Public Storage Executive Insights: Occupancy Trends, Expenses
Christy McElroy – UBS: Just looking at your occupancy trends, in Q4, you average 90.2%, and then ended the year at 89.6%, so a natural sort of seasonal trend toward year-end, but then this quarter, it looks like you’re able to reverse course pretty early in the year, and actually show a 10 basis point increase for average occupancy in Q1 versus Q4 which is pretty abnormal in this industry. You’ve talked in the past about possibly trying to reduce some of the seasonality in occupancy during the slower months. So, I’m wondering is this Q1 trend reflective of that, and if so, maybe you can provide a little color on your efforts on that front.
Ronald L. Havner, Jr. – Chairman, CEO and President: Christy, I think last quarter, in the third quarter, we did say that we had record occupancies during last summer that we would be focusing on – trying to mitigate the seasonal downturn as you pointed out, and so we did that in Q1. We were also doing it in Q4, and as we move into the rental season, you’re going to see that occupancy gap narrow into Q2 and Q3 and we’re going to be happy, if we just really comp last year.
Christy McElroy – UBS: Is it a function of how you’re discounting or how you’re setting rents, how you’re able to sort of reduce that seasonality.
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John Reyes – SVP and CFO: It’s all that, Christy. It’s the rents, it’s the discount, it’s the level of advertising spent be it on television or on the Internet. So it’s all the above, and working in concert, we’re trying to maintain an even keel of occupancy as best we can, and there is still going to be seasonality but I think what you’re seeing is a little bit of that’s smoothing out on a sequential basis looking from the fourth quarter to the first quarter.
Todd Thomas – KeyBanc Capital Markets: Just a question on expenses. I was just wondering if you could comment about the increase that we saw this quarter not the 1.9% increase is real concerning, but we saw the clients from the other storage REITs this quarter. A lot of the pressures look like stem from real estate taxes and payroll and some of the other overhead that you broke out this quarter. Should we expect to see sort of similar year-over-year increases on those lines throughout the year and are we starting to see some pressure build on expenses a bit?
Ronald L. Havner, Jr. – Chairman, CEO and President: Todd, I’ll take a couple of the expenses, and John can take a couple. Probably the biggest swinging item is R&M and R&M has two categories. You’ve got what I’ll call ongoing R&M, the usual kind of (cleaning, fixing gage) that kind of stuff and we accelerated that in Q1 and so that was up due to the mild weather. That was up about $2.5 million, and you can see that both on that line as well as if you go further back in the press release, the maintenance CapEx results was also up about 20% for the quarter over prior year, also due to the mild weather. Offsetting that in the R&M line was about a $1.2 million, $1.3 million reduction in snow removal. So you got two different things going on there. Our best guess is that as the year goes on the ongoing R&M will moderate, so that we hopefully end the year flat to maybe slightly down year-over-year and realize some of the benefit from the snow removal. The supervisory payroll is higher headcount on DMs versus last year as well as some state unemployment taxes and then the allocated overhead is also slightly higher headcount. We expect the allocated overhead growth to moderate as we go through the balance of the year. Property taxes?
John Reyes – SVP and CFO: On property tax, we were up about, I think, about a $1.7 million on property taxes and about $600,000 of that $1.7 million is due to the fact that last year when we bought the partnership interests in affiliated partnerships that resulted in basically a technical termination of those partnerships, which meant when we back up they were primarily California properties. So with the technical termination of the partnerships, it results today in a stepped-up basis for property tax purposes, and therefore, increased property taxes. That was built into the acquisition and a yield when we bought this interest. But what you are seeing here is now a $600,000 a quarter bump in property taxes just as a result of doing that transaction last year. But (despite of that) we still been property taxes are going to be up – at least from our budget, we are still budgeting somewhere in the neighborhood of 3.5% to 4% for the entire year.