EX-99.1 2 psa-20200225xex99_1.htm EX-99.1 psa-20191231 Press Release

 

News Release



Public Storage

701 Western Avenue

Glendale, CA 91201-2349

PublicStorage.com







 

 



For Release

Immediately



Date

February 25,  2020



Contact

Ryan Burke



 

(818) 244-8080, Ext. 1141



 

 



Public Storage Reports Results for the Fourth Quarter and Year Ended December 31, 2019

GLENDALE,  California – Public Storage (NYSE:PSA) announced today operating results for the fourth quarter and year ended December 31, 2019.       

Operating Results for the Three Months Ended December 31, 2019

For the three months ended December 31, 2019, net income allocable to our common shareholders was $327.3 million or $1.87 per diluted common share, compared to $530.1 million or $3.04 per diluted common share in 2018 representing a decrease of $202.8 million or $1.17 per diluted common share.  The decrease is due primarily to (i) $183.1 million in aggregate gains due to Shurgard Self Storage SA’s (“Shurgard’s”) initial public offering and the sale of our facility in West London to Shurgard in October 2018, (ii) a $15.7 million decrease due to the impact of foreign currency exchange gains and losses associated with our euro denominated debt and (iii) a $6.2 million allocation to our preferred shareholders associated with our preferred share redemption activities in the three months ended December 31, 2019,  offset partially by (iv) a $10.3 million increase in self-storage net operating income (described below) and (v) a reduction in general and administrative expense attributable to $8.1 million in incremental share-based compensation expense in the three months ended December 31, 2018 for the planned retirement of our former CEO and CFO.

The $10.3 million increase in self-storage net operating income is a result of a $0.7 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 1.1% or $6.6 million in the three months ended December 31, 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 4.6% or $5.9 million in the three months ended December 31, 2019 as compared to 2018, due primarily to a  40% ($3.7 million) increase in marketing expenses, increased property manager payroll and increased property tax expense.  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. 

Operating Results for the Year Ended December 31, 2019

In 2019, net income allocable to our common shareholders was $1,272.8 million or $7.29 per diluted common share, compared to $1,488.9 million or $8.54 per diluted common share in 2018 representing a  decrease of $216.1 million or $1.25 per diluted common share.  The decrease is due primarily to (i) $183.1 million in aggregate gains due to Shurgard’s initial public offering and the sale of our facility in West London to Shurgard in October 2018, (ii) our $37.7 million equity share of gains recorded by PS Business Parks during 2018, (iii) a $10.3 million decrease due to the impact of foreign currency exchange gains associated with our euro denominated debt and (iv) a $32.7 million allocation to our preferred shareholders associated with our preferred share redemption activities in 2019. These impacts were offset partially by a $30.1 million increase in self-storage net operating income (described below) and a reduction in general and administrative expense attributable to $30.7  million in incremental share-based compensation expense in 2018 for the planned retirement of our former CEO and CFO.

The $30.1 million increase in self-storage net operating income is a result of a  $2.6 million increase in our Same Store Facilities and $27.5 million increase in our non-Same Store Facilities.  Revenues for the Same Store Facilities increased 1.4% or $33.3 million in 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 5.0% or $30.6 million in 2019 as compared to 2018,  due primarily to a  47.2% ($15.3 million) increase in marketing expenses and increased property taxes.  The increase in net operating income of $27.5 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.

1

 

 

 



Funds from Operations

For the three months ended December 31, 2019,  funds from operations (“FFO”) was $2.72 per diluted common share, as compared to $2.77 in 2018, representing a decrease of 1.8%.  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 year ended December 31, 2019, FFO was $10.58 per diluted common share, as compared to $10.45 in 2018, representing an increase of 1.2%.

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 December 31,

 

Year ended December 31,



 

 

 

 

 

 

 

Percentage

 

 

 

 

 

 

 

Percentage



 

2019

 

2018

 

Change

 

2019

 

2018

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per share

$

 2.72 

 

$

 2.77 

 

(1.8)%

 

$

 10.58 

 

$

 10.45 

 

 1.2% 

Eliminate the per share impact of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

items excluded from Core FFO, including

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

our equity share from investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange loss (gain)

 

 0.06 

 

 

 (0.03)

 

 

 

 

 (0.04)

 

 

 (0.10)

 

 

Application of EITF D-42

 

 0.06 

 

 

 -

 

 

 

 

 0.21 

 

 

 -

 

 

Shurgard - IPO costs and casualty loss

 

 -

 

 

 0.02 

 

 

 

 

 -

 

 

 0.03 

 

 

Acceleration/(Forfeiture) of share-based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

compensation expense due to the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

departure of senior executives

 

 -

 

 

 0.05 

 

 

 

 

 (0.01)

 

 

 0.18 

 

 

Other items

 

 -

 

 

 -

 

 

 

 

 0.01 

 

 

 -

 

 

Core FFO per share

$

 2.84 

 

$

 2.81 

 

 1.1% 

 

$

 10.75 

 

$

 10.56 

 

 1.8% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





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, 2017.  We review the operations of our Same Store Facilities, which excludes facilities whose operating trends are significantly affected by factors such as casualty events, as well as recently developed or acquired facilities, to more effectively evaluate the ongoing performance of our self-storage portfolio in 2017, 2018 and 2019.  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 2,159 facilities (139.3 million net rentable square feet) that represent approximately 82% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at December 31, 2019.     





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Operating Data for the Same

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Store Facilities (2,159 facilities)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended December 31,

 

Year ended December 31,



 

 

 

 

 

 

Percentage

 

 

 

 

 

 

 

Percentage



2019

 

2018

 

Change

 

2019

 

2018

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



(Dollar amounts in thousands, except for per square foot data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

$

 572,192 

 

$

 565,417 

 

 1.2% 

 

$

 2,290,721 

 

$

 2,258,099 

 

 1.4% 

Late charges and administrative fees

 

 25,905 

 

 

 26,073 

 

(0.6)%

 

 

 103,851 

 

 

 103,199 

 

 0.6% 

Total revenues (a)

 

 598,097 

 

 

 591,490 

 

 1.1% 

 

 

 2,394,572 

 

 

 2,361,298 

 

 1.4% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property taxes

 

 37,387 

 

 

 36,286 

 

 3.0% 

 

 

 233,453 

 

 

 223,088 

 

 4.6% 

On-site property manager payroll

 

 27,562 

 

 

 25,943 

 

 6.2% 

 

 

 118,450 

 

 

 115,531 

 

 2.5% 

Supervisory payroll

 

 8,377 

 

 

 7,887 

 

 6.2% 

 

 

 37,771 

 

 

 37,179 

 

 1.6% 

Repairs and maintenance

 

 11,330 

 

 

 11,709 

 

(3.2)%

 

 

 46,078 

 

 

 44,896 

 

 2.6% 

Snow removal

 

 861 

 

 

 719 

 

 19.7% 

 

 

 3,954 

 

 

 3,592 

 

 10.1% 

Utilities

 

 10,031 

 

 

 10,404 

 

(3.6)%

 

 

 42,209 

 

 

 43,457 

 

(2.9)%

Marketing

 

 12,853 

 

 

 9,178 

 

 40.0% 

 

 

 47,622 

 

 

 32,344 

 

 47.2% 

Other direct property costs

 

 15,709 

 

 

 15,459 

 

 1.6% 

 

 

 63,572 

 

 

 62,042 

 

 2.5% 

Allocated overhead

 

 11,671 

 

 

 12,254 

 

(4.8)%

 

 

 48,809 

 

 

 49,144 

 

(0.7)%

Total cost of operations (a)

 

 135,781 

 

 

 129,839 

 

 4.6% 

 

 

 641,918 

 

 

 611,273 

 

 5.0% 

Net operating income (b)

$

 462,316 

 

$

 461,651 

 

 0.1% 

 

$

 1,752,654 

 

$

 1,750,025 

 

 0.2% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 77.3% 

 

 

 78.0% 

 

(0.9)%

 

 

 73.2% 

 

 

 74.1% 

 

(1.2)%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average for the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Square foot occupancy

 

 93.1% 

 

 

 92.5% 

 

 0.6% 

 

 

 93.5% 

 

 

 93.1% 

 

 0.4% 

Realized annual rental income per (c):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Occupied square foot

$

 17.66 

 

$

 17.55 

 

 0.6% 

 

$

 17.60 

 

$

 17.41 

 

 1.1% 

Available square foot (“REVPAF”)

$

 16.44 

 

$

 16.23 

 

 1.3% 

 

$

 16.45 

 

$

 16.21 

 

 1.5% 

At December 31:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Square foot occupancy

 

 

 

 

 

 

 

 

 

 91.8% 

 

 

 91.3% 

 

 0.5% 

Annual contract rent per occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

square foot (d)

 

 

 

 

 

 

 

 

$

 18.12 

 

$

 18.03 

 

 0.5% 



(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 net income.  

3

 

 

 

(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 data)

Total revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

$

 586,004 

 

$

 599,244 

 

$

 611,227 

 

$

 598,097 

 

$

 2,394,572 

2018

$

 577,310 

 

$

 587,793 

 

$

 604,705 

 

$

 591,490 

 

$

 2,361,298 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost of operations:

 

 

 

 

 

 

 

 

 

 

 

 

2019

$

 168,359 

 

$

 166,913 

 

$

 170,865 

 

$

 135,781 

 

$

 641,918 

2018

$

 162,034 

 

$

 158,857 

 

$

 160,543 

 

$

 129,839 

 

$

 611,273 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

$

 64,945 

 

$

 65,671 

 

$

 65,450 

 

$

 37,387 

 

$

 233,453 

2018

$

 61,858 

 

$

 62,571 

 

$

 62,373 

 

$

 36,286 

 

$

 223,088 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repairs and maintenance, including

 

 

 

 

 

 

 

 

 

 

 

 

snow removal expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

$

 13,369 

 

$

 11,687 

 

$

 12,785 

 

$

 12,191 

 

$

 50,032 

2018

$

 12,124 

 

$

 12,081 

 

$

 11,855 

 

$

 12,428 

 

$

 48,488 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing:

 

 

 

 

 

 

 

 

 

 

 

 

2019

$

 8,751 

 

$

 12,084 

 

$

 13,934 

 

$

 12,853 

 

$

 47,622 

2018

$

 6,855 

 

$

 8,090 

 

$

 8,221 

 

$

 9,178 

 

$

 32,344 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVPAF:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

$

 16.08 

 

$

 16.48 

 

$

 16.79 

 

$

 16.44 

 

$

 16.45 

2018

$

 15.84 

 

$

 16.17 

 

$

 16.60 

 

$

 16.23 

 

$

 16.21 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average realized annual

 

 

 

 

 

 

 

 

 

 

 

 

rent per occupied square foot:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

$

 17.38 

 

$

 17.53 

 

$

 17.82 

 

$

 17.66 

 

$

 17.60 

2018

$

 17.19 

 

$

 17.23 

 

$

 17.69 

 

$

 17.55 

 

$

 17.41 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average occupancy levels

 

 

 

 

 

 

 

 

for the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 92.5% 

 

 

 94.0% 

 

 

 94.2% 

 

 

 93.1% 

 

 

 93.5% 

2018

 

 92.1% 

 

 

 93.8% 

 

 

 93.8% 

 

 

 92.5% 

 

 

 93.1% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



4

 

 

 



The following table sets forth selected market trends in our Same Store Facilities:





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Facilities Operating Trends by Market (Unaudited)

 

 

 

 

 

 



 

Three Months Ended December 31,

 

Year Ended December 31,



 

2019

 

 

2018

 

Change

 

 

2019

 

 

2018

 

Change



(Amounts in thousands, except for per square foot data)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

$

 91,070 

 

$

 89,024 

 

 2.3% 

 

$

 362,057 

 

$

 352,672 

 

 2.7% 

San Francisco

 

 50,904 

 

 

 49,847 

 

 2.1% 

 

 

 203,195 

 

 

 199,162 

 

 2.0% 

New York

 

 37,861 

 

 

 37,482 

 

 1.0% 

 

 

 151,526 

 

 

 148,676 

 

 1.9% 

Washington DC

 

 28,495 

 

 

 27,907 

 

 2.1% 

 

 

 113,607 

 

 

 110,642 

 

 2.7% 

Seattle-Tacoma

 

 26,914 

 

 

 26,566 

 

 1.3% 

 

 

 107,639 

 

 

 106,261 

 

 1.3% 

Miami

 

 28,016 

 

 

 28,433 

 

(1.5)%

 

 

 112,734 

 

 

 114,428 

 

(1.5)%

Atlanta

 

 21,205 

 

 

 21,293 

 

(0.4)%

 

 

 85,885 

 

 

 84,450 

 

 1.7% 

Chicago

 

 29,760 

 

 

 29,075 

 

 2.4% 

 

 

 118,293 

 

 

 117,094 

 

 1.0% 

Dallas-Ft. Worth

 

 20,463 

 

 

 20,610 

 

(0.7)%

 

 

 82,281 

 

 

 83,155 

 

(1.1)%

Orlando-Daytona

 

 15,131 

 

 

 14,996 

 

 0.9% 

 

 

 60,640 

 

 

 59,901 

 

 1.2% 

Houston

 

 16,701 

 

 

 17,510 

 

(4.6)%

 

 

 67,962 

 

 

 71,266 

 

(4.6)%

Philadelphia

 

 14,858 

 

 

 14,417 

 

 3.1% 

 

 

 59,120 

 

 

 56,747 

 

 4.2% 

Tampa

 

 11,426 

 

 

 11,543 

 

(1.0)%

 

 

 46,083 

 

 

 46,377 

 

(0.6)%

West Palm Beach

 

 10,990 

 

 

 10,923 

 

 0.6% 

 

 

 43,959 

 

 

 43,630 

 

 0.8% 

Portland

 

 9,909 

 

 

 10,052 

 

(1.4)%

 

 

 40,163 

 

 

 40,622 

 

(1.1)%

All other markets

 

 184,394 

 

 

 181,812 

 

 1.4% 

 

 

 739,428 

 

 

 726,215 

 

 1.8% 

Total revenues

$

 598,097 

 

$

 591,490 

 

 1.1% 

 

$

 2,394,572 

 

$

 2,361,298 

 

 1.4% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

$

 77,281 

 

$

 75,221 

 

 2.7% 

 

$

 298,725 

 

$

 292,281 

 

 2.2% 

San Francisco

 

 41,652 

 

 

 41,192 

 

 1.1% 

 

 

 163,878 

 

 

 162,202 

 

 1.0% 

New York

 

 29,970 

 

 

 30,097 

 

(0.4)%

 

 

 107,992 

 

 

 107,351 

 

 0.6% 

Washington DC

 

 22,314 

 

 

 21,802 

 

 2.3% 

 

 

 84,329 

 

 

 82,745 

 

 1.9% 

Seattle-Tacoma

 

 22,449 

 

 

 21,357 

 

 5.1% 

 

 

 84,315 

 

 

 83,375 

 

 1.1% 

Miami

 

 24,781 

 

 

 26,164 

 

(5.3)%

 

 

 84,269 

 

 

 87,277 

 

(3.4)%

Atlanta

 

 16,671 

 

 

 16,643 

 

 0.2% 

 

 

 63,630 

 

 

 62,519 

 

 1.8% 

Chicago

 

 18,906 

 

 

 18,801 

 

 0.6% 

 

 

 63,228 

 

 

 64,906 

 

(2.6)%

Dallas-Ft. Worth

 

 16,315 

 

 

 16,628 

 

(1.9)%

 

 

 56,623 

 

 

 58,461 

 

(3.1)%

Orlando-Daytona

 

 11,855 

 

 

 11,879 

 

(0.2)%

 

 

 44,116 

 

 

 44,066 

 

 0.1% 

Houston

 

 10,280 

 

 

 11,753 

 

(12.5)%

 

 

 42,380 

 

 

 47,071 

 

(10.0)%

Philadelphia

 

 10,712 

 

 

 10,430 

 

 2.7% 

 

 

 41,773 

 

 

 40,097 

 

 4.2% 

Tampa

 

 8,803 

 

 

 8,947 

 

(1.6)%

 

 

 32,416 

 

 

 33,378 

 

(2.9)%

West Palm Beach

 

 8,215 

 

 

 8,446 

 

(2.7)%

 

 

 32,192 

 

 

 32,397 

 

(0.6)%

Portland

 

 7,927 

 

 

 8,034 

 

(1.3)%

 

 

 30,511 

 

 

 31,548 

 

(3.3)%

All other markets

 

 134,185 

 

 

 134,257 

 

(0.1)%

 

 

 522,277 

 

 

 520,351 

 

 0.4% 

Total net operating income

$

 462,316 

 

$

 461,651 

 

 0.1% 

 

$

 1,752,654 

 

$

 1,750,025 

 

 0.2% 

 

5

 

 

 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Facilities Operating Trends by Market (Continued)

 

 

 

 

 

 



 

 

 

 

 



 

Three Months Ended December 31,

 

 

Year Ended December 31,



 

2019

 

2018

 

Change

 

 

2019

 

2018

 

Change

Weighted average square foot

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 occupancy:

 

 

 

 

 

 

 

 

 

Los Angeles

 

 95.4% 

 

 

 94.6% 

 

 0.8% 

 

 

 95.2% 

 

 

 95.0% 

 

 0.2% 

San Francisco

 

 93.8% 

 

 

 93.5% 

 

 0.3% 

 

 

 94.3% 

 

 

 94.4% 

 

(0.1)%

New York

 

 93.7% 

 

 

 93.8% 

 

(0.1)%

 

 

 94.1% 

 

 

 94.3% 

 

(0.2)%

Washington DC

 

 92.5% 

 

 

 91.8% 

 

 0.8% 

 

 

 93.4% 

 

 

 92.4% 

 

 1.1% 

Seattle-Tacoma

 

 92.3% 

 

 

 92.0% 

 

 0.3% 

 

 

 93.1% 

 

 

 93.2% 

 

(0.1)%

Miami

 

 93.1% 

 

 

 92.4% 

 

 0.8% 

 

 

 93.0% 

 

 

 92.9% 

 

 0.1% 

Atlanta

 

 92.2% 

 

 

 93.0% 

 

(0.9)%

 

 

 93.0% 

 

 

 93.2% 

 

(0.2)%

Chicago

 

 92.4% 

 

 

 90.1% 

 

 2.6% 

 

 

 92.1% 

 

 

 90.3% 

 

 2.0% 

Dallas-Ft. Worth

 

 91.9% 

 

 

 91.2% 

 

 0.8% 

 

 

 92.0% 

 

 

 91.4% 

 

 0.7% 

Orlando-Daytona

 

 93.3% 

 

 

 93.2% 

 

 0.1% 

 

 

 94.1% 

 

 

 94.5% 

 

(0.4)%

Houston

 

 90.9% 

 

 

 89.8% 

 

 1.2% 

 

 

 89.7% 

 

 

 90.9% 

 

(1.3)%

Philadelphia

 

 94.6% 

 

 

 94.7% 

 

(0.1)%

 

 

 95.3% 

 

 

 94.9% 

 

 0.4% 

Tampa

 

 92.3% 

 

 

 91.7% 

 

 0.7% 

 

 

 92.6% 

 

 

 92.9% 

 

(0.3)%

West Palm Beach

 

 93.9% 

 

 

 93.4% 

 

 0.5% 

 

 

 93.9% 

 

 

 93.8% 

 

 0.1% 

Portland

 

 92.6% 

 

 

 92.8% 

 

(0.2)%

 

 

 94.0% 

 

 

 94.0% 

 

 0.0% 

All other markets

 

 92.9% 

 

 

 92.3% 

 

 0.7% 

 

 

 93.5% 

 

 

 92.9% 

 

 0.6% 

Total weighted average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

square foot occupancy

 

 93.1% 

 

 

 92.5% 

 

 0.6% 

 

 

 93.5% 

 

 

 93.1% 

 

 0.4% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized annual rent per

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 occupied square foot:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

$

 26.25 

 

$

 25.83 

 

 1.6% 

 

$

 26.11 

 

$

 25.47 

 

 2.5% 

San Francisco

 

 26.96 

 

 

 26.42 

 

 2.0% 

 

 

 26.73 

 

 

 26.14 

 

 2.3% 

New York

 

 26.16 

 

 

 25.84 

 

 1.2% 

 

 

 26.05 

 

 

 25.51 

 

 2.1% 

Washington DC

 

 21.79 

 

 

 21.51 

 

 1.3% 

 

 

 21.51 

 

 

 21.27 

 

 1.1% 

Seattle-Tacoma

 

 20.41 

 

 

 20.19 

 

 1.1% 

 

 

 20.20 

 

 

 19.94 

 

 1.3% 

Miami

 

 20.13 

 

 

 20.60 

 

(2.3)%

 

 

 20.31 

 

 

 20.63 

 

(1.6)%

Atlanta

 

 13.43 

 

 

 13.28 

 

 1.1% 

 

 

 13.44 

 

 

 13.15 

 

 2.2% 

Chicago

 

 15.22 

 

 

 15.24 

 

(0.1)%

 

 

 15.17 

 

 

 15.33 

 

(1.0)%

Dallas-Ft. Worth

 

 13.57 

 

 

 13.76 

 

(1.4)%

 

 

 13.63 

 

 

 13.88 

 

(1.8)%

Orlando-Daytona

 

 14.19 

 

 

 14.10 

 

 0.6% 

 

 

 14.12 

 

 

 13.90 

 

 1.6% 

Houston

 

 13.09 

 

 

 13.91 

 

(5.9)%

 

 

 13.52 

 

 

 14.01 

 

(3.5)%

Philadelphia

 

 16.84 

 

 

 16.33 

 

 3.1% 

 

 

 16.65 

 

 

 16.04 

 

 3.8% 

Tampa

 

 14.04 

 

 

 14.23 

 

(1.3)%

 

 

 14.12 

 

 

 14.13 

 

(0.1)%

West Palm Beach

 

 18.49 

 

 

 18.48 

 

 0.1% 

 

 

 18.50 

 

 

 18.37 

 

 0.7% 

Portland

 

 18.56 

 

 

 18.75 

 

(1.0)%

 

 

 18.52 

 

 

 18.71 

 

(1.0)%

All other markets

 

 14.25 

 

 

 14.13 

 

 0.8% 

 

 

 14.20 

 

 

 14.03 

 

 1.2% 

Total realized rent per

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

occupied square foot

$

 17.66 

 

$

 17.55 

 

 0.6% 

 

$

 17.60 

 

$

 17.41 

 

 1.1% 



 

6

 

 

 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Facilities Operating Trends by Market (Continued)

 

 

 

 

 

 



 

 

 

 

 



Three Months Ended December 31,

 

 

Year Ended December 31,



 

2019

 

2018

 

Change

 

 

2019

 

2018

 

Change

REVPAF:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

$

 25.04 

 

$

 24.43 

 

 2.5% 

 

$

 24.87 

 

$

 24.20 

 

 2.8% 

San Francisco

 

 25.27 

 

 

 24.70 

 

 2.3% 

 

 

 25.20 

 

 

 24.67 

 

 2.1% 

New York

 

 24.50 

 

 

 24.23 

 

 1.1% 

 

 

 24.50 

 

 

 24.05 

 

 1.9% 

Washington DC

 

 20.16 

 

 

 19.75 

 

 2.1% 

 

 

 20.09 

 

 

 19.65 

 

 2.2% 

Seattle-Tacoma

 

 18.84 

 

 

 18.58 

 

 1.4% 

 

 

 18.81 

 

 

 18.57 

 

 1.3% 

Miami

 

 18.75 

 

 

 19.03 

 

(1.5)%

 

 

 18.88 

 

 

 19.16 

 

(1.5)%

Atlanta

 

 12.38 

 

 

 12.36 

 

 0.2% 

 

 

 12.50 

 

 

 12.25 

 

 2.0% 

Chicago

 

 14.07 

 

 

 13.73 

 

 2.5% 

 

 

 13.97 

 

 

 13.84 

 

 0.9% 

Dallas-Ft. Worth

 

 12.47 

 

 

 12.55 

 

(0.6)%

 

 

 12.54 

 

 

 12.68 

 

(1.1)%

Orlando-Daytona

 

 13.24 

 

 

 13.15 

 

 0.7% 

 

 

 13.29 

 

 

 13.14 

 

 1.1% 

Houston

 

 11.90 

 

 

 12.50 

 

(4.8)%

 

 

 12.13 

 

 

 12.73 

 

(4.7)%

Philadelphia

 

 15.94 

 

 

 15.47 

 

 3.0% 

 

 

 15.86 

 

 

 15.22 

 

 4.2% 

Tampa

 

 12.96 

 

 

 13.05 

 

(0.7)%

 

 

 13.08 

 

 

 13.13 

 

(0.4)%

West Palm Beach

 

 17.35 

 

 

 17.26 

 

 0.5% 

 

 

 17.37 

 

 

 17.23 

 

 0.8% 

Portland

 

 17.18 

 

 

 17.40 

 

(1.3)%

 

 

 17.40 

 

 

 17.58 

 

(1.0)%

All other markets

 

 13.25 

 

 

 13.04 

 

 1.6% 

 

 

 13.28 

 

 

 13.03 

 

 1.9% 

Total REVPAF

$

 16.44 

 

$

 16.23 

 

 1.3% 

 

$

 16.45 

 

$

 16.21 

 

 1.5% 



Property Operations – Non-Same Store Facilities

In addition to our Same Store Facilities, at December 31, 2019 we had  324 facilities that were not stabilized with respect to occupancies or rental rates since January 1, 2017 or that we did not own as of January 1, 2017.  The following table summarizes operating data with respect to these 324 facilities (unaudited).  Additional data and metrics with respect to these facilities is included in the MD&A in our December 31, 2019 Form 10-K.



 

7

 

 

 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-SAME STORE

Three Months Ended December 31,

 

Year ended December 31,

FACILITIES

2019

 

2018

 

Change

 

2019

 

2018

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



(Dollar amounts in thousands, except for per square foot data)

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Facilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 Acquisitions

$

 7,773 

 

$

 7,319 

 

$

 454 

 

$

 30,473 

 

$

 28,704 

 

$

 1,769 

2018 Acquisitions

 

 4,143 

 

 

 2,879 

 

 

 1,264 

 

 

 16,029 

 

 

 5,167 

 

 

 10,862 

2019 Acquisitions

 

 5,861 

 

 

 -

 

 

 5,861 

 

 

 12,704 

 

 

 -

 

 

 12,704 



 

 17,777 

 

 

 10,198 

 

 

 7,579 

 

 

 59,206 

 

 

 33,871 

 

 

 25,335 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developed and expanded facilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developed in 2013 - 2015

 

 7,288 

 

 

 6,842 

 

 

 446 

 

 

 28,331 

 

 

 26,725 

 

 

 1,606 

Developed in 2016 and 2017

 

 11,633 

 

 

 9,655 

 

 

 1,978 

 

 

 43,358 

 

 

 34,233 

 

 

 9,125 

Developed in 2018 and 2019

 

 5,089 

 

 

 1,805 

 

 

 3,284 

 

 

 15,230 

 

 

 3,392 

 

 

 11,838 

Completed Expansions

 

 13,649 

 

 

 10,653 

 

 

 2,996 

 

 

 49,214 

 

 

 41,879 

 

 

 7,335 

Expansions in process

 

 3,508 

 

 

 3,811 

 

 

 (303)

 

 

 14,438 

 

 

 15,465 

 

 

 (1,027)



 

 41,167 

 

 

 32,766 

 

 

 8,401 

 

 

 150,571 

 

 

 121,694 

 

 

 28,877 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-same store facilities

 

 19,986 

 

 

 19,794 

 

 

 192 

 

 

 80,203 

 

 

 80,744 

 

 

 (541)

Total revenues

 

 78,930 

 

 

 62,758 

 

 

 16,172 

 

 

 289,980 

 

 

 236,309 

 

 

 53,671 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations before

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

depreciation and amortization:
   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Facilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 Acquisitions

 

 2,571 

 

 

 2,225 

 

 

 346 

 

 

 10,203 

 

 

 9,669 

 

 

 534 

2018 Acquisitions

 

 1,632 

 

 

 1,276 

 

 

 356 

 

 

 7,197 

 

 

 2,141 

 

 

 5,056 

2019 Acquisitions

 

 2,242 

 

 

 -

 

 

 2,242 

 

 

 5,072 

 

 

 -

 

 

 5,072 



 

 6,445 

 

 

 3,501 

 

 

 2,944 

 

 

 22,472 

 

 

 11,810 

 

 

 10,662 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developed and expanded facilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developed in 2013 - 2015

 

 1,772 

 

 

 1,714 

 

 

 58 

 

 

 8,284 

 

 

 8,031 

 

 

 253 

Developed in 2016 and 2017

 

 3,714 

 

 

 5,015 

 

 

 (1,301)

 

 

 18,188 

 

 

 17,984 

 

 

 204 

Developed in 2018 and 2019

 

 2,765 

 

 

 1,722 

 

 

 1,043 

 

 

 11,195 

 

 

 4,136 

 

 

 7,059 

Completed Expansions

 

 5,387 

 

 

 2,823 

 

 

 2,564 

 

 

 21,579 

 

 

 13,756 

 

 

 7,823 

Expansions in process

 

 913 

 

 

 733 

 

 

 180 

 

 

 4,114 

 

 

 3,963 

 

 

 151 



 

 14,551 

 

 

 12,007 

 

 

 2,544 

 

 

 63,360 

 

 

 47,870 

 

 

 15,490 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-same store facilities

 

 5,694 

 

 

 4,684 

 

 

 1,010 

 

 

 24,829 

 

 

 24,778 

 

 

 51 

Total cost of operations

 

 26,690 

 

 

 20,192 

 

 

 6,498 

 

 

 110,661 

 

 

 84,458 

 

 

 26,203 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquired Facilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 Acquisitions

 

 5,202 

 

 

 5,094 

 

 

 108 

 

 

 20,270 

 

 

 19,035 

 

 

 1,235 

2018 Acquisitions

 

 2,511 

 

 

 1,603 

 

 

 908 

 

 

 8,832 

 

 

 3,026 

 

 

 5,806 

2019 Acquisitions

 

 3,619 

 

 

 -

 

 

 3,619 

 

 

 7,632 

 

 

 -

 

 

 7,632 



 

 11,332 

 

 

 6,697 

 

 

 4,635 

 

 

 36,734 

 

 

 22,061 

 

 

 14,673 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developed and expanded facilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Developed in 2013 - 2015

 

 5,516 

 

 

 5,128 

 

 

 388 

 

 

 20,047 

 

 

 18,694 

 

 

 1,353 

Developed in 2016 and 2017

 

 7,919 

 

 

 4,640 

 

 

 3,279 

 

 

 25,170 

 

 

 16,249 

 

 

 8,921 

Developed in 2018 and 2019

 

 2,324 

 

 

 83 

 

 

 2,241 

 

 

 4,035 

 

 

 (744)

 

 

 4,779 

Completed Expansions

 

 8,262 

 

 

 7,830 

 

 

 432 

 

 

 27,635 

 

 

 28,123 

 

 

 (488)

Expansions in process

 

 2,595 

 

 

 3,078 

 

 

 (483)

 

 

 10,324 

 

 

 11,502 

 

 

 (1,178)



 

 26,616 

 

 

 20,759 

 

 

 5,857 

 

 

 87,211 

 

 

 73,824 

 

 

 13,387 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other non-same store facilities

 

 14,292 

 

 

 15,110 

 

 

 (818)

 

 

 55,374 

 

 

 55,966 

 

 

 (592)

Net operating income (a)

$

 52,240 

 

$

 42,566 

 

$

 9,674 

 

$

 179,319 

 

$

 151,851 

 

$

 27,468 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



(a)

See attached reconciliation of self-storage NOI to net income.  



8

 

 

 



Investing and Capital Activities

During the three months ended December 31, 2019, we acquired twelve self-storage facilities (three in South Carolina, two each in Indiana, North Carolina and Washington and one each in Arizona, Texas and Virginia) with 0.9 million net rentable square feet for $121.1 million. During 2019, we acquired 44 self-storage facilities (twelve in Virginia,  six in Florida, three each in Georgia, Indiana, North Carolina, South Carolina and Texas,  two each in Arizona, Massachusetts and Washington, and one each in Colorado, Kentucky, Michigan, Minnesota and Tennessee) with 3.1 million net rentable square feet for $429.9 million. Subsequent to December 31, 2019, we acquired or were under contract to acquire 14 self-storage facilities (four in Ohio, three in California, two each in New York and Tennessee, and one each in Indiana, Massachusetts and Nebraska) with 1.1 million net rentable square feet for $245.3 million.

During the three months ended December 31, 2019, we opened three newly developed facilities and various expansion projects (0.5 million net rentable square feet – 0.2 million each in Florida and Minnesota, and 0.1 million in Washington) costing $83.6 million.  During 2019, we opened eleven newly developed facilities and various expansion projects (3.7 million net rentable square feet – 1.5 million in Texas, 0.5 million in Minnesota, 0.3 million each in Colorado, Florida and North Carolina, 0.2 million each in Georgia, Tennessee and Washington, and 0.1 million each in California and Michigan) costing $379.1 million. At December 31, 2019, we had various facilities in development (1.3 million net rentable square feet) estimated to cost $209 million and various expansion projects (3.1 million net rentable square feet) estimated to cost $410 million.  Our aggregate 4.4 million net rentable square foot pipeline of development and expansion facilities includes 1.4 million in California, 1.2 million in Florida, 0.4 million in Minnesota, 0.3 million in Texas, 0.2 million each in Missouri, Virginia and Washington, and 0.5 million in other states.   The remaining $477 million of development costs for these projects is expected to be incurred primarily in the next 18 months.

On November 15, 2019, we issued our 4.7% Series J Preferred Shares for gross proceeds of $258.8 million.

On November 26, 2019, we called our 5.875% Series A Preferred Shares for redemption. The shares were redeemed on December 30, 2019.

On December 20, 2019, we issued our 4.75% Series K Preferred Shares for gross proceeds of $230 million.

On January 24, 2020,  we completed a public offering of  €500 million ($552 million) of Euro denominated Senior Unsecured Notes, bearing interest at a fixed rate of 0.875% and maturing on January 24, 2032. 

As we reported in an SEC form 8-K on February 14, 2020, we submitted a non-binding proposal to acquire 100% of the issued stapled securities of National Storage REIT (“NSR”), an Australia-based publicly-traded REIT (ASX:NSR) that owns and operates 167 self-storage facilities in Australia and New Zealand, for a cash purchase price of A$2.40 per share.  Our proposal was subject to a number of conditions, including due diligence.  Any transaction would be subject to processes for acquisition of widely held entities under Australian law, including securityholder approval.  There is no assurance that Public Storage will reach a definitive agreement or consummate a transaction with NSR or that if such an agreement is reached, it will be on terms consistent with our non-binding proposal.

Distributions Declared

On February 21, 2020, 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 March 31, 2020 to shareholders of record as of March 16, 2020.

Fourth Quarter Conference Call

A conference call is scheduled for February 26, 2020 at 9:00 a.m. (PST) to discuss the fourth 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 1995740). A simultaneous audio webcast may be accessed by using the link at www.publicstorage.com under “About Us, Investor Relations, News and Events, Events Calendar.”  A replay of the conference call may be accessed through March 11, 2020 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, Events Calendar.” All forms of replay utilize conference ID number 1995740.

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 December 31, 2019, we had: (i) interests in 2,483 self-storage facilities located in 38 states with approximately 169 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 234 self-storage facilities located in seven Western European nations with

9

 

 

 

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 December 31, 2019.  Our headquarters are located in Glendale, California.

Additional information about Public Storage is available on our website, www.publicstorage.com.

We expect to release our 2019 Annual Report on Form 10-K within approximately one business day.

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, acquisition and expansion 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; the risk that our existing self-storage facilities may be at a disadvantage in competing with newly developed facilities with more visual and customer appeal; difficulties in our ability to successfully evaluate, finance, integrate into our existing operations and manage properties that we acquire directly or through the acquisition of entities that own and operate self-storage facilities; increased reliance on Google as a customer acquisition channel; 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 legal and regulatory environment, including changes in federal, state and local laws and regulations governing environmental issues, taxes, our tenant reinsurance business, pricing of our self-storage space and labor; 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 California ballot initiative (or other equivalent actions) that could remove the property tax protections of Proposition 13 with respect to our California real estate and result in substantial increases in our California property tax expense; changes in U.S. 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 operations or our business, customer and employee relationships or result in fraudulent payments; 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 and cost overruns on our projects to develop or expand our facilities; ongoing litigation and other legal and regulatory actions that 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.

 

10

 

 

PUBLIC STORAGE

SELECTED INCOME STATEMENT DATA

(Amounts in thousands, except per share data)

(Unaudited)

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Year Ended



 

December 31,

 

December 31,



 

2019

 

2018

 

2019

 

2018



 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Self-storage facilities

 

$

 677,027 

 

$

 654,248 

 

$

 2,684,552 

 

$

 2,597,607 

Ancillary operations

 

 

 40,472 

 

 

 38,212 

 

 

 162,271 

 

 

 156,673 



 

 

 717,499 

 

 

 692,460 

 

 

 2,846,823 

 

 

 2,754,280 



 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Self-storage cost of operations

 

 

 162,471 

 

 

 150,031 

 

 

 752,579 

 

 

 695,731 

Ancillary cost of operations

 

 

 10,113 

 

 

 10,343 

 

 

 44,204 

 

 

 43,991 

Depreciation and amortization

 

 

 134,885 

 

 

 121,374 

 

 

 512,918 

 

 

 483,646 

General and administrative

 

 

 20,308 

 

 

 28,442 

 

 

 71,983 

 

 

 118,720 

Interest expense

 

 

 12,647 

 

 

 7,953 

 

 

 45,641 

 

 

 32,542 



 

 

 340,424 

 

 

 318,143 

 

 

 1,427,325 

 

 

 1,374,630 



 

 

 

 

 

 

 

 

 

 

 

 

Other increase (decrease) to net income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

 6,424 

 

 

 7,550 

 

 

 28,436 

 

 

 26,442 

Equity in earnings of unconsolidated real estate entities (a)

 13,916 

 

 

 12,966 

 

 

 69,547 

 

 

 103,495 

Gain on sale of real estate

 

 

 -

 

 

 36,078 

 

 

 341 

 

 

 37,903 

Gain due to Shurgard public offering

 

 

 -

 

 

 151,616 

 

 

 -

 

 

 151,616 

Foreign currency exchange (loss) gain

 

 

 (10,318)

 

 

 5,379 

 

 

 7,829 

 

 

 18,117 

Net income

 

 

 387,097 

 

 

 587,906 

 

 

 1,525,651 

 

 

 1,717,223 

Allocation to noncontrolling interests

 

 

 (1,082)

 

 

 (1,701)

 

 

 (5,117)

 

 

 (6,192)

Net income allocable to Public Storage shareholders

 

 

 386,015 

 

 

 586,205 

 

 

 1,520,534 

 

 

 1,711,031 

Allocation of net income to:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred shareholders – distributions

 

 

 (51,614)

 

 

 (54,078)

 

 

 (210,179)

 

 

 (216,316)

Preferred shareholders – redemptions

 

 

 (6,153)

 

 

 -

 

 

 (32,693)

 

 

 -

Restricted share units 

 

 

 (997)

 

 

 (2,025)

 

 

 (4,895)

 

 

 (5,815)

Net income allocable to common shareholders

 

$

 327,251 

 

$

 530,102 

 

$

 1,272,767 

 

$

 1,488,900 



 

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share – Basic

 

$

 1.88 

 

$

 3.05 

 

$

 7.30 

 

$

 8.56 

Net income per common share – Diluted

 

$

 1.87 

 

$

 3.04 

 

$

 7.29 

 

$

 8.54 

Weighted average common shares – Basic

 

 

 174,383 

 

 

 174,075 

 

 

 174,287 

 

 

 173,969 

Weighted average common shares – Diluted

 

 

 174,590 

 

 

 174,466 

 

 

 174,530 

 

 

 174,297 





(a)

The reduction in equity in earnings for the year ended December 31, 2019 reflects a $35.3 million reduction in our equity earnings from PSB due primarily to a reduction in our equity share of PSB’s gains on sale, offset partially by a $1.3 million increase in equity in earnings from Shurgard.  The increase in equity in earnings for Shurgard reflects i) our $5.2 million equity share of costs of the IPO and casualty losses incurred by Shurgard in 2018 and ii) a $10.1 million reduction in our equity share of depreciation, offset partially by iii) an approximate $14.0 million reduction in our equity share of core FFO from Shurgard.  The reductions in our equity share of Core FFO and depreciation from Shurgard is due primarily to Shurgard’s IPO on October 15, 2018, which reduced our equity interest from 49% to approximately 35%, and resulted in dilution from approximately €199 million in Shurgard’s IPO proceeds that remained uninvested in real estate at December 31, 2019.

 

11

 

 

PUBLIC STORAGE

SELECTED BALANCE SHEET DATA

(Amounts in thousands, except share and per share data)

 

 

 







 

 

 

 

 

 



 

December 31, 2019

 

December 31, 2018

ASSETS

 

(Unaudited)

 

 

 



 

 

 

 

 

 

Cash and equivalents

 

$

 409,743 

 

$

 361,218 



 

 

 

 

 

 

Operating real estate facilities:

 

 

 

 

 

 

Land and buildings, at cost

 

 

 16,289,146 

 

 

 15,296,844 

Accumulated depreciation

 

 

 (6,623,475)

 

 

 (6,140,072)



 

 

 9,665,671 

 

 

 9,156,772 

Construction in process

 

 

 141,934 

 

 

 285,339 

Investments in unconsolidated real estate entities

 

 

 767,816 

 

 

 783,988 

Goodwill and other intangible assets, net

 

 

 205,936 

 

 

 209,856 

Other assets

 

 

 174,344 

 

 

 131,097 

Total assets

 

$

 11,365,444 

 

$

 10,928,270 



 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 



 

 

 

 

 

 

Senior unsecured notes

 

$

 1,875,218 

 

$

 1,384,880 

Mortgage notes

 

 

 27,275 

 

 

 27,403 

Accrued and other liabilities

 

 

 383,284 

 

 

 371,259 

Total liabilities

 

 

 2,285,777 

 

 

 1,783,542 



 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Public Storage shareholders’ equity:

 

 

 

 

 

 

Cumulative Preferred Shares, $0.01 par value, 100,000,000 shares

 

 

 

 

 

 

authorized, 162,600 shares issued (in series) and outstanding,

 

 

 

 

 

 

(161,000 at December 31, 2018) at liquidation preference

 

 

 4,065,000 

 

 

 4,025,000 

Common Shares, $0.10 par value, 650,000,000 shares authorized,

 

 

 

 

 

 

174,418,615 shares issued and outstanding, (174,130,881 shares

 

 

 

 

 

 

at December 31, 2018)

 

 

 17,442 

 

 

 17,413 

Paid-in capital

 

 

 5,710,934 

 

 

 5,718,485 

Accumulated deficit

 

 

 (665,575)

 

 

 (577,360)

Accumulated other comprehensive loss

 

 

 (64,890)

 

 

 (64,060)

Total Public Storage shareholders’ equity

 

 

 9,062,911 

 

 

 9,119,478 

Noncontrolling interests

 

 

 16,756 

 

 

 25,250 

Total equity

 

 

 9,079,667 

 

 

 9,144,728 

Total liabilities and equity

 

$

 11,365,444 

 

$

 10,928,270 





 

12

 

 

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

 

Year Ended



 

December 31,

 

December 31,



 

2019

 

2018

 

2019

 

2018



 

 

 

 

 

 

 

 

 

 

 

 

Computation of FFO per Share:

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Net income allocable to common shareholders

 

$

 327,251 

 

$

 530,102 

 

$

 1,272,767 

 

$

 1,488,900 

Eliminate items excluded from FFO:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 133,897 

 

 

 121,374 

 

 

 511,413 

 

 

 483,646 

Depreciation from unconsolidated real estate investments

 19,161 

 

 

 21,630 

 

 

 71,725 

 

 

 79,868 

Depreciation allocated to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

and restricted share unitholders

 

 

 (903)

 

 

 (822)

 

 

 (4,208)

 

 

 (3,646)

Gains on sale of real estate, including equity

 

 

 

 

 

 

 

 

 

 

 

 

investment share

 

 

 (4,516)

 

 

 (189,802)

 

 

 (5,896)

 

 

 (227,332)

FFO allocable to common shares (a)

 

$

 474,890 

 

$

 482,482 

 

$

 1,845,801 

 

$

 1,821,436 

Diluted weighted average common shares

 

 

 174,590 

 

 

 174,466 

 

 

 174,530 

 

 

 174,297 

FFO per share (a)

 

$

 2.72 

 

$

 2.77 

 

$

 10.58 

 

$

 10.45 



 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Earnings per Share to FFO per Share:

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share—Diluted

 

$

 1.87 

 

$

 3.04 

 

$

 7.29 

 

$

 8.54 

Eliminate per share amounts excluded from FFO per share:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 0.87 

 

 

 0.81 

 

 

 3.32 

 

 

 3.21 

Gains on sale of real estate and Shurgard IPO

 

 

 (0.02)

 

 

 (1.08)

 

 

 (0.03)

 

 

 (1.30)

FFO per share (a)

 

$

 2.72 

 

$

 2.77 

 

$

 10.58 

 

$

 10.45 



 

 

 

 

 

 

 

 

 

 

 

 

Computation of Funds Available for Distribution ("FAD"):

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

FFO allocable to common shares

 

$

 474,890 

 

$

 482,482 

 

$

 1,845,801 

 

$

 1,821,436 

Eliminate effect of items included in FFO but not FAD:

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense in excess

 

 

 

 

 

 

 

 

 

 

of cash paid

 4,866 

 

 

 16,602 

 

 

 13,671 

 

 

 57,589 

Foreign currency exchange loss (gain)

 

 

 10,318 

 

 

 (5,379)

 

 

 (7,829)

 

 

 (18,117)

Impact of EITF D-42, including equity investment share

 

 

 10,706 

 

 

 -

 

 

 37,246 

 

 

 -

Less: Capital expenditures to maintain real estate facilities (b)

 (57,140)

 

 

 (45,990)

 

 

 (192,539)

 

 

 (139,397)



 

 

 

 

 

 

 

 

 

 

 

 

FAD (a)

 

$

 443,640 

 

$

 447,715 

 

$

 1,696,350 

 

$

 1,721,511 



 

 

 

 

 

 

 

 

 

 

 

 

Distributions paid to common shareholders and restricted

 

 

 

 

 

 

 

 

 

 

 

 

share units

 

$

 349,754 

 

$

 349,203 

 

$

 1,398,570 

 

$

 1,396,364 



 

 

 

 

 

 

 

 

 

 

 

 

Distribution payout ratio

 

 

 78.8% 

 

 

 78.0% 

 

 

 82.4% 

 

 

 81.1% 



 

 

 

 

 

 

 

 

 

 

 

 

Distributions per common share

 

$

 2.00 

 

$

 2.00 

 

$

 8.00 

 

$

 8.00 



 

 

 

 

 

 

 

 

 

 

 

 

(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.

(b)

Capital expenditures for 2019 include certain projects that are not traditional like-for-like replacements of existing components, and in certain circumstances upgrade existing components before the end of their functional lives.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Overview” and “Liquidity and Capital Resources – Capital Expenditure Requirements” in our December 31, 2019 Form 10-K for further information.

 

13

 

 

PUBLIC STORAGE

SELECTED FINANCIAL DATA

 

Reconciliation of Self-Storage Net Operating Income to

Net Income

(Unaudited – amounts in thousands)

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Year Ended



 

December 31,

 

December 31,



 

2019

 

2018

 

2019

 

2018



 

 

 

 

 

 

 

 

 

 

 

 

Self-storage revenues for:

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Facilities

 

$

 598,097 

 

$

 591,490 

 

$

 2,394,572 

 

$

 2,361,298 

Acquired facilities

 

 

 17,777 

 

 

 10,198 

 

 

 59,206 

 

 

 33,871 

Developed and expanded facilities

 

 

 41,167 

 

 

 32,766 

 

 

 150,571 

 

 

 121,694 

Other non-same store facilities

 

 

 19,986 

 

 

 19,794 

 

 

 80,203 

 

 

 80,744 

Self-storage revenues

 

 

 677,027 

 

 

 654,248 

 

 

 2,684,552 

 

 

 2,597,607 



 

 

 

 

 

 

 

 

 

 

 

 

Self-storage cost of operations for:

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Facilities

 

 

 135,781 

 

 

 129,839 

 

 

 641,918 

 

 

 611,273 

Acquired facilities

 

 

 6,445 

 

 

 3,501 

 

 

 22,472 

 

 

 11,810 

Developed and expanded facilities

 

 

 14,551 

 

 

 12,007 

 

 

 63,360 

 

 

 47,870 

Other non-same store facilities

 

 

 5,694 

 

 

 4,684 

 

 

 24,829 

 

 

 24,778 

Self-storage cost of operations

 

 

 162,471 

 

 

 150,031 

 

 

 752,579 

 

 

 695,731 



 

 

 

 

 

 

 

 

 

 

 

 

Self-storage NOI for:

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Facilities

 

 

 462,316 

 

 

 461,651 

 

 

 1,752,654 

 

 

 1,750,025 

Acquired facilities

 

 

 11,332 

 

 

 6,697 

 

 

 36,734 

 

 

 22,061 

Developed and expanded facilities

 

 

 26,616 

 

 

 20,759 

 

 

 87,211 

 

 

 73,824 

Other non-same store facilities

 

 

 14,292 

 

 

 15,110 

 

 

 55,374 

 

 

 55,966 

Self-storage NOI (a)

 

 

 514,556 

 

 

 504,217 

 

 

 1,931,973 

 

 

 1,901,876 

Ancillary revenues

 

 

 40,472 

 

 

 38,212 

 

 

 162,271 

 

 

 156,673 

Ancillary cost of operations

 

 

 (10,113)

 

 

 (10,343)

 

 

 (44,204)

 

 

 (43,991)

Depreciation and amortization

 

 

 (134,885)

 

 

 (121,374)

 

 

 (512,918)

 

 

 (483,646)

General and administrative expense

 

 

 (20,308)

 

 

 (28,442)

 

 

 (71,983)

 

 

 (118,720)

Interest and other income

 

 

 6,424 

 

 

 7,550 

 

 

 28,436 

 

 

 26,442 

Interest expense

 

 

 (12,647)

 

 

 (7,953)

 

 

 (45,641)

 

 

 (32,542)

Equity in earnings of unconsolidated real estate entities

 

 

 13,916 

 

 

 12,966 

 

 

 69,547 

 

 

 103,495 

Gain on sale of real estate

 

 

 -

 

 

 36,078 

 

 

 341 

 

 

 37,903 

Gain due to Shurgard public offering

 

 

 -

 

 

 151,616 

 

 

 -

 

 

 151,616 

Foreign currency exchange (loss) gain

 

 

 (10,318)

 

 

 5,379 

 

 

 7,829 

 

 

 18,117 

Net income on our income statement

 

$

 387,097 

 

$

 587,906 

 

$

 1,525,651 

 

$

 1,717,223 



(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.

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