Construction/Building — July 30, 2010

Public Storage Canadian Properties Announces Second Quarter 2010 Operating Results

TORONTO, ONTARIO--(Marketwire - July 30, 2010) - Public Storage Canadian Properties (TSX:PUB) today announced operating results for the second quarter ended June 30, 2010.

Operating Results

Net income of the Partnership was $1,517,000 or $0.17 per partnership unit ("Unit") and $2,757,000 or $0.30 per Unit for the three and six months ended June 30, 2010 compared to $1,717,000 or $0.19 per Unit and $3,247,000 or $0.36 per Unit for the same periods in 2009. The decreases in net income and net income per unit were due primarily to an increase in amortization of real estate facilities in connection with three new self-storage facilities placed in service during 2009.

Property Operations

The Partnership owns, and derives substantially all of its income from, 28 self-storage facilities, of which 16 are located in Ontario, 5 are located in British Columbia, 6 are located in Québec and 1 is located in Alberta. In addition, the Partnership owns parcels of land in 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). "Same Store" facilities are defined as 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. 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.

As at June 30, 2010, the "Same Store" facilities consisted of 20 self-storage facilities located in the provinces of Alberta, British Columbia, Ontario and Quebec and contain approximately 1,683,000 net rentable square feet or approximately 72.7% of the total portfolio. The first of these properties opened in August 1979, and the last of these properties to commence operations opened in July 2006.

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,
  2010 2009 Change 2010 2009 Change
             
Rental income $ 5,804,000 $ 5,122,000 13.3% $ 11,296,000 $ 10,323,000 9.4%
Less: cost of operations 1,965,000 1,658,000 18.5% 4,005,000 3,689,000 8.6%
Less: management fees 348,000 304,000 14.5% 678,000 613,000 10.6%
Net operating income (1) $ 3,491,000 $ 3,160,000 10.5% $ 6,613,000 $ 6,021,000 9.8%
             
Gross margin (2) 60.1% 61.7%   58.5% 58.3%  
Weighted average for period:            
  Occupancy 87.3% 83.0%   85.0% 80.0%  
  Realized annual rent per square foot (3) $15.85 $14.71 7.7% $15.83 $15.37 3.0%
End of period occupancy 89.1% 85.0%   89.1% 85.0%  
 
(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-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 performance measures do not have any standardized meanings prescribed by generally accepted accounting principles ("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.

The Real Property Association of Canada ("REALpac") defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and extraordinary items, plus depreciation and amortization, plus future income taxes and after adjustments for equity accounted for entities and non-controlling interests. Adjustments for equity accounted for entities and joint ventures and non-controlling interests are calculated to reflect funds from operations on the same basis as the consolidated properties.

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, 2010 and 2009:

 
  Three months ended June 30, Six months ended June 30,
  2010 2009 Change 2010 2009 Change
Calculation of FFO:            
Net income $ 1,517,000 $ 1,717,000   $ 2,757,000 $ 3,247,000  
Amortization of real estate facilities            
Continuing operations 1,419,000 1,161,000   2,829,000 2,271,000  
  Discontinued operations 11,000 24,000   28,000 48,000  
Loss on disposition of excess land 143,000 -   143,000 -  
Future income tax expense (benefit) 3,000 (12,000)   34,000 (34,000)  
FFO $ 3,093,000 $ 2,890,000 7.0% $ 5,791,000 $ 5,532,000 4.7%
Weighted average number of units 9,040,181 9,040,181   9,040,181 9,040,181  
FFO per Unit $0.34 $0.32 6.3% $0.64 $0.61 5.1%
             
Calculation of EBITDA:            
Net income $ 1,517,000 $ 1,717,000   $ 2,757,000 $ 3,247,000  
Amortization of real estate facilities            
  Continuing operations 1,419,000 1,161,000   2,829,000 2,271,000  
  Discontinued operations 11,000 24,000   28,000 48,000  
Loss on disposition of excess land 143,000 -   143,000 -  
Interest and commitment fees 341,000 215,000   697,000 359,000  
Future income tax expense (benefit) 3,000 (12,000)   34,000 (34,000)  
Interest and other income (1,000) (6,000)   (5,000) (14,000)  
EBITDA $ 3,433,000 $ 3,099,000 10.8% $ 6,483,000 $ 5,877,000 10.3%
Weighted average number of units 9,040,181 9,040,181   9,040,181 9,040,181  
EBITDA per Unit $0.38 $0.34 11.8% $0.72 $0.65 10.8%
             

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 web site is www.publicstoragecanada.com. The Partnership's investor web site is www.pscinvestor.com.

PUBLIC STORAGE CANADIAN PROPERTIES
SELECTED FINANCIAL DATA

  Three Months Ended June 30, Six Months Ended June 30,
  2010 2009 2010 2009
         
Revenue:        
Rental income $ 6,807,000 $ 5,555,000 $ 13,163,000 $ 11,172,000
Interest and other income 1,000 6,000 5,000 14,000
  6,808,000 5,561,000 13,168,000 11,186,000
         
Costs and expenses:        
Cost of operations 2,878,000 2,159,000 5,848,000 4,692,000
Management fees paid to an affiliate 408,000 333,000 790,000 670,000
Amortization of real estate facilities 1,419,000 1,161,000 2,829,000 2,271,000
Interest and commitment fees 341,000 215,000 697,000 359,000
Administrative 162,000 112,000 274,000 235,000
Loss on disposition of excess land 143,000 - 143,000 -
  5,351,000 3,980,000 10,581,000 8,227,000
         
Income from continuing operations before income taxes 1,457,000 1,581,000 2,587,000 2,959,000
         
Future income tax benefit (expense) (3,000) 12,000 (34,000) 34,000
         
Income from continuing operations 1,454,000 1,593,000 2,553,000 2,993,000
         
Discontinued operations 63,000 124,000 204,000 254,000
         
Net income $ 1,517,000 $ 1,717,000 $ 2,757,000 $ 3,247,000
         
Net income / Unit – continuing operations $ 0.16 $ 0.18 $ 0.28 $ 0.33
Net income / Unit – discontinued operations 0.01 0.01 0.02 0.03
         
Net income per Unit $ 0.17 $ 0.19 $ 0.30 $ 0.36
         
Distributions per Unit $ 0.225 $ 0.225 $ 0.45 $ 0.45
         
Weighted average number of Units outstanding 9,040,181 9,040,181 9,040,181 9,040,181
         
 
  As at June 30, 2010 As at December 31, 2009
Balance sheet data:    
Cash and cash equivalents $ 776,000 $ 268,000
Real estate facilities, net (1) 125,605,000 129,283,000
Asset held for disposition 689,000 717,000
Properties under development 7,393,000 5,472,000
Receivables and other assets 1,610,000 523,000
Future income taxes 1,128,000 1,162,000
Total assets $ 137,201,000 $ 137,425,000
     
Accounts payable and accrued liabilities $ 3,081,000 $ 3,346,000
Advance payments from renters 1,881,000 1,739,000
Interest rate swaps 105,000 263,000
Debt 46,102,000 44,892,000
Partners' equity 86,032,000 87,185,000
Total liabilities and partner's equity $ 137,201,000 $ 137,425,000
     
Units outstanding at end of period 9,040,181 9,040,181
 
(1) The Canadian Accounting Standards Board ("AcSB") confirmed that the adoption of International Financial Reporting Standards ("IFRS") will be effective for Canadian publicly accountable enterprises on January 1, 2011, including the Partnership. IFRS will replace Canadian GAAP for these enterprises. Comparative information under IFRS will also need to be provided for reporting purposes.
 
The Partnership will be required to disclose the fair value of its investment properties under IFRS. In connection with the transition to IFRS, the Partnership commissioned an appraisal of its real estate portfolio by Colliers International Reality Advisors, Inc., an independent real estate appraisal firm. As at October 1, 2009 the Partnership's real estate portfolio (excluding properties under development and asset held for disposition as at December 31, 2009) was valued at approximately $234 million.
 

For more information, please contact

Public Storage Canadian Properties
Vincent Chan
(866) PS-CANADA
(866) 772-2623

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