How did the COVID-19 pandemic impact Public Storage's financial performance during this quarter?

The COVID-19 pandemic negatively impacted Public Storage's business and results of operations. While self-storage facilities were deemed essential and remained open, the company experienced reduced demand, a decrease in late charges and administrative fees, and foreign currency exchange losses. However, occupancy levels improved, and the company implemented safety measures and a remote work environment for corporate staff.

What is the outlook for revenue growth, considering the current economic climate?

Public Storage noted an improvement in demand and a reduction in move-outs during the third quarter, leading to increased rental rates for new tenants and a resumption of rate increases for existing long-term tenants. While these trends offer a more optimistic outlook, the company acknowledges the ongoing uncertainty and potential for future revenue pressures due to factors like moderating move-out trends and potential economic downturns.

What is the company's strategy for growth given the current market conditions?

Public Storage continues to focus on growth through both acquisitions and development. Post-period, the company entered into contracts to acquire 54 self-storage facilities for $686.9 million. They also maintain a robust development pipeline with 12 new facilities and 26 expansions planned, underscoring a commitment to expanding their portfolio despite market uncertainties.

How is the company managing its debt and liquidity?

Public Storage maintains a strong financial profile with a $500 million revolving credit facility (undrawn as of the reporting date) and significant access to capital markets. They expect approximately $1.2 billion in capital resources for the next year, exceeding their identified capital needs. The company's debt is well-laddered with no material maturities until September 2022, providing financial flexibility.

Public Storage 10-Q Quarterly Report Q3 FY2020

Summary

Public Storage (PSA) reported its third-quarter 2020 financial results, showing a decrease in net income attributable to common shareholders for both the three and nine-month periods ended September 30, 2020, compared to the same periods in 2019. This decrease was primarily influenced by foreign currency exchange losses related to Euro-denominated debt and an increase in depreciation and amortization expense. Despite these headwinds, the company's core self-storage operations demonstrated resilience, particularly in Same Store Facilities, which saw a slight revenue decrease of 2.7% and 1.5% for the respective periods, driven by improvements in occupancy trends and a resumption of rental rate increases for existing tenants, partially offset by reduced late fees and administrative charges. The company also highlighted its active development and acquisition pipeline, underscoring a commitment to growth despite the ongoing economic uncertainties presented by the COVID-19 pandemic.

Financial Highlights

33 data points

Beta

Revenue

$734.54M

Net Income

$324.87M

0.4% Net Margin

EPS (Diluted)

$1.41

Total Assets

$11.39B

Cash & Equivalents

$293.95M

Free Cash Flow

$528.27M

Financial Statements

Beta

Revenue	$734.54M
Operating Expenses	$395.23M
Interest Expense	$14.28M
Net Income	$324.87M
EPS (Basic)	$1.41
EPS (Diluted)	$1.41
Shares Outstanding (Basic)	174.50M
Shares Outstanding (Diluted)	174.63M

Key Highlights

1Net income allocable to common shareholders decreased by $90.5 million and $139.3 million for the three and nine months ended September 30, 2020, respectively, compared to the prior year.
2Self-storage revenues for Same Store Facilities decreased by 2.7% for the three months and 1.5% for the nine months ended September 30, 2020, year-over-year.
3The company experienced significant foreign currency exchange losses of $41.9 million and $52.3 million in the three and nine-month periods, respectively, primarily due to Euro-denominated debt.
4Despite revenue pressures, occupancy levels in Same Store Facilities improved year-over-year, showing a 1.4% increase for the three-month period.
5Public Storage maintained a strong liquidity position with approximately $1.2 billion in expected capital resources for the upcoming year, exceeding identified capital needs.
6The company continued to actively pursue growth through acquisitions, with 54 self-storage facilities under contract or acquired post-period end for $686.9 million.
7The COVID-19 pandemic continues to be a significant factor impacting operations, with the company implementing safety measures and adapting to a remote work environment for corporate staff.

Public Storage Quarterly Report for Q3 Ended Sep 30, 2020

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions