Business Wire | Aug 3, 2021 04:06PM EDT

National Storage Affiliates Trust Reports Second Quarter 2021 Results

Aug. 03, 2021

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Aug. 03, 2021--National Storage Affiliates Trust ("NSA" or the "Company") (NYSE: NSA) today reported the Company's second quarter 2021 results.

Second Quarter 2021 Highlights

* Reported net income of $35.7 million for the second quarter of 2021, an increase of 100.6% compared to the second quarter of 2020. Reported diluted earnings per share of $0.25 for the second quarter of 2021 compared to $0.10 for the second quarter of 2020. * Reported core funds from operations ("Core FFO") of $59.7 million, or $0.55 per share for the second quarter of 2021, an increase of 34.1% per share compared to the second quarter of 2020. * Reported an increase in same store net operating income ("NOI") of 21.5% for the second quarter of 2021 compared to the same period in 2020, driven by a 16.3% increase in same store total revenues partially offset by an increase of 4.3% in same store property operating expenses. * Reported same store period-end occupancy of 96.7% as of June 30, 2021, an increase of 720 basis points compared to June 30, 2020. * Received approximately $103.7 million of net proceeds from the sale of 2,390,000 common shares under the Company's at the market ("ATM") program during the second quarter of 2021. * Issued the previously announced $55.0 million of 3.10% senior unsecured notes due May 4, 2033 in a private placement to certain institutional investors on May 26, 2021. * Acquired 20 wholly-owned self storage properties for $269.4 million during the second quarter of 2021. Consideration for these acquisitions included the issuance of $24.1 million of OP equity.

Highlights Subsequent to Quarter-End

* Acquired seven wholly-owned self storage properties for approximately $68.6 million. * Completed an underwritten public offering of 10,120,000 common shares resulting in net proceeds of approximately $497.4 million. * Issued the previously announced $35.0 million of 2.16% senior unsecured notes due May 4, 2026 and $90.0 million of 3.00% senior unsecured notes due May 4, 2031 on July 26, 2021 in a private placement to certain institutional investors. * Entered into an agreement on July 9, 2021 with a single lender for an $88.0 million interest-only secured debt financing that matures in July 2028 and has a fixed interest rate of 2.77%. * Received commitments in July 2021 from a syndicated group of lenders to increase the total borrowing capacity under the Company's credit facility with the addition of a $100.0 million 5.5-year term loan tranche E.

Tamara Fischer, President and Chief Executive Officer, commented, "2021 continues to be an exceptional year for NSA on all fronts, delivering growth in second quarter same store NOI of 21.5% and investing nearly $270 million in the acquisition of 20 self storage properties. Our operational results and outlook for the remainder of 2021 give us the confidence to raise our 2021 guidance for Core FFO per share growth to 24.3% at the midpoint and increase our expected range of total acquisitions to be well over $1.0 billion. We've also taken several steps recently to further strengthen our balance sheet and maintain ample liquidity to fund NSA's outsized growth."

Financial Results

($ inthousands,except per Three Months Ended June 30, Six Months Ended June 30,share andunit data)

2021 2020 Growth 2021 2020 Growth

Net income $ 35,675 $ 17,787 100.6 % $ 63,310 $ 33,550 88.7 %



Funds FromOperations $ 59,603 $ 41,009 45.3 % $ 110,510 $ 77,287 43.0 %("FFO")^(1)

Add backacquisition 118 252 (53.2) % 410 1,085 (62.2) %costs

Core FFO^ $ 59,721 $ 41,261 44.7 % $ 110,920 $ 78,372 41.5 %(1)



Earnings(loss) per $ 0.33 $ 0.10 230.0 % $ 0.58 $ 0.16 (262.5) %share -basic

Earnings(loss) per $ 0.25 $ 0.10 150.0 % $ 0.44 $ 0.16 (175.0) %share -diluted



FFO pershare and $ 0.55 $ 0.41 34.1 % $ 1.03 $ 0.80 28.8 %unit^(1)

Core FFOper share $ 0.55 $ 0.41 34.1 % $ 1.04 $ 0.81 28.4 %and unit^(1)

(1)

Non-GAAP financial measures, including FFO, Core FFO and NOI, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.

Net income increased $17.9 million for the second quarter of 2021 and $29.8 million for the six months ended June 30, 2021 ("year-to-date") as compared to the same periods in 2020. These increases resulted primarily from additional NOI generated from the 80 self storage properties acquired between July 1, 2020 and June 30, 2021 and same store NOI growth, partially offset by increases in depreciation and amortization.

The increases in FFO and Core FFO for the second quarter of 2021 and year-to-date were primarily the result of incremental NOI from properties acquired between July 1, 2020 and June 30, 2021 and same store NOI growth, partially offset by increases in subordinated performance unit distributions.

Same Store Operating Results (560 Stores)

^Non-GAAP financial measures, including FFO, Core FFO and NOI, are defined^ in the Glossary in the supplemental financial information and, where(1) appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.

Net income increased $17.9 million for the second quarter of 2021 and $29.8 million for the six months ended June 30, 2021 ("year-to-date") as compared to the same periods in 2020. These increases resulted primarily from additional NOI generated from the 80 self storage properties acquired between July 1, 2020 and June 30, 2021 and same store NOI growth, partially offset by increases in depreciation and amortization.

The increases in FFO and Core FFO for the second quarter of 2021 and year-to-date were primarily the result of incremental NOI from properties acquired between July 1, 2020 and June 30, 2021 and same store NOI growth, partially offset by increases in subordinated performance unit distributions.

Same Store Operating Results (560 Stores)

($ inthousands,except per Three Months Ended June 30, Six Months Ended June 30,squarefoot data)

2021 2020 Growth 2021 2020 Growth

Total $ 107,382 $ 92,327 16.3 % $ 208,899 $ 186,201 12.2 %revenues

Propertyoperating 28,859 27,676 4.3 % 57,692 56,337 2.4 %expenses

NetOperating $ 78,523 $ 64,651 21.5 % $ 151,207 $ 129,864 16.4 %Income(NOI)

NOI Margin 73.1 % 70.0 % 3.1 % 72.4 % 69.7 % 2.7 %



Average 95.4 % 87.8 % 7.6 % 94.0 % 87.4 % 6.6 %Occupancy

AverageAnnualizedRentalRevenue $ 12.78 $ 11.97 6.8 % $ 12.62 $ 12.12 4.1 %PerOccupiedSquareFoot

Year-over-year same store total revenues increased 16.3% for the second quarter of 2021 and 12.2% year-to-date as compared to the same periods in 2020. The increase for the second quarter of 2021 was driven primarily by a 760 basis point increase in average occupancy and a 6.8% increase in average annualized rental revenue per occupied square foot. The year-to-date increase was driven primarily by a 660 basis point increase in average occupancy and a 4.1% increase in average annualized rental revenue per occupied square foot. Markets which generated above portfolio average same store total revenue growth include: Portland, Phoenix, Sarasota and Las Vegas. Markets which generated below portfolio average same store total revenue growth include: Atlanta, Oklahoma City, Dallas and Tulsa.

Year-over-year same store property operating expenses increased 4.3% for the second quarter of 2021 and 2.4% year-to-date as compared to the same periods in 2020. The increases primarily resulted from increases in personnel expense, property taxes and repairs and maintenance expense offset by decreases in marketing expense.

Investment Activity

During the second quarter, NSA invested approximately $269.4 million in the acquisition of 20 self storage properties consisting of approximately 1.7 million rentable square feet configured in approximately 13,700 storage units. Total consideration for these acquisitions included approximately $243.6 million of net cash, the issuance of approximately $9.3 million of OP units and $14.8 million of subordinated performance units and the assumption of approximately $1.7 million of other liabilities.

Balance Sheet

On April 8, 2021, Kroll Bond Rating Agency affirmed the issuer credit rating of the Company's operating partnership at BBB and revised its outlook to Positive from Stable.

During the second quarter, the Company entered into agreements to increase the aggregate capacity of its ATM program to $400.0 million and received approximately $103.7 million of net proceeds from the sale of 2,390,000 common shares under the ATM program, which included the issuance of common shares prior to the increase in the aggregate capacity of the ATM program. Subsequent to quarter end, the Company received approximately $40.0 million of net proceeds from the sale of 782,000 common shares under the ATM program. The Company used the net proceeds for self storage property acquisitions and to repay borrowings outstanding under its revolving line of credit. As of August 3, 2021, the Company has approximately $308.0 million of capacity remaining under its ATM program.

On May 3, 2021, the Company's operating partnership entered into an agreement to issue $180.0 million of senior unsecured notes, comprised of $35.0 million of 2.16% senior unsecured notes due May 4, 2026 (the "2026 Notes"), $90.0 million of 3.00% senior unsecured notes due May 4, 2031 (the "May 2031 Notes") and $55.0 million of 3.10% senior unsecured notes due May 4, 2033 (the "2033 Notes"). On May 26, 2021 the operating partnership issued the 2033 Notes and on July 26, 2021 the operating partnership issued the 2026 Notes and the May 2031 Notes. The Company used the proceeds to repay outstanding amounts on its revolving line of credit and for general corporate purposes.

On July 9, 2021, the Company entered into an agreement with a single lender for an $88.0 million debt financing secured by a first lien on eight of the Company's self storage properties. This interest-only loan matures in July 2028 and has a fixed interest rate of 2.77%. The Company used the proceeds to repay outstanding amounts on its revolving line of credit.

In July 2021, NSA completed an underwritten public offering of 10,120,000 common shares, including 1,320,000 common shares sold upon the exercise in full by the underwriters of their option to purchase additional common shares. The shares were issued at a price of $51.25 per share, resulting in net proceeds of approximately $497.4 million. The Company used or expects to use the proceeds for self storage property acquisitions, general corporate purposes and to repay borrowings outstanding under its revolving line of credit.

NSA received commitments in July 2021 from a syndicated group of lenders to partially exercise the expansion option under its credit facility by adding an additional $100.0 million 5.5-year term loan tranche E. The tranche E term loan is expected to close during the third quarter of 2021 and mature in early 2027. The Company plans to use the proceeds for self storage property acquisitions and for general corporate purposes.

Common Share Dividends

On May 27, 2021, NSA's Board of Trustees declared a quarterly cash dividend of $0.38 per common share, representing a 15.2% increase from the second quarter 2020. The second quarter 2021 dividend was paid on June 30, 2021 to shareholders of record as of June 15, 2021.

2021 Guidance

The following table outlines NSA's updated and prior FFO guidance estimates and related assumptions for the year ended December 31, 2021:

Prior Ranges Actual Current Ranges for for Results Full Year 2021 Full Year 2021 for Full Year Low High Low High 2020

Core FFO per share^(1) $2.11 $2.14 $1.89 $1.93 $1.71



Same store operations

Total revenue growth 11.75% 12.75% 5.5% 6.5% 1.7%

Property operating expenses 2.5% 3.5% 3.5% 4.5% 0.5%growth

NOI growth 15.0% 17.0% 6.0% 8.0% 2.2%



General and administrative expenses

General and administrativeexpenses (excluding $45.0 $46.0 $42.0 $44.0 $39.3equity-based compensation), inmillions

Equity-based compensation, in $5.5 $6.0 $5.5 $6.0 $4.3millions



Management fees and other $24.0 $25.0 $22.0 $23.0 $23.0revenue, in millions

Core FFO from unconsolidatedreal estate ventures, in $19.0 $20.0 $17.0 $18.0 $15.6millions



Subordinated performance unit $43.0 $45.0 $37.0 $39.0 $29.7distributions, in millions



Acquisitions of self storage $1,100.0 $1,300.0 $500.0 $650.0 $543.3properties, in millions

(1) The following table provides a reconciliation of the range of estimated earnings (loss) per share - diluted to estimated Core FFO per share and unit:

Current Ranges forFull Year 2021

Prior Ranges forFull Year 2021

Low

High

Low

High

Earnings (loss) per share - diluted

$0.94

$1.03

$0.75

$0.85

Impact of the difference in weighted average number of shares and GAAP accounting for noncontrolling interests, two-class method and treasury stock method

0.15

0.06

0.13

0.03

Add real estate depreciation and amortization, including NSA's share of unconsolidated venture real estate depreciation and amortization

1.39

1.43

1.34

1.39

FFO attributable to subordinated unitholders

(0.38)

(0.40)

(0.34)

(0.36)

Add acquisition costs and NSA's share of unconsolidated real estate venture acquisition costs

0.01

0.02

0.01

0.02

Core FFO per share and unit

$2.11

$2.14

$1.89

$1.93

Supplemental Financial Information

The full text of this earnings release and supplemental financial information, including certain financial information referenced in this release, are available on NSA's website at http://ir.nationalstorageaffiliates.com/quarterly-reporting and as exhibit 99.1 to the Company's Form 8-K furnished to the SEC on August 3, 2021.

Non-GAAP Financial Measures & Glossary

This press release contains certain non-GAAP financial measures. These non-GAAP measures are presented because NSA's management believes these measures help investors understand NSA's business, performance and ability to earn and distribute cash to its shareholders by providing perspectives not immediately apparent from net income (loss). These measures are also frequently used by securities analysts, investors and other interested parties. The presentations of FFO, Core FFO and NOI in this press release are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, NSA's method of calculating these measures may be different from methods used by other companies, and, accordingly, may not be comparable to similar measures as calculated by other companies that do not use the same methodology as NSA. These measures, and other words and phrases used herein, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.

Quarterly Teleconference and Webcast

The Company will host a conference call at 1:00 pm Eastern Time on Wednesday, August 4, 2021 to discuss its second quarter 2021 financial results. At the conclusion of the call, management will accept questions from certified financial analysts. All other participants are encouraged to listen to a webcast of the call by accessing the link found on the Company's website at www.nationalstorageaffiliates.com.

Conference Call and Webcast:

Date/Time: Wednesday, August 4, 2021, 1:00pm ET

Webcast available at: www.nationalstorageaffiliates.com

Domestic (Toll Free US & Canada): 877.407.9711

International: 412.902.1014

Replay:

Domestic (Toll Free US & Canada): 877.660.6853

International: 201.612.7415

Conference ID: 13692161

A replay of the call will be available for one week through Wednesday, August 11, 2021. A replay of the webcast will be available for 30 days on NSA's website at www.nationalstorageaffiliates.com.

Upcoming Industry Conferences

NSA management is scheduled to participate in the virtual BofA Securities 2021 Global Real Estate Conference, September 21 - 22, 2021 and the virtual Evercore 7th Annual Storage Symposium on September 28, 2021.

About National Storage Affiliates Trust

National Storage Affiliates Trust is a real estate investment trust headquartered in Denver, Colorado, focused on the ownership, operation and acquisition of self storage properties located within the top 100 metropolitan statistical areas throughout the United States. As of June 30, 2021, the Company held ownership interests in and operated 864 self storage properties located in 36 states and Puerto Rico with approximately 55.2 million rentable square feet. NSA is one of the largest owners and operators of self storage properties among public and private companies in the United States. For more information, please visit the Company's website at www.nationalstorageaffiliates.com. NSA is included in the MSCI US REIT Index (RMS/RMZ), the Russell 2000 Index of Companies and the S&P MidCap 400 Index.

NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. Changes in any circumstances may cause the Company's actual results to differ significantly from those expressed in any forward-looking statement. When used in this release, the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: market trends in the Company's industry, interest rates, the debt and lending markets or the general economy; the Company's business and investment strategy; the acquisition of properties, including those under contract and the Company's ability to execute on its acquisition pipeline; the timing of acquisitions under contract; the internalization of retiring participating regional operators ("PROs") into the Company; negative impacts from the COVID-19 pandemic on the economy, the self storage industry, the broader financial markets, the Company's financial condition, results of operations and cash flows and the ability of the Company's tenants to pay rent; and the Company's guidance estimates for the year ended December 31, 2021. For a further list and description of such risks and uncertainties, see the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission, and the other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

^(1) The following table provides a reconciliation of the range of estimatedearnings (loss) per share - diluted to estimated Core FFO per share and unit:

Current Ranges Prior Ranges for for Full Year 2021 Full Year 2021

Low High Low High

Earnings (loss) per share - diluted $0.94 $1.03 $0.75 $0.85

Impact of the difference in weighted averagenumber of shares and GAAP accounting for 0.15 0.06 0.13 0.03noncontrolling interests, two-class methodand treasury stock method

Add real estate depreciation andamortization, including NSA's share of 1.39 1.43 1.34 1.39unconsolidated venture real estatedepreciation and amortization

FFO attributable to subordinated unitholders (0.38) (0.40) (0.34) (0.36)

Add acquisition costs and NSA's share ofunconsolidated real estate venture 0.01 0.02 0.01 0.02acquisition costs

Core FFO per share and unit $2.11 $2.14 $1.89 $1.93

Supplemental Financial Information

The full text of this earnings release and supplemental financial information, including certain financial information referenced in this release, are available on NSA's website at http://ir.nationalstorageaffiliates.com/quarterly-reporting and as exhibit 99.1 to the Company's Form 8-K furnished to the SEC on August 3, 2021.

Non-GAAP Financial Measures & Glossary

This press release contains certain non-GAAP financial measures. These non-GAAP measures are presented because NSA's management believes these measures help investors understand NSA's business, performance and ability to earn and distribute cash to its shareholders by providing perspectives not immediately apparent from net income (loss). These measures are also frequently used by securities analysts, investors and other interested parties. The presentations of FFO, Core FFO and NOI in this press release are not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, NSA's method of calculating these measures may be different from methods used by other companies, and, accordingly, may not be comparable to similar measures as calculated by other companies that do not use the same methodology as NSA. These measures, and other words and phrases used herein, are defined in the Glossary in the supplemental financial information and, where appropriate, reconciliations of these measures and other non-GAAP financial measures to their most directly comparable GAAP measures are included in the Schedules to this press release and in the supplemental financial information.

Quarterly Teleconference and Webcast

The Company will host a conference call at 1:00 pm Eastern Time on Wednesday, August 4, 2021 to discuss its second quarter 2021 financial results. At the conclusion of the call, management will accept questions from certified financial analysts. All other participants are encouraged to listen to a webcast of the call by accessing the link found on the Company's website at www.nationalstorageaffiliates.com.

Conference Call and Webcast:

Date/Time: Wednesday, August 4, 2021, 1:00pm ET

Webcast available at: www.nationalstorageaffiliates.com

Domestic (Toll Free US & Canada): 877.407.9711

International: 412.902.1014

Replay:

Domestic (Toll Free US & Canada): 877.660.6853

International: 201.612.7415

Conference ID: 13692161

A replay of the call will be available for one week through Wednesday, August 11, 2021. A replay of the webcast will be available for 30 days on NSA's website at www.nationalstorageaffiliates.com.

Upcoming Industry Conferences

NSA management is scheduled to participate in the virtual BofA Securities 2021 Global Real Estate Conference, September 21 - 22, 2021 and the virtual Evercore 7th Annual Storage Symposium on September 28, 2021.

About National Storage Affiliates Trust

National Storage Affiliates Trust is a real estate investment trust headquartered in Denver, Colorado, focused on the ownership, operation and acquisition of self storage properties located within the top 100 metropolitan statistical areas throughout the United States. As of June 30, 2021, the Company held ownership interests in and operated 864 self storage properties located in 36 states and Puerto Rico with approximately 55.2 million rentable square feet. NSA is one of the largest owners and operators of self storage properties among public and private companies in the United States. For more information, please visit the Company's website at www.nationalstorageaffiliates.com. NSA is included in the MSCI US REIT Index (RMS/RMZ), the Russell 2000 Index of Companies and the S&P MidCap 400 Index.

NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. Changes in any circumstances may cause the Company's actual results to differ significantly from those expressed in any forward-looking statement. When used in this release, the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: market trends in the Company's industry, interest rates, the debt and lending markets or the general economy; the Company's business and investment strategy; the acquisition of properties, including those under contract and the Company's ability to execute on its acquisition pipeline; the timing of acquisitions under contract; the internalization of retiring participating regional operators ("PROs") into the Company; negative impacts from the COVID-19 pandemic on the economy, the self storage industry, the broader financial markets, the Company's financial condition, results of operations and cash flows and the ability of the Company's tenants to pay rent; and the Company's guidance estimates for the year ended December 31, 2021. For a further list and description of such risks and uncertainties, see the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission, and the other documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

National Storage Affiliates Trust

Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

REVENUE

Rental revenue $ 127,310 $ 95,302 $ 240,437 $ 190,704

Other property-related 4,829 3,418 8,966 6,789 revenue

Management fees and other 6,107 5,697 11,835 11,146 revenue

Total revenue 138,246 104,417 261,238 208,639

OPERATING EXPENSES

Property operating 36,654 30,257 71,258 60,849 expenses

General and administrative 12,450 10,329 23,688 21,423 expenses

Depreciation and 36,051 29,309 68,475 58,414 amortization

Other 310 462 707 851

Total operating expenses 85,465 70,357 164,128 141,537

OTHER (EXPENSE) INCOME

Interest expense (17,339 ) (15,513 ) (34,131 ) (31,141 )

Equity in earnings(losses) of unconsolidated 1,174 52 1,933 (288 )real estate ventures

Acquisition costs (118 ) (252 ) (410 ) (1,085 )

Non-operating expense (148 ) (317 ) (321 ) (509 )

Other expense (16,431 ) (16,030 ) (32,929 ) (33,023 )

Income before income taxes 36,350 18,030 64,181 34,079

Income tax expense (675 ) (243 ) (871 ) (529 )

Net income 35,675 17,787 63,310 33,550

Net income attributable to (6,957 ) (7,365 ) (13,754 ) (16,480 )noncontrolling interests

Net income attributable toNational Storage 28,718 10,422 49,556 17,070 Affiliates Trust

Distributions to preferred (3,276 ) (3,274 ) (6,551 ) (6,547 )shareholders

Net income attributable to $ 25,442 $ 7,148 $ 43,005 $ 10,523 common shareholders



Earnings (loss) per share $ 0.33 $ 0.10 $ 0.58 $ 0.16 - basic

Earnings (loss) per share $ 0.25 $ 0.10 $ 0.44 $ 0.16 - diluted



Weighted average shares 76,712 68,210 74,267 64,004 outstanding - basic

Weighted average shares 129,578 68,210 126,396 64,004 outstanding - diluted

National Storage Affiliates Trust

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

(unaudited)

June 30,

December 31,

2021

2020

ASSETS

Real estate

Self storage properties

$

4,077,016

$

3,639,192

Less accumulated depreciation

(504,498

)

(443,623

)

Self storage properties, net

3,572,518

3,195,569

Cash and cash equivalents

22,410

18,723

Restricted cash

3,565

2,978

Debt issuance costs, net

2,113

2,496

Investment in unconsolidated real estate ventures

195,567

202,533

Other assets, net

72,399

68,149

Operating lease right-of-use assets

22,674

23,129

Total assets

$

3,891,246

$

3,513,577

LIABILITIES AND EQUITY

Liabilities

Debt financing

$

2,058,573

$

1,916,971

Accounts payable and accrued liabilities

48,058

47,043

Interest rate swap liabilities

53,638

77,918

Operating lease liabilities

24,379

24,756

Deferred revenue

19,072

16,414

Total liabilities

2,203,720

2,083,102

Equity

Preferred shares of beneficial interest, par value $0.01 per share. 50,000,000 authorized, 8,736,719 and 8,732,719 issued and outstanding at June 30, 2021 and December 31, 2020, respectively, at liquidation preference

218,418

218,318

Common shares of beneficial interest, par value $0.01 per share. 250,000,000 shares authorized, 77,708,831 and 71,293,117 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

777

713

Additional paid-in capital

1,244,269

1,050,714

Distributions in excess of earnings

(263,117

)

(251,704

)

Accumulated other comprehensive loss

(33,046

)

(49,084

)

Total shareholders' equity

1,167,301

968,957

Noncontrolling interests

520,225

461,518

Total equity

1,687,526

1,430,475

Total liabilities and equity

$

3,891,246

$

3,513,577

National Storage Affiliates Trust

Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

(unaudited)

June 30, December 31,

2021 2020

ASSETS

Real estate

Self storage properties $ 4,077,016 $ 3,639,192

Less accumulated depreciation (504,498 ) (443,623 )

Self storage properties, net 3,572,518 3,195,569

Cash and cash equivalents 22,410 18,723

Restricted cash 3,565 2,978

Debt issuance costs, net 2,113 2,496

Investment in unconsolidated real estate ventures 195,567 202,533

Other assets, net 72,399 68,149

Operating lease right-of-use assets 22,674 23,129

Total assets $ 3,891,246 $ 3,513,577

LIABILITIES AND EQUITY

Liabilities

Debt financing $ 2,058,573 $ 1,916,971

Accounts payable and accrued liabilities 48,058 47,043

Interest rate swap liabilities 53,638 77,918

Operating lease liabilities 24,379 24,756

Deferred revenue 19,072 16,414

Total liabilities 2,203,720 2,083,102

Equity

Preferred shares of beneficial interest, parvalue $0.01 per share. 50,000,000 authorized,8,736,719 and 8,732,719 issued and outstanding at 218,418 218,318 June 30, 2021 and December 31, 2020,respectively, at liquidation preference

Common shares of beneficial interest, par value$0.01 per share. 250,000,000 shares authorized,77,708,831 and 71,293,117 shares issued and 777 713 outstanding at June 30, 2021 and December 31,2020, respectively

Additional paid-in capital 1,244,269 1,050,714

Distributions in excess of earnings (263,117 ) (251,704 )

Accumulated other comprehensive loss (33,046 ) (49,084 )

Total shareholders' equity 1,167,301 968,957

Noncontrolling interests 520,225 461,518

Total equity 1,687,526 1,430,475

Total liabilities and equity $ 3,891,246 $ 3,513,577

Reconciliation of Net Income to FFO and Core FFO

(in thousands, except per share and unit amounts) (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net income

$

35,675

$

17,787

$

63,310

$

33,550

Add (subtract):

Real estate depreciation and amortization

35,698

28,955

67,768

57,719

Company's share of unconsolidated real estate venture real estate depreciation and amortization

3,840

3,811

7,721

7,598

Mark-to-market changes in value on equity securities

-

-

-

142

Distributions to preferred shareholders and unitholders

(3,517

)

(3,514

)

(7,034

)

(7,028

)

FFO attributable to subordinated performance unitholders(1)

(12,093

)

(6,030

)

(21,255

)

(14,694

)

FFO attributable to common shareholders, OP unitholders, and LTIP unitholders

59,603

41,009

110,510

77,287

Add:

Acquisition costs

118

252

410

1,085

Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders

$

59,721

$

41,261

$

110,920

$

78,372

Weighted average shares and units outstanding - FFO and Core FFO:(2)

Weighted average shares outstanding - basic

76,712

68,210

74,267

64,004

Weighted average restricted common shares outstanding

33

34

29

29

Weighted average effect of forward offering agreement(3)

-

-

199

-

Weighted average OP units outstanding

29,963

29,720

29,858

30,215

Weighted average DownREIT OP unit equivalents outstanding

1,925

1,925

1,925

1,887

Weighted average LTIP units outstanding

536

534

561

576

Total weighted average shares and units outstanding - FFO and Core FFO

109,169

100,423

106,839

96,711

FFO per share and unit

$

0.55

$

0.41

$

1.03

$

0.80

Core FFO per share and unit

$

0.55

$

0.41

$

1.04

$

0.81

Reconciliation of Net Income to FFO and Core FFO

(in thousands, except per share and unit amounts) (unaudited)



Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

Net income $ 35,675 $ 17,787 $ 63,310 $ 33,550

Add (subtract):

Real estate depreciation and 35,698 28,955 67,768 57,719 amortization

Company's share ofunconsolidated real estateventure real estate 3,840 3,811 7,721 7,598 depreciation andamortization

Mark-to-market changes in - - - 142 value on equity securities

Distributions to preferred (3,517 ) (3,514 ) (7,034 ) (7,028 )shareholders and unitholders

FFO attributable tosubordinated performance (12,093 ) (6,030 ) (21,255 ) (14,694 )unitholders^(1)

FFO attributable to commonshareholders, OP 59,603 41,009 110,510 77,287 unitholders, and LTIPunitholders

Add:

Acquisition costs 118 252 410 1,085

Core FFO attributable tocommon shareholders, OP $ 59,721 $ 41,261 $ 110,920 $ 78,372 unitholders, and LTIPunitholders



Weighted average shares andunits outstanding - FFO and Core FFO:^(2)

Weighted average shares 76,712 68,210 74,267 64,004 outstanding - basic

Weighted average restricted 33 34 29 29 common shares outstanding

Weighted average effect offorward offering agreement^ - - 199 - (3)

Weighted average OP units 29,963 29,720 29,858 30,215 outstanding

Weighted average DownREIT OP 1,925 1,925 1,925 1,887 unit equivalents outstanding

Weighted average LTIP units 536 534 561 576 outstanding

Total weighted averageshares and units outstanding 109,169 100,423 106,839 96,711 - FFO and Core FFO



FFO per share and unit $ 0.55 $ 0.41 $ 1.03 $ 0.80

Core FFO per share and unit $ 0.55 $ 0.41 $ 1.04 $ 0.81

(1)

Amounts represent distributions declared for subordinated performance unitholders and DownREIT subordinated performance unitholders for the periods presented.

(2)

NSA combines OP units and DownREIT OP units with common shares because, after the applicable lock-out periods, OP units in the Company's operating partnership are redeemable for cash or, at NSA's option, exchangeable for common shares on a one-for-one basis and DownREIT OP units are also redeemable for cash or, at NSA's option, exchangeable for OP units in the Company's operating partnership on a one-for-one basis, subject to certain adjustments in each case. Subordinated performance units, DownREIT subordinated performance units and LTIP units may also, under certain circumstances, be convertible into or exchangeable for common shares (or other units that are convertible into or exchangeable for common shares). See footnote(4) for additional discussion of subordinated performance units, DownREIT subordinated performance units, and LTIP units in the calculation of FFO and Core FFO per share and unit.

(3)

Represents the dilutive effect of the forward offering from the application of the treasury stock method

Amounts represent distributions declared for subordinated performance(1) unitholders and DownREIT subordinated performance unitholders for the periods presented.

NSA combines OP units and DownREIT OP units with common shares because, after the applicable lock-out periods, OP units in the Company's operating partnership are redeemable for cash or, at NSA's option, exchangeable for common shares on a one-for-one basis and DownREIT OP units are also redeemable for cash or, at NSA's option, exchangeable for OP units in the(2) Company's operating partnership on a one-for-one basis, subject to certain adjustments in each case. Subordinated performance units, DownREIT subordinated performance units and LTIP units may also, under certain circumstances, be convertible into or exchangeable for common shares (or other units that are convertible into or exchangeable for common shares). See footnote^(4) for additional discussion of subordinated performance units, DownREIT subordinated performance units, and LTIP units in the calculation of FFO and Core FFO per share and unit.

(3) Represents the dilutive effect of the forward offering from the application of the treasury stock method

Reconciliation of Earnings (Loss) Per Share - Diluted to FFO and Core FFO Per Share and Unit(in thousands, except per share and unit amounts) (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Earnings (loss) per share - diluted

$

0.25

$

0.10

$

0.44

$

0.16

Impact of the difference in weighted average number of shares(4)

0.04

(0.03

)

0.09

(0.06

)

Impact of GAAP accounting for noncontrolling interests, two-class method and treasury stock method(5)

-

0.07

-

0.17

Add real estate depreciation and amortization

0.33

0.29

0.63

0.60

Add Company's share of unconsolidated real estate venture real estate depreciation and amortization

0.04

0.04

0.07

0.08

FFO attributable to subordinated performance unitholders

(0.11

)

(0.06

)

(0.20

)

(0.15

)

FFO per share and unit

0.55

0.41

1.03

0.80

Add acquisition costs

-

-

0.01

0.01

Core FFO per share and unit

$

0.55

$

0.41

$

1.04

$

0.81

Reconciliation of Earnings (Loss) Per Share - Diluted to FFO and Core FFO PerShare and Unit(in thousands, except per share and unit amounts) (unaudited)



Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Earnings (loss) per share - diluted $ 0.25 $ 0.10 $ 0.44 $ 0.16

Impact of the difference in weighted 0.04 (0.03 ) 0.09 (0.06 )average number of shares^(4)

Impact of GAAP accounting fornoncontrolling interests, two-class - 0.07 - 0.17 method and treasury stock method^(5)

Add real estate depreciation and 0.33 0.29 0.63 0.60 amortization

Add Company's share of unconsolidatedreal estate venture real estate 0.04 0.04 0.07 0.08 depreciation and amortization

FFO attributable to subordinated (0.11 ) (0.06 ) (0.20 ) (0.15 )performance unitholders

FFO per share and unit 0.55 0.41 1.03 0.80

Add acquisition costs - - 0.01 0.01

Core FFO per share and unit $ 0.55 $ 0.41 $ 1.04 $ 0.81

(4)

Adjustment accounts for the difference between the weighted average number of shares used to calculate diluted earnings per share and the weighted average number of shares used to calculate FFO and Core FFO per share and unit. Diluted earnings per share is calculated using the two-class method for the company's restricted common shares and the treasury stock method for certain unvested LTIP units, and assumes the conversion of vested LTIP units into OP units on a one-for-one basis and the hypothetical conversion of subordinated performance units, and DownREIT subordinated performance units into OP units, even though such units may only be convertible into OP units (i) after a lock-out period and (ii) upon certain events or conditions. For additional information about the conversion of subordinated performance units and DownREIT subordinated performance units into OP units, see Note 10 to the Company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission. The computation of weighted average shares and units for FFO and Core FFO per share and unit includes all restricted common shares and LTIP units that participate in distributions and excludes all subordinated performance units and DownREIT subordinated performance units because their effect has been accounted for through the allocation of FFO to the related unitholders based on distributions declared.

(5)

Represents the effect of adjusting the numerator to consolidated net income (loss) prior to GAAP allocations for noncontrolling interests, after deducting preferred share and unit distributions, and before the application of the two-class method and treasury stock method, as described in footnote(4).

Adjustment accounts for the difference between the weighted average number of shares used to calculate diluted earnings per share and the weighted average number of shares used to calculate FFO and Core FFO per share and unit. Diluted earnings per share is calculated using the two-class method for the company's restricted common shares and the treasury stock method for certain unvested LTIP units, and assumes the conversion of vested LTIP units into OP units on a one-for-one basis and the hypothetical conversion of subordinated performance units, and DownREIT subordinated performance units into OP units, even though such units may only be convertible into(4) OP units (i) after a lock-out period and (ii) upon certain events or conditions. For additional information about the conversion of subordinated performance units and DownREIT subordinated performance units into OP units, see Note 10 to the Company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission. The computation of weighted average shares and units for FFO and Core FFO per share and unit includes all restricted common shares and LTIP units that participate in distributions and excludes all subordinated performance units and DownREIT subordinated performance units because their effect has been accounted for through the allocation of FFO to the related unitholders based on distributions declared.

Represents the effect of adjusting the numerator to consolidated net income (loss) prior to GAAP allocations for noncontrolling interests,(5) after deducting preferred share and unit distributions, and before the application of the two-class method and treasury stock method, as described in footnote^(4).

Net Operating Income(dollars in thousands) (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net income

$

35,675

$

17,787

$

63,310

$

33,550

(Subtract) add:

Management fees and other revenue

(6,107

)

(5,697

)

(11,835

)

(11,146

)

General and administrative expenses

12,450

10,329

23,688

21,423

Other

310

462

707

851

Depreciation and amortization

36,051

29,309

68,475

58,414

Interest expense

17,339

15,513

34,131

31,141

Equity in (earnings) losses of unconsolidated real estate ventures

(1,174

)

(52

)

(1,933

)

288

Acquisition costs

118

252

410

1,085

Income tax expense

675

243

871

529

Non-operating expense

148

317

321

509

Net Operating Income

$

95,485

$

68,463

$

178,145

$

136,644

Net Operating Income(dollars in thousands) (unaudited)



Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

Net income $ 35,675 $ 17,787 $ 63,310 $ 33,550

(Subtract) add:

Management fees and other (6,107 ) (5,697 ) (11,835 ) (11,146 )revenue

General and administrative 12,450 10,329 23,688 21,423 expenses

Other 310 462 707 851

Depreciation and 36,051 29,309 68,475 58,414 amortization

Interest expense 17,339 15,513 34,131 31,141

Equity in (earnings) lossesof unconsolidated real (1,174 ) (52 ) (1,933 ) 288 estate ventures

Acquisition costs 118 252 410 1,085

Income tax expense 675 243 871 529

Non-operating expense 148 317 321 509

Net Operating Income $ 95,485 $ 68,463 $ 178,145 $ 136,644

EBITDA and Adjusted EBITDA(dollars in thousands) (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net income

$

35,675

$

17,787

$

63,310

$

33,550

Add:

Depreciation and amortization

36,051

29,309

68,475

58,414

Company's share of unconsolidated real estate venture depreciation and amortization

3,840

3,811

7,721

7,598

Interest expense

17,339

15,513

34,131

31,141

Income tax expense

675

243

871

529

EBITDA

93,580

66,663

174,508

131,232

Add (subtract):

Acquisition costs

118

252

410

1,085

Equity-based compensation expense

1,348

1,151

2,634

1,925

Adjusted EBITDA

$

95,046

$

68,066

$

177,552

$

134,242

View source version on businesswire.com: https://www.businesswire.com/news/home/20210803006016/en/

CONTACT: National Storage Affiliates Trust Investor/Media Relations George Hoglund, CFA Vice President - Investor Relations 720.630.2160 ghoglund@nsareit.net