10-KPeriod: FY2019

Extra Space Storage Inc. Annual Report, Year Ended Dec 31, 2019

Filed February 25, 2020For Securities:EXR

Summary

Extra Space Storage Inc.'s (EXR) 2019 Form 10-K details a year of consistent growth, driven by strategic acquisitions and organic revenue increases. The company continued to expand its portfolio, owning or operating 1,817 self-storage properties across 40 states, Washington D.C., and Puerto Rico. Total revenues grew by 9.3% year-over-year, primarily fueled by an 8.7% increase in property rental revenue, which benefited from both acquisitions and higher rental rates at stabilized stores. The company's focus on operational efficiency, leveraging technology for dynamic pricing, and expanding its management business are key drivers of its performance. Financially, EXR demonstrated strong operational results, with a 2.9% increase in same-store net operating income. The company maintained a healthy balance sheet, though it continues to utilize debt financing to fund its growth initiatives, with total debt outstanding around $5.1 billion at year-end 2019. EXR also reported a robust Funds From Operations (FFO) attributable to common stockholders and unit holders of $667.9 million. The company's commitment to returning value to shareholders is evident through its consistent dividend payments. Key risks highlighted include general economic downturns, increased competition, and interest rate fluctuations, all of which management actively monitors.

Financial Highlights

39 data points
Beta

Revenue

$1.31B

74.3% Gross Margin

Net Income

$419.97M

32.1% Net Margin

EPS (Diluted)

$3.24

Total Assets

$8.53B

Cash & Equivalents

$65.75M

Free Cash Flow

$707.69M

Financial Statements
Beta
Revenue$1.31B
Cost of Revenue$336.05M
Gross Profit$972.40M
Operating Expenses$674.70M
Operating Income$634.96M
Interest Expense$22.71M
Net Income$419.97M
EPS (Basic)$3.27
EPS (Diluted)$3.24
Shares Outstanding (Basic)128.20M
Shares Outstanding (Diluted)136.43M

Key Highlights

  • 1Total revenues increased by 9.3% to $1.31 billion in 2019.
  • 2Property rental revenue grew by 8.7% to $1.13 billion, driven by acquisitions and higher rental rates.
  • 3Same-store net operating income (NOI) increased by 2.9% to $742.8 million.
  • 4The company owned and/or operated 1,817 self-storage stores as of December 31, 2019.
  • 5Funds From Operations (FFO) attributable to common stockholders and unit holders increased to $667.9 million.
  • 6Total debt outstanding was approximately $5.1 billion as of December 31, 2019.
  • 7The company declared and paid dividends of $3.56 per common share in 2019.

Frequently Asked Questions

Extra Space Storage Inc. (EXR) is a fully integrated, self-administered, and self-managed real estate investment trust (REIT) that owns, operates, acquires, develops, and redevelops self-storage properties. Its primary business objectives are to maximize cash flow for distribution to stockholders and achieve sustainable long-term growth in cash flow per share. Key strategies include optimizing store performance through revenue management and operational efficiency, acquiring self-storage stores, and expanding its third-party management business.

In 2019, EXR showed strong financial performance. Total revenues increased by 9.3% to $1.31 billion, largely due to a 8.7% rise in property rental revenue from acquisitions and higher rental rates. Same-store net operating income (NOI) grew by 2.9%, indicating healthy performance of its existing properties. Funds From Operations (FFO) also increased to $667.9 million. The company expanded its portfolio and managed its debt effectively, maintaining a debt-to-total enterprise value ratio of 25.9%.

Key risks highlighted by Extra Space Storage include adverse changes in general economic conditions and the real estate industry, which can impact occupancy and rental rates. Competition from new and existing operators is also a significant factor. Other risks include potential uninsured losses, disruptions in credit and financial markets, increased interest rates, and the possibility of failing to maintain its REIT status, which would have significant adverse tax consequences. The company also relies on technology and faces risks associated with cybersecurity.