Public Storage (NYSE:PSA) announced today operating results for
the three and six months ended June 30, 2020.
Comment by CEO
“We are proud of the way our employees, customers, and business
partners have come together,” said Joe Russell, Chief Executive
Officer. “I want to thank all Public Storage employees for their
extraordinary efforts in keeping our more than 2,500 self-storage
properties open for customers throughout the pandemic. We are
committed to health and safety as we continue to support our
customers and communities through difficult times.”
Operating Results for the Three Months
Ended June 30, 2020
For the three months ended June 30, 2020, net income allocable
to our common shareholders was $246.1 million or $1.41 per diluted
common share, compared to $306.4 million or $1.76 per diluted
common share in 2019 representing a decrease of $60.3 million or
$0.35 per diluted common share. The decrease is due primarily to
(i) a $22.5 million decrease in self-storage net operating income
(described below), (ii) a $14.1 million decrease due to the impact
of foreign currency exchange losses associated with our Euro
denominated debt, and (iii) a $10.8 million increase in
depreciation and amortization expense.
The $22.5 million decrease in self-storage net operating income
is a result of a $30.2 million decrease in our Same Store
Facilities (as defined below), offset by a $7.6 million increase in
our non-Same Store Facilities (as defined below). Revenues for the
Same Store Facilities decreased 3.0% or $18.7 million in the three
months ended June 30, 2020 as compared to 2019, due primarily to
lower realized annual rent per occupied square foot and reduced
late charges and administrative fees. Cost of operations for the
Same Store Facilities increased by 6.7% or $11.5 million in the
three months ended June 30, 2020 as compared to 2019, due primarily
to a 20.7% ($6.4 million) increase in on-site property manager
payroll and 36.9% ($4.6 million) increase in marketing expenses.
The increase in net operating income of $7.6 million for the
non-Same Store Facilities is due primarily to the impact of
facilities acquired in 2019 and 2020 and the fill-up of recently
developed and expanded facilities.
Operating Results for the Six Months
Ended June 30, 2020
For the six months ended June 30, 2020, net income allocable to
our common shareholders was $559.3 million or $3.20 per diluted
common share, compared to $608.2 million or $3.49 per diluted
common share in 2019 representing a decrease of $48.9 million or
$0.29 per diluted common share. The decrease is due primarily to
(i) a $13.0 million decrease in self-storage net operating income
(described below), (ii) a $12.9 million decrease due to the impact
of foreign currency exchange gains and losses associated with our
Euro denominated debt, and (iii) a $24.7 million increase in
depreciation and amortization expense.
The $13.0 million decrease in self-storage net operating income
is a result of a $29.9 million decrease in our Same Store
Facilities (as defined below), offset by a $16.9 million increase
in our non-Same Store Facilities (as defined below). Revenues for
the Same Store Facilities decreased 0.9% or $11.5 million in the
six months ended June 30, 2020 as compared to 2019, due primarily
to reduced late charges and administrative fees. Cost of operations
for the Same Store Facilities increased by 5.3% or $18.4 million in
the six months ended June 30, 2020 as compared to 2019, due
primarily to a 46.1% ($9.9 million) increase in marketing expenses
and a 12.0% ($7.4 million) increase in on-site property manager
payroll expense. The increase in net operating income of $16.9
million for the non-Same Store Facilities is due primarily to the
impact of facilities acquired in 2019 and 2020 and the fill-up of
recently developed and expanded facilities.
Funds from Operations
For the three months ended June 30, 2020, funds from operations
(“FFO”) was $2.28 per diluted common share, as compared to $2.57 in
the same period in 2019, representing a decrease of 11.3%. 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 six months ended June 30, 2020, FFO was $4.90 per
diluted common share, as compared to $5.09 in the same period in
2019, representing a decrease of 3.7%.
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 and losses, (ii) EITF D-42 charges related
to the redemption of preferred securities, and (iii) certain other
non-cash and/or nonrecurring income or expense items primarily
representing, with respect to the periods presented below, the
impact of casualties, due diligence costs incurred in strategic
transactions, and contingency resolutions. 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 June 30,
Six Months Ended June 30,
Percentage
Percentage
2020
2019
Change
2020
2019
Change
FFO per share
$
2.28
$
2.57
(11.3
)%
$
4.90
$
5.09
(3.7
)%
Eliminate the per share impact of
items excluded from Core FFO,
including
our equity share from investments:
Foreign currency exchange loss (gain)
0.11
0.03
0.06
(0.01
)
Application of EITF D-42
0.09
0.05
0.09
0.10
Other items
(0.02
)
(0.01
)
(0.01
)
-
Core FFO per share
$
2.46
$
2.64
(6.8
)%
$
5.04
$
5.18
(2.7
)%
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, 2018. The composition of our
Same Store Facilities allows us to more effectively evaluate the
ongoing performance of our self-storage portfolio in 2018, 2019,
and 2020 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 2,224 facilities (143.9
million net rentable square feet) that represent approximately 84%
of the aggregate net rentable square feet of our U.S. consolidated
self-storage portfolio at June 30, 2020.
Selected
Operating Data for the Same
Store Facilities
(2,224 facilities)
(unaudited):
Three Months Ended June 30,
Six Months Ended June 30,
Percentage
Percentage
2020
2019
Change
2020
2019
Change
(Dollar amounts in thousands,
except for per square foot data)
Revenues:
Rental income
$
579,643
$
590,082
(1.8
)%
$
1,163,375
$
1,165,644
(0.2
)%
Late charges and administrative fees
17,707
25,973
(31.8
)%
43,510
52,708
(17.5
)%
Total revenues (a)
597,350
616,055
(3.0
)%
1,206,885
1,218,352
(0.9
)%
Cost of operations:
Property taxes
70,003
67,550
3.6
%
140,190
134,377
4.3
%
On-site property manager payroll
37,496
31,067
20.7
%
69,550
62,102
12.0
%
Supervisory payroll
10,839
10,213
6.1
%
21,652
20,264
6.8
%
Repairs and maintenance
11,180
11,748
(4.8
)%
21,662
22,649
(4.4
)%
Snow removal
128
320
(60.0
)%
2,041
3,177
(35.8
)%
Utilities
9,124
9,921
(8.0
)%
19,554
21,217
(7.8
)%
Marketing
17,005
12,426
36.9
%
31,301
21,427
46.1
%
Other direct property costs
16,498
16,643
(0.9
)%
32,950
33,487
(1.6
)%
Allocated overhead
11,086
11,993
(7.6
)%
24,740
26,505
(6.7
)%
Total cost of operations (a)
183,359
171,881
6.7
%
363,640
345,205
5.3
%
Net operating income (b)
$
413,991
$
444,174
(6.8
)%
$
843,245
$
873,147
(3.4
)%
Gross margin
69.3
%
72.1
%
(3.9
)%
69.9
%
71.7
%
(2.5
)%
Weighted average for the period:
Square foot occupancy
94.2
%
94.0
%
0.2
%
93.7
%
93.2
%
0.5
%
Realized annual rental income per (c):
Occupied square foot
$
17.10
$
17.45
(2.0
)%
$
17.26
$
17.38
(0.7
)%
Available square foot (“REVPAF”)
$
16.11
$
16.40
(1.8
)%
$
16.17
$
16.20
(0.2
)%
At June 30:
Square foot occupancy
94.6
%
94.1
%
0.5
%
Annual contract rent per occupied
square foot (d)
$
17.35
$
17.91
(3.1
)%
(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 data)
Total revenues:
2020
$
609,535
$
597,350
2019
$
602,297
$
616,055
$
628,573
$
615,268
$
2,462,193
Total cost of operations:
2020
$
180,281
$
183,359
2019
$
173,324
$
171,881
$
175,983
$
140,306
$
661,494
Property taxes:
2020
$
70,187
$
70,003
2019
$
66,827
$
67,550
$
67,353
$
38,904
$
240,634
Repairs and maintenance, including
snow removal expenses:
2020
$
12,395
$
11,308
2019
$
13,758
$
12,068
$
13,166
$
12,572
$
51,564
Marketing:
2020
$
14,296
$
17,005
2019
$
9,001
$
12,426
$
14,345
$
13,230
$
49,002
REVPAF:
2020
$
16.23
$
16.11
2019
$
16.00
$
16.40
$
16.71
$
16.37
$
16.37
Weighted average realized annual
rent per occupied square foot:
2020
$
17.43
$
17.10
2019
$
17.30
$
17.45
$
17.74
$
17.59
$
17.52
Weighted average occupancy levels
for the period:
2020
93.1
%
94.2
%
2019
92.5
%
94.0
%
94.2
%
93.1
%
93.4
%
Property Operations – Non-Same Store
Facilities
In addition to the 2,224 Same Store Facilities, we have 276
facilities that were not stabilized with respect to occupancies,
revenues or cost of operations since January 1, 2018 or that we did
not own as of January 1, 2018, including 84 facilities that were
acquired from third parties, 76 newly developed facilities, 71
facilities that have been expanded or are targeted for expansion,
and 45 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 June 30, 2020 Form 10-Q.
Investing and Capital
Activities
During the three months ended June 30, 2020, we acquired six
self-storage facilities (four in Ohio and one in California and
Florida) with 0.4 million net rentable square feet for $67.1
million. During the six months ended June 30, 2020, we acquired 15
self-storage facilities (four in Ohio, three in California, two
each in New York and Tennessee and one each in Florida, Indiana,
Massachusetts and Nebraska) with 1.2 million net rentable square
feet for $253.3 million. Subsequent to June 30, 2020, we acquired
or were under contract to acquire five self-storage facilities (two
in Minnesota and one each in Colorado, Michigan and Utah) with 0.3
million net rentable square feet for $33.3 million.
During the three months ended June 30, 2020, we opened two newly
developed facilities and various expansion projects (0.4 million
net rentable square feet – 0.2 million in Florida and 0.1 million
in California and Minnesota) costing $44.7 million. During the six
months ended June 30, 2020, we opened two newly developed
facilities and various expansion projects (0.5 million net rentable
square feet – 0.2 million each in Florida and Minnesota and 0.1
million in California) costing $70.0 million. At June 30, 2020, we
had various facilities in development (1.1 million net rentable
square feet) estimated to cost $195 million and various expansion
projects (2.7 million net rentable square feet) estimated to cost
$361 million. Our aggregate 3.8 million net rentable square foot
pipeline of development and expansion facilities includes 1.5
million in California, 1.0 million in Florida, 0.2 million each in
Missouri, Texas, Virginia and Washington and 0.5 million in other
states. The remaining $403 million of development costs for these
projects is expected to be incurred primarily in the next 18 to 24
months.
On June 9, 2020, we called for redemption, and on July 10, 2020
we redeemed, our 5.375% Series V Preferred Shares for $495 million,
plus accrued dividends.
On June 17, 2020, we issued our 4.625% Series L Preferred Shares
for gross proceeds of $565 million.
COVID-19 Pandemic
The COVID-19 Pandemic (the “COVID Pandemic”) and the resulting
economic recession has and will continue to impact our operations,
revenues, cost of operations, as well as our investments and
capital availability, as described in more detail in “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” in our June 30, 2020 Form 10-Q.
Distributions Declared
On August 3, 2020, 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 September 30, 2020 to
shareholders of record as of September 15, 2020.
Second Quarter Conference
Call
A conference call is scheduled for August 6, 2020 at 9:00 a.m.
(PDT) to discuss the second 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 2158058). 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 August 20, 2020 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 2158058.
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 June 30, 2020, we had: (i) interests in
2,500 self-storage facilities located in 38 states with
approximately 171 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 238
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 28 million rentable square feet of
commercial space at June 30, 2020. Our headquarters are located in
Glendale, California.
This press release, our Form 10-Q for the second quarter of
2020, and 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 25, 2020 and in our
other filings with the SEC including: general risks associated with
the ownership and operation of real estate, including changes in
demand, risk related to development, expansion and acquisition 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; risks
associated with the COVID Pandemic or similar events, including but
not limited to illness or death of our employees or customers,
negative impacts to the economic environment and to self-storage
customers which could reduce the demand for self-storage or reduce
our ability to collect rent, and/or potential regulatory actions to
(i) close our facilities if we were determined not to be an
“essential business” or for other reasons, (ii) limit our ability
to increase rent or otherwise limit the rent we can charge or (iii)
limit our ability to collect rent or evict delinquent tenants; risk
that even though many initial restrictions due to the COVID
Pandemic have eased, they could be reinstituted in case of future
waves of infection or if additional pandemics occur; risk that we
could experience a change in the move-out patterns of our long-term
customers due to economic uncertainty and the significant increase
in unemployment resulting from the COVID Pandemic. This could lead
to lower occupancies and rent “roll down” as long-term customers
are replaced with new customers at lower rates; risk of negative
impacts on the cost and availability of debt and equity capital as
a result of the COVID Pandemic, which could have a material impact
upon our capital and growth plans; the impact of competition from
new and existing self-storage and commercial facilities and other
storage alternatives; the risk that our existing self-storage
facilities may be at a disadvantage in competing with newly
developed facilities with more visual and customer appeal; risks
related to increased reliance on Google as a customer acquisition
channel; difficulties in our ability to successfully evaluate,
finance, integrate into our existing operations and manage
properties that we acquire directly or through the acquisition of
entities that own and operate self-storage facilities; 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 legal and
regulatory environment, as well as national, state and local laws
and regulations including, without limitation, those governing
environmental issues, taxes, our tenant reinsurance business, and
labor, including 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 November 2020 California 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 United States 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 operations or our business,
customer and employee relationships or result in fraudulent
payments; 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 and cost overruns
on our projects to develop new facilities or expand our existing
facilities; 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 because of new information, new estimates, or other
factors, events or circumstances after the date of these forward
looking statements, except when 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, neither
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
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Revenues:
Self-storage facilities
$
664,542
$
669,339
$
1,338,743
$
1,319,747
Ancillary operations
44,743
41,611
86,624
80,241
709,285
710,950
1,425,367
1,399,988
Expenses:
Self-storage cost of operations
213,825
196,083
421,750
389,739
Ancillary cost of operations
11,782
11,653
22,727
22,198
Depreciation and amortization
137,618
126,859
273,518
248,800
General and administrative
20,294
15,264
41,358
34,767
Interest expense
14,145
12,254
27,766
20,397
397,664
362,113
787,119
715,901
Other increase to net income:
Interest and other income
5,831
8,582
12,310
15,547
Equity in earnings of unconsolidated real
estate entities
17,655
18,914
41,623
36,586
Gain on sale of real estate
-
341
1,117
341
Foreign currency exchange (loss) gain
(19,295
)
(5,218
)
(10,350
)
2,573
Net income
315,812
371,456
682,948
739,134
Allocation to noncontrolling interests
(889
)
(1,400
)
(1,869
)
(2,557
)
Net income allocable to Public Storage
shareholders
314,923
370,056
681,079
736,577
Allocation of net income to:
Preferred shareholders – distributions
(52,952
)
(53,525
)
(104,957
)
(108,537
)
Preferred shareholders – redemptions
(15,069
)
(8,861
)
(15,069
)
(17,394
)
Restricted share units
(783
)
(1,259
)
(1,800
)
(2,492
)
Net income allocable to common
shareholders
$
246,119
$
306,411
$
559,253
$
608,154
Per common
share:
Net income per common share – Basic
$
1.41
$
1.76
$
3.21
$
3.49
Net income per common share – Diluted
$
1.41
$
1.76
$
3.20
$
3.49
Weighted average common shares – Basic
174,493
174,253
174,470
174,215
Weighted average common shares –
Diluted
174,575
174,542
174,596
174,459
PUBLIC STORAGE
SELECTED BALANCE SHEET
DATA
(Amounts in thousands, except
share and per share data)
June 30, 2020
December 31, 2019
ASSETS
(Unaudited)
Cash and equivalents
$
1,268,475
$
409,743
Operating real estate facilities:
Land and buildings, at cost
16,697,846
16,289,146
Accumulated depreciation
(6,881,358
)
(6,623,475
)
9,816,488
9,665,671
Construction in process
153,382
141,934
Investments in unconsolidated real estate
entities
753,358
767,816
Goodwill and other intangible assets,
net
206,922
205,936
Other assets
159,430
174,344
Total assets
$
12,358,055
$
11,365,444
LIABILITIES AND EQUITY
Senior unsecured notes
$
2,431,606
$
1,875,218
Mortgage notes
26,265
27,275
Preferred shares called for redemption
495,000
-
Accrued and other liabilities
394,986
383,284
Total liabilities
3,347,857
2,285,777
Equity:
Public Storage shareholders’ equity:
Cumulative Preferred Shares, $0.01 par
value, 100,000,000 shares
authorized, 165,400 shares issued (in
series) and outstanding,
(162,600 at December 31, 2019) at
liquidation preference
4,135,000
4,065,000
Common Shares, $0.10 par value,
650,000,000 shares authorized,
174,498,918 shares issued and outstanding,
(174,418,615 shares
at December 31, 2019)
17,450
17,442
Paid-in capital
5,702,466
5,710,934
Accumulated deficit
(789,089
)
(665,575
)
Accumulated other comprehensive loss
(73,136
)
(64,890
)
Total Public Storage shareholders’
equity
8,992,691
9,062,911
Noncontrolling interests
17,507
16,756
Total equity
9,010,198
9,079,667
Total liabilities and equity
$
12,358,055
$
11,365,444
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
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Computation of
FFO per Share:
Net income allocable to common
shareholders
$
246,119
$
306,411
$
559,253
$
608,154
Eliminate items excluded from FFO:
Depreciation and amortization
136,821
126,859
271,958
248,800
Depreciation from unconsolidated real
estate investments
16,872
17,247
35,115
34,761
Depreciation allocated to noncontrolling
interests
and restricted share unitholders
(938
)
(1,088
)
(1,899
)
(2,286
)
Gains on sale of real estate, including
equity
investment share
-
(992
)
(9,241
)
(992
)
FFO allocable to common shares (a)
$
398,874
$
448,437
$
855,186
$
888,437
Diluted weighted average common shares
174,575
174,542
174,596
174,459
FFO per share (a)
$
2.28
$
2.57
$
4.90
$
5.09
Reconciliation of
Earnings per Share to FFO per Share:
Earnings per share—Diluted
$
1.41
$
1.76
$
3.20
$
3.49
Eliminate per share amounts excluded from
FFO per share:
Depreciation and amortization
0.87
0.82
1.75
1.61
Gains on sale of real estate
-
(0.01
)
(0.05
)
(0.01
)
FFO per share (a)
$
2.28
$
2.57
$
4.90
$
5.09
Computation of
Funds Available for Distribution ("FAD"):
FFO allocable to common shares
$
398,874
$
448,437
$
855,186
$
888,437
Eliminate effect of items included in FFO
but not FAD:
Share-based compensation expense in excess
of cash paid
6,546
5,456
3,716
2,363
Foreign currency exchange loss (gain)
19,295
5,218
10,350
(2,573
)
Impact of EITF D-42, including equity
investment share
15,069
8,861
15,069
17,394
Less: Capital expenditures to maintain
real estate facilities (b)
(38,772
)
(42,354
)
(95,629
)
(72,559
)
FAD (a)
$
401,012
$
425,618
$
788,692
$
833,062
Distributions paid to common shareholders
and restricted
share units
$
349,834
$
349,593
$
699,636
$
699,071
Distribution payout ratio
87.2
%
82.1
%
88.7
%
83.9
%
Distributions per common share
$
2.00
$
2.00
$
4.00
$
4.00
(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 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 June 30, 2020
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
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Self-storage revenues for:
Same Store Facilities
$
597,350
$
616,055
$
1,206,885
$
1,218,352
Acquired facilities
13,603
6,440
25,472
10,361
Developed and expanded facilities
43,203
36,174
85,488
69,889
Other non-same store facilities
10,386
10,670
20,898
21,145
Self-storage revenues
664,542
669,339
1,338,743
1,319,747
Self-storage cost of operations for:
Same Store Facilities
183,359
171,881
363,640
345,205
Acquired facilities
6,918
2,857
12,430
4,971
Developed and expanded facilities
19,309
17,583
37,657
32,029
Other non-same store facilities
4,239
3,762
8,023
7,534
Self-storage cost of operations
213,825
196,083
421,750
389,739
Self-storage NOI for:
Same Store Facilities
413,991
444,174
843,245
873,147
Acquired facilities
6,685
3,583
13,042
5,390
Developed and expanded facilities
23,894
18,591
47,831
37,860
Other non-same store facilities
6,147
6,908
12,875
13,611
Self-storage NOI (a)
450,717
473,256
916,993
930,008
Ancillary revenues
44,743
41,611
86,624
80,241
Ancillary cost of operations
(11,782
)
(11,653
)
(22,727
)
(22,198
)
Depreciation and amortization
(137,618
)
(126,859
)
(273,518
)
(248,800
)
General and administrative expense
(20,294
)
(15,264
)
(41,358
)
(34,767
)
Interest and other income
5,831
8,582
12,310
15,547
Interest expense
(14,145
)
(12,254
)
(27,766
)
(20,397
)
Equity in earnings of unconsolidated real
estate entities
17,655
18,914
41,623
36,586
Gain on sale of real estate
-
341
1,117
341
Foreign currency exchange (loss) gain
(19,295
)
(5,218
)
(10,350
)
2,573
Net income on our income statement
$
315,812
$
371,456
$
682,948
$
739,134
(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/20200805005995/en/
Ryan Burke (818) 244-8080, Ext. 1141
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