Overall Financial Performance and Outlook Q2 & H1 2025 Performance Highlights Public Storage's Q2 and H1 2025 net income decreased due to foreign currency losses, yet the company raised its full-year outlook on stabilizing operations and accelerated acquisitions - The company is raising its 2025 outlook based on stabilizing operations and increased acquisition volume, anticipating over $1.1 billion in investment for the year4 Q2 2025 Key Performance Indicators | Metric | Value | | :--- | :--- | | Net Income per Diluted Share | $1.76 | | Core FFO per Diluted Share | $4.28 | | Same Store Direct NOI Margin | 78.8% | | Acquisitions (Q2) | 16 facilities for $162.3 million | | Development & Expansion (Q2) | 0.2 million sq. ft. for $64.0 million | Detailed Operating Results Net income for Q2 and H1 2025 significantly decreased due to increased foreign currency losses, while self-storage NOI saw a modest increase driven by Non-Same Store facilities Net Income Comparison (Common Shareholders) | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $309.0 million ($1.76/share) | $468.4 million ($2.66/share) | -$159.4 million (-$0.90/share) | | Six Months Ended June 30 | $667.2 million ($3.79/share) | $927.6 million ($5.26/share) | -$260.4 million (-$1.47/share) | - The primary driver for the decrease in net income in both periods was a significant increase in foreign currency exchange losses related to Euro-denominated notes payable911 - Increases in self-storage net operating income were driven by Non-Same Store facilities, with a $12.0 million increase in Q2 and a $25.5 million increase in H1, offsetting slight Same Store declines1012 Funds from Operations (FFO) Analysis Core FFO per share increased for both Q2 and H1 2025, while GAAP FFO per share declined significantly due to foreign exchange losses FFO & Core FFO per Share vs. Prior Year | Metric (per share) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Diluted EPS | $1.76 | $2.66 | (33.8)% | | FFO per Share | $3.44 | $4.30 | (20.0)% | | Core FFO per Share | $4.28 | $4.23 | 1.2% | | Metric (per share) | H1 2025 | H1 2024 | % Change | | Diluted EPS | $3.79 | $5.26 | (27.9)% | | FFO per Share | $7.15 | $8.54 | (16.3)% | | Core FFO per Share | $8.39 | $8.26 | 1.6% | - The significant divergence between FFO and Core FFO is primarily due to the exclusion of a $146.1 million foreign currency exchange loss in Q2 2025 from the Core FFO calculation16 2025 Full-Year Outlook Public Storage raised its full-year 2025 Core FFO per share guidance, reflecting improved Non-Same Store NOI expectations and increased incremental Non-Same Store NOI forecast Updated 2025 Full-Year Guidance | Metric | Current Guidance | Prior Guidance | | :--- | :--- | :--- | | Core FFO per Share | $16.45 - $17.00 | $16.35 - $17.00 | | Same Store Revenue Growth | (1.3)% to 0.8% | (1.3)% to 0.8% | | Same Store Expense Growth | 2.3% to 3.0% | 2.5% to 4.0% | | Same Store NOI Growth | (2.6)% to 0.3% | (2.9)% to 0.2% | | Non-Same Store NOI | $465 million - $475 million | $444 million - $464 million | | Incremental Non-Same Store NOI (2026+) | $110 million | $80 million | - The 2025 guidance includes an estimated negative 1% impact on Same Store revenue growth and a $0.23 per share impact on Core FFO due to temporary government pricing limitations in Los Angeles County25 Property Operations Same Store Facilities Performance Same Store facilities experienced a slight 0.6% decrease in Q2 2025 NOI due to rising direct costs offsetting modest revenue growth, with occupancy slightly declining Q2 2025 Same Store Operating Results (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $945.2 million | $943.1 million | 0.2% | | Total Direct Cost of Operations | $200.2 million | $196.1 million | 2.1% | | Net Operating Income (NOI) | $716.6 million | $720.9 million | (0.6)% | | Weighted Average Occupancy | 92.6% | 93.0% | (0.4)% | | Realized Annual Rent per Occupied Sq. Ft. | $22.50 | $22.36 | 0.6% | - The increase in direct costs was driven primarily by a 4.4% rise in property taxes and a 5.0% increase in marketing expenses, partially offset by a 2.9% decrease in on-site property manager payroll17 Non-Same Store Facilities Performance The Non-Same Store portfolio, comprising 538 unstabilized facilities, is a key driver of overall NOI growth, with the Simply portfolio generating significant NOI in Q2 2025 - The Non-Same Store portfolio consists of 538 facilities, including 211 acquired, 40 newly developed, 62 expanded, and 225 other unstabilized properties18 - The Simply portfolio, acquired in 2023, generated $77.5 million in revenue and $53.9 million in NOI in Q2 2025 with an average occupancy of 88.6%20 Investing, Capital Activities, and Strategic Initiatives Acquisitions and Development The company maintained an active investment pace in Q2 2025 with significant acquisitions and new developments, and a robust pipeline for future growth - Q2 2025 Acquisitions: Acquired 16 self-storage facilities (1.1 million sq. ft.) for $162.3 million19 - Post-Q2 Acquisitions: Acquired or under contract to acquire 47 facilities (3.1 million sq. ft.) for $481.9 million19 - Development Pipeline: Projects are expected to add 3.8 million net rentable square feet for an estimated total cost of $648.2 million, with $390.9 million remaining to be spent21 Strategic Transactions Public Storage, as part of a consortium, made a non-binding offer to acquire Abacus Storage King, potentially expanding its presence in Australia and New Zealand - A consortium including Public Storage made a non-binding offer to acquire Abacus Storage King (ASX:ASK)23 - Public Storage's estimated share of the cost is approximately $710 million (A$1.08 billion), expected to be funded with Australian Dollar denominated debt23 - The transaction is subject to due diligence, negotiation of a definitive agreement, and various approvals23 Corporate Governance The Board of Trustees appointed Luke Petherbridge as a new independent trustee, bringing over 20 years of corporate finance and real estate experience - Luke Petherbridge was appointed as a new independent trustee to the Board of Trustees, effective immediately6 - Mr. Petherbridge has over 20 years of experience and currently serves as the CEO of Link Logistics, joining the Nominating, Governance, and Sustainability Committee67 Consolidated Financial Statements Consolidated Income Statement Q2 2025 total revenues increased, but net income decreased significantly due to a substantial foreign currency loss, impacting common shareholders' allocation Q2 2025 Consolidated Income Statement Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $1,201,094 | $1,173,211 | | Total Expenses | $701,095 | $687,109 | | Foreign currency exchange (loss) gain | ($146,070) | $12,449 | | Net Income | $361,411 | $521,209 | | Net income allocable to common shareholders | $308,968 | $468,366 | Consolidated Balance Sheet Total assets increased driven by cash and real estate, while liabilities rose mainly due to notes payable, resulting in a slight decrease in total equity Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $1,104,603 | $447,416 | | Total real estate facilities, net | $18,430,821 | $18,360,653 | | Total Assets | $20,541,453 | $19,754,934 | | Notes payable | $10,440,279 | $9,353,034 | | Total Liabilities | $11,065,104 | $9,941,282 | | Total Equity | $9,476,349 | $9,813,652 | Funds Available for Distribution (FAD) Q2 2025 FAD increased to $719.4 million, leading to an improved payout ratio of 73.2% despite stable common distributions per share FAD and Distribution Payout Ratio | Metric (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | FFO allocable to common shares | $604,494 | $756,142 | | FAD | $719,398 | $657,849 | | Distributions paid to common shareholders | $526,358 | $525,003 | | Distribution payout ratio | 73.2% | 79.8% | Reconciliation of Self-Storage NOI to Net Income Total self-storage NOI increased in Q2 2025, primarily driven by strong growth from Non-Same Store facilities, offsetting a slight decrease in Same Store contributions Self-Storage NOI by Facility Type (Q2, in thousands) | Facility Type | NOI Q2 2025 | NOI Q2 2024 | | :--- | :--- | :--- | | Same Store Facilities | $716,552 | $720,870 | | Acquired facilities | $37,600 | $32,173 | | Newly developed and expanded facilities | $30,607 | $26,298 | | Other non-same store facilities | $49,182 | $46,894 | | Total Self-storage NOI | $833,941 | $826,235 |
Public Storage(PSA) - 2025 Q2 - Quarterly Results