Public Storage Quarterly Report for Q1 Ended Mar 31, 2013

Summary

Public Storage (PSA) reported strong financial performance for the first quarter of 2013, with net income increasing to $161.9 million ($0.94 per diluted common share) from $125.3 million ($0.73 per diluted common share) in the prior year period. This growth was primarily driven by a $30.3 million increase in self-storage net operating income and a significant reduction in allocations to preferred shareholders. Funds from Operations (FFO) also showed robust growth, increasing to $1.57 per diluted common share from $1.35 in the prior year, and Core FFO per share rose to $1.65 from $1.44. The company experienced solid performance in its Same Store Facilities, with revenues up 5.4% year-over-year. This was attributed to a 1.8% increase in average occupancy and a 3.7% rise in realized rent per occupied square foot, driven by rent increases for longer-term tenants and reduced promotional discounts for new tenants. The company maintains a strategic focus on maximizing occupancy and rental rates, anticipating continued positive year-over-year growth in rental income throughout 2013. PSA also continues to actively manage its capital structure, issuing significant amounts of preferred securities to optimize its cost of capital and maintain financial flexibility.

Key Highlights

• 1Net income increased by $36.6 million to $161.9 million, or $0.94 per diluted common share, for the three months ended March 31, 2013, compared to $125.3 million, or $0.73 per diluted common share, for the same period in 2012.
• 2Funds from Operations (FFO) per diluted common share increased by 16.3% to $1.57 for the first quarter of 2013, up from $1.35 in the prior year.
• 3Core FFO per diluted common share rose by 14.6% to $1.65 in the first quarter of 2013, compared to $1.44 in the corresponding period of 2012, excluding items like foreign currency exchange impacts.
• 4Same Store Facilities revenue increased by 5.4%, driven by a 1.8% rise in average occupancy and a 3.7% increase in realized rent per occupied square foot.
• 5The company issued approximately $725.0 million of preferred securities in the first three months of 2013, continuing its strategy of utilizing preferred equity for capital needs and cost optimization.
• 6As of March 31, 2013, Public Storage had $398.3 million in cash and cash equivalents, supporting its liquidity and operational needs.
• 7Development pipeline includes projects to add approximately 1.3 million net rentable square feet with an estimated aggregate cost of $169 million.

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