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Operating Results
Net income of the Partnership was $1,717,000 or $0.19 per partnership unit ("Unit") for the three months ended June 30, 2009 compared to $1,997,000 or $0.22 per Unit for the same period in 2008. Net income of the Partnership was $3,247,000 or $0.36 per Unit for the six months ended June 30, 2009 compared to $3,577,000 or $0.40 per Unit for the same period in 2008.
Property Operations
The Partnership owns, and derives substantially all of its income from, 27 self-storage facilities, of which fifteen are located in Ontario, five are located in British Columbia, six are located in Quebec and one is located in Alberta. In addition, the Partnership owns parcels of land in Oakville, Ontario; Orleans, Ontario; and Richmond Hill, Ontario for development into new self-storage facilities.
In order to evaluate the performance of the Partnership's portfolio, management analyzes the operating performance of a stabilized group of self-storage facilities (herein referred to as "Same Store" facilities). Management considers the operating performance of the "Same Store" facilities to be a more useful measure of the overall operating performance of the Partnership's portfolio to analyze trends and provide meaningful comparisons. "Same Store" facilities are facilities that have been owned and operated at a mature, stabilized occupancy level since January 1, of the earliest period presented. Management considers a facility to be stabilized after it has been opened for at least three years. As at June 30, 2009, the "Same Store" facilities consist of 16 facilities that have been owned and operated by the Partnership since its inception and two facilities that were opened in 2005 and contain approximately 1,366,000 net rentable square feet and 12,678 storage units.
The following table summarizes the pre-amortization operating results of the Partnership's "Same Store" facilities.
Three months ended June 30, Six months ended June 30,
---------------------------------------------------------------
2009 2008 Change 2009 2008 Change
---------------------------------------------------------------
Rental
income $ 4,525,000 $ 5,035,000 (10.1%) $ 9,152,000 $ 9,794,000 (6.6%)
Less: cost
of operations 1,265,000 1,491,000 (15.2%) 2,841,000 3,051,000 (6.9%)
Less:
management
fees 271,000 302,000 (10.3%) 549,000 587,000 (6.5%)
----------------------- -----------------------
Net operating
income (1) $ 2,989,000 $ 3,242,000 (7.8%) $ 5,762,000 $ 6,156,000 (6.4%)
----------------------- -----------------------
----------------------- -----------------------
Gross
margin (2) 66.1% 64.4% 63.0% 62.9%
Weighted
average for
period:
Occupancy 89.1% 86.1% 86.1% 85.4%
Realized
annual rent
per square
foot (3) $14.90 $17.14 (13.1%) $15.59 $16.82 (7.3%)
End of
period
occupancy 90.1% 87.1% 90.1% 87.1%
(1) Net operating income ("NOI") is equal to rental income less cost of
operations and management fees paid to an affiliate before amortization.
This non-generally accepted accounting principles ("GAAP") financial
measure does not have any standardized meanings prescribed by GAAP and
is therefore unlikely to be comparable to similar measures presented by
other issuers.
(2) Gross margin is computed by dividing property net operating income by
rental income.
(3) Realized rent per square foot represents the actual revenue earned per
occupied square foot. Management believes this is a more relevant
measure than posted or scheduled rates as posted rates can be discounted
through promotions.
Funds from Operations ("FFO") and Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")
FFO and EBITDA are supplementary performance measures for real estate companies used by investors and analysts. These non-generally accepted accounting principles ("GAAP") financial measures do not have any standardized meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Many investors and analysts consider FFO and EBITDA to be measures of the performance of real estate companies. FFO is equal to net income computed in accordance with GAAP before depreciation, amortization and gains or losses on sale of real estate assets. EBITDA is equal to earnings before interest income, interest expense, taxes, depreciation and amortization. FFO and EBITDA do not take into consideration scheduled principal payments on debt, capital improvements, distributions or other obligations of the Partnership. Accordingly, FFO and EBITDA are not substitutes for the Partnership's cash flow or net income as a measure of the Partnership's liquidity or operating performance or ability to pay distributions.
The following table calculates FFO and EBITDA for the three and six months ended June 30, 2009 and 2008:
Three months ended June 30, Six months ended June 30,
---------------------------------------------------------------
2009 2008 Change 2009 2008 Change
---------------------------------------------------------------
Calculation
of FFO:
Net income $ 1,717,000 $ 1,997,000 $ 3,247,000 $ 3,577,000
Amortization
of real
estate
facilities 1,185,000 1,066,000 2,319,000 2,115,000
Amortization
of
intangible
assets - 49,000 - 99,000
Less: future
income tax
benefit (12,000) (46,000) (34,000) (117,000)
----------------------- -----------------------
FFO $ 2,890,000 $ 3,066,000 (5.7%) $ 5,532,000 $ 5,674,000 (2.5%)
----------------------- -----------------------
----------------------- -----------------------
Weighted
average
number of
Units 9,040,181 9,040,181 9,040,181 9,040,181
FFO per
Unit $0.32 $0.34 (5.9%) $0.61 $0.63 (3.2%)
Calculation
of EBITDA:
Net income $ 1,717,000 $ 1,997,000 $ 3,247,000 $ 3,577,000
Amortization
of real
estate 1,185,000 1,066,000 2,319,000 2,115,000
Amortization
of
intangibles - 49,000 - 99,000
Interest
and
commitment
fees 215,000 141,000 359,000 284,000
Less: income
tax benefit (12,000) (46,000) (34,000) (117,000)
Less:
interest
income (6,000) (41,000) (14,000) (75,000)
----------------------- -----------------------
EBITDA $ 3,099,000 $ 3,166,000 (2.1%) $ 5,877,000 $ 5,883,000 (0.1%)
----------------------- -----------------------
----------------------- -----------------------
Weighted
average
number of
Units 9,040,181 9,040,181 9,040,181 9,040,181
EBITDA
per Unit $0.34 $0.35 (2.9%) $0.65 $0.65 (0.0%)
Distributions
The board of directors of the general partner today declared a distribution of $0.225 per Unit payable on September 30, 2009 to unitholders of record at the close of business on September 15, 2009.
Partnership Information
Public Storage Canadian Properties is a publicly held limited partnership that invests in self-storage facilities. More information about the Partnership is available on the Internet. The Partnership's main website is www.publicstoragecanada.com. The Partnership's investor website is www.pscinvestor.com.
PUBLIC STORAGE CANADIAN PROPERTIES
SELECTED FINANCIAL DATA
Three Months Ended June 30, Six Months Ended June 30,
-------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------
Revenue:
Rental income $ 5,828,000 $ 6,155,000 $ 11,721,000 $ 11,905,000
Interest and
other income 6,000 41,000 14,000 75,000
-------------------------------------------------------
5,834,000 6,196,000 11,735,000 11,980,000
-------------------------------------------------------
Costs and expenses:
Cost of operations 2,268,000 2,435,000 4,906,000 4,971,000
Management fees paid
to an affiliate 349,000 369,000 703,000 714,000
Amortization of
real estate
facilities 1,185,000 1,066,000 2,319,000 2,115,000
Amortization of
intangible assets - 49,000 - 99,000
Interest and
commitment fees 215,000 141,000 359,000 284,000
Administrative 112,000 185,000 235,000 337,000
-------------------------------------------------------
4,129,000 4,245,000 8,522,000 8,520,000
Income before
income taxes 1,705,000 1,951,000 3,213,000 3,460,000
-------------------------------------------------------
Future income
tax benefit 12,000 46,000 34,000 117,000
-------------------------------------------------------
Net income $ 1,717,000 $ 1,997,000 $ 3,247,000 $ 3,577,000
-------------------------------------------------------
-------------------------------------------------------
Net income per Unit $ 0.19 $ 0.22 $ 0.36 $ 0.40
Distributions per Unit $ 0.225 $ 0.45 $ 0.45 $ 0.90
Weighted average
number of Units
outstanding 9,040,181 9,040,181 9,040,181 9,040,181
As at As at
June 30, 2009 December 31, 2008
---------------------------------
Balance sheet data:
Cash and cash equivalents $ 288,000 $ 2,390,000
Debt 41,384,000 24,371,000
Total assets 136,076,000 119,504,000
Partners' equity 88,795,000 90,046,000
Units outstanding at end of period 9,040,181 9,040,181
Contacts: Public Storage Canadian Properties Vincent Chan (866) PS-CANADA or (866) 772-2623
SOURCE: Public Storage Canadian Properties
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