Simultaneously with the term note agreement, the Company entered into a new,three year Line of Credit agreement, which provides $125 million of unsecuredfinancing at a rate of LIBOR plus 1.375%. The facility is expandable, at theCompany`s option, to $175 million and can be extended for one additional year.At March 31, 2009, $23 million had been drawn on the Line. The Company`s line of credit and term notes require it to meet certain financialcovenants, including prescribed leverage, fixed charge coverage, minimum networth, limitations on additional indebtedness and limitations on dividendpayouts. One such covenant limits total consolidated liabilities to 55% of grossasset value; at March 31st this ratio was 55.4%.
The Company expects to receivea waiver from its lenders, and is in the process of negotiating an amendment tothe unsecured line of credit and term note agreements. As of April 30, 2009, theCompany believes it is again in compliance with the original covenant provision.During the quarter, the Company issued 56,071 shares through its DividendReinvestment Program, Direct Stock Purchase Plan and Employee Option Plan. Atotal of $1.3 million was received and was used to fund capital improvements. YEAR 2009 EARNINGS GUIDANCE:The Company is anticipating reduced consumer demand in many of its markets andfor conditions to become increasingly more competitive. It expects to utilizeleasing incentives as well as increased advertising and aggressive marketing toimprove occupancy and, accordingly, estimates a decline in same store revenue of2-3% from that of 2008. Property operating costs are projected to grow by 1-2%,resulting in a decline in same store NOI of 2-4%.
The Company has curtailed its expansion and enhancement program and, untilmarket conditions significantly improve, will defer its planned 2009expenditures of $50 million. It has an estimated total of $8 million ofcommitments outstanding on construction projects remaining to be completed in2009. At present, the Company does not have any properties under contract and does notexpect to actively pursue the purchase of additional facilities while thecapital markets remain unstable. Approximately $5 million of additional capitalremains committed by the Company as its share of the equity for the JointVenture formed in 2008. General and administrative expenses are not expected to increase significantlyin 2009.
At March 31, 2009, all but $23 million of the Company`s debt is either fixedrate or covered by rate swap contracts that essentially fix the rate. Subsequentborrowings that may occur will be pursuant to the Company`s Line of Creditagreement at a floating rate of LIBOR plus 1.375%. Management expects funds from operations for the second quarter of 2009 to beapproximately $.73 to $.75 per share, and between $3.00 and $3.08 for the year2009. FORWARD LOOKING STATEMENTS:When used within this news release, the words "intends," "believes," "expects,""anticipates," and similar expressions are intended to identify "forward lookingstatements" within the meaning of that term in Section 27A of the SecuritiesExchange Act of 1933, and in Section 21E of the Securities Act of 1934. Suchforward-looking statements involve known and unknown risks, uncertainties andother factors, which may cause the actual results, performance or achievementsof the Company to be materially different from those expressed or implied bysuch forward looking statements. CONFERENCE CALL:Sovran Self Storage will hold its First Quarter Earnings Release Conference Callat 9:00 a.m Eastern Time on Thursday, May 7, 2009. Anyone wishing to listen tothe call may access the webcast via the event page at.
The call will be archived for a period of90 days after initial airing Sovran Self Storage, Inc. is a self-administered and self-managed equity REITthat is in the business of acquiring and managing self-storage facilities. TheCompany operates 385 self-storage facilities in 24 states under the name "UncleBob`s Self Storage"®. For more information, please contact David Rogers, CFO orDiane Piegza, VP Corporate Communications at (716) 633-1850 or visit theCompany`s Web site at SOVRAN SELF STORAGE, INC. 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.