Public Storage Quarterly Report for Q2 Ended Jun 30, 2019

Summary

Public Storage (PSA) reported its second-quarter 2019 financial results, showcasing continued revenue growth in its core self-storage operations. For the three months ended June 30, 2019, revenue increased by 3.7% year-over-year to $710.95 million, driven by a 1.9% rise in same-store revenue, attributed to higher rental rates. Net income allocable to common shareholders decreased to $306.4 million ($1.76 per diluted share) from $348.3 million ($2.00 per diluted share) in the prior year's quarter, impacted by foreign currency fluctuations and equity share of gains from an investment. For the six months ended June 30, 2019, revenue grew 3.4% to $1.4 billion, while net income allocable to common shareholders decreased to $608.2 million ($3.49 per diluted share) from $636.1 million ($3.65 per diluted share), primarily due to a significant equity share of gains on sale of assets by PS Business Parks in the prior year. The company's balance sheet showed total assets of $11.11 billion at June 30, 2019, with real estate facilities representing the largest component. Liabilities increased, notably notes payable rising to $1.91 billion from $1.41 billion at year-end 2018, partly due to new senior note issuances. Despite the decrease in net income, the company maintained a strong liquidity position with approximately $1.1 billion in expected capital resources for the next year, exceeding identified capital needs of $415.1 million. Management highlighted strategic investments in development and acquisitions, alongside effective management of operating costs and a focus on maintaining strong credit metrics.

Key Highlights

• 1Revenue from self-storage operations increased 3.7% year-over-year to $710.95 million for the three months ended June 30, 2019.
• 2Same-store revenue increased by 1.9% in the quarter, driven by higher rental rates per occupied square foot.
• 3Net income allocable to common shareholders decreased to $306.4 million ($1.76/share) for the quarter, down from $348.3 million ($2.00/share) in Q2 2018, impacted by foreign currency and investment gains in the prior year.
• 4Total assets grew to $11.11 billion as of June 30, 2019, with real estate facilities constituting the majority.
• 5Notes payable increased to $1.91 billion from $1.41 billion at year-end 2018, reflecting new debt issuances.
• 6The company reported strong liquidity, with expected capital resources of approximately $1.1 billion for the next year, exceeding identified capital needs of $415.1 million.
• 7Management continues to invest in development and acquisitions, with $328.6 million in remaining spending on the current development pipeline.

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