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Public Storage Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 7, 2012 07:19AM
Public Storage Inc. (PSA) filed Quarterly Report for the period ended 2012-03-31.
Highlight of Business Operations:Net income with respect to our self-storage operations increased by $20.6 million or 12.7% during the three months ended March 31, 2012, when compared to the same period in 2011. This was due primarily to a 6.3% increase in net operating income with respect to our Same Store Facilities due to increased revenues driven by higher occupancy and higher realized rents per occupied square foot, and a 34.8% increase in net operating income with respect to the Non Same Store Facilities, due primarily to the impact of the properties acquired in 2012 and 2011.
Equity in earnings from PSB decreased to $1.9 million in the three months ended March 31, 2011 as compared to $8.8 million in the same period in 2011. This decrease was principally due to (i) the impact of redemptions of preferred securities, which increased income allocations to the preferred equity holders in the quarter ended March 31, 2012, as compared to reducing income allocations in the same period in 2011, (ii) increased depreciation and interest expense, each as a result of the properties PSB acquired in 2011, partially offset by (iii) incremental income generated by the properties PSB acquired in 2011. See Note 4 to our March 31, 2012 financial statements for selected financial information on PSB, as well as PSB s filings and selected financial information that can be accessed through the Securities and Exchange Commission, and on PSB s website, www.psbusinessparks.com.
Investment in Shurgard Europe: Equity in earnings of Shurgard Europe represents our 49% equity share of Shurgard Europe s net income. At December 31, 2011 and March 31, 2012, Shurgard Europe s operations are comprised of 188 wholly-owned facilities with 10 million net rentable square feet. Selected financial data for Shurgard Europe for each of the three month periods ended March 31, 2012 and 2011, respectively, is included in Note 4 to our financial statements. As described in more detail in Note 4, we receive interest income and trademark license fees from Shurgard Europe, of which 49% is classified as equity in earnings and the remaining 51% as interest and other income.
Equity in earnings from Shurgard Europe for the three months ended March 31, 2012 was $6.8 million as compared to $4.5 million for the same period in 2011, representing an increase of $2.3 million. The increase was primarily due to Shurgard Europe s acquisition on March 2, 2011 of the 80% interests it did not own in two joint ventures that owned 72 self-storage facilities.
The increase in tenant reinsurance revenues over the past year was due primarily to an increase in the percentage of our existing tenants retaining such policies and in increase in premium rates. On average, approximately 62% and 59% of our tenants had such policies during the three months ended March 31, 2012 and 2011, respectively. We expect less growth in the percentage of tenants retaining insurance policies in the remainder of 2012 as compared to the same periods in 2011.