Summary
Public Storage (PSA) reported its first quarter 2010 results, showing a challenging operating environment as a result of broader economic pressures. While same-store occupancy saw a slight increase of 0.6%, revenues declined by 2.2% year-over-year due to a 3.0% reduction in realized rental rates. This decline is attributed to recessionary impacts affecting disposable income and moving trends. Despite the revenue pressure, the company managed to decrease its cost of operations by 0.7% through reduced advertising and operational efficiencies. Looking ahead, Public Storage announced a significant acquisition agreement on April 1, 2010, to purchase 30 self-storage facilities for $189 million. This strategic move signals an intention to expand its asset base, potentially capitalizing on opportunities from distressed sellers in the current economic climate. The company ended the quarter with a strong liquidity position, holding approximately $720 million in cash and $95 million in short-term investments, alongside an available $300 million line of credit, indicating ample resources to manage operations and pursue growth opportunities.
Financial Highlights
30 data points| Revenue | $397.32M |
| Interest Expense | $7.34M |
| Net Income | $123.96M |
| EPS (Basic) | $0.21 |
| EPS (Diluted) | $0.21 |
| Shares Outstanding (Basic) | 168.48M |
| Shares Outstanding (Diluted) | 169.31M |
Key Highlights
- 1Same-store occupancy increased by 0.6% to 88.4% for the quarter ended March 31, 2010, compared to the prior year period, indicating a stabilization in demand.
- 2Total revenues for same-store facilities decreased by 2.2% ($7.7 million) year-over-year, primarily driven by a 3.0% decline in realized rent per occupied square foot, reflecting pricing pressures.
- 3Cost of operations for same-store facilities decreased by 0.7% ($0.9 million), demonstrating effective cost management through reduced advertising and operational efficiencies.
- 4Net income allocable to common shareholders decreased significantly to $34.7 million ($0.21 per share) from $159.5 million ($0.95 per share) in the prior year, largely due to the impact of EITF D-42 accounting for preferred securities redemptions and repurchases.
- 5Public Storage entered into an agreement to acquire 30 self-storage facilities for $189 million, signaling a strategic expansion initiative. As of May 7, 2010, eight facilities had closed.
- 6The company maintained a strong liquidity position with $720 million in cash and $95 million in short-term investments, and had access to a $300 million credit line.
- 7Capital expenditures for the 12 months ending March 31, 2011, are projected to be approximately $575 million, including significant redemptions of preferred securities and the cash portion of the recent acquisition.