CubeSmart (NYSE:CUBE) today announced its operating results for the
three and six months ended June 30, 2017.
“We are pleased with our second quarter performance, which
reflects steady, broad-based demand and the competitive impact of
new supply in select markets,” commented President and Chief
Executive Officer Christopher P. Marr. “Our recent new
developments, specifically those located in the boroughs of New
York City, are leasing-up ahead of expectations, and our
third-party management platform continues to rapidly expand. Our
balance sheet is in excellent shape and we remain focused on
creating long-term shareholder value by maximizing store level cash
flow and maintaining a disciplined approach to capital
allocation.”
Key Highlights for the Quarter
- Reported funds from operations (“FFO”) per share, as adjusted,
of $0.39, representing a year-over-year increase of 8.3%.
- Increased same-store (432 stores) net operating income (“NOI”)
5.0% year over year, driven by 4.2% revenue growth and a 2.5%
increase in property operating expenses.
- Same-store occupancy averaged 93.8% during the quarter, ending
the quarter with same-store occupancy of 94.6%, a 20 basis point
increase year over year.
- Closed on two store acquisitions totaling $21.9 million.
- Closed on a property that the Company previously had under
contract to acquire upon completion of construction and issuance of
certificate of occupancy (“C/O”) for $11.2 million.
- Issued $100 million of unsecured senior notes at a weighted
average effective interest rate of 3.653%.
Funds from Operations
FFO, as adjusted, was $72.3 million for the second quarter of
2017, compared with $65.4 million for the second quarter of 2016.
FFO per share, as adjusted, increased 8.3% to $0.39 for the second
quarter of 2017, compared with $0.36 for the same period last
year.
Investment Activity
Acquisition Activity
The Company acquired two properties for $21.9 million during the
three and six months ended June 30, 2017. These acquired
stores are located in Maryland and California.
Development Activity
The Company has agreements with developers for the construction
of Class A self-storage properties in high-barrier-to-entry
locations. These agreements are structured as either purchases at
C/O or as joint venture developments. During the second quarter of
2017, the Company acquired a property located in Riverwoods,
Illinois at C/O for a total investment of $11.2 million. For the
six months ended June 30, 2017, the Company acquired one property
at C/O and opened for operation one wholly-owned development
property for $20.9 million.
As of June 30, 2017, the Company had three properties under
contract to purchase at C/O for a total acquisition price of $49.9
million. The stores are located in Illinois (1) and Florida
(2). The purchase of the three properties is expected to occur at
various times between the fourth quarter of 2017 and first quarter
of 2018. These acquisitions are subject to due diligence and other
customary closing conditions, and no assurance can be provided that
these acquisitions will be completed on the terms described, or at
all.
As of June 30, 2017, the Company had seven joint venture
development properties and one wholly owned project under
development. The Company anticipates investing a total of $337.5
million related to these projects and had invested $160.3 million
of that total as of June 30, 2017. These stores are located in New
York (5), Massachusetts (1), New Jersey (1), and Washington, D.C.
(1). The eight projects are expected to open at various times
between the third quarter of 2017 and the first quarter of 2019.
During the quarter, the Company opened for operation approximately
7.4% of the total expected net rentable square feet of its joint
venture development property in New York, New York, which is
expected to have a total investment of $74.3 million upon the
store’s completion during the third quarter of 2017.
Third-Party Management
As of June 30, 2017, the Company’s third-party management
program included 390 stores totaling 25.5 million square feet.
During the three and six months ended June 30, 2017, the Company
added 37 stores and 81 stores, respectively, to its third-party
management program.
Same-Store Results
The Company’s same-store portfolio at June 30, 2017 included 432
stores containing approximately 29.5 million rentable square feet,
or approximately 89.0% of the aggregate rentable square feet of the
Company’s 478 owned stores. These same-store properties
represented approximately 92.4% of property net operating income
for the quarter ended June 30, 2017.
Same-store physical occupancy at period end for the second
quarter of 2017 was 94.6%, compared with 94.4% for the same quarter
of last year. Same-store revenues for the second quarter of
2017 increased 4.2%, and same-store operating expenses increased
2.5% from the same quarter in 2016. Same-store net operating income
increased 5.0%, as compared with the same period in 2016.
Operating Results
As of June 30, 2017, the Company’s total owned portfolio
included 478 stores containing 33.2 million rentable square feet
and had a physical occupancy of 93.0%.
Revenues increased $12.0 million and property operating expenses
increased $3.2 million in the second quarter of 2017, as compared
with the same period in 2016. Increases in revenues were
primarily attributable to increased net effective rents and
occupancy levels in the same-store portfolio as well as revenues
generated from property acquisitions and recently opened
development properties. Increases in property operating expenses
were primarily attributable to a $0.9 million increase in
same-store expenses and a $1.9 million of increased expenses
associated with newly acquired stores.
Interest expense increased from $12.2 million during the
three months ended June 30, 2016 to $14.0 million during the three
months ended June 30, 2017, an increase of $1.8 million. The
increase is attributable to a higher amount of outstanding debt
during the 2017 period, partially offset by lower interest rates
during the 2017 period. To fund a portion of the Company’s growth,
the average debt balance during the three months ended June 30,
2017 increased approximately $243 million from the same period in
2016 from $1,390 million to $1,633 million. The weighted average
effective interest rate on our outstanding debt decreased from
3.83% for the three months ended June 30, 2016 to 3.80% for the
three months ended June 30, 2017.
The Company reported net income attributable to the Company’s
common shareholders of $32.5 million, or $0.18 per common share, in
the second quarter of 2017, compared with net income attributable
to the Company’s common shareholders of $18.9 million, or $0.11 per
common share, in the second quarter of 2016.
Financing Activity
On April 4, 2017, the Operating Partnership issued $50.0 million
of its 4.375% Senior Notes due 2023 (the “2023 Notes”) and $50.0
million of its 4.000% Senior Notes due 2025 (the “2025 Notes”). The
2023 Notes are part of the same series as the $250.0 million
principal amount of 2023 notes that the Operating Partnership
issued on December 17, 2013. The 2023 Notes were priced at 105.040%
of the principal amount to yield 3.495% to maturity. The 2025 Notes
are part of the same series as the $250.0 million principal amount
of 2025 notes that the Operating Partnership issued on October 26,
2015. The 2025 Notes were priced at 101.343% of the principal
amount to yield 3.811% to maturity. Net proceeds from the
offerings were used to repay the Company’s unsecured term loan that
was scheduled to mature in June 2018. Unamortized loan procurement
costs of $0.2 million were written off in conjunction with the
repayment.
During the quarter and year to date, the Company did not sell
any common shares of beneficial interest through its
“at-the-market” equity program (“ATM”). As of June 30, 2017, the
Company had 5.8 million shares available for issuance under the
existing equity distribution agreements.
Quarterly Dividend
On May 31, 2017, the Company declared a dividend of $0.27 per
common share. The dividend was paid on July 17, 2017 to common
shareholders of record on July 3, 2017.
2017 Financial Outlook
The Company is adjusting its previously issued estimates and
maintaining its underlying assumptions for 2017 guidance. Fully
diluted FFO per share, as adjusted, for 2017 is now expected to be
between $1.53 and $1.57 (previously between $1.52 and $1.57). The
Company’s estimates are based on the following key operating
assumptions:
- For 2017, a same-store pool consisting of 432 properties
totaling 29.5 million square feet
- Same-store net operating income (“NOI”) growth of 4.0% to 5.0%
over 2016, driven by revenue growth of 3.75% to 4.75% and expense
growth of 4.0% to 5.0%
- General and administrative expenses of approximately $35.0
million to $36.0 million
Key investment and financing assumptions include:
- Impact of development activity:
- Four new stores opened in 2015 for a total investment of $65.1
million.
- Five new stores opened in 2016 for a total investment of $133.4
million.
- Two new wholly-owned development properties and two new joint
venture development properties are expected to open in 2017 for a
total investment of $159.7 million. As of June 30, 2017, one
wholly-owned property has opened for $9.7 million and one joint
venture development property partially opened during the quarter
and is expected to be completed in the third quarter for $74.3
million.
- Three new stores are expected to be acquired at C/O in 2017 for
a total investment of $40.3 million, of which one property has been
acquired for $11.2 million.
- Approximately $0.06 to $0.07 per share of dilution in 2017
related to development activity.
- Impact of financing activity:
- Funding 2017 debt maturities and our acquisition and
development commitments with long-term capital, with specific
impact to 2017 earnings dependent upon the amount, timing, cost and
form of capital we raise.
Due to uncertainty related to the timing and terms of
transactions, the impact of any potential future speculative
investment activity not contemplated above, is excluded from
guidance. For 2017, the Company is targeting $25 million to
$75 million of acquisitions, excluding contracts related to joint
venture development or purchase at completion of construction and
issuance of C/O investments discussed above, and $0 to $50 million
of dispositions.
|
|
|
|
|
|
|
|
|
|
|
|
2017 Full Year Guidance |
|
Range or Value |
|
|
Earnings per diluted
share allocated to common shareholders |
|
$ |
0.70 |
|
to |
|
$ |
0.74 |
|
|
Plus: real estate
depreciation and amortization |
|
|
0.83 |
|
|
|
|
0.83 |
|
|
FFO per diluted share,
as adjusted |
|
$ |
1.53 |
|
to |
|
$ |
1.57 |
|
|
|
|
|
|
|
|
|
|
|
|
The Company estimates that its fully diluted FFO, as adjusted,
per share for the quarter ending September 30, 2017 will be between
$0.40 and $0.41, and that its fully diluted earnings per share for
the period will be between $0.19 and $0.20.
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter 2017 Guidance |
|
Range or Value |
|
|
Earnings per diluted
share allocated to common shareholders |
|
$ |
0.19 |
|
to |
|
$ |
0.20 |
|
|
Plus: real estate
depreciation and amortization |
|
|
0.21 |
|
|
|
|
0.21 |
|
|
FFO per diluted share,
as adjusted |
|
$ |
0.40 |
|
to |
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call
Management will host a conference call at 11:00 a.m. ET on
Friday, July 28, 2017 to discuss financial results for the three
and six months ended June 30, 2017.
A live webcast of the conference call will be available online
from the investor relations page of the Company's corporate website
at www.CubeSmart.com. Telephone participants may avoid any
delays in joining the conference call by pre-registering for the
call using the following link to receive a special dial-in number
and PIN: http://dpregister.com/10109491.
Telephone participants who are unable to pre-register for the
conference call may join on the day of the call using
1-877-506-3281 for domestic callers, +1-412-902-6677 for
international callers, or 1-855-669-9657 for callers in
Canada. After the live webcast, the call will remain
available on CubeSmart's website for 30 days. In addition, a
telephonic replay of the call will be available through August 28,
2017. The replay numbers are 1-877-344-7529 for domestic
callers, +1-412-317-0088 for international callers, and
1-855-669-9658 for callers in Canada. For callers accessing a
telephonic replay, the conference number is 10109491.
Supplemental operating and financial data as of June 30, 2017 is
available on the Company’s corporate website under Investor
Relations - Financial Information - Financial Reports.
About CubeSmart
CubeSmart is a self-administered and self-managed real estate
investment trust. The Company's self-storage properties are
designed to offer affordable, easily accessible and secure storage
space for residential and commercial customers. According to
the 2017 Self-Storage Almanac, CubeSmart is one of the top three
owners and operators of self-storage properties in the United
States.
Non-GAAP Financial Measures
Funds from operations (“FFO”) is a widely used performance
measure for real estate companies and is provided here as a
supplemental measure of operating performance. The April 2002
National Policy Bulletin of the National Association of Real Estate
Investment Trusts (the “White Paper”), as amended, defines FFO as
net income (computed in accordance with GAAP), excluding gains (or
losses) from sales of real estate and related impairment charges,
plus real estate 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 stores. 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 FFO 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 real
estate, gains from remeasurement of investments in real estate
ventures, impairments of depreciable assets, and depreciation,
which can make periodic and peer analyses of operating performance
more difficult. The Company’s computation of FFO may not be
comparable to FFO reported by other REITs or real estate companies.
FFO should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indication of the
Company’s performance. FFO does not represent cash generated from
operating activities determined in accordance with GAAP and is not
a measure of liquidity or an indicator of the Company’s ability to
make cash distributions. The Company believes that to further
understand its performance, FFO should be compared with its
reported net income and considered in addition to cash flows
computed in accordance with GAAP, as presented in its Consolidated
Financial Statements.
FFO, as adjusted represents FFO as defined above, excluding the
effects of acquisition related costs, gains or losses from early
extinguishment of debt, and other non-recurring items, which the
Company believes are not indicative of the Company’s operating
results.
The Company defines net operating income, which it refers to as
“NOI,” as total continuing revenues less continuing property
operating expenses. NOI also can be calculated by adding back
to net income (loss): interest expense on loans, loan procurement
amortization expense, loan procurement amortization expense – early
repayment of debt, acquisition related costs, equity in losses of
real estate ventures, other expense, depreciation and amortization
expense, general and administrative expense, and deducting from net
income (loss): gains from sale of real estate, net, other income,
gains from remeasurement of investments in real estate ventures and
interest income. NOI is not a measure of performance
calculated in accordance with GAAP.
Management uses NOI as a measure of operating performance at
each of its stores, and for all of its stores 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 CubeSmart (“we,” “us,” “our”
or the “Company”), contain certain forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, or the “Exchange Act.” Forward-looking
statements include statements concerning the Company’s plans,
objectives, goals, strategies, future events, future revenues or
performance, capital expenditures, financing needs, plans or
intentions relating to acquisitions and other information that is
not historical information. In some cases, forward-looking
statements can be identified by terminology such as “believes,”
“expects,” “estimates,” “may,” “will,” “should,” “anticipates,” or
“intends” or the negative of such terms or other comparable
terminology, or by discussions of strategy. 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. As a result, you should not rely on or construe any
forward-looking statements in this presentation, or which
management may make orally or in writing from time to time, as
predictions of future events or as guarantees of future
performance. We caution you not to place undue reliance on
forward-looking statements, which speak only as of the date of this
presentation or as of the dates otherwise indicated in the
statements. All of our forward-looking statements, including those
in this presentation, are qualified in their entirety by this
statement.
There are a number of risks and uncertainties that could cause
our actual results to differ materially from the forward-looking
statements contained in or contemplated by this presentation. Any
forward-looking statements should be considered in light of the
risks and uncertainties referred to in Item 1A. “Risk Factors” in
our Annual Report on Form 10-K and in our other filings with the
Securities and Exchange Commission (“SEC”). These risks include,
but are not limited to, the following:
- national and local economic, business, real estate and other
market conditions;
- the competitive environment in which we operate, including our
ability to maintain or raise occupancy and rental rates;
- the execution of our business plan;
- the availability of external sources of capital;
- 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;
- increases in taxes, fees, and assessments from state and local
jurisdictions;
- risks of investing through joint ventures;
- 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 Item 1A of our Annual Report on
Form 10-K and, from time to time, in other reports that we
file with the SEC or in other documents that we publicly
disseminate.
Given these uncertainties, we caution readers not to place undue
reliance on forward-looking statements. 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.
|
|
CUBESMART AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(in thousands, except share data) |
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Storage properties |
|
$ |
4,071,098 |
|
|
$ |
3,998,180 |
|
|
Less: Accumulated
depreciation |
|
|
(719,214 |
) |
|
|
(671,364 |
) |
|
Storage properties, net
(including VIE assets of $230,599 and $208,048, respectively) |
|
|
3,351,884 |
|
|
|
3,326,816 |
|
|
Cash and cash
equivalents |
|
|
8,077 |
|
|
|
2,973 |
|
|
Restricted cash |
|
|
4,164 |
|
|
|
7,893 |
|
|
Loan procurement costs,
net of amortization |
|
|
1,875 |
|
|
|
2,150 |
|
|
Investment in real
estate ventures, at equity |
|
|
93,757 |
|
|
|
98,682 |
|
|
Other assets, net |
|
|
33,481 |
|
|
|
36,514 |
|
|
Total
assets |
|
$ |
3,493,238 |
|
|
$ |
3,475,028 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
Unsecured senior notes,
net |
|
$ |
1,141,928 |
|
|
$ |
1,039,076 |
|
|
Revolving credit
facility |
|
|
60,000 |
|
|
|
43,300 |
|
|
Unsecured term loans,
net |
|
|
299,195 |
|
|
|
398,749 |
|
|
Mortgage loans and
notes payable, net |
|
|
112,977 |
|
|
|
114,618 |
|
|
Accounts payable,
accrued expenses and other liabilities |
|
|
126,621 |
|
|
|
93,764 |
|
|
Distributions
payable |
|
|
49,382 |
|
|
|
49,239 |
|
|
Deferred revenue |
|
|
21,964 |
|
|
|
20,226 |
|
|
Security deposits |
|
|
422 |
|
|
|
412 |
|
|
Total
liabilities |
|
|
1,812,489 |
|
|
|
1,759,384 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests in the Operating Partnership |
|
|
59,416 |
|
|
|
54,407 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Common
shares $.01 par value, 400,000,000 shares authorized, 180,197,464
and 180,083,111 shares issued and outstanding at
June 30, 2017 and December 31, 2016,
respectively |
|
|
1,802 |
|
|
|
1,801 |
|
|
Additional paid-in capital |
|
|
2,306,086 |
|
|
|
2,314,014 |
|
|
Accumulated other comprehensive loss |
|
|
(666 |
) |
|
|
(1,850 |
) |
|
Accumulated deficit |
|
|
(691,778 |
) |
|
|
(658,583 |
) |
|
Total
CubeSmart shareholders’ equity |
|
|
1,615,444 |
|
|
|
1,655,382 |
|
|
Noncontrolling interests in subsidiaries |
|
|
5,889 |
|
|
|
5,855 |
|
|
Total
equity |
|
|
1,621,333 |
|
|
|
1,661,237 |
|
|
Total
liabilities and equity |
|
$ |
3,493,238 |
|
|
$ |
3,475,028 |
|
|
|
|
|
|
|
|
|
|
|
|
CUBESMART AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(in thousands, except share data) |
|
(unaudited) |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income |
|
$ |
121,224 |
|
|
$ |
111,538 |
|
|
$ |
238,281 |
|
|
$ |
216,535 |
|
|
Other
property related income |
|
|
13,880 |
|
|
|
12,643 |
|
|
|
26,863 |
|
|
|
24,406 |
|
|
Property
management fee income |
|
|
3,455 |
|
|
|
2,345 |
|
|
|
6,452 |
|
|
|
4,456 |
|
|
Total
revenues |
|
|
138,559 |
|
|
|
126,526 |
|
|
|
271,596 |
|
|
|
245,397 |
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
operating expenses |
|
|
44,821 |
|
|
|
41,607 |
|
|
|
89,695 |
|
|
|
81,826 |
|
|
Depreciation and amortization |
|
|
36,736 |
|
|
|
41,448 |
|
|
|
74,855 |
|
|
|
80,804 |
|
|
General
and administrative |
|
|
8,800 |
|
|
|
7,891 |
|
|
|
18,294 |
|
|
|
16,119 |
|
|
Acquisition related costs |
|
|
668 |
|
|
|
2,563 |
|
|
|
827 |
|
|
|
4,905 |
|
|
Total
operating expenses |
|
|
91,025 |
|
|
|
93,509 |
|
|
|
183,671 |
|
|
|
183,654 |
|
|
OPERATING
INCOME |
|
|
47,534 |
|
|
|
33,017 |
|
|
|
87,925 |
|
|
|
61,743 |
|
|
OTHER (EXPENSE)
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense on loans |
|
|
(13,975 |
) |
|
|
(12,200 |
) |
|
|
(27,574 |
) |
|
|
(24,284 |
) |
|
Loan
procurement amortization expense |
|
|
(776 |
) |
|
|
(611 |
) |
|
|
(1,482 |
) |
|
|
(1,216 |
) |
|
Equity in
losses of real estate ventures |
|
|
(253 |
) |
|
|
(724 |
) |
|
|
(1,025 |
) |
|
|
(1,236 |
) |
|
Other |
|
|
308 |
|
|
|
901 |
|
|
|
200 |
|
|
|
1,231 |
|
|
Total
other expense |
|
|
(14,696 |
) |
|
|
(12,634 |
) |
|
|
(29,881 |
) |
|
|
(25,505 |
) |
|
NET
INCOME |
|
|
32,838 |
|
|
|
20,383 |
|
|
|
58,044 |
|
|
|
36,238 |
|
|
NET (INCOME)
LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests in the Operating Partnership |
|
|
(427 |
) |
|
|
(227 |
) |
|
|
(704 |
) |
|
|
(399 |
) |
|
Noncontrolling interest in subsidiaries |
|
|
47 |
|
|
|
268 |
|
|
|
104 |
|
|
|
335 |
|
|
NET INCOME
ATTRIBUTABLE TO THE COMPANY |
|
|
32,458 |
|
|
|
20,424 |
|
|
|
57,444 |
|
|
|
36,174 |
|
|
Distribution to preferred shareholders |
|
|
— |
|
|
|
(1,502 |
) |
|
|
— |
|
|
|
(3,004 |
) |
|
NET INCOME
ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS |
|
$ |
32,458 |
|
|
$ |
18,922 |
|
|
$ |
57,444 |
|
|
$ |
33,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to common shareholders |
|
$ |
0.18 |
|
|
$ |
0.11 |
|
|
$ |
0.32 |
|
|
$ |
0.19 |
|
|
Diluted earnings per
share attributable to common shareholders |
|
$ |
0.18 |
|
|
$ |
0.11 |
|
|
$ |
0.32 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic
shares outstanding |
|
|
180,183 |
|
|
|
177,880 |
|
|
|
180,174 |
|
|
|
176,838 |
|
|
Weighted-average
diluted shares outstanding |
|
|
181,189 |
|
|
|
179,221 |
|
|
|
181,198 |
|
|
|
178,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store Facility Results (432
stores) |
|
(in thousands, except percentage and per square foot
data) |
|
(unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
|
|
Six Months Ended |
|
|
|
|
|
June 30, |
|
Percent |
|
June 30, |
|
Percent |
|
|
2017 |
|
|
2016 |
|
|
Change |
|
2017 |
|
|
2016 |
|
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income |
|
$ |
110,659 |
|
|
$ |
106,051 |
|
|
4.3 |
|
% |
|
$ |
218,012 |
|
|
$ |
207,900 |
|
|
4.9 |
|
% |
Other
property related income |
|
|
11,691 |
|
|
|
11,315 |
|
|
3.3 |
|
% |
|
|
22,887 |
|
|
|
21,938 |
|
|
4.3 |
|
% |
Total
revenues |
|
|
122,350 |
|
|
|
117,366 |
|
|
4.2 |
|
% |
|
|
240,899 |
|
|
|
229,838 |
|
|
4.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
taxes |
|
|
12,904 |
|
|
|
11,986 |
|
|
7.7 |
|
% |
|
|
25,696 |
|
|
|
23,754 |
|
|
8.2 |
|
% |
Personnel
expense |
|
|
10,016 |
|
|
|
9,512 |
|
|
5.3 |
|
% |
|
|
19,860 |
|
|
|
19,285 |
|
|
3.0 |
|
% |
Advertising |
|
|
2,117 |
|
|
|
2,505 |
|
|
(15.5 |
) |
% |
|
|
3,789 |
|
|
|
3,964 |
|
|
(4.4 |
) |
% |
Repair
and maintenance |
|
|
1,458 |
|
|
|
1,457 |
|
|
0.1 |
|
% |
|
|
2,785 |
|
|
|
2,632 |
|
|
5.8 |
|
% |
Utilities |
|
|
3,223 |
|
|
|
3,160 |
|
|
2.0 |
|
% |
|
|
6,881 |
|
|
|
6,980 |
|
|
(1.4 |
) |
% |
Property
insurance |
|
|
639 |
|
|
|
820 |
|
|
(22.1 |
) |
% |
|
|
1,353 |
|
|
|
1,759 |
|
|
(23.1 |
) |
% |
Other
expenses |
|
|
4,715 |
|
|
|
4,776 |
|
|
(1.3 |
) |
% |
|
|
10,038 |
|
|
|
9,787 |
|
|
2.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
|
35,072 |
|
|
|
34,216 |
|
|
2.5 |
|
% |
|
|
70,402 |
|
|
|
68,161 |
|
|
3.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income
(1) |
|
$ |
87,278 |
|
|
$ |
83,150 |
|
|
5.0 |
|
% |
|
$ |
170,497 |
|
|
$ |
161,677 |
|
|
5.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
|
|
71.3 |
|
% |
|
70.8 |
|
% |
|
|
|
|
70.8 |
|
% |
|
70.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
end occupancy (2) |
|
|
94.6 |
|
% |
|
94.4 |
|
% |
|
|
|
|
94.6 |
|
% |
|
94.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
average occupancy (3) |
|
|
93.8 |
|
% |
|
93.6 |
|
% |
|
|
|
|
93.0 |
|
% |
|
92.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
rentable square feet |
|
|
29,542 |
|
|
|
|
|
|
|
|
|
29,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
annual rent per occupied square foot (4) |
|
$ |
15.97 |
|
|
$ |
15.37 |
|
|
3.9 |
|
% |
|
$ |
15.87 |
|
|
$ |
15.19 |
|
|
4.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled
annual rent per square foot (5) |
|
$ |
17.03 |
|
|
$ |
17.01 |
|
|
0.1 |
|
% |
|
$ |
16.59 |
|
|
$ |
16.50 |
|
|
0.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Same-Store Net Operating Income to Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store net
operating income (1) |
|
$ |
87,278 |
|
|
$ |
83,150 |
|
|
|
|
|
$ |
170,497 |
|
|
$ |
161,677 |
|
|
|
|
Non same-store net
operating income (1) |
|
|
7,229 |
|
|
|
3,523 |
|
|
|
|
|
|
13,486 |
|
|
|
5,295 |
|
|
|
|
Indirect property
overhead (6) |
|
|
(769 |
) |
|
|
(1,754 |
) |
|
|
|
|
|
(2,082 |
) |
|
|
(3,401 |
) |
|
|
|
Depreciation and
amortization |
|
|
(36,736 |
) |
|
|
(41,448 |
) |
|
|
|
|
|
(74,855 |
) |
|
|
(80,804 |
) |
|
|
|
General and
administrative expense |
|
|
(8,800 |
) |
|
|
(7,891 |
) |
|
|
|
|
|
(18,294 |
) |
|
|
(16,119 |
) |
|
|
|
Acquisition related
costs |
|
|
(668 |
) |
|
|
(2,563 |
) |
|
|
|
|
|
(827 |
) |
|
|
(4,905 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
47,534 |
|
|
$ |
33,017 |
|
|
|
|
|
$ |
87,925 |
|
|
$ |
61,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________(1) Net operating income (NOI) is
a non-GAAP (generally accepted accounting principles) financial
measure that excludes from operating income the impact of
depreciation and general & administrative
expense.(2) Represents occupancy at June 30 of the
respective year.(3) Represents the weighted average
occupancy for the period.(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 asking rents per available square foot for
the period.(6) Includes property management income
earned in conjunction with managed properties.
|
|
Non-GAAP Measure – Computation of Funds From
Operations |
|
(in thousands, except per share data) |
|
(unaudited) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2017 |
|
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to the Company's common
shareholders |
|
$ |
32,458 |
|
$ |
18,922 |
|
$ |
57,444 |
|
$ |
33,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
property |
|
|
36,078 |
|
|
40,831 |
|
|
73,553 |
|
|
79,730 |
|
Company's
share of unconsolidated real estate ventures |
|
|
2,479 |
|
|
2,852 |
|
|
5,259 |
|
|
5,243 |
|
Noncontrolling interests in the Operating Partnership |
|
|
427 |
|
|
227 |
|
|
704 |
|
|
399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders and OP
unitholders |
|
$ |
71,442 |
|
$ |
62,832 |
|
$ |
136,960 |
|
$ |
118,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan
procurement amortization expense - early repayment of debt |
|
|
190 |
|
|
— |
|
|
190 |
|
|
— |
|
Acquisition related costs (1) |
|
|
668 |
|
|
2,604 |
|
|
827 |
|
|
5,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted, attributable to common shareholders and
OP unitholders |
|
$ |
72,300 |
|
$ |
65,436 |
|
$ |
137,977 |
|
$ |
123,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to common shareholders - basic |
|
$ |
0.18 |
|
$ |
0.11 |
|
$ |
0.32 |
|
$ |
0.19 |
|
Earnings per share
attributable to common shareholders - diluted |
|
$ |
0.18 |
|
$ |
0.11 |
|
$ |
0.32 |
|
$ |
0.19 |
|
FFO per share and unit
- fully diluted |
|
$ |
0.39 |
|
$ |
0.35 |
|
$ |
0.75 |
|
$ |
0.66 |
|
FFO, as adjusted per
share and unit - fully diluted |
|
$ |
0.39 |
|
$ |
0.36 |
|
$ |
0.75 |
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic
shares outstanding |
|
|
180,183 |
|
|
177,880 |
|
|
180,174 |
|
|
176,838 |
|
Weighted-average
diluted shares outstanding |
|
|
181,189 |
|
|
179,221 |
|
|
181,198 |
|
|
178,172 |
|
Weighted-average
diluted shares and units outstanding |
|
|
183,477 |
|
|
181,430 |
|
|
183,358 |
|
|
180,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend per common
share and unit |
|
$ |
0.27 |
|
$ |
0.21 |
|
$ |
0.54 |
|
$ |
0.42 |
|
Payout ratio of FFO, as
adjusted |
|
|
69.2 |
% |
|
58.3 |
% |
|
72.0 |
% |
|
60.9 |
% |
___________________(1) Acquisition related costs for the six
months ended June 30, 2016 include $0.2 million of acquisition
related costs that are included in the Company’s share of equity in
losses of real estate ventures.
Contact:
CubeSmart
Charles Place
Director, Investor Relations
(610) 535-5700
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