National Storage Affiliates(NSA) - 2020 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's analysis of financial condition and operations ITEM 1. Financial Statements This section presents unaudited condensed consolidated financial statements and detailed notes on financial position, performance, and key policies Condensed Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (dollars in thousands) | ASSETS | June 30, 2020 | December 31, 2019 | | :--------------------------------- | :------------ | :------------------ | | Self storage properties, net | $2,964,626 | $2,753,897 | | Cash and cash equivalents | $17,271 | $20,558 | | Restricted cash | $5,635 | $3,718 | | Investment in unconsolidated real estate ventures | $210,114 | $214,061 | | Other assets, net | $60,927 | $65,441 | | Total assets | $3,285,050 | $3,084,245 | | LIABILITIES AND EQUITY | | | | Debt financing | $1,741,544 | $1,534,047 | | Interest rate swap liabilities | $91,175 | $19,943 | | Total liabilities | $1,916,305 | $1,632,144 | | Total equity | $1,368,745 | $1,452,101 | | Total liabilities and equity | $3,285,050 | $3,084,245 | Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net income over specific periods Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $104,417 | $95,419 | $208,639 | $185,991 | | Total operating expenses | $70,357 | $64,189 | $141,537 | $125,761 | | Net income | $17,787 | $17,733 | $33,550 | $30,673 | | Net income (loss) attributable to National Storage Affiliates Trust | $10,422 | $(7,656) | $17,070 | $(245) | | Net income (loss) attributable to common shareholders | $7,148 | $(10,913) | $10,523 | $(6,090) | | Earnings (loss) per share - basic and diluted | $0.10 | $(0.19) | $0.16 | $(0.11) | | Dividends declared per common share | $0.33 | $0.32 | $0.66 | $0.62 | Condensed Consolidated Statements of Comprehensive Income (Loss) This section presents the company's comprehensive income or loss, including net income and other comprehensive income items Condensed Consolidated Statements of Comprehensive Income (Loss) (dollars in thousands) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $17,787 | $17,733 | $33,550 | $30,673 | | Unrealized loss on derivative contracts | $(10,423) | $(19,075) | $(76,792) | $(27,114) | | Other comprehensive (loss) income | $(6,489) | $(20,352) | $(72,246) | $(29,667) | | Comprehensive income (loss) attributable to National Storage Affiliates Trust | $6,126 | $(20,648) | $(29,519) | $(19,154) | Condensed Consolidated Statements of Changes in Equity This section outlines the changes in the company's equity over specific periods, reflecting share issuances and other equity-related transactions - The company issued 8,105,192 common shares in connection with the mergers of SecurCare and DLAN on March 31, 2020[26][69] - During the six months ended June 30, 2020, the company sold 512,000 common shares through its ATM program, generating approximately $16.2 million in net proceeds[72][223] Total Equity (dollars in thousands) | Date | Total Equity | | :---------------- | :----------- | | June 30, 2020 | $1,368,745 | | December 31, 2019 | $1,452,101 | Condensed Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (dollars in thousands) | Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $105,683 | $93,475 | | Net Cash Used In Investing Activities | $(243,898) | $(318,073) | | Net Cash Provided By Financing Activities | $136,845 | $227,988 | | (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | $(1,370) | $3,390 | | Cash, Cash Equivalents and Restricted Cash - End of period | $22,906 | $19,753 | - Acquisition of self storage properties decreased from $307.8 million in 2019 to $239.1 million in 2020 for the six months ended June 30[32] - Borrowings under debt financings decreased from $499.0 million in 2019 to $311.0 million in 2020 for the six months ended June 30[32] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements Note 1. ORGANIZATION AND NATURE OF OPERATIONS National Storage Affiliates Trust is a self-administered and self-managed REIT focused on self-storage properties in the top 100 U.S. metropolitan areas, with a significant internalization of its largest PRO - As of June 30, 2020, the Company operated and held ownership interests in 784 self storage properties located across 35 states and Puerto Rico, comprising approximately 49.2 million rentable square feet in approximately 394,000 storage units[42] - The Company owned 607 consolidated self storage properties and managed an additional portfolio of 177 properties owned by its unconsolidated real estate ventures as of June 30, 2020[39][41] - On March 31, 2020, the Company completed the mergers of its largest PRO, SecurCare Self Storage, Inc., and DLAN Corporation, internalizing SecurCare's property management platform and discontinuing related fees and distributions[40] Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This section outlines the key accounting principles and methods used in preparing the financial statements, including consolidation, revenue recognition, and income allocation - The Company consolidates its operating partnership and controlled subsidiaries, including 21 DownREIT partnerships that are considered VIEs, owning 34 self storage properties[45][47] - Rental revenue is recognized ratably over the lease term using the straight-line method, with most leases being month-to-month[49] - The Company allocates GAAP income (