FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1995 Commission file number 0-23466
SHURGARD STORAGE CENTERS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 91-1603837
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1201-3RD AVENUE, SUITE 2200, SEATTLE, WASHINGTON 98101
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) 206-624-8100
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Shares outstanding at July 14, 1995:
Class A Common Stock, $.001 par value, 23,015,987 shares
outstanding
Class B Common Stock, $.001 par value, 154,604 shares
outstanding
<PAGE>
Shurgard Storage Centers, Inc.
Part I, Item 1: Consolidated Balance Sheets
(unaudited)
(Amounts in thousands except share data)
June 30, December 31,
1995 1994
Assets: ---------- -----------
Storage centers:
Land $ 99,758 $ 88,532
Buildings and equipment, net 400,844 362,332
Construction in progress 8,280 532
---------- ----------
508,882 451,396
Other real estate investments 21,364 15,104
Cash and cash equivalents 7,012 13,162
Restricted cash 2,959 2,766
Other assets 45,684 12,162
--------- ---------
Total assets $ 585,901 $ 494,590
========= =========
Liabilities and Shareholders' Equity:
Accounts payable and other liabilities $ 11,463 $ 10,138
Lines of credit 42,000
Notes payable 132,391 125,137
--------- --------
Total liabilities 143,854 177,275
--------- --------
Minority interest in other
real estate investments 2,671 470
--------- --------
Shareholders' equity:
Class A common stock, $0.001 par value;
120,000,000 authorized; 22,595,987 and
16,983,887 shares issued and outstanding 443,259 317,434
Class B common stock, $0.001 par value;
500,000 shares authorized, 154,604 issued
and outstanding; net of loans to shareholders
of $4,002 (1,086) (1,086)
Cumulative dividends (32,610) (17,324)
Cumulative earnings 29,813 17,821
--------- --------
Total shareholders' equity 439,376 316,845
--------- --------
Total liabilities and
shareholders' equity $ 585,901 $ 494,590
========= ========
<PAGE>
Shurgard Storage Centers, Inc.
Part I, Item 1: Consolidated Statements of Earnings
(unaudited)
(Amounts in thousands except per share data)
Company
-------------------------
Three months Three months
ended ended
June 30, 1995 June 30, 1994
------------- -------------
Rental revenue $ 22,771 $ 19,085
Revenue from other
real estate investments 362 46
Property management revenue 974
-------- --------
Total revenue 24,107 19,131
-------- --------
Operating expense 6,180 4,222
Management fees 1,142
Depreciation and amortization 4,264 3,491
Real estate taxes 1,885 1,751
General and administrative 1,449 823
-------- -------
Total expenses 13,778 11,429
-------- -------
Income from operations 10,329 7,702
-------- -------
Interest and other income 161 154
Interest expense (3,852) (2,293)
-------- -------
Total other income (expense) (3,691) (2,139)
-------- -------
Income before extraordinary item 6,638 5,563
Extraordinary item - loss
on retirement of debt (1,180)
-------- -------
Net income $ 6,638 $ 4,383
======== =======
Net income per Common and
Common Equivalent Share:
Income before extraordinary item $ 0.35 $ 0.33
Extraordinary item - loss
on retirement of debt (0.07)
-------- ------
Net income per share $ 0.35 $ 0.26
======== ======
<PAGE>
Shurgard Storage Centers, Inc.
Part I, Item 1: Consolidated Statements of Earnings
(unaudited)
(Amounts in thousands except per share data)
Company Predecessor
------------------------ -----------
Six months ended June 30, Period from
------------------------ Jan. 1, 1994 to
1995 1994 Mar. 1, 1994
---------- --------- -----------
Rental revenue $ 43,743 $ 25,236 $ 12,348
Revenue from other
real estate investments 701 59 20
Property management revenue 1,031
--------- --------- ---------
Total revenue 45,475 25,295 12,368
--------- --------- ---------
Operating expense 11,315 5,692 2,961
Management fees 1,320 1,506 733
Depreciation and amortization 8,031 4,291 2,390
Real estate taxes 3,693 2,326 1,170
General and administrative 2,236 926 1,232
------- ------- ------
Total expenses 26,595 14,741 8,486
------- ------- ------
Income from operations 18,880 10,554 3,882
------- -------- -------
Interest and other income 395 231 188
Interest expense (7,283) (2,992) (487)
Incentive management fees (5,340)
Litigation, hostile takeover defense
and consolidation expense (12,180)
Gain on consolidation 48,223
------- ------- ------
Total other income (expense) (6,888) (2,761) 30,404
------- ------- ------
Income before
extraordinary item 11,992 7,793 34,286
Extraordinary item- loss
on retirement of debt (1,180)
------- -------- -------
Net income $ 11,992 $ 6,613 $ 34,286
======= ======== =======
Net income per Common and
Common Equivalent Share:
Income before
extraordinary item $ 0.66 $ 0.46
Extraordinary item - loss
on retirement of debt (0.07)
--------- ----------
Net income per share $ 0.66 $ 0.39
========= ==========
<PAGE>
Shurgard Storage Centers, Inc.
Part I, Item 1: Consolidated Statements of Cash Flows
(unaudited)
(Amounts in thousands)
Company Predecessor
------------------- -----------
Six months ended Period from
June 30, Jan. 1, 1994
------------------- to March 1,
1995 1994 1994
-------- ------- ------------
Operating activities:
Net income $11,992 $6,613 $34,286
Adjustments to reconcile earnings
to net cash provided by operating
activities:
Depreciation and amortization 8,031 4,291 2,390
Minority interest in earnings
from investments in joint
partnerships 66
Gain on consolidation (48,223)
Loss on retirement of debt 1,180
Earnings in excess of distributions
from joint venture (20)
Changes in other accounts:
Restricted cash (193) (2,783)
Other assets 2,216 (773) 2,675
Accounts payable and
other liabilities (1,510) 848 (2,391)
Accrued consolidation expense 16,399
Net cash provided by operating -------- ------ ------
activities 20,602 9,376 5,116
-------- ------ ------
Investing activities:
Construction, acquisition and
improvement of storage centers (18,503) (66,048) (1,158)
Purchase of real estate investments (6,530)
Purchase of amortizable assets (200)
Investment in property management
company (428)
Investment in limited partnership (35,308)
Proceeds from sale of real estate
and equipment 64,120
Distributions in excess of earnings from
investment in joint partnerships 270 16
Net cash (used in) provided by ------- ------- -------
investing activitiies (60,699) (66,032) 62,962
------- ------- -------
Financing activities:
Proceeds from stock offering 96,944
Proceeds from notes payable 227,180 350
Proceeds from line of credit 54,093 680
Payment of financing costs (1,353) (6,738)
Payment of assumed consolidation
liabilities (11,662)
Repayment of lines of credit (100,430)
Principal payments on notes payable (21) (129,162) (855)
Dividends paid (15,286) (2,378)
Distributions to partners (764)
Net cash provided by (used in) -------- -------- --------
financing activities 33,947 77,240 (589)
-------- -------- --------
(Decrease) increase in cash and
cash equivalents (6,150) 20,584 67,489
Cash and cash equivalents
at beginning of year 13,162 --- 9,057
Cash and cash equivalents -------- -------- --------
at end of period $ 7,012 $ 20,584 $76,546
======== ======== =======
Supplemental schedule of cash flow information:
Cash paid during the period
for interest $ 7,492 $ 2,992 $ 487
========= ======== ======
<PAGE>
Shurgard Storage Centers, Inc.
Part I, Item 1: Notes to Consolidated Financial Statements
Six Months Ended June 30, 1995
(unaudited)
Note A _ Basis of Presentation
The consolidated financial statements include the accounts of the
Company, SSC Property Holdings, Inc., SSC Acquisitions, Inc.,
Shurgard Evergreen Limited Partnership, Shurgard Institutional
Partners, and Capitol Hill Partners. SSC Property Holdings, Inc.
was established as a wholly-owned subsidiary to hold all storage
centers which secure certain notes. SSC Acquisitions, Inc. was
established as a wholly owned subsidiary to hold all storage
centers which secure a line of credit. Shurgard Evergreen
Limited Partnership is wholly owned directly and indirectly
through a subsidiary. Shurgard Evergreen Limited Partnership
owns a 59.5% interest in Shurgard Institutional Partners. The
Company holds a 90% ownership interest in Capitol Hill Partners.
All intercompany balances and transactions have been eliminated
upon consolidation. Prior to March 1, 1994, the Company was
inactive.
The consolidated financial statements included in this report are
unaudited. In the opinion on the Company, all adjustments
necessary for a fair presentation of such financial statements
have been included and such adjustments consisted only of normal
recurring items. The interim financial statements should be read
in conjunction with the 1994 Annual Report. Interim results are
not necessarily indicative of results for a full year.
The combined financial statements presented herein for the period
from January 1, 1994 to March 1, 1994 represent the Predecessor's
combined results of operations and cash flows prior to the March
1, 1994. Since the purchase method of accounting was used to
record assets acquired and certain limited partners elected to
receive cash rather than Company stock, the Predecessor financial
statements are not comparable in all material respects with
financial statements subsequent to the Acquisition Date. The
most significant differences relate to the Partnerships' higher
historical cost of storage centers and the related depreciation
and the Company's higher debt and related interest expense in
periods after the Acquisition Date.
Weighted average shares outstanding for the three and six months
ended June 30, 1995 were 19,140,701 and 18,117,241, respectively
and for both the three and six months ended June 30, 1994 were
16,983,887.
Note B Merger
In December 1994, the Board of Directors executed a Merger
Agreement with Shurgard Incorporated (the Management Company) in
order to become self-administered and self-advised. At a special
meeting on March 21, 1995, the shareholders voted to approve the
Merger with the Management Company. On March 24, 1995, the
Company issued 1,266,705 new shares of Class A common stock to
the shareholders of the Management Company, subject to certain
adjustments and an audit of the Management Company's final
statement of assets, liabilities and stockholder's equity. In
addition, 282,572 shares previously owned by the Management
Company were reissued to Management Company shareholders. The
Management Company shareholders may receive additional shares
over the next five years as consideration for certain partnership
interests held by the Management Company which were not valued at
the time of the Merger. A summary of the assets and liabilities
assumed in this transaction are as follows (amounts in
thousands):
Storage centers $ 8,058
Cash 780
Other assets 34,138
Line of credit (4,337)
Notes payable (7,275)
Other liabilities (2,480)
--------
$28,884
During the second quarter, SSC Evergreen, Inc., a wholly owned
subsidiary of the Company, purchased the limited partnership
interest in a partnership (the Evergreen Partnership) which owns
seven storage centers and a 59.5% interest in a joint venture
owning three additional storage centers. The Company paid $35.5
million in exchange for the 99% limited partnership interest.
The Company previously owned the 1% general partnership interest
which was acquired in the Merger.
The following unaudited pro forma statements of income represent
the results of operations of the Company for the six months ended
June 30, 1994 and as if all properties owned by the Company at
June 30, 1995 had been acquired on January 1, 1994 and the merger
of the Management Company and the acquisition of Evergreen
Partnership had been consummated on January 1, 1994. The pro
forma results do not necessarily indicate the actual results that
would have been obtained, nor are they necessarily indicative of
the future operations of the combined companies.
Six months ended June 30,
------------------------
1995 1994
----------- ----------
(in thousands)
Revenues $ 49,070 $ 46,282
Operations expenses (19,721) (18,845)
Depreciation and amoritization (8,845) (8,782)
Interest expense (5,415) (5,239)
Net income before ----------- ---------
extraordinary item 15,089 13,416
Extraordinary item - loss on
retirement of debt (1,180)
----------- ---------
Net income $ 15,089 $ 12,236
=========== =========
Per share data:
Net income before
extraordinary item $ 0.66 $ 0.59
Extraordinary item - loss on
retirement of debt (0.05)
----------- ----------
Net income $ 0.66 $ 0.54
=========== ==========
Note C _ Lines of Credit
During 1995, the Company borrowed an additional $54.1 million on
its lines of credit. Proceeds were used to repay the $4.3
million line of credit assumed in the Merger as well as fund the
acquisition of the Evergreen Partnership and four storage
centers. Proceeds were also used to fund purchase of several
parcels of undeveloped land and the initial construction costs at
these development sites. All outstanding balances on the lines
of credit were repaid in June with the proceeds from the offering
of Company shares.
Note D _ Shareholder's Equity
On June 13, 1995 the Company issued an additional 4.5 million
Class A Common shares at $23.00 per share, providing net proceeds
after offering costs of $96.9 million. On July 11, 1995, the
Company's underwriters exercised their over allotment option and
the Company issued an additional 420,000 shares. These
additional shares provided approximately $9 million in net
proceeds which will be used to fund storage center development
and acquisitions and general corporate purposes.
Part I, Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Company has entered into a number of important transactions
during 1995 that further establish the structural and financial
means of executing its 1995 growth plan. The following discussion
summarizes the recent developments pertaining to the Company.
Merger of the Management Company - In order to create a fully
integrated company and more closely align the interests of
management with the shareholders, the Management Company merged with
the Company on March 24, 1995. Pursuant to the Agreement and Plan
of Merger, the outstanding shares of the Management Company common
stock were converted into an aggregate of 1,266,705 newly issued
shares of the Company's Class A Common Stock (Common Stock) and an
additional 282,572 shares that replaced the Common Stock previously
owned by the Management Company, subject to certain adjustments.
Pursuant to the Merger Agreement, Management Company shareholders
are also entitled to receive additional shares of Common Stock in
the future based on (i) the extent to which, during the five years
following the Merger, the Company realizes value as a result of
certain transactions relating to interests in or assets of six
limited partnerships acquired by the Company in the Merger and (ii)
the value, at the end of five years after the Merger, or in the
event of a change of control of the Company, of any remaining
interests in such partnerships as determined by independent
appraisal.
Listing of Common Stock on the NYSE - The Common Stock was
authorized for listing on the NYSE under the symbol "SHU" on April
27, 1995, and commenced trading on the NYSE on May 5, 1995. From
March 28, 1994 through May 4, 1995, the Common Stock traded on the
Nasdaq National Market under the symbol "SHUR."
Acquisition of Evergreen Properties - In May 1995, SSC Evergreen,
Inc., a wholly owned subsidiary of the Company, purchased the
limited partner interest in Shurgard Evergreen Limited Partnership
(the Evergreen Partnership), an entity formed in May 1990 to develop
and own self storage centers, of which the Company is the general
partner. The limited partner interest was owned by a wholly owned
subsidiary of the State Investment Board of the State of Washington.
The Evergreen Partnership developed and owns seven self storage
centers directly and, through a joint venture, owns an interest in
an additional three centers. Three of the centers are located in
the Atlanta, Georgia area, three are located in the Portland, Oregon
area, and one each is located near Philadelphia, Pennsylvania,
Phoenix, Arizona, San Antonio, Texas and Seattle, Washington. At
the time of acquisition, the centers, having an aggregate of 631,000
net rentable square feet, had a weighted average occupancy rate of
81%, based on net rentable square footage. The purchase price for
the limited partner interest in Evergreen Partnership was $35.5
million which was financed through the Company's line of credit.
Additional Developments and Acquisitions - In 1995, the Company
has continued to selectively acquire development parcels and self
storage centers in its target markets. Seven developments,
including joint ventures, are currently under construction in the
United States which will contain an aggregate of approximately
445,000 net rentable square feet of storage space. Land has been
purchased for two additional centers and construction is expected to
begin this summer. The Company has also acquired existing self
storage properties in Taylor, Michigan (March 1995), Orland Park,
Illinois (May 1995), Puyallup, Washington (May 1995) and Madison
Heights, Michigan (June 1995) with a total of approximately 173,000
net rentable square feet of storage space. In the first six months
of 1995, the Company invested $4.7 million in its Benelux subsidiary
which owns one operating storage center and has commenced
construction on two additional centers in the Brussels metropolitan
area. The three Belgian facilities are expected to have aggregate
net rentable square footage of 169,000.
Public Stock Offering - On June 13, 1995 the Company issued an
additional 4.5 million Class A Common shares at $23.00 per share,
providing net proceeds after offering costs of $96.9 million. On
July 11, 1995, the Company's underwriters exercised their over
allotment option and the Company issued an additional 420,000
shares. These additional shares provided approximately $9 million
in net proceeds which will be used to fund storage center
development and acquisitions and general corporate purposes.
Liquidity and Capital Resources
During 1995, the Company invested $26.5 million in storage centers.
In addition to the $8 million storage center acquired in the Merger,
the Company invested approximately $10 million in acquisitions of
four operating storage centers, $6 million in development projects
and over $2 million in capital improvements to its existing
portfolio. The $6.5 million increase in other real estate
investments reflects primarily the $4.7 million invested in the
Company's Benelux subsidiary and the $1.8 million invested in the
Tennessee joint ventures. As described above, the Company also
invested $35.3 million in cash (net of partnership cash received) in
the purchase of the Evergreen partnership interest.
Cash balances declined from December 31, 1994 to June 30, 1995 as
operating cash flow and working capital were used to temporarily
fund acquisition and development needs. Additional cash was
borrowed on the lines of credit as needed to meet remaining
acquisition and development requirements. The Company borrowed $7
million on March 31, 1995, under its line of credit to repay the
$4.3 million line of credit assumed in the Merger and finance the
acquisition and development activity described above. All
outstanding balances on the Company's lines of credit were repaid on
June 13, 1995, leaving current capital available from lines of
credit at June 30, 1995 of $100 million. At June 30, 1995, the
Company's debt to total asset ratio was 23% and its debt to total
capitalization ratio was 20%.
The Company anticipates that cash flow from operating activities,
available lines of credit and the proceeds from its equity offering
will continue to provide adequate capital for planned expansion,
principal payments and dividend payments in accordance with REIT
requirements. Cash provided by operating activities for the six
months of operations was $21 million. The Company has declared the
following dividends during 1995:
Quarter ended Record Date Pay Date Per Share Amount
------------- ------------- ------------- ----------------
Dec. 31, 1994 Feb. 10, 1995 Mar. 29, 1995 0.44
Mar. 31, 1995 Mar. 22, 1995 May 19, 1995 0.46
June 30, 1995 June 2, 1995 July 31, 1995 0.46
Results of Operations
The Company operates a professionally-managed real estate portfolio
consisting primarily of self service storage properties that provide
month-to-month leases for business and personal use. Net income for
the quarter was $6.6 million, or $0.35 per share, reflecting three
months of consolidated operations for 160 storage centers and two
business parks, as well as a partial quarter of operations for an
additional thirteen centers acquired during the quarter (the fourth
acquisition occurred on June 30, 1995 so no operating results are
included). The table below provides measures of geographic
diversity and property earnings as a percentage of historical cost.
Performance measures are annualized to allow comparisons between
periods.
Year-to-date 1995
Percentage of Portfolio Annualized Property
Based on Original Cost Performance
---------------------- ------------------
California 15.0% 12.5%
Florida 5.7% 11.8%
New York 5.3% 15.7%
Texas 14.4% 11.9%
Virginia 8.9% 12.2%
Washington 20.2% 12.2%
Other 30.5% 14.2%
------
Total 100%
The annualized property performance percentages are determined by
dividing the annualized property level net operating income (rental
revenue less direct property operating expenses and real estate
taxes) for the six months ended June 30, 1995 by the original
acquisition cost. This new definition of NOI excludes management
fees which were incurred prior to the merger in order to be
comparable with the current presentation. This performance is not
necessarily indicative of what the actual property performance
percentages for the full year will be. Net operating income is not
reduced by depreciation, general and administrative expenses or
certain management level operating expenses and, had it been, the
percentages would be lower. This performance measure should not be
construed as a yield or return of investment.
FFO is used by many financial analysts in evaluating REIT's. The
Company has historically defined FFO as net income before
extraordinary items, plus depreciation and amortization, plus or
minus certain non-recurring revenue and expenses. The Company has
modified our definition of FFO in accordance with the
recommendations of NAREIT (the REIT industry association) to exclude
amortization of financing costs. Accordingly, management now
calculates FFO as net income before extraordinary items, plus
depreciation and amortization relating to real estate activities,
plus or minus certain non-recurring revenue and expenses.
The following table reconciles our previous definition to the new
NAREIT definition (in thousands):
Quarter Ended June 30, Six Mos. Ended June 30,
---------------------- -----------------------
Pro Forma Pro Forma
1995 1994 1995 1994
-------- ------- ------- -------
Net income before $ 6,639 $ 5,422 $11,993 $10,709
extraordinary item
Depreciation/Amortization 4,347 3,519 8,141 6,493
Non-recurring
revenue/expenses 0 0 0 (58)
------- ------- ------ ------
FFO as Previously Defined 10,986 8,941 20,134 17,144
Less deferred financing costs (280) (190) (560) (380)
------- ------- ------ ------
FFO as Currently Defined $ 10,706 $ 8,751 $19,574 $16,764
======= ======= ====== ======
Weighted Average Shares
Outstanding 19,141 16,984 18,117 16,984
======= ======= ====== ======
FFO for the second quarter of 1995 rose nearly $2 million over the
pro forma FFO for the second quarter of 1994. This growth reflects
the improved performance of current properties as well as the
addition of properties acquired during the past year. Future growth
rates will reflect the performance of developments, as well as
current properties and acquisitions. Given the anticipated rent-up
time frame on development properties, it normally takes six to nine
months after opening a store to generate positive cash flow.
Additionally, it could take a year or longer to reach a return
consistent with the current portfolio. During this `rent-up'
period, management expects earnings and FFO per share will be
effected. Management estimates that, at the current share level,
the effect on FFO, for the first year of operations for an average
development, will be slightly above $0.01 per share, assuming that
it is financed with debt. Although in the interim, total growth in
FFO will not reflect the full impact of expected increases in same
store operations and from acquisitions, management continues to
believe that development of storage centers will provide superior
long-term returns.
Quarter Ended June 30, 1995 compared to Quarter Ended June 30, 1994
Net income for the second quarter of 1995 has increased 19.3% or
$1.1 million over net income before extraordinary item for the
second quarter of 1994. This significant improvement reflects the
Company's merger with its advisor/property management company, the
acquisition of 34 storage, as well as strong growth in earnings for
the original portfolio.
Second quarter 1995 revenues rose 26% or $5 million compared to the
second quarter of 1994, including the addition of $1 million in
revenues from property management operations and a $3.7 million
increase in rental revenues. Rising rental revenues reflect
approximately $1.5 million of revenues related to the 20 storage
centers acquired September 1, 1994, $1.1 million of revenues related
to properties added during this quarter, and an 8% increase in
average rental rates for the original portfolio of assets. The
average rental rate on the Company's original portfolio of storge
centers rose from $8.13 for the second quarter of 1994 to $8.78 for
the second quarter of 1995. Average occupancy levels declined
slightly to 87% for the quarter ended June 30, 1995 from 89% for the
quarter ended June 30, 1994.
Total expenses for the second quarter of 1995 rose 20.5% or $2.3
million over the second quarter of 1994, of which $773,000
represents increases in noncash depreciation and amortization
reflecting the Company's acquisitions and loan costs related to the
lines of credit. An additional $784,000 of the increase reflects
the addition of the storage centers discussed above. Due to its
merger with the management company, the Company no longer pays
management fees but instead recognizes the actual expenses of
management administration and real estate operations. These
additional expenses are also offset by the revenues received for
services performed for outside parties. General and administrative
expenses includes an additional $400,000 and operating expenses
includes $1.2 million related to the addition of the management
company expenses. These are offset by the $974,000 in revenue
generated from its external operations and the $1.1 million
elimination of management fees.
Interest expense rose $1.6 million for the second quarter of 1995
over the same quarter in 1994 due to higher debt balances. During
the second quarter of 1994, the Company had no outstanding balances
on its lines of credit, while the outstanding balances for the
second quarter of 1995 reflect borrowings related to the acquisition
activity discussed above.
Six Months Ended June 30, 1995 compared to June Ended June 30, 1994
The following comparison of operating results discuss the Company's
actual first half 1995 results to the combined operating results of
the Predecessor from January 1, 1994 to March 1, 1994 and the
operating results of the Company from March 1, 1994 (the beginning
of operations) to June 30, 1994.
Rental revenues for the first six months rose 16.4% or $6.2 million
compared to the first half of 1994. This reflects approximately
$2.9 million of revenues related to the 20 storage centers acquired
September 1, 1994, $1.1 million of revenues related to properties
added during this quarter, as well as rental rate increases for the
original portfolio of assets.
Total expenses for the first six months of 1995 rose 14.5% over the
first half of 1994, while income from operations rose 31% for the
same period. This increase reflects the addition of acquisitions
made during the last year as well as the merger with the property
management company discussed above.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SHURGARD STORAGE CENTERS, INC.
Date: July 26, 1995 By: /s/ Harrell Beck
Harrell Beck
Chief Financial Officer and Authorized Signatory
Shurgard Storage Centers, Inc.
Statement of Computation of Earnings to Fixed Charges
Six Months Ended June 30, 1995
(amounts in thousands)
Net Income 11,992
Fixed Charges:
Interest 7,283
Amortization of Loan costs 560
------
7,843
------
Net Income before Fixed Charges 19,835
Divided by Fixed Charges 7,843
------
Ratio of Earnings to Fixed Charges 2.53
======
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000906933
<NAME> SHURGARD STORAGE CENTERS, INC.
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> JUN-30-1995 JUN-30-1995
<CASH> 9,971 9,971
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 527,236 527,236
<DEPRECIATION> 18,354 18,354
<TOTAL-ASSETS> 585,901 585,901
<CURRENT-LIABILITIES> 0 0
<BONDS> 132,391 132,391
<COMMON> 442,173 442,173
0 0
0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 585,901 585,901
<SALES> 22,771 43,743
<TOTAL-REVENUES> 24,268 45,870
<CGS> 0 0
<TOTAL-COSTS> 12,329 24,359
<OTHER-EXPENSES> 1,449 2,236
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,852 7,283
<INCOME-PRETAX> 6,638 11,992
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 6,638 11,992
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 6,638 11,992
<EPS-PRIMARY> 0.35 0.66
<EPS-DILUTED> 0.35 0.66
</TABLE>
