Summary
Public Storage (PSA) reported its financial results for the quarter and six months ended June 30, 2017. For the quarter, net income attributable to common shareholders decreased slightly to $276.7 million ($1.59 per diluted share) from $280.8 million ($1.61 per diluted share) in the prior year period, primarily due to increased foreign exchange losses on Euro-denominated debt. However, for the six-month period, net income attributable to common shareholders increased to $557.8 million ($3.20 per diluted share) from $522.1 million ($3.00 per diluted share) in the prior year, driven by higher self-storage net operating income and increased equity in earnings from unconsolidated real estate entities. The company's core self-storage operations demonstrated resilience, with same-store revenues increasing by 3.3% for the quarter and 3.7% for the six months, driven by higher realized rental income per occupied square foot. While occupancy slightly decreased year-over-year, management attributed this to market softness and increased competition in some areas. The company continued to invest in growth, with ongoing development projects and strategic acquisitions, though short-term dilution from these activities was noted. PSA maintained a strong liquidity position with significant cash reserves and available borrowing capacity.
Financial Highlights
35 data points| Revenue | $664.31M |
| Cost of Revenue | $182.58M |
| Gross Profit | $481.73M |
| Operating Expenses | $307.75M |
| Operating Income | $356.56M |
| Interest Expense | $1.12M |
| Net Income | $353.70M |
| EPS (Basic) | $1.59 |
| EPS (Diluted) | $1.59 |
| Shares Outstanding (Basic) | 173.60M |
| Shares Outstanding (Diluted) | 174.07M |
Key Highlights
- 1Net income attributable to common shareholders for the six months ended June 30, 2017, increased by $35.7 million to $557.8 million, or $3.20 per diluted share, compared to $522.1 million, or $3.00 per diluted share, in the prior year.
- 2Self-storage revenues from same-store facilities increased by 3.3% for the quarter and 3.7% for the six months, primarily due to higher realized annual rent per occupied square foot.
- 3The company's core self-storage operations continue to perform well, with Net Operating Income (NOI) from same-store facilities increasing by 2.6% for the quarter and 3.3% for the six months.
- 4Equity in earnings from unconsolidated real estate entities (PSB and Shurgard Europe) increased significantly, by $9.8 million for the quarter and $15.6 million for the six months, reflecting improved performance of these investments.
- 5Foreign currency exchange losses, primarily related to Euro-denominated debt, negatively impacted quarterly results by $25.4 million, but this was partially offset by improvements in operating segments.
- 6Public Storage maintained a strong liquidity position with $358.3 million in cash and cash equivalents and $484.6 million in available borrowing capacity on its revolving credit facility as of June 30, 2017.
- 7The company continues to invest in growth through development and acquisitions, with approximately $658.6 million in ongoing development projects and several acquisitions completed or under contract.