10-Q: Quarterly report pursuant to Section 13 or 15(d)
Published on November 3, 2022
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2022
OR
For the transition period from to
Commission file number: 001-37351
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
(Address of principal executive offices) (Zip code)
(720 ) 630-2600
(Registrant's telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbols | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange
Act.
☒ | Accelerated Filer | ☐ | ||||||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ||||||||||||
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of November 2, 2022, 90,865,339 common shares of beneficial interest, $0.01 par value per share, were outstanding.
NATIONAL STORAGE AFFILIATES TRUST | ||||||||
TABLE OF CONTENTS | ||||||||
FORM 10-Q | ||||||||
Page | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
ITEM 1. | Financial Statements | |||||||
Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (Unaudited) | ||||||||
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited) | ||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited) | ||||||||
Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited) | ||||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (Unaudited) | ||||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | ||||||||
ITEM 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | |||||||
ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk | |||||||
ITEM 4. | Controls and Procedures | |||||||
PART II. OTHER INFORMATION | ||||||||
ITEM 1. | Legal Proceedings | |||||||
ITEM 1A. | Risk Factors | |||||||
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||
ITEM 3. | Defaults Upon Senior Securities | |||||||
ITEM 4. | Mine Safety Disclosures | |||||||
ITEM 5. | Other Information | |||||||
ITEM 6. | Exhibits | |||||||
Signatures |
2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
(Unaudited)
September 30, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
ASSETS | |||||||||||
Real estate | |||||||||||
Self storage properties | $ | $ | |||||||||
Less accumulated depreciation | ( |
( |
|||||||||
Self storage properties, net |
|||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Debt issuance costs, net | |||||||||||
Investment in unconsolidated real estate ventures | |||||||||||
Other assets, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Liabilities | |||||||||||
Debt financing | $ | $ | |||||||||
Accounts payable and accrued liabilities | |||||||||||
Interest rate swap liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Deferred revenue | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Equity | |||||||||||
Preferred shares of beneficial interest, par value $ |
|||||||||||
Common shares of beneficial interest, par value $ |
|||||||||||
Additional paid-in capital | |||||||||||
Distributions in excess of earnings | ( |
( |
|||||||||
Accumulated other comprehensive income (loss) | ( |
||||||||||
Total shareholders' equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ | |||||||||
See notes to condensed consolidated financial statements.
3
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
REVENUE | |||||||||||||||||||||||
Rental revenue | $ | $ | $ | $ | |||||||||||||||||||
Other property-related revenue | |||||||||||||||||||||||
Management fees and other revenue | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||||
Property operating expenses | |||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
OTHER (EXPENSE) INCOME | |||||||||||||||||||||||
Interest expense | ( |
( |
( |
( |
|||||||||||||||||||
Equity in earnings of unconsolidated real estate ventures |
|||||||||||||||||||||||
Acquisition costs | ( |
( |
( |
( |
|||||||||||||||||||
Non-operating expense | ( |
( |
( |
( |
|||||||||||||||||||
Gain on sale of self storage properties | |||||||||||||||||||||||
Other expense, net | ( |
( |
( |
( |
|||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | ( |
( |
( |
( |
|||||||||||||||||||
Net income | |||||||||||||||||||||||
Net income attributable to noncontrolling interests |
( |
( |
( |
( |
|||||||||||||||||||
Net income attributable to National Storage Affiliates Trust |
|||||||||||||||||||||||
Distributions to preferred shareholders |
( |
( |
( |
( |
|||||||||||||||||||
Net income attributable to common shareholders |
$ | $ | $ | $ | |||||||||||||||||||
Earnings per share - basic | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share - diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding - basic | |||||||||||||||||||||||
Weighted average shares outstanding - diluted | |||||||||||||||||||||||
Dividends declared per common share | $ | $ | $ | $ |
See notes to condensed consolidated financial statements.
4
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(dollars in thousands)
(Unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Unrealized gain on derivative contracts | |||||||||||||||||||||||
Reclassification of other comprehensive (income) loss to interest expense |
( |
||||||||||||||||||||||
Other comprehensive income |
|||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||
Comprehensive income attributable to noncontrolling interests |
( |
( |
( |
( |
|||||||||||||||||||
Comprehensive income attributable to National Storage Affiliates Trust |
$ | $ | $ | $ |
See notes to condensed consolidated financial statements.
5
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(dollars in thousands, except number of shares)
(Unaudited)
Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Distributions | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Paid-in | In Excess Of | Comprehensive | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Capital | Earnings | (Loss) Income | Interests | Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2020 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | ||||||||||||||||||||||||||||||||||||||||||||
OP equity issued for property acquisitions: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
OP units and subordinated performance units, net of offering costs |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemptions of OP units |
— | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, net of offering costs |
— | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from noncontrolling interests |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Effect of changes in ownership for consolidated entities |
— | — | — | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted common shares |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Vesting and forfeitures of restricted common shares, net |
— | — | ( |
— | ( |
— | — | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Preferred share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Common share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balances, March 31, 2021 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | ||||||||||||||||||||||||||||||||||||||||||||
OP equity issued for property acquisitions: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
OP units and subordinated performance units, net of offering costs |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemptions of OP units |
— | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, net of offering costs |
— | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, share based compensation plans |
— | — | — | — | — | ( |
See notes to condensed consolidated financial statements.
6
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(dollars in thousands, except number of shares)
(Unaudited)
Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Distributions | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Paid-in | In Excess Of | Comprehensive | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Capital | Earnings | (Loss) Income | Interests | Equity | |||||||||||||||||||||||||||||||||||||||||||||
Effect of changes in ownership for consolidated entities |
— | — | — | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted common shares |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Vesting and forfeitures of restricted common shares, net |
— | — | ( |
— | ( |
— | — | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Preferred share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Common share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | ( |
( |
( |
||||||||||||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balances, June 30, 2021 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | ||||||||||||||||||||||||||||||||||||||||||||
OP equity issued for property acquisitions: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
OP units and subordinated performance units, net of offering costs |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemptions of OP units |
— | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, net of offering costs |
— | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Effect of changes in ownership for consolidated entities |
— | — | — | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted common shares |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Vesting and forfeitures of restricted common shares, net |
— | — | ( |
— | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Common share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balances, September 30, 2021 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ |
See notes to condensed consolidated financial statements.
7
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(dollars in thousands, except number of shares)
(Unaudited)
Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Distributions | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Paid-in | In Excess Of | Comprehensive | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Capital | Earnings | (Loss) Income | Interests | Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2021 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | ||||||||||||||||||||||||||||||||||||||||||||
OP equity issued: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Internalization of PRO, net of offering costs | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of properties |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemptions of OP units |
— | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of Series A-1 preferred units |
— | — | — | — | — | ( |
|||||||||||||||||||||||||||||||||||||||||||||||
Effect of changes in ownership for consolidated entities |
— | — | — | — | ( |
— | |||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted common shares |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Vesting and forfeitures of restricted common shares, net |
— | — | ( |
— | ( |
— | — | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Preferred share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Common share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balances, March 31, 2022 | $ | $ | $ | $ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
OP units and subordinated performance units, net of offering costs |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemptions of OP units |
— | — | — | ( |
|||||||||||||||||||||||||||||||||||||||||||||||||
Redemptions of Series A-1 preferred units | — | — | — | — | — | ( |
|||||||||||||||||||||||||||||||||||||||||||||||
Effect of changes in ownership for consolidated entities |
— | — | — | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
See notes to condensed consolidated financial statements.
8
NATIONAL STORAGE AFFILIATES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(dollars in thousands, except number of shares)
(Unaudited)
Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional | Distributions | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Paid-in | In Excess Of | Comprehensive | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Capital | Earnings | (Loss) Income | Interests | Equity | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted common shares |
— | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Vesting and forfeitures of restricted common shares, net |
— | — | ( |
— | ( |
— | — | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Preferred share dividends |
— | — | — | — | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||||||||
Common share dividends |
— | — | — | — | — | ( |
— | — | ( |
||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests |
— | — | — | — | — | — | — | ( |
( |
||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — |