10-KPeriod: FY2013

Extra Space Storage Inc. Annual Report, Year Ended Dec 31, 2013

Filed March 3, 2014For Securities:EXR

Summary

Extra Space Storage Inc. (EXR) presented its 2013 annual report, highlighting strong growth driven by strategic acquisitions and effective property management. The company expanded its portfolio significantly, owning or managing 1,029 properties across 35 states and Puerto Rico, encompassing approximately 75.7 million square feet. This expansion contributed to a substantial increase in property rental revenue. Financially, EXR demonstrated robust revenue growth, with property rental revenue increasing by 28.8% year-over-year, largely due to acquisitions and improved occupancy and rental rates. The company managed its expenses effectively, although depreciation and amortization increased due to the expanded asset base. Management remains focused on maximizing stockholder value through operational efficiency, strategic acquisitions, and growing its third-party management business.

Financial Highlights

36 data points
Beta

Net Income

$172.08M

EPS (Diluted)

$1.53

Total Assets

$3.98B

Cash & Equivalents

$126.72M

Free Cash Flow

$271.26M

Financial Statements
Beta
Cost of Revenue$140.01M
Operating Expenses$307.13M
Operating Income$213.48M
Interest Expense$71.63M
Net Income$172.08M
EPS (Basic)$1.54
EPS (Diluted)$1.53
Shares Outstanding (Basic)111.35M
Shares Outstanding (Diluted)113.11M

Key Highlights

  • 1Portfolio Expansion: Owned or managed 1,029 properties across 35 states and Puerto Rico, covering 75.7 million sq ft.
  • 2Revenue Growth: Property rental revenue increased by 28.8% year-over-year, driven by acquisitions and improved rental rates.
  • 3Strategic Acquisitions: Acquired 78 properties in 2013 and 91 in 2012, expanding market presence.
  • 4Operational Efficiency: Utilized industry-leading revenue management systems for real-time rate adjustments.
  • 5Diversified Income Streams: Generated revenue from rental operations, tenant reinsurance, and property management fees.
  • 6Financial Prudence: Maintained a debt-to-capitalization ratio of 27.5% as of December 31, 2013.
  • 7REIT Status: Maintained REIT qualification, focusing on distributions to stockholders.

Frequently Asked Questions

Extra Space Storage Inc. is a fully integrated REIT focused on owning, operating, managing, acquiring, developing, and redeveloping self-storage facilities. Its strategy centers on maximizing property performance through efficient management, pursuing strategic acquisitions to expand its portfolio, and growing its third-party property management business.

In 2013, EXR saw significant financial growth, with total revenues increasing by 27.2% to $520.6 million. Property rental revenue, the primary driver, grew by 28.8%. This growth was primarily attributed to the acquisition of 78 new properties in 2013 and 91 in 2012, as well as improvements in occupancy and rental rates at existing stabilized properties. Expenses also increased due to the larger operational footprint, but net income attributable to common stockholders rose substantially to $172.1 million from $117.3 million in 2012.

Key risks include adverse economic conditions impacting occupancy and rental rates, competition from other storage facilities, difficulties in completing and integrating acquisitions, potential uninsured losses, increased operating costs (taxes, utilities), and environmental liabilities. The company also faces risks related to interest rate fluctuations, its ability to maintain REIT status, and reliance on key personnel.

The company finances its long-term growth through a combination of cash flow from operations, borrowings under its credit lines, traditional secured mortgage financing, joint ventures with third parties, and potentially additional equity offerings. It aims to maintain a flexible approach to financing future acquisitions and developments.