10-KPeriod: FY2020

Public Storage Annual Report, Year Ended Dec 31, 2020

Filed February 24, 2021For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) operates the largest self-storage facility network in the U.S., offering storage spaces for personal and business use on a month-to-month basis. As of December 31, 2020, the company owned and operated 2,548 facilities, totaling 175 million net rentable square feet across 38 states. The company's business model is primarily driven by its self-storage operations, supplemented by ancillary services like tenant reinsurance and third-party management. PSA also holds significant equity interests in PS Business Parks, Inc. (42%) and Shurgard Self Storage SA (35%), providing diversification into commercial real estate and European self-storage markets, respectively. The company's financial performance in 2020 was impacted by the COVID-19 pandemic, leading to a 1.0% decrease in same-store revenues compared to 2019. However, trends improved in the latter half of the year, with a 0.8% increase in same-store revenues in the fourth quarter. Occupancy for same-store facilities increased by 2.7% year-over-year. Despite revenue challenges, PSA maintained a strong financial position with an "A" credit rating, indicating solid access to capital markets. The company remains focused on improving existing facility performance, strategic acquisitions, development, and leveraging its scale and brand for continued growth.

Financial Highlights

32 data points
Beta

Revenue

$2.92B

Net Income

$1.36B

46.6% Net Margin

EPS (Diluted)

$6.29

Total Assets

$11.82B

Cash & Equivalents

$257.56M

Free Cash Flow

$2.04B

Financial Statements
Beta
Revenue$2.92B
Operating Expenses$1.56B
Interest Expense$56.28M
Net Income$1.36B
EPS (Basic)$6.29
EPS (Diluted)$6.29
Shares Outstanding (Basic)174.49M
Shares Outstanding (Diluted)174.64M

Key Highlights

  • 1Public Storage is the largest owner and operator of self-storage facilities in the U.S., with 2,548 facilities and 175 million net rentable square feet as of December 31, 2020.
  • 2The company experienced a 1.0% decrease in same-store revenues in 2020 due to the COVID-19 pandemic, but saw improving trends in the latter half of the year, with same-store revenues up 0.8% in Q4 2020.
  • 3Occupancy for same-store facilities increased by 2.7% year-over-year by the end of 2020, signaling demand recovery.
  • 4PSA holds significant stakes in PS Business Parks (42%) and Shurgard Self Storage SA (35%), providing diversification benefits.
  • 5The company maintains a strong credit rating ('A' senior debt), ensuring good access to capital markets for funding growth initiatives.
  • 6Growth strategies include improving existing facilities, acquiring and developing new properties, and expanding ancillary businesses.
  • 7The company successfully adapted to the pandemic by implementing touchless eRental® processes and remote work for corporate functions.

Frequently Asked Questions

The COVID-19 pandemic negatively impacted Public Storage's revenues, resulting in a 1.0% decrease in same-store revenues for the full year 2020 compared to 2019. This was partly due to government restrictions on rent increases and reduced late charges. However, revenue trends improved in the second half of 2020, with same-store revenues increasing by 0.8% in the fourth quarter. Occupancy also showed improvement, increasing by 2.7% year-over-year for same-store facilities by the end of 2020.

Public Storage pursues several growth strategies: (i) improving the operating performance of its existing self-storage facilities through optimized pricing and marketing; (ii) acquiring well-located existing facilities and developing new ones; (iii) expanding ancillary business activities such as tenant reinsurance and third-party management services; and (iv) leveraging its investments in PS Business Parks and Shurgard. The company aims to balance these strategies based on capital availability and investment opportunities.

Public Storage maintains a strong financial profile with 'A' credit ratings from major agencies, indicating good access to capital. While 2020 revenues were impacted by the pandemic, demand and revenue trends improved in the latter half of the year. The company has a clear strategy for growth through acquisitions and development, supported by a healthy liquidity position and access to debt and equity markets. Management anticipates continued revenue growth in the first half of 2021, though second-half growth carries more uncertainty due to challenging comparables and potential shifts in customer behavior.

Public Storage leverages its scale, brand recognition, and technology platform as competitive advantages. The company also focuses on optimizing revenue through a balanced strategy of occupancy and rental rates, adjusting pricing and promotions based on market data. While the industry is fragmented, PSA aims to outpace smaller operators through economies of scale in operations and marketing. The company also actively rebrands and upgrades facilities to remain competitive with newer developments.