Public Storage 2015 Annual Report Download - page 14
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Core funds from operations per share (“Core FFO”) represents diluted net income per share (“EPS”) before the
impact of i) depreciation expense and disposition gains or losses and ii) foreign currency gains and losses, the
application of EITF D-42, and certain other items. Free cash flow per share (“Free Cash Flow”) represents Core FFO,
less per share capital expenditures and non-cash stock based compensation expense. Core FFO and Free Cash Flow
are not substitutes for EPS and may not be comparable with other REITs due to calculation differences; however, we
believe they are helpful measures for investors and REIT analysts to understand our performance. Net Operating
Income (“NOI”) represents revenues less pre-depreciation cost of operations earned directly at our properties, and we
believe is a useful performance measure that we and the investment community use to evaluate performance and real
estate values. Each of these non-GAAP measures exclude the impact of depreciation, which is based upon historical
cost and assumes the value of buildings diminish ratably over time, while we believe that real estate values fluctuate due
Europe as if we owned them, to provide a measure of the performance of all the businesses we have a significant interest
in. However, the inclusion of these entities in these supplemental measures does not substitute for “equity in earnings
of unconsolidated real estate entities” on our income statement.
Supplemental Non-GAAP Disclosures (unaudited)
Reconciliation of Revenues including PSB and Shurgard Europe
(Amounts in millions)
For the year ended December 31,
2015 2014 2013
Consolidated revenues $ 2,382 $ 2,177 $ 1,965
Commercial and property management included in interest
and other income 16 18 16
Shurgard Europe’s revenues 237 214 207
Reconciliation of NOI
(Amounts in millions)
For the year ended December 31,
2015 2014 2013
Operating income on our income statement $ 1,232 $ 1,055 $ 951
Commercial and property management included in interest
and other income 12 13 12
Eliminate depreciation and G&A expense 514 510 454
Add -
Total net operating income 2,155 1,962 1,783
Public Storage’s share of NOI $ 1,936 $ 1,750 $ 1,579
Reconciliation of Core FFO and Free Cash Flow per Share
For the year ended December 31,
2015 2014 2013 2010 2005
EPS $ 6.07 $ 5.25 $ 4.89 $ 2.35 $ 1.97
Eliminate noncore items (including our equity share):
Depreciation expense 2.89 2.96 2.66 2.44 1.79
Real estate gains (0.17) (0.23) (0.02) (0.06) (0.13)
Foreign currency, EITF D-42, and other noncore items 0.11 0.11 (0.09) 0.49 0.06
Core FFO per share $ 8.90 $ 8.09 $ 7.44 $ 5.22 $ 3.69
Deduct capital expenditures and exclude non-cash comp (0.24) (0.36) (0.26) (0.41) (0.18)
Free Cash Flow per share $ 8.66 $ 7.73 $ 7.18 $ 4.81 $ 3.51