10-QPeriod: Q2 FY2021

Public Storage Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 3, 2021For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) reported strong financial performance for the quarter and six months ended June 30, 2021. Revenue from self-storage facilities saw significant growth, driven by both increased rental rates and occupancy. The company also demonstrated effective cost management, leading to improved operating margins. Significant investments in acquisitions and development indicate a strategy focused on expansion and long-term growth. Financially, PSA reported robust net income and Funds from Operations (FFO), highlighting operational efficiency and a healthy balance sheet. The company successfully raised capital through debt and preferred equity offerings to support its growth initiatives. Management expressed confidence in continued revenue growth and operational strength in the latter half of the year, supported by strong demand in the self-storage market.

Financial Highlights

32 data points
Beta

Revenue

$829.32M

Net Income

$410.43M

49.5% Net Margin

EPS (Diluted)

$1.97

Total Assets

$14.49B

Cash & Equivalents

$480.81M

Free Cash Flow

$621.29M

Financial Statements
Beta
Revenue$829.32M
Operating Expenses$441.05M
Interest Expense$21.99M
Net Income$410.43M
EPS (Basic)$1.98
EPS (Diluted)$1.97
Shares Outstanding (Basic)174.82M
Shares Outstanding (Diluted)175.55M

Key Highlights

  • 1Total revenues increased by 16.9% for the three months ended June 30, 2021, compared to the same period in 2020, reaching $829.3 million.
  • 2Net income allocable to common shareholders significantly increased to $346.2 million ($1.97 per diluted share) for the three months ended June 30, 2021, up from $246.1 million ($1.41 per diluted share) in the prior year.
  • 3Same Store Facilities revenue grew by 10.8% in the three months ended June 30, 2021, driven by a 7.8% increase in realized annual rent per occupied square foot and a 3.0% increase in average occupancy.
  • 4The company acquired 99 self-storage facilities for $2.5 billion during the first six months of 2021, significantly expanding its portfolio.
  • 5Funds From Operations (FFO) per diluted share increased by 31.1% to $2.99 for the three months ended June 30, 2021.
  • 6Public Storage successfully raised $2.5 billion in debt offerings and $604 million in preferred share offerings during the first six months of 2021.
  • 7The company reported a substantial increase in net operating income for its self-storage operations, up 28.3% year-over-year for the three months ended June 30, 2021.

Frequently Asked Questions

The primary driver of revenue growth was the strong performance of Same Store Facilities, which saw a 10.8% increase in revenue. This was attributed to a combination of higher rental rates (7.8% increase in realized annual rent per occupied square foot) and improved occupancy (3.0% increase in average occupancy).

Public Storage funded its growth initiatives through a combination of capital sources. During the first six months of 2021, the company raised approximately $2.5 billion through public debt offerings and $604 million through a public offering of preferred shares. They also utilized existing cash reserves and operating cash flow.

Management expects continued year-over-year revenue growth in the second half of 2021, supported by stable customer demand and strong rental rates. However, they anticipate a potential decrease in occupancy levels in the fourth quarter due to seasonal patterns in customer behavior, particularly concerning move-out activity.

Public Storage demonstrated effective cost management, with Same Store Facilities' cost of operations decreasing by 13.1% in the second quarter of 2021. Key contributors to this reduction included lower on-site property manager payroll, decreased marketing expenses, and a favorable shift in property tax timing.