Public Storage (NYSE:PSA) announced today operating results for
the three and six months ended June 30, 2016.
Operating Results for the Three Months
Ended June 30, 2016
For the three months ended June 30, 2016, net income allocable
to our common shareholders was $280.8 million or $1.61 per diluted
common share, compared to $263.9 million or $1.52 in 2015
representing an increase of $16.9 million or $0.09. The increase is
primarily due to (i) a $33.5 million increase in self-storage net
operating income (described below) and (ii) an $8.6 million foreign
exchange translation gain associated with our euro denominated
debt, partially offset by (iii) a $15.5 million allocation to our
preferred shareholders as a result of redemption activities during
the three months ended June 30, 2016 and (iv) $16.7 million in
gains on sale of real estate investments recorded in the three
months ended June 30, 2015.
The $33.5 million increase in self-storage net operating income
is a result of a $23.9 million increase in our Same Store
Facilities (as defined below) and a $9.6 million increase in our
Non Same Store Facilities (as defined below). Revenues for the Same
Store Facilities increased 6.0% or $29.4 million in the three
months ended June 30, 2016 as compared to 2015, due primarily to
higher realized annual rent per occupied square foot. Cost of
operations for the Same Store Facilities increased by 4.2% or $5.5
million in the three months ended June 30, 2016 as compared to
2015, due primarily to increased property taxes, repairs and
maintenance and payroll. The increase in net operating income for
the Non Same Store Facilities is due primarily to the impact of 296
self-storage facilities acquired, developed or expanded since
January 2013.
Operating Results for the Six Months
Ended June 30, 2016
For the six months ended June 30, 2016, net income allocable to
our common shareholders was $522.1 million or $3.00 per diluted
common share, compared to $476.5 million or $2.75 in 2015
representing an increase of $45.6 million or $0.25. The increase is
primarily due to (i) a $78.8 million increase in self-storage net
operating income offset partially by (ii) a $22.1 million increase
in allocation to our preferred shareholders as a result of
redemption activities and (iii) a $17.5 million reduction in gains
on sales of real estate investments.
The $78.8 million increase in self-storage net operating income
is a result of a $58.4 million increase in our Same Store
Facilities and a $20.4 million increase in our Non Same Store
Facilities. Revenues for the Same Store Facilities increased 6.2%
or $60.1 million in the six months ended June 30, 2016 as compared
to 2015, due primarily to higher realized annual rent per occupied
square foot. Cost of operations for the Same Store Facilities
increased by 0.6% or $1.7 million in the six months ended June 30,
2016 as compared to 2015, due primarily to increased property
taxes, repairs and maintenance, and payroll, offset partially by
lower snow removal, utilities and advertising and selling expense.
The increase in net operating income for the Non Same Store
Facilities is due primarily to the impact of 296 self-storage
facilities acquired, developed or expanded since January 2013.
Funds from Operations
For the three months ended June 30, 2016, funds from operations
(“FFO”) was $2.34 per diluted common share, as compared to $2.15 in
2015, representing an increase of 8.8%. FFO is a non-GAAP
(generally accepted accounting principles) term defined by the
National Association of Real Estate Investment Trusts and generally
represents net income before depreciation, gains and losses and
impairment charges with respect to real estate assets.
For the six months ended June 30, 2016, FFO was $4.43 per
diluted common share, as compared to $4.06 in 2015, representing an
increase of 9.1%.
We also present “Core FFO per share,” a non-GAAP measure that
represents FFO per share excluding the impact of (i) foreign
currency exchange gains and losses, (ii) EITF D-42 charges related
to the redemption of preferred securities, (iii) general and
administrative expenses associated with the acquisition of
self-storage facilities and (iv) certain other non-cash and/or
nonrecurring income or expense items. We review Core FFO per share
to evaluate our ongoing operating performance, and we believe it is
used by investors and REIT analysts in a similar manner. However,
Core FFO per share is not a substitute for net income per share.
Because other REITs may not compute Core FFO per share in the same
manner as we do, may not use the same terminology or may not
present such a measure, Core FFO per share may not be comparable
among REITs.
The following table reconciles from FFO per share to Core FFO
per share (unaudited):
Three Months Ended June 30,
Six Months Ended June 30,
Percentage
Percentage 2016 2015 Change 2016 2015 Change FFO per share $
2.34 $ 2.15 8.8 % $ 4.43 $ 4.06 9.1 %
Eliminate the per share impact of items
excluded from Core FFO:
Foreign currency exchange (gain) loss,
net, including our equity share
(0.04 ) - 0.01 - Application of EITF D-42 0.09 - 0.15 0.03 Property
acquisition costs - 0.02 - 0.02 Other items 0.01
- 0.02 - Core FFO per share $ 2.40 $
2.17 10.6 % $ 4.61 $ 4.11 12.2 %
Property Operations – Same Store
Facilities
The Same Store Facilities represent those facilities that have
been owned and operated on a stabilized level of occupancy,
revenues and cost of operations since January 1, 2014. We review
the operations of our Same Store Facilities, which excludes
facilities whose operating trends are significantly affected by
factors such as facilities damaged by casualty events, as well as
recently developed or acquired facilities, to more effectively
evaluate the ongoing performance of our self-storage portfolio in
2014, 2015, and 2016. We believe the Same Store information is used
by investors and analysts in a similar manner. The Same Store pool
decreased from the 2,007 facilities at March 31, 2016 to 2,003
facilities at June 30, 2016 due primarily to flooding at certain
properties in our Houston market. The following table summarizes
the historical operating results of these 2,003 facilities (127.5
million net rentable square feet) that represent approximately 85%
of the aggregate net rentable square feet of our U.S. consolidated
self-storage portfolio at June 30, 2016.
Selected
Operating Data for the Same
Store Facilities
(2,003 facilities)
(unaudited):
Three Months Ended June 30, Six Months Ended June 30, Percentage
Percentage 2016 2015 Change 2016 2015 Change (Dollar amounts in
thousands, except for per square foot amounts) Revenues: Rental
income $ 498,172 $ 469,725 6.1 % $ 980,593 $ 922,998 6.2 % Late
charges and administrative fees 23,144 22,216
4.2 % 46,859 44,370 5.6 % Total
revenues (a) 521,316 491,941 6.0 %
1,027,452 967,368 6.2 % Cost of
operations: Property taxes 52,940 50,404 5.0 % 105,776 101,014 4.7
% On-site property manager payroll 27,058 25,419 6.4 % 54,159
52,527 3.1 % Supervisory payroll 9,478 9,074 4.5 % 18,616 18,151
2.6 % Repairs and maintenance 9,830 8,751 12.3 % 18,113 16,774 8.0
% Snow removal 494 293 68.6 % 3,343 8,493 (60.6 )% Utilities 8,684
9,270 (6.3 )% 18,736 19,932 (6.0 )% Advertising and selling expense
5,563 5,553 0.2 % 10,655 11,758 (9.4 )% Other direct property costs
13,476 13,418 0.4 % 27,137 26,515 2.3 % Allocated overhead
8,514 8,354 1.9 % 19,315
18,993 1.7 % Total cost of operations (a) 136,037
130,536 4.2 % 275,850
274,157 0.6 % Net operating income (b) $ 385,279 $
361,405 6.6 % $ 751,602 $ 693,211 8.4 %
Gross margin 73.9 % 73.5 % 0.5 % 73.2 % 71.7 % 2.1 %
Weighted average for the period: Square foot occupancy 95.3 % 95.4
% (0.1 )% 94.5 % 94.4 % 0.1 % Realized annual rental income per
(c): Occupied square foot $ 16.39 $ 15.45 6.1 % $ 16.28 $ 15.34 6.1
% Available square foot (“REVPAF”) $ 15.62 $ 14.73 6.0 % $ 15.38 $
14.47 6.3 % At June 30: Square foot occupancy 95.2 % 95.7 % (0.5 )%
Annual contract rent per occupied square
foot (d)
$ 17.13 $ 16.26 5.4 % (a) Revenues and cost of
operations do not include ancillary revenues and expenses generated
at the facilities with respect to tenant reinsurance and retail
sales. (b) See attached reconciliation of self-storage net
operating income (“NOI”) to operating income. (c) Realized
annual rent per occupied square foot is computed by dividing
annualized rental income, before late charges and administrative
fees, by the weighted average occupied square feet for the period.
Realized annual rent per available square foot (“REVPAF”) is
computed by dividing annualized rental income, before late charges
and administrative fees, by the total available rentable square
feet for the period. These measures exclude late charges and
administrative fees in order to provide a better measure of our
ongoing level of revenue. Late charges are dependent upon the level
of delinquency and administrative fees are dependent upon the level
of move-ins. In addition, the rates charged for late charges and
administrative fees can vary independently from rental rates. These
measures take into consideration promotional discounts, which
reduce rental income. (d) Contract rent represents the
applicable contractual monthly rent charged to our tenants,
excluding the impact of promotional discounts, late charges and
administrative fees.
The following table summarizes selected quarterly financial data
with respect to the Same Store Facilities (unaudited):
For the Quarter Ended
March 31 June 30 September 30
December 31 Entire Year (Amounts in thousands, except for
per square foot amounts) Total revenues: 2016 $ 506,136 $ 521,316
2015 $ 475,427 $ 491,941 $ 516,918 $ 508,054 $ 1,992,340
Total cost of operations: 2016 $ 139,813 $ 136,037 2015 $ 143,621 $
130,536 $ 133,765 $ 107,368 $ 515,290 Property taxes: 2016 $
52,836 $ 52,940 2015 $ 50,610 $ 50,404 $ 50,053 $ 27,958 $ 179,025
Repairs and maintenance, including snow
removal expenses:
2016 $ 11,132 $ 10,324 2015 $ 16,223 $ 9,044 $ 10,198 $ 10,318 $
45,783 Advertising and selling expense: 2016 $ 5,092 $ 5,563
2015 $ 6,205 $ 5,553 $ 6,970 $ 6,447 $ 25,175 REVPAF: 2016 $
15.13 $ 15.62 2015 $ 14.22 $ 14.73 $ 15.44 $ 15.19 $ 14.89
Weighted average realized annual rent per
occupied square foot:
2016 $ 16.16 $ 16.39 2015 $ 15.22 $ 15.45 $ 16.20 $ 16.19 $ 15.77
Weighted average occupancy levels for the
period:
2016 93.6 % 95.3 % 2015 93.4 % 95.4 % 95.3 % 93.9 % 94.5 %
Property Operations – Non Same Store
Facilities
The Non Same Store Facilities at June 30, 2016 represent 296
facilities that were not stabilized with respect to occupancies or
rental rates since January 1, 2014 or that we did not own as of
January 1, 2014. The following table summarizes operating data with
respect to the Non Same Store Facilities (unaudited):
NON SAME STORE Three Months Ended June
30, Six Months Ended June 30,
FACILITIES 2016
2015 Change 2016 2015
Change (Dollar amounts in thousands, except for per
square foot amounts)
Revenues: 2016 acquisitions $ 3,264 $ -
$ 3,264 $ 5,103 $ - $ 5,103 2015 acquisitions 3,777 1,019 2,758
7,372 1,642 5,730 2014 acquisitions 11,500 10,334 1,166 22,435
20,006 2,429 2013 acquisitions 24,582 22,475 2,107 48,392 43,849
4,543 Developed facilities 5,194 1,830 3,364 9,451 3,016 6,435
Other facilities 24,754 23,429 1,325
48,768 45,784 2,984 Total
revenues 73,071 59,087 13,984 141,521
114,297 27,224
Cost of operations before depreciation
and amortization expense:
2016 acquisitions 1,174 - 1,174 1,725 - 1,725 2015 acquisitions
1,275 374 901 2,567 578 1,989 2014 acquisitions 3,143 2,989 154
6,246 6,137 109 2013 acquisitions 7,094 6,803 291 14,211 13,966 245
Developed facilities 2,623 956 1,667 4,433 1,573 2,860 Other
facilities 6,341 6,168 173 12,518
12,657 (139 ) Total cost of operations
21,650 17,290 4,360 41,700
34,911 6,789
Net operating
income: 2016 acquisitions 2,090 - 2,090 3,378 - 3,378 2015
acquisitions 2,502 645 1,857 4,805 1,064 3,741 2014 acquisitions
8,357 7,345 1,012 16,189 13,869 2,320 2013 acquisitions 17,488
15,672 1,816 34,181 29,883 4,298 Developed facilities 2,571 874
1,697 5,018 1,443 3,575 Other facilities 18,413
17,261 1,152 36,250 33,127
3,123 Net operating income (a) $ 51,421 $
41,797 $ 9,624 $ 99,821 $ 79,386 $ 20,435
At June
30:
Square foot occupancy: 2016 acquisitions 91.7 % - - 2015
acquisitions 92.3 % 88.0 % 4.9 % 2014 acquisitions 94.5 % 93.4 %
1.2 % 2013 acquisitions 94.6 % 94.7 % (0.1 )% Developed facilities
65.8 % 77.3 % (14.9 )% Other facilities 90.3 % 91.1 %
(0.9 )% 89.4 % 91.9 % (2.7 )%
Annual contract rent per occupied square foot: 2016 acquisitions $
11.10 $ - - 2015 acquisitions 13.09 12.94 1.2 % 2014 acquisitions
14.09 13.04 8.1 % 2013 acquisitions 15.08 14.04 7.4 % Developed
facilities 12.73 11.37 12.0 % Other facilities 17.46
16.45 6.1 % $ 14.93 $ 14.48
3.1 % Number of facilities: 2016 acquisitions 24 - 24
2015 acquisitions 17 8 9 2014 acquisitions 44 44 -
2013 acquisitions
105
105
-
Developed facilities 29 13 16 Other facilities 77
77 - 296 247
49 Net rentable square feet (in
thousands): 2016 acquisitions 1,703 - 1,703 2015 acquisitions 1,285
560 725 2014 acquisitions 3,457 3,457 - 2013 acquisitions 6,906
6,906 - Developed facilities 3,113 1,124 1,989 Other facilities
6,324 6,290 34
22,788 18,337 4,451 (a)
See attached reconciliation of self-storage NOI to
operating income.
Investing and Capital Markets
Activities
During the three months ended June 30, 2016, we acquired 12
self-storage facilities (six located in Ohio, two each in South
Carolina and Texas, and one each in North Carolina and Indiana),
with 0.9 million net rentable square feet, for $99 million.
Subsequent to June 30, 2016, we acquired or were under contract to
acquire 21 self-storage facilities (11 in Oklahoma, four in
Kentucky, two in Ohio, and one each in Georgia, Colorado, Utah and
Michigan), with 1.7 million net rentable square feet, for $169
million. During the six months ended June 30, 2016, we acquired 24
self-storage facilities with 1.7 million net rentable square feet
for $198 million.
During the three months ended June 30, 2016, we completed seven
newly developed facilities and various expansion projects (1.0
million net rentable square feet) costing $116 million. During the
six months ended June 30, 2016, we completed nine newly developed
facilities and various expansion projects (1.3 million net rentable
square feet) costing an aggregate of $137 million. At June 30,
2016, we had various facilities in development (4.1 million net
rentable square feet) estimated to cost $510 million and various
expansion projects (0.9 million net rentable square feet) estimated
to cost $121 million. The remaining $403 million of development
costs for these projects is expected to be incurred in 2016 and
2017.
On May 17, 2016, we issued our 5.125% Series C Preferred Shares
for gross proceeds of $200 million.
On June 21, 2016, we called our 6.35% Series R Preferred Shares
for redemption. The shares were redeemed on July 26, 2016.
On July 20, 2016, we issued our 4.95% Series D Preferred Shares
for gross proceeds of $325 million.
Distributions Declared
On July 27, 2016, our Board of Trustees declared a regular
common quarterly dividend of $1.80 per common share. The Board also
declared dividends with respect to our various series of preferred
shares. All the dividends are payable on September 29, 2016 to
shareholders of record as of September 14, 2016.
Second Quarter Conference
Call
A conference call is scheduled for July 28, 2016 at 11:00 a.m.
(PDT) to discuss the second quarter earnings results. The domestic
dial-in number is (866) 406-5408, and the international dial-in
number is (973) 582-2770 (conference ID number for either domestic
or international is 45700639). A simultaneous audio webcast may be
accessed by using the link at www.publicstorage.com under “Company
Info, Investor Relations, News and Events, Events Calendar.” A
replay of the conference call may be accessed through August 11,
2016 by calling (800) 585-8367 (domestic) or (404) 537-3406
(international) or by using the link at www.publicstorage.com under
“Company Info, Investor Relations, News and Events, Events
Calendar.” All forms of replay utilize conference ID number
45700639.
About Public Storage
Public Storage, a member of the S&P 500 and FT Global 500,
is a REIT that primarily acquires, develops, owns and operates
self-storage facilities. The Company’s headquarters are located in
Glendale, California. At June 30, 2016, we had interests in 2,310
self-storage facilities located in 38 states with approximately 151
million net rentable square feet in the United States and 218
storage facilities located in seven Western European nations with
approximately 12 million net rentable square feet operated under
the “Shurgard” brand. We also own a 42% common equity interest in
PS Business Parks, Inc. (NYSE:PSB) which owned and operated
approximately 28 million rentable square feet of commercial space
at June 30, 2016.
Additional information about Public Storage is available on our
website, www.publicstorage.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements in this press release, other than statements
of historical fact, are forward-looking statements which may be
identified by the use of the words “expects,” “believes,”
“anticipates,” “should,” “estimates” and similar expressions. These
forward-looking statements involve known and unknown risks and
uncertainties, which may cause our actual results and performance
to be materially different from those expressed or implied in the
forward-looking statements. Factors and risks that may impact
future results and performance include, but are not limited to,
those described in Part 1, Item 1A, “Risk Factors” in our most
recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission (the “SEC”) on February 29, 2016 and in our
other filings with the SEC and the following: general risks
associated with the ownership and operation of real estate,
including changes in demand, risk related to development of
self-storage facilities, potential liability for environmental
contamination, natural disasters and adverse changes in laws and
regulations governing property tax, real estate and zoning; risks
associated with downturns in the national and local economies in
the markets in which we operate, including risks related to current
economic conditions and the economic health of our customers; the
impact of competition from new and existing self-storage and
commercial facilities and other storage alternatives; difficulties
in our ability to successfully evaluate, finance, integrate into
our existing operations and manage acquired and developed
properties; risks associated with international operations
including, but not limited to, unfavorable foreign currency rate
fluctuations, changes in tax laws, and local and global economic
uncertainty that could adversely affect our earnings and cash
flows; risks related to our participation in joint ventures; the
impact of the regulatory environment as well as national, state and
local laws and regulations including, without limitation, those
governing environmental, taxes, our tenant reinsurance business and
labor, and risks related to the impact of new laws and regulations;
risks of increased tax expense associated either with a possible
failure by us to qualify as a REIT, or with challenges to the
determination of taxable income for our taxable REIT subsidiaries;
changes in federal or state tax laws related to the taxation of
REITs and other corporations; security breaches or a failure of our
networks, systems or technology could adversely impact our
business, customer and employee relationships; risks associated
with the self-insurance of certain business risks, including
property and casualty insurance, employee health insurance and
workers compensation liabilities; difficulties in raising capital
at a reasonable cost; delays in the development process; ongoing
litigation and other legal and regulatory actions which may divert
management’s time and attention, require us to pay damages and
expenses or restrict the operation of our business; and economic
uncertainty due to the impact of war or terrorism. These
forward-looking statements speak only as of the date of this press
release. All of our forward-looking statements, including those in
this press release, are qualified in their entirety by this
statement. We expressly disclaim any obligation to update publicly
or otherwise revise any forward-looking statements, whether as a
result of new information, new estimates, or other factors, events
or circumstances after the date of this press release, except where
expressly required by law. Given these risks and uncertainties, you
should not rely on any forward-looking statements in this press
release, or which management may make orally or in writing from
time to time, as predictions of future events nor guarantees of
future performance.
PUBLIC STORAGE
SELECTED BALANCE SHEET DATA
(Amounts in thousands, except share and
per share data)
Three Months Ended June 30, Six Months Ended June 30, 2016
2015 2016 2015
Revenues: Self-storage facilities $
594,387 $ 551,028 $ 1,168,973 $ 1,081,665 Ancillary operations
39,801 37,587 77,001
71,829 634,188 588,615
1,245,974 1,153,494
Expenses: Self-storage cost of operations 157,687 147,826
317,550 309,068 Ancillary cost of operations 14,317 13,271 27,740
24,041 Depreciation and amortization 107,013 106,473 212,141
213,619 General and administrative 18,321
20,988 41,368 45,148
297,338 288,558 598,799
591,876 Operating income 336,850 300,057 647,175
561,618
Other income (expense): Interest and other
income 4,028 3,815 7,864 7,852 Interest expense (1,378 ) - (2,089 )
- Equity in earnings of unconsolidated real estate entities 10,227
7,480 24,391 23,664 Gain on sale of real estate investments -
16,688 689 18,160 Foreign currency exchange gain (loss)
8,632 - (2,322 ) - Net
income 358,359 328,040 675,708 611,294 Allocation to noncontrolling
interests (1,700 ) (1,635 ) (3,176 )
(3,108 ) Net income allocable to Public Storage shareholders
356,659 326,405 672,532 608,186 Allocation of net income to:
Preferred shareholders – distributions (59,216 ) (61,449 ) (121,488
) (125,004 ) Preferred shareholders – redemptions (15,537 ) -
(26,873 ) (4,784 ) Restricted share units (1,131 )
(1,030 ) (2,061 ) (1,859 ) Net income allocable to
common shareholders $ 280,775 $ 263,926 $ 522,110
$ 476,539
Per common
share:
Net income per common share – Basic $ 1.62 $ 1.53 $
3.02 $ 2.76 Net income per common share – Diluted $
1.61 $ 1.52 $ 3.00 $ 2.75 Weighted
average common shares – Basic 173,087 172,629
173,032 172,575 Weighted average
common shares – Diluted 174,000 173,387
173,925 173,377
PUBLIC STORAGE
SELECTED BALANCE SHEET DATA
(Amounts in thousands, except share and
per share data)
June 30, 2016 December 31, 2015
ASSETS (Unaudited)
Cash and cash equivalents $ 260,124 $ 104,285
Operating real estate facilities: Land and buildings, at cost
13,570,660 13,205,261 Accumulated depreciation (5,064,423 )
(4,866,738 ) 8,506,237 8,338,523 Construction in process
228,103 219,190 Investments in unconsolidated real estate entities
(a) 696,069 809,308 Goodwill and other intangible assets, net
213,396 211,458 Other assets 93,208 95,468
Total assets $ 9,997,137 $ 9,778,232
LIABILITIES AND EQUITY Senior unsecured
notes $ 379,792 $ 263,940 Mortgage notes 57,043 55,076 Preferred
shares called for redemption 487,500 - Accrued and other
liabilities 305,769 261,578 Total
liabilities 1,230,104 580,594 Equity: Public Storage
shareholders’ equity:
Cumulative Preferred Shares, $0.01 par
value, 100,000,000 shares authorized, 147,700 shares issued (in
series) and outstanding (162,200 at December 31, 2015), at
liquidation preference
3,692,500 4,055,000
Common Shares, $0.10 par value,
650,000,000 shares authorized, 173,098,015 shares issued and
outstanding, 172,921,241 shares at December 31, 2015)
17,310 17,293 Paid-in capital 5,598,846 5,601,506 Accumulated
deficit (491,912 ) (434,610 ) Accumulated other comprehensive loss
(78,991 ) (68,548 ) Total Public Storage
shareholders’ equity 8,737,753 9,170,641 Noncontrolling interests
29,280 26,997 Total equity
8,767,033 9,197,638 Total liabilities and
equity $ 9,997,137 $ 9,778,232 (a)
Decrease in investments in unconsolidated
real estate entities is due primarily to a $104 million cash
distribution we received from Shurgard Europe in the three months
ended June 30, 2016.
PUBLIC STORAGE
SELECTED FINANCIAL DATA
Computation of Funds from Operations
and Funds Available for Distribution
(Unaudited – amounts in thousands, except
per share data)
Three Months Ended June 30, Six Months Ended June 30, 2016
2015 2016 2015
Computation of
FFO per Share:
Net income allocable to common shareholders $ 280,775 $
263,926 $ 522,110 $ 476,539 Eliminate items excluded from FFO:
Depreciation and amortization 107,013 106,473 212,141 213,619
Depreciation from unconsolidated real estate investments 19,454
19,035 38,991 37,816
Depreciation allocated to noncontrolling
interests and restricted share unitholders
(876 ) (828 ) (1,758 ) (1,755 )
Gains on sale of real estate investments,
including our equity share from investments and other
- (16,625 ) (689 ) (23,103 ) FFO
allocable to common shares (a) $ 406,366 $ 371,981 $
770,795 $ 703,116 Diluted weighted average common
shares 174,000 173,387 173,925
173,377 FFO per share (a) $ 2.34 $ 2.15
$ 4.43 $ 4.06
Reconciliation of
Earnings per Share to FFO per Share:
Earnings per share - diluted $ 1.61 $ 1.52 $ 3.00 $ 2.75
Eliminate per share amounts excluded from FFO:
Depreciation and amortization, including
amounts from investments and excluding amounts allocated to
noncontrolling interests and restricted share unitholders
0.72 0.72 1.43 1.44
Gains on sale of real estate investments,
including our equity share from investments and other
0.01 (0.09 ) - (0.13 )
FFO per share (a) $ 2.34 $ 2.15 $ 4.43 $ 4.06
Computation of
Funds Available for Distribution ("FAD"):
FFO allocable to common shares $ 406,366 $ 371,981 $ 770,795
$ 703,116 Eliminate effect of items included in FFO but not FAD:
Non-cash share-based compensation expense 8,431 7,334 16,483 14,492
Foreign currency exchange (gain) loss,
net, including our equity share from investments
(6,537 ) - 1,381 -
Application of EITF D-42, including our
equity share from investments
15,537 - 26,873 4,784 Less: Capital expenditures to maintain real
estate facilities (30,552 ) (24,562 ) (44,945
) (32,461 ) FAD (a) $ 393,245 $ 354,753
$ 770,587 $ 689,931 Distributions paid to common
shareholders $ 311,357 $ 293,327 $ 605,324 $
534,776 Distribution payout ratio 79.2 % 82.7
% 78.6 % 77.5 % Distributions per common share $ 1.80
$ 1.70 $ 3.50 $ 3.10 (a)
FFO and FFO per share are non-GAAP measures defined by the
National Association of Real Estate Investment Trusts and, along
with the non-GAAP measure FAD, are considered helpful measures of
REIT performance by REITs and many REIT analysts. FFO represents
net income before real estate depreciation, gains or losses and
impairment charges, which are excluded because they are based upon
historical real estate costs and assume that building values
diminish ratably over time, while we believe that real estate
values fluctuate due to market conditions. FAD represents FFO
adjusted to exclude certain non-cash charges and to deduct capital
expenditures. We utilize FAD in evaluating our ongoing cash flow
available for investment, debt repayment, and common distributions.
We believe investors and analysts utilize FAD in a similar manner.
FFO and FFO per share are not a substitute for net income or
earnings per share. FFO and FAD are not substitutes for GAAP net
cash flow in evaluating our liquidity or ability to pay dividends,
because they exclude investing and financing activities presented
on our statements of cash flows. In addition, other REITs may
compute these measures differently, so comparisons among REITs may
not be helpful.
PUBLIC STORAGE
SELECTED FINANCIAL DATA
Reconciliation of Self-Storage Net
Operating Income to
Operating Income
(Unaudited – amounts in thousands)
Three Months Ended June 30, Six Months Ended June 30, 2016
2015 2016 2015 Self-storage revenues for: Same Store
Facilities $ 521,316 $ 491,941 $ 1,027,452 $ 967,368 Non Same Store
Facilities 73,071 59,087 141,521
114,297 Self-storage revenues 594,387 551,028
1,168,973 1,081,665 Self-storage cost of operations for:
Same Store Facilities 136,037 130,536 275,850 274,157 Non Same
Store Facilities 21,650 17,290
41,700 34,911 Self-storage cost of operations
157,687 147,826 317,550 309,068 Self-storage net operating
income for: Same Store Facilities 385,279 361,405 751,602 693,211
Non Same Store Facilities 51,421 41,797
99,821 79,386 Self-storage net
operating income (a) 436,700 403,202 851,423 772,597 Ancillary
operating revenues 39,801 37,587 77,001 71,829 Ancillary cost of
operations (14,317 ) (13,271 ) (27,740 ) (24,041 ) Depreciation and
amortization (107,013 ) (106,473 ) (212,141 ) (213,619 ) General
and administrative expense (18,321 ) (20,988 )
(41,368 ) (45,148 ) Operating income on our income statement
$ 336,850 $ 300,057 $ 647,175 $ 561,618
(a) Net operating income or “NOI” is a
non-GAAP financial measure that excludes the impact of depreciation
and amortization expense, which is based upon historical real
estate costs and assumes that building values diminish ratably over
time, while we believe that real estate values fluctuate due to
market conditions. We utilize NOI in determining current property
values, evaluating property performance, and in evaluating
operating trends. We believe that investors and analysts utilize
NOI in a similar manner. NOI is not a substitute for net income,
net operating cash flow, or other related GAAP financial measures,
in evaluating our operating results. This table reconciles from NOI
for our self-storage facilities to the operating income presented
on our income statement.
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Public StorageClemente Teng(818) 244-8080, Ext. 1141
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