Public Storage(PSA) - 2025 Q1 - Quarterly Results

Financial Performance - For the three months ended March 31, 2025, net income allocable to common shareholders was $358.2 million, or $2.04 per diluted share, a decrease of 22.0% compared to $459.2 million, or $2.60 per diluted share for the same period in 2024[6][10]. - Net income for Q1 2025 was $410.8 million, a decrease from $511.7 million in Q1 2024, with net income allocable to common shareholders at $358.2 million[28]. - FFO for the quarter was $653.2 million, or $3.71 per diluted share, representing a decrease of 12.7% from $748.5 million, or $4.24 per diluted share in the same period of 2024[10][13]. - Core FFO allocable to common shareholders was $724.6 million, or $4.12 per diluted share, reflecting a 1.9% increase from $710.9 million, or $4.03 per diluted share in the same period of 2024[13]. - Funds Available for Distribution (FAD) increased to $685,351 thousand for the three months ended March 31, 2025, compared to $630,256 thousand for the same period in 2024, marking a growth of about 8.7%[32]. - The distribution payout ratio decreased to 76.8% in Q1 2025 from 83.6% in Q1 2024, reflecting a more conservative approach to shareholder distributions[32]. Revenue and Operating Income - Revenues for Same Store Facilities increased by 0.1% to $934.5 million, with rental income remaining stable at $901.7 million[14]. - Self-storage Net Operating Income (NOI) increased to $801,844 thousand in Q1 2025 from $788,631 thousand in Q1 2024, showing an increase of about 1.7%[35]. - Self-storage revenues for same store facilities were $934,543 thousand for Q1 2025, slightly up from $934,029 thousand in Q1 2024, indicating a marginal increase of 0.05%[35]. - The company reported a Same Store direct net operating income margin of 77.1% for the quarter[8]. Acquisitions and Development - The company acquired nine self-storage facilities with 0.7 million net rentable square feet for $141.0 million during the quarter, and has additional acquisitions under contract for five facilities with 0.4 million net rentable square feet for $43.2 million[8][16]. - Public Storage acquired BREIT Simply Storage LLC for $2.2 billion, which includes 127 self-storage facilities generating revenues of $38.6 million and NOI of $26.6 million for Q1 2025[17]. - Public Storage plans to acquire Abacus Storage King for approximately $586 million, enhancing its presence in the growing self-storage market in Australia and New Zealand[20]. - The company had various facilities in development and expansion expected to add 3.7 million net rentable square feet at an estimated cost of $665.5 million[8]. - Three newly developed facilities added 0.7 million net rentable square feet at a cost of $144.4 million, with a pipeline of 3.7 million net rentable square feet expected to incur $424.8 million in development costs over the next 18 to 24 months[18]. Occupancy and Costs - The square foot occupancy for Same Store Facilities was 91.5%, a decrease of 0.6% compared to 92.1% in the same period of 2024[14]. - The total direct cost of operations for Same Store Facilities was $214.0 million, a slight increase of 0.1% compared to the previous year[14]. - The company expects same-store revenue growth in 2025 to range from -1.3% to 0.8%, with expense growth projected between 2.5% and 4.0%[22]. Financial Position - Total assets decreased to $19,615,446 thousand as of March 31, 2025, from $19,754,934 thousand at December 31, 2024, representing a decline of approximately 0.7%[30]. - Total liabilities remained relatively stable at $9,945,094 thousand as of March 31, 2025, compared to $9,941,282 thousand at December 31, 2024[30]. - The accumulated deficit increased to $(867,425) thousand as of March 31, 2025, from $(699,083) thousand at December 31, 2024, reflecting a deterioration in retained earnings[30]. Interest and Guidance - Interest expense for 2025 is estimated at $285 million, with preferred dividends at $195 million[22]. - Core FFO per share guidance for 2025 is projected between $16.35 and $17.00, reflecting a growth rate of -1.9% to 2.0% from 2024[22]. Currency Impact - The company reported a foreign currency exchange loss of $68,695 thousand in Q1 2025, compared to a gain of $37,543 thousand in Q1 2024, indicating a significant negative impact from currency fluctuations[35]. Operational Overview - The company operates 3,399 self-storage facilities across 40 states, totaling approximately 247 million net rentable square feet[24]. - Public Storage's development and expansion projects are expected to significantly enhance its operational capacity and market reach in the coming years[18].