10-KPeriod: FY2009

Extra Space Storage Inc. Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:EXR

Summary

Extra Space Storage Inc.'s 2010 10-K filing highlights a company operating in the self-storage industry, with a portfolio of 766 properties owned and/or managed across 33 states and Washington D.C. as of December 31, 2009. The company, structured as a REIT, focuses on maximizing stockholder value through strategic property management, expanding its management business, and acquiring self-storage properties. The report also details the financial performance for the year ended December 31, 2009, noting a challenging operational environment with decreases in same-store revenue and net operating income, primarily due to economic conditions impacting occupancy and rental rates. Despite these challenges, the company implemented cost-control measures and continued its strategy of selective acquisitions and portfolio optimization. The company's financial condition at year-end 2009 shows total assets of $2.4 billion and total liabilities of $1.4 billion, with a debt-to-capitalization ratio of 57.1%. A significant portion of the report addresses various risk factors, including economic downturns, competition, operational challenges, environmental liabilities, and the company's debt financing structure. The management emphasizes its proactive approach to revenue management through technology and its commitment to maintaining REIT qualification through necessary distributions.

Financial Highlights

33 data points
Beta

Net Income

$31.98M

EPS (Diluted)

$0.37

Total Assets

$2.41B

Cash & Equivalents

$131.95M

Free Cash Flow

$81.17M

Financial Statements
Beta
Cost of Revenue$88.94M
Operating Expenses$208.26M
Operating Income$71.89M
Interest Expense$67.58M
Net Income$31.98M
EPS (Basic)$0.37
EPS (Diluted)$0.37
Shares Outstanding (Basic)86.34M
Shares Outstanding (Diluted)91.08M

Key Highlights

  • 1Extra Space Storage Inc. owned or managed 766 self-storage properties across 33 states and Washington D.C. as of December 31, 2009.
  • 2Total revenues for the year ended December 31, 2009, were $280.5 million, with property rental revenue of $238.3 million.
  • 3The company experienced a challenging year with decreases in same-store rental revenues and net operating income due to economic conditions, though expense controls were strong.
  • 4As of December 31, 2009, the company had approximately $1.4 billion in total debt, resulting in a debt-to-total capitalization ratio of 57.1%.
  • 5The company announced a wind-down of its development activities in June 2009.
  • 6Key growth strategies include maximizing property performance, expanding the management business, and acquiring self-storage properties.
  • 7The company had $132 million in cash and cash equivalents at the end of 2009, with plans to use it for debt repayment and general corporate purposes.

Frequently Asked Questions

In 2009, Extra Space Storage faced a challenging economic environment. While total revenues increased slightly to $280.5 million, same-store rental revenues and net operating income saw decreases of 2.9% and 4.3% respectively, due to lower occupancy and rental rates. However, the company managed expenses effectively, with same-store operating expenses decreasing by 0.2%.

As of December 31, 2009, Extra Space Storage had approximately $1.4 billion in total debt, resulting in a debt-to-total capitalization ratio of 57.1%. The company had $132 million in cash and cash equivalents available to manage its liquidity needs, primarily for debt repayment and general corporate purposes.

A major strategic shift in 2009 was the company's announcement in June to wind down its development activities. This decision impacted unrecovered development and acquisition costs and led to severance costs being recognized.

The company employs a state-of-the-art, web-based yield management technology called STORE, along with a system called RevMan. These tools enable real-time analysis and adjustment of rental rates across the portfolio to respond to market conditions, aiming to maximize revenue and minimize operating costs.