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41
Selected Operating Data for the Shurgard
Euro
p
e Same Store Pool (163 facilities): Year Ended December 31, Year Ended December 31,
Percentage
Percentage
2013 2012 Change 2012 2011
Change
(Dollar amounts in thousands, except weighted average data, utilizing
Revenues (including late charges and
administrative fees) $ 190,673 $ 194,275 (1.9)% $ 194,275 $ 196,163 (1.0)%
Less: Cost of operations (excluding
depreciation and amortization expenses) 80,295 79,994 0.4% 79,994 83,641 (4.4)%
Net operating income (b) $ 110,378 $ 114,281 (3.4)% $ 114,281 $ 112,522 1.6%
Gross margin 57.9% 58.8% (1.5)% 58.8% 57.4% 2.4%
Weighted average for the period:
Square foot occupancy (c) 81.2% 83.1% (2.3)% 83.1% 85.0% (2.2)%
Realized annual rent, prior to late charges
and administrative fees, per:
Occupied square foot (d) $ 26.65 $ 26.56 0.3% $ 26.56 $ 26.18 1.5%
Available square foot (“REVPAF”) (d) $ 21.64 $ 22.07 (1.9)% $ 22.07 $ 22.25 (0.8)%
Average Euro to the U.S. Dollar for
the period (a):
Constant exchange rates used herein 1.328 1.328 - 1.328 1.328 -
Actual historical exchange rates 1.328 1.285 3.3% 1.285 1.392 (7.7)%
(a) In order to isolate changes in the underlying operations from the impact of exchange rates, the amounts in this
table are presented on a constant exchange rate basis. The amounts for years ended December 31, 2012 and
2011 have been restated using the actual exchange rates for the year ended December 31, 2013.
(b) We present Shurgard Europe’s same-store net operating income or “NOI,” which is a non-GAAP (generally
accepted accounting principles) financial measure that excludes the impact of depreciation and amortization
expense. 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, in evaluating
property performance and in comparing period-to-period and market-to-market property operating results. In
addition, we believe the investment community utilizes NOI in determining operating performance and real
estate values, and does not consider depreciation expense because it is based upon historical cost. NOI is not a
substitute for net income, net operating cash flow, or other related GAAP financial measures, in evaluating
Shurgard Europe’s operating results.
(c) Square foot occupancies represent weighted average occupancy levels over the entire period.
(d) Realized annual rent per occupied square foot is computed by dividing annualized rental income, before late
charges and administrative fees, by the weighted average occupied square feet for the period. Realized annual
rent per available square foot (“REVPAF”) is computed by dividing annualized rental income, before late
charges and administrative fees, by the total available net rentable square feet for the period. These measures
exclude late charges and administrative fees in order to provide a better measure of our ongoing level of
revenue. Late charges are dependent upon the level of delinquency, and administrative fees are dependent upon
the level of move-ins. In addition, the rates charged for late charges and administrative fees can vary
independently from rental rates. These measures take into consideration promotional discounts, which reduce
rental income.
Net operating income decreased 3.4% in 2013 as compared to 2012, principally due to a reduction
in revenue of 1.9% and relatively flat cost of operations. Net operating income increased 1.6% in 2012 as
compared to 2011, due to decreases in expenses offset by lower revenues. While revenue declined in 2013,
the most recent trends in the fourth quarter of 2013 have improved. Due to the limited number of facilities
in this portfolio and lack of geographic diversification, as well as recent volatile economic conditions in