iv) facilities whose operating trends are
significantly affected by factors such as casualty events, and (v)
facilities which were otherwise not stabilized at December 31, 2016
(such as recently developed facilities acquired from third parties
before December 31, 2016). Our Same Store Facilities decreased from
2,165 facilities at June 30, 2019 to 2,159 at September 30, 2019.
The composition of our Same Store Facilities allows us to more
effectively evaluate the ongoing performance of our self-storage
portfolio in 2017, 2018, and 2019 and exclude the impact of fill-up
of unstabilized facilities, which can significantly affect
operating trends. We believe the Same Store information is used by
investors and REIT analysts in a similar manner. The following
table summarizes the historical operating results of these 2,159
facilities (139.3 million net rentable square feet) that represent
approximately 83% of the aggregate net rentable square feet of our
U.S. consolidated self-storage portfolio at September 30, 2019.
Selected
Operating Data for the Same
Store Facilities
(2,159 facilities)
(unaudited):
Three Months Ended September
30,
Nine Months Ended September
30,
Percentage
Percentage
2019
2018
Change
2019
2018
Change
(Dollar amounts in thousands,
except for per square foot amounts)
Revenues:
Rental income
$
584,577
$
578,198
1.1
%
$
1,718,529
$
1,692,682
1.5
%
Late charges and administrative fees
26,650
26,507
0.5
%
77,946
77,126
1.1
%
Total revenues (a)
611,227
604,705
1.1
%
1,796,475
1,769,808
1.5
%
Cost of operations:
Property taxes
65,450
62,373
4.9
%
196,066
186,802
5.0
%
On-site property manager payroll
30,647
30,137
1.7
%
90,888
89,588
1.5
%
Supervisory payroll
9,754
9,411
3.6
%
29,394
29,292
0.3
%
Repairs and maintenance
12,785
11,855
7.8
%
34,748
33,187
4.7
%
Snow removal
-
-
-
3,093
2,873
7.7
%
Utilities
11,572
11,525
0.4
%
32,178
33,053
(2.6
)%
Marketing
13,934
8,221
69.5
%
34,769
23,166
50.1
%
Other direct property costs
15,293
15,565
(1.7
)%
47,863
46,583
2.7
%
Allocated overhead
11,430
11,456
(0.2
)%
37,138
36,890
0.7
%
Total cost of operations (a)
170,865
160,543
6.4
%
506,137
481,434
5.1
%
Net operating income (b)
$
440,362
$
444,162
(0.9
)%
$
1,290,338
$
1,288,374
0.2
%
Gross margin
72.0
%
73.5
%
(2.0
)%
71.8
%
72.8
%
(1.4
)%
Weighted average for the period:
Square foot occupancy
94.2
%
93.8
%
0.4
%
93.6
%
93.3
%
0.3
%
Realized annual rental income per (c):
Occupied square foot
$
17.82
$
17.69
0.7
%
$
17.58
$
17.37
1.2
%
Available square foot (“REVPAF”)
$
16.79
$
16.60
1.1
%
$
16.45
$
16.20
1.5
%
At September 30:
Square foot occupancy
92.7
%
92.0
%
0.8
%
Annual contract rent per occupied square
foot (d)
$
18.17
$
18.16
0.1
%
(a)
Revenues and cost of operations do not
include ancillary revenues and expenses generated at the facilities
with respect to tenant reinsurance and retail sales.
(b)
See attached reconciliation of
self-storage NOI to net income.
(c)
Realized annual rent per occupied square
foot is computed by dividing annualized rental income, before late
charges and administrative fees, by the weighted average occupied
square feet for the period. Realized annual rent per available
square foot (“REVPAF”) is computed by dividing annualized rental
income, before late charges and administrative fees, by the total
available rentable square feet for the period. These measures
exclude late charges and administrative fees in order to provide a
better measure of our ongoing level of revenue. Late charges are
dependent upon the level of delinquency, and administrative fees
are dependent upon the level of move-ins. In addition, the rates
charged for late charges and administrative fees can vary
independently from rental rates. These measures take into
consideration promotional discounts, which reduce rental
income.
(d)
Annual contract rent represents the agreed
upon monthly rate that is paid by our tenants in place at the time
of measurement. Contract rates are initially set in the lease
agreement upon move-in and we adjust them from time to time with
notice. Contract rent excludes other fees that are charged on a
per-item basis, such as late charges and administrative fees, does
not reflect the impact of promotional discounts, and does not
reflect the impact of rents that are written off as
uncollectible.
The following table summarizes selected quarterly financial data
with respect to the Same Store Facilities (unaudited):
For the Quarter Ended
March 31
June 30
September 30
December 31
Entire Year
(Amounts in thousands, except for
per square foot amounts)
Total revenues:
2019
$
586,004
$
599,244
$
611,227
2018
$
577,310
$
587,793
$
604,705
$
591,490
$
2,361,298
Total cost of operations:
2019
$
168,359
$
166,913
$
170,865
2018
$
162,034
$
158,857
$
160,543
$
129,839
$
611,273
Property taxes:
2019
$
64,945
$
65,671
$
65,450
2018
$
61,858
$
62,571
$
62,373
$
36,286
$
223,088
Repairs and maintenance,
including snow removal expenses:
2019
$
13,369
$
11,687
$
12,785
2018
$
12,124
$
12,081
$
11,855
$
12,428
$
48,488
Marketing:
2019
$
8,751
$
12,084
$
13,934
2018
$
6,855
$
8,090
$
8,221
$
9,178
$
32,344
REVPAF:
2019
$
16.08
$
16.48
$
16.79
2018
$
15.84
$
16.17
$
16.60
$
16.23
$
16.21
Weighted average realized annual
rent per occupied square foot:
2019
$
17.38
$
17.53
$
17.82
2018
$
17.19
$
17.23
$
17.69
$
17.55
$
17.41
Weighted average occupancy levels
for the period:
2019
92.5
%
94.0
%
94.2
%
2018
92.1
%
93.8
%
93.8
%
92.5
%
93.1
%
Property Operations – Non-Same Store
Facilities
In addition to the 2,159 Same Store Facilities, we have 309
facilities that were not stabilized with respect to occupancies,
revenues or cost of operations since January 1, 2017 or that we did
not own as of January 1, 2017, including 91 facilities that were
acquired from third parties, 78 newly developed facilities, 60
facilities that have been expanded or are targeted for expansion,
and 80 facilities that are unstabilized due to the impact of
casualties and other factors (collectively, the “Non-Same Store
Facilities”). Operating data, metrics, and further commentary with
respect to these facilities, including detail by vintage, is
included in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” under “Self-Storage
Operations” in our September 30, 2019 Form 10-Q.
Investing and Capital
Activities
During the three months ended September 30, 2019, we acquired
ten self-storage facilities (two each in Georgia and Massachusetts
and one each in Florida, Indiana, Minnesota, North Carolina,
Tennessee and Texas) with 0.8 million net rentable square feet for
$110.7 million. During the nine months ended September 30, 2019, we
acquired 32 self-storage facilities (eleven in Virginia, six in
Florida, three in Georgia, two each in Massachusetts and Texas and
one each in Arizona, Colorado, Indiana, Kentucky, Michigan,
Minnesota, North Carolina and Tennessee) with 2.2 million net
rentable square feet for $308.7 million. Subsequent to September
30, 2019, we acquired or were under contract to acquire eight
self-storage facilities (three in South Carolina, two in North
Carolina and one each in Arizona, Texas and Virginia) with 0.6
million net rentable square feet for $69.6 million.
During the three months ended September 30, 2019, we opened two
newly developed facilities and various expansion projects (0.6
million net rentable square feet – 0.3 million in Minnesota, 0.2
million in Colorado and 0.1 million in Washington) costing $72.4
million. During the nine months ended September 30, 2019, we opened
eight newly developed facilities and various expansion projects
(3.2 million net rentable square feet – 1.5 million in Texas, 0.3
million each in Colorado, Minnesota and North Carolina, 0.2 million
each in Georgia and Tennessee and 0.1 million each in California,
Florida, Michigan and Washington) costing $295.5 million. At
September 30, 2019, we had various facilities in development (1.3
million net rentable square feet) estimated to cost $219 million
and various expansion projects (2.4 million net rentable square
feet) estimated to cost $313 million. Our aggregate 3.7 million net
rentable square foot pipeline of development and expansion
facilities includes 1.2 million in Florida, 0.8 million in
California, 0.4 million each in Minnesota and Washington, 0.2
million each in Colorado, Missouri, Texas and Virginia and 0.1
million in New York. The remaining $348 million of development
costs for these projects is expected to be incurred primarily in
the next 18 months.
On September 11, 2019, we called our 5.625% Series U Preferred
Shares for redemption. These shares were redeemed at their $287.5
million liquidation value plus accrued dividends on October 15,
2019.
On September 12, 2019, we issued our 4.875% Series I Preferred
Shares for gross proceeds of $316 million.
On September 17, 2019, we acquired the remaining 74.25% equity
interests we did not own in consolidated partnerships that owned
two stabilized self-storage facilities located in California with
144,000 net rentable square feet for $35 million in cash.
Distributions Declared
On October 23, 2019, our Board of Trustees declared a regular
common quarterly dividend of $2.00 per common share. The Board also
declared dividends with respect to our various series of preferred
shares. All the dividends are payable on December 30, 2019 to
shareholders of record as of December 13, 2019.
Third Quarter Conference
Call
A conference call is scheduled for October 30, 2019 at 9:00 a.m.
(PDT) to discuss the third quarter earnings results. The domestic
dial-in number is (866) 406-5408, and the international dial-in
number is (973) 582-2770 (conference ID number for either domestic
or international is 2795945). A simultaneous audio webcast may be
accessed by using the link at www.publicstorage.com under “About
Us, Investor Relations, News and Events, Event Calendar.” A replay
of the conference call may be accessed through November 13, 2019 by
calling (800) 585-8367 (domestic), (404) 537-3406 (international)
or by using the link at www.publicstorage.com under “About Us,
Investor Relations, News and Events, Event Calendar.” All forms of
replay utilize conference ID number 2795945.
About Public Storage
Public Storage, a member of the S&P 500 and FT Global 500,
is a REIT that primarily acquires, develops, owns and operates
self-storage facilities. At September 30, 2019, we had: (i)
interests in 2,468 self-storage facilities located in 38 states
with approximately 167 million net rentable square feet in the
United States, (ii) an approximate 35% common equity interest in
Shurgard Self Storage SA (Euronext Brussels:SHUR) which owned 231
self-storage facilities located in seven Western European nations
with approximately 13 million net rentable square feet operated
under the “Shurgard” brand and (iii) an approximate 42% common
equity interest in PS Business Parks, Inc. (NYSE:PSB) which owned
and operated approximately 29 million rentable square feet of
commercial space at September 30, 2019. Our headquarters are
located in Glendale, California.
Additional information about Public Storage is available on our
website, www.publicstorage.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements in this press release, other than statements
of historical fact, are forward-looking statements which may be
identified by the use of the words “expects,” “believes,”
“anticipates,” “should,” “estimates” and similar expressions. These
forward-looking statements involve known and unknown risks and
uncertainties, which may cause our actual results and performance
to be materially different from those expressed or implied in the
forward-looking statements. Factors and risks that may impact
future results and performance include, but are not limited to,
those described in Part 1, Item 1A, “Risk Factors” in our most
recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission (the “SEC”) on February 27, 2019 and in our
other filings with the SEC and the following: general risks
associated with the ownership and operation of real estate,
including changes in demand, risk related to development of
self-storage facilities, potential liability for environmental
contamination, natural disasters and adverse changes in laws and
regulations governing property tax, real estate and zoning; risks
associated with downturns in the national and local economies in
the markets in which we operate, including risks related to current
economic conditions and the economic health of our customers; the
impact of competition from new and existing self-storage and
commercial facilities and other storage alternatives; difficulties
in our ability to successfully evaluate, finance, integrate into
our existing operations and manage acquired and developed
properties; risks associated with international operations
including, but not limited to, unfavorable foreign currency rate
fluctuations, changes in tax laws, and local and global economic
uncertainty that could adversely affect our earnings and cash
flows; risks related to our participation in joint ventures; the
impact of the regulatory environment as well as national, state and
local laws and regulations including, without limitation, those
governing environmental, taxes, our tenant reinsurance business and
labor, and risks related to the impact of new laws and regulations;
risks of increased tax expense associated either with a possible
failure by us to qualify as a REIT, or with challenges to the
determination of taxable income for our taxable REIT subsidiaries;
risks due to a potential November 2020 statewide ballot initiative
(or other equivalent actions) that could remove the protections of
Proposition 13 with respect to our real estate and result in
substantial increases in our assessed values and property tax bills
in California; changes in federal or state tax laws related to the
taxation of REITs and other corporations; security breaches or a
failure of our networks, systems or technology could adversely
impact our business, customer and employee relationships; risks
associated with the self-insurance of certain business risks,
including property and casualty insurance, employee health
insurance and workers compensation liabilities; difficulties in
raising capital at a reasonable cost; delays in the development
process; ongoing litigation and other legal and regulatory actions
which may divert management’s time and attention, require us to pay
damages and expenses or restrict the operation of our business; and
economic uncertainty due to the impact of war or terrorism. These
forward-looking statements speak only as of the date of this press
release. All of our forward-looking statements, including those in
this press release, are qualified in their entirety by this
statement. We expressly disclaim any obligation to update publicly
or otherwise revise any forward-looking statements, whether as a
result of new information, new estimates, or other factors, events
or circumstances after the date of this press release, except where
expressly required by law. Given these risks and uncertainties, you
should not rely on any forward-looking statements in this press
release, or which management may make orally or in writing from
time to time, as predictions of future events nor guarantees of
future performance.
PUBLIC STORAGE
SELECTED INCOME STATEMENT
DATA
(Amounts in thousands, except per
share data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Revenues:
Self-storage facilities
$
687,778
$
666,616
$
2,007,525
$
1,943,359
Ancillary operations
41,558
39,752
121,799
118,461
729,336
706,368
2,129,324
2,061,820
Expenses:
Self-storage cost of operations
200,369
183,637
590,108
545,700
Ancillary cost of operations
11,893
11,907
34,091
33,648
Depreciation and amortization
129,233
124,516
378,033
362,272
General and administrative
16,908
27,429
51,675
90,278
Interest expense
12,597
8,094
32,994
24,589
371,000
355,583
1,086,901
1,056,487
Other increase (decrease) to net
income:
Interest and other income
6,465
7,020
22,012
18,892
Equity in earnings of unconsolidated real
estate entities
19,045
17,771
55,631
90,529
Gain on sale of real estate
-
1,401
341
1,825
Foreign currency exchange gain
15,574
2,612
18,147
12,738
Net income
399,420
379,589
1,138,554
1,129,317
Allocation to noncontrolling interests
(1,478
)
(1,562
)
(4,035
)
(4,491
)
Net income allocable to Public Storage
shareholders
397,942
378,027
1,134,519
1,124,826
Allocation of net income to:
Preferred shareholders – distributions
(50,028
)
(54,080
)
(158,565
)
(162,238
)
Preferred shareholders – redemptions
(9,146
)
-
(26,540
)
-
Restricted share units
(1,406
)
(1,268
)
(3,898
)
(3,790
)
Net income allocable to common
shareholders
$
337,362
$
322,679
$
945,516
$
958,798
Per common
share:
Net income per common share – Basic
$
1.94
$
1.85
$
5.43
$
5.51
Net income per common share – Diluted
$
1.93
$
1.85
$
5.42
$
5.50
Weighted average common shares – Basic
174,334
173,975
174,255
173,933
Weighted average common shares –
Diluted
174,611
174,348
174,510
174,240
PUBLIC STORAGE
SELECTED BALANCE SHEET
DATA
(Amounts in thousands, except
share and per share data)
September 30, 2019
December 31, 2018
ASSETS
(Unaudited)
Cash and equivalents
$
541,357
$
361,218
Operating real estate facilities:
Land and buildings, at cost
16,031,472
15,296,844
Accumulated depreciation
(6,496,989
)
(6,140,072
)
9,534,483
9,156,772
Construction in process
184,033
285,339
Investments in unconsolidated real estate
entities
771,167
783,988
Goodwill and other intangible assets,
net
211,476
209,856
Other assets
171,345
131,097
Total assets
$
11,413,861
$
10,928,270
LIABILITIES AND EQUITY
Senior unsecured notes
$
1,864,662
$
1,384,880
Mortgage notes
27,773
27,403
Preferred shares called for redemption
287,500
-
Accrued and other liabilities
444,962
371,259
Total liabilities
2,624,897
1,783,542
Equity:
Public Storage shareholders’ equity:
Cumulative Preferred Shares, $0.01 par
value, 100,000,000 shares authorized, 150,650 shares issued (in
series) and outstanding, (161,000 at December 31, 2018) at
liquidation preference
3,766,250
4,025,000
Common Shares, $0.10 par value,
650,000,000 shares authorized, 174,378,478 shares issued and
outstanding, (174,130,881 shares at December 31, 2018)
17,438
17,413
Paid-in capital
5,719,182
5,718,485
Accumulated deficit
(650,222
)
(577,360
)
Accumulated other comprehensive loss
(78,513
)
(64,060
)
Total Public Storage shareholders’
equity
8,774,135
9,119,478
Noncontrolling interests
14,829
25,250
Total equity
8,788,964
9,144,728
Total liabilities and equity
$
11,413,861
$
10,928,270
PUBLIC STORAGE
SELECTED FINANCIAL
DATA
Computation of Funds from
Operations and Funds Available for Distribution
(Unaudited – amounts in thousands
except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Computation of
FFO per Share:
Net income allocable to common
shareholders
$
337,362
$
322,679
$
945,516
$
958,798
Eliminate items excluded from FFO:
Depreciation and amortization
128,716
124,516
377,516
362,272
Depreciation from unconsolidated real
estate investments
17,803
19,615
52,564
58,238
Depreciation allocated to noncontrolling
interests and restricted share unitholders
(1,019
)
(892
)
(3,305
)
(2,824
)
Gains on sale of real estate, including
our equity share from investments
(388
)
(1,766
)
(1,380
)
(37,530
)
FFO allocable to common shares (a)
$
482,474
$
464,152
$
1,370,911
$
1,338,954
Diluted weighted average common shares
174,611
174,348
174,510
174,240
FFO per share (a)
$
2.76
$
2.66
$
7.86
$
7.68
Reconciliation of
Earnings per Share to FFO per Share:
Earnings per share—Diluted
$
1.93
$
1.85
$
5.42
$
5.50
Eliminate per share amounts excluded from
FFO per share:
Depreciation and amortization
0.83
0.82
2.45
2.40
Gains on sale of real estate
-
(0.01
)
(0.01
)
(0.22
)
FFO per share (a)
$
2.76
$
2.66
$
7.86
$
7.68
Computation of
Funds Available for Distribution ("FAD"):
FFO allocable to common shares
$
482,474
$
464,152
$
1,370,911
$
1,338,954
Eliminate effect of items included in FFO
but not FAD:
Share-based compensation expense in excess
of cash paid
6,442
17,998
8,805
40,987
Foreign currency exchange gain
(15,574
)
(2,612
)
(18,147
)
(12,738
)
Application of EITF D-42
9,146
-
26,540
-
Less: Capital expenditures to maintain
real estate facilities (b)
(62,840
)
(40,180
)
(135,399
)
(93,407
)
FAD (a)
$
419,648
$
439,358
$
1,252,710
$
1,273,796
Distributions paid to common shareholders
and restricted share units
$
349,745
$
349,166
$
1,048,816
$
1,047,161
Distribution payout ratio
83.3
%
79.5
%
83.7
%
82.2
%
Distributions per common share
$
2.00
$
2.00
$
6.00
$
6.00
(a)
FFO and FFO per share are non-GAAP
measures defined by the National Association of Real Estate
Investment Trusts and, along with the non-GAAP measure FAD, are
considered helpful measures of REIT performance by REITs and many
REIT analysts. FFO represents GAAP net income before depreciation
and amortization, real estate gains or losses and impairment
charges, which are excluded because they are based upon historical
costs and assume that building values diminish ratably over time,
while we believe that real estate values fluctuate due to market
conditions. FAD represents FFO adjusted to exclude certain non-cash
charges and to deduct capital expenditures. We utilize FAD in
evaluating our ongoing cash flow available for investment, debt
repayment and common distributions. We believe investors and
analysts utilize FAD in a similar manner. FFO and FFO per share are
not a substitute for net income or earnings per share. FFO and FAD
are not substitutes for GAAP net cash flow in evaluating our
liquidity or ability to pay dividends, because they exclude
investing and financing activities presented on our statements of
cash flows. In addition, other REITs may compute these measures
differently, so comparisons among REITs may not be helpful.
(b)
Capital expenditures for 2019 include
certain projects that are not traditional like-for-like
replacements of existing components, and in certain circumstances
upgrade existing components before the end of their functional
lives. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” under “Overview” and
“Liquidity and Capital Resources – Capital Expenditure
Requirements” in our September 30, 2019 Form 10-Q for further
information.
PUBLIC STORAGE
SELECTED FINANCIAL
DATA
Reconciliation of Self-Storage
Net Operating Income to
Net Income
(Unaudited – amounts in
thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Self-storage revenues for:
Same Store facilities
$
611,227
$
604,705
$
1,796,475
$
1,769,808
Acquired facilities
16,222
9,171
41,429
23,673
Newly developed and expanded
facilities
39,771
31,963
109,404
88,928
Other non-same store facilities
20,558
20,777
60,217
60,950
Self-storage revenues
687,778
666,616
2,007,525
1,943,359
Self-storage cost of operations for:
Same Store facilities
170,865
160,543
506,137
481,434
Acquired facilities
6,058
3,156
16,027
8,309
Newly developed and expanded
facilities
16,976
13,376
48,809
35,863
Other non-same store facilities
6,470
6,562
19,135
20,094
Self-storage cost of operations
200,369
183,637
590,108
545,700
Self-storage NOI for:
Same Store facilities
440,362
444,162
1,290,338
1,288,374
Acquired facilities
10,164
6,015
25,402
15,364
Newly developed and expanded
facilities
22,795
18,587
60,595
53,065
Other non-same store facilities
14,088
14,215
41,082
40,856
Self-storage NOI (a)
487,409
482,979
1,417,417
1,397,659
Ancillary revenues
41,558
39,752
121,799
118,461
Ancillary cost of operations
(11,893
)
(11,907
)
(34,091
)
(33,648
)
Depreciation and amortization
(129,233
)
(124,516
)
(378,033
)
(362,272
)
General and administrative expense
(16,908
)
(27,429
)
(51,675
)
(90,278
)
Interest and other income
6,465
7,020
22,012
18,892
Interest expense
(12,597
)
(8,094
)
(32,994
)
(24,589
)
Equity in earnings of unconsolidated real
estate entities
19,045
17,771
55,631
90,529
Gain on sale of real estate
-
1,401
341
1,825
Foreign currency exchange gain
15,574
2,612
18,147
12,738
Net income on our income statement
$
399,420
$
379,589
$
1,138,554
$
1,129,317
(a)
Net operating income or “NOI” is a
non-GAAP financial measure that excludes the impact of depreciation
and amortization expense, which is based upon historical costs and
assumes that building values diminish ratably over time, while we
believe that real estate values fluctuate due to market conditions.
We utilize NOI in determining current property values, evaluating
property performance, and in evaluating operating trends. We
believe that investors and analysts utilize NOI in a similar
manner. NOI is not a substitute for net income, operating cash
flow, or other related GAAP financial measures, in evaluating our
operating results. This table reconciles from NOI for our
self-storage facilities to the net income presented on our income
statement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191029006022/en/
Ryan Burke (818) 244-8080, Ext. 1141
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