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Public Storage Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 9, 2011 11:14AM
Public Storage Inc. (PSA) filed Quarterly Report for the period ended 2011-03-31. Public Storage Inc. has a market cap of $19.78 billion; its shares were traded at around $116.03 with a P/E ratio of 20.83 and P/S ratio of 12.01. The dividend yield of Public Storage Inc. stocks is 2.76%. Public Storage Inc. had an annual average earning growth of 5.7% over the past 10 years. GuruFocus rated Public Storage Inc. the business predictability rank of 4.5-star.
Highlight of Business Operations:
Another important component of our long-term growth is our access to capital and deployment of that capital. During the year ended December 31, 2010, we acquired 42 self-storage facilities for $239.6 million. During January 2011, we acquired five additional facilities for $19.6 million. In February 2011, we acquired the leasehold interest in the land for one of our existing self-storage facilities for approximately $6.6 million. We are currently under contract to acquire two additional facilities; however, these acquisitions are subject to contingencies and there can be no assurance that these acquisitions will be completed. We believe that there may be opportunities to acquire additional facilities in the remainder of 2011, because we have continued to see facilities come to market. There is significant competition for facilities marketed in many of the geographic locations we find attractive. As a result, there can be no assurance that we will be able to acquire attractively priced properties.
At March 31, 2011, we had approximately $145.1 million of cash. We also have access to our $300 million line of credit which expires March 27, 2012. From March 31, 2011 through May 6, 2011, we raised approximately $375 million in gross proceeds from the issuance of our 6.5% Cumulative Preferred Shares of Beneficial Interest, Series Q. Our capital commitments for the remainder of 2011 are approximately $405.6 million include (i) $27.6 million in principal payments on debt, (ii) $28.0 million for the acquisition of two self-storage facilities described below and (iii) $350.0 million for a partial redemption of our Series I Cumulative Preferred Shares. We have no further significant commitments until 2013, when $265.6 million of existing debt comes due.
Our ability to raise additional capital by issuing our common or preferred securities is dependent upon capital market conditions. Capital markets have improved from the severe stress in late 2008 and early 2009. In 2010 we issued in aggregate $270 million (face amount) of Cumulative Preferred Shares at a weighted average rate of 6.701%. From March 31, 2011 through May 6, 2011, we issued in aggregate $375 million (face amount) of Series Q Cumulative Preferred Shares at a rate of 6.500%. There can be no assurance that market conditions will continue to permit preferred security issuances at amounts and at rates that we will find reasonable. We do not believe, however, that we are dependent on raising capital to fund our operations or meet our obligations.
For the three months ended March 31, 2011, net income allocable to our common shareholders was $148.1 million or $0.87 per diluted common share, compared to $34.7 million or $0.21 per diluted common share for the same period in 2010, representing an increase of $113.4 million or $0.66 per diluted common share. This increase is due to (i) a foreign currency exchange gain of $31.3 million during the quarter ended March 31, 2011 as compared to a loss of $34.8 million for the same period in 2010, (ii) an Emerging Issues Task Force D-42 (“EITF D- 42”) charge totaling $25.7 million incurred in the three months ended March 31, 2010, in connection with the redemption of our Equity Shares, Series A, and (iii) improved operations of our Same Store Facilities (discussed below) and our non same store facilities.
Net income with respect to our self-storage operations increased by $14.2 million or 9.6% during the three months ended March 31, 2011, when compared to the same period in 2010. This was due to a) a $12.0 million increase in revenues for the Same Store facilities while cost of operations for those facilities remained flat, and b) a $9.0 million increase in revenues with respect to the Other Facilities due primarily to the acquisition of 42 facilities during 2010, partially offset by c) an increase of $3.1 million in cost of operations for the Other Facilities and d) increased amortization of tenant intangible assets at the 47 facilities acquired in 2010 and the three months ended March 31, 2011.
Stocks Discussed: PSA,