Extra Space Storage Releases 2Q 2009 Financial Results

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Self-storage operator Extra Space Storage Inc. announced its operating results for the three and six months ended June 30, 2009. Highlights for the second quarter of 2009 include:
 
The company achieved funds from operations of $0.07 per diluted share, including development dilution of $0.02 per share. FFO was $0.24 per diluted share after adjusting to exclude a $0.06 per share gain on the repurchase of exchangeable senior notes, a $0.22 per share charge attributable to the wind down of the company's development program, and $0.01 per share of non-cash interest charges related to the company's exchangeable senior notes.
 
Same-store revenue and net operating income at the company's 252 stores decreased by 3 percent and 2.8 percent respectively when compared to the three months ended June 30, 2008.
 
The company closed $96.6 million of debt financing during the quarter and an additional $48.3 million subsequent to quarter end. With the closing of these loans, Extra Space has the capacity to satisfy all debt maturities through 2011.
 
The company repurchased $43 million principal amount of exchangeable senior notes, resulting in a gain on early extinguishment of debt of approximately $5.1 million, or $0.06 per share. The gain includes $0.03 per share of non-cash charges related to the write-off of the discount associated with the repurchased exchangeable senior notes.
 
Extra Space announced a new joint venture with an affiliate of Harrison Street Real Estate Capital LLC in which the company will contribute 42 properties and receive $62.4 million in cash and a 20 percent interest. The joint venture is subject to customary closing conditions and is expected to close in the late third quarter or the fourth quarter of 2009.
 
Finally, the company initiated the wind-down of its development program. As a result, it incurred charges totaling $20.2 million, or $0.22 per share.
 
"Extra Space has improved its capital position appreciably with the announcement of the new joint venture with Harrison Street, the winding down of our development program, and significant progress in obtaining debt financing to satisfy our upcoming debt maturities through 2011,” said Chairman and CEO Spencer Kirk. “The operating environment remains challenging, but we remain steadfast in our efforts to retain occupancy, optimize revenue and control expenses."

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