Public Storage (NYSE:PSA) announced today operating results for
the three and six months ended June 30, 2019.
Operating Results for the Three Months
Ended June 30, 2019
For the three months ended June 30, 2019, net income allocable
to our common shareholders was $306.4 million or $1.76 per diluted
common share, compared to $348.3 million or $2.00 per diluted
common share in 2018 representing a decrease of $41.9 million or
$0.24 per diluted common share. The decrease is due primarily to
(i) a $27.2 million decrease due to the impact of foreign currency
exchange gains and losses associated with our euro denominated
debt, (ii) our $24.0 million equity share of a gain on sale of
assets recorded by PS Business Parks in the three months ended June
30, 2018, and (iii) an $8.9 million allocation to our preferred
shareholders associated with our preferred share redemption
activities in the three months ended June 30, 2019. These decreases
were offset partially by (iv) a $7.9 million increase in
self-storage net operating income (described below), and (v) a
reduction in general and administrative expense attributable to
$7.8 million in incremental share-based compensation expense in the
three months ended June 30, 2018 for the planned retirement of our
former CEO and CFO.
The $7.9 million increase in self-storage net operating income
is a result of a $3.4 million increase in our Same Store Facilities
(as defined below) and a $4.5 million increase in our Non Same
Store Facilities (as defined below). Revenues for the Same Store
Facilities increased 1.9% or $11.5 million in the three months
ended June 30, 2019 as compared to 2018, due primarily to higher
realized annual rent per occupied square foot. Cost of operations
for the Same Store Facilities increased by 5.1% or $8.1 million in
the three months ended June 30, 2019 as compared to 2018, due
primarily to increased property taxes and higher marketing
expenses. The increase in net operating income of $4.5 million for
the Non Same Store Facilities is due primarily to the impact of
facilities acquired in 2018 and 2019 and the fill-up of recently
developed and expanded facilities.
Operating Results for the Six Months
Ended June 30, 2019
For the six months ended June 30, 2019, net income allocable to
our common shareholders was $608.2 million or $3.49 per diluted
common share, compared to $636.1 million or $3.65 per diluted
common share in 2018 representing a decrease of $27.9 million or
$0.16 per diluted common share. The decrease is due primarily to
(i) our $34.9 million equity share of gains recorded by PS Business
Parks in the six months ended June 30, 2018, (ii) a $17.4 million
allocation to our preferred shareholders associated with our
preferred share redemption activities in the six months ended June
30, 2019 and (iii) a $7.6 million decrease due to the impact of
foreign currency exchange gains associated with our euro
denominated debt. These decreases were offset partially by (iv) a
$15.3 million increase in self-storage net operating income
(described below) and (v) a reduction in general and administrative
expense attributable to $15.6 million in incremental share-based
compensation expense in the six months ended June 30, 2018 for the
planned retirement of our former CEO and CFO.
The $15.3 million increase in self-storage net operating income
is a result of a $5.7 million increase in our Same Store Facilities
and a $9.6 million increase in our Non Same Store Facilities.
Revenues for the Same Store Facilities increased 1.7% or $20.2
million in the six months ended June 30, 2019 as compared to 2018,
due primarily to higher realized annual rent per occupied square
foot. Cost of operations for the Same Store Facilities increased by
4.5% or $14.4 million in the six months ended June 30, 2019 as
compared to 2018, due primarily to increased property taxes and
higher marketing expenses. The increase in net operating income of
$9.6 million for the Non Same Store Facilities is due primarily to
the impact of facilities acquired in 2018 and 2019 and the fill-up
of recently developed and expanded facilities.
Funds from Operations
For the three months ended June 30, 2019, funds from operations
(“FFO”) was $2.57 per diluted common share, as compared to $2.65 in
the same period in 2018, representing a decrease of 3.0%. FFO is a
non-GAAP measure defined by the National Association of Real Estate
Investment Trusts and generally represents net income before
depreciation and amortization expense, gains and losses and
impairment charges with respect to real estate assets. A
reconciliation of GAAP diluted net income per share to FFO per
share, and additional descriptive information regarding this
non-GAAP measure, is attached.
For the six months ended June 30, 2019, FFO was $5.09 per
diluted common share, as compared to $5.02 in the same period in
2018, representing an increase of 1.4%.
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) accelerations of
accruals or reductions in accruals due to the departure of senior
executives 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
2019
2018
Change
2019
2018
Change
FFO per share
$
2.57
$
2.65
(3.0)%
$
5.09
$
5.02
1.4%
Eliminate the per share impact of
items excluded from Core FFO,
including
our equity share from investments:
Foreign currency exchange loss (gain)
0.03
(0.13)
(0.01)
(0.06)
Application of EITF D-42
0.05
-
0.10
-
(Forfeiture)/Acceleration of
share-based
compensation expense due to the
departure of senior executives
(0.01)
0.04
(0.01)
0.09
Other items
-
0.01
0.01
-
Core FFO per share
$
2.64
$
2.57
2.7%
$
5.18
$
5.05
2.6%
Property Operations – Same Store
Facilities
The Same Store Facilities represent the 2,165 facilities that
have been owned and operated on a stabilized level of occupancy,
revenues and cost of operations since January 1, 2017. Accordingly,
our Same Store Facilities exclude (i) facilities acquired after
December 31, 2016, (ii) newly developed or expanded facilities,
(iii) facilities where expansion is under construction or that we
expect to commence by December 31, 2019, (iv) facilities whose
operating trends are significantly affected by factors such as
casualty events, and (v) facilities which were otherwise not
stabilized at December 31, 2016 (such as recently developed
facilities acquired from third parties before December 31, 2016).
The composition of our Same Store Facilities allows us to more
effectively evaluate the ongoing performance of our self-storage
portfolio in 2017, 2018, and 2019 and exclude the impact of fill-up
of unstabilized facilities, which can significantly affect
operating trends. We believe the Same Store information is used by
investors and REIT analysts in a similar manner. The following
table summarizes the historical operating results of these 2,165
facilities (139.8 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 June 30, 2019.
Selected
Operating Data for the Same
Store Facilities
(2,165 facilities)
(unaudited):
Three Months Ended June 30,
Six Months Ended June 30,
Percentage
Percentage
2019
2018
Change
2019
2018
Change
(Dollar amounts in thousands,
except for per square foot amounts)
Revenues:
Rental income
$
576,681
$
565,717
1.9%
$
1,139,311
$
1,119,833
1.7%
Late charges and administrative fees
25,374
24,868
2.0%
51,491
50,809
1.3%
Total revenues (a)
602,055
590,585
1.9%
1,190,802
1,170,642
1.7%
Cost of operations:
Property taxes
66,076
62,940
5.0%
131,429
125,166
5.0%
On-site property manager payroll
30,283
29,461
2.8%
60,546
59,757
1.3%
Supervisory payroll
9,937
9,826
1.1%
19,717
19,958
(1.2)%
Repairs and maintenance
11,434
11,478
(0.4)%
22,047
21,440
2.8%
Snow removal
301
661
(54.5)%
3,102
2,880
7.7%
Utilities
9,670
10,152
(4.7)%
20,698
21,632
(4.3)%
Marketing
12,126
8,115
49.4%
20,906
14,994
39.4%
Other direct property costs
16,260
15,310
6.2%
32,699
31,146
5.0%
Allocated overhead
11,648
11,688
(0.3)%
25,778
25,503
1.1%
Total cost of operations (a)
167,735
159,631
5.1%
336,922
322,476
4.5%
Net operating income (b)
$
434,320
$
430,954
0.8%
$
853,880
$
848,166
0.7%
Gross margin
72.1%
73.0%
(1.2)%
71.7%
72.5%
(1.1)%
Weighted average for the period:
Square foot occupancy
94.0%
93.8%
0.2%
93.2%
93.0%
0.2%
Realized annual rental income per (c):
Occupied square foot
$
17.55
$
17.25
1.7%
$
17.48
$
17.23
1.5%
Available square foot (“REVPAF”)
$
16.50
$
16.19
1.9%
$
16.30
$
16.02
1.7%
At June 30:
Square foot occupancy
94.1%
93.6%
0.5%
Annual contract rent per occupied
square foot (d)
$
18.01
$
17.81
1.1%
(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 NOI to net 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)
Annual contract rent represents the agreed
upon monthly rate that is paid by our tenants in place at the time
of measurement. Contract rates are initially set in the lease
agreement upon move-in and we adjust them from time to time with
notice. Contract rent excludes other fees that are charged on a
per-item basis, such as late charges and administrative fees, does
not reflect the impact of promotional discounts, and does not
reflect the impact of rents that are written off as
uncollectible.
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:
2019
$
588,747
$
602,055
2018
$
580,057
$
590,585
$
607,598
$
594,302
$
2,372,542
Total cost of operations:
2019
$
169,187
$
167,735
2018
$
162,845
$
159,631
$
161,324
$
130,477
$
614,277
Property taxes:
2019
$
65,353
$
66,076
2018
$
62,226
$
62,940
$
62,750
$
36,550
$
224,466
Repairs and maintenance, including
snow removal expenses:
2019
$
13,414
$
11,735
2018
$
12,181
$
12,139
$
11,903
$
12,475
$
48,698
Marketing:
2019
$
8,780
$
12,126
2018
$
6,879
$
8,115
$
8,246
$
9,205
$
32,445
REVPAF:
2019
$
16.10
$
16.50
2018
$
15.86
$
16.19
$
16.62
$
16.25
$
16.23
Weighted average realized annual
rent per occupied square foot:
2019
$
17.41
$
17.55
2018
$
17.21
$
17.25
$
17.72
$
17.57
$
17.44
Weighted average occupancy levels
for the period:
2019
92.5%
94.0%
2018
92.1%
93.8%
93.8%
92.5%
93.1%
Property Operations – Non Same Store
Facilities
In addition to the 2,165 same-store facilities, we have 291
facilities that were not stabilized with respect to occupancies,
revenues or cost of operations since January 1, 2017 or that we did
not own as of January 1, 2017, including 81 facilities that were
acquired from third parties, 76 newly developed facilities, 62
facilities that have been expanded or are targeted for expansion,
and 72 facilities that are unstabilized due to the impact of
casualties and other factors (collectively, the “Non Same Store
Facilities”). Operating data, metrics, and further commentary with
respect to these facilities, including detail by vintage, is
included in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” under “Self-Storage
Operations” in our June 30, 2019 Form 10-Q.
Investing and Capital
Activities
During the three months ended June 30, 2019, we acquired 10
self-storage facilities (four in Florida, two in Virginia and one
each in Arizona, Colorado, Michigan and Texas) with 0.7 million net
rentable square feet for $116.7 million. During the six months
ended June 30, 2019, we acquired 22 self-storage facilities (eleven
in Virginia, five in Florida, and one each in Arizona, Colorado,
Georgia, Kentucky, Michigan and Texas) with 1.4 million net
rentable square feet for $198.0 million. Subsequent to June 30,
2019, we acquired or were under contract to acquire ten
self-storage facilities (two each in Georgia and Texas and one each
in Florida, Indiana, Minnesota, North Carolina, Tennessee and
Virginia) with 0.8 million net rentable square feet for $86.5
million.
During the three months ended June 30, 2019, we opened two newly
developed facilities and various expansion projects (1.1 million
net rentable square feet – 0.3 million in North Carolina, 0.2
million each in Georgia, Tennessee and Texas and 0.1 million each
in Colorado and Michigan) costing $89.7 million. During the six
months ended June 30, 2019, we opened six newly developed
facilities and various expansion projects (2.7 million net rentable
square feet – 1.5 million in Texas, 0.3 million in North Carolina,
0.2 million each in Colorado, Georgia and Tennessee and 0.1 million
each in California, Florida and Michigan) costing $223.2 million.
At June 30, 2019, we had various facilities in development (1.1
million net rentable square feet) estimated to cost $189 million
and various expansion projects (2.7 million net rentable square
feet) estimated to cost $332 million. Our aggregate 3.8 million net
rentable square foot pipeline of development and expansion
facilities includes 1.2 million in Florida, 0.7 million in
Minnesota, 0.6 million in California, 0.4 million in Washington,
0.2 million each in Colorado, Missouri, Texas and Virginia and 0.1
million in New York. The remaining $329 million of development
costs for these projects is expected to be incurred primarily in
the next 18 months.
On May 23, 2019, we called our 6.00% Series Z Preferred Shares
for redemption. The shares were redeemed at liquidation value on
June 27, 2019 for $287.5 million.
On April 12, 2019, we completed a public offering of $500
million in aggregate principal amount of senior notes bearing
interest at an annual rate of 3.385% maturing on May 1, 2029.
On April 19, 2019, we amended our $500 million revolving line of
credit. This amendment (i) extends the maturity date from March 31,
2020 to April 19, 2024, (ii) decreases the current effective
borrowing spread over LIBOR from 0.850% to 0.70%, and (iii)
decreases the current effective facility fee from 0.080% to 0.070%.
All other terms remain substantially the same.
Distributions Declared
On July 24, 2019, our Board of Trustees declared a regular
common quarterly dividend of $2.00 per common share. The Board also
declared dividends with respect to our various series of preferred
shares. All the dividends are payable on September 27, 2019 to
shareholders of record as of September 12, 2019.
Second Quarter Conference
Call
A conference call is scheduled for July 31, 2019 at 9:00 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 7560077). A simultaneous audio webcast may be
accessed by using the link at www.publicstorage.com under “About
Us, Investor Relations, News and Events, Event Calendar.” A replay
of the conference call may be accessed through August 14, 2019 by
calling (800) 585-8367 (domestic), (404) 537-3406 (international)
or by using the link at www.publicstorage.com under “About Us,
Investor Relations, News and Events, Event Calendar.” All forms of
replay utilize conference ID number 7560077.
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. At June 30, 2019, we had: (i) interests in
2,456 self-storage facilities located in 38 states with
approximately 166 million net rentable square feet in the United
States, (ii) an approximate 35% common equity interest in Shurgard
Self Storage SA (Euronext Brussels:SHUR) which owned 231
self-storage facilities located in seven Western European nations
with approximately 13 million net rentable square feet operated
under the “Shurgard” brand and (iii) an approximate 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, 2019. Our headquarters are located in
Glendale, California.
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 27, 2019 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;
risks due to a potential November 2020 statewide ballot initiative
(or other equivalent actions) that could remove the protections of
Proposition 13 with respect to our real estate and result in
substantial increases in our assessed values and property tax bills
in California; 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)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenues:
Self-storage facilities
$
669,339
$
645,206
$
1,319,747
$
1,276,743
Ancillary operations
41,611
40,322
80,241
78,709
710,950
685,528
1,399,988
1,355,452
Expenses:
Self-storage cost of operations
196,083
179,876
389,739
362,063
Ancillary cost of operations
11,653
11,101
22,198
21,741
Depreciation and amortization
126,859
119,777
248,800
237,756
General and administrative
15,264
31,329
34,767
62,849
Interest expense
12,254
8,388
20,397
16,495
362,113
350,471
715,901
700,904
Other increase (decrease) to net
income:
Interest and other income
8,582
6,328
15,547
11,872
Equity in earnings of unconsolidated real
estate entities
18,914
41,963
36,586
72,758
Gain on sale of real estate
341
-
341
424
Foreign currency exchange (loss) gain
(5,218)
21,944
2,573
10,126
Net income
371,456
405,292
739,134
749,728
Allocation to noncontrolling interests
(1,400)
(1,490)
(2,557)
(2,929)
Net income allocable to Public Storage
shareholders
370,056
403,802
736,577
746,799
Allocation of net income to:
Preferred shareholders – distributions
(53,525)
(54,077)
(108,537)
(108,158)
Preferred shareholders – redemptions
(8,861)
-
(17,394)
-
Restricted share units
(1,259)
(1,425)
(2,492)
(2,522)
Net income allocable to common
shareholders
$
306,411
$
348,300
$
608,154
$
636,119
Per common
share:
Net income per common share – Basic
$
1.76
$
2.00
$
3.49
$
3.66
Net income per common share – Diluted
$
1.76
$
2.00
$
3.49
$
3.65
Weighted average common shares – Basic
174,253
173,932
174,215
173,912
Weighted average common shares –
Diluted
174,542
174,224
174,459
174,186
PUBLIC STORAGE
SELECTED BALANCE SHEET
DATA
(Amounts in thousands, except
share and per share data)
June 30, 2019
December 31, 2018
ASSETS
(Unaudited)
Cash and equivalents
$
360,331
$
361,218
Operating real estate facilities:
Land and buildings, at cost
15,781,745
15,296,844
Accumulated depreciation
(6,375,132)
(6,140,072)
9,406,613
9,156,772
Construction in process
191,874
285,339
Investments in unconsolidated real estate
entities
778,523
783,988
Goodwill and other intangible assets,
net
210,178
209,856
Other assets
165,772
131,097
Total assets
$
11,113,291
$
10,928,270
LIABILITIES AND EQUITY
Senior unsecured notes
$
1,879,850
$
1,384,880
Mortgage notes
28,260
27,403
Accrued and other liabilities
410,671
371,259
Total liabilities
2,318,781
1,783,542
Equity:
Public Storage shareholders’ equity:
Cumulative Preferred Shares, $0.01 par
value, 100,000,000 shares
authorized, 149,500 shares issued (in
series) and outstanding,
(161,000 at December 31, 2018) at
liquidation preference
3,737,500
4,025,000
Common Shares, $0.10 par value,
650,000,000 shares authorized,
174,294,523 shares issued and outstanding,
(174,130,881 shares
at December 31, 2018)
17,429
17,413
Paid-in capital
5,729,945
5,718,485
Accumulated deficit
(648,391)
(577,360)
Accumulated other comprehensive loss
(67,549)
(64,060)
Total Public Storage shareholders’
equity
8,768,934
9,119,478
Noncontrolling interests
25,576
25,250
Total equity
8,794,510
9,144,728
Total liabilities and equity
$
11,113,291
$
10,928,270
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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Computation of
FFO per Share:
Net income allocable to common
shareholders
$
306,411
$
348,300
$
608,154
$
636,119
Eliminate items excluded from FFO:
Depreciation and amortization
126,859
119,777
248,800
237,756
Depreciation from unconsolidated real
estate investments
17,247
19,308
34,761
38,623
Depreciation allocated to noncontrolling
interests
and restricted share unitholders
(1,088)
(1,014)
(2,286)
(1,932)
Gains on sale of real estate, including
our equity share
from investments
(992)
(23,873)
(992)
(35,764)
FFO allocable to common shares (a)
$
448,437
$
462,498
$
888,437
$
874,802
Diluted weighted average common shares
174,542
174,224
174,459
174,186
FFO per share (a)
$
2.57
$
2.65
$
5.09
$
5.02
Reconciliation of
Earnings per Share to FFO per Share:
Earnings per share—Diluted
$
1.76
$
2.00
$
3.49
$
3.65
Eliminate per share amounts excluded from
FFO:
Depreciation and amortization allocable
to
common shareholders
0.82
0.79
1.61
1.58
Gains on sale of real estate, including
our equity share
from investments
(0.01)
(0.14)
(0.01)
(0.21)
FFO per share (a)
$
2.57
$
2.65
$
5.09
$
5.02
Computation of
Funds Available for Distribution ("FAD"):
FFO allocable to common shares
$
448,437
$
462,498
$
888,437
$
874,802
Eliminate effect of items included in FFO
but not FAD:
Share-based compensation expense in
excess
of cash paid
5,456
17,080
2,363
22,989
Foreign currency exchange loss (gain)
5,218
(21,944)
(2,573)
(10,126)
Application of EITF D-42
8,861
-
17,394
-
Less: Capital expenditures to maintain
real estate facilities
(42,354)
(28,883)
(72,559)
(53,227)
FAD (a)
$
425,618
$
428,751
$
833,062
$
834,438
Distributions paid to common shareholders
and restricted
share units
$
349,593
$
348,984
$
699,071
$
697,995
Distribution payout ratio
82.1%
81.4%
83.9%
83.6%
Distributions per common share
$
2.00
$
2.00
$
4.00
$
4.00
(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
GAAP net income before depreciation and amortization, real estate
gains or losses and impairment charges, which are excluded because
they are based upon historical 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
Net Income
(Unaudited – amounts in
thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Self-storage revenues for:
Same Store facilities
$
602,055
$
590,585
$
1,190,802
$
1,170,642
Acquired facilities
13,999
7,575
25,207
14,502
Newly developed and expanded
facilities
36,888
30,357
71,342
58,669
Other non-same store facilities
16,397
16,689
32,396
32,930
Self-storage revenues
669,339
645,206
1,319,747
1,276,743
Self-storage cost of operations for:
Same Store facilities
167,735
159,631
336,922
322,476
Acquired facilities
5,358
2,624
9,969
5,153
Newly developed and expanded
facilities
17,712
11,972
32,301
23,004
Other non-same store facilities
5,278
5,649
10,547
11,430
Self-storage cost of operations
196,083
179,876
389,739
362,063
Self-storage NOI for:
Same Store facilities
434,320
430,954
853,880
848,166
Acquired facilities
8,641
4,951
15,238
9,349
Newly developed and expanded
facilities
19,176
18,385
39,041
35,665
Other non-same store facilities
11,119
11,040
21,849
21,500
Self-storage NOI (a)
473,256
465,330
930,008
914,680
Ancillary revenues
41,611
40,322
80,241
78,709
Ancillary cost of operations
(11,653)
(11,101)
(22,198)
(21,741)
Depreciation and amortization
(126,859)
(119,777)
(248,800)
(237,756)
General and administrative expense
(15,264)
(31,329)
(34,767)
(62,849)
Interest and other income
8,582
6,328
15,547
11,872
Interest expense
(12,254)
(8,388)
(20,397)
(16,495)
Equity in earnings of unconsolidated real
estate entities
18,914
41,963
36,586
72,758
Gain on sale of real estate
341
-
341
424
Foreign currency exchange (loss) gain
(5,218)
21,944
2,573
10,126
Net income on our income statement
$
371,456
$
405,292
$
739,134
$
749,728
(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 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, 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
net income presented on our income statement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190730006025/en/
Ryan Burke (818) 244-8080, Ext. 1141
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