Summary
Public Storage (PSA) reported solid performance for the nine months ended September 30, 2014, driven by consistent revenue growth in its core self-storage operations. Same-store facilities saw a 5.3% increase in revenue, attributed to higher occupancy rates and rental income per occupied square foot. The company continued its strategic acquisition of new properties, adding 31 facilities during the period and with further acquisitions planned. Development projects are also underway, set to add significant rentable square footage. This growth in physical assets and rental income is positively impacting key performance indicators, including Funds from Operations (FFO).
Financial Highlights
33 data pointsBeta
Financial Statements
Beta
| Revenue | $567.09M |
| Cost of Revenue | $158.57M |
| Gross Profit | $408.52M |
| Operating Expenses | $287.52M |
| Operating Income | $279.57M |
| Interest Expense | $1.24M |
| Net Income | $294.98M |
| EPS (Basic) | $1.34 |
| EPS (Diluted) | $1.34 |
| Shares Outstanding (Basic) | 172.38M |
| Shares Outstanding (Diluted) | 173.30M |
Key Highlights
- 1Revenue from Same Store Facilities increased by 5.3% for the nine months ended September 30, 2014, compared to the prior year, driven by a 4.7% increase in realized rent per occupied square foot and a 0.6% increase in average occupancy.
- 2The company acquired 31 self-storage facilities for approximately $276.3 million during the nine months ended September 30, 2014, and has continued acquisition activity post-period.
- 3Development and expansion projects were underway, expected to add approximately 3.0 million net rentable square feet of storage space at an estimated cost of $342 million.
- 4Funds From Operations (FFO) per diluted common share increased by 7.6% to $5.81 for the nine months ended September 30, 2014, compared to $5.40 in the prior year.
- 5Core FFO per share also showed strong growth, increasing by 9.7% to $5.88 for the nine months ended September 30, 2014.
- 6The company maintained a strong liquidity position with approximately $519 million in capital resources as of September 30, 2014, including $98 million in cash and $286 million in available borrowing capacity.
- 7Despite a slight increase in operating costs, particularly property taxes and utilities, the company effectively managed expenses, leading to an increase in net operating income.
Frequently Asked Questions
Public Storage reported an 11.1% increase in total rental income for the nine months ended September 30, 2014, reaching $1.52 billion. This growth was primarily driven by a 5.3% increase in revenue from Same Store Facilities, attributed to higher rental rates and occupancy, and a significant 120.3% increase from Non Same Store Facilities due to recent acquisitions.
Public Storage continues to actively pursue growth through both acquisitions and development. During the nine months ended September 30, 2014, they acquired 31 facilities for $276.3 million. They also have significant development projects in progress, aiming to add approximately 3.0 million net rentable square feet. Post-period acquisitions and ongoing development indicate a commitment to expanding their portfolio.
As of September 30, 2014, Public Storage had robust capital resources totaling $519 million, comprising cash, retained operating cash flow, and significant available borrowing capacity on its credit line. The company favors a capital structure with a low debt-to-total-capitalization ratio, primarily utilizing preferred securities for leverage, which offers financial flexibility and helps meet REIT distribution requirements.
The company expects continued revenue growth driven by increasing rental rates to existing customers (generally on an annual basis) and maintaining high occupancy levels, aiming for at least 90%. While recent trends in move-ins, move-outs, and in-place rents are positive, management acknowledges that short-term trends can be volatile and are subject to various market factors.