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Extra Space Storage Changes 2009 Dividend Distribution


In response to continuing uncertainty in the capital markets, the board of directors of real estate investment trust Extra Space Storage Inc. has decided to modify the company's dividend distributions for the remainder of fiscal 2009. The company does not expect to distribute a dividend in the second and third quarters, but will pay an estimated fourth-quarter dividend of between $0.24 and $0.30 per share using a combination of approximately 10 percent cash and 90 percent common shares.
The 4Q dividend, combined with the first-quarter 2009 cash dividend of $0.25 per share that was paid on March 31, is expected to satisfy the REIT distribution requirements and generally allow the company to avoid the payment of corporate income tax for such year. Extra Space estimates its annual net-taxable income for 2009 to be between $45 million and $50 million, and its total annual distributions for the year to be between $0.27 and $0.28 per share in cash and between $0.22 and $0.27 per share in stock.
In conjunction with the dividend modifications, the company has repurchased approximately $71.5 million principal amount of exchangeable senior notes due in 2012 for approximately $44.5 million. The repurchase will result in a one-time gain of approximately $22.5 million, or $0.25 per share, on early extinguishment of debt for the quarter ended March 31. This gain was not previously included in the company's earnings guidance for 2009.

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