10-QPeriod: Q2 FY2009

Public Storage Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 10, 2009For Securities:PSAPSA-PRPSA-PFPSA-PGPSA-PHPSA-PIPSA-PJPSA-PMPSA-PNPSA-POPSA-PPPSA-PQPSA-PSPSA-PKPSA-PL

Summary

Public Storage (PSA) reported its second-quarter 2009 financial results, highlighting a net income of $199.2 million, or $0.80 per diluted common share, compared to $133.8 million, or $0.40 per diluted common share, in the same period of the prior year. This significant increase was primarily driven by a $33.2 million foreign exchange gain and a $25.4 million reduction in general and administrative expenses, partly offset by a decline in same-store facility operations and an $8.2 million impairment charge related to discontinued operations. For the six-month period, net income was $416.2 million, a decrease from $646.2 million in the prior year. This decline was mainly due to a $341.8 million gain on the disposition of an interest in Shurgard Europe recognized in the prior year, partially offset by a $72.0 million reduction in earnings allocated to preferred partnership unitholders due to security redemptions and lower general and administrative expenses. The company maintained a strong liquidity position with $584.9 million in cash and cash equivalents and an undrawn $300 million revolving credit facility.

Financial Highlights

30 data points
Beta

Revenue

$406.48M

Net Income

$199.17M

49.0% Net Margin

EPS (Diluted)

$0.80

Total Assets

$9.70B

Cash & Equivalents

$584.86M

Free Cash Flow

$282.38M

Financial Statements
Beta
Revenue$406.48M
Interest Expense$7.29M
Net Income$199.17M
EPS (Basic)$0.80
EPS (Diluted)$0.80
Shares Outstanding (Basic)168.35M
Shares Outstanding (Diluted)168.53M

Key Highlights

  • 1Net income for Q2 2009 increased to $199.2 million ($0.80/share) from $133.8 million ($0.40/share) in Q2 2008.
  • 2Six-month net income decreased to $416.2 million from $646.2 million in the prior year, largely due to a significant gain on Shurgard Europe disposition in the prior year.
  • 3Same-store facility revenues decreased 3.5% year-over-year in Q2 2009, reflecting lower rental rates and occupancy due to economic conditions.
  • 4The company reported a $33.2 million foreign exchange gain in Q2 2009, contributing to the increased net income.
  • 5General and administrative expenses were significantly reduced in Q2 2009 compared to Q2 2008, primarily due to lower incentive compensation.
  • 6Public Storage ended the quarter with $584.9 million in cash and cash equivalents, maintaining a strong liquidity position.
  • 7An $8.2 million impairment charge was recorded in discontinued operations related to an eminent domain proceeding.

Frequently Asked Questions

The increase in net income was primarily driven by a $33.2 million foreign exchange gain and a $25.4 million reduction in general and administrative expenses, partially offset by a decline in same-store facility operations and an impairment charge.

Same-store facility revenues decreased by 3.5% year-over-year in Q2 2009. This was due to a 2.9% reduction in realized rent per occupied square foot and a 1.1% reduction in average occupancy, reflecting the impact of current economic conditions.

Public Storage maintained a strong liquidity position with $584.9 million in cash and cash equivalents and an undrawn $300 million revolving credit facility.

The six-month net income decreased compared to the prior year primarily due to a significant gain on the disposition of an interest in Shurgard Europe recognized in the prior year. While Shurgard Europe's operations continue to be accounted for under the equity method, their performance has a less direct impact on the consolidated results compared to the prior year.