Summary
This 10-Q filing for Extra Space Storage Inc. (EXR) for the quarter ended March 31, 2010, indicates a period of revenue decline compared to the prior year, primarily driven by the sale of 19 properties into a new joint venture with Harrison Street in January 2010, and the deconsolidation of five properties due to new accounting guidance. Despite the revenue decrease, the company saw an increase in management and franchise fees due to growth in third-party managed properties and a new joint venture, as well as a significant rise in tenant reinsurance revenue. Expenses also decreased, largely due to the property sale, though general and administrative expenses rose slightly to support the expanded management business. The company's financial position shows a reduction in total assets and liabilities compared to the end of 2009, with significant paydowns on notes payable. While net income attributable to common stockholders dropped substantially from the previous year, largely due to a large gain on repurchase of exchangeable senior notes in Q1 2009, the company maintained a solid operational foundation. The company continues to strategically manage its portfolio, focusing on maximizing property performance, expanding its management business, and selectively acquiring new properties, while navigating a challenging economic environment.
Financial Highlights
24 data points| Cost of Revenue | $21.96M |
| Operating Expenses | $46.72M |
| Operating Income | $20.86M |
| Interest Expense | $17.27M |
| Net Income | $3.57M |
| EPS (Basic) | $0.04 |
| EPS (Diluted) | $0.04 |
| Shares Outstanding (Basic) | 86.87M |
| Shares Outstanding (Diluted) | 91.67M |
Key Highlights
- 1Total revenues decreased by 2.4% to $67.6 million for the first quarter of 2010 compared to $69.2 million in the prior year, primarily due to property sales and deconsolidations.
- 2Net income attributable to common stockholders significantly decreased from $27.6 million in Q1 2009 to $3.6 million in Q1 2010, largely influenced by a substantial gain on debt repurchase in the prior year.
- 3The company sold 19 properties into a new joint venture with Harrison Street, contributing to a decrease in property rental revenues but increasing management and franchise fees.
- 4Operating expenses decreased by 1.3% to $46.7 million, driven by lower property operations expenses associated with property sales.
- 5Cash flows from operations were $16.0 million, a decrease from $18.6 million in the prior year, reflecting lower net income.
- 6Debt levels decreased significantly, with notes payable falling from $1.1 billion to $936.5 million, and the debt-to-total capitalization ratio standing at 51.7% as of March 31, 2010.
- 7The company managed 125 third-party properties by the end of the quarter, a substantial increase from 70 in the prior year, bolstering its management and franchise fee revenue.