-- Funds from Operations ("FFO")
-- FFO of $0.25 per share for the three months ended March 31, 2009,
a 4.2% increase over the $0.24 per share reported in the same
period of the previous year.
-- Same-store Revenue (378 same-store facilities)
-- Same-store total revenue decreased $458 thousand from $57.0 million
to $56.5 million, or 0.8%, from the first quarter of 2008.
-- Same-store Property Operating Expenses
-- Same-store property operating expenses decreased $46 thousand, or
0.2%, when compared to the first quarter of 2008.
-- Same-store Net Operating Income ("NOI")
-- Same-store NOI decreased $412 thousand from $34.8 million to
$34.4 million, or 1.2%, from the first quarter of 2008.
-- Realized Annual Rent
-- Same-store realized annual rent per square foot grew to $11.28 or
1.4% over the first quarter of 2008.
-- Same-store Physical Occupancy
-- Average physical occupancy was 77.0% for the first quarter of 2009
on the same-store facilities compared to 79.1% for the first
quarter of 2008.
President and Chief Investment Officer Christopher Marr commented, "We
continue to make meaningful progress with our capital raising efforts.
Subsequent to the end of the quarter, we have closed on an asset sale and a
secured term loan that together have provided us with approximately $17
million of proceeds. We have commitments for $37.2 million of secured loans
with $26.5 million we would expect to close prior to the end of the second
quarter and the balance to close early in the third quarter. Additionally,
we expect to close on dispositions under contract for proceeds totaling
$23.6 million. These total expected proceeds of $77.8 million, when
combined with $87 million of revolving credit facility capacity at March
31, 2009 and our expected $49 million of 2009 and 2010 retained cash flow
will provide ample funding to repay all of our $194.8 million of fixed rate
mortgage obligations through the end of 2010. We remain very active on the
financing and disposition front and currently have a pipeline in excess of
$100 million of potential sales and financing proceeds. We are extremely
pleased with our successful efforts in producing attractive capital raising
opportunities."
Funds from Operations
FFO for the first quarter of 2009 was $15.6 million, compared to $14.8
million for the first quarter of 2008. FFO per share grew 4.2% to $0.25
per share for the first quarter of 2009, compared to $0.24 for the same
quarter of last year.
Operating Results
The Company reported a net loss of $2.1 million or $0.03 per share in the
first quarter of 2009, compared to a net loss of $4.0 million or $0.07 per
share in the first quarter of 2008.
Total revenues decreased from $57.9 million to $57.7 million, or $219
thousand. Total property operating expenses and general administrative
expenses remained constant at $24.5 million and $5.5 million, respectively,
in the first quarter of 2009, compared to the same period in 2008.
Interest expense decreased approximately $2.5 million in the first quarter
of 2009, compared to the first quarter of 2008, primarily as a result of
reduced levels of debt outstanding and lower interest rates during the
first quarter of 2009 as compared to the same period in 2008.
The Company's 386 owned facilities, containing 24.9 million rentable square
feet, had a physical occupancy at March 31, 2009 of 75.4% and an average
physical occupancy for the quarter ended March 31, 2009 of 76.8%.
Same-Store Results
The Company's same-store pool at March 31, 2009 represented 378 facilities
containing approximately 24.4 million rentable square feet and included
approximately 98.0% of the aggregate rentable square feet of the Company's
386 owned facilities. These same-store facilities represent approximately
98.4% of property net operating income for the quarter ended March 31,
2009.
The same-store average physical occupancy for the first quarter of 2009 was
77.0% compared to 79.1% for the same quarter of last year. In-place annual
rent per square foot remained constant at $12.31 for the first quarter of
2009 and 2008. Same-store rental income for the first quarter of 2009
decreased 1.3% over the same period in 2008. Same-store total revenues
decreased 0.8% and same-store operating expenses decreased 0.2% as compared
to the first quarter of 2008. Same-store net operating income decreased
1.2% in the first quarter of 2009 compared to the same quarter of 2008.
Acquisition and Disposition Activity
During the first quarter, the Company disposed of one asset in Florida for
$3.0 million. The Company recognized a gain of approximately $0.5 million
on the sale. The proceeds were used to reduce balances outstanding under
our revolving credit facility.
Quarterly Dividend
On February 25, 2009, the Company declared a dividend of $0.025 per share.
The dividend was paid on April 22, 2009, to shareholders of record on April
7, 2009.
Second Quarter and Full-Year 2009 Financial Outlook
"We are pleased with our first quarter operating results and our overall
expectations for 2009 remain unchanged. We are introducing second quarter
FFO per share guidance, which includes the impact of our debut national
television advertising campaign. While we expect that our 2009 marketing
expenditures will be generally consistent with our expenditures in 2008, we
have shifted much of our spend from yellow page advertising to television
and radio initiatives. Our media advertising will be heavily weighted to
the beginning of our prime rental season, and accordingly, our second
quarter guidance includes approximately $2.9 million, or $0.05 per share,
of related costs. We currently expect $0.19 to $0.20 of FFO per share in
the second quarter," said Timothy Martin, Chief Financial Officer. "We
remain comfortably in compliance with the financial covenants of our
unsecured credit facility, and expect to continue to remain in compliance
through the maturity of the loan. Our full-year guidance assumes we
exercise our right to extend the maturity of the facility to November, 2010
with the payment of a $675 thousand extension fee."
The Company is affirming its previously issued full-year 2009 financial
outlook and continues to expect that its fully-diluted FFO per share will
be between $0.87 and $0.97, and that its fully-diluted net loss per share
for the period will be between $(0.32) and $(0.22). The Company's estimate
is based on the following key assumptions:
-- General and administrative expenses of approximately $22.0 million to
$22.8 million
-- Same-store revenue growth of -2.0% to 0% over 2008
-- Same-store expense growth of 1.5% to 2.5% over 2008
-- Same-store net operating income growth of -4.0% to -1.0% over 2008
-- Dispositions and new financings totaling $100 million to $150 million,
weighted to midyear
-- Average LIBOR assumption for the year, including the impact of
existing hedges, of approximately 2.9%
2009 Full Year Guidance Range or Value
-------------------------
Earnings (loss) per diluted share allocated to
common shareholders $ (0.32) to $ (0.22)
Less: gains on sales of real estate (0.01) (0.01)
Plus: real estate depreciation and amortization 1.20 1.20
------- -------
FFO per diluted share $ 0.87 to $ 0.97
======= =======
The Company estimates that its fully-diluted FFO per share for the quarter
ending June 30, 2009 will be between $0.19 and $0.20, and that its
fully-diluted net loss per share for the period will be between $(0.10) and
$(0.11).
2nd Quarter 2009 Guidance Range or Value
-------------------------
Earnings (loss) per diluted share allocated to
common shareholders $ (0.11) to $ (0.10)
Plus: real estate depreciation and amortization 0.30 0.30
------- -------
FFO per diluted share $ 0.19 to $ 0.20
======= =======
Conference Call
Management will host a conference call at 11:00 a.m. ET on Friday, May 8,
2009, to discuss financial results for the three months ended March 31,
2009.
A live webcast of the conference call will be available online from the
investor relations page of the Company's corporate website at
www.ustoreit.com. The dial-in numbers are 1-800-860-2442 for domestic
callers and +1 412-858-4600 for international callers. After the live
webcast, the call will remain available on U-Store-It's website for thirty
days. In addition, a telephonic replay of the call will be available until
June 8, 2009. The replay dial-in number is 1-877-344-7529 for domestic
callers and +1 412-317-0088 for international callers. The reservation
number for both is 429621.
Supplemental operating and financial data as of March 31, 2009 is available
on our corporate website under the heading "Investor Relations and
Financial Information."
About U-Store-It Trust
U-Store-It Trust is a self-administered and self-managed real estate
investment trust. The Company's self-storage facilities are designed to
offer affordable, easily accessible and secure storage space for
residential and commercial customers. According to the Self-Storage
Almanac, U-Store-It Trust is one of the top four owners and operators of
self-storage facilities in the United States.
Non-GAAP Performance Measurements
FFO is a widely used performance measure for real estate companies and is
provided here as a supplemental measure of operating performance. The
Company calculates FFO in accordance with the best practices described in
the April 2002 National Policy Bulletin of the National Association of Real
Estate Investment Trusts (the "White Paper"). The White Paper defines FFO
as net income (computed in accordance with GAAP), excluding gains (or
losses) from sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures.
Management uses FFO as a key performance indicator in evaluating the
operations of the Company's facilities. Given the nature of its business as
a real estate owner and operator, the Company considers FFO a key measure
of its operating performance that is not specifically defined by accounting
principles generally accepted in the United States. The Company believes
that FFO is useful to management and investors as a starting point in
measuring its operational performance because it excludes various items
included in net income that do not relate to or are not indicative of its
operating performance such as gains (or losses) from sales of property and
depreciation, which can make periodic and peer analyses of operating
performance more difficult. FFO should not be considered as an alternative
to net income (determined in accordance with GAAP) as an indicator of the
Company's financial performance, is not an alternative to cash flow from
operating activities (determined in accordance with GAAP) as a measure of
the Company's liquidity, and is not indicative of funds available to fund
the Company's cash needs, including its ability to make distributions.
We define net operating income, which we refer to as "NOI," as total
continuing revenues less continuing property operating expenses. NOI also
can be calculated by adding back to net income: interest expense, loan
procurement amortization expense, noncontrolling interests, depreciation
and general and administrative, and deducting from net income: gains on
sale of self-storage facilities, interest income and other. NOI is not a
measure of performance calculated in accordance with GAAP.
Management uses NOI as a measure of operating performance at each of our
facilities, and for all of our facilities in the aggregate. NOI should not
be considered as a substitute for operating income, net income, cash flows
provided by operating, investing and financing activities, or other income
statement or cash flow statement data prepared in accordance with GAAP.
Forward-Looking Statements
This presentation, together with other statements and information publicly
disseminated by U-Store-It Trust ("we," "us," "our" or the "Company"),
contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Such statements are
based on assumptions and expectations that may not be realized and are
inherently subject to risks, uncertainties and other factors, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Although we believe the expectations reflected in these
forward-looking statements are based on reasonable assumptions, future
events and actual results, performance, transactions or achievements,
financial and otherwise, may differ materially from the results,
performance, transactions or achievements expressed or implied by the
forward-looking statements. Risks, uncertainties and other factors that
might cause such differences, some of which could be material, include, but
are not limited to:
-- national and local economic, business, real estate and other market
conditions;
-- the competitive environment in which we operate;
-- the execution of our business plan;
-- financing risks, including the risk of over-leverage and the
corresponding risk of default on our mortgage and other debt and potential
inability to refinance existing indebtedness;
-- increases in interest rates and operating costs;
-- counterparty non-performance related to the use of derivative
financial instruments;
-- our ability to maintain our status as a real estate investment trust
("REIT") for federal income tax purposes;
-- acquisition and development risks;
-- changes in real estate and zoning laws or regulations;
-- risks related to natural disasters;
-- potential environmental and other liabilities;
-- other factors affecting the real estate industry generally or the self-
storage industry in particular; and
-- other risks identified in our Annual Report on Form 10-K and, from
time to time, in other reports we file with the Securities and Exchange
Commission (the "SEC") or in other documents that we publicly disseminate.
We undertake no obligation to publicly update or revise these
forward-looking statements, whether as a result of new information, future
events or otherwise except as may be required in securities laws.
U-STORE-IT TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
March 31, December 31,
2009 2008
----------- -----------
ASSETS
Storage facilities $ 1,882,654 $ 1,888,123
Less: Accumulated depreciation (337,605) (328,165)
----------- -----------
Storage facilities, net 1,545,049 1,559,958
Cash and cash equivalents 1,577 3,744
Restricted cash 16,244 16,217
Loan procurement costs, net of amortization 3,584 4,453
Assets held for sale - 2,378
Other assets, net 8,599 10,909
----------- -----------
Total assets $ 1,575,053 $ 1,597,659
=========== ===========
LIABILITIES AND EQUITY
Revolving credit facility $ 163,000 $ 172,000
Unsecured term loan 200,000 200,000
Secured term loan 57,419 57,419
Mortgage loans and notes payable 545,461 548,085
Accounts payable, accrued expenses and other
liabilities 29,927 39,410
Distributions payable 1,582 1,572
Deferred revenue 9,900 9,725
Security deposits 458 472
Other liabilities held for sale - 22
----------- -----------
Total liabilities 1,007,747 1,028,705
Noncontrolling interests of the Company 45,833 46,026
Commitments and contingencies
Shareholders' equity:
Common shares $.01 par value, 200,000,000 shares
authorized, 57,687,122 and 57,623,491 shares
issued and outstanding at March 31, 2009 and
December 31, 2008, respectively 577 576
Additional paid-in capital 801,887 801,029
Accumulated other comprehensive loss (6,302) (7,553)
Accumulated deficit (274,689) (271,124)
----------- -----------
Total shareholders' equity 521,473 522,928
----------- -----------
Total liabilities and equity $ 1,575,053 $ 1,597,659
=========== ===========
U-STORE-IT TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months ended
March 31,
------------------------
2009 2008
----------- -----------
(Dollars and shares in
thousands, except
per share data)
REVENUES
Rental income $ 53,813 $ 54,358
Other property related income 3,863 3,537
----------- -----------
Total revenues 57,676 57,895
----------- -----------
OPERATING EXPENSES
Property operating expenses 24,457 24,514
Depreciation and amortization 18,736 19,536
General and administrative 5,474 5,495
----------- -----------
Total operating expenses 48,667 49,545
----------- -----------
OPERATING INCOME 9,009 8,350
----------- -----------
OTHER INCOME (EXPENSE)
Interest:
Interest expense on loans (11,353) (13,827)
Loan procurement amortization expense (483) (471)
Interest income 44 59
Other (12) 68
----------- -----------
Total other expense (11,804) (14,171)
----------- -----------
LOSS FROM CONTINUING OPERATIONS (2,795) (5,821)
DISCONTINUED OPERATIONS
Income from discontinued operations 9 914
Net gain on disposition of discontinued
operations 500 572
----------- -----------
Total discontinued operations 509 1,486
----------- -----------
NET LOSS (2,286) (4,335)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING
INTERESTS 177 351
----------- -----------
NET LOSS ATTRIBUTABLE TO THE COMPANY (2,109) (3,984)
=========== ===========
Basic and diluted loss per share from continuing
operations attributable to common shareholders $ (0.04) $ (0.09)
Basic and diluted earnings per share from
discontinued operations attributable to common
shareholders 0.01 0.02
----------- -----------
Basic and diluted loss per share attributable to
common shareholders $ (0.03) $ (0.07)
=========== ===========
Weighted-average basic and diluted shares
outstanding 57,687 57,593
AMOUNTS ATTRIBUTABLE TO THE COMPANY'S
COMMON SHAREHOLDERS:
Loss from continuing operations $ (2,577) $ (5,360)
Total discontinued operations 468 1,376
----------- -----------
Net loss $ (2,109) $ (3,984)
=========== ===========
Same-store facility results (378 facilities)
(in thousands, except percentage and per square foot data)
Three Months ended
March 31,
------------------ Percent
2009 2008 Change
-------- -------- --------
REVENUES
Rental income $ 52,996 $ 53,705 -1.3%
Other property related income 3,516 3,265 7.7%
-------- -------- --------
Total revenues 56,512 56,970 -0.8%
-------- -------- --------
OPERATING EXPENSES
Property taxes 7,289 7,236 0.7%
Personnel expense 6,159 6,030 2.1%
Advertising 1,190 1,046 13.8%
Repair and maintenance 603 788 -23.5%
Utilities 2,635 2,627 0.3%
Property insurance 633 789 -19.8%
Other expenses 3,579 3,618 -1.1%
-------- -------- --------
Total operating expenses 22,088 22,134 -0.2%
-------- -------- --------
Net operating income (1) $ 34,424 $ 34,836 -1.2%
======== ======== ========
Gross margin 60.9% 61.1%
Period average occupancy (2) 77.0% 79.1%
Period end occupancy (3) 75.6% 79.1%
Total rentable square feet 24,396 24,396
Realized annual rent
per occupied square foot (4) $ 11.28 $ 11.13 1.4%
Scheduled annual rent per square foot (5) $ 12.31 $ 12.31 0.0%
Reconciliation of Same-Store Net Operating
Income to Operating Income
Same-store net operating income (1) $ 34,424 $ 34,836
Non same-store net operating income (1) 543 279
Indirect property overhead (1,748) (1,734)
Depreciation (18,736) (19,536)
General and administrative expense (5,474) (5,495)
-------- --------
Operating Income $ 9,009 $ 8,350
======== ========
(1) Net operating income (NOI) is a non-GAAP (generally accepted
accounting principles) financial measure that excludes the impact of
depreciation and general & administrative expense.
(2) Square feet occupancy represents the weighted average occupancy for
the period.
(3) Represents occupancy at March 31 of the respective year.
(4) Realized annual rent per occupied square foot is computed by dividing
rental income by the weighted average occupied square feet for the
period.
(5) Scheduled annual rent per square foot represents annualized scheduled
rents per available square foot for the period.
Non-GAAP Measure - Computation of Funds From Operations
(in thousands, except per share data)
Three months ended
March 31,
--------------------
2009 2008
--------- ---------
Net loss $ (2,286) $ (4,335)
Add (deduct):
Real estate depreciation 18,400 19,708
Gains on sales of real estate (500) (572)
--------- ---------
FFO $ 15,614 $ 14,801
========= =========
Loss per share - fully diluted $ (0.03) $ (0.07)
FFO per share and unit - fully diluted $ 0.25 $ 0.24
Weighted-average diluted shares outstanding 57,687 57,593
Weighted-average diluted shares and units outstanding 62,768 62,690
Dividend per common share and unit $ 0.025 $ 0.18
Payout ratio of FFO 10% 76%
Contact Information: Contact: U-Store-It Trust Timothy M. Martin Chief Financial Officer (610) 293-5700