National Storage Affiliates(US:NSA)2022-05-05 20:34Financial Performance - Net income for the three months ended March 31, 2022, was $44.8 million, an increase of $17.2 million compared to $27.6 million for the same period in 2021, primarily due to increased net operating income from 241 self storage properties acquired[130]. - Total rental revenue for the three months ended March 31, 2022, was $174.5 million, up $61.3 million from $113.1 million in the same period of 2021, driven by both same store and non-same store portfolio growth[131]. - Same store portfolio rental revenue increased to $128.3 million for the three months ended March 31, 2022, compared to $109.7 million in the same period of 2021, reflecting a growth of $18.6 million[131]. - Total revenue increased by $64.2 million, or 52.2%, for the three months ended March 31, 2022, compared to the same period in 2021, primarily due to revenue from 241 self-storage properties acquired[133]. - Rental revenue rose by $61.3 million, or 54.2%, driven by a $42.7 million increase in non-same store rental revenue and an 18.6 million increase in same store rental revenue, reflecting a 17.0% increase in average occupancy[134]. - Net income attributable to common shareholders was $21.9 million for the three months ended March 31, 2022, compared to $17.6 million for the same period in 2021, reflecting an increase of $4.4 million[132]. - Net income for the three months ended March 31, 2022, was $44.786 million, compared to $27.635 million in the same period of 2021, representing a 62% increase[149]. - FFO attributable to common shareholders, OP unitholders, and LTIP unitholders for Q1 2022 was $86.856 million, up from $50.907 million in Q1 2021, reflecting a 70.6% increase[149]. - Core FFO attributable to common shareholders, OP unitholders, and LTIP unitholders reached $87.409 million in Q1 2022, compared to $51.199 million in Q1 2021, marking a 70.7% increase[149]. - Net Operating Income (NOI) for Q1 2022 was $131.277 million, a significant increase from $82.660 million in Q1 2021, indicating a 59% growth[153]. - EBITDA for the three months ended March 31, 2022, was $130.199 million, compared to $80.928 million in the same period of 2021, showing a 60.5% increase[157]. - Adjusted EBITDA for Q1 2022 was $130.162 million, up from $82.506 million in Q1 2021, reflecting a 57.8% increase[157]. Property Acquisition and Management - The company acquired 12 self storage properties for $92.9 million during the three months ended March 31, 2022, adding approximately 678,000 rentable square feet[123]. - As of March 31, 2022, the company owned a portfolio of 884 self storage properties, comprising approximately 55.7 million rentable square feet across 39 states and Puerto Rico[122]. - The company’s same store portfolio consisted of 631 consolidated self storage properties as of March 31, 2022, which are used to analyze operating performance[128]. - The company’s property management platform managed 510 consolidated properties and 177 unconsolidated properties as of March 31, 2022, enhancing operational control[116]. - The 75% third-party interest in the company's unconsolidated real estate ventures, which own 177 properties, represents a potential acquisition opportunity valued at approximately $1.5 billion[124]. Expenses and Financial Strategy - Property operating expenses were $49.4 million, an increase of $14.8 million, or 42.6%, primarily due to a $13.7 million rise in non-same store property operating expenses[138]. - General and administrative expenses increased by $2.7 million, or 24.3%, due to higher supervisory and administrative fees and personnel costs[139]. - Depreciation and amortization rose by $25.6 million, or 79.1%, primarily due to incremental depreciation from the 241 self-storage properties acquired[140]. - Interest expense increased by $5.9 million, or 34.9%, due to additional borrowings from various senior unsecured notes and term loan debt[141]. - The company aims to maintain its qualification as a REIT for U.S. federal income tax purposes, which is crucial for its financial strategy[112]. Cash Flow and Capital Expenditures - The company had $26.6 million in cash and cash equivalents as of March 31, 2022, an increase of $1.6 million from December 31, 2021[163]. - Operating cash flow increased to $110.1 million for the three months ended March 31, 2022, up from $64.1 million in the same period of 2021, representing a growth of 71.8%[164]. - Cash used in investing activities decreased to $83.5 million for the three months ended March 31, 2022, compared to $149.4 million in the same period of 2021, a reduction of 44.1%[165]. - Capital expenditures totaled $8.2 million for the three months ended March 31, 2022, compared to $5.7 million in the same period of 2021, an increase of 43.9%[166]. - Total capital expenditures for recurring, value-enhancing, and acquisition categories were $7.9 million for the three months ended March 31, 2022, compared to $6.4 million in 2021, reflecting a 23.5% increase[167]. - Cash used in financing activities was $25.3 million for the three months ended March 31, 2022, compared to cash provided of $86.4 million in the same period of 2021[168]. Debt and Interest Rate Management - As of March 31, 2022, the total borrowings under the credit facility amounted to $1.550 billion, with a remaining capacity to borrow $219.3 million while remaining compliant with financial covenants[169]. - The company issued $16.6 million of OP equity in connection with the acquisition of 12 properties during the three months ended March 31, 2022[179]. - As of March 31, 2022, the company had $550.0 million of debt subject to variable interest rates, excluding variable-rate debt subject to interest rate swaps[200]. - A hypothetical increase or decrease of 100 basis points in one-month LIBOR would result in a change in interest expense on the variable-rate debt of approximately $5.5 million annually, impacting future earnings and cash flows[200]. - The company utilizes interest rate swaps to convert variable rate debt to fixed rate, moderating exposure to interest rate risk[199]. Shareholder Returns and Capital Contributions - A cash dividend of $0.50 per common share was declared on February 24, 2022, for shareholders of record as of March 15, 2022[181]. - As of March 31, 2022, the operating partnership had an aggregate of $2,968.0 million of unreturned capital contributions attributed to common shareholders and OP unitholders[184]. - The subordinated allocation for outstanding subordinated performance units is 6%, with an aggregate of $218.6 million of unreturned capital contributions allocated to various series of subordinated performance units as of March 31, 2022[186]. - The allocation of capital transaction proceeds is determined by the general partner and may be distributed to OP unitholders at their discretion[195]. - The company may retain amounts allocated to OP unitholders for operational purposes, which can be used as additional capital contributions to property portfolios[193]. Market and Operational Insights - The self-storage business experiences minor seasonal fluctuations, with higher revenues and profits typically realized from May through September, and the highest occupancy levels in July[198]. - The company’s future income and cash flows are sensitive to market interest rates, with interest rate risk being the primary market risk exposure[199]. - There are no off-balance sheet arrangements or guarantees of obligations for unconsolidated entities as of March 31, 2022, minimizing exposure to financing and liquidity risks[197]. - The preferred and subordinated allocations for capital transaction proceeds are equal to those for distributions of operating cash flow for each property portfolio[192]. - The company has the right to adjust capital contributions allocated to the operating partnership based on various factors, including capital expenditures and property sales[196].