Summary
Public Storage (PSA) reported solid performance in its first quarter of 2014, demonstrating growth in both its core self-storage operations and its diversified investments. Net income allocable to common shareholders increased to $174.1 million, or $1.01 per diluted share, up from $161.9 million, or $0.94 per diluted share, in the prior year's quarter. This growth was primarily driven by a significant increase in self-storage net operating income, which rose by $30.8 million, reflecting a 5.1% increase in revenue from Same Store Facilities due to higher occupancy and rental rates, and substantial contributions from newly acquired properties. The company continued its aggressive acquisition strategy, having acquired 121 facilities in 2013 and showing strong momentum in developing and expanding its portfolio. As of March 31, 2014, PSA had approximately $625 million in capital resources, including cash, available credit, and retained operating cash flow, which is expected to fund its commitments for the remainder of the year, including debt repayments, property acquisitions, and development projects. Management highlighted a strategic preference for preferred securities in its capital structure to maintain financial flexibility and meet REIT distribution requirements.
Financial Highlights
34 data points| Revenue | $515.04M |
| Cost of Revenue | $173.16M |
| Gross Profit | $341.89M |
| Operating Income | $217.09M |
| Interest Expense | $3.48M |
| Net Income | $227.20M |
| EPS (Basic) | $1.01 |
| EPS (Diluted) | $1.01 |
| Shares Outstanding (Basic) | 171.91M |
| Shares Outstanding (Diluted) | 172.81M |
Key Highlights
- 1Net income allocable to common shareholders increased by 7.5% to $174.1 million ($1.01 per diluted share) for the three months ended March 31, 2014, compared to $161.9 million ($0.94 per diluted share) in the prior year.
- 2Self-storage net operating income (NOI) grew by 10.3% to $329.5 million, driven by a 5.1% revenue increase in Same Store Facilities and strong performance from recently acquired Non Same Store Facilities.
- 3Same Store Facilities revenue increased 5.1% to $440.6 million, attributed to a 0.8% rise in average occupancy and a 4.3% increase in realized rent per occupied square foot.
- 4The company significantly expanded its portfolio, acquiring 121 self-storage facilities in 2013 for $1.2 billion and continuing to pursue acquisitions and development projects, with approximately 1.9 million net rentable square feet of new space planned.
- 5Funds From Operations (FFO) per diluted common share increased by 10.8% to $1.74, and Core FFO per diluted common share increased by 9.1% to $1.80, indicating strong operational performance beyond GAAP net income.
- 6As of March 31, 2014, Public Storage had approximately $625 million in capital resources, including $101 million in cash and cash equivalents and $285 million in available borrowing capacity on its revolving line of credit.
- 7The company's financial strategy continues to emphasize preferred securities as a primary form of leverage to maintain financial flexibility and satisfy REIT distribution requirements.