U-STORE-IT TRUST FORM 8-K/A
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K/A
Amendment No. 1
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2006
 
U-STORE-IT TRUST
(Exact Name of Registrant as Specified in its Charter)
 
         
Maryland
(State or Other Jurisdiction of
Incorporation or Organization)
  001-32324
(Commission File Number)
  20-1024732
(IRS Employer Identification No.)
         
6745 Engle Road, Suite 300
Cleveland, OH 44130
(Address of Principal
Executive Offices)
      44130
(Zip Code)
(440)234-0700
Registrant’s Telephone Number, Including Area Code
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

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EXPLANATORY NOTE:
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, U-Store-It Trust (the “Company”) hereby amends its Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 7, 2006, for the purpose of filing the financial statements and pro forma financial information required by Item 9.01 of Form 8-K with respect to the Company’s acquisition of a portfolio of 24 self-storage facilities from Crownridge Storage Portfolio, LLC and Williams Storage Portfolio III, LLC, both Nevada limited liability companies (the “Sure Save USA Self Storage Acquisition”) in accordance with Rule 3-14 and Article 11 of Regulation S-X, respectively. In addition, the Company completed acquisitions of 11 other self-storage facilities during 2006 and has determined that it is probable that an additional 13 facilities will be acquired and accordingly is including their results in the pro forma financial information.
In accordance with Rule 3-14 and Article 11 of Regulation S-X, the Company hereby files the following financial statements and pro forma financial information, respectively.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Sure Save Storage Portfolio
Independent Auditors’ Report.
Combined Statement of Revenues and Certain Operating Expenses for the Year Ended December 31, 2005.
Notes to Combined Statement of Revenues and Certain Operating Expenses.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Condensed Consolidated Financial Information.
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2005.
Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2005.
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2005.
Notes to the Unaudited Pro Forma Condensed Consolidated Statement of Operations.

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INDEX TO FINANCIAL STATEMENTS
         
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF U-STORE-IT TRUST AND SUBSIDIARIES (THE “COMPANY”):
       
    4  
    5  
    6  
    7  
 
       
SURE SAVE STORAGE PORTFOLIO
       
    9  
    10  
    11  
 EX-23.1 Consent of Independent Public Accouting Firm

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U-STORE-IT TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 2005
(Dollars in Thousands)
                                         
      U-Store-It     Completed             Probable        
      Trust     Facility             Facility     U-Store-It  
    Historical     Acquisitions             Acquisitions     Trust  
    (1)     (2)     Subtotal     (3)     Pro Forma  
ASSETS
                                       
Storage facilities — net
  $ 1,246,295     $ 223,371  (iii)   $ 1,469,666     $ 77,494     $ 1,547,160  
Cash and cash equivalents
    201,098       (171,073 )(i)     30,025             30,025  
Restricted cash
    14,672       (17 )(i)     14,655             14,655  
Loan procurement costs — net
    10,437       97 (iii)     10,534             10,534  
Other assets
    8,631       443 (iii)     9,074             9,074  
Other assets — related party
    355             355             355  
 
                             
TOTAL ASSETS
  $ 1,481,488     $ 52,821     $ 1,534,309     $ 77,494     $ 1,611,803  
 
                             
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
LIABILITIES
                                       
Loans payable
  $ 669,282     $ 52,072  (ii)   $ 721,354     $ 77,494     $ 798,848  
Capital lease obligations
    56             56             56  
Accounts payable and accrued expenses
    18,798       67  (ii)     18,865             18,865  
Accounts payable and accrued expenses — related party
    74             74             74  
Distribution payable
    16,624             16,624             16,624  
Rents received in advance
    8,857       633  (ii)     9,490             9,490  
Security deposits
    685       49  (ii)     734             734  
 
                             
Total liabilities
    714,376       52,821  (ii)     767,197       77,494       844,691  
MINORITY INTEREST
    64,108             64,108             64,108  
SHAREHOLDERS’ EQUITY
                                       
Common shares
    570             570             570  
Additional paid-in-capital
    795,244             795,244             795,244  
Unearned share grant compensation
    (1,557 )           (1,557 )           (1,557 )
Accumulated deficit
    (91,253 )           (91,253 )           (91,253 )
 
                             
Total shareholders’ equity
    703,004             703,004             703,004  
 
                             
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 1,481,488     $ 52,821     $ 1,534,309     $ 77,494     $ 1,611,803  
 
                             
See accompanying notes to the unaudited proforma condensed consolidated balance sheet.

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NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 2005
(Dollars in Thousands)
Presentation
     The accompanying Unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company reflects adjustments related to (1) the acquisition of 35 self-storage facilities (including Sure Save Storage Portfolio) completed subsequent to December 31, 2005 (2) the probable acquisitions of 13 self-storage facilities (3) and borrowings on the credit facility, and is presented as if they all had occurred on December 31, 2005.
     In the opinion of the Company’s management, all material adjustments necessary to reflect the effects of the preceding transactions have been made. The Unaudited Pro Forma Condensed Consolidated Balance Sheet is presented for illustrative purposes only and is not necessarily indicative of what the actual financial position of the Company would have been had the acquisitions and financings described above occurred on December 31, 2005, nor does it purport to represent the future financial position of the Company. This Unaudited Pro Forma Condensed Consolidated Balance Sheet should be read in conjunction with the Company’s annual report on Form 10-K for the annual period ended December 31, 2005.
Notes
(1)     Reflects the historical consolidated balance sheet of U-Store-It Trust included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.
 
(2)     Represents the adjustments related to the acquisition of 35 self-storage facilities. These acquisitions were completed from January 1, 2006 through March 1, 2006.
     The acquisition cost for the assets is calculated as follows:
         
Paid from cash on hand and borrowing on credit facility
  $ 216,090 (i)
Fair value of debt and other net liabilities assumed
  7,821 (ii)
 
     
Aggregate acquisition cost
  $ 223,911 (iii)
 
     
 
       
(i) Reflects cash and cash equivalents and restricted cash used for the purchase of the facilities
  $ 171,090  
Reflects proceeds from credit facility for the purchase of the facilities
    45,000  
 
     
Total cash
  $ 216,090  
 
     
 
       
(ii) As part of the completed facility acquisition transactions, total debt and other liabilities increased by:
       
Borrowing under credit facilities
  $ 45,000  
Debt assumed between January 1, 2006 and March 1, 2006 related to the Dallas, Texas acquisition:
       
Mortgage loans collateralized by certain facilities of Dallas, Texas portfolio due from 2014 to 2015, effective interest rate of 5.87% per annum
    7,072  
 
     
Total debt
    52,072  
 
     
Other liabilities assumed:
       
Accounts payable and accrued expenses
    67  
Rents received in advance
    633  
Security deposits
    49  
 
     
 
    749  
 
     
Total debt and other net liabilities
  $ 52,821  
 
     
 
       
(iii) The preliminary allocation of the aggregate acquisition cost to the assets acquired is as follows:
       
Storage facilities
  $ 223,371  
Loan procurement costs
    97  
Other assets
    443  
 
     
Total assets acquired
  $ 223,911  
 
     
 
       
(3) Represents the adjustments related to the probable acquisition of 13 self-storage facilities.
       
 
       
The acquisition cost for the facilities is calculated as follows:
       
Paid from proceeds from borrowing on credit facility
  $ 75,434  
Debt assumed related to U-Stor probable acquisition
    2,060  
 
     
Total acquisition cost
  $ 77,494  
 
     

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U-STORE-IT TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
(Dollars and Shares in Thousands Except Per Share Amounts)
                                                 
      U-Store-It     Completed             Probable              
      Trust     Facility             Facility     Other     U-Store-It  
    Historical     Acquisitions             Acquisitions     Adjustments     Trust  
    (4)     (5)     Subtotal     (6)     (7)     Pro Forma  
REVENUES
                                               
Rental income
  $ 138,120     $ 19,970     $ 158,090     $ 6,096     $     $ 164,186  
Other property related income
    10,001       1,433       11,434       220             11,654  
 
                                   
Total revenues
    148,121       21,403       169,524       6,316             175,840  
 
                                   
OPERATING EXPENSES:
                                               
Property operating expenses
    54,952       7,209       62,161       2,244             64,405  
Property operating expense — related party
    43             43                   43  
Depreciation
    39,949       8,941       48,890       2,867             51,757  
General and administrative/
                                               
Management Fee
    17,786       120       17,906       45             17,951  
General and administrative — related party
    736             736                   736  
 
                                   
Total operating expenses
    113,466       16,270       129,736       5,156             134,892  
 
                                   
OPERATING INCOME
    34,655       5,133       39,788       1,160             40,948  
 
                                   
OTHER INCOME (EXPENSE):
                                               
Interest:
                                               
Interest expense on loans
    (32,370 )     (3,116 )     (35,486 )     (4,641 )           (40,127 )
Loan procurement amortization expense
    (1,785 )     (10 )     (1,795 )                 (1,795 )
Early extinguishment of debt
    (93 )           (93 )                 (93 )
Interest income
    2,405             2,405                   2,405  
Other
    (47 )           (47 )                 (47 )
 
                                   
Total other expense
    (31,890 )     (3,126 )     (35,016 )     (4,641 )           (39,657 )
INCOME  FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST
    2,765       2,007       4,772       (3,481 )           1,291  
MINORITY INTEREST
    (199 )           (199 )           113       (86 )
 
                                   
INCOME  FROM CONTINUING OPERATIONS
  $ 2,566     $ 2,007     $ 4,573     $ (3,481 )   $ 113     $ 1,205  
 
                                   
Earnings from continuing operations per share:
                                               
Basic earnings per share
  $ 0.06                                     $ 0.03  
Diluted earnings per share
  $ 0.06                                     $ 0.03  
Weighted average share information:
                                               
Basic shares outstanding
    42,120                                       42,120  
Diluted shares outstanding
    42,203                                       42,203  
See accompanying notes to the unaudited proforma condensed consolidated statement of operations.

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NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands)
Presentation
     The accompanying Unaudited Pro Forma Condensed Consolidated Statement of Operations of the Company for the Year Ended December 31, 2005 is based on the Consolidated Historical Statements of Operations of the Company and is presented as if (1) the acquisition of self-storage facilities completed subsequent to December 31, 2005, (2) the probable acquisitions of 13 self-storage facilities, (3) and borrowings on the credit facility all had occurred on January 1, 2005.
     In the opinion of the Company’s management, all material adjustments necessary to reflect the effects of the preceding transactions have been made. The Unaudited Pro Forma Condensed Consolidated Statement of Operations is presented for illustrative purposes only and is not necessarily indicative of what the actual results of operations would have been had the transactions described above occurred on January 1, 2005, nor does it purport to represent the future results of operations of the Company.
Notes
(4)   Reflects the historical consolidated statement of income of U-Store-It Trust for the year ended December 31, 2005.
 
(5)   Represents the results of operations which will be reflected in our operating partnership as a result of the acquisition of 35 storage facilities. These acquisitions were completed from January 1, 2006 through March 1, 2006.
                                                         
                                                    Total  
                                                    Completed  
    Nashville,     Dallas,     U-Stor     Sure Save             Proforma     Facility  
    Tennessee     Texas     Portfolio     Portfolio     Texas     Adjustments     Acquisitions  
TOTAL FACILITIES
    2       2       3       24       4               35  
REVENUES:
                                                       
Rental income
  $ 1,329     $ 1,406     $ 1,083     $ 14,695     $ 1,457     $     $ 19,970  
Other property related income
    87       4       92       1,134       116             1,433  
 
                                         
Total revenues
    1,416       1,410       1,175       15,829       1,573             21,403  
 
                                         
OPERATING EXPENSES:
                                                       
Property operating expenses
    458       180       438       5,087       886       160 (a)     7,209  
Depreciation
                                  8,941 (b)     8,941  
General and administrative/ Management fee
          71       79       379       89       (498 )(a)     120  
 
                                         
Total operating expenses
    458       251       517       5,466       975       8,603       16,270  
 
                                         
OPERATING INCOME
    958       1,159       658       10,363       598       (8,603 )     5,133  
 
                                         
OTHER EXPENSE:
                                                       
Interest:
                                                       
Interest expense on loans
                                  (3,116 )(c)     (3,116
Loan procurement amortization expense
                                  (10 )(c)     (10
Interest income
                                         
Other
                                         
 
                                         
Total other expense
                                  (3,126     (3,126
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST
    958       1,159       658       10,363       598       (11,729 )     2,007  
Minority interest
                                         
 
                                         
INCOME (LOSS) FROM CONTINUING OPERATIONS
  $ 958     $ 1,159     $ 658     $ 10,363     $ 598     $ (11,729 )   $ 2,007  
 
                                         
 
(a)   Additional costs of $280 are anticipated to be incurred to manage the new facilities purchased consisting of $160 for property operating and $120 for general and administrative expenses. Management fees of $498 are eliminated as these represent fees paid to an unaffiliated management company that will no longer be incurred. Adjustment reflects net difference between these expenses.
 
(b)   Depreciation expense adjustment includes depreciation calculated on a straight line basis over the estimated useful lives ranging between 5-39 years on assets acquired in 2006 of $223,371, with $158,607 allocated to building and other depreciable assets and $64,764 allocated to land.
 
(c)   Represents additional interest expense from borrowings under the credit facility and debt assumed in connection with completed facility transaction.
     Additional interest on loan assumed between January 1, 2006 and March 1, 2006:
         
Mortgage loan collateralized by Dallas, TX facility, due 2014, effective interest rate of 5.87% per annum
  $ 253  
Mortgage loan collateralized by Dallas, TX facility, due 2015, effective interest rate of 5.87% per annum
    163  
Interest from borrowings under our revolving credit facility related to acquisitions completed subsequent to December 31, 2005
    2,700  
 
     
Total increase in interest expense
  $ 3,116  
 
     
 
       
Loan procurement amortization expense from assumed indebtedness
  $ 10  

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(6)   Represents the following results of operations which will be reflected in our operating partnership as a result of the probable acquisition of 13 self-storage facilities.
                                                         
                                                    Total  
                                                    Probable  
                                    Stone &     Proforma     Facility  
    Texas     Nickey     SecureCare     U-Stor     Oak     Adjustments     Acquisitions  
TOTAL FACILITIES
    3       4       4       1       1 (a)             13  
REVENUES:
                                                       
Rental income
  $ 630     $ 1,936     $ 3,105     $ 425     $             6,096  
Other property related income
    50       5       144       21                   220  
 
                                         
Total revenues
    680       1,941       3,249       446                   6,316  
 
                                         
OPERATING EXPENSES:
                                                       
Property operating expenses
    380       776       849       180           $ 59 (b)     2,244  
Depreciation
                                  2,867 (c)     2,867  
General and administrative/Management fee
    238       108       163       31             (495 )(b)     45  
 
                                         
Total operating expenses
    618       884       1,012       211             2,431       5,156  
 
                                         
OPERATING INCOME (EXPENSE)
    62       1,057       2,237       235             (2,431 )     1,160  
 
                                         
OTHER EXPENSE:
                                                       
Interest expense
                                  (4,641 )(d)     (4,641
Loan procurement amortization expense
                                         
 
                                         
Total other expense
                                  (4,641 )     (4,641 )
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST
    62       1,057       2,237       235             (7,072 )     (3,481 )
Minority interest
                                         
 
                                         
INCOME (LOSS) FROM CONTINUING OPERATIONS
  $ 62     $ 1,057     $ 2,237     $ 235     $     $ (7,072 )   $ (3,481 )
 
                                         
 
(a)   The San Antonio, Texas facility is currently under construction.
 
(b)   Additional costs of $104 are anticipated to be incurred to manage the new facilities consisting of $59 for property operating and $45 for general and administrative expenses. Management fees of $495 are eliminated as these represent fees paid to an unaffiliated management company that will no longer be incurred. Adjustment reflects net difference between these expenses.
 
(c)   Depreciation expense adjustment includes depreciation calculated on a straight line basis over the estimated useful lives ranging between 5-39 years on assets acquired of $77,494, with $51,158 allocated to buildings and other depreciable assets and $26,336 allocated to land.
 
(d)   Adjustment represents interest expense relating to assumed mortgages secured by one of the facilities and the remainder from borrowings on the revolving credit facility.
 
(7)   Reflects the allocation of income to minority interest holders (approximately 6.7%).

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INDEPENDENT AUDITORS’ REPORT
To the Board of Trustees and Shareholders
U-Store-It Trust
Cleveland, Ohio
We have audited the accompanying combined statement of revenues and certain operating expenses of the Sure Save Storage Portfolio (the “Properties”) for the year ended December 31, 2005. The statement is the responsibility of the Properties’ management. Our responsibility is to express an opinion on this statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free from material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Properties’ internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement. We believe that our audit provides a reasonable basis for our opinion.
The accompanying combined statement of revenues and certain operating expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in Form 8-K/A of U-Store-It Trust, as described in Note 1. This presentation is not intended to be a complete presentation of the Properties’ revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material respects, the revenues and certain operating expenses described in Note 1 of the Properties for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.
/s/ THE SCHONBRAUN McCANN GROUP LLC
Roseland, New Jersey
April 7, 2006

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SURE SAVE STORAGE PORTFOLIO
COMBINED STATEMENT OF REVENUES AND
CERTAIN OPERATING EXPENSES
         
    Year ended  
    December 31, 2005  
Revenues
       
Base rents
  $ 14,694,713  
Other income
    1,133,810  
 
     
 
    15,828,523  
 
     
 
       
Certain Operating Expenses
       
Property operating expenses
    3,707,485  
Real estate taxes
    1,379,023  
General and administrative expenses
    378,862  
 
     
 
    5,465,370  
 
     
 
       
Revenues in excess of certain operating expenses
  $ 10,363,153  
 
     
See accompanying notes to combined statement of revenues and certain operating expenses.

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SURE SAVE STORAGE PORTFOLIO
NOTES TO COMBINED STATEMENT OF REVENUES AND
CERTAIN OPERATING EXPENSES
1.   BASIS OF PRESENTATION
 
    Presented herein is the combined statement of revenues and certain operating expenses related to the operation of the following twenty-four storage facilities, collectively (“Sure-Save Storage Portfolio” or the “Properties”):
             
Property Name   Facility Location   Units
 
           
1400 S. GENE AUTRY TRAIL
  Palm Springs, CA     578  
 
           
72500 VARNER RD.
  Thousand Palms, CA     861  
 
           
401&500 RADIO RD.
  Palm Springs, CA     636  
 
           
67-650 E. RAMON RD.
  Cathedral City, CA     1,042  
 
           
401 S. WATERMAN
  San Bernardino, CA     406  
 
           
601 S. WATERMAN
  San Bernardino, CA     1,009  
 
           
1450 23RD STREET
  San Bernardino, CA     693  
 
           
1441 E. BASELINE ST.
  San Bernardino, CA     1,044  
 
           
210 W. BONNIE VIEW DR.
  Rialto, CA     526  
 
           
26441 HIGHLAND AVE.
  Highland, CA     549  
 
           
1844 N. 43RD AVE.
  Phoenix, AZ     798  
 
           
3122 E. WASHINGTON
  Phoenix, AZ     440  
 
           
536 N. POWER RD.
  Mesa, AZ     476  
 
           
2645 S. NELLIS BLVD.
  Las Vegas, NV     413  

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SURE SAVE STORAGE PORTFOLIO
NOTES TO COMBINED STATEMENT OF REVENUES AND
CERTAIN OPERATING EXPENSES
1.   BASIS OF PRESENTATION — Continued
             
Property Name   Facility Location   Units
 
           
7370 CHEYENNE
  Las Vegas, NV     402  
 
           
198 W ARTESIA BLVD.
  Long Beach, CA     1,420  
 
           
7600 ARLINGTON AVE
  Riverside, CA     648  
 
           
2828 W. 5TH STREET
  Santa Ana, CA     743  
 
           
9150 & 9180 JAMACHA RD
  Spring Valley, CA     731  
 
           
4011 FAIRGROUNDS
  Riverside, CA     715  
 
           
3026 S. COUNTRY CLUB
  Mesa, AZ     435  
 
           
909 S. COUNTRY CLUB
  Mesa, AZ     537  
 
           
49 HOTEL CIRCLE
  Albuquerque, NM     426  
 
           
1220 SPRING STUEBNER
  Spring, TX     510  
 
           
 
        16,038  
The accompany combined statement of revenues and certain operating expenses for the year ended December 31, 2005 was prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) which requires certain information with respect to real estate operations to be included with certain filings with the SEC. Accordingly, the combined revenues and certain operating expenses excludes certain expenses that may not be comparable to those expected to be incurred by U-Store-It Trust in the proposed future operations of the Properties. Items excluded consist of mortgage interest expense, depreciation, management fees and general and administrative expenses not directly related to the future operations.

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SURE SAVE STORAGE PORTFOLIO
NOTES TO COMBINED STATEMENT OF REVENUES AND
CERTAIN OPERATING EXPENSES
2.   USE OF ESTIMATES
 
    The preparation of the combined statement of revenues and certain operating expenses in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the combined statement of revenues and certain operating expenses and accompanying notes. Actual results could differ from those estimates.
 
3.   REVENUE RECOGNITION
 
    Revenue relating to the Properties is recognized when payments are due. If it is determined after all methods of collection have been exhausted, that the account will not be collected, then it is written off to bad debt expense. The Properties are being leased to tenants under operating leases generally on a month to month basis.
 
4.   PROPERTY OPERATING EXPENSES
 
    The Properties’ operating expenses for the year ended December 31, 2005, include $504,015 for insurance, $472,233 for utilities, $325,060 in operating and maintenance costs, $1,367,704 in payroll, $701,709 in bad debts and advertising expenses of $336,764 (see note 5).
 
5.   ADVERTISING
 
    Advertising costs are expensed as incurred, $336,764 for 2005, and are included in property operating expenses.

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SIGNATURE
     Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K/A to be signed on its behalf by the undersigned thereunto duly authorized.
         
  U-STORE-IT TRUST
(Registrant)
 
 
Date: April 21, 2006  By:   /s/ TEDD D. TOWSLEY    
    Name:   Tedd D. Towsley  
    Chief Financial Officer   
 

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