10-QPeriod: Q1 FY2021

Extra Space Storage Inc. Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 3, 2021For Securities:EXR

Summary

Extra Space Storage Inc. (EXR) reported strong financial results for the first quarter of 2021, demonstrating resilience and growth within the self-storage sector. Total revenues increased by 7.9% year-over-year to $358.9 million, driven by a 5.9% increase in property rental revenue, attributed to higher occupancy and strategic acquisitions. Net income attributable to common stockholders more than doubled to $203.0 million, or $1.53 per diluted share, compared to $108.2 million, or $0.83 per diluted share, in the prior year's quarter. The company's operational efficiency is highlighted by a 6.5% increase in same-store net operating income (NOI), reaching $201.0 million, with same-store occupancy rising to 95.7%. This performance underscores the strong demand for self-storage solutions and EXR's effective management strategies. The company also successfully completed strategic transactions, including the sale of 16 stores to a new joint venture, generating a significant gain of $64.4 million and reinforcing its portfolio management approach.

Financial Highlights

38 data points
Beta

Revenue

$358.86M

74.3% Gross Margin

Net Income

$203.00M

56.6% Net Margin

EPS (Diluted)

$1.53

Total Assets

$9.34B

Cash & Equivalents

$60.33M

Free Cash Flow

$203.88M

Financial Statements
Beta
Revenue$358.86M
Cost of Revenue$92.37M
Gross Profit$266.49M
Operating Expenses$181.67M
Operating Income$241.07M
Interest Expense$40.70M
Net Income$203.00M
EPS (Basic)$1.54
EPS (Diluted)$1.53
Shares Outstanding (Basic)132.01M
Shares Outstanding (Diluted)139.68M

Key Highlights

  • 1Total revenues grew 7.9% to $358.9 million for Q1 2021, with property rental revenue up 5.9% driven by increased occupancy and acquisitions.
  • 2Net income attributable to common stockholders surged to $203.0 million ($1.53/share) from $108.2 million ($0.83/share) in Q1 2020, a significant year-over-year improvement.
  • 3Same-store Net Operating Income (NOI) increased by 6.5% to $201.0 million, indicating robust operational performance in stabilized properties.
  • 4Same-store occupancy reached a strong 95.7% by quarter-end, up from 90.9% in the prior year's quarter, reflecting high demand.
  • 5The company recognized a substantial gain of $64.4 million from the sale of 16 stores to a newly formed joint venture.
  • 6Total assets remained relatively stable at $9.34 billion, while total liabilities decreased to $6.02 billion due to debt management.

Frequently Asked Questions

The primary driver of revenue growth was an increase in property rental revenues, up 5.9%, primarily due to higher occupancy rates at stabilized stores and the contribution from recently acquired properties. Tenant reinsurance revenues also saw a significant increase of 17.9%.

Total liabilities decreased to $6.02 billion from $6.46 billion at the end of the prior year. The company actively managed its debt, showing a decrease in revolving lines of credit and a notable increase in notes payable, suggesting a refinancing or strategic shift in its debt structure. The weighted average interest rate on total debt was 2.7%.

The strong performance in Q1 2021, marked by increased revenues, robust NOI growth, and high occupancy, suggests a positive outlook for the self-storage sector and EXR specifically. The company's strategic property dispositions and acquisitions indicate active portfolio management aimed at optimizing returns. Management believes its cash flow from operations, combined with existing credit facilities and market access, is sufficient to meet its needs for the next 12 months.

The company recognized a significant gain of $63.9 million on real estate transactions during the first quarter of 2021, primarily from the sale of 16 stores to a newly established joint venture. This gain substantially contributed to the overall increase in net income compared to the prior year, which had no comparable gain.