Shurgard Storage Ctr (NYSE:SHU)
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Shurgard Storage Centers, Inc. (NYSE:SHU), a leading
self-storage real estate investment trust in the United States and
Europe, today released results for the quarter and six months ended
June 30, 2005. The Company announced continued strong performance from
its store operations, but reported a net loss for the second quarter
of 2005 of $693,000 compared with net income of $20.8 million in the
second quarter of 2004. The loss reported this period was due
primarily to $5.2 million of non-cash expenses relating to foreign
currency exchange and derivative losses. The comparable quarter in
2004 included a $12 million gain on the sale of properties. The
diluted net loss per share from continuing operations was $0.08 in the
second quarter of 2005 compared to diluted net income per share from
continuing operations of $0.11 in the second quarter of 2004.
Funds from Operations (FFO) attributable to common shareholders
for the second quarter of 2005 was $15.4 million (after $5.2 million
of foreign currency exchange and derivative losses, net of minority
interest), compared to $24.5 million (after $300,000 of foreign
currency exchange and derivative gains, net of minority interest) in
the second quarter of 2004. FFO per share was $0.33 (after $0.11 of
foreign exchange and derivative losses, net of minority interest) for
the second quarter of 2005, compared to $0.53 (after $0.01 of foreign
exchange and derivative gains, net of minority interest) for the same
period in 2004.
Store Operating Results
Store operating results in both the United States and Europe
continued on an upward trend during the quarter. At constant exchange
rates, total Same Store revenue increased 7.1%, and net operating
income (NOI) after indirect and leasehold expenses increased 6.2%,
compared to the same quarter in 2004. The revenue growth was driven
primarily by occupancy gains in Europe and a combination of both
occupancy and rate gains in the United States. The European Same Store
portfolio achieved a combined occupancy of 80% at the end of the
second quarter, a 5% gain from the end of the first quarter. Same
Store occupancy gains were realized in each country in Europe. David
K. Grant, president and chief operating officer stated, "During the
quarter, we increased our entire European tenant base by almost 5,000
customers, reaching a total count in excess of 64,000. Clearly, we are
seeing the benefits of more focused rate management and our strategic
decision to slow the pace of development in some of our European
markets, such as the Netherlands." Mr. Grant added, "This trend has
continued into the third quarter with occupancy of the same store pool
surpassing 81% as of the end of July. The Company's 40 U.S. and 43
European New Stores also showed strong occupancy growth during the
quarter."
The Company's strong store performance was offset by higher
borrowing costs ($4.8 million, equivalent to $0.10 per share),
increased general and administrative expenses relating primarily to
the Sarbanes-Oxley Section 404 internal control assessment and related
process improvements ($1.7 million, equivalent to $0.04 per share),
increased real estate costs charged to income due to the change in
volume and mix of real estate investment activities from the prior
year ($2 million, equivalent to $0.04 per share) and restructuring
charges related to the company's previously announced integration plan
between the United States and Europe ($1.3 million, equivalent to
$0.03 per share).
Portfolio
As of June 30, 2005, Shurgard operated an international network of
643 properties containing approximately 40.5 million net rentable
square feet. The total includes 484 owned, partially owned or leased
storage centers in operation in the United States, 20 stores in the
United States managed for third parties and 139 owned or partially
owned stores in Europe. Of the 623 owned, partially owned or leased
stores in the United States and Europe, 540 are classified as Same
Store and 83 are classified as New Store.
Shurgard's Domestic and European New Store group represents 17% of
the Company's total investment in storage centers. The New Store group
is in various stages of lease-up and currently produces approximately
3% of Shurgard's total NOI after leasehold and indirect expenses. Mr.
Grant stated, "There is significant embedded future growth in our New
Store portfolio. Lease-up of our New Store group, which represents an
investment of approximately $530 million, is expected to be a key
driver of Shurgard's FFO growth for the next several years."
As of the end of the quarter, the Company had 16 new stores under
construction or pending construction (seven in the United States and
nine in Europe) for an estimated total cost of $114 million and seven
re-development projects underway for an estimated cost of $11.4
million. The Company also completed the acquisition of nine stores in
the United States (six in North Carolina, two in Florida and one in
California) for a total cost of $41 million, adding 698,000 net
rentable square feet.
Same Store Operating Results
During the second quarter of 2005, the Domestic Same Store segment
generated growth in revenue of 5.9% and in NOI before leasehold and
indirect expenses of 5.5% over the second quarter of 2004. Growth in
NOI after leasehold and indirect expenses in the quarter was 3.5% over
the same quarter in 2004. The growth in indirect operating expenses
reflects the increase in field management and marketing positions in
the past year. Management believes the current quarterly run-rate of
indirect expenses is at a stabilized level.
At constant exchange rates, the Europe Same Store segment in the
second quarter of 2005 generated increases in revenue of 11.3% and in
NOI before leasehold and indirect expenses of 19.8% over the second
quarter of 2004. NOI after leasehold and indirect expenses in the
quarter grew 21.6% for Same Stores, compared to the same quarter in
2004. Strong revenue growth was due mainly to the substantial
improvement in average occupancy during the quarter in the Same Store
portfolio, which increased to 78% from 68% in the comparable quarter
in 2004. Occupancy improved in all countries, but occupancy growth was
particularly strong in the Netherlands, Sweden and Denmark.
Long-term Cost Reductions
The Company believes there are significant synergies possible with
the integration of Shurgard Europe. In particular, Europe's rate of
indirect expenses as a percentage of revenue is currently running at
13% for the Same Store group. Management believes this can be reduced
to a stabilized level of approximately 6% of revenue by the fourth
quarter of 2007.
Consolidated general and administrative expenses are currently
running at a rate of approximately 8% of revenue. Management forecasts
that these will be cut to approximately 4% of revenue by the fourth
quarter of 2007. Of the $34 million in general and administrative
expenses expected for the full year 2005, approximately $11 million
relates to audit, tax, and Sarbanes-Oxley Section 404 compliance and
consulting expenses. These expenses are projected to decline to an
annual run-rate of closer to $3 million by the fourth quarter of 2007.
Additionally, benefits from the full integration of Europe will
generate further savings in general and administrative expenses.
2005 FFO and Earnings Guidance
The Company believes that 2005 FFO per share will be in the range
of $1.90 to $1.95, reflecting the additional non-cash foreign exchange
and derivative losses reported this quarter and lower than expected
store development in Europe. In aggregate, the Company has reported
$0.18 of adjustments to FFO guidance related to foreign exchange and
derivative losses and $0.09 related to dilution and restructuring
charges related to the acquisition of the remaining partner's interest
in Shurgard Europe in 2005. Going forward, foreign exchange gains or
losses on intercompany debt will not be reported in earnings. After
deducting estimated depreciation (net of minority interest) of $1.75
per share and adding estimated gains from dispositions of $0.25 per
share, which are not included in the calculation of FFO, the Company
expects to report earnings per share in 2005 of $0.40 to $0.45. This
guidance does not include any estimate for costs incurred in
connection with the recent unsolicited proposal.
A copy of this press release and table attachments will also be
available on the Company's website at
http://investorrelations.shurgard.com.
The Company uses FFO in addition to net earnings (loss) to report
its operating results. The Company uses the definition of FFO adopted
by the National Association of Real Estate Investment Trusts.
Accordingly, FFO is defined as net earnings (computed in accordance
with GAAP), excluding gains (losses) on dispositions of interests in
depreciated operating properties and real estate depreciation and
amortization expenses. FFO includes the Company's share of FFO of
unconsolidated real estate ventures and discontinued operations and
excludes minority interests in FFO. The Company believes FFO is a
meaningful disclosure as a supplement to net earnings (loss) because
net earnings (loss) assumes that the values of real estate assets
diminish predictably over time as reflected through depreciation and
amortization expenses. The Company believes that the values of real
estate assets fluctuate due to market conditions. The Company's
calculation of FFO may not be comparable to similarly titled measures
reported by other companies because not all companies calculate FFO in
the same manner. FFO is not a liquidity measure and should not be
considered as an alternative to cash flows or indicative of cash
available for distribution. It also should not be considered an
alternative to net earnings (loss), as determined in accordance with
U.S. GAAP, as an indication of the Company's financial performance. A
reconciliation of GAAP net income (loss) to FFO is included in the
tables attached to this release.
Statements in this release concerning the beliefs, expectations,
intentions, future events, future performance, business prospects and
business strategy in the United States and Europe, including
statements regarding the earnings guidance, projected development
activity, including projected revenues, expenses, FFO projections, and
net income projections for 2005 and beyond, constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act and are based on several assumptions. If any of these
assumptions are not satisfied or prove to be incorrect, actual results
could differ materially from those indicated in the forward-looking
statements. The risks and uncertainties that may cause these
forward-looking statements to prove to be incorrect include:
-- the risks that implementation of the business plan, including
marketing and sales initiatives, will not be successful;
-- the risk that the Company's earnings (loss), expenses or
revenues may be affected by other factors, such as the risk of
changes in economic conditions in the markets in which we
operate;
-- the risk that competition from new self storage facilities or
other storage alternatives may cause rent to decline and may
cause occupancy rates to drop, or may cause delays in lease up
of newly developed properties;
-- the risk that new developments could be delayed or reduced;
-- the risk that the Company may experience increases in the cost
of labor, taxes, marketing and other operating and
construction expenses;
-- the risk that tax law changes may change the taxability of
future income;
-- the risk that increases in interest rates and/or downgrades of
our credit ratings may increase the cost of refinancing long
term debt;
-- the risk that we may incur significant expenses defending
against hostile takeover attempts;
-- the risk that the Company's alternatives for funding its
business plan may be impaired by its inability to access its
shelf registration statement or the economic uncertainty due
to the impact of war or terrorism; and
-- the risk that Shurgard Europe may be adversely impacted if
that entity is unable to complete funding of its development
joint ventures.
We may also be affected by deadlines imposed by the Sarbanes-Oxley
Act of 2002 and other pending legislation. Changes in accounting
principles, including impending changes in accounting for stock
options, may affect the Company's reported results of operations and
financial position. The information presented in this release reflects
Shurgard's expectations as of the date of this release. Except as
required by law, Shurgard undertakes no obligation to update or revise
the information provided herein.
For a discussion of additional risks and other factors that could
affect these forward-looking statements and Shurgard's financial
performance, see Shurgard's Annual Report on Form 10-K for the year
ended December 31, 2004, filed with the SEC on March 29, 2005, Form
10-Q for the quarter ended March 31, 2005, filed with the SEC on May
10, 2005, and Form 10-Q for the quarter ended June 30, 2005, filed
with the SEC on August 9, 2005.
-0-
*T
INDEX of TABLES TO FOLLOW:
Table 1. Consolidated Statements of Net Income for the three months
and half year ended June 30, 2005 and 2004
Table 2. Consolidated Balance Sheet as of June 30, 2005 and
December 31, 2004
Table 3. FFO Reconciliation for the three months and half year ended
June 30, 2005 and 2004
Table 4. Split of FFO between European Joint Ventures and the rest of
Shurgard Storage Centers, Inc. for the quarter and half year
ended June 30, 2005
Table 5. Earnings Per Share for the three months and half year ended
June 30, 2005 and 2004
Table 6. FFO Per Share for the three months and half year ended June
30, 2005 and 2004
Table 7. Segment reporting information results for the three months
ended June 30, 2005
Table 8. Segment reporting information results for the three months
ended June 30, 2004
Table 9. Domestic Same Store Results for the three months and half
year ended June 30, 2005 and 2004
Table 10. Summary of Operating Self Storage Properties as of June 30,
2005
Table 11. Europe Same Store Results for the three months and half year
ended June 30, 2005 and 2004
Table 12. Quarterly comparison for Europe Same Store of second quarter
2005 versus second quarter 2004
Table 13. Domestic Same Store Vintage Analysis for the three months
ended June 30, 2005 and 2004
Table 14. European Development Performance Vintage Analysis (in
dollars) for the three months ended June 30, 2005 and 2004
Table 15. European Development Performance Vintage Analysis (in euros)
for the three months ended June 30, 2005 and 2004
Table 16. Foreign exchange translation for the three months and half
year ended June 30, 2005 and 2004
Table 17. Store Asset Values and Operating Information for the three
months ended June 30, 2005
Table 1: SHURGARD STORAGE CENTERS, INC.
OPERATING RESULTS (unaudited)
Condensed Consolidated Statements of Net Income for the three and
six months ended June 30, 2005 and 2004
(in thousands except share data)
For the three months For the six months
ended June 30, ended June 30,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenue
Storage center operations $118,384 $103,143 $230,862 $201,131
Other 1,350 1,268 2,736 2,588
-------- -------- -------- --------
Total revenue 119,734 104,411 233,598 203,719
-------- -------- -------- --------
Expenses
Operating 57,898 49,562 117,079 99,874
Real estate development 2,713 681 5,643 1,032
Depreciation and amortization 23,292 21,327 46,677 41,490
Impairment losses and abandoned
project loses 868 763 1,191 973
General, administrative and
other 10,914 7,850 18,943 17,070
-------- -------- -------- --------
Total expenses 95,685 80,183 189,533 160,439
-------- -------- -------- --------
Income from storage center
operations 24,049 24,228 44,065 43,280
-------- -------- -------- --------
Other income (expense)
Interest expense (25,485) (20,662) (49,610) (40,471)
(Loss) gain on derivatives (1,353) 662 (1,712) (115)
Foreign exchange loss (5,715) (442) (9,563) (2,392)
Interest income and other, net 1,268 686 2,228 1,201
-------- -------- -------- --------
Other expense, net (31,285) (19,756) (58,657) (41,777)
-------- -------- -------- --------
(Loss) income before equity in
earnings of other real estate
investments, net, minority
interest and income taxes (7,236) 4,472 (14,592) 1,503
Minority interest 6,876 3,821 12,986 8,353
Equity in earnings of other
real estate investments, net 12 23 33 25
Income tax expense (379) - (389) (23)
-------- -------- -------- --------
(Loss) income from continuing
operations (727) 8,316 (1,962) 9,858
Discontinued operations
Income from discontinued
operations 34 501 102 993
Gain on sale of discontinued
operations - 11,990 6,423 11,990
-------- -------- -------- --------
Discontinued operations 34 12,491 6,525 12,983
Cumulative effect of change in
accounting principle - - - (2,339)
-------- -------- -------- --------
Net (loss) income (693) 20,807 4,563 20,502
Net (loss) income allocation
Preferred stock dividends and
other (3,039) (3,059) (6,080) (6,116)
-------- -------- -------- --------
Net (loss) income available to
common shareholders $ (3,732) $ 17,748 $ (1,517) $ 14,386
======== ======== ======== ========
For the three months For the six months
ended June 30, ended June 30,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Net (loss) income per Common
Share - Basic:
(Loss) income from continuing
operations available to common
shareholders $ (0.08) $ 0.12 $ (0.17) $ 0.08
Total discontinued operations - 0.27 0.14 0.28
Cumulative effect of change in
accounting principle - - - (0.05)
-------- -------- -------- --------
Net (loss) income per share $ (0.08) $ 0.39 $ (0.03) $ 0.31
======== ======== ======== ========
Net (loss) income per Common
Share - Diluted:
(Loss) income from continuing
operations available to common
shareholders $ (0.08) $ 0.11 $ (0.17) $ 0.08
Discontinued operations - 0.27 0.14 0.28
Cumulative effect of change in
accounting principle - - - (0.05)
-------- -------- -------- --------
Net (loss) income per share $ (0.08) $ 0.38 $ (0.03) $ 0.31
======== ======== ======== ========
Distributions per common share $ 0.56 $ 0.55 $ 1.11 $ 1.09
======== ======== ======== ========
Table 2: SHURGARD STORAGE CENTERS, INC.
BALANCE SHEET (unaudited)
Condensed Consolidated Balance Sheet as of June 30, 2005 and
December 31, 2004
(in thousands except share data)
June 30, December 31,
2005 2004
---------- ----------
ASSETS:
Storage centers:
Operating storage centers $3,173,780 $3,143,488
Less accumulated depreciation (510,956) (479,531)
---------- ----------
Operating storage centers, net 2,662,824 2,663,957
Construction in progress 73,700 58,431
Properties held for sale 5,442 8,328
---------- ----------
Total storage centers 2,741,966 2,730,716
---------- ----------
Cash and cash equivalents 37,479 50,277
Restricted cash 5,303 7,181
Goodwill 27,440 24,206
Other assets 117,181 120,504
---------- ----------
Total assets $2,929,369 $2,932,884
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and accrued expenses $ 61,714 $ 60,938
Other liabilities 114,029 112,014
Lines of credit 557,400 397,300
Notes payable 1,253,128 1,287,202
---------- ----------
Total liabilities 1,986,271 1,857,454
---------- ----------
Minority interest 104,328 169,232
Commitments and contingencies (Notes 16)
Shareholders' equity:
Series C Cumulative Redeemable Preferred
Stock; $0.001 par value; 2,000,000 shares
authorized; 2,000,000 shares issued
and outstanding; liquidation preference of
$50,000 48,115 48,115
Series D Cumulative Redeemable Preferred
Stock; $0.001 par value; 3,450,000 shares
authorized; 3,450,000 shares issued
and outstanding; liquidation preference of
$86,250 83,068 83,068
Class A Common Stock, $0.001 par value;
120,000,000 authorized; 46,789,519 and
46,624,900 shares issued and outstanding,
respectively 47 47
Additional paid-in capital 1,134,675 1,127,138
Accumulated deficit (408,160) (354,985)
Accumulated other comprehensive (loss) income (18,975) 2,815
---------- ----------
Total shareholders' equity 838,770 906,198
---------- ----------
Total liabilities and shareholders' equity $2,929,369 $2,932,884
========== ==========
Table 3: SHURGARD STORAGE CENTERS, INC.
Funds From Operations (unaudited)
FFO Reconciliation for the three and six months ended June 30, 2005
and 2004
(in thousands except per share data)
For the three For the six months
months
ended June 30, ended June 30,
------------------ ------------------
2005 2004 2005 2004
------- -------- ------- --------
Net income (loss) $ (693) $ 20,807 $ 4,563 $ 20,502
Depreciation and amortization (1) 19,130 18,737 38,865 36,616
Gain on sale of operating
properties - (11,990) (6,423) (11,990)
Cumulative effect of change in
accounting principle - - - 2,339
------- -------- ------- --------
FFO 18,437 27,554 37,005 47,467
Preferred distribution and other (3,039) (3,059) (6,080) (6,116)
------- -------- ------- --------
FFO attributable to common
shareholders $15,398 $ 24,495 $30,925 $ 41,351
======= ======== ======= ========
FFO per share $ 0.33 $ 0.53 $ 0.65 $ 0.89
======= ======== ======= ========
Distributions per common share $ 0.56 $ 0.55 $ 1.11 $ 1.09
======= ======== ======= ========
(1) Excludes depreciation related to non-real estate assets and
minority interests in depreciation and amortization and includes
depreciation and amortization of discontinued operations.
Table 4: SHURGARD STORAGE CENTERS, INC.
Split of FFO between European joint ventures and the rest of Shurgard
Storage Centers, Inc.
For the three and six months ended June 30, 2005
(in thousands)
For the three months ended Shurgard Shurgard Remainder Consolidated
June 30, 2005 Europe Europe of Shurgard
20% (Excluding Shurgard Storage
owned joint Storage Centers,
joint ventures) Centers, Inc.
ventures (2) Inc.
(2)
--------- --------- ----------- ----------
Net income (loss) $(1,140) $(13,551) $13,998 $ (693)
Depreciation and
amortization (1) 255 4,517 14,358 19,130
Gain on sales of operating
properties - - - -
------- -------- ------- -------
FFO $ (885) $ (9,034) $28,356 $18,437
======= ======== ======= =======
(in thousands)
For the six months ended Shurgard Shurgard Remainder Consolidated
June 30, 2005 Europe Europe of Shurgard
20% (Excluding Shurgard Storage
owned joint Storage Centers,
joint ventures) Centers, Inc.
ventures (2) Inc.
(2)
--------- --------- ----------- ----------
Net income (loss) $(2,220) $(24,589) $31,372 $ 4,563
Depreciation and
amortization (1) 492 9,418 28,955 38,865
Gain on sales of operating
properties - - (6,423) (6,423)
------- -------- ------- -------
FFO $(1,728) $(15,171) $53,904 $37,005
======= ======== ======= =======
(1) Excludes depreciation related to non-real estate assets and
minority interests in depreciation and amortization and includes
depreciation and amortization of discontinued operations.
(2) Balances are presented net of minority interests.
Foreign Exchange and Derivative Losses included in FFO presented above
(in thousands)
For the three months ended Shurgard Shurgard Remainder Consolidated
June 30, 2005 Europe Europe of Shurgard
20% (Excluding Shurgard Storage
owned joint Storage Centers,
joint ventures) Centers, Inc.
ventures (2) Inc.
(2)
--------- --------- ----------- ----------
Gain (loss) on derivatives $(1,435) $ (1,271) $ 1,353 $(1,353)
Foreign exchange gain (loss) - (4,286) (1,429) (5,715)
Minority interest 1,185 709 - 1,894
------- -------- ------- -------
Net amount included in FFO $ (250) $ (4,848) $ (76) $(5,174)
======= ======== ======= =======
(in thousands)
For the six months ended Shurgard Shurgard Remainder Consolidated
June 30, 2005 Europe Europe of Shurgard
20% (Excluding Shurgard Storage
owned joint Storage Centers,
joint ventures) Centers, Inc.
ventures (2) Inc.
(2)
--------- --------- ----------- ----------
Gain (loss) on derivatives $(1,873) $ (1,886) $ 2,047 $(1,712)
Foreign exchange gain (loss) - (7,601) (1,962) (9,563)
Minority interest 1,546 1,212 - 2,758
------- -------- ------- -------
Net amount included in FFO $ (327) $ (8,275) $ 85 $(8,517)
======= ======== ======= =======
Table 5: SHURGARD STORAGE CENTERS, INC.
EARNINGS PER SHARE (unaudited)
Earnings Per Share Per Share for the three and six months ended
June 30, 2005 and 2004
Basic &
Diluted
(in thousands except per share Earnings Per
data) share
-------- -------
For the three months ended June 30,
2005
Weighted-average number of shares 46,600
Loss from continuing operations $ (727)
Less: preferred distributions and
other (3,039)
-------
Loss from continuing operations
available
to common shareholders adjusted (3,766)$ (0.08)
Discontinued operations 34 -
------- -------
Net Loss $(3,732)$ (0.08)
======= =======
Effect of
Basic dilutive Diluted
(in thousands except per share Per stock Per
data) Earnings share options share
-------- ------ --------- --------
For the three months ended June 30,
2004
Weighted-average number of shares 45,763 579 46,342
Income from continuing operations $ 8,316
Less: preferred distributions and
other (3,059)
-------
Income from continuing operations
available
to common shareholders adjusted 5,257 $ 0.12 $(0.01) $ 0.11
Discontinued operations 12,491 0.27 - 0.27
------- ------- ------ -------
Net Income $17,748 $ 0.39 $(0.01) $ 0.38
======= ======= ====== =======
Basic &
Diluted
(in thousands except per share Earnings Per
data) share
-------- -------
For the six months ended June 30,
2005
Weighted-average number of shares 46,557
Loss from continuing operations $(1,962)
Less: preferred distributions and
other (6,080)
-------
Loss from continuing operations
available
to common shareholders adjusted (8,042)$ (0.17)
Discontinued operations 6,525 0.14
------- -------
Net Loss $(1,517)$ (0.03)
======= =======
Effect of
Basic dilutive Diluted
(in thousands except per share Per stock Per
data) Earnings share options share
-------- ------ --------- --------
For the six months ended June 30,
2004
Weighted-average number of shares 45,708 641 46,349
Income from continuing operations $ 9,858
Less: preferred distributions and
other (6,116)
-------
Income from continuing operations
available
to common shareholders adjusted 3,742 $ 0.08 $ - $ 0.08
Discontinued operations 12,983 0.28 - 0.28
Cumulative effect of change in
accounting principle (2,339) (0.05) - (0.05)
------- ------- ------ -------
Net Income $14,386 $ 0.31 $ - $ 0.31
======= ======= ====== =======
Table 6: SHURGARD STORAGE CENTERS, INC.
FFO PER SHARE (unaudited)
FFO Per Share for the three and six months ended June 30, 2005 and
2004
Effect of
Basic dilutive Diluted
(in thousands except per share Per stock Per
data) Earnings share options share
-------- ------- --------- --------
For the three months ended June 30,
2005
Weighted-average number of shares 46,600 727 47,327
FFO $18,437
Less: preferred distributions and
other (3,039)
-------
FFO available to common
shareholders adjusted $15,398 $ 0.33 $ - $ 0.33
======= ======= ====== =======
Effect of
Basic dilutive Diluted
(in thousands except per share Per stock Per
data) Earnings share options share
-------- ------- --------- --------
For the three months ended June 30,
2004
Weighted-average number of shares 45,763 579 46,342
FFO $27,554
Less: preferred distributions and
other (3,059)
-------
FFO available to common
shareholders adjusted $24,495 $ 0.55 $(0.02) $ 0.53
======= ======= ====== =======
Effect of
Basic dilutive Diluted
(in thousands except per share Per stock Per
data) Earnings share options share
-------- ------- --------- --------
For the six months ended June 30,
2005
Weighted-average number of shares 46,557 713 47,270
FFO $37,005
Less: preferred distributions and
other (6,080)
-------
FFO available to common
shareholders adjusted $30,925 $ 0.66 $(0.01) $ 0.65
======= ======= ====== =======
Effect of
Basic dilutive Diluted
(in thousands except per share Per stock Per
data) Earnings share options share
-------- ------- --------- --------
For the six months ended June 30,
2004
Weighted-average number of shares 45,708 641 46,349
FFO $47,467
Less: preferred distributions and
other (6,116)
-------
FFO available to common
shareholders adjusted $41,351 $ 0.90 $(0.01) $ 0.89
======= ======= ====== =======
Table 7: SHURGARD STORAGE CENTERS, INC.
SEGMENT REPORTING INFORMATION RESULTS (unaudited)
Segment reporting information results for the three months ended
June 30, 2005
Three months ended June 30, 2005
(dollars in Domestic Europe Total
thousands
except average
rent)
----------------- ----------------- -----------------
Same Store (1) Amount % of Amount % of Amount % of
total total total
---------------- ----------------- ----------------- -----------------
Number of
Storage Centers 444 92% 96 69% 540 87%
Segment Revenues $ 82,431 93% $ 25,139 81% $ 107,570 90%
NOI after indirect
and leasehold
expense $ 49,770 95% $ 10,355 110% $ 60,125 97%
Avg. annual rent
per sq. ft.(3) $ 11.99 $ 22.16
Avg. sq. ft.
occupancy 86% 78%
Total Storage
Center Costs
(4) $1,776,408 89% $ 823,157 73% $2,599,565 83%
New Store (2)
----------------
Number of
Storage Centers 40 8% 43 31% 83 13%
Segment Revenues $ 5,899 7% $ 5,764 19% $ 11,663 10%
NOI after indirect
and leasehold
expense $ 2,710 5% $ (959) (10)% $ 1,751 3%
Avg. sq. ft.
occupancy 75% 45%
Total Storage
Center Costs
(4) $ 218,971 11% $ 310,513 27% $ 529,484 17%
Combined New and
Same Stores
----------------
Number of
Storage Centers 484 100% 139 100% 623 100%
Segment Revenues $ 88,330 100% $ 30,903 100% $ 119,233 100%
NOI after indirect
and leasehold
expense $ 52,480 100% $ 9,396 100% $ 61,876 100%
Total Storage
Center Costs
(4) $1,995,379 100% $1,133,670 100% $3,129,049 100%
(1) Our definition of Same Store includes existing storage centers
acquired prior to January 1 of the previous year as well as
developed properties that have been operating for a full two years
as of January 1 of the current year. Our definition of Same Store
results in the addition of storage centers each year as new
acquisitions and developments meet the criteria for inclusion, so
we then include these storage centers in the previous year's
comparable data. Other storage companies may define Same Store
differently, which will affect the comparability of the data.
(2) Our definition of New Store, as shown in the table above, includes
existing domestic facilities that had not been acquired or leased
as of January 1 of the previous year as well as developed
properties that have not been operating a full two years as of
January 1 of the current year.
(3) Average annual rent per square foot is calculated by dividing
actual rent collected by the average number of square feet
occupied during the period.
(4) Total costs capitalized to storage centers.
Table 8: SHURGARD STORAGE CENTERS, INC.
SEGMENT REPORTING INFORMATION RESULTS (unaudited)
Segment reporting information results for the three months ended
June 30, 2004
Three months ended
June 30, 2004
(dollars in thousands Domestic Europe (4) Total
except average rent)
-------------- -------------- ---------------
Same Store (1) Amount % of Amount % of Amount % of
total total total
-------------------------------- ------ ------- ------ ------- -------
Number of Storage Centers 444 96% 96 77% 540 92%
Segment Revenues $77,863 98% $22,579 91% $100,442 96%
NOI after indirect
and leasehold expense $48,102 100% $ 8,514 134% $ 56,616 104%
Avg. annual rent per sq.
ft. (3) $ 11.49 $ 22.46
Avg. sq. ft. occupancy 85% 68%
New Store (2)
-------------------------
Number of Storage Centers 20 4% 28 23% 48 8%
Segment Revenues $ 1,747 2% $ 2,243 9% $ 3,990 4%
NOI after indirect
and leasehold expense $ 115 0% $(2,160) (34)% $ (2,045) (4)%
Avg. sq. ft. occupancy 51% 16%
Combined New and Same
Stores
-------------------------
Number of Storage Centers 464 100% 124 100% 588 100%
Segment Revenues $79,610 100% $24,822 100% $104,432 100%
NOI after indirect
and leasehold expense $48,217 100% $ 6,354 100% $ 54,571 100%
(1) Our definition of Same Store includes existing storage centers
acquired prior to January 1 of the previous year as well as
developed properties that have been operating for a full two years
as of January 1 of the current year. Our definition of Same Store
results in the addition of storage centers each year as new
acquisitions and developments meet the criteria for inclusion, so
we then include these storage centers in the previous year's
comparable data. Other storage companies may define Same Store
differently, which will affect the comparability of the data.
(2) Our definition of New Store, as shown in the table above, includes
existing domestic facilities that had not been acquired or leased
as of January 1 of the previous year as well as developed
properties that have not been operating a full two years as of
January 1 of the current year.
(3) Average annual rent per square foot is calculated by dividing
actual rent collected by the average number of square feet
occupied during the period.
(4) Amounts for 2004 have been translated from local currencies to
U.S. dollars at a constant exchange rate using the average
exchange rates for the quarter ended 2005.
Table 9: SHURGARD STORAGE CENTERS, INC.
DOMESTIC QUARTER TO DATE SAME STORE RESULTS (unaudited)
Domestic Same Store Results for the three and six months ended June
30, 2005 and 2004
Same Store Results (1)
For the three months ended June 30,
-----------------------------------
(dollars in thousands except
average rent) 2005 2004 % Change
----------- ----------- ----------
Segment revenue $ 82,431 $ 77,863 5.9%
Operating expense:
Personnel expenses 9,176 8,656 6.0%
Real estate taxes 7,341 6,679 9.9%
Repairs and maintenance 2,293 2,300 (0.3)%
Marketing expense 2,313 2,015 14.8%
Utilities and phone expenses 2,440 2,507 (2.7)%
Cost of goods sold 1,197 1,034 15.8%
Store admin and other
expenses 2,500 2,366 5.7%
----------- -----------
Direct operating and real
estate tax expense 27,260 25,557 6.7%
----------- -----------
NOI 55,171 52,306 5.5%
Leasehold expense 1,029 939 9.6%
----------- -----------
NOI after leasehold expense 54,142 51,367 5.4%
Indirect operating expense (2) 4,372 3,265 33.9%
----------- -----------
NOI after indirect operating
and leasehold expense $ 49,770 $ 48,102 3.5%
=========== ===========
Avg. annual rent per sq.ft. $ 11.99 $ 11.49 4.4%
Avg. sq.ft. occupancy 86% 85%
Total net rentable sq.ft. 29,284,000 29,284,000
Number of properties as
of June 30 444 444
For the six months ended June 30,
-------------------------------------
(dollars in thousands except
average rent) 2005 2004 % Change
----------- ----------- -----------
Segment revenue $ 160,671 $ 151,838 5.8%
Operating expense:
Personnel expenses 18,028 16,887 6.8%
Real estate taxes 14,865 13,947 6.6%
Repairs and maintenance 4,577 4,762 (3.9)%
Marketing expense 4,244 3,763 12.8%
Utilities and phone expenses 5,390 5,391 0.0%
Cost of goods sold 2,031 1,781 14.0%
Store admin and other
expenses 5,717 4,785 19.5%
----------- -----------
Direct operating and real
estate tax expense 54,852 51,316 6.9%
----------- -----------
NOI 105,819 100,522 5.3%
Leasehold expense 2,158 1,964 9.9%
----------- -----------
NOI after leasehold expense 103,661 98,558 5.2%
Indirect operating expense (2) 8,199 6,473 26.7%
----------- -----------
NOI after indirect operating
and leasehold expense $ 95,462 $ 92,085 3.7%
=========== ===========
Avg. annual rent per sq.ft. $ 11.91 $ 11.43 4.2%
Avg. sq.ft. occupancy 85% 84%
Total net rentable sq.ft. 29,284,000 29,284,000
Number of properties as
of June 30 444 444
(1) Table includes the total operating results of each storage center
regardless of our percentage ownership interest in that storage
center.
(2) Indirect operating expense includes certain shared property costs
such as district and corporate management, purchasing, national
contracts personnel and marketing, as well as certain overhead
costs allocated to property operations such as business
information technology, legal services, human resources and
accounting. Does not include containerized storage operations,
internal real estate acquisition cost or abandoned development
expense. Indirect operating expense is allocated to storage
centers based on number of months in operation during the period.
(3) Average annual rent per square foot is calculated by dividing
actual rent collected by the average number of square feet
occupied during the period.
Table 10: SHURGARD STORAGE CENTERS, INC.
SUMMARY OF OPERATING SELF STORAGE PROPERTIES (unaudited)
Summary of Operating Self Storage Properties as of June 30,
2005
Domestic European
---------------------- ---------------------
Number of Net Number of Net
Rentable Rentable
Properties Square Feet Properties Square
Feet
---------- ----------- ---------- ----------
100% owned or leased 380 24,605,000 103 5,613,000
Partially owned or
leased, consolidated 104 7,285,000 36 1,788,000
Fee managed 20 1,206,000 - -
---------- ----------- ---------- ----------
504 33,096,000 139 7,401,000
========== =========== ========== ==========
Total
-----------------------
Number of Net Rentable
Properties Square Feet
---------- ------------
100% owned or leased 483 30,218,000
Partially owned or
leased, consolidated 140 9,073,000
Fee managed 20 1,206,000
---------- ------------
643 40,497,000
========== ============
Table 11: SHURGARD STORAGE CENTERS, INC.
EUROPE QUARTER TO DATE SAME STORE RESULTS (unaudited)
Europe Same Store Results for three and six months ended June 30,
2005 and 2004 (1)
Three months ended June 30,
-------------------------------
(in thousands except average
rent) 2005 2004 % Change
---------- ---------- ----------
Segment revenue $ 25,139 $ 22,579 11.3%
Operating expense:
Personnel expenses 3,629 3,392 7.0%
Real estate taxes 1,164 1,131 2.9%
Repairs and maintenance 806 929 (13.2)%
Marketing expense 1,840 2,117 (13.1)%
Utilities and phone expenses 685 585 17.1%
Cost of goods sold 938 845 11.0%
Store admin and other expenses 1,919 1,760 9.0%
---------- ----------
Direct operating and real
estate tax expense 10,981 10,759 2.1%
---------- ----------
NOI 14,158 11,820 19.8%
Leasehold expense 498 476 4.6%
---------- ----------
NOI after leasehold expense 13,660 11,344 20.4%
Indirect operating expense (2) 3,305 2,830 16.8%
---------- ----------
NOI after indirect operating
and leasehold expense $ 10,355 $ 8,514 21.6%
========== ==========
Avg. annual rent per sq. ft.
(3) $ 22.16 $ 22.46 (1.3)%
Avg. sq. ft. occupancy 78% 68% 14.7%
Total net rentable sq. ft. 5,287,000 5,287,000
Number of properties 96 96
Six months ended June 30,
-----------------------------------
(in thousands except average
rent) 2005 2004 (5) % Change
---------- ---------- ----------
Segment revenue $ 50,437 $ 44,958 12.2%
Operating expense:
Personnel expenses 7,126 6,701 6.3%
Real estate taxes 2,358 2,323 1.5%
Repairs and maintenance 1,737 1,846 (5.9)%
Marketing expense 4,189 4,073 2.8%
Utilities and phone expenses 1,571 1,358 15.7%
Cost of goods sold 1,837 1,616 13.7%
Store admin and other expenses 3,948 3,524 12.0%
---------- ----------
Direct operating and real
estate tax expense 22,766 21,441 6.2%
---------- ----------
NOI 27,671 23,517 17.7%
Leasehold expense 1,020 974 4.7%
---------- ----------
NOI after leasehold expense 26,651 22,543 18.2%
Indirect operating expense (2) 6,687 5,825 14.8%
---------- ----------
NOI after indirect operating
and leasehold expense $ 19,964 $ 16,718 19.4%
========== ==========
Avg. annual rent per sq. ft.
(3) $ 22.90 $ 22.81 0.4%
Avg. sq. ft. occupancy 75% 67% 11.9%
Total net rentable sq. ft. 5,287,000 5,287,000
Number of properties 96 96
(1) Amounts for both years have been translated from local currencies
at a constant exchange rate using the average exchange rate for
the three and six months ended June 30, 2005 for the 2005 to 2004
comparison.
(2) Indirect operating expense includes certain shared property costs
such as district and regional management, national contracts
personnel and marketing, as well as certain overhead costs
allocated to property operations such as business information
technology, human resources and accounting. It does not include
internal real estate acquisition cost or abandoned development
expense. Indirect operating expense is allocated to storage
centers based on number of months in operation during the period.
(3) Average annual rent per square foot is calculated by dividing
actual rent collected by the average number of square feet
occupied during the period.
Table 12: SHURGARD STORAGE CENTERS, INC.
EUROPEAN 2005 QUARTERLY COMPARISON (unaudited)
Quarterly comparison for European same store of second quarter 2005
versus second quarter 2004
Percent change compared to prior
year quarter
----------------------------------
Number of Q2 2005 Q2 Q2 NOI Q2 Q2
Properties Average Segment (after Occupancy Rate
Occupancy Revenue leasehold
expenses)
---------- --------- ------- --------- --------- ------
Belgium 17 76% 2.5% (0.2)% 5.3% (1.1)%
Netherlands 22 71% 15.5% 6.7% 21.9% (3.6)%
France 23 83% 11.7% 41.1% 11.4% 0.0%
Sweden 20 79% 12.8% 27.5% 14.4% 1.8%
Denmark 4 87% 35.9% 97.5% 32.4% 0.7%
United Kingdom 10 76% 6.8% 8.1% 18.4% (8.6)%
---------- --------- ------- --------- --------- ------
Europe Totals 96 78% 11.3% 20.4% 14.7% (1.3)%
========== ========= ======= ========= ========= ======
Table 13: SHURGARD STORAGE CENTERS, INC.
DOMESTIC YEAR TO DATE SAME STORE VINTAGE TABLE (unaudited)
Domestic Same Store Vintage Analysis for the three months ended June
30, 2005 and 2004
Total Net
(in Rentable
millions) sq. ft. Average Occupancy
Total when --------------------
Storage all phases Three months ended
Number of Center are --------------------
Properties Cost (1) complete 6/30/2005 6/30/2004
----------- ---------- ----------- --------------------
Same Store
since 2005 34 $178.3 2,322,000 83% 79%
Same Store
since 2004 59 217.7 4,389,000 81% 78%
Same Store
since 2003 or
prior 351 1,380.4 22,573,000 87% 87%
----------- ---------- ----------- --------------------
Same Store
total 444 $1,776.4 29,284,000 86% 85%
=========== ========== =========== ====================
(in thousands)
(in thousands) NOI
Average Annual Rent Segment (after leasehold
(per sq. ft) (2) Revenue expense)
-------------------- -------------------- -------------------
Three months ended Three months ended Three months ended
-------------------- -------------------- -------------------
6/30/2005 6/30/2004 6/30/2005 6/30/2004 6/30/2005 6/30/2004
--------- ---------- --------- ---------- --------- ---------
Same
Store
since
2005 $12.50 $11.80 $6,515 $5,834 $3,682 $3,184
Same
Store
since
2004 8.58 7.96 8,379 7,477 5,092 4,436
Same
Store
since
2003 or
prior 12.56 12.08 67,537 64,552 45,368 43,747
--------- ----------- -------- ------------ ------- ---------
Same
Store
total $11.99 $11.49 $82,431 $77,863 $54,142 $51,367
========= =========== ======== ============ ======= =========
(1) Total capitalized costs to storage centers since the store was
acquired or developed.
(2) Average annual rent per square foot is calculated by dividing
actual rent collected by the average number of square feet
occupied during the period.
Table 14: SHURGARD STORAGE CENTERS, INC.
EUROPEAN DEVELOPMENT (in US Dollars) (unaudited)
European Development Performance Vintage Analysis for the three
months ended June 30, 2005 and 2004
Average
(in millions) Occupancy
Storage Center Total Net -----------
Cost Rentable For the
Number ---------------- sq. ft. three months
of Devel- when all ended June 30,
Prop- opment Total phases are -----------
New store: erties Cost (1) Cost (2) complete 2005 2004
---------- ------- ------- ------- ---------- -----------
Opened in 2005
Germany 1 $ 5.2 $ 5.3 47,000 1.9% -
France 1 4.5 4.5 56,000 3.4% -
Denmark 1 6.1 6.1 50,000 9.7% -
United Kingdom 1 11.8 11.8 37,000 5.9% -
------ ------ ------ ---------- -----------
Total opened in
2005 4 $ 27.6 $ 27.7 190,000 5.2% -
------ ------ ------ ---------- -----------
Opened in 2004
Germany 4 $ 25.3 $ 25.4 202,000 31.5% -
France 4 22.8 22.9 167,000 29.7% -
Denmark 2 14.0 14.0 101,000 48.9% 8.3%
United Kingdom 3 31.2 31.6 123,000 31.4% 1.4%
------ ------ ------ ---------- -----------
Total opened in
2004 13 $ 93.3 $ 93.9 593,000 33.9% 1.7%
------ ------ ------ ---------- -----------
Opened in 2003
Belgium 1 $ 3.3 $ 4.6 45,000 73.2% 45.5%
Netherlands 7 37.6 39.9 351,000 55.3% 25.2%
Germany 5 33.8 33.9 268,000 48.7% 20.1%
France 7 41.7 45.4 372,000 51.4% 20.7%
Sweden 2 10.9 13.8 94,000 62.6% 31.0%
Denmark 1 7.5 10.0 49,000 97.4% 46.0%
United Kingdom 3 32.2 41.3 152,000 55.4% 26.7%
------ ------ ------ ---------- -----------
Total opened in
2003 26 $167.0 $188.9 1,331,000 55.5% 24.9%
------ ------ ------ ---------- -----------
------ ------- ------- ---------- -----------
New Store Total 43 $287.9 $310.5 2,114,000 44.9% 16.2%
====== ====== ====== ========== ===========
Same store:
-------------------
Opened in 2002
Belgium 2 $ 7.0 $ 9.9 101,000 52.5% 42.9%
Netherlands 7 38.9 55.1 368,000 60.4% 43.4%
France 7 41.5 59.4 378,000 72.3% 57.0%
Sweden 3 17.2 25.0 151,000 78.0% 62.4%
Denmark 2 14.0 20.0 102,000 86.7% 56.9%
United Kingdom 3 33.5 50.4 166,000 74.0% 54.7%
------ ------ ------ ---------- -----------
Total opened in
2002 24 $152.1 $219.8 1,266,000 69.3% 52.3%
------ ------ ------ ---------- -----------
Opened in 2001 and
before
Belgium 15 $ 67.8 $101.2 894,000 78.9% 75.8%
Netherlands 15 77.7 114.9 821,000 76.2% 65.3%
France 16 87.9 133.1 854,000 87.3% 81.9%
Sweden 17 87.9 137.0 974,000 79.0% 69.9%
Denmark 2 12.9 18.7 107,000 86.3% 73.3%
United Kingdom 7 65.6 98.5 371,000 77.1% 68.6%
------ ------ ------ ---------- -----------
Total opened before
2002 72 $399.8 $603.4 4,021,000 80.2% 72.8%
------ ------ ------ ---------- -----------
Same Store Total 96 $551.9 $823.2 5,287,000 77.6% 67.9%
====== ====== ====== ========== ===========
$293.9
Average Annual (in thousands)
Rent (in thousands) NOI (3)
(per sq. ft) (3) Segment (after leasehold
(4) Revenue (3) expense)
---------------- ---------------- ----------------
For the three For the three For the three
months months months
ended June 30, ended June 30, ended June 30,
---------------- ---------------- ----------------
New store: 2005 2004 2005 2004 2005 (5) 2004
------------------- ------ ------ ------- ------- -------- ------
Opened in 2005
Germany $ - $ - $ - $ - $ (157)$ -
France - - 1 - (45) -
Denmark 10.31 - 21 - (119) -
United Kingdom 14.44 - 10 - (122) -
------ ------ ------- ------- -------- ------
Total opened in
2005 $ 8.37 $ - $ 32 $ - $ (443)$ -
------ ------ ------- ------- -------- ------
Opened in 2004
Germany $17.25 $ - $ 291 $ - $ (65) $ (88)
France 19.76 - 288 - (99) (97)
Denmark 20.36 6.42 301 23 53 (114)
United Kingdom 47.56 50.82 497 35 143 (43)
------ ------ ------- ------- -------- ------
Total opened in
2004 $24.46 $13.97 $ 1,377 $ 58 $ 32 $ (342)
------ ------ ------- ------- -------- ------
Opened in 2003
Belgium $14.87 $14.93 $ 135 $ 84 $ 53 $ 26
Netherlands 19.55 21.41 1,003 510 116 (117)
Germany 14.50 17.07 507 247 29 (262)
France 20.85 22.79 1,151 529 367 (352)
Sweden 18.60 17.90 323 164 93 (30)
Denmark 22.66 22.85 299 148 147 49
United Kingdom 40.27 44.18 937 503 409 24
------ ------ ------- ------- -------- ------
Total opened in
2003 $21.27 $23.20 $ 4,355 $ 2,185 $ 1,214 $ (662)
------ ------ ------- ------- -------- ------
New Store Total $21.81 $22.93 $ 5,764 $ 2,243 $ 803 $(1,004)
====== ====== ======= ======= ======== ======
Same store:
-------------------
Opened in 2002
Belgium $12.67 $13.05 $ 182 $ 152 $ 37 $ 18
Netherlands 19.53 20.77 1,164 882 385 360
France 20.12 20.16 1,598 1,265 761 276
Sweden 22.17 20.73 732 555 403 224
Denmark 21.94 22.65 533 359 287 112
United Kingdom 37.78 43.38 1,286 1,094 718 546
------ ------ ------- ------- -------- ------
Total opened in
2002 $22.45 $23.33 $ 5,495 $ 4,307 $ 2,591 $ 1,536
------ ------ ------- ------- -------- ------
Opened in 2001 and
before
Belgium $16.24 $16.38 $ 3,154 $ 3,103 $ 1,953 $ 1,976
Netherlands 20.67 21.25 3,375 3,047 1,758 1,649
France 25.48 25.22 5,347 4,953 3,104 2,464
Sweden 20.86 20.79 4,487 4,071 2,374 1,954
Denmark 22.24 21.45 582 462 300 185
United Kingdom 33.89 37.49 2,699 2,636 1,580 1,580
------ ------ ------- ------- -------- ------
Total opened before
2002 $22.08 $22.38 $19,644 $18,272 $11,069 $ 9,808
------ ------ ------- ------- ------- ------
---------------- ---------------- ------- ------
Same Store Total $22.16 $22.46 $25,139 $22,579 $13,660 $11,344
====== ====== ======= ======= ======= ======
(1) The total development cost of these projects is reported in U.S.
dollars translated at the June 30, 2005 exchange rate of $1.21 to
the euro. The operating results (see note (2) below) are reported
at the average exchange rate for the three months ended June 30,
2005 which was $1.26 to the euro. As these exchange rates are
different we believe it does not allow for an accurate measure of
property investment yield. We believe the application of a
constant exchange rate to both the property cost and operating
results would provide a more meaningful measure of investment
yield.
(2) The total cost of the storage centers includes additional costs of
approximately $293.9 million we paid to acquire additional
interests in Shurgard Europe in 2003 through 2005. The amounts
have been translated at the June 30, 2005 exchange rate.
(3) The amounts have been translated from local currencies at a
constant exchange rate using the average exchange rate for the
second quarter of 2005.
(4) Average annual rent per square foot is calculated by dividing
actual rent collected by the average number of square feet
occupied during the period. On the year of opening the average
annual rent is lower as the store had not been opened a full year.
(5) Expenses in some instances may include certain pre-opening costs.
Table 15: SHURGARD STORAGE CENTERS, INC.
EUROPEAN DEVELOPMENT (in Euros) (unaudited)
European Development Performance Vintage Analysis for the three
months ended June 30, 2005 and 2004
(in millions)
Storage Center Total Net
Cost Rentable
Number ---------------------- sq. ft.
of Devel- when all
Prop- opment Total phases are
New store: erties Cost Cost (1) complete
------------------ ------- ---------- ----------- ----------
Opened in 2005
Germany 1 EUR 4.3 EUR 4.4 47,000
France 1 3.7 3.7 56,000
Denmark 1 5.1 5.1 50,000
United Kingdom 1 9.8 9.8 37,000
------- ---------- ----------- ----------
Total opened in
2005 4 EUR 22.9 EUR 23.0 190,000
------- ---------- ----------- ----------
Opened in 2004
Germany 4 EUR 21.0 EUR 21.2 202,000
France 4 18.9 19.0 167,000
Denmark 2 11.6 11.6 101,000
United Kingdom 3 25.9 26.3 123,000
------- ---------- ----------- ----------
Total opened in
2004 (a) 13 EUR 77.4 EUR 78.1 593,000
------- ---------- ----------- ----------
Opened in 2003
Belgium 1 EUR 2.7 EUR 3.8 45,000
Netherlands 7 31.2 33.1 351,000
Germany 5 28.0 28.1 268,000
France 7 34.6 37.5 372,000
Sweden 2 9.0 11.4 94,000
Denmark 1 6.2 8.3 49,000
United Kingdom 3 26.7 34.2 152,000
------- ---------- ----------- ----------
Total opened in
2003 (b) 26 EUR 138.4 EUR 156.4 1,331,000
------- ---------- ----------- ----------
New Store Total 43 EUR 238.7 EUR 257.5 2,114,000
======= ========== =========== ==========
Same store:
------------------
Opened in 2002
Belgium 2 EUR 5.8 EUR 8.2 101,000
Netherlands 7 32.2 45.7 368,000
France 7 34.4 49.2 377,000
Sweden 3 14.3 20.7 151,000
Denmark 2 11.6 16.6 102,000
United Kingdom 3 27.8 41.8 166,000
------- ---------- ----------- ----------
Total opened in
2002 (c) 24 EUR 126.1 EUR 182.2 1,265,000
------- ---------- ----------- ----------
Opened in 2001 and
before
Belgium 15 EUR 56.2 EUR 83.9 894,000
Netherlands 15 64.4 95.3 821,000
France 16 72.9 110.2 855,000
Sweden 17 72.9 113.6 974,000
Denmark 2 10.7 15.5 107,000
United Kingdom 7 54.4 81.6 371,000
------- ---------- ----------- ----------
Total opened
before 2002 72 EUR 331.5 EUR 500.1 4,022,000
------- ---------- ----------- ----------
Same Store Total 96 EUR 457.6 EUR 682.3 5,287,000
======= ========== =========== ==========
Average Average Annual Rent
Occupancy (per sq. ft) (2)(3)
-------------- -------------------------
For the For the
three months three months
ended June 30, ended June 30,
--------------------- -------------------------
New store: 2005 2004 2005 2004
---------- -------- ----------- ------------- -----------
Opened in 2005
Germany 1.9% - EUR - EUR -
France 3.4% - - -
Denmark 9.7% - 8.18 -
United Kingdom 5.9% - 11.46 -
-------- ----------- ------------- -----------
Total opened in
2005 5.2% - EUR 6.64 EUR -
-------- ----------- ------------- -----------
Opened in 2004
Germany 31.5% - EUR 13.69 EUR -
France 29.7% - 15.69 -
Denmark 48.9% 8.3% 16.17 5.10
United Kingdom 31.4% 1.4% 37.77 40.36
-------- ----------- ------------- -----------
Total opened in
2004 (a) 33.9% 1.7% EUR 19.43 EUR 11.09
-------- ----------- ------------- -----------
Opened in 2003
Belgium 73.2% 45.5% EUR 11.81 EUR 11.85
Netherlands 55.3% 25.2% 15.52 17.00
Germany 48.7% 20.1% 11.51 13.55
France 51.4% 20.7% 16.56 18.10
Sweden 62.6% 31.0% 14.77 14.21
Denmark 97.4% 46.0% 18.00 18.14
United Kingdom 55.4% 26.7% 31.98 35.08
-------- ----------- ------------- -----------
Total opened in
2003 (b) 55.5% 24.9% EUR 16.89 EUR 18.42
-------- ----------- ------------- -----------
New Store Total 44.9% 16.2% EUR 17.32 EUR 18.21
======== =========== ============= ===========
Same store:
------------------
Opened in 2002
Belgium 52.5% 42.9% EUR 10.06 EUR 10.36
Netherlands 60.4% 43.4% 15.51 16.49
France 72.3% 57.0% 15.98 16.01
Sweden 78.0% 62.4% 17.61 16.46
Denmark 86.7% 56.9% 17.42 17.99
United Kingdom 74.0% 54.7% 30.00 34.45
-------- ----------- ------------- -----------
Total opened in
2002 (c) 69.3% 52.3% EUR 17.83 EUR 18.52
-------- ----------- ------------- -----------
Opened in 2001 and
before
Belgium 78.9% 75.8% EUR 12.89 EUR 13.01
Netherlands 76.2% 65.3% 16.42 16.87
France 87.3% 81.9% 20.23 20.03
Sweden 79.0% 69.9% 16.56 16.51
Denmark 86.3% 73.3% 17.66 17.03
United Kingdom 77.1% 68.6% 26.91 29.77
-------- ----------- ------------- -----------
Total opened
before 2002 80.2% 72.8% EUR 17.53 EUR 17.77
-------- ----------- ------------- -----------
Same Store Total 77.6% 67.9% EUR 17.59 EUR 17.91
======== =========== ============= ===========
(in thousands)
Segment
Revenue (2)
-------------------------
For the
three months
ended June 30,
-------------------------
New store: 2005 2004
------------------ ------------ ------------
Opened in 2005
Germany EUR - EUR -
France 1 -
Denmark 17 -
United Kingdom 8 -
------------ ------------
Total opened in
2005 EUR 26 EUR -
------------ ------------
Opened in 2004
Germany EUR 231 EUR -
France 229 -
Denmark 239 19
United Kingdom 394 29
------------ ------------
Total opened in
2004 (a) EUR 1,093 EUR 48
------------ ------------
Opened in 2003
Belgium EUR 107 EUR 67
Netherlands 796 405
Germany 402 196
France 914 419
Sweden 256 131
Denmark 238 118
United Kingdom 744 407
------------ ------------
Total opened in
2003 (b) EUR 3,457 EUR 1,743
------------ ------------
New Store Total EUR 4,576 EUR 1,791
============ ============
Same store:
------------------
Opened in 2002
Belgium EUR 144 EUR 121
Netherlands 924 700
France 1,269 1,005
Sweden 582 443
Denmark 423 285
United Kingdom 1,021 884
------------ ------------
Total opened in
2002 (c) EUR 4,363 EUR 3,438
------------ ------------
Opened in 2001 and
before
Belgium EUR 2,505 EUR 2,464
Netherlands 2,680 2,419
France 4,246 3,933
Sweden 3,563 3,255
Denmark 462 367
United Kingdom 2,143 2,131
------------ ------------
Total opened
before 2002 EUR 15,599 EUR 14,569
------------ ------------
Same Store Total EUR 19,962 EUR 18,007
============ ============
(in thousands)
NOI (2)
(after leasehold
expense)
----------------------------
For the
three months
ended June 30,
----------------------------
New store: 2005 (4) 2004
------------------ --------------- ------------
Opened in 2005
Germany EUR (125) EUR -
France (36) -
Denmark (95) -
United Kingdom (97) -
--------------- ------------
Total opened in
2005 EUR (353) EUR -
--------------- ------------
Opened in 2004
Germany EUR (52) EUR (70)
France (79) (77)
Denmark 42 (90)
United Kingdom 113 (35)
--------------- ------------
Total opened in
2004 (a) EUR 24 EUR (272)
--------------- ------------
Opened in 2003
Belgium EUR 42 EUR 20
Netherlands 92 (93)
Germany 23 (208)
France 292 (280)
Sweden 74 (24)
Denmark 117 39
United Kingdom 325 19
--------------- ------------
Total opened in
2003 (b) EUR 965 EUR (527)
--------------- ------------
New Store Total EUR 636 EUR (799)
=============== ============
Same store:
------------------
Opened in 2002
Belgium EUR 29 EUR 14
Netherlands 306 286
France 604 219
Sweden 320 179
Denmark 228 89
United Kingdom 570 441
--------------- ------------
Total opened in
2002 (c) EUR 2,057 EUR 1,228
--------------- ------------
Opened in 2001 and
before
Belgium EUR 1,551 EUR 1,569
Netherlands 1,396 1,309
France 2,465 1,956
Sweden 1,885 1,562
Denmark 238 147
United Kingdom 1,255 1,277
--------------- ------------
Total opened
before 2002 EUR 8,790 EUR 7,820
--------------- ------------
Same Store Total EUR 10,847 EUR 9,048
=============== ============
(1) The total cost of the storage centers includes additional costs of
approximately EUR 243.5 million we paid to acquire additional
interests in Shurgard Europe in 2003 through 2005.
(2) The amounts have been translated from local currencies at a
constant exchange rate using the average exchange rate for the
second quarter of 2005.
(3) Average annual rent per square foot is calculated by dividing
actual rent collected by the average number of square feet
occupied during the period. On the year of opening the average
annual rent is lower as the store had not been opened a full year.
(4) Expenses in some instances may include certain pre-opening costs.
Table 16: SHURGARD STORAGE CENTERS, INC.
FOREIGN EXCHANGE TRANSLATION (unaudited)
Foreign exchange translation for three and six months ended June
30, 2005 and 2004
With the growth in the Company's foreign operations, foreign currency
translation has a greater impact on the quarterly reporting of our
financial results. Foreign currency translation could cause volatility
in the reported financial results of the Company and otherwise limit
the comparability of operating results and financial position from one
period over another. Specifically, generally accepted accounting
principles ("GAAP") prescribe specific foreign currency translation
standards. For example, assets and liabilities are translated at the
exchange rate in effect at the end of the applicable period. Revenue,
expenses, and other components of the income statement and statement
of cash flows are shown at the average exchange rate during the
applicable period. For the quarter ended June 30, 2005, the average
exchange rate between the Euro and the U.S. Dollar was $1.26 per Euro.
During the quarter ended June 30, 2004, the average exchange rate was
$1.20 per Euro. During the six months ended June 30, 2005, the average
exchange rate was $1.29 per Euro. During the six months ended June 30,
2004, the average exchange rate was $1.23 per Euro. Revenues and total
expenses for Shurgard Europe increased $1.0 million and $0.9 million,
respectively, in the second quarter of 2005 over the second quarter of
2004. Revenues and total expenses for Shurgard Europe increased $2.1
million and $1.9 million, respectively, in the first six months of
2005 over the first six months of 2004. As of December 31, 2004 the
exchange rate between the Euro and the U.S. Dollar was $1.36 per Euro
compared to $1.21 per Euro as of June 30, 2005. Total assets and total
liabilities decreased approximately $84.9 million and $16.1 million,
respectively, from December 31, 2004 to June 30, 2005, as a result of
exchange rate variances.
Table 17: SHURGARD STORAGE CENTERS, INC.
STORE ASSET VALUES AND OPERATING INFORMATION SCHEDULE (unaudited)
Store asset values and operating information schedule for the three
months ended June 30, 2005
(in thousands except
for number of
properties) Net
No. of Ownership Rentable Occupancy
Properties interest (5) Square Feet (Q2 Avg)
---------- ------------ ----------- ---------
Same Store
-----------------------
Domestic wholly owned
or leased (1) 357 100% 23,085 85.1%
Domestic joint ventures
(2) 87 79% 6,199 82.5%
European wholly owned
or leased (1) 96 100% 5,287 77.6%
------ ------- -------
Total Same Store 540 34,571 83%
====== ======= =======
New Store
-----------------------
Domestic wholly owned
or leased developments
(1) 11 100% 605 66.1%
Domestic joint
ventures developments
(2) 12 68% 743 61.0%
Domestic acquisitions
(3) 17 94% 1,258 85.3%
European wholly owned
or leased developments
(1) 6 100% 288 53.5%
European 20%
development
ventures
developments(4) 36 20% 1,788 44.3%
European acquisition
(3) 1 100% 38 78.9%
------ ------- -------
Total New Store 83 4,720 61.5%
====== ======= =======
TOTALS 623 39,291 81%
====== ======= =======
(in thousands except
for Gross Book Applicable Segment Q2 Leasehold
number of properties) Value (6) debt (7) Revenue NOI (8) Expense
---------- ---------- ------- ------- --------
Same Store
-----------------------
Domestic wholly owned
or leased (1) $1,413,303 $ 50,027 $ 67,104 $44,985 $ 993
Domestic joint ventures
(2) 363,105 161,395 15,327 10,186 36
European wholly owned
or leased (1) 823,157 378,527 25,139 14,158 498
---------- -------- -------- ------- ------
Total Same Store $2,599,565 $589,949 $107,570 $69,329 $ 1,527
========== ======== ======== ======= ======
New Store
-----------------------
Domestic wholly owned
or leased developments
(1) $ 59,592 $ - $ 1,417 $ 441 $ 31
Domestic joint
ventures developments
(2) 62,619 2,364 1,816 922 -
Domestic acquisitions
(3) 96,760 33,973 2,666 1,733 -
European wholly owned
or leased developments
(1) 59,378 23,407 1,606 733 -
European 20%
development
ventures
developments(4) 236,141 153,200 3,780 (98) 84
European acquisition
(3) 14,994 - 378 252 -
---------- -------- -------- ------- -----
Total New Store $ 529,484 $212,944 $ 11,663 $ 3,983 $ 115
========== ======== ======== ======= =====
TOTALS $3,129,049 $802,893 $119,233 $73,312 $ 1,642
========== ======== ======== ======= =====
(1) Includes owned and leased properties in which we have a 100%
interest.
(2) Includes properties in which we own an interest less than 100% but
that are consolidated in our financial statements. The store
information and results reflected the full 100% amounts.
(3) Includes all stores acquired in 2005 and 2004.
(4) Includes properties developed under First and Second Shurgard in
which we hold a 20% interest.
(5) Represents ownership interest as of June 30, 2005.
(6) The actual completed cost of these projects are reported in U.S.
dollars translated at the June 30, 2005 exchange rate of $1.21 to
the Euro. Operating results are reported at the average exchange
rate for the three months ended June 30, 2005 which was $1.26 to
the Euro. As these exchange rates are different we believe it does
not allow for an accurate measure of property investment yield.
However, we believe the application of a constant exchange rate to
both the property cost and operating results may provide a more
meaningful measure of investment yield.
(7) Applicable debt represents debt secured by asset pool.
(8) Represents Net Operating Income after Direct Expenses. The
indirect expenses not included in NOI for Domestic Same Store,
European Same store, Domestic New Store and Europe Store are the
following (in thousands except indirect expense per revenue
dollar):
(9) Other items -- Shurgard Europe's balance sheet contains the
following line items:
Assets
Properties held for sale $ 3.2 m
Cash and cash equivalents $ 21.2 m
Other assets $ 64.7 m
Liabilities and equity
Intercompany note payable (a) This note is an asset on
$ 63.3 m the books of Shurgard Inc.
Other liabilities $ 104.2 m
Minority interest $ 81.2 m
Indirect
expense
Q2 indirect expense Q2 segment revenue per revenue
dollar
-------------------------------------- --------------
Domestic Europe Domestic Europe Domestic Europe
---------- ------- -------- -------- ------- ------
Same Store $4,372 $ 3,305 $82,431 $25,139 $0.05 $0.13
------ ------- ------- ------- ----- -----
New Store $ 355 $ 1,762 $ 5,899 $ 5,764 $0.06 $0.31
------ ------- ------- ------- ----- -----
*T