Public Storage 1997 Annual Report Download - page 33

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Public Storage, Inc. 1997 Annual Report
Self-storage operations: The self-storage operations is by far the largest component of the Company’s operations, representing approximately
82% of total revenues generated during 1997. At the beginning of 1994, the Company had a total of 368 self-storage facilities included in its
consolidated financial statements. Since that time, the Company through acquisition and development activities has increased the number of
self-storage facilities by 526 (1995 –152 facilities, 1996 – 201 facilities and 1997 –173 facilities). Self-storage rental income and cost of opera-
tions presented on the consolidated statements of income reflect the operations of all the 894 self-storage facilities owned by the Company and
the Consolidated Entities. For year to year comparisons, the following table summarizes the operating results (before depreciation) of those
facilities owned throughout each of the past three years and those acquired during the past three years:
Self-Storage Operations: Year Ended December 31, Year Ended December 31,
Percentage Percentage
(Dollar amounts in thousands, except rents per square foot) 1997 1996 Change 1996 1995 Change
Rental income:
Consistent group $162,376 $153,566 5.7% $153,566 $147,178 4.3%
Post-1994 acquisitions 223,164 116,863 91.0% 116,863 36,922 216.5%
385,540 270,429 42.6% 270,429 184,100 46.9%
Cost of operations:
Consistent group 49,392 47,317 4.4% 47,317 50,960 (7.2)%
Post-1994 acquisitions 68,571 35,177 94.9% 35,177 12,436 182.9%
117,963 82,494 43.0% 82,494 63,396 30.1%
Net operating income:
Consistent group 112,984 106,249 6.3% 106,249 96,218 10.4%
Post-1994 acquisitions 154,593 81,686 89.3% 81,686 24,486 233.6%
$267,577 $187,935 42.4% $187,935 $120,704 55.7%
Consistent group data:
Gross margin 69.6% 69.2% 0.4% 69.2% 65.4% 3.8%
Weighted average occupancy 90.9% 90.3% 0.6% 90.3% 89.3% 1.0%
Average realized annual rent per
occupied square foot $8.28 $7.92 4.6% $7.92 $7.68 3.1%
Average scheduled annual rent per square foot $8.76 $8.04 9.0% $8.04 $7.44 8.1%
Number of facilities (at the end of the period):
Consistent group 368 368
— 368 368 —
Cumulative post-1994 acquisitions 526 353 49.0% 353 152 132.2%
Net rentable square feet (at the end of the period):
Consistent group 21,662 21,662
— 21,662 21,662 —
Cumulative post-1994 acquisitions 31,909 21,755 46.7% 21,755 9,116 138.7%
For the consistent group of facilities owned throughout each of the three fiscal years, year-over-year improvements in rental income of
5.7% in 1997 and 4.3% in 1996 are the result of increased realized rent per square foot and increased weighted average occupancy levels, as
reflected in the table above. The Company believes that the improvement in each of these areas is due to (i) the national telephone reservation
system which was implemented during 1996 and the first part of 1997, (ii) increased rental rates put into effect during the second half of
1996, and (iii) media advertising implemented during the second half of 1997.
As indicated above, the Company implemented a national telephone reservation system to provide added customer service. Customers
calling either the Company’s toll-free telephone referral system, (800) 44-STORE, or a local Public Storage facility, are directed to the national
reservation system where a trained representative discusses with the customer space requirements, price and location preferences and also
informs the customer of other products and services provided by the Company and its subsidiaries.