Public Storage (NYSE:PSA) announced today operating results for
the three and nine months ended September 30, 2016.
Operating Results for the Three Months
Ended September 30, 2016
For the three months ended September 30, 2016, net income
allocable to our common shareholders was $309.0 million or $1.78
per diluted common share, compared to $273.5 million or $1.58 in
2015 representing an increase of $35.5 million or $0.20. The
increase is primarily due to (i) a $28.3 million increase in
self-storage net operating income (described below) and (ii) an
$8.0 million decrease in income allocated to preferred
shareholders.
The $28.3 million increase in self-storage net operating income
is a result of an $18.1 million increase in our Same Store
Facilities (as defined below) and a $10.2 million increase in our
Non Same Store Facilities (as defined below). Revenues for the Same
Store Facilities increased 5.1% or $26.6 million in the three
months ended September 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 6.4% or $8.5
million in the three months ended September 30, 2016 as compared to
2015, due primarily to increased property taxes, on-site property
manager payroll, and allocated overhead. The increase in net
operating income for the Non Same Store Facilities is due primarily
to the impact of 308 self-storage facilities acquired, developed or
expanded since January 2013.
Operating Results for the Nine Months
Ended September 30, 2016
For the nine months ended September 30, 2016, net income
allocable to our common shareholders was $831.1 million or $4.78
per diluted common share, compared to $750.0 million or $4.32 in
2015 representing an increase of $81.1 million or $0.46. The
increase is primarily due to (i) a $107.1 million increase in
self-storage net operating income offset partially by (ii) an $18.0
million increase in allocation to our preferred shareholders as a
result of redemption activities and (iii) a $28.1 million reduction
in gains on sales of real estate investments, including our equity
share.
The $107.1 million increase in self-storage net operating income
is a result of a $76.3 million increase in our Same Store
Facilities and a $30.8 million increase in our Non Same Store
Facilities. Revenues for the Same Store Facilities increased 5.8%
or $86.5 million in the nine months ended September 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 2.5% or $10.2 million in the nine months
ended September 30, 2016 as compared to 2015, due primarily to
increased property taxes, on-site property manager payroll and
repairs and maintenance, offset partially by lower snow removal
costs. The increase in net operating income for the Non Same Store
Facilities is due primarily to the impact of 308 self-storage
facilities acquired, developed or expanded since January 2013.
Funds from Operations
For the three months ended September 30, 2016, funds from
operations (“FFO”) was $2.51 per diluted common share, as compared
to $2.27 in 2015, representing an increase of 10.6%. 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 nine months ended September 30, 2016, FFO was $6.94 per
diluted common share, as compared to $6.33 in 2015, representing an
increase of 9.6%.
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 September 30,
Nine Months Ended September 30, Percentage Percentage 2016 2015
Change 2016 2015 Change FFO per share $ 2.51 $ 2.27 10.6 % $
6.94 $ 6.33 9.6 %
Eliminate the per share impact of items
excluded from Core FFO:
-
-
Foreign currency exchange loss, net,
including our equity share
0.02 - 0.03 - Application of EITF D-42 - 0.03 0.15 0.06 Property
acquisition costs - 0.01 0.01 0.03 Other items - 0.02
0.01 0.02 Core FFO per share $ 2.53 $ 2.33 8.6 % $
7.14 $ 6.44 10.9 %
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 2,003 facilities at June 30, 2016 to 2,000
facilities at September 30, 2016, due primarily to casualty damage.
The following table summarizes the historical operating results of
these 2,000 facilities (127.2 million net rentable square feet)
that represent approximately 84% of the aggregate net rentable
square feet of our U.S. consolidated self-storage portfolio at
September 30, 2016.
Selected
Operating Data for the Same
Store Facilities
(2,000 facilities)
(unaudited):
Three Months Ended September 30, Nine Months Ended September 30,
Percentage Percentage 2016 2015 Change 2016 2015 Change (Dollar
amounts in thousands, except for per square foot amounts) Revenues:
Rental income $ 516,971 $ 491,235 5.2 % $ 1,495,273 $ 1,412,123 5.9
% Late charges and administrative fees 25,301
24,478 3.4 % 72,050 68,733 4.8 %
Total revenues (a) 542,272 515,713 5.1
% 1,567,323 1,480,856 5.8 % Cost
of operations: Property taxes 52,629 49,946 5.4 % 158,278 150,861
4.9 % On-site property manager payroll 27,160 25,449 6.7 % 81,210
77,866 4.3 % Supervisory payroll 9,252 8,933 3.6 % 27,830 27,052
2.9 % Repairs and maintenance 10,760 10,179 5.7 % 28,847 26,920 7.2
% Snow removal - - 0.0 % 3,332 8,451 (60.6 )% Utilities 10,417
10,469 (0.5 )% 29,111 30,373 (4.2 )% Advertising and selling
expense 7,573 6,954 8.9 % 18,205 18,687 (2.6 )% Other direct
property costs 13,556 13,036 4.0 % 40,602 39,463 2.9 % Allocated
overhead 10,633 8,520 24.8 %
29,919 27,484 8.9 % Total cost of operations
(a) 141,980 133,486 6.4 %
417,334 407,157 2.5 % Net operating income (b)
$ 400,292 $ 382,227 4.7 % $ 1,149,989 $
1,073,699 7.1 % Gross margin 73.8 % 74.1 % (0.4 )%
73.4 % 72.5 % 1.2 % Weighted average for the period: Square
foot occupancy 95.3 % 95.3 % 0.0 % 94.8 % 94.7 % 0.1 % Realized
annual rental income per (c): Occupied square foot $ 17.06 $ 16.21
5.2 % $ 16.54 $ 15.63 5.8 % Available square foot (“REVPAF”) $
16.25 $ 15.44 5.2 % $ 15.67 $ 14.80 5.9 % At September 30: Square
foot occupancy 94.2 % 94.2 % 0.0 %
Annual contract rent per occupied square
foot (d)
$ 17.70 $ 16.91 4.7 % (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 $ 504,952 $
520,099 $ 542,272 2015 $ 474,337 $ 490,806 $ 515,713 $ 506,869 $
1,987,725 Total cost of operations: 2016 $ 139,511 $ 135,843
$ 141,980 2015 $ 143,301 $ 130,370 $ 133,486 $ 107,080 $ 514,237
Property taxes: 2016 $ 52,720 $ 52,929 $ 52,629 2015 $
50,508 $ 50,407 $ 49,946 $ 27,845 $ 178,706
Repairs and maintenance, including snow
removal expenses:
2016 $ 11,111 $ 10,308 $ 10,760 2015 $ 16,167 $ 9,025 $ 10,179 $
10,300 $ 45,671 Advertising and selling expense: 2016 $
5,080 $ 5,552 $ 7,573 2015 $ 6,192 $ 5,541 $ 6,954 $ 6,432 $ 25,119
REVPAF: 2016 $ 15.13 $ 15.63 $ 16.25 2015 $ 14.22 $ 14.73 $
15.44 $ 15.19 $ 14.90
Weighted average realized annual rent per
occupied square foot:
2016 $ 16.17 $ 16.39 $ 17.06 2015 $ 15.23 $ 15.45 $ 16.21 $ 16.19 $
15.77
Weighted average occupancy levels for the
period:
2016 93.6 % 95.4 % 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 September 30, 2016 represent
308 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 September 30, Nine Months Ended September 30,
FACILITIES 2016 2015 Change 2016 2015 Change (Dollar amounts
in thousands, except for per square foot amounts)
Revenues:
2016 acquisitions $ 5,292 $ - $ 5,292 $ 10,395 $ - $ 10,395 2015
acquisitions 4,076 1,861 2,215 11,448 3,503 7,945 2014 acquisitions
12,081 11,037 1,044 34,516 31,043 3,473 2013 acquisitions 25,645
23,867 1,778 74,037 67,716 6,321 Developed facilities 6,579 2,842
3,737 16,030 5,858 10,172 Other facilities 27,212
25,656 1,556 78,381 73,665
4,716 Total revenues 80,885 65,263
15,622 224,807 181,785
43,022
Cost of operations before depreciation
and amortization expense:
2016 acquisitions 1,937 - 1,937 3,662 - 3,662 2015 acquisitions
1,362 574 788 3,929 1,152 2,777 2014 acquisitions 3,345 3,166 179
9,591 9,303 288 2013 acquisitions 7,536 7,197 339 21,747 21,163 584
Developed facilities 2,989 1,127 1,862 7,422 2,700 4,722 Other
facilities 6,756 6,460 296 19,770
19,603 167 Total cost of
operations 23,925 18,524 5,401 66,121
53,921 12,200
Net
operating income: 2016 acquisitions 3,355 - 3,355 6,733 - 6,733
2015 acquisitions 2,714 1,287 1,427 7,519 2,351 5,168 2014
acquisitions 8,736 7,871 865 24,925 21,740 3,185 2013 acquisitions
18,109 16,670 1,439 52,290 46,553 5,737 Developed facilities 3,590
1,715 1,875 8,608 3,158 5,450 Other facilities 20,456
19,196 1,260 58,611 54,062
4,549 Net operating income (a) $ 56,960 $
46,739 $ 10,221 $ 158,686 $ 127,864 $ 30,822
At September
30:
Square foot occupancy: 2016 acquisitions 91.3 % - - 2015
acquisitions 91.2 % 89.4 % 2.0 % 2014 acquisitions 93.5 % 93.9 %
(0.4 )% 2013 acquisitions 93.1 % 93.4 % (0.3 )% Developed
facilities 66.6 % 75.3 % (11.6 )% Other facilities 89.0 %
90.0 % (1.1 )% 88.1 % 90.8 %
(3.0 )% Annual contract rent per occupied square foot: 2016
acquisitions $ 11.04 $ - - 2015 acquisitions 13.84 13.38 3.4 % 2014
acquisitions 14.67 13.69 7.2 % 2013 acquisitions 15.72 14.76 6.5 %
Developed facilities 13.22 12.31 7.4 % Other facilities
18.00 16.88 6.6 % $ 15.36 $
15.07 1.9 % Number of facilities: 2016 acquisitions
32 - 32 2015 acquisitions 17 10 7 2014 acquisitions 44 44 - 2013
acquisitions 105 105 - Developed facilities 30 16 14 Other
facilities 80 80 -
308 255 53 Net rentable square
feet (in thousands): 2016 acquisitions 2,329 - 2,329 2015
acquisitions 1,285 738 547 2014 acquisitions 3,457 3,457 - 2013
acquisitions 6,906 6,906 - Developed facilities 3,225 1,463 1,762
Other facilities 6,699 6,614 85
23,901 19,178 4,723
(a) See attached reconciliation of
self-storage NOI to operating income.
Investing and Capital Markets
Activities
During the three months ended September 30, 2016, we acquired
eight self-storage facilities (four located in Kentucky, and one
each in Georgia, Colorado, Michigan and Utah), with 0.6 million net
rentable square feet, for $73 million. During the nine months ended
September 30, 2016, we acquired 32 self-storage facilities with 2.3
million net rentable square feet for $271 million. Subsequent to
September 30, 2016, we acquired or were under contract to acquire
21 self-storage facilities (11 in Oklahoma, four each in Tennessee
and Ohio, and one each in California and Texas), with 1.7 million
net rentable square feet for $149 million.
During the three months ended September 30, 2016, we completed
one newly developed facility and various expansion projects (0.2
million net rentable square feet) costing $25 million. During the
nine months ended September 30, 2016, we completed ten newly
developed facilities and various expansion projects (1.4 million
net rentable square feet) costing an aggregate of $162 million. At
September 30, 2016, we had various facilities in development (4.2
million net rentable square feet) estimated to cost $543 million
and various expansion projects (1.1 million net rentable square
feet) estimated to cost $145 million. The remaining $427 million of
development costs for these projects is expected to be incurred
primarily in the next 18 months.
On July 20, 2016, we issued our 4.95% Series D Preferred Shares
for gross proceeds of $325 million.
On October 14, 2016, we issued our 4.90% Series E Preferred
Shares for gross proceeds of $350 million.
Distributions Declared
On October 26, 2016, our Board of Trustees declared a regular
common quarterly dividend of $2.00 per common share, which is an
increase of $0.20 or 11% over the previous quarter's distribution.
The Board also declared dividends with respect to our various
series of preferred shares. All the dividends are payable on
December 29, 2016 to shareholders of record as of December 14,
2016.
Third Quarter Conference
Call
A conference call is scheduled for October 27, 2016 at 11:00
a.m. (PDT) to discuss the third 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 92505093). 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
November 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 92505093.
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 September 30, 2016, we had interests in
2,319 self-storage facilities located in 38 states with
approximately 152 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 September 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 INCOME STATEMENT
DATA
(Amounts in thousands, except per share
data)
Three Months Ended Nine Months Ended September 30, September
30, 2016 2015 2016 2015
Revenues: Self-storage facilities $
623,157 $ 580,976 $ 1,792,130 $ 1,662,641 Ancillary operations
39,991 37,896 116,992
109,725 663,148 618,872
1,909,122 1,772,366
Expenses: Self-storage cost of operations 165,905 152,010
483,455 461,078 Ancillary cost of operations 12,722 12,676 40,462
36,715 Depreciation and amortization 109,432 106,082 321,573
319,701 General and administrative 22,140
23,573 63,508 68,721
310,199 294,341 908,998
886,215 Operating income 352,949 324,531 1,000,124
886,151
Other income (expense): Interest and other
income 3,750 3,659 11,614 11,509 Interest expense (1,221 ) - (3,310
) - Equity in earnings of unconsolidated real estate entities
17,237 12,603 41,628 36,267 Gain on sale of real estate investments
- 343 689 18,503 Foreign currency exchange loss (3,665 )
- (5,987 ) - Net income 369,050
341,136 1,044,758 952,430 Allocation to noncontrolling interests
(1,745 ) (1,568 ) (4,921 ) (4,676 ) Net
income allocable to Public Storage shareholders 367,305 339,568
1,039,837 947,754 Allocation of net income to: Preferred
shareholders – distributions (57,178 ) (61,062 ) (178,666 )
(186,066 ) Preferred shareholders – redemptions - (4,113 ) (26,873
) (8,897 ) Restricted share units (1,170 ) (885 )
(3,231 ) (2,744 ) Net income allocable to common
shareholders $ 308,957 $ 273,508 $ 831,067 $
750,047
Per common
share:
Net income per common share – Basic $ 1.78 $ 1.58 $
4.80 $ 4.34 Net income per common share – Diluted $
1.78 $ 1.58 $ 4.78 $ 4.32 Weighted
average common shares – Basic 173,108 172,771
173,057 172,641 Weighted average
common shares – Diluted 173,848 173,529
173,899 173,428
PUBLIC STORAGE
SELECTED BALANCE SHEET
(Amounts in thousands, except share and
per share data)
September 30, 2016 December 31, 2015
ASSETS
(Unaudited) Cash and cash equivalents $ 57,213 $ 104,285
Operating real estate facilities: Land and buildings, at
cost 13,686,241 13,205,261 Accumulated depreciation
(5,166,881 ) (4,866,738 ) 8,519,360 8,338,523 Construction
in process 261,372 219,190 Investments in unconsolidated real
estate entities (a) 697,040 809,308 Goodwill and other intangible
assets, net 212,548 211,458 Other assets 118,236
95,468 Total assets $ 9,865,769 $ 9,778,232
LIABILITIES AND EQUITY
Senior unsecured notes $ 383,438 $ 263,940 Mortgage notes 47,454
55,076 Accrued and other liabilities 345,734
261,578 Total liabilities 776,626 580,594 Equity:
Public Storage shareholders’ equity:
Cumulative Preferred Shares, $0.01 par
value, 100,000,000 shares authorized, 160,700 shares issued (in
series) and outstanding (162,200 at December 31, 2015), at
liquidation preference
4,017,500 4,055,000
Common Shares, $0.10 par value,
650,000,000 shares authorized, 173,137,424 shares issued and
outstanding, (172,921,241 shares at December 31, 2015)
17,314 17,293 Paid-in capital 5,602,834 5,601,506 Accumulated
deficit (494,325 ) (434,610 ) Accumulated other comprehensive loss
(83,667 ) (68,548 ) Total Public Storage
shareholders’ equity 9,059,656 9,170,641 Noncontrolling interests
29,487 26,997 Total equity
9,089,143 9,197,638 Total liabilities and
equity $ 9,865,769 $ 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 Nine Months Ended September 30, September
30, 2016 2015 2016 2015
Computation of
FFO per Share:
Net income allocable to common shareholders $ 308,957 $
273,508 $ 831,067 $ 750,047 Eliminate items excluded from FFO:
Depreciation and amortization 109,432 106,082 321,573 319,701
Depreciation from unconsolidated real estate investments 18,328
21,276 57,319 59,092
Depreciation allocated to noncontrolling
interests and restricted share unitholders
(884 ) (877 ) (2,642 ) (2,632 )
Gains on sale of real estate investments,
including our equity share from investments and other
(78 ) (5,730 ) (767 ) (28,833 ) FFO
allocable to common shares (a) $ 435,755 $ 394,259 $
1,206,550 $ 1,097,375 Diluted weighted average common
shares 173,848 173,529 173,899
173,428 FFO per share (a) $ 2.51 $ 2.27
$ 6.94 $ 6.33
Reconciliation of
Earnings per Share to FFO per Share:
Earnings per share - diluted $ 1.78 $ 1.58 $ 4.78 $ 4.32
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
0.73 0.73 2.16 2.17
Gains on sale of real estate investments,
including our equity share from investments and other
- (0.04 ) - (0.16 ) FFO
per share (a) $ 2.51 $ 2.27 $ 6.94 $ 6.33
Computation of
Funds Available for Distribution ("FAD"):
FFO allocable to common shares $ 435,755 $ 394,259 $
1,206,550 $ 1,097,375 Eliminate effect of items included in FFO but
not FAD: Non-cash share-based compensation expense 11,416 9,911
27,899 24,403
Foreign currency exchange loss, net,
including our equity share from investments
3,665 - 5,046 -
Application of EITF D-42, including our
equity share from investments
- 5,160 26,873 9,944 Less: Capital expenditures to maintain real
estate facilities (22,834 ) (20,414 ) (67,779
) (52,875 ) FAD (a) $ 428,002 $ 388,916
$ 1,198,589 $ 1,078,847 Distributions paid to common
shareholders $ 311,374 $ 293,634 $ 916,698 $
828,410 Distribution payout ratio 72.8 % 75.5
% 76.5 % 76.8 % Distributions per common share $ 1.80
$ 1.70 $ 5.30 $ 4.80 (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 Nine Months Ended September 30, September
30, 2016 2015 2016 2015 Self-storage revenues for: Same
Store Facilities $ 542,272 $ 515,713 $ 1,567,323 $ 1,480,856 Non
Same Store Facilities 80,885 65,263
224,807 181,785 Self-storage revenues
623,157 580,976 1,792,130 1,662,641 Self-storage cost of
operations for: Same Store Facilities 141,980 133,486 417,334
407,157 Non Same Store Facilities 23,925
18,524 66,121 53,921
Self-storage cost of operations 165,905 152,010 483,455 461,078
Self-storage net operating income for: Same Store Facilities
400,292 382,227 1,149,989 1,073,699 Non Same Store Facilities
56,960 46,739 158,686
127,864 Self-storage net operating income (a) 457,252
428,966 1,308,675 1,201,563 Ancillary operating revenues 39,991
37,896 116,992 109,725 Ancillary cost of operations (12,722 )
(12,676 ) (40,462 ) (36,715 ) Depreciation and amortization
(109,432 ) (106,082 ) (321,573 ) (319,701 ) General and
administrative expense (22,140 ) (23,573 )
(63,508 ) (68,721 ) Operating income on our income statement
$ 352,949 $ 324,531 $ 1,000,124 $ 886,151
(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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161026006971/en/
Public StorageClemente Teng(818) 244-8080, Ext. 1141
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