Extra Space Storage Inc. Reports Second Quarter 2011 Results
Achieves $0.27 FFO per Share; Same-Store NOI Increases 7.8%; Acquires 24 Properties
(firmenpresse) - SALT LAKE CITY, UT -- (Marketwire) -- 07/28/11 -- Extra Space Storage Inc. (NYSE: EXR), a
leading owner and operator of self-storage properties in the United States,
announced operating results for the three and six months ended June 30,
2011.
Achieved funds from operations ("FFO") of $0.27 per diluted share
including development dilution of $0.02 per share resulting in
approximately 22% year-over-year growth for the quarter.
Grew same-store occupancy by 290 basis points to 89.0% at June 30,
2011, compared to 86.1% as of June 30, 2010.
Increased same-store revenue and net operating income ("NOI") by 4.7%
and 7.8%, respectively, as compared to the same period in 2010. Same-store
revenue and NOI include tenant reinsurance income and expenses.
Acquired 24 properties in 11 states.
Added 26 properties to the Company's third-party management platform.
Issued and sold 5,335,423 shares of common stock in a public offering
for total net proceeds of approximately $112.5 million.
Paid a quarterly dividend of $0.14 per share.
Spencer F. Kirk, Chairman and CEO of Extra Space Storage Inc., commented:
"Extra Space Storage's diversified growth platform has produced another
quarter of strong results for our shareholders. Our solid performance
resulted from better than anticipated core operations, robust acquisition
activity and significant growth in our third-party management business.
These components have combined to enhance our trajectory towards double-
digit earnings growth in 2011 and beyond."
The following table outlines the Company's FFO and FFO as adjusted for the
three and six months ended June 30, 2011 and 2010. The table also provides
a reconciliation to GAAP net income per diluted share for each period
presented (amounts shown in thousands, except share data - unaudited):
FFO and FFO as adjusted include the dilutive impact from lease-up
development properties of $0.02 per diluted share for the three months
ended June 30, 2011 compared to $0.03 for the same period in 2010.
The following table outlines the Company's same-store property performance
for the three and six months ended June 30, 2011 and 2010 (amounts shown in
thousands, except share data - unaudited):
The Company's major markets with revenue growth above the portfolio average
for the three months ended June 30, 2011 were Boston, New York / New
Jersey, Philadelphia and Washington, D.C. Markets performing below the
Company's portfolio average included Houston, Las Vegas and San Bernardino
/ Riverside.
During the quarter, the Company purchased 24 properties for approximately
$84.8 million. These properties are located in California, Colorado,
Indiana, Kentucky, Nevada, New Jersey, Ohio, Tennessee, Texas, Utah and
Virginia. Of the 24 properties, 15 are from a single portfolio located in
Indiana, Kentucky and Ohio. Subsequent to the end of the quarter the
Company completed the acquisition of one property located in Maryland for
$5.7 million. The Company has 24 additional properties under contract for
approximately $143.6 million. These properties are located in California,
Colorado, Maryland, Massachusetts, New Jersey and Texas. The purchase of
these properties is subject to due diligence and other customary closing
conditions and is currently expected to close by the end of the year. No
assurance can be provided that any of these acquisitions will be completed
on the terms described, or at all.
During the quarter, 26 properties were added to the Company's third-party
management program, 19 of which were from a single portfolio with locations
in California and Hawaii. As of June 30, 2011, the Company managed a total
of 180 properties for third-party owners. The Company continues to be the
largest self-storage management company in the United States.
During the quarter, the Company executed a $50.0 million secured line of
credit with TD Bank. The Company also increased the capacity of its Wells
Fargo line of credit from $45.0 million to $75.0 million. The Company now
has five lines of credit with a total capacity of $315.0 million, of which
$129.0 million was drawn as of June 30, 2011. As of June 30, 2011, the
Company had 64 unencumbered properties remaining on which to place debt.
As of June 30, 2011, the Company's percentage of fixed-rate debt to total
debt was 71.0%. The weighted average interest rate on the Company's debt
was 5.6% for fixed-rate debt and 3.1% for variable-rate debt. The combined
weighted average interest rate was 4.8% with a weighted average maturity of
approximately six years.
Subsequent to the end of the quarter, the Company locked the interest rate
on $83.5 million in trust preferred debt at 4.99% for seven years.
On May 17, 2011, the Company issued and sold 5,000,000 shares of common
stock in a public offering. On May 24, 2011, the underwriter partially
exercised its over-allotment option to purchase an additional 335,423
shares of common stock from the Company. After giving effect to the
exercise of the option, the Company sold a total of 5,335,423 shares of
common stock in the public offering for total net proceeds of approximately
$112.5 million. Proceeds of the offering were used to fund acquisitions,
pay down debt and for general corporate purposes.
The Company paid a second quarter dividend of $0.14 per share on the common
stock of the Company on June 30, 2011 to stockholders of record at the
close of business on June 15, 2011.
The Company currently estimates that FFO per diluted share for the year
ending December 31, 2011 will be between $1.10 and $1.13. For the third
quarter 2011, the Company estimates that FFO per diluted share will be
between $0.29 and $0.30. FFO estimates for the year are fully diluted for
an estimated average number of shares and Operating Partnership units ("OP
units") outstanding during the year. The Company's estimates are forward-
looking and based on management's view of current and future market
conditions.
The Company's actual results may differ materially from these estimates,
which include the following annual assumptions:
Same-store property revenue growth including tenant reinsurance between
3.5% and 4.25%.
Same-store property expense increase including tenant reinsurance
between 0.0% and 1.0%.
Same-store property NOI growth including tenant reinsurance between
5.0% and 6.5%.
Net tenant reinsurance income between $22.5 million and $23.5 million.
General and administrative expenses between $47.0 million and $49.0
million, including non-cash compensation expense of approximately $5.0
million.
Average monthly cash balance of approximately $25.0 million.
Equity in earnings of real estate ventures between $7.5 million and
$8.5 million.
Acquisition activity of approximately $240.0 million.
Interest expense between $67.0 million and $68.5 million.
Weighted average LIBOR of 0.4%.
Weighted average number of outstanding shares, including OP units, of
approximately 96.7 million.
Dilution associated with the Company's development program between
$7.5 million and $8.0 million.
Taxes associated with the Company's taxable Real Estate Investment
Trust ("REIT") subsidiary between $1.0 million and $2.0 million, inclusive
of solar tax credits.
Unrecovered development and acquisition costs of approximately $2.5
million
Non-cash interest charges associated with exchangeable senior notes of
approximately $1.8 million.
Supplemental unaudited financial information regarding the Company's
performance can be found on the Company's website at . Click on the
"Investor Relations" link at the bottom of the home page, then on
"Financial & Stock Info," then on "Quarterly Earnings" on the left of the
page. This supplemental information provides additional detail on items
that include property occupancy and financial performance by portfolio and
market, debt maturity schedules and performance and progress of property
development.
At periodic times, the Company will provide graphical information related
to the Company and/or the self-storage industry. These graphics can be seen
at
.
The Company will host a conference call at 12:00 p.m. Eastern Time on
Friday, July 29, 2011 to discuss its financial results. To participate in
the conference call, please dial 866-362-4831 or 617-597-5347 for
international participants, Conference ID: 48674800. The conference call
will also be available on the Company's website at . To listen to a
live broadcast, go to the site at least 15 minutes prior to the scheduled
start time in order to register, download and install any necessary audio
software. A replay of the call will be available for 30 days on the
Company's website in the Investor Relations section.
A replay of the call will also be available by telephone, from 3:00 p.m.
Eastern Time on July 29, 2011, until midnight Eastern Time on August 29,
2011. The replay dial-in numbers are 888-286-8010 or 617-801-6888 for
international callers, Conference ID: 81454121.
Certain information set forth in this release contains "forward-looking
statements" within the meaning of the federal securities laws. Forward-
looking statements include statements concerning our plans, objectives,
goals, strategies, future events, future revenues or performance, capital
expenditures, financing needs, plans or intentions relating to
acquisitions, developments and other information that is not historical
information. In some cases, forward-looking statements can be identified by
terminology such as "believes," "estimates," "expects," "may," "will,"
"should," "anticipates," or "intends," or the negative of such terms or
other comparable terminology, or by discussions of strategy. We may also
make additional forward-looking statements from time to time. All such
subsequent forward-looking statements, whether written or oral, by us or on
our behalf, are also expressly qualified by these cautionary statements.
There are a number of risks and uncertainties that could cause our actual
results to differ materially from the forward-looking statements contained
in or contemplated by this release. Any forward-looking statements should
be considered in light of the risks referenced in the "Risk Factors"
section included in our most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. Such factors include, but are not limited
to:
changes in general economic conditions, the real estate industry and
the markets in which we operate;
the effect of competition from new and existing self-storage facilities
or other storage alternatives, which could cause rents and occupancy rates
to decline;
difficulties in our ability to evaluate, finance, complete and
integrate acquisitions and developments successfully and to lease up those
properties, which could adversely affect our profitability;
potential liability for uninsured losses and environmental
contamination;
the impact of the regulatory environment as well as national, state,
and local laws and regulations including, without limitation, those
governing REITs, which could increase our expenses and reduce our cash
available for distribution;
disruptions in credit and financial markets and resulting difficulties
in raising capital or obtaining credit at reasonable rates or at all, which
could impede our ability to grow;
increased interest rates and operating costs;
reductions in asset valuations and related impairment charges;
delays in the development and construction process, which could
adversely affect our profitability;
the failure to maintain our REIT status for federal income tax
purposes;
economic uncertainty due to the impact of war or terrorism, which could
adversely affect our business plan; and
our ability to attract and retain qualified personnel and management
members.
All forward-looking statements are based upon our current expectations and
various assumptions. Our expectations, beliefs and projections are
expressed in good faith and we believe there is a reasonable basis for
them, but there can be no assurance that management's expectations, beliefs
and projections will result or be achieved. All forward-looking statements
apply only as of the date made. We undertake no obligation to publicly
update or revise forward-looking statements which may be made to reflect
events or circumstances after the date made or to reflect the occurrence of
unanticipated events.
The Company operates as a self-managed and self-administered REIT. Readers
are encouraged to find further detail regarding Extra Space Storage's
organizational structure in its most recent Annual Report on Form 10-K as
filed with the SEC.
FFO provides relevant and meaningful information about the Company's
operating performance that is necessary, along with net income and cash
flows, for an understanding of the Company's operating results. The Company
believes FFO is a meaningful disclosure as a supplement to net earnings.
Net earnings assume that the values of real estate assets diminish
predictably over time as reflected through depreciation and amortization
expenses. The values of real estate assets fluctuate due to market
conditions and the Company believes FFO more accurately reflects the value
of the Company's real estate assets. FFO is defined by the National
Association of Real Estate Investment Trusts, Inc. ("NAREIT") as net income
computed in accordance with accounting principles generally accepted in the
United States ("GAAP"), excluding gains or losses on sales of operating
properties, plus depreciation and amortization and after adjustments to
record unconsolidated partnerships and joint ventures on the same basis.
The Company believes that to further understand the Company's performance,
FFO should be considered along with the reported net income and cash flows
in accordance with GAAP, as presented in the Company's consolidated
financial statements.
For informational purposes, the Company provides FFO as adjusted for the
exclusion of gains from early extinguishment of debt, non-recurring write-
downs, unrecovered acquisition and development costs and non-cash interest
charges related to ASC 470-20 (formerly FASB Staff Position No. APB 14-1).
Although the Company's calculation of FFO as adjusted differs from NAREIT's
definition of FFO and may not be comparable to that of other REITs and real
estate companies, the Company believes it provides a meaningful
supplemental measure of operating performance. The Company believes that by
excluding gains from early extinguishment of debt, non-recurring write-
downs, the costs related to acquiring properties and non-cash charges
related to ASC 470-20 (formerly FASB Staff Position No. APB 14-1),
stockholders and potential investors are presented with an indicator of its
operating performance that more closely achieves the objectives of the real
estate industry in presenting FFO. FFO as adjusted by the Company should
not be considered a replacement of the NAREIT definition of FFO or used as
an alternative to net income as an indication of the Company's performance,
as an alternative to net cash flow from operating activities, as a measure
of liquidity, or as an indicator of the Company's ability to make cash
distributions.
The Company's computation of FFO may not be comparable to FFO reported by
other REITs or real estate companies that do not define the term in
accordance with the current NAREIT definition or that interpret the current
NAREIT definition differently. FFO does not represent cash generated from
operating activities determined in accordance with GAAP, and should not be
considered as an alternative to net income as an indication of the
Company's performance, as an alternative to net cash flow from operating
activities, as a measure of liquidity, or as an indicator of the Company's
ability to make cash distributions.
The Company's same-store properties for the three and six months ended June
30, 2011 consisted of 253 properties that were wholly-owned and operated
and that were stabilized by the first day of each period. The Company
considers a property to be stabilized once it has been open three years or
has sustained average square foot occupancy of 80.0% or more for one
calendar year. Same-store results provide information relating to property
operations without the effects of acquisitions or completed developments
and should not be used as a basis for future same-store performance or for
the performance of the Company's properties as a whole.
Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a fully
integrated, self-administered and self-managed REIT that owns and/or
operates 860 self-storage properties in 34 states and Washington, D.C. The
Company's properties comprise approximately 570,000 units and approximately
62 million square feet of rentable space, offering customers a wide
selection of conveniently located and secure storage solutions across the
country, including boat storage, RV storage and business storage. The
Company is the second largest owner and/or operator of self-storage
properties in the United States and is the largest self-storage management
company in the United States.
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Datum: 28.07.2011 - 14:16 Uhr
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