Press Releases

Sovran Self Storage Reports Fourth Quarter 2009 Results; Provides 2010 Earnings Guidance

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 ended December 31, 2009.

As a result of one time charges associated with the early repayment of some of its long term bank notes, the Company experienced a loss for the quarter in the amount of $1.5 million or $.06 per diluted share. Net income available to common shareholders for the same period in 2008 was $8.4 million or $.38 per diluted share. Funds from operations for the quarter were $.28 per fully diluted common share. The one-time charges totaled just over $9 million, or $0.33 per fully diluted share.

On October 5, 2009, the Company sold 4.025 million shares of common stock, realizing net proceeds of $114 million from the issuance. The Company applied the proceeds of the offering to repay $100 million of its bank term notes maturing in 2012, and terminated the interest rate swap agreements associated with the repaid debt obligation. Primarily as a result of these actions, Fitch Ratings reinstated the Company's investment grade credit rating at BBB- (matching the rating issued by Standard and Poor's).

David Rogers, the Company's Chief Financial Officer said, "We're happy to see 2010 arrive. 2009 was the first year in our 25 years in the self storage business that our same store revenues went backwards, and the number of stores in our portfolio declined. Nonetheless, we begin the new year with a much stronger balance sheet, tremendous liquidity, a refined set of tools to attract and better serve our customers, and the potential to capitalize on some solid opportunities later this year or early next."

OPERATIONS:

Total Company net operating income for the fourth quarter declined 3.2% ($1 million) compared with the same quarter in 2008 to $30.9 million. Overall average occupancy for the quarter was 80.9% and average rent per square foot for the portfolio was $10.18.

The Company continues to make extensive use of move-in incentives as customers take advantage of Uncle Bob's Self Storage(R) signature "Name Your Price" program announced earlier this year, granting $3.6 million of move-in incentives during the fourth quarter. "Customers like the fact that we offer both free rent and allow them to name their own price for a month - it takes some of the pressure off during these difficult economic times," said Kenneth Myszka, President and COO. "Although revenues at the 354 stores owned and/or managed for the entire quarter in both years decreased 3.6% over the fourth quarter 2008, year-end occupancy was only 70 basis points below that of last year, and we're seeing strong overall move-in activity."

The Company's same store operating expenses decreased by a total of 4.0% from last year's fourth quarter, including a 6.4% reduction in property taxes. Significant savings were realized in all operating expense categories except marketing and internet advertising costs.

General and administrative expenses grew $566,000 over the same period in 2008, primarily due to a charge off of almost $300,000 resulting from terminated construction projects and increased expenses associated with operating the Joint Venture that was formed with Heitman LLC in the second half of 2008.

During the quarter, revenue growth was seen at the Company's Maryland, Michigan and Virginia stores, while stores in Florida, Louisiana, and Texas (primarily the Houston market area) showed revenue declines.

PROPERTIES:

The Company did not acquire any properties during the quarter for its own portfolio or for that of the Joint Venture. The Company did, however, sell two stores located near Pittsburgh, PA, thereby exiting that market. The stores were sold for $5.4 million, bringing the total to 5 stores sold during the year for a combined sales price of $16.3 million.

On October 2, 2009, the Company opened its second store in Richmond, VA. The 78,000 square foot facility was built at a cost of $7 million including land, and features both traditional and climate controlled storage as well as the Company's Dri-guard storage spaces. It also includes individual door alarms, a large retail area for moving and storage supplies, and a conference room for customer use.

As previously announced, the Company curtailed its 2009 program of expanding and enhancing its existing stores. However, ten projects that were started in 2008 were completed this year at a cost of $11 million, providing 239,000 square feet of additional and/or improved space to existing stores.

CAPITAL TRANSACTIONS:

As noted above, the Company completed a 4.025 million share stock sale on October 5, 2009, the proceeds of which were used to repay $100 million of bank term debt. As a result, the Company incurred one time charges totaling just over $9 million, ($0.33 per share) to terminate the interest rate swap contracts and to write off the unamortized financing fees associated with the notes that were repaid.

On December 1st, the Company used the remaining proceeds of the stock issuance and the proceeds of the sale of the Pittsburgh properties to repay $26 million of outstanding mortgage debt.

At December 31, 2009, the Company had $400 million of unsecured term note debt and $81.2 million of mortgage debt outstanding. The Company has no significant debt maturities until mid-2012.

Illustrated below are key financial ratios at December 31, 2009:

    --  Debt to Enterprise Value (at $36.00/share) 32.3%
    --  Debt to Book Cost of Storage Facilities 34.7%
    --  Debt to EBITDA Ratio 4.6x
    --  Debt Service Coverage 3.4x

YEAR 2010 EARNINGS GUIDANCE:

The Company is experiencing soft consumer demand in many of its markets and expects conditions to remain competitive. It anticipates the continuation of leasing incentives as well as increased advertising and aggressive marketing to improve occupancy and, accordingly, estimates a decline in same store revenue of 0 to 2% from that of 2009. It is expected that the first and second quarters will show the steepest declines, with the latter half of 2010 performing a bit stronger. Property operating costs are projected to increase by 3 to 4%, including an expected 6% increase in property taxes. Accordingly, the Company is anticipating a decline of 3 to 4% in same store net operating income for 2010.

While the Company has curtailed its 3 year / $150 million program of expanding and enhancing its existing properties, it has identified some 21 properties at which it plans to add or improve approximately 500,000 square feet of storage space during 2010 at an estimated cost of $20 million. The Company also has budgeted $12 million to provide for recurring capitalized expenditures, including roofing, painting, paving, and office renovations.

The Company is selectively evaluating acquisition opportunities, but at present has no properties under contract and expects to remain prudent while the capital and real estate markets remain unstable. It is negotiating the sale of several of its non-core stores (as noted, five were sold in 2009), and plans to sell up to a dozen more by mid 2010. Neither the effect of these potential dispositions, nor the impact of any acquisitions has been factored into projected FFO results for 2010.

General and administrative expenses are expected to increase by 3% as the Company plans to expand its internet marketing presence.

At December 31, 2009, all of the Company's debt is either fixed rate or covered by rate swap contracts that essentially fix the rate. Subsequent borrowings that may occur will be pursuant to the Company's Line of Credit agreement at a floating rate of LIBOR plus 1.375%.

At December 31, 2009, the Company had 27.5 million shares of common stock outstanding and .42 million Operating Partnership Units outstanding.

As a result of the above assumptions, management expects funds from operations for the full year 2010 to be approximately $2.41 to $2.45 per share, and between $0.56 and $0.58 for the first quarter of 2010.

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 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, 2010. Anyone wishing to listen to the call may access the webcast via the event page at http://www.unclebobs.com/company/investment/. The call will be archived for a period of 90 days after initial airing.

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 381 self storage facilities in 24 states under the name "Uncle Bob's Self Storage"(R). For more information, please contact David Rogers, CFO or Diane Piegza, VP Corporate Communications at (716) 633-1850 or visit the Company's Web site.


SOVRAN SELF STORAGE, INC.

BALANCE SHEET DATA

(unaudited)

                                                    December 31,   December 31,

(dollars in thousands)                              2009           2008

Assets

Investment in storage facilities:

Land                                                $ 237,684      $ 236,655

Building, equipment and construction in progress      1,149,899      1,129,960

                                                      1,387,583      1,366,615

Less: accumulated depreciation                        (245,178  )    (212,301  )

Investment in storage facilities, net                 1,142,405      1,154,314

Cash and cash equivalents                             10,710         4,486

Accounts receivable                                   2,405          2,934

Receivable from related parties                       -              14

Receivable from joint ventures                        173            336

Investment in joint ventures                          19,944         20,111

Prepaid expenses                                      4,250          4,647

Intangible asset - in-place customer leases (net
of accumulated                                        -              289
amortization of $5,449 in 2009 and $5,160 in 2008)

Other assets                                          5,314          7,171

Net assets of discontinued operations                 -              18,226

Total Assets                                        $ 1,185,201    $ 1,212,528

Liabilities

Line of credit                                      $ -            $ 14,000

Term notes                                            400,000        500,000

Accounts payable and accrued liabilities              22,339         23,970

Deferred revenue                                      5,060          5,570

Fair value of interest rate swap agreements           11,524         25,490

Accrued dividends                                     -              14,090

Mortgages payable                                     81,219         109,261

Total Liabilities                                     520,142        692,381

Noncontrolling redeemable Operating Partnership       15,005         15,118
Units at redemption value

Equity

Common stock                                          287            232

Additional paid-in capital                            814,988        666,633

Accumulated deficit                                   (139,863  )    (122,581  )

Accumulated other comprehensive loss                  (11,265   )    (25,162   )

Treasury stock at cost                                (27,175   )    (27,175   )

Total Shareholders' Equity                            636,972        491,947

Noncontrolling interest - consolidated joint          13,082         13,082
venture

Total Equity                                          650,054        505,029

Total Liabilities and Equity                        $ 1,185,201    $ 1,212,528




CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

                                           October 1, 2009    October 1, 2008

                                           to                 to

(dollars in thousands, except share data)  December 31, 2009  December 31, 2008

Revenues

Rental income                              $ 46,458           $ 48,252

Other operating income                       1,745              1,590

Management and acquisition fee income        315                234

Total operating revenues                     48,518             50,076

Expenses

Property operations and maintenance          13,303             13,669

Real estate taxes                            4,347              4,523

General and administrative                   5,358              4,792

Depreciation and amortization                8,279              8,322

Amortization of in-place customer leases     27                 208

Total operating expenses                     31,314             31,514

Income from operations                       17,204             18,562

Other income (expense)

Interest expense (A)                         (17,499    )       (10,130    )

Interest income                              10                 49

Casualty loss                                (390       )       -

Equity in income of joint ventures           81                 142

Income from continuing operations            (594       )       8,623

(Loss) gain from discontinued operations
(including loss on disposal of

$627 in 2009)                                (586       )       255

Net (loss) income                            (1,180     )       8,878

Net income attributable to noncontrolling    (322       )       (500       )
interests

Net (loss) income attributable to common   $ (1,502     )     $ 8,378
shareholders

Earnings per common share attributable to
common shareholders - basic

Continuing operations                      $ (0.03      )     $ 0.37

Discontinued operations                      (0.03      )       0.01

Earnings per common share - basic          $ (0.06      )     $ 0.38

Earnings per common share attributable to
common shareholders - diluted

Continuing operations                      $ (0.03      )     $ 0.37

Discontinued operations                      (0.03      )       0.01

Earnings per common share - diluted        $ (0.06      )     $ 0.38

Common shares used in basic

earnings per share calculation               27,227,922         21,862,359

Common shares used in diluted

earnings per share calculation               27,248,818         21,872,257

Dividends declared per common share        $ 0.4500           $ 0.6400

(A) Interest expense for the three months
ending December 31 consists of the
following

Interest expense                           $ 8,224            $ 9,805

Amortization of financing fees               258                325

Write-off of unamortized financing fees
related to                                   634                -
$100 million term note repaid in 2009

Interest rate swap termination payments      8,383              -

Total interest expense                     $ 17,499           $ 10,130




CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

                                            January 1, 2009    January 1, 2008

                                            to                 to

(dollars in thousands, except share data)   December 31, 2009  December 31, 2008

Revenues

Rental income                               $ 186,892          $ 192,474

Other operating income                        6,876              6,584

Management and acquisition fee income         1,243              1,135

Total operating revenues                      195,011            200,193

Expenses

Property operations and maintenance           51,955             54,858

Real estate taxes                             19,591             18,706

General and administrative                    18,650             17,279

Depreciation and amortization                 33,096             32,556

Amortization of in-place customer leases      288                1,320

Total operating expenses                      123,580            124,719

Income from operations                        71,431             75,474

Other income (expense)

Interest expense(B)                           (50,050    )       (38,097    )

Interest income                               85                 322

Casualty loss                                 (390       )       -

Gain on sale of land                          1,127              -

Equity in income of joint ventures            235                104

Income from continuing operations             22,438             37,803

(Loss) income from discontinued operations
(including loss on disposal                   (784       )       1,880
of $1,636 in 2009 and gain on disposal of
$716 in 2008

Net income                                    21,654             39,683

Net income attributable to noncontrolling     (1,738     )       (2,284     )
interests

Net income attributable to common           $ 19,916           $ 37,399
shareholders

Earnings per common share attributable to
common shareholders - basic

Continuing operations                       $ 0.87             $ 1.63

Discontinued operations                       (0.03      )       0.09

Earnings per common share - basic           $ 0.84             $ 1.72

Earnings per common share attributable to
common shareholders - diluted

Continuing operations                       $ 0.87             $ 1.63

Discontinued operations                       (0.03      )       0.09

Earnings per common share - diluted         $ 0.84             $ 1.72

Common shares used in basic

earnings per share calculation                23,786,616         21,761,997

Common shares used in diluted

earnings per share calculation                23,796,803         21,782,804

Dividends declared per common share (C)     $ 1.5400           $ 2.5400

(B) Interest expense for the year ended
December 31 consists of the following:

Interest expense                            $ 38,907           $ 36,905

Amendment and waiver fees                     923              -

Amortization of financing fees                1,203              1,192

Write-off of unamortized financing fees
related to                                    634                -
$100 million term note repaid in 2009

Interest rate swap termination payments       8,383              -

Total interest expense                      $ 50,050           $ 38,097

(C)The dividends declared in 2009 include the three dividends declared during
the year and does not include the dividend declared on January 4, 2010 of $0.45
per common share.




COMPUTATION OF FUNDS FROM OPERATIONS (FFO)
(1) - (unaudited)

                                            October 1, 2009    October 1, 2008

                                            to                 to

(dollars in thousands, except share data)   December 31, 2009  December 31, 2008

Net (loss) income attributable to           $ (1,502     )     $ 8,378
controlling interests

Net income attributable to noncontrolling     322                500
interests

Depreciation of real estate and
amortization of intangible

assets exclusive of deferred financing        8,349              8,671
fees

Depreciation and amortization from            199                72
unconsolidated joint ventures

Loss on sale of real estate                   627                -

Funds from operations allocable to
noncontrolling

interest in Operating Partnership             (116       )       (325       )

Funds from operations allocable to
noncontrolling

interest in consolidated joint ventures       (340       )       (340       )

Funds from operations available to common

shareholders                                  7,539              16,956

FFO per share - diluted                     $ 0.28             $ 0.78

Common shares - diluted                       27,248,818         21,872,257

                                            January 1, 2009    January 1, 2008

                                            to                 to

(dollars in thousands, except share data)   December 31, 2009  December 31, 2008

Net income attributable to controlling      $ 19,916           $ 37,399
interests

Net income attributable to noncontrolling     1,738              2,284
interests

Depreciation of real estate and
amortization of intangible

assets exclusive of deferred financing        33,819             34,466
fees

Depreciation and amortization from            820                334
unconsolidated joint ventures

Loss (gain) on sale of real estate            509                (716       )

Funds from operations allocable to
noncontrolling

interest in Operating Partnership             (984       )       (1,366     )

Funds from operations allocable to
noncontrolling

interest in consolidated joint ventures       (1,360     )       (1,564     )

Funds from operations available to common

shareholders                                  54,458             70,837

FFO per share - diluted                     $ 2.36             $ 3.25

Common shares - diluted                       23,796,803         21,782,804

(1) 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 computed in accordance with generally accepted
accounting principles ("GAAP"),

excluding gains or losses on sales of properties, 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.




QUARTERLY SAME STORE DATA (2)  October 1, 2009    October 1, 2008

                               to                 to                 Percentage

(dollars in thousands)         December 31, 2009  December 31, 2008  Change

Revenues:

Rental income                  $ 46,309           $ 48,252           -4.0  %

Other operating income           1,659              1,527            8.6   %

Total operating revenues         47,968             49,779           -3.6  %

Expenses:

Property operations and          13,199             13,636           -3.2  %
maintenance

Real estate taxes                4,234              4,523            -6.4  %

Total operating expenses         17,433             18,159           -4.0  %

Operating income               $ 30,535           $ 31,620           -3.4  %

(2) Includes the 354 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 venture
stores managed by the Company.

Same Store Revenues by State   October 1, 2009    October 1, 2008
(2)

                               to                 to                 Percentage

(dollars in thousands)         December 31, 2009  December 31, 2008  Change

Alabama                          2,580              2,616            -1.4  %

Arizona                          1,185              1,242            -4.6  %

Connecticut                      1,001              1,093            -8.4  %

Florida                          7,213              7,845            -8.1  %

Georgia                          3,085              3,186            -3.2  %

Louisiana                        1,829              2,048            -10.7 %

Maine                            258                271              -4.8  %

Maryland                         517                467              10.7  %

Massachusetts                    1,677              1,686            -0.5  %

Michigan                         588                567              3.7   %

Mississippi                      1,798              1,842            -2.4  %

Missouri                         1,043              1,089            -4.2  %

New Hampshire                    547                525              4.2   %

New York                         4,479              4,455            0.5   %

North Carolina                   1,417              1,458            -2.8  %

Ohio                             1,979              2,017            -1.9  %

Pennsylvania                     423                457              -7.4  %

Rhode Island                     430                448              -4.0  %

South Carolina                   870                940              -7.4  %

Tennessee                        515                501              2.8   %

Texas                            12,251             12,820           -4.4  %

Virginia                         2,283              2,206            3.5   %

Total same store               $ 47,968           $ 49,779           -3.6  %




YEAR TO DATE SAME STORE DATA   January 1, 2009    January 1, 2008
(3)

                               to                 to                 Percentage

(dollars in thousands)         December 31, 2009  December 31, 2008  Change

Revenues:

Rental income                  $ 184,872          $ 191,072          -3.2 %

Other operating income           6,520              6,484            0.6  %

Total operating revenues         191,392            197,556          -3.1 %

Expenses:

Property operations and          51,394             54,477           -5.7 %
maintenance

Real estate taxes                19,373             18,618           4.1  %

Total operating expenses         70,767             73,095           -3.2 %

Operating income               $ 120,625          $ 124,461          -3.1 %

(3) Includes the 352 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 venture stores managed by the Company.




OTHER DATA             Same Store (2)                        All Stores (4)

                       2009                 2008             2009      2008

Weighted average         81.1       %       81.9       %       80.9  %   81.8  %
quarterly occupancy

Occupancy at December    80.1       %       80.8       %       79.9  %   80.6  %
31

Rent per occupied      $ 10.18            $ 10.47            $ 10.18   $ 10.47
square foot

(4) Does not include 25 unconsolidated joint venture stores
managed by the Company

Investment in Storage
Facilities:

The following summarizes activity in storage facilities during the twelve months
ended December 31, 2009:

Beginning balance      $ 1,366,615

Property acquisitions    -

Improvements and
equipment additions:

Expansions and new       17,959
build

Roofing, paving,
painting, and
equipment:

Stabilized stores        7,628

Recently acquired and
consolidated joint       669
venture stores

Change in
construction in          (4,121     )
progress (Total CIP
$9.8 million)

Dispositions             (1,167     )

Storage facilities at  $ 1,387,583
cost at period end

                       December 31, 2009  December 31, 2008

Common shares
outstanding at           27,547,027         22,016,348
December 31

Operating Partnership
Units outstanding at     419,952            419,952
December 31




    Source: Sovran Self Storage, Inc.