10-QPeriod: Q3 FY2019

Extra Space Storage Inc. Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 5, 2019For Securities:EXR

Summary

Extra Space Storage Inc. (EXR) reported solid financial results for the nine months ended September 30, 2019. Total revenues increased by 9.4% year-over-year to $972.7 million, driven primarily by a 8.9% rise in property rental revenue and an 11.0% increase in tenant reinsurance revenue. This growth was fueled by the acquisition of new stores and increased rental rates at existing stabilized properties. The company's property operations expenses also saw an increase, largely due to the expansion of its store portfolio. Net income attributable to common stockholders for the nine-month period was $307.7 million, a slight decrease from $313.8 million in the prior year, impacted by a gain on real estate transactions in the prior year and increased interest expenses. Funds From Operations (FFO) attributable to common stockholders and unit holders increased by 6.9% to $492.9 million, demonstrating the company's operational profitability. The company maintained strong liquidity, with $62.3 million in cash and cash equivalents and an available revolving credit line, positioning it well for future growth and operational demands.

Financial Statements
Beta
Revenue$337.50M
Cost of Revenue$88.65M
Gross Profit$248.85M
Operating Expenses$174.87M
Operating Income$162.64M
Interest Expense$5.68M
Net Income$108.09M
EPS (Basic)$0.84
EPS (Diluted)$0.83
Shares Outstanding (Basic)128.78M
Shares Outstanding (Diluted)137.32M

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2019, grew 9.4% to $972.7 million compared to $889.3 million in the prior year.
  • 2Property rental revenue increased by 8.9% year-over-year to $841.5 million, driven by acquisitions and higher rental rates.
  • 3Funds From Operations (FFO) attributable to common stockholders and unit holders increased 6.9% to $492.9 million for the nine months ended September 30, 2019.
  • 4The company's balance sheet shows total assets of $8.32 billion and total liabilities of $5.41 billion as of September 30, 2019.
  • 5Cash and cash equivalents stood at $62.3 million as of September 30, 2019, indicating healthy liquidity.
  • 6Same-store rental revenues increased by 3.3% for the three months ended September 30, 2019, and by 3.8% for the nine months ended September 30, 2019, indicating strong performance in existing properties.
  • 7The company continued to expand its portfolio, owning or having ownership interests in 1,167 operating stores as of September 30, 2019, an increase from 1,099 stores in the prior year period.

Frequently Asked Questions

Total revenues for the first nine months of 2019 increased by 9.4% to $972.7 million, up from $889.3 million in the same period of 2018. This growth was primarily driven by a 8.9% increase in property rental revenue and an 11.0% increase in tenant reinsurance revenue.

Funds From Operations (FFO) attributable to common stockholders and unit holders for the first nine months of 2019 increased by 6.9% to $492.9 million, compared to $460.7 million in the same period of 2018. This indicates a positive trend in operational profitability before considering real estate depreciation and amortization and gains/losses on property sales.

As of September 30, 2019, Extra Space Storage Inc. reported total liabilities of $5.41 billion and total assets of $8.32 billion. The company maintained a healthy liquidity position with $62.3 million in cash and cash equivalents. Its debt-to-total enterprise value ratio was 23.0%.

The company's same-store portfolio demonstrated strong performance. Same-store rental revenues increased by 3.3% for the three months and 3.8% for the nine months ended September 30, 2019, compared to the prior year periods, indicating effective revenue management and stable tenant retention in its established properties.