Sovran Self Storage Inc. (SSS, Financial) filed Quarterly Report for the period ended 2012-06-30.
Sovran Self Storage Inc has a market cap of $1.67 billion; its shares were traded at around $57.3 with a P/E ratio of 19.4 and P/S ratio of 7.9. The dividend yield of Sovran Self Storage Inc stocks is 3.1%.
Net operating income or NOI is a non-GAAP (generally accepted accounting principles) financial measure that we define as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense, amounts attributable to noncontrolling interests, impairment and casualty losses, depreciation and amortization expense, acquisition related costs, general and administrative expense, and deducting from net income: income from discontinued operations, interest income, gain on sale of real estate, and equity in income of joint ventures. We believe that NOI is a meaningful measure of operating performance because we utilize NOI in making decisions with respect to capital allocations, in determining current property values, and in comparing period-to-period and market-to-market property operating results. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income. There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income. The following table reconciles NOI generated by our self-storage facilities to our net income presented in the consolidated financial statements for three months ended June 30, 2012 and 2011.
We recorded rental revenues of $107.3 million for the six months ended June 30, 2012, an increase of $13.2 million or 14.0% when compared to rental revenues of $94.1 million for the same period in 2011. Of the increase in rental revenue, $3.5 million resulted from a 3.7% increase in rental revenues at the 345 core properties considered in same store sales (those properties included in the consolidated results of operations since January 1, 2011). The increase in same store rental revenues was a result of a 430 basis point increase in average quarterly occupancy which was offset by a 2.0% decrease in rental income per square foot. The remaining increase in rental revenue of $9.7 million resulted from the continued lease-up of our Richmond, Virginia property constructed in 2009 and the revenues from the acquisition of 33 properties completed since January 1, 2011. Other operating income, which includes merchandise sales, insurance commissions, truck rentals, management fees and acquisition fees, increased by $2.9 million for the six months ended June 30, 2012 compared to the same period in 2011 primarily as a result of increased commissions earned on customer insurance and from fees for managing the properties in the new joint venture (Sovran HHF Storage Holdings II LLC) which began operations in July 2011. We also earned a $0.1 million acquisition fee from the new joint venture in the six months ended June 30, 2012. There was no acquisition fee in the same period of 2011.
During the six months ended June 30, 2012, the Company issued 386,491 shares under this Equity Program at a weighted average issue price of $50.64 per share, generating net proceeds of $19.2 million after deducting $0.4 million of sales commissions payable to Wells Fargo. In addition to sales commissions paid to Wells Fargo, the Company incurred expenses of $31,000 in connection with the Equity Program during 2012. The Company expects to continue to offer, sell, and issue shares of common stock under the Equity Program from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under the Equity Program.
Our revenues typically have been higher in the third and fourth quarters, primarily because self-storage facilities tend to experience greater occupancy during the late spring, summer and early fall months due to the greater incidence of residential moves and college student activity during these periods. However, we believe that our customer mix, diverse geographic locations, rental structure and expense structure provide adequate protection against undue fluctuations in cash flows and net revenues during off-peak seasons. Thus, we do not expect seasonality to affect materially distributions to shareholders.
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Sovran Self Storage Inc has a market cap of $1.67 billion; its shares were traded at around $57.3 with a P/E ratio of 19.4 and P/S ratio of 7.9. The dividend yield of Sovran Self Storage Inc stocks is 3.1%.
Highlight of Business Operations:
We recorded rental revenues of $54.6 million for the three months ended June 30, 2012, an increase of $7.1 million or 15.0% when compared to rental revenues of $47.4 million for the same period in 2011. Of the increase in rental revenue, $2.0 million resulted from a 4.3% increase in rental revenues at the 345 core properties considered in same store sales (those properties included in the consolidated results of operations since April 1, 2011). The increase in same store rental revenues was a result of a 580 basis point increase in average quarterly occupancy which was offset by a 3.3% decrease in rental income per square foot. The remaining increase in rental revenue of $5.1 million resulted from the continued lease-up of our Richmond, Virginia property constructed in 2009 and the revenues from the acquisition of 33 properties completed since April 1, 2011. Other operating income, which includes merchandise sales, insurance commissions, truck rentals, management fees and acquisition fees, increased by $1.5 million for the three months ended June 30, 2012 compared to the same period in 2011 primarily as a result of increased commissions earned on customer insurance, and from fees for managing the properties in the new joint venture (Sovran HHF Storage Holdings II LLC) which began operations in July 2011.Net operating income or NOI is a non-GAAP (generally accepted accounting principles) financial measure that we define as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense, amounts attributable to noncontrolling interests, impairment and casualty losses, depreciation and amortization expense, acquisition related costs, general and administrative expense, and deducting from net income: income from discontinued operations, interest income, gain on sale of real estate, and equity in income of joint ventures. We believe that NOI is a meaningful measure of operating performance because we utilize NOI in making decisions with respect to capital allocations, in determining current property values, and in comparing period-to-period and market-to-market property operating results. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income. There are material limitations to using a measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income. We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income. The following table reconciles NOI generated by our self-storage facilities to our net income presented in the consolidated financial statements for three months ended June 30, 2012 and 2011.
We recorded rental revenues of $107.3 million for the six months ended June 30, 2012, an increase of $13.2 million or 14.0% when compared to rental revenues of $94.1 million for the same period in 2011. Of the increase in rental revenue, $3.5 million resulted from a 3.7% increase in rental revenues at the 345 core properties considered in same store sales (those properties included in the consolidated results of operations since January 1, 2011). The increase in same store rental revenues was a result of a 430 basis point increase in average quarterly occupancy which was offset by a 2.0% decrease in rental income per square foot. The remaining increase in rental revenue of $9.7 million resulted from the continued lease-up of our Richmond, Virginia property constructed in 2009 and the revenues from the acquisition of 33 properties completed since January 1, 2011. Other operating income, which includes merchandise sales, insurance commissions, truck rentals, management fees and acquisition fees, increased by $2.9 million for the six months ended June 30, 2012 compared to the same period in 2011 primarily as a result of increased commissions earned on customer insurance and from fees for managing the properties in the new joint venture (Sovran HHF Storage Holdings II LLC) which began operations in July 2011. We also earned a $0.1 million acquisition fee from the new joint venture in the six months ended June 30, 2012. There was no acquisition fee in the same period of 2011.
During the six months ended June 30, 2012, the Company issued 386,491 shares under this Equity Program at a weighted average issue price of $50.64 per share, generating net proceeds of $19.2 million after deducting $0.4 million of sales commissions payable to Wells Fargo. In addition to sales commissions paid to Wells Fargo, the Company incurred expenses of $31,000 in connection with the Equity Program during 2012. The Company expects to continue to offer, sell, and issue shares of common stock under the Equity Program from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under the Equity Program.
Our revenues typically have been higher in the third and fourth quarters, primarily because self-storage facilities tend to experience greater occupancy during the late spring, summer and early fall months due to the greater incidence of residential moves and college student activity during these periods. However, we believe that our customer mix, diverse geographic locations, rental structure and expense structure provide adequate protection against undue fluctuations in cash flows and net revenues during off-peak seasons. Thus, we do not expect seasonality to affect materially distributions to shareholders.
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