10-QPeriod: Q2 FY2013

Extra Space Storage Inc. Quarterly Report for Q2 Ended Jun 30, 2013

Filed August 8, 2013For Securities:EXR

Summary

Extra Space Storage Inc.'s (EXR) third-quarter 2013 10-Q filing shows robust revenue growth, driven by a significant increase in property rental income and a growing portfolio of managed and owned properties. The company has expanded its property count and continues to benefit from rising occupancy rates and increased rental rates for both new and existing customers in its stabilized properties. Financially, EXR demonstrated strong operational performance with a substantial year-over-year increase in total revenues and net income. The company also successfully raised capital through the issuance of exchangeable senior notes. While managing increased interest expenses due to higher debt levels, EXR maintained a disciplined approach to acquisitions and operations, positioning itself for continued growth in the self-storage market.

Financial Highlights

32 data points
Beta

Net Income

$34.47M

EPS (Diluted)

$0.31

Total Assets

$3.43B

Cash & Equivalents

$206.93M

Free Cash Flow

$75.44M

Financial Statements
Beta
Cost of Revenue$33.46M
Operating Expenses$72.87M
Operating Income$53.38M
Interest Expense$18.36M
Net Income$34.47M
EPS (Basic)$0.31
EPS (Diluted)$0.31
Shares Outstanding (Basic)110.73M
Shares Outstanding (Diluted)113.96M

Key Highlights

  • 1Total revenues increased by 33.0% to $126.2 million for the three months ended June 30, 2013, compared to $95.0 million in the prior year period.
  • 2Property rental revenues saw a substantial increase of 35.4% year-over-year, driven by acquisitions and improved occupancy and rental rates.
  • 3Net income attributable to common stockholders grew significantly to $34.5 million for the quarter, up from $22.4 million in the same period last year.
  • 4The company completed six property acquisitions in the first six months of 2013, adding to its portfolio and contributing to revenue growth.
  • 5Total debt increased, leading to higher interest expenses, but the company benefited from a lower weighted average interest rate compared to the prior year.
  • 6Extra Space Storage Inc. successfully issued $250 million in 2.375% Exchangeable Senior Notes due 2033, strengthening its capital position.
  • 7Same-store rental and tenant reinsurance revenues increased by 7.8% for the quarter, indicating healthy performance from existing properties.

Frequently Asked Questions

The primary driver of revenue growth is the increase in property rental revenue, which is fueled by the acquisition of new properties and improved performance in existing stabilized properties. This includes higher occupancy rates and increased rental rates for both new and existing tenants.

The company's total debt has increased, leading to higher interest expenses. However, this was partially offset by a lower combined weighted average interest rate on its debt compared to the previous year, partly due to the issuance of new notes at a lower rate and the use of interest rate swaps. The company also successfully issued new exchangeable senior notes.

The consistent acquisition of new properties is a key part of Extra Space Storage's growth strategy. These acquisitions directly contribute to increased rental revenue and expand the company's overall property portfolio, enhancing economies of scale and market presence.

The company is focusing on maximizing property performance through strategic and efficient management, including revenue management systems and cost-minimizing opportunities. While property operations expenses have increased, this is largely in line with the expansion of the property portfolio through acquisitions.