CubeSmart (NYSE:CUBE) today announced its operating results for the
three and twelve months ended December 31, 2017.
“We continued to execute on our strategic growth plans in 2017,
expanding CubeSmart’s owned and managed store count by 18% and
opening seven newly developed properties totaling over $200 million
of investment,” commented President and Chief Executive Officer
Christopher P. Marr. “Fundamentals continue to be impacted by new
supply in select submarkets while demand remains steady and
broad-based. Looking forward to 2018, we are confident that our
operating platform will continue to maximize store performance and
our disciplined investment strategy will generate attractive
risk-adjusted returns for shareholders.”
Key Highlights for the Fourth Quarter
- Reported earnings per share (“EPS”) attributable to the
Company’s common shareholders of $0.22.
- Reported funds from operations (“FFO”) per share, as adjusted,
of $0.41, representing a year-over-year increase of 7.9%.
- Increased same-store (432 stores) net operating income (“NOI”)
5.4% year over year, driven by 4.0% revenue growth and a 0.1%
increase in property operating expenses.
- Same-store occupancy averaged 92.3% during the quarter, ending
the quarter with same-store occupancy of 91.7%.
- Closed on two property acquisitions totaling $18.6
million.
- Closed on two properties that the Company previously had under
contract to acquire upon completion of construction and issuance of
certificate of occupancy (“C/O”) for $29.1 million.
- Opened for operation one development property for a total cost
of $49.3 million.
- Increased the quarterly dividend 11.1% to an annualized rate of
$1.20 per common share from the previous annualized rate of $1.08
per common share.
- Sold 1.0 million common shares at an average sales price of
$29.13 per share, resulting in net proceeds of $29.6
million.
- Added 37 stores to our third-party management platform during
the quarter, bringing our total third-party managed store count to
452.
Financial Results
Net income attributable to the Company’s common shareholders was
$39.5 million for the fourth quarter of 2017, compared with $23.4
million for the fourth quarter of 2016. EPS attributable to
the Company’s common shareholders was $0.22 for the fourth quarter
of 2017, compared with $0.13 for the same period last year.
Net income attributable to the Company’s common shareholders for
the year ended December 31, 2017 was $134.3 million, compared to
$79.9 million for the year ended December 31, 2016. EPS increased
64.4% to $0.74 for the year ended December 31, 2017 compared with
$0.45 for the prior year.
FFO, as adjusted, was $76.3 million for the fourth quarter of
2017, compared with $69.0 million for the fourth quarter of
2016. FFO per share, as adjusted, increased 7.9% to $0.41 for
the fourth quarter of 2017, compared with $0.38 for the same period
last year.
FFO, as adjusted, for the year ended December 31, 2017 was
$291.5 million, compared with $261.2 million for the year ended
December 31, 2016. FFO per share, as adjusted, increased 10.4% to
$1.59 for the year ended December 31, 2017, compared with $1.44 for
the year ended December 31, 2016.
Investment Activity
Acquisition Activity
The Company acquired two stores for $18.6 million during the
three months ended December 31, 2017. These stores are
located in Texas (1) and Florida (1). For the full year, the
Company acquired four stores for $40.4 million, excluding three
properties acquired at C/O. Subsequent to year-end, the Company
acquired a store in Texas for $12.2 million and is under contract
to acquire a store in Washington D.C. for $34.2 million.
Unconsolidated Joint Venture Activity
On November 1, 2017, the Company formed a new joint venture
(“HVP IV”) to acquire self-storage assets in which it will have a
20% ownership position. In conjunction with its formation on
November 1, 2017, HVP IV acquired one store for an aggregate
purchase price of $9.4 million, of which the Company contributed
$1.9 million. Subsequent to year-end, HVP IV acquired two
properties for $20.5 million and has two properties under contract
for $32.0 million which are expected to close by the second quarter
of 2018. These stores are located in Arizona (1), Maryland
(1), and Texas (3).
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 fourth quarter of
2017, the Company acquired two properties at C/O, located in
Florida (1) and Illinois (1), for $29.1 million and opened for
operation a joint venture development property in New York for a
total cost of $49.3 million. For the year ended December 31, 2017,
the Company acquired three stores at C/O, opened for operation two
wholly-owned development properties and two joint venture
development properties for a total cost of $208.3 million.
As of December 31, 2017, the Company had one property located in
Florida under contract to purchase at C/O for a total acquisition
price of $20.8 million. The purchase of this property is expected
to occur during the second quarter of 2018. This acquisition is
subject to due diligence and other customary closing conditions,
and no assurance can be provided that this acquisition will be
completed on the terms described, or at all. As of
December 31, 2017, the Company had six joint venture development
properties under development. The Company anticipates investing a
total of $230.5 million related to these projects and had invested
$74.3 million of that total as of year-end. These stores are
located in Massachusetts (1), New Jersey (1), and New York
(4). The six projects are expected to open at various times
between the third quarter of 2018 and the third quarter of
2019.
Third-Party Management
As of December 31, 2017, the Company’s third-party management
program included 452 stores totaling 29.6 million square
feet. During the three and twelve months ended December 31,
2017, the Company added 37 stores and 160 stores, respectively, to
its third-party management platform.
Same-Store Results
The Company’s same-store portfolio at December 31, 2017 included
432 stores containing approximately 29.6 million rentable square
feet, or approximately 87.6% of the aggregate rentable square feet
of the Company’s 484 owned stores. These same-store
properties represented approximately 91.1% of property NOI for the
quarter ended December 31, 2017.
Same-store physical occupancy at period end for the fourth
quarter of 2017 was 91.7%, compared with 91.8% for the same quarter
of last year. Same-store revenues for the fourth quarter of
2017 increased 4.0%, and same-store operating expenses increased
0.1% from the same quarter in 2016. Same-store NOI increased
5.4%, as compared with the same period in 2016.
For the year ended December 31, 2017, same-store revenues
increased 4.4%, same-store operating expenses increased 2.8%, and
same-store NOI increased 5.1%, as compared with the year ended
December 31, 2016.
Operating Results
As of December 31, 2017, the Company’s total owned portfolio
included 484 stores containing 33.8 million rentable square feet
and had a physical occupancy of 89.2%.
Revenues increased $10.9 million and property operating expenses
increased $2.4 million in the fourth quarter of 2017, as compared
with the same period in 2016. Increases in revenues were
primarily attributable to increased net effective rents in the
same-store portfolio and revenues generated from property
acquisitions and recently opened development properties.
Increases in property operating expenses were primarily
attributable to $0.9 million of increased expenses associated with
newly acquired stores and $1.5 million of increased costs to manage
our portfolio and support our growth.
Interest expense increased from $13.3 million during the
three months ended December 31, 2016 to $14.9 million during the
three months ended December 31, 2017, an increase of $1.6
million. The increase is attributable to a higher amount of
outstanding debt and higher interest rates during the 2017 period.
To fund a portion of the Company’s growth, the average debt balance
during the three months ended December 31, 2017 increased
approximately $74 million from the same period in 2016 from $1,581
million to $1,655 million. The weighted average effective interest
rate on our outstanding debt increased from 3.75% for the three
months ended December 31, 2016 to 3.83% for the three months ended
December 31, 2017.
Financing Activity
During the quarter and for the year ended December 31, 2017, the
Company sold 1.0 million common shares of beneficial interest
through its at-the-market equity program at an average sales price
of $29.13 per share, resulting in net proceeds of $29.6 million,
after deducting offering costs. As of December 31, 2017, the
Company had 4.7 million shares available for issuance under the
existing equity distribution agreements.
Quarterly Dividend
On December 14, 2017, the Company declared a dividend of $0.30
per common share, an 11.1% increase compared with the Company’s
previously declared quarterly dividend of $0.27 per common share.
The dividend was paid on January 16, 2018 to common shareholders of
record on January 2, 2018.
2018 Financial Outlook
“Our same-store growth expectations assume modest increases in
net effective rental rates, the impact of new supply on our
portfolio, and continued pressure on real estate taxes,” stated
Chief Financial Officer Tim Martin. “Our lease-up properties
continue to meet or exceed expectations and our FFO guidance
reflects the short-term dilution from this value creation growth
strategy.”
The Company estimates that its fully diluted FFO per share, as
adjusted, for 2018 will be between $1.60 and $1.65, and that its
fully diluted earnings per share for the period will be between
$0.76 and $0.81. Due to uncertainty related to the timing and
terms of transactions, the impact of any potential future
speculative investment activity is excluded from guidance.
For 2018, the same store pool will consist of 458 properties
totaling 31.6 million square feet.
|
|
|
|
|
Current Ranges for |
2018 Full Year
Guidance Range Summary |
|
Annual Assumptions |
Same-store revenue growth |
|
2.0% |
to |
3.0% |
Same-store expense
growth |
|
3.5% |
to |
4.5% |
Same-store NOI
growth |
|
1.5% |
to |
3.0% |
|
|
|
|
|
Acquisition of
wholly-owned operating properties |
|
$50M |
to |
$100M |
Acquisition of
properties at C/O |
|
$20.8M |
|
$20.8M |
New development
openings |
|
$151.7M |
|
$151.7M |
Dispositions |
|
$0 |
to |
$50M |
Dilution from
properties in lease-up |
|
($0.06) |
to |
($0.07) |
|
|
|
|
|
Property management fee
income |
|
$19.0M |
to |
$21.0M |
General and
administrative expenses |
|
$36.0M |
to |
$37.0M |
Interest and loan
amortization expense |
|
$65.5M |
to |
$67.5M |
Weighted average shares
and units |
|
185.3M |
|
185.3M |
|
|
|
|
|
Earnings per diluted
share allocated to |
|
$0.76 |
to |
$0.81 |
common
shareholders |
|
|
|
|
Plus: real estate
depreciation and amortization |
|
$0.84 |
|
$0.84 |
FFO per diluted
share, as adjusted |
|
$1.60 |
to |
$1.65 |
|
1st Quarter 2018 Guidance |
|
Range or Value |
Earnings per diluted
share allocated to common shareholders |
|
$ 0.18 |
to |
$ 0.19 |
Plus: real estate
depreciation and amortization |
|
0.20 |
|
0.20 |
FFO per diluted
share, as adjusted |
|
$ 0.38 |
to |
$ 0.39 |
|
Conference Call
Management will host a conference call at 11:00 a.m. ET on
Friday, February 16, 2018 to discuss financial results for the
three and twelve months ended December 31, 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/10115564.
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, and 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 March 16,
2018. 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 10115564.
Supplemental operating and financial data as of December 31,
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 2018 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. The Company believes NOI is
useful to investors in evaluating operating performance because it
is one of the primary measures used by management and store
managers to evaluate the economic productivity of the Company’s
stores, including the ability to lease stores, increase pricing and
occupancy, and control property operating expenses. Additionally,
NOI helps the Company’s investors meaningfully compare the results
of its operating performance from period to period by removing the
impact of its capital structure (primarily interest expense on
outstanding indebtedness) and depreciation of the basis in its
assets from operating results.
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;
- the failure of our joint venture partners to fulfill
their obligations to us or their pursuit of actions that are
inconsistent with our objectives;
- reductions in asset valuations and related impairment
charges;
- security breaches or a failure of our networks, systems
or technology, which could adversely impact our business, customer
and employee relationships;
- 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.
Contact:
CubeSmart
Charles PlaceDirector, Investor Relations(610) 535-5700
|
CUBESMART AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
2016 |
ASSETS |
|
|
|
|
|
|
Storage properties |
|
$ |
4,161,715 |
|
|
$ |
3,998,180 |
|
Less: Accumulated
depreciation |
|
|
(752,925 |
) |
|
|
(671,364 |
) |
Storage properties, net
(including VIE assets of $291,496 and $208,048, respectively) |
|
|
3,408,790 |
|
|
|
3,326,816 |
|
Cash and cash
equivalents |
|
|
5,268 |
|
|
|
2,973 |
|
Restricted cash |
|
|
3,890 |
|
|
|
7,893 |
|
Loan procurement costs,
net of amortization |
|
|
1,592 |
|
|
|
2,150 |
|
Investment in real
estate ventures, at equity |
|
|
91,206 |
|
|
|
98,682 |
|
Other assets, net |
|
|
34,590 |
|
|
|
36,514 |
|
Total
assets |
|
$ |
3,545,336 |
|
|
$ |
3,475,028 |
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
Unsecured senior notes,
net |
|
$ |
1,142,460 |
|
|
$ |
1,039,076 |
|
Revolving credit
facility |
|
|
81,700 |
|
|
|
43,300 |
|
Unsecured term loans,
net |
|
|
299,396 |
|
|
|
398,749 |
|
Mortgage loans and
notes payable, net |
|
|
111,434 |
|
|
|
114,618 |
|
Accounts payable,
accrued expenses and other liabilities |
|
|
143,344 |
|
|
|
93,764 |
|
Distributions
payable |
|
|
55,297 |
|
|
|
49,239 |
|
Deferred revenue |
|
|
21,529 |
|
|
|
20,226 |
|
Security deposits |
|
|
486 |
|
|
|
412 |
|
Total
liabilities |
|
|
1,855,646 |
|
|
|
1,759,384 |
|
|
|
|
|
|
|
|
Noncontrolling
interests in the Operating Partnership |
|
|
54,320 |
|
|
|
54,407 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Common
shares $.01 par value, 400,000,000 shares authorized, 182,215,735
and 180,083,111 shares issued and outstanding at
December 31, 2017 and December 31, 2016,
respectively |
|
|
1,822 |
|
|
|
1,801 |
|
Additional paid-in capital |
|
|
2,356,620 |
|
|
|
2,314,014 |
|
Accumulated other comprehensive income (loss) |
|
|
3 |
|
|
|
(1,850 |
) |
Accumulated deficit |
|
|
(729,311 |
) |
|
|
(658,583 |
) |
Total
CubeSmart shareholders’ equity |
|
|
1,629,134 |
|
|
|
1,655,382 |
|
Noncontrolling interests in subsidiaries |
|
|
6,236 |
|
|
|
5,855 |
|
Total
equity |
|
|
1,635,370 |
|
|
|
1,661,237 |
|
Total
liabilities and equity |
|
$ |
3,545,336 |
|
|
$ |
3,475,028 |
|
|
CUBESMART AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income |
|
$ |
125,063 |
|
|
$ |
116,650 |
|
|
$ |
489,043 |
|
|
$ |
449,601 |
|
Other
property related income |
|
|
13,897 |
|
|
|
12,842 |
|
|
|
55,001 |
|
|
|
50,255 |
|
Property
management fee income |
|
|
4,522 |
|
|
|
3,054 |
|
|
|
14,899 |
|
|
|
10,183 |
|
Total
revenues |
|
|
143,482 |
|
|
|
132,546 |
|
|
|
558,943 |
|
|
|
510,039 |
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Property
operating expenses |
|
|
44,661 |
|
|
|
42,216 |
|
|
|
181,508 |
|
|
|
165,847 |
|
Depreciation and amortization |
|
|
34,855 |
|
|
|
39,234 |
|
|
|
145,681 |
|
|
|
161,865 |
|
General
and administrative |
|
|
8,223 |
|
|
|
8,639 |
|
|
|
34,745 |
|
|
|
32,823 |
|
Acquisition related costs |
|
|
232 |
|
|
|
759 |
|
|
|
1,294 |
|
|
|
6,552 |
|
Total
operating expenses |
|
|
87,971 |
|
|
|
90,848 |
|
|
|
363,228 |
|
|
|
367,087 |
|
OPERATING
INCOME |
|
|
55,511 |
|
|
|
41,698 |
|
|
|
195,715 |
|
|
|
142,952 |
|
OTHER (EXPENSE)
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
Interest: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense on loans |
|
|
(14,924 |
) |
|
|
(13,328 |
) |
|
|
(56,952 |
) |
|
|
(50,399 |
) |
Loan
procurement amortization expense |
|
|
(579 |
) |
|
|
(706 |
) |
|
|
(2,638 |
) |
|
|
(2,577 |
) |
Equity in
losses of real estate ventures |
|
|
(81 |
) |
|
|
(845 |
) |
|
|
(1,386 |
) |
|
|
(2,662 |
) |
Other |
|
|
(69 |
) |
|
|
228 |
|
|
|
872 |
|
|
|
1,062 |
|
Total
other expense |
|
|
(15,653 |
) |
|
|
(14,651 |
) |
|
|
(60,104 |
) |
|
|
(54,576 |
) |
NET
INCOME |
|
|
39,858 |
|
|
|
27,047 |
|
|
|
135,611 |
|
|
|
88,376 |
|
NET (INCOME)
LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests in the Operating Partnership |
|
|
(399 |
) |
|
|
(259 |
) |
|
|
(1,593 |
) |
|
|
(941 |
) |
Noncontrolling interest in subsidiaries |
|
|
88 |
|
|
|
59 |
|
|
|
270 |
|
|
|
470 |
|
NET INCOME
ATTRIBUTABLE TO THE COMPANY |
|
|
39,547 |
|
|
|
26,847 |
|
|
|
134,288 |
|
|
|
87,905 |
|
Distribution to preferred shareholders |
|
|
— |
|
|
|
(539 |
) |
|
|
— |
|
|
|
(5,045 |
) |
Preferred
share redemption charge |
|
|
— |
|
|
|
(2,937 |
) |
|
|
— |
|
|
|
(2,937 |
) |
NET INCOME
ATTRIBUTABLE TO THE COMPANY’S COMMON SHAREHOLDERS |
|
$ |
39,547 |
|
|
$ |
23,371 |
|
|
$ |
134,288 |
|
|
$ |
79,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to common shareholders |
|
$ |
0.22 |
|
|
$ |
0.13 |
|
|
$ |
0.74 |
|
|
$ |
0.45 |
|
Diluted earnings per
share attributable to common shareholders |
|
$ |
0.22 |
|
|
$ |
0.13 |
|
|
$ |
0.74 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic
shares outstanding |
|
|
181,437 |
|
|
|
180,053 |
|
|
|
180,525 |
|
|
|
178,246 |
|
Weighted-average
diluted shares outstanding |
|
|
182,432 |
|
|
|
181,232 |
|
|
|
181,448 |
|
|
|
179,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store Facility Results (432
stores) |
(in thousands, except percentage and per square foot
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
Year Ended |
|
|
|
|
|
December 31, |
|
Percent |
|
December 31, |
|
Percent |
|
|
2017 |
|
2016 |
|
Change |
|
2017 |
|
2016 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income |
|
$ |
112,399 |
|
|
$ |
107,863 |
|
|
4.2 |
|
% |
|
$ |
444,290 |
|
|
$ |
424,977 |
|
|
4.5 |
|
% |
Other
property related income |
|
|
11,456 |
|
|
|
11,264 |
|
|
1.7 |
|
% |
|
|
46,131 |
|
|
|
44,689 |
|
|
3.2 |
|
% |
Total
revenues |
|
|
123,855 |
|
|
|
119,127 |
|
|
4.0 |
|
% |
|
|
490,421 |
|
|
|
469,666 |
|
|
4.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
taxes |
|
|
11,020 |
|
|
|
11,499 |
|
|
(4.2 |
) |
% |
|
|
48,851 |
|
|
|
46,841 |
|
|
4.3 |
|
% |
Personnel
expense |
|
|
9,890 |
|
|
|
9,558 |
|
|
3.5 |
|
% |
|
|
39,887 |
|
|
|
38,502 |
|
|
3.6 |
|
% |
Advertising |
|
|
2,031 |
|
|
|
1,592 |
|
|
27.6 |
|
% |
|
|
7,698 |
|
|
|
7,555 |
|
|
1.9 |
|
% |
Repair
and maintenance |
|
|
1,644 |
|
|
|
1,623 |
|
|
1.3 |
|
% |
|
|
5,867 |
|
|
|
5,662 |
|
|
3.6 |
|
% |
Utilities |
|
|
3,314 |
|
|
|
3,523 |
|
|
(5.9 |
) |
% |
|
|
14,328 |
|
|
|
14,400 |
|
|
(0.5 |
) |
% |
Property
insurance |
|
|
631 |
|
|
|
709 |
|
|
(11.0 |
) |
% |
|
|
2,632 |
|
|
|
3,180 |
|
|
(17.2 |
) |
% |
Other
expenses |
|
|
4,688 |
|
|
|
4,665 |
|
|
0.5 |
|
% |
|
|
19,829 |
|
|
|
19,226 |
|
|
3.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
|
33,218 |
|
|
|
33,169 |
|
|
0.1 |
|
% |
|
|
139,092 |
|
|
|
135,366 |
|
|
2.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income
(1) |
|
$ |
90,637 |
|
|
$ |
85,958 |
|
|
5.4 |
|
% |
|
$ |
351,329 |
|
|
$ |
334,300 |
|
|
5.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
|
|
73.2 |
|
% |
|
72.2 |
|
% |
|
|
|
|
71.6 |
|
% |
|
71.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
end occupancy (2) |
|
|
91.7 |
|
% |
|
91.8 |
|
% |
|
|
|
|
91.7 |
|
% |
|
91.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
average occupancy (3) |
|
|
92.3 |
|
% |
|
92.3 |
|
% |
|
|
|
|
93.1 |
|
% |
|
92.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
rentable square feet |
|
|
29,561 |
|
|
|
|
|
|
|
|
|
29,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
annual rent per occupied square foot (4) |
|
$ |
16.48 |
|
|
$ |
15.85 |
|
|
4.0 |
|
% |
|
$ |
16.15 |
|
|
$ |
15.48 |
|
|
4.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled
annual rent per square foot (5) |
|
$ |
16.61 |
|
|
$ |
16.36 |
|
|
1.5 |
|
% |
|
$ |
16.67 |
|
|
$ |
16.53 |
|
|
0.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Same-Store Net Operating Income to Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store net
operating income (1) |
|
$ |
90,637 |
|
|
$ |
85,958 |
|
|
|
|
|
$ |
351,329 |
|
|
$ |
334,300 |
|
|
|
|
Non same-store net
operating income (1) |
|
|
8,867 |
|
|
|
5,464 |
|
|
|
|
|
|
30,538 |
|
|
|
15,262 |
|
|
|
|
Indirect property
overhead (6) |
|
|
(683 |
) |
|
|
(1,092 |
) |
|
|
|
|
|
(4,432 |
) |
|
|
(5,370 |
) |
|
|
|
Depreciation and
amortization |
|
|
(34,855 |
) |
|
|
(39,234 |
) |
|
|
|
|
|
(145,681 |
) |
|
|
(161,865 |
) |
|
|
|
General and
administrative expense |
|
|
(8,223 |
) |
|
|
(8,639 |
) |
|
|
|
|
|
(34,745 |
) |
|
|
(32,823 |
) |
|
|
|
Acquisition related
costs |
|
|
(232 |
) |
|
|
(759 |
) |
|
|
|
|
|
(1,294 |
) |
|
|
(6,552 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
55,511 |
|
|
$ |
41,698 |
|
|
|
|
|
$ |
195,715 |
|
|
$ |
142,952 |
|
|
|
|
___________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31 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 |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to the Company's common
shareholders |
|
$ |
39,547 |
|
|
$ |
23,371 |
|
$ |
134,288 |
|
$ |
79,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
property |
|
|
34,136 |
|
|
|
38,570 |
|
|
142,961 |
|
|
159,495 |
|
Company's
share of unconsolidated real estate ventures |
|
|
2,527 |
|
|
|
2,868 |
|
|
10,243 |
|
|
11,016 |
|
Noncontrolling interests in the Operating Partnership |
|
|
399 |
|
|
|
259 |
|
|
1,593 |
|
|
941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders and OP
unitholders |
|
$ |
76,609 |
|
|
$ |
65,068 |
|
$ |
289,085 |
|
$ |
251,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add
(deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan
procurement amortization expense - early repayment of debt |
|
|
— |
|
|
|
— |
|
|
190 |
|
|
— |
|
Acquisition related costs (1) |
|
|
257 |
|
|
|
962 |
|
|
1,319 |
|
|
6,932 |
|
Preferred
share redemption charge |
|
|
— |
|
|
|
2,937 |
|
|
— |
|
|
2,937 |
|
Property
damage related to hurricanes, net of expected insurance proceeds
(2) |
|
|
(550 |
) |
|
|
— |
|
|
874 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO, as adjusted, attributable to common shareholders and
OP unitholders |
|
$ |
76,316 |
|
|
$ |
68,967 |
|
$ |
291,468 |
|
$ |
261,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to common shareholders - basic |
|
$ |
0.22 |
|
|
$ |
0.13 |
|
$ |
0.74 |
|
$ |
0.45 |
|
Earnings per share
attributable to common shareholders - diluted |
|
$ |
0.22 |
|
|
$ |
0.13 |
|
$ |
0.74 |
|
$ |
0.45 |
|
FFO per share and unit
- fully diluted |
|
$ |
0.42 |
|
|
$ |
0.36 |
|
$ |
1.57 |
|
$ |
1.38 |
|
FFO, as adjusted per
share and unit - fully diluted |
|
$ |
0.41 |
|
|
$ |
0.38 |
|
$ |
1.59 |
|
$ |
1.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average basic
shares outstanding |
|
|
181,437 |
|
|
|
180,053 |
|
|
180,525 |
|
|
178,246 |
|
Weighted-average
diluted shares outstanding |
|
|
182,432 |
|
|
|
181,232 |
|
|
181,448 |
|
|
179,533 |
|
Weighted-average
diluted shares and units outstanding |
|
|
184,310 |
|
|
|
183,276 |
|
|
183,598 |
|
|
181,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend per common
share and unit |
|
$ |
0.30 |
|
|
$ |
0.27 |
|
$ |
1.11 |
|
$ |
0.90 |
|
Payout ratio of FFO, as
adjusted |
|
|
73.2 |
% |
|
|
71.1 |
% |
|
69.8 |
% |
|
62.5 |
% |
_____________________________________________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Acquisition related costs for the three months ended and year
ended December 31, 2016 include $0.2 million and $0.4 million,
respectively, of acquisition related costs that are included in the
Company’s share of equity in losses of real estate ventures.
- Property damage related to hurricanes, net of expected
insurance proceeds for the year ended December 31, 2017 includes
$0.1 million of storm damage related costs that are included in the
Company’s share of equity in losses of real estate ventures.
CubeSmart (NYSE:CUBE)
Historical Stock Chart
From Mar 2024 to Apr 2024
CubeSmart (NYSE:CUBE)
Historical Stock Chart
From Apr 2023 to Apr 2024