SOURCE: Extra Space Storage Inc.

January 23, 2008 17:46 ET

Extra Space Storage Inc. Announces Conference Call to Discuss 2007 Financial Results and Sets 2008 FFO Guidance

SALT LAKE CITY, UT--(Marketwire - January 23, 2008) - Extra Space Storage Inc. (the "Company") (NYSE: EXR) today announced the date of the Company's conference call to discuss financial results for the three months and year ended December 31, 2007 and issued estimated guidance for 2008 Funds from Operations ("FFO") and net income per share.

Conference Call

Extra Space Storage Inc. will host a conference call at 1:00 p.m. Eastern Time on Tuesday, February 19, 2008, to discuss its financial results for the three months and year ended December 31, 2007. The Company will release its financial results the same day at 6:00 a.m. Eastern Time. The conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's website at www.extraspace.com and then by clicking on the "investor relations" link at the bottom of the home page. To listen to the live call, please go to the website at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. A digital replay will be available on Tuesday, February 19, 2008 at 3:00 p.m. Eastern Time through Tuesday, March 4, 2008 at midnight Eastern Time. To access the replay, dial 888-286-8010 and enter passcode 56210131. International callers should dial 617-801-6888 and enter the same passcode.

2008 FFO Guidance

At this time, the Company estimates that 2008 FFO per share will be in the range of $1.23 to $1.27 per share before development dilution. After considering the impact of carrying costs associated with the Company's development program, the Company expects 2008 FFO per share to be in the range of $1.17 to $1.21 per share. In both cases, FFO estimates are fully diluted for an estimated average number of shares and Operating Partnership units outstanding during the year. The Company's estimates are forward looking and based on management's view of current and future market conditions. The Company's actual results may differ materially from these estimates, which include the following annual assumptions:

--  Same-store stabilized property revenue growth of between 2.5% and
    4%.
    
--  Same-store stabilized property expense growth of between 2.5% and
    3.5%.
    
--  Same-store stabilized property Net Operating Income ("NOI")
    growth of between 2.5% and 4%.
    
--  Tenant insurance net income of between $7.5 million and $8.5
    million.
    
--  General and administrative expenses (net of development fees) of
    between $38.0 million and $39.0 million including estimated non-cash
    compensation expense of $2.6 million.
    
--  Interest expense of between $65.0 million and $69.0 million.
    
--  Weighted average LIBOR of 4.2%.
    
--  Weighted average number of outstanding shares, including
    Operating Partnership ("OP") units, of approximately 72.0 million. Included
    in this amount is an estimated 3.0 million contingent conversion shares and
    contingent conversion units converting to common shares and OP units
    throughout the year.
    
--  Carrying costs associated with the Company's development program
    of between $3.5 million and $4.5 million. Approximately $3.1 million to
    $3.9 million of carrying costs are associated with six wholly-owned
    developments opened in 2006 and 2007 and 11 that are scheduled to open in
    2008. Approximately $0.4 million to $0.6 million of carrying costs are
    associated with five joint-venture developments opened in 2006 and 2007 and
    one that is scheduled to be completed in 2008.
    

Following is a reconciliation of the range of estimated fully diluted net income per share to estimated fully diluted FFO per share for the year ending December 31, 2008:

                                                          Low End  High End
                                                          -------- --------
Estimated diluted net income per share                    $   0.54 $   0.58
Estimated income allocated to Operating Partnership and
 other minority interest                                      0.04     0.04
Estimated depreciation and amortization of consolidated
 and unconsolidated entities                                  0.59     0.59
                                                          -------- --------
Estimated diluted FFO per share                           $   1.17 $   1.21
                                                          ======== ========

Funds from Operations

FFO provides relevant and meaningful information about the Company's operating performance that is necessary, along with net income and cash flows, for an understanding of the Company's operating results. The Company believes FFO is a meaningful disclosure as a supplement to net earnings. Net earnings assume that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions and the Company believes FFO more accurately reflects the value of the Company's real estate assets. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT") as net income computed in accordance with accounting principles generally accepted in the United States ("GAAP"), excluding gains or losses on sales of operating properties, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. The Company believes that to further understand the Company's performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in the Company's consolidated financial statements.

The Company's computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income as an indication of the Company's performance, as an alternative to net cash flow from operating activities as a measure of liquidity, or as an indicator of the Company's ability to make cash distributions.

Forward-Looking Statements

Certain information set forth in this release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements include statements concerning our 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," "estimates," "expects," "may," "will," "should," "anticipates," or "intends" or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

All forward-looking statements, including without limitation, management's examination of historical operating trends and estimates of future earnings, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management's expectations, beliefs and projections will result or be achieved. All forward-looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward-looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

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 release. Any forward-looking statements should be considered in light of the risks referenced in the "Risk Factors" section included in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such factors include, but are not limited to:

--  changes in general economic conditions and in the markets in
    which we operate;
    
--  the effect of competition from new self-storage facilities or
    other storage alternatives, which would cause rents and occupancy rates to
    decline;
    
--  potential liability for uninsured losses and environmental
    contamination;
    
--  difficulties in our ability to evaluate, finance and integrate
    acquired and developed properties into our existing operations and to lease
    up those properties, which could adversely affect our profitability;
    
--  the impact of the regulatory environment as well as national,
    state, and local laws and regulations including, without limitation, those
    governing REITs, which could increase our expenses and reduce our cash
    available for distribution;
    
--  difficulties in raising capital at reasonable rates, which could
    impede our ability to grow;
    
--  delays in the development and construction process, which could
    adversely affect our profitability; and
    
--  economic uncertainty due to the impact of war or terrorism, which
    could adversely affect our business plan.
    

About Extra Space Storage Inc.

Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a fully integrated, self-administered and self-managed real estate investment trust that operates 644 self-storage properties in 33 states and Washington, D.C. The Company's properties comprise approximately 444,000 units and 47 million square feet rented by approximately 330,000 individual tenants. The Company is the second largest operator of self storage in the United States.

Contact Information

  • For Information:
    James Overturf
    Extra Space Storage Inc.
    (801) 365-4501

    Mark Collinson
    CCG Investor Relations
    (310) 477-9800