10-KPeriod: FY2021

Public Storage Annual Report, Year Ended Dec 31, 2021

Filed February 22, 2022For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) reported strong performance in its 2021 10-K filing, driven by robust growth in its self-storage operations. The company achieved significant revenue increases in its Same Store Facilities, up 10.5% year-over-year, supported by higher rental rates and occupancy. This growth was further bolstered by a near-record acquisition of 232 facilities for $5.1 billion in 2021, expanding its footprint across the U.S. The company also highlighted its strategic investments in technology to enhance customer experience and optimize operations, with 76% of move-ins sourced through its website. Management is focused on improving existing facility performance, strategic acquisitions, and development, alongside ancillary businesses like tenant reinsurance and third-party management. Public Storage also emphasized its commitment to sustainability and its robust financial position, with strong credit ratings and ample liquidity to support future growth initiatives.

Financial Highlights

35 data points
Beta

Revenue

$3.42B

Net Income

$1.95B

57.2% Net Margin

EPS (Diluted)

$9.87

Total Assets

$17.38B

Cash & Equivalents

$734.60M

Free Cash Flow

$2.54B

Financial Statements
Beta
Revenue$3.42B
Operating Expenses$1.81B
Interest Expense$90.77M
Net Income$1.95B
EPS (Basic)$9.91
EPS (Diluted)$9.87
Shares Outstanding (Basic)174.86M
Shares Outstanding (Diluted)175.57M

Key Highlights

  • 1Achieved 10.5% revenue growth in Same Store Facilities in 2021, driven by a 8.8% increase in realized annual rent per occupied square foot and a 1.9% rise in average occupancy.
  • 2Completed a significant acquisition of 232 self-storage facilities totaling 21.8 million net rentable square feet for $5.1 billion in 2021.
  • 3Invested $218.0 million in developing and expanding self-storage space, adding 1.6 million net rentable square feet.
  • 4Leveraged technology, with approximately 76% of move-ins in 2021 sourced through its website, indicating a strong digital customer acquisition strategy.
  • 5Reported a substantial increase in net income to $1,732.4 million ($9.87 per diluted common share) in 2021, up from $1,098.3 million ($6.29 per diluted common share) in 2020.
  • 6Maintained strong financial health with $7.5 billion in notes payable at a weighted average interest rate of 1.8% as of December 31, 2021, and a $500 million revolving line of credit with no outstanding borrowings at year-end.
  • 7The company reported a 37.0% increase in Funds From Operations (FFO) per share to $13.36 in 2021, compared to $9.75 in 2020.

Frequently Asked Questions

The primary driver of revenue growth in 2021 was the strong performance of its Same Store Facilities, which saw a 10.5% increase in revenues. This was primarily due to a substantial rise in realized annual rent per occupied square foot (8.8%) and an improvement in average occupancy (1.9%). Strategic acquisitions and development also contributed significantly to overall revenue growth.

Public Storage is investing in growth through a multi-pronged strategy: 1) acquiring existing facilities (acquiring 232 facilities in 2021), 2) developing new facilities and expanding existing ones (investing $218.0 million in 2021), and 3) enhancing its technology platform to improve customer experience and operational efficiency. The company also continues to grow its ancillary businesses like tenant reinsurance and third-party management.

Key risks identified include significant exposure to real estate market fluctuations, potential impacts from natural disasters and climate change, increasing operating costs (such as property taxes), competition within the self-storage industry, cybersecurity threats, and risks associated with its international investments (Shurgard) and commercial property investments (PS Business Parks). The company also notes risks related to economic conditions and potential future public health crises.

Public Storage maintains a strong financial profile with significant access to capital markets. As of December 31, 2021, it had $7.5 billion in notes payable with a low weighted-average interest rate of 1.8%. The company utilizes operating cash flow, debt, preferred equity, and common equity to fund its operations and growth. It also maintains a $500 million revolving line of credit for liquidity, with no borrowings outstanding at year-end 2021. The company's strong credit ratings (A/A2 from S&P/Moody's for senior notes) facilitate access to capital at favorable terms.