Press Releases

Sovran Self Storage Reports Fourth Quarter 2010 Results; Announces Acquisition of 7 Stores

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, 2010.

Net income available to common shareholders for the fourth quarter of 2010 was $8.5 million or $0.31 per fully diluted share. For the same period in 2009, there was a net loss to common shareholders of $1.5 million, or $0.06 per fully diluted common share. Funds from operations (FFO) for the quarter were $0.62 per fully diluted common share compared to $0.28 for the same period last year. Had the Company not recorded charges of $0.8 million related to a late December acquisition, FFO would have been $0.65 per fully diluted common share for the fourth quarter of 2010.

Stronger operating results in the fourth quarter of 2010 including lower than expected real estate taxes and a debt extinguishment charge in the fourth quarter of 2009 resulted in the increase to earnings and FFO.

During the quarter, the Company also acquired seven new stores: four in Charlotte and three in Raleigh, NC. The combined purchase price was $34.7 million, and the acquisitions added to the Company's already significant presence in both cities.

"We're seeing positive trends on many fronts - revenues are strengthening, costs are contained, investment opportunities are available, and we're well positioned to grow from here," said Robert J. Attea, Chairman and Chief Executive Officer.

OPERATIONS:

Revenues for the 344 stores wholly owned by the Company for the entire quarter of each year increased 2.6% from those of the fourth quarter of 2009, the result of a 90 basis point increase in rental rates and strong growth in other revenues.

"We achieved solid gains in rental rates this quarter, and we saw revenues increase in 23 of 24 states," said Kenneth F. Myszka, the Company's President and COO. "We're encouraged by improving demand in our markets."

Same store operating expenses decreased 1.9% for the fourth quarter of 2010 compared to the prior year period, the result of a net property tax decrease of 12.1% offset by increases in health care, workers compensation, and property maintenance costs. The property tax expense was achieved by reductions won at several locations as a result of successful challenges to assessed values, and also due to conservatively estimated accruals during the first three quarters at the Company's Florida, Texas, and Gulf Coast properties.

Consequently, same store net operating income increased 5.2% this period over the fourth quarter of 2009 as a result of increased revenues, controlled costs, and a significant decrease in property taxes.

General and administrative expenses grew by about $1.4 million over the same period in 2009. More than half of this increase was attributable to $0.8 million of acquisition costs expensed in conjunction with the purchase of the Carolina stores. The balance was primarily due to increased income taxes associated with operations of the Company's taxable REIT subsidiary, incentive compensation, and marketing and internet advertising costs.

During the fourth quarter of 2010, all states save one achieved same store sales equal to or greater than the same period in 2009. For the first time since the hurricanes of 2005 and 2006, the Florida stores reported revenues greater than the prior year's quarter, a sign that recovery may be on the horizon. The stores with the strongest revenue growth include most of New England, Louisiana, New York, and Tennessee.

PROPERTIES:

In late December 2010, the Company acquired seven stores for a combined purchase price of $34.7 million. The stores range in age from one to four years old, have a combined 0.5 million square feet and an overall occupancy rate of just over 55% at December 31, 2010. The acquisition was funded from cash generated by the sale of properties reported earlier in the year, and a $10 million draw on the Company's line of credit.

"We're excited to add these high quality assets to our portfolio," commented Attea. "It was an opportune time to acquire, and we expect our marketing and pricing initiatives to rapidly improve the performance of these stores."

The Company continues with its program of expanding and enhancing its properties. In 2010, projects providing approximately 168,500 square feet of additional and/or improved space at existing stores were added at a cost of $9.4 million. The Company is currently evaluating up to $32 million of such improvements in 2011.

CAPITAL TRANSACTIONS:

At December 31, 2010, the Company had $400 million of unsecured term note debt, $79.0 million of mortgage debt outstanding and $10 million drawn on its line of credit. The Company has no significant debt maturities until mid-2012.

Illustrated below are key financial ratios at December 31, 2010:


    -- Debt to Enterprise Value (at $38.00/share)     31.5 %

    -- Debt to Book Cost of Storage Facilities        34.4 %

    -- Debt to EBITDA Ratio                           4.8  x

    -- Debt Service Coverage                          3.2  x



At December 31, 2010, the Company had approximately $5.8 million of cash on hand, and up to $115 million available on its line of credit.

YEAR 2011 EARNINGS GUIDANCE:

Management is encouraged by improving demand in most markets. Nonetheless, the Company anticipates the continuation of leasing incentives supplemented by aggressive and increased advertising. An increase in same store revenue of 2% to 3% is projected from that of 2010. Property operating costs are projected to increase by 2% to 3%, including an expected 4% annual increase in property taxes. Accordingly, the Company is anticipating an increase of 2% to 3% in same store net operating income for 2011.

The Company has identified some 27 properties at which it plans to add or improve approximately 0.7 million square feet of storage space during 2011 at an estimated cost of $32 million. The Company also has budgeted $11 million to provide for recurring capitalized expenditures including roofing, painting, paving, and office renovations.

The Company is selectively evaluating potential acquisitions, but at present has no properties under contract. Purchases made in 2011 are not expected to impact 2011's guidance inasmuch as the Company expects to invest in both low occupancy "turn-around" opportunities as well as stabilized properties.

General and administrative expenses are expected to increase due to income taxes on its taxable REIT subsidiaries and the Company's plans to continue expanding its internet marketing presence.

At December 31, 2010, all but $10 million 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, 2010, the Company had 27.7 million shares of common stock outstanding and 0.34 million Operating Partnership Units outstanding.

As a result of the above assumptions, management expects funds from operations for the full year 2011 to be approximately $2.59 to $2.62 per share, and between $0.60 and $0.62 for the first quarter of 2011.

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 10:00 a.m. Eastern Time on Thursday, February 24, 2011. To access the conference call, dial 877.407.8033 (domestic), or 201.689.8033 (international), at least five minutes prior to the scheduled start of the call. Management will accept questions from registered financial analysts after prepared remarks; all others are encouraged to listen to the call via webcast by accessing "events and conference calls" under the investor relations tab at www.unclebobs.com/company/.

The webcast will be archived for a period of 90 days; a telephone replay will also be available for 72 hours by calling 877.660.6853 and entering pass codes 286/364666.

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 377 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)                            2010           2009

Assets

Investment in storage facilities:

Land                                              $ 240,651      $ 234,522

Building, equipment and construction in progress    1,179,305      1,129,932

                                                    1,419,956      1,364,454

Less: accumulated depreciation                      (271,797  )    (238,971  )

Investment in storage facilities, net               1,148,159      1,125,483

Cash and cash equivalents                           5,766          10,710

Accounts receivable                                 2,377          2,346

Receivable from joint venture                       253            173

Investment in joint venture                         19,730         19,944

Prepaid expenses                                    4,408          4,203

Other assets                                        4,848          5,313

Net assets of discontinued operations               -              16,926

Total Assets                                      $ 1,185,541    $ 1,185,098

Liabilities

Line of credit                                    $ 10,000       $ -

Term notes                                          400,000        400,000

Accounts payable and accrued liabilities            23,991         22,316

Deferred revenue                                    4,925          4,980

Fair value of interest rate swap agreements         10,528         11,524

Mortgages payable                                   78,954         81,219

Total Liabilities                                   528,398        520,039

Noncontrolling redeemable Operating Partnership     12,480         15,005
Units at redemption value

Equity

Common stock                                        288            287

Additional paid-in capital                          816,986        814,988

Accumulated deficit                                 (148,264  )    (139,863  )

Accumulated other comprehensive loss                (10,254   )    (11,265   )

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

Total Shareholders' Equity                          631,581        636,972

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

Total Equity                                        644,663        650,054

Total Liabilities and Equity                      $ 1,185,541    $ 1,185,098




CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

                                           October 1, 2010    October 1, 2009

                                           to                 to

(dollars in thousands, except share data)  December 31, 2010  December 31, 2009

Revenues

Rental income                              $ 46,259           $ 45,495

Other operating income                       2,278              1,708

Management and acquisition fee income        319                315

Total operating revenues                     48,856             47,518

Expenses

Property operations and maintenance          13,171             12,971

Real estate taxes                            3,775              4,285

General and administrative                   6,767              5,358

Depreciation and amortization                8,323              8,116

Amortization of in-place customer leases     -                  27

Total operating expenses                     32,036             30,757

Income from operations                       16,820             16,761

Other income (expense)

Interest expense (A)                         (7,949     )       (17,499    )

Casualty loss                                -                  (390       )

Interest income                              19                 10

Equity in income of joint ventures           86                 81

Income from continuing operations            8,976              (1,037     )

Loss from discontinued operations
(including loss on disposal of $627 in       -                  (143       )
2009)

Net income                                   8,976              (1,180     )

Net income attributable to noncontrolling    (445       )       (322       )
interests

Net income attributable to common          $ 8,531            $ (1,502     )
shareholders

Earnings per common share attributable to
common shareholders - basic

Continuing operations                      $ 0.31             $ (0.05      )

Discontinued operations                      -                  (0.01      )

Earnings per common share - basic          $ 0.31             $ (0.06      )

Earnings per common share attributable to
common shareholders - diluted

Continuing operations                      $ 0.31             $ (0.05      )

Discontinued operations                      -                  (0.01      )

Earnings per common share - diluted        $ 0.31             $ (0.06      )

Common shares used in basic

earnings per share calculation               27,494,452         27,227,922

Common shares used in diluted

earnings per share calculation               27,543,257         27,248,818

Dividends declared per common share        $ 0.4500           $ 0.4500

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

Interest expense                           $ 7,691            $ 8,224

Amortization of financing fees               258                258

Write-off of unamortized financing fees
related to

$100 million term note repaid in 2009        -                  634

Interest rate swap termination payments      -                  8,383

Total interest expense                     $ 7,949            $ 17,499




CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

                                            January 1, 2010    January 1, 2009

                                            to                 to

(dollars in thousands, except share data)   December 31, 2010  December 31, 2009

Revenues

Rental income                               $ 182,865          $ 183,074

Other operating income                        7,947              6,723

Management and acquisition fee income         1,260              1,243

Total operating revenues                      192,072            191,040

Expenses

Property operations and maintenance           51,845             50,726

Real estate taxes                             19,065             19,355

General and administrative                    21,857             18,649

Depreciation and amortization                 32,939             32,448

Amortization of in-place customer leases      -                  288

Total operating expenses                      125,706            121,466

Income from operations                        66,366             69,574

Other income (expense)

Interest expense (B)                          (31,711    )       (50,050    )

Interest income                               84                 85

Casualty loss                                 -                  (390       )

Gain on the sale of land                      -                  1,127

Equity in income of joint ventures            240                235

Income from continuing operations             34,979             20,581

Income from discontinued operations
(including a gain on disposal of $6,944 in
2010

and loss on disposal of $1,636 in 2009)       7,562              1,073

Net income                                    42,541             21,654

Net income attributable to noncontrolling     (1,899     )       (1,738     )
interests

Net income attributable to common           $ 40,642           $ 19,916
shareholders

Earnings per common share attributable to
common shareholders - basic

Continuing operations                       $ 1.20             $ 0.79

Discontinued operations                       0.28               0.05

Earnings per common share - basic           $ 1.48             $ 0.84

Earnings per common share attributable to
common shareholders - diluted

Continuing operations                       $ 1.20             $ 0.79

Discontinued operations                       0.28               0.05

Earnings per common share - diluted         $ 1.48             $ 0.84

Common shares used in basic

earnings per share calculation                27,472,117         23,786,616

Common shares used in diluted

earnings per share calculation                27,513,945         23,796,803

Dividends declared per common share (C)     $ 1.8000           $ 1.5400

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

Interest expense                            $ 30,681           $ 38,907

Amendment and waiver fees                     -                  923

Amortization of financing fees                1,030              1,203

Write-off of unamortized financing fees
related to

$100 million term note repaid in 2009         -                  634

Interest rate swap termination payments       -                  8,383

Total interest expense                      $ 31,711           $ 50,050




(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, 2010    October 1, 2009

                                           to                 to

(dollars in thousands, except share data)  December 31, 2010  December 31, 2009

Net income attributable to common          $ 8,531            $ (1,502     )
shareholders

Net income attributable to noncontrolling    445                322
interests

Depreciation of real estate and
amortization of intangible

assets exclusive of deferred financing       8,323              8,143
fees

Depreciation of real estate included in      -                  206
discontinued operations

Depreciation and amortization from           199                199
unconsolidated joint ventures

Loss on sale of real estate                  -                  627

Funds from operations allocable to
noncontrolling

interest in Operating Partnership            (208       )       (116       )

Funds from operations allocable to
noncontrolling

interest in consolidated joint ventures      (340       )       (340       )

Funds from operations available to common

shareholders                                 16,950             7,539

FFO per share - diluted                    $ 0.62             $ 0.28

Common shares - diluted                      27,543,257         27,248,818

                                           January 1, 2010    January 1, 2009

                                           to                 to

(dollars in thousands, except share data)  December 31, 2010  December 31, 2009

Net income attributable to common          $ 40,642           $ 19,916
shareholders

Net income attributable to noncontrolling    1,899              1,738
interests

Depreciation of real estate and
amortization of intangible

assets exclusive of deferred financing       32,939             32,736
fees

Depreciation of real estate included in      217                1,083
discontinued operations

Depreciation and amortization from           788                820
unconsolidated joint ventures

(Gain) loss on sale of real estate           (6,944     )       509

Funds from operations allocable to
noncontrolling

interest in Operating Partnership            (885       )       (984       )

Funds from operations allocable to
noncontrolling

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

Funds from operations available to common

shareholders                                 67,296             54,458

FFO per share - diluted                    $ 2.45             $ 2.36

Common shares - diluted                      27,513,945         23,796,803




(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      October 1, 2010      October 1, 2009
STORE DATA (2) *

                    to                   to                  Percentage

(dollars in         December 31, 2010    December 31, 2009   Change
thousands)

Revenues:

Rental income       $ 46,162             $ 45,489             1.5   %

Other operating       2,167                1,625              33.4  %
income

Total operating       48,329               47,114             2.6   %
revenues

Expenses:

Property
operations and        13,079               12,896             1.4   %
maintenance

Real estate taxes     3,761                4,277              -12.1 %

Total operating       16,840               17,173             -1.9  %
expenses

Operating income    $ 31,489             $ 29,941             5.2   %

(2) Includes the 344 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.

* See exhibit A
for supplemental
same store data.

YEAR TO DATE SAME   January 1, 2010      January 1, 2009
STORE DATA (2)

                    to                   to                  Percentage

(dollars in         December 31, 2010    December 31, 2009   Change
thousands)

Revenues:

Rental income       $ 182,635            $ 183,069            -0.2  %

Other operating       7,519                6,395              17.6  %
income

Total operating       190,154              189,464            0.4   %
revenues

Expenses:

Property
operations and        51,532               50,561             1.9   %
maintenance

Real estate taxes     19,009               19,345             -1.7  %

Total operating       70,541               69,906             0.9   %
expenses

Operating income    $ 119,613            $ 119,558            0.0   %

OTHER DATA          Same Store (2)                           All Stores (3)

                    2010                 2009                2010        2009

Weighted average
quarterly             81.0%                81.0%              80.9%       80.9%
occupancy

Occupancy at          80.2%                80.0%              80.0%       79.9%
December 31

Rent per occupied   $10.33               $10.24              $10.33      $10.18
square foot

(3) 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, 2010:

Beginning balance   $ 1,364,454

Property              34,155
acquisitions

Improvements and
equipment
additions:

Expansions            9,389

Roofing, paving,
painting, and
equipment:

Stabilized stores     12,924

Recently acquired
and consolidated      998
joint venture
stores

Change in
construction in       (1,788          )
progress (Total
CIP $8.1 million)

Dispositions          (176            )

Storage facilities
at cost at period   $ 1,419,956
end

                    December 31, 2010    December 31, 2009

Common shares         27,650,829           27,547,027
outstanding

Operating
Partnership Units     339,025              419,952
outstanding





Exhibit A

Sovran Self Storage, Inc.

Same Store Performance Summary

Three Months Ended December 31, 2010

(unaudited)

                                         Avg
                               Avg       Quarterly
                               Qtrly     Occupancy      Revenue                      Expenses                      NOI
                       Square  Rent per  for the        for the Three Months         for the Three Months          for the Three Months
                               Occupied  Three Months   Ended December 31,           Ended December 31,            Ended December 31,
                                         Ended
                                         December 31,

State          Stores  Feet    Square    2010   2009    2010      2009      %        2010      2009      %         2010      2009      %
                               Foot                                         Change                       Change                        Change

Alabama        22      1,588   $ 8.01    76.4%  75.1%   $ 2,617   $ 2,580   1.43%    $ 855     $ 901     -5.11%    $ 1,762   $ 1,679   4.94%

Arizona        9       530       10.05   86.4%  86.5%     1,211     1,185   2.19%      428       450     -4.89%      783       735     6.53%

Connecticut    5       301       17.00   79.8%  72.5%     1,041     1,001   4.00%      394       356     10.67%      647       645     0.31%

Florida        53      3,452     10.30   79.3%  79.0%     7,273     7,213   0.83%      2,498     2,626   -4.87%      4,775     4,587   4.10%

Georgia        22      1,421     9.54    78.7%  81.2%     2,791     2,714   2.84%      924       985     -6.19%      1,867     1,729   7.98%

Louisiana      14      836       11.20   82.1%  80.1%     1,979     1,829   8.20%      576       525     9.71%       1,403     1,304   7.59%

Maine          2       114       11.80   77.5%  75.4%     271       258     5.04%      101       108     -6.48%      170       150     13.33%

Maryland       4       172       14.29   86.7%  86.2%     545       517     5.42%      178       202     -11.88%     367       315     16.51%

Massachusetts  12      664       12.41   81.1%  81.6%     1,740     1,677   3.76%      676       703     -3.84%      1,064     974     9.24%

Michigan       4       239       8.53    88.7%  83.1%     472       438     7.76%      210       228     -7.89%      262       210     24.76%

Mississippi    12      924       9.05    82.2%  84.4%     1,805     1,798   0.39%      582       529     10.02%      1,223     1,269   -3.62%

Missouri       7       432       11.13   86.5%  85.7%     1,064     1,043   2.01%      415       293     41.64%      649       750     -13.47%

New Hampshire  4       260       10.76   82.0%  79.3%     569       547     4.02%      208       208     0.00%       361       339     6.49%

New York       28      1,599     13.12   83.7%  83.7%     4,859     4,479   8.48%      1,629     1,494   9.04%       3,230     2,985   8.21%

North          11      539       9.29    79.8%  80.0%     1,005     1,033   -2.71%     412       396     4.04%       593       637     -6.91%
Carolina

Ohio           17      1,132     8.79    84.8%  84.6%     2,186     2,124   2.92%      819       923     -11.27%     1,367     1,201   13.82%

Pennsylvania   4       208       9.93    80.5%  81.4%     427       423     0.95%      153       153     0.00%       274       270     1.48%

Rhode Island   4       168       12.37   79.6%  79.5%     456       430     6.05%      226       190     18.95%      230       240     -4.17%

South          8       443       9.82    80.6%  78.3%     914       870     5.06%      352       406     -13.30%     562       464     21.12%
Carolina

Tennessee      4       291       8.46    89.7%  81.5%     570       515     10.68%     246       250     -1.60%      324       265     22.26%

Texas          81      5,887     10.18   80.6%  82.2%     12,322    12,251  0.58%      4,269     4,535   -5.87%      8,053     7,716   4.37%

Virginia       17      1,003     10.62   80.6%  77.5%     2,212     2,189   1.05%      689       712     -3.23%      1,523     1,477   3.11%

Portfolio      344     22,203  $ 10.33   81.0%  81.0%   $ 48,329  $ 47,114  2.58%    $ 16,840  $ 17,173  -1.94%    $ 31,489  $ 29,941  5.17%
Total

Dollars in thousands except for average quarterly rent per occupied square foot. Square feet in thousands.

344 wholly owned same stores.




    Source: Sovran Self Storage, Inc.