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Public Storage Management Discusses Q2 2012 Results - Earnings Call Transcript

All forward-looking statements speak only as of today, August 3, 2012, and we assume no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

A reconciliation to GAAP of the non-GAAP financial measures we are providing on this call is included in our earnings press release. You can find our press release, SEC reports and the audio webcast replay of this conference call on our website at

I'll turn the call over to John Reyes.

Edward John Reyes

Thank you, Clem. Our second quarter core FFO per share was $1.62 compared to $1.43 last year, a 13% increase. Five items contributed to this growth. First, our same-store net operating income increased by 8.3%, adding $0.12 per share. Our non-same-store properties added $0.03. Last year's acquisition of affiliated partnership interests added $0.02, lower financing costs other added $0.04, ancillary operations, primarily our tenant reinsurance business, added $0.01. Partially offsetting this was $0.03 per share from lower interest income.

We completed several capital transactions in the second quarter. We issued $288 million of preferred securities, with a rate of 5.625%, and called for redemption $416 million, with an average rate of 6.7%. Assuming no further reissuances, preferred dividends are expected to be about $8 million lower in the third quarter of 2012 as compared to last year.

With that, I will now turn it over to Ron.

Ronald L. Havner

Thank you, John. The second quarter benefited from solid demand, resulting in record-high occupancies and higher realized rents. In Q2, we reduced media spend by 44% or about $1.5 million, as well as promotional discounts.

Net customer acquisition cost declined as customer move-in volumes remained constant despite lower media and promotional discounts. At the end of July 2012, occupancy, asking rents and in-place rents were all higher than the same period last year.

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