Summary
Extra Space Storage Inc. (EXR) reported its financial results for the second quarter ended June 30, 2010. The company experienced a slight decrease in total revenues compared to the same period in the prior year, primarily driven by a decline in property rental income. This decline was largely due to the sale of 19 properties to a joint venture and the deconsolidation of five properties due to new accounting guidance. However, management and franchise fees, as well as tenant reinsurance revenues, saw increases, reflecting growth in the management business and customer participation in reinsurance programs. Operating expenses also decreased significantly, largely because the prior year's results included substantial "Unrecovered development and acquisition costs" and severance costs related to the wind-down of the company's development program. This resulted in a substantial increase in income from operations year-over-year. Despite higher interest expenses, the company's net income attributable to common stockholders improved significantly, driven by the operational efficiencies and the absence of prior year charges. The company maintained compliance with its debt covenants and continued to manage its liquidity and capital resources prudently.
Financial Highlights
33 data points| Cost of Revenue | $20.94M |
| Operating Expenses | $45.97M |
| Operating Income | $22.81M |
| Interest Expense | $16.23M |
| Net Income | $6.18M |
| EPS (Basic) | $0.07 |
| EPS (Diluted) | $0.07 |
| Shares Outstanding (Basic) | 87.37M |
| Shares Outstanding (Diluted) | 92.30M |
Key Highlights
- 1Total revenues for Q2 2010 decreased slightly by 0.4% to $68.8 million compared to $69.1 million in Q2 2009.
- 2Property rental revenue declined by 3.3% to $56.8 million, attributed to property sales and deconsolidations, but was partially offset by revenue increases from acquisitions and lease-up properties.
- 3Management and franchise fees increased by 7.2% to $5.7 million, driven by growth in third-party managed properties and a new joint venture.
- 4Tenant reinsurance revenue saw a significant increase of 24.6% to $6.3 million, due to higher customer participation rates.
- 5Total expenses decreased by 31.1% to $46.0 million, largely due to the absence of significant "Unrecovered development and acquisition costs" and severance costs incurred in the prior year's Q2.
- 6Income from operations significantly increased by 861.9% to $22.8 million, compared to $2.4 million in Q2 2009.
- 7Net income attributable to common stockholders improved to $6.2 million ($0.07 per diluted share) from a net loss of $7.5 million ($0.09 per diluted share) in Q2 2009.