Sovran Self Storage Reports Fourth Quarter Results; Adjusted FFO per Share Increases 13.3%, Issues Guidance for 2016

BUFFALO, N.Y.--(BUSINESS WIRE)-- Sovran Self Storage, Inc. (NYSE: SSS), a self storage real estate investment trust (REIT), reported operating results for the quarter and year ended December 31, 2015.

Fourth Quarter 2015 Highlights:

• Achieved adjusted funds from operations per fully diluted common share of $1.28, representing a 13.3% increase over the same period last year.
• Increased same store revenue by 6.7% and net operating income ("NOI")(1) by 7.8% as compared to the fourth quarter of 2014.
• Grew same store average occupancy for the quarter by 120 basis points to 90.5% compared to the same period in 2014. Same store occupancy at December 31, 2015, was 90.1%; a full 120 basis points over December 31, 2014.
• Paid a quarterly dividend of $0.85 per share of common stock.
• Achieved full year adjusted funds from operations per fully diluted common share of $4.94, representing a 13.3% increase over full year 2014 results. This is the Company’s fifth consecutive year of double digit percentage adjusted FFO growth.
• Attained credit rating upgrades from both Standard and Poor’s and Fitch (to BBB from BBB-). Moody’s Investors Service also initiated coverage with a ‘Baa2’ credit rating on the Company’s corporate credit and issue-level ratings.

Net income available to common shareholders for the fourth quarter of 2015 was $30.0 million or $0.83 per fully diluted common share. For the same period in 2014, net income available to common shareholders was $25.7 million or $0.76 per fully diluted common share.

Funds from operations (“FFO”)(2) for the quarter were $1.26 per fully diluted common share compared to $1.08 for the same period last year. Absent $0.6 million of acquisition costs incurred in the fourth quarter of 2015 and $1.9 million of acquisition costs and straight-line rent adjustments in the fourth quarter of 2014, adjusted FFO per fully diluted common share was $1.28 and $1.13 for the fourth quarter of 2015 and 2014, respectively.

Increased occupancy and rental rates were the primary contributors to the Company’s strong FFO growth during the quarter.

OPERATIONS:

Total revenues increased 11.9% over last year’s fourth quarter while operating costs increased 10.6%, resulting in an NOI increase of 12.5%. Overall occupancy averaged 89.8% for the period, and rental rates averaged $12.83 per sq. ft.

Revenues for the 399 stores wholly owned by the Company since January 1, 2014 increased 6.7% from those of the fourth quarter of 2014, the result of a 120 basis point increase in average occupancy, a 5.0% increase in rental rates and increases in tenant insurance administrative fees and other income.

Same store operating expenses increased 4.6% for the fourth quarter of 2015 compared to the prior year period, primarily the result of increased real estate taxes.

Consequently, same store net operating income increased 7.8% this period over the fourth quarter of 2014.

General and administrative expenses increased by approximately $1.1 million over the same period in 2014, primarily due to increases in personnel costs associated with operating 24 more stores during the quarter than at this time last year, and legal fees. Beginning with the first quarter of 2015, the company reclassified internet marketing costs from general and administrative expenses to property operations expense for all periods presented so as to be consistent with industry practices.

During the fourth quarter of 2015, the Company experienced same store revenue growth in 28 of its 29 major markets in the same store pool. Overall, the markets with the strongest revenue impact include those in Florida, New York and Georgia.

For the full year 2015, same store revenues increased by 6.2% and same store NOI improved by 7.9%. Same store occupancy at December 31, 2015 increased by 120 basis points over that of December 31, 2014 to 90.1%.

PROPERTIES:

During the quarter, the Company acquired one store near Philadelphia, PA at a cost of approximately $6.6 million. It also sold two non-strategic facilities in South Carolina for approximately $4.0 million. Both were acquired as part of a portfolio purchased in September, 2015.

As described in its prospectus filed January 19, 2016, the Company entered into contracts to acquire 30 self storage facilities in ten different states for a total purchase price of approximately $398 million (including the Philadelphia store referenced above). The facilities include five single store acquisitions and four portfolio acquisitions; one comprised of 13 stores, and three comprised of four properties each. In aggregate, the newly announced transactions include 21 stabilized properties in the Company’s existing markets of Boston/SE New Hampshire (6), Central/Southern Florida (5), Connecticut (2), Dallas (3), Denver (1), New York City metro area (2) and Philadelphia (2). A contract to acquire a recently developed facility in Phoenix, AZ, another market in which the Company has a presence, was also executed. The balance of the acquisitions includes eight properties in the Los Angeles, CA metro area, a new market for the Company. Seven of these properties are stabilized while the eighth property is a newly developed store in North Los Angeles County.

As noted above, one of the Philadelphia properties was acquired in December, 2015, at a cost of approximately $6.6 million. In January and February, 2016, 19 of the aforementioned stores were acquired at a cost of approximately $222 million; four in Southern Florida, four in Los Angeles, six in Boston/SE New Hampshire, three in Dallas and one each in Phoenix and Philadelphia. The purchase price of all of these acquisitions was funded through draws on the Company’s line of credit, which draws have been subsequently repaid through proceeds of the Company’s underwritten public offering described below. The remaining 10 previously announced properties are expected to be acquired at various dates through April, 2016, at a total cost of approximately $169 million.

In addition to the transactions described above, the Company is also under contract to purchase three Certificate of Occupancy properties; two in Chicago, one in Charleston, SC and one in Miami, FL. The Miami property was acquired at a cost of approximately $11 million in February 2016. The Company expects to execute the purchase of the three remaining properties upon completion of construction at various dates later in 2016 for total consideration of approximately $27 million.

The purchase of the remaining facilities by the Company is subject to customary conditions to closing, and there is no assurance that these properties will be acquired.

CAPITAL TRANSACTIONS:

Illustrated below are key financial ratios at December 31, 2015:

• Debt to Enterprise Value (at $107.31/share) 17.4%
• Debt to Book Cost of Storage Facilities 33.4%
• Debt to EBITDA Ratio 3.8x
• Debt Service Coverage 6.1x

At December 31, 2015, the Company had approximately $7.0 million of cash on hand, and $221 million available on its line of credit, excluding its expansion feature.

During the quarter, the Company issued 450,000 shares pursuant to its “At The Market” program at an average price of $99.58 per share. The net proceeds of $44.2 million were used, in part, to acquire the aforementioned properties. In October, the Company issued 45,370 shares at a price of $96.45 through its Dividend Reinvestment Plan.

On January 4, 2016, the Company increased its line of credit facility from $300 million to $500 million. This increase was pursuant to an expansion feature set forth in the Company’s existing unsecured credit agreement. The other terms of the Company’s line of credit facility were unchanged.

On January 20, 2016, the Company agreed to issue and sell 2,300,000 shares of the Company’s common stock, par value $.01 per share, plus up to an additional 345,000 shares of common stock pursuant to the underwriters’ option, at a price to the public of $105.75 per share. The offering of 2,645,000 shares of the Company’s common stock closed on January 25, 2016, resulting in net proceeds to the Company of approximately $269.7 million, part of which was used to fund the aforementioned properties.

COMMON STOCK DIVIDEND:

Subsequent to quarter-end, the Company’s Board of Directors approved a quarterly dividend of $0.85 per share or $3.40 annualized.

YEAR 2016 EARNINGS GUIDANCE:

Management is encouraged by its occupancy gains and its ability to attain significant rental rate growth in most markets. The following assumptions covering operations have been utilized in formulating guidance for the first quarter and full year 2016:

Same Store Projected Increases Over 2015

1Q 2016

Full Year 2016

Revenue

6.0 – 7.0%

6.0 – 7.0%

Operating Costs (excluding property taxes)

3.0 – 4.0%

3.0 – 4.0%

Property Taxes

6.0 – 7.0%

6.0 – 7.0%

Total Operating Expenses

4.0 – 5.0%

4.0 – 5.0%

Net Operating Income

7.0 – 8.0%

7.0 – 8.0%

The Company’s 2016 same store pool consists of the 428 stabilized stores owned since December 31, 2014. The stores purchased in 2014 at Certificate of Occupancy or that were in the early stages of lease-up are not included, regardless of their current occupancies. The Company believes that occupancy levels achieved during the lease-up period, using discounted rates, are not truly indicative of a new store’s performance, and therefore do not result in a meaningful year-over-year comparison in future years. The Company will include such stores in its same store pool in the first year after the stores achieve 80% sustained occupancy using market rates and incentives.

The Houston market is expected to comprise approximately 10.0% of the 2016 forecasted NOI of the Company’s wholly owned stores. Forecasts for the 41 same store pool of properties in the Company’s Houston market include revenue growth of 5.75% – 6.25%, operating expense increases of 4.0% – 5.0% (inclusive of a 6% projected increase in property taxes), and NOI growth of between 6.0% and 7.0%.

The Company intends to spend up to $40 million on its expansion and enhancement program. It has also budgeted $19 million to provide for recurring capitalized expenditures including roofing, paving, and office renovations.

The Company has assumed $100 million of accretive acquisitions in 2016 in addition to the aforementioned properties under contract or already acquired. Per share FFO guidance is projected after adding back third party acquisition costs. Purchases of these additional properties are expected to be funded via proceeds from the Company’s January 2016 common stock offering and draws on its line of credit which carries an interest rate of LIBOR plus 1.10%.

At the conclusion of 2015, the Company operated six self-storage facilities that it acquired during 2014 and 2015 upon issuance of Certificate of Occupancy or in the early stages of lease-up. It also acquired one in Phoenix, AZ and one in Miami, FL in February 2016, and expects to acquire another in Los Angeles, CA in March. Further, it expects to acquire three more such Certificate of Occupancy facilities at various dates later in 2016. Upon acquisition, these properties have insufficient rental revenue to cover operating costs; accordingly, for the first 24 to 36 months of operation, ownership of these facilities is dilutive to FFO per share. The Company expects that during 2016, it will incur such dilution to the extent of $0.07 to $0.08 per share due to the aforementioned acquisitions.

Annual general and administrative expenses are expected to be approximately $41-42 million. The increase over the prior year is primarily due to the need for additional personnel required for recent acquisitions and the Company’s plans to continue expanding its Corporate Alliance program.

Subsequent to our common stock offering in January, 2016, the Company had 39.4 million shares of common stock outstanding and 0.2 million Operating Partnership Units outstanding.

As a result of the above assumptions, management expects adjusted funds from operations for the full year 2016 to be approximately $5.45 to $5.51 per share, and between $1.17 and $1.19 per share for the first quarter of 2016.

FORWARD LOOKING STATEMENTS:

When used within this news release, the words “intends,” “believes,” “expects,” “anticipates,” and similar expressions are intended to identify “forward looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933, and in Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward looking statements. Such factors include, but are not limited to, the effect of competition from new self storage facilities, which could cause rents and occupancy rates to decline; the Company’s ability to evaluate, finance and integrate acquired businesses into the Company’s existing business and operations; the Company’s ability to enter new markets where it has little or no operational experience; the Company’s existing indebtedness may mature in an unfavorable credit environment, preventing refinancing or forcing refinancing of the indebtedness on terms that are not as favorable as the existing terms; interest rates may fluctuate, impacting costs associated with the Company’s outstanding floating rate debt; the Company’s ability to comply with debt covenants; the future ratings on the Company’s debt instruments; the regional concentration of the Company’s business may subject it to economic downturns in the states of Florida and Texas; the Company’s ability to effectively compete in the industries in which it does business; the Company’s reliance on its call center; the Company’s cash flow may be insufficient to meet required payments of principal, interest and dividends; and tax law changes which may change the taxability of future income.

CONFERENCE CALL:

Sovran Self Storage will hold its Fourth Quarter Earnings Release Conference Call at 9:00 a.m. Eastern Time on Thursday, February 18, 2016. To help avoid connection delays, participants are encouraged to pre-register using this link. Anyone unable to pre-register may access the conference call at 877.737.7051 (domestic) or 201.689.8878 (international). Management will accept questions from registered financial analysts after prepared remarks; all others are encouraged to listen to the call via webcast by accessing “news and events” under the investor relations tab at www.unclebobs.com/company/.

The webcast will be archived for 90 days; a telephone replay will also be available for 72 hours by calling 877.660.6853 and entering conference ID 13628177.

ABOUT SOVRAN SELF STORAGE, INC:

Sovran Self Storage, Inc. is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self storage facilities. The Company operates over 500 self storage facilities in 26 states under the name Uncle Bob’s Self Storage®. For more information, visit www.unclebobs.com, like us on Facebook, or follow us on Twitter.

SOVRAN SELF STORAGE, INC.
BALANCE SHEET DATA
(unaudited)
						December 31,								December 31,
(dollars in thousands)						2015								2014
Assets
Investment in storage facilities:
Land						$	480,176							$	397,642
Building, equipment and construction in progress							2,011,526								1,780,341
							2,491,702								2,177,983
Less: accumulated depreciation							(465,195	)							(411,701	)
Investment in storage facilities, net							2,026,507								1,766,282
Cash and cash equivalents							7,032								8,543
Accounts receivable							6,805								5,758
Receivable from joint venture							929								583
Investment in joint venture							62,520								57,803
Prepaid expenses							6,115								6,533
Fair value of interest rate swap agreements							550								-
Intangible asset - in-place customer leases (net of accumulated
amortization of $21,017 in 2015 and $17,662 in 2014)							1,303								2,204
Other assets							11,095								7,094
Total Assets						$	2,122,856							$	1,854,800
Liabilities
Line of credit						$	79,000							$	49,000
Term notes							750,000								750,000
Accounts payable and accrued liabilities							48,523								43,551
Deferred revenue							7,511								7,290
Fair value of interest rate swap agreements							15,343								13,341
Mortgages payable							1,993								2,127
Total Liabilities							902,370								865,309
Noncontrolling redeemable Operating Partnership Units at redemption value							18,171								13,622
Equity
Common stock							367								341
Additional paid-in capital							1,388,343								1,156,225
Accumulated deficit							(171,980	)							(167,692	)
Accumulated other comprehensive loss							(14,415	)							(13,005	)
Total Shareholders' Equity							1,202,315								975,869
Total Liabilities and Equity						$	2,122,856							$	1,854,800

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
				October 1, 2015						October 1, 2014
				to						to
(dollars in thousands, except share data)				December 31, 2015						December 31, 2014
Revenues
Rental income				$	87,996					$	78,605
Other operating income					5,552						4,811
Management fee income					1,492						1,272
Acquisition fee income					-						241
Total operating revenues					95,040						84,929
Expenses
Property operations and maintenance (3)					20,915						19,611
Real estate taxes					9,252						7,664
General and administrative (3)					10,201						9,113
Acquisition related costs					576						1,432
Operating leases of storage facilities					-						1,997
Depreciation and amortization					14,349						12,580
Amortization of in-place customer leases					719						1,389
Total operating expenses					56,012						53,786
Income from operations					39,028						31,143
Other income (expense)
Interest expense (A)					(9,328	)					(9,247	)
Interest income					-						9
(Loss) gain on sale of real estate					(487	)					3,399
Equity in income of joint ventures					970						533
Net income					30,183						25,837
Net income attributable to noncontrolling interests					(146	)					(144	)
Net income attributable to common shareholders				$	30,037					$	25,693
Earnings per common share attributable to common shareholders - basic				$	0.83					$	0.76
Earnings per common share attributable to common shareholders - diluted				$	0.83					$	0.76
Common shares used in basic
earnings per share calculation					36,109,010						33,656,369
Common shares used in diluted
earnings per share calculation					36,327,085						33,845,905
Dividends declared per common share				$	0.85					$	0.68
(A) Interest expense for the three months ending December 31 consists of the following
Interest expense				$	9,032					$	9,007
Amortization of deferred financing fees					296						240
Total interest expense				$	9,328					$	9,247
				January 1, 2015						January 1, 2014
				to						to
(dollars in thousands, except share data)				December 31, 2015						December 31, 2014
Revenues
Rental income				$	338,435					$	302,044
Other operating income					22,331						18,934
Management fee income					5,836						4,722
Acquisition fee income					-						380
Total operating revenues					366,602						326,080
Expenses
Property operations and maintenance (3)					81,915						75,333
Real estate taxes					36,563						32,097
General and administrative (3)					38,659						35,222
Acquisition related costs					2,991						7,359
Operating leases of storage facilities					683						7,987
Depreciation and amortization					55,083						47,637
Amortization of in-place customer leases					3,423						4,112
Total operating expenses					219,317						209,747
Income from operations					147,285						116,333
Other income (expense)
Interest expense (A)					(37,124	)					(34,578	)
Interest income					5						40
(Loss) gain on sale of real estate					(494	)					5,176
Equity in income of joint ventures					3,405						2,086
Net income					113,077						89,057
Net income attributable to noncontrolling interests					(553	)					(526	)
Net income attributable to common shareholders				$	112,524					$	88,531
Earnings per common share attributable to common shareholders - basic				$	3.18					$	2.68
Earnings per common share attributable to common shareholders - diluted				$	3.16					$	2.67
Common shares used in basic
earnings per share calculation					35,379,212						33,018,716
Common shares used in diluted
earnings per share calculation					35,600,520						33,190,673
Dividends declared per common share				$	3.20					$	2.72
(A) Interest expense for the year ending December 31 consists of the following
Interest expense				$	35,940					$	33,719
Amortization of deferred financing fees					1,184						859
Total interest expense				$	37,124					$	34,578

COMPUTATION OF FUNDS FROM OPERATIONS (FFO) (2) - (unaudited)
				October 1, 2015						October 1, 2014
				to						to
(dollars in thousands, except share data)				December 31, 2015						December 31, 2014
Net income attributable to common shareholders				$	30,037					$	25,693
Net income attributable to noncontrolling interests					146						144
Depreciation of real estate and amortization of intangible
assets exclusive of deferred financing fees					14,780						13,730
Depreciation and amortization from unconsolidated joint ventures					590						500
Gain on sale of real estate					487						(3,399	)
Funds from operations allocable to noncontrolling
interest in Operating Partnership					(223	)					(205	)
Funds from operations available to common shareholders					45,817						36,463
FFO per share - diluted				$	1.26					$	1.08
Adjustments to FFO
Acquisition costs expensed					576						1,432
Company's share of acquisition costs expensed by Sovran HHF Storage Holdings					-						182
Acquisition fee income from Sovran HHF Storage Holdings					-						(240	)
Operating leases straight line rent adjustment					-						497
Funds from operations resulting from non-recurring items allocable to noncontrolling
interest in Operating Partnership					(3	)					(10	)
Adjusted funds from operations available to common shareholders					46,390						38,324
Adjusted FFO per share - diluted				$	1.28					$	1.13
Common shares - diluted					36,327,085						33,845,905
				January 1, 2015						January 1, 2014
				to						to
(dollars in thousands, except share data)				December 31, 2015						December 31, 2014
Net income attributable to common shareholders				$	112,524					$	88,531
Net income attributable to noncontrolling interests					553						526
Depreciation of real estate and amortization of intangible
assets exclusive of deferred financing fees					57,429						50,827
Depreciation and amortization from unconsolidated joint ventures					2,435						1,666
Loss (gain) on sale of real estate					494						(5,176	)
Funds from operations allocable to noncontrolling
interest in Operating Partnership					(848	)					(806	)
Funds from operations available to common shareholders					172,587						135,568
FFO per share - diluted				$	4.85					$	4.08
Adjustments to FFO
Acquisition costs expensed					2,991						7,359
Company's share of acquisition costs expensed by Sovran HHF Storage Holdings					-						367
Acquisition fee income from Sovran HHF Storage Holdings					-						(376	)
Operating leases straight line rent adjustment					146						1,987
Funds from operations resulting from non-recurring items allocable to noncontrolling
interest in Operating Partnership					(15	)					(56	)
Adjusted funds from operations available to common shareholders					175,709						144,849
Adjusted FFO per share - diluted				$	4.94					$	4.36
Common shares - diluted					35,600,520						33,190,673

QUARTERLY SAME STORE DATA (4) * 399 stores owned since 12/31/13 (unaudited)			October 1, 2015				October 1, 2014
			to				to									Percentage
(dollars in thousands)			December 31, 2015				December 31, 2014				Change					Change
Revenues:
Rental income			$	76,654			$	71,921			$	4,733				6.6	%
Tenant insurance				2,778				2,455				323				13.2	%
Other operating income				1,203				1,164				39				3.4	%
Total operating revenues				80,635				75,540				5,095				6.7	%
Expenses:
Payroll and benefits				6,989				6,739				250				3.7	%
Real estate taxes				7,766				6,859				907				13.2	%
Utilities				2,409				2,580				(171	)			-6.6	%
Repairs and maintenance				3,274				3,231				43				1.3	%
Office and other operating expense				2,721				2,612				109				4.2	%
Insurance				1,016				1,019				(3	)			-0.3	%
Advertising & yellow pages				306				342				(36	)			-10.5	%
Internet marketing (3)				1,208				1,185				23				1.9	%
Total operating expenses				25,689				24,567				1,122				4.6	%
Net operating income			$	54,946			$	50,973			$	3,973				7.8	%
QTD Same store move ins				34,870				35,744				(874	)
QTD Same store move outs				37,512				39,354				(1,842	)
OTHER COMPARABLE QUARTERLY SAME STORE DATA * (unaudited)			October 1, 2015				October 1, 2014
			to				to									Percentage
			December 31, 2015				December 31, 2014				Change					Change
Stores owned since 12/31/12 (384 stores)
Revenues			$	75,461			$	70,722			$	4,739				6.7	%
Expenses including internet advertising				24,237				23,070				1,167				5.1	%
Net operating income			$	51,224			$	47,652			$	3,572				7.5	%
Stores owned since 12/31/11 (356 stores)
Revenues			$	68,437			$	64,245			$	4,192				6.5	%
Expenses including internet advertising				22,282				21,193				1,089				5.1	%
Net operating income			$	46,155			$	43,052			$	3,103				7.2	%
* See exhibits A and B for supplemental quarterly same store data.
YEAR TO DATE SAME STORE DATA * 399 stores owned since 12/31/13 (unaudited)			January 1, 2015				January 1, 2014
			to				to									Percentage
(dollars in thousands)			December 31, 2015				December 31, 2014				Change					Change
Revenues:
Rental income			$	301,525			$	284,613			$	16,912				5.9	%
Tenant insurance				10,979				9,644				1,335				13.8	%
Other operating income				5,427				5,147				280				5.4	%
Total operating revenues				317,931				299,404				18,527				6.2	%
Expenses:
Payroll and benefits				27,469				26,518				951				3.6	%
Real estate taxes				31,593				30,041				1,552				5.2	%
Utilities				10,925				11,389				(464	)			-4.1	%
Repairs and maintenance				12,400				11,256				1,144				10.2	%
Office and other operating expense				10,294				10,390				(96	)			-0.9	%
Insurance				4,059				4,152				(93	)			-2.2	%
Advertising & yellow pages				1,297				1,441				(144	)			-10.0	%
Internet marketing (3)				5,319				5,307				12				0.2	%
Total operating expenses				103,356				100,494				2,862				2.8	%
Net operating income			$	214,575			$	198,910			$	15,665				7.9	%
YTD Same store move ins				160,553				165,430				(4,877	)
YTD Same store move outs				156,900				161,965				(5,065	)

OTHER DATA			Same Store (4)										All Stores (5)
			2015					2014					2015					2014
Weighted average quarterly occupancy				90.5	%				89.3	%				89.8	%				88.9	%
Occupancy at December 31				90.1	%				88.9	%				89.4	%				88.4	%
Rent per occupied square foot			$12.64					$12.04					$12.83					$12.19
Investment in Storage Facilities: (unaudited)
The following summarizes activity in storage facilities during the year ended December 31, 2015:
Beginning balance			$	2,177,983
Property acquisitions				278,572
Improvements and equipment additions:
Expansions				16,203
Roofing, paving, and equipment:
Stabilized stores				19,322
Recently acquired stores				4,282
Change in construction in progress (Total CIP $7.0 million)				2,239
Dispositions and Impairments				(6,899	)
Storage facilities at cost at period end			$	2,491,702
Comparison of Selected G&A Costs (unaudited)			Quarter Ended										Year Ended
			December 31, 2015					December 31, 2014					December 31, 2015					December 31, 2014
Management and administrative salaries and benefits				6,645					5,995					23,947					22,337
Training				351					287					1,017					1,046
Call center				491					444					1,896					1,651
Uncle Bob's Management costs				205					51					496					448
Income taxes				(374	)				(27	)				1,251					927
Legal, accounting and professional				1,147					684					2,853					1,873
Other administrative expenses (6)				1,736					1,679					7,199					6,940
			$	10,201				$	9,113				$	38,659				$	35,222
Net rentable square feet			December 31, 2015
Wholly owned properties				30,582,611
Joint venture properties				5,189,872
Third party managed properties				1,179,556
				36,952,039
			December 31, 2015					December 31, 2014
Common shares outstanding				36,710,673					34,105,955
Operating Partnership Units outstanding				168,866					155,484

(1) Net operating income or "NOI" is a non-GAAP (generally accepted accounting principles) financial measure that we define as total continuing revenues less continuing property operating expenses. NOI also can be calculated by adding back to net income: interest expense, impairment and casualty losses, depreciation and amortization expense, acquisition related costs, general and administrative expense, and deducting from net income: income from discontinued operations, interest income, gain on sale of real estate, and equity in income of joint ventures. We believe that NOI is a meaningful measure of operating performance, because we utilize NOI in making decisions with respect to capital allocations, in determining current property values, and comparing period-to-period and market-to-market property operating results. NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues, operating income and net income.

(2) We believe that Funds from Operations (“FFO”) provides relevant and meaningful information about our operating performance that is necessary, along with net earnings and cash flows, for an understanding of our operating results. FFO adds back historical cost depreciation, which assumes the value of real estate assets diminishes predictably in the future. In fact, real estate asset values increase or decrease with market conditions. Consequently, we believe FFO is a useful supplemental measure in evaluating our operating performance by disregarding (or adding back) historical cost depreciation.

Funds from operations is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income available to common shareholders computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of properties, plus impairment of real estate assets, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be compared with our reported net income and cash flows in accordance with GAAP, as presented in our consolidated financial statements.

Our 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 (determined in accordance with GAAP) as an indication of our performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, or as an indicator of our ability to make cash distributions.

(3) For all periods presented internet marketing costs are included in property operations and maintenance expense. The internet marketing costs had previously been included in general and administrative expenses. For the three months ended December 31, 2015 and 2014, total internet marketing expense was $1,367 and $1,280, respectively. For the year ended December 31, 2015 and 2014, total internet marketing expense was $5,884 and $5,570, respectively.

(4) Includes the stores owned and/or managed by the Company for the entire periods presented that are consolidated in our financial statements. Does not include unconsolidated joint ventures or other stores managed by the Company.

(5) Does not include unconsolidated joint venture stores or other stores managed by the Company

(6) Other administrative expenses include office rent, travel expense, investor relations and miscellaneous other expenses.

Exhibit A
Sovran Self Storage, Inc.
Same Store Performance Summary by Market
Three Months Ended December 31, 2015
(unaudited)
									Avg Qtrly				Avg Qtrly Occupancy for								Revenue												Expenses												NOI
									Rent per				the Three Months Ended								for the Three Months												for the Three Months												for the Three Months
						Square			Occupied				December 31,								Ended December 31,												Ended December 31,												Ended December 31,
Market			Stores			Feet			Square Foot				2015				2014				2015				2014				% Change				2015				2014				% Change				2015				2014				% Change
Houston-The Woodlands-Sugar Land, TX			40			3,069			$	13.56			90.6	%			92.4	%			$	9,843			$	9,290			6.0	%			$	3,115			$	3,288			-5.3	%			$	6,728			$	6,002			12.1	%
New England-CT-RI-NH-MA-ME			31			1,913				16.58			90.2	%			88.4	%				7,480				6,991			7.0	%				2,326				2,227			4.4	%				5,154				4,764			8.2	%
Dallas-Fort Worth-Arlington, TX			20			1,364				11.61			93.3	%			92.0	%				3,835				3,553			7.9	%				1,291				1,113			16.0	%				2,544				2,440			4.3	%
Atlanta-Sandy Springs-Roswell, GA			20			1,353				12.15			91.5	%			91.7	%				4,005				3,653			9.6	%				1,120				957			17.0	%				2,885				2,696			7.0	%
Buffalo-Upstate, NY			19			1,266				12.98			87.6	%			88.0	%				3,750				3,499			7.2	%				1,308				1,254			4.3	%				2,442				2,245			8.8	%
New York-Newark-Jersey City, NY-NJ-PA			18			1,068				22.70			92.1	%			88.1	%				5,783				5,282			9.5	%				1,610				1,722			-6.5	%				4,173				3,560			17.2	%
Austin-Round Rock, TX			15			1,167				12.70			86.7	%			85.2	%				3,359				3,153			6.5	%				1,388				1,077			28.9	%				1,971				2,076			-5.1	%
New Orleans-Lafayette, LA			14			810				11.34			92.3	%			88.9	%				2,242				2,188			2.5	%				619				640			-3.3	%				1,623				1,548			4.8	%
Miami-Fort Lauderdale-West Palm Beach, FL			13			858				16.38			91.2	%			89.7	%				3,383				3,128			8.2	%				957				861			11.1	%				2,426				2,267			7.0	%
San Antonio-New Braunfels, TX			12			713				12.25			91.3	%			89.3	%				2,099				1,912			9.8	%				991				545			81.8	%				1,108				1,367			-18.9	%
Tampa-St. Petersburg-Clearwater, FL			12			746				13.36			93.7	%			91.4	%				2,472				2,311			7.0	%				737				690			6.8	%				1,735				1,621			7.0	%
Virginia Beach-Norfolk-Newport News, VA			11			838				10.38			88.1	%			85.2	%				2,012				1,979			1.7	%				710				680			4.4	%				1,302				1,299			0.2	%
Phoenix-Mesa-Scottsdale, AZ			10			668				10.46			89.6	%			87.2	%				1,670				1,556			7.3	%				456				449			1.6	%				1,214				1,107			9.7	%
Chicago-Naperville-Elgin, IL			9			693				14.15			90.4	%			87.0	%				2,305				2,129			8.3	%				569				770			-26.1	%				1,736				1,359			27.7	%
Cleveland-Elyria, OH			9			629				11.44			87.8	%			89.0	%				1,660				1,578			5.2	%				503				586			-14.2	%				1,157				992			16.6	%
Raleigh-Durham, NC			8			534				11.70			93.0	%			91.1	%				1,541				1,465			5.2	%				392				384			2.1	%				1,149				1,081			6.3	%
Pensacola-Ferry Pass-Brent, FL			8			602				8.15			87.0	%			77.3	%				1,159				1,160			-0.1	%				454				449			1.1	%				705				711			-0.8	%
Jacksonville, FL			8			547				10.33			94.3	%			94.5	%				1,416				1,316			7.6	%				476				447			6.5	%				940				869			8.2	%
St. Louis, MO			8			515				12.86			90.1	%			87.1	%				1,555				1,442			7.8	%				709				470			50.9	%				846				972			-13.0	%
Montgomery, AL			7			490				9.49			89.4	%			85.7	%				1,100				984			11.8	%				313				313			0.0	%				787				671			17.3	%
Space Coast, FL			7			525				11.86			90.3	%			94.5	%				1,462				1,328			10.1	%				407				395			3.0	%				1,055				933			13.1	%
Beaumont-Port Arthur, TX			7			428				12.84			93.4	%			93.9	%				1,355				1,311			3.4	%				413				568			-27.3	%				942				743			26.8	%
Charlotte-Concord-Gastonia, NC			7			428				11.51			93.3	%			92.7	%				1,218				1,133			7.5	%				365				344			6.1	%				853				789			8.1	%
Jackson, MS			6			397				11.20			91.6	%			92.5	%				1,068				1,042			2.5	%				294				293			0.3	%				774				749			3.3	%
Cape Coral-Fort Myers, FL			6			314				11.37			93.7	%			87.8	%				905				788			14.8	%				279				250			11.6	%				626				538			16.4	%
Chattanooga, TN-GA			5			353				11.07			89.2	%			88.0	%				913				852			7.2	%				317				287			10.5	%				596				565			5.5	%
Youngstown-Warren-Boardman, OH-PA			5			333				8.81			88.7	%			89.5	%				695				677			2.7	%				253				241			5.0	%				442				436			1.4	%
Birmingham-Hoover, AL			5			313				8.39			88.8	%			84.1	%				626				584			7.2	%				235				213			10.3	%				391				371			5.4	%
Columbia, SC			5			287				10.00			95.7	%			88.6	%				735				674			9.1	%				271				294			-7.8	%				464				380			22.1	%
Other markets			54			3,603				10.54			89.3	%			88.9	%				8,989				8,582			4.7	%				2,811				2,760			1.8	%				6,178				5,822			6.1	%
Portfolio Total			399			26,824			$	12.64			90.5	%			89.3	%			$	80,635			$	75,540			6.7	%			$	25,689			$	24,567			4.6	%			$	54,946			$	50,973			7.8	%
Properties owned since 12/31/13 (detail shown above)			399			26,824				12.64			90.5	%			89.3	%			$	80,635			$	75,540			6.7	%			$	25,689			$	24,567			4.6	%			$	54,946			$	50,973			7.8	%
Properties owned since 12/31/12			384			25,721				12.32			90.5	%			89.4	%			$	75,461			$	70,722			6.7	%			$	24,237			$	23,070			5.1	%			$	51,224			$	47,652			7.5	%
Properties owned since 12/31/11			356			23,532				12.21			90.4	%			89.5	%			$	68,437			$	64,245			6.5	%			$	22,282			$	21,193			5.1	%			$	46,155			$	43,052			7.2	%
Dollars in thousands except for average quarterly rent per occupied square foot. Square feet in thousands.
List includes markets where the Company has five or more stores.

Exhibit B
Sovran Self Storage, Inc.
Same Store Performance Summary by Market
Twelve Months Ended December 31, 2015
(unaudited)
												Revenue															Expenses															NOI
												for the Twelve Months															for the Twelve Months															for the Twelve Months
								Square				Ended December 31,															Ended December 31,															Ended December 31,
Market				Stores				Feet				2015					2014					% Change					2015					2014					% Change					2015					2014					% Change
Houston-The Woodlands-Sugar Land, TX				40				3,069				$	38,750				$	36,477				6.2	%				$	13,108				$	13,205				-0.7	%				$	25,642				$	23,272				10.2	%
New England-CT-RI-NH-MA-ME				31				1,913					29,393					27,907				5.3	%					9,575					9,002				6.4	%					19,818					18,905				4.8	%
Dallas-Fort Worth-Arlington, TX				20				1,364					15,057					14,081				6.9	%					5,123					4,974				3.0	%					9,934					9,107				9.1	%
Atlanta-Sandy Springs-Roswell, GA				20				1,353					15,560					14,350				8.4	%					4,386					4,297				2.1	%					11,174					10,053				11.2	%
Buffalo-Upstate, NY				19				1,266					15,066					14,053				7.2	%					5,157					4,943				4.3	%					9,909					9,110				8.8	%
New York-Newark-Jersey City, NY-NJ-PA				18				1,068					22,313					21,048				6.0	%					7,279					7,215				0.9	%					15,034					13,833				8.7	%
Austin-Round Rock, TX				15				1,167					13,433					12,714				5.7	%					4,832					4,343				11.3	%					8,601					8,371				2.7	%
New Orleans-Lafayette, LA				14				810					8,975					8,781				2.2	%					2,578					2,500				3.1	%					6,397					6,281				1.8	%
Miami-Fort Lauderdale-West Palm Beach, FL				13				858					13,202					12,320				7.2	%					3,789					3,751				1.0	%					9,413					8,569				9.8	%
San Antonio-New Braunfels, TX				12				713					8,250					7,420				11.2	%					2,999					2,572				16.6	%					5,251					4,848				8.3	%
Tampa-St. Petersburg-Clearwater, FL				12				746					9,725					9,124				6.6	%					2,879					2,781				3.5	%					6,846					6,343				7.9	%
Virginia Beach-Norfolk-Newport News, VA				11				838					8,161					8,118				0.5	%					2,757					2,630				4.8	%					5,404					5,488				-1.5	%
Phoenix-Mesa-Scottsdale, AZ				10				668					6,566					6,115				7.4	%					1,985					2,109				-5.9	%					4,581					4,006				14.4	%
Chicago-Naperville-Elgin, IL				9				693					8,997					8,377				7.4	%					3,145					3,414				-7.9	%					5,852					4,963				17.9	%
Cleveland-Elyria, OH				9				629					6,581					6,230				5.6	%					2,109					2,060				2.4	%					4,472					4,170				7.2	%
Raleigh-Durham, NC				8				534					6,144					5,852				5.0	%					1,513					1,479				2.3	%					4,631					4,373				5.9	%
Pensacola-Ferry Pass-Brent, FL				8				602					4,679					4,672				0.1	%					1,807					1,858				-2.7	%					2,872					2,814				2.1	%
Jacksonville, FL				8				547					5,530					5,035				9.8	%					1,857					1,829				1.5	%					3,673					3,206				14.6	%
St. Louis, MO				8				515					6,098					5,766				5.8	%					2,179					1,970				10.6	%					3,919					3,796				3.2	%
Montgomery, AL				7				490					4,226					3,968				6.5	%					1,325					1,286				3.0	%					2,901					2,682				8.2	%
Space Coast, FL				7				525					5,622					5,155				9.1	%					1,586					1,527				3.9	%					4,036					3,628				11.2	%
Beaumont-Port Arthur, TX				7				428					5,378					5,118				5.1	%					1,813					1,774				2.2	%					3,565					3,344				6.6	%
Charlotte-Concord-Gastonia, NC				7				428					4,784					4,396				8.8	%					1,382					1,344				2.8	%					3,402					3,052				11.5	%
Jackson, MS				6				397					4,242					4,054				4.6	%					1,206					1,196				0.8	%					3,036					2,858				6.2	%
Cape Coral-Fort Myers, FL				6				314					3,430					2,943				16.5	%					1,108					1,036				6.9	%					2,322					1,907				21.8	%
Chattanooga, TN-GA				5				353					3,571					3,360				6.3	%					1,270					1,201				5.7	%					2,301					2,159				6.6	%
Youngstown-Warren-Boardman, OH-PA				5				333					2,788					2,696				3.4	%					1,016					925				9.8	%					1,772					1,771				0.1	%
Birmingham-Hoover, AL				5				313					2,457					2,250				9.2	%					910					836				8.9	%					1,547					1,414				9.4	%
Columbia, SC				5				287					2,874					2,689				6.9	%					1,114					1,088				2.4	%					1,760					1,601				9.9	%
Other markets				54				3,603					36,079					34,335				5.1	%					11,569					11,349				1.9	%					24,510					22,986				6.6	%
Portfolio Total				399				26,824				$	317,931				$	299,404				6.2	%				$	103,356				$	100,494				2.8	%				$	214,575				$	198,910				7.9	%
Dollars and square feet in thousands.
List includes markets where the Company has five or more stores.

Exhibit C
Sovran Self Storage, Inc.
Debt Maturity Schedule
December 31, 2015
(unaudited)
									Current
			Maturity			Basis of			Interest
(dollars in thousands)			Date			Rate			Rate (**)				2016				2017				2018				2019				2020				Thereafter				Total
Line of credit			Dec-2019			Variable			1.72	%			$	-			$	-			$	-			$	79,000			$	-			$	-			$	79,000
Term note			Apr-2016			Fixed			6.38	%				150,000				-				-				-				-				-				150,000
Term note			Jun-2020			Swapped to fixed			3.77	%				-				-				-				-				125,000				-				125,000
Term note			Jun-2020			Swapped to fixed			3.01	%				-				-				-				-				100,000				-				100,000
Term note			Jun-2020			Swapped to fixed			2.77	%				-				-				-				-				100,000				-				100,000
Term note			Aug-2021			Fixed			5.54	%				-				-				-				-				-				100,000				100,000
Term note			Apr-2024			Fixed			4.53	%				-				-				-				-				-				175,000				175,000
Mortgage note			May-2026			Fixed			5.99	%				142				151				160				170				181				1,189				1,993
													$	150,142			$	151			$	160			$	79,170			$	325,181			$	276,189			$	830,993
(**) Rate as of December 31, 2015 based on existing debt rating. Interest rates shown do not include amortization of financing fees and facility fees which are expected to be $1.4 million in 2016.

Exhibit D
Sovran Self Storage, Inc.
Certificate of Occupancy Performance Summary
December 31, 2015
(unaudited)
(dollars in thousands)
																								Revenue								Expenses								NOI
																								for the Three Months								for the Three Months								for the Three Months
						# of							Net Rentable			Occupancy at December 31,								Ended December 31,								Ended December 31,								Ended December 31,
Market			Acquired			Stores			Cost				Square Feet			2015				2014				2015				2014				2015				2014				2015					2014
Chicago, IL			May-2014			1			$	5,500			52,168			75.8	%			47.8	%			$	164			$	82			$	77			$	100			$	87				$	(18	)
Chattanooga, TN			Sep-2014			1				6,550			57,260			91.5	%			49.6	%				164				73				82				45				82					28
Chicago, IL			Nov-2014			1				5,750			97,611			69.2	%			34.7	%				144				12				127				51				17					(39	)
Chicago, IL			Mar-2015			1				8,690			64,780			36.1	%			0.0	%				78				-				121				-				(43	)				-
Phoenix, AZ			Jun-2015			1				7,904			64,401			48.1	%			0.0	%				107				-				67				-				40					-
Boston, MA			Jun-2015			1				10,291			63,475			17.9	%			0.0	%				29				-				48				-				(19	)				-
						6			$	44,685			399,695											$	686			$	167			$	522			$	196			$	164				$	(29	)

View source version on businesswire.com: http://www.businesswire.com/news/home/20160217006529/en/

Sovran Self Storage, Inc.
Diane Piegza, Vice President
Investor Relations and Community Affairs
716-650-6115

Source: Sovran Self Storage, Inc.