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National Storage Affiliates Trust$25.70($.31)(1.19%)

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 National Storage Affiliates Trust Reports Second Quarter 2017 Results; Net Income Increases $9.6 Million; Core FFO Per Share Increases 10.7%; Same Store NOI Increases 8.4%; Acquired 10 Self Storage Properties
   Wednesday, August 02, 2017 4:02:08 PM ET

National Storage Affiliates Trust ("NSA" or the "Company") (NSA ) today reported the Company’s second quarter 2017 results.

Key Highlights

-- Net income was $15.6 million for the second quarter of 2017, an increase of $9.6 million compared to $6.0 million for the second quarter of 2016.

-- Core funds from operations ("Core FFO") was $22.5 million, or $0.31 per share, for the second quarter of 2017, an increase of 10.7% per share compared to $14.7 million, or $0.28 per share, for the second quarter of 2016.

-- Same store total revenues were $42.7 million for the second quarter of 2017, an increase of 5.8% compared to $40.3 million for the second quarter of 2016.

-- Same store NOI was $29.7 million for the second quarter of 2017, an increase of 8.4% compared to $27.4 million for the second quarter of 2016.

-- Acquired 10 self storage properties during the second quarter of 2017 for $70.0 million.

-- Increased quarterly cash dividend to $0.26 per common share, which represents an 8% increase over the first quarter 2017 quarterly cash dividend of $0.24 per common share.

Arlen Nordhagen, Chief Executive Officer and Chairman, commented, "We are very pleased with our 2017 operating results to date, with second quarter same store revenues and NOI growing 5.8% and 8.4%, respectively, over the same period last year. Although the slower pace of acquisitions has delayed some of our anticipated growth in FFO, our acquisition pace has recently accelerated and we remain optimistic that we’ll end the year near the midpoint of our original guidance of $350 million invested during 2017. Finally, our iStorage joint venture continues to perform very well and our strong balance sheet provides us with the capital base we need to continue to drive long term shareholder value."

                                                            
Financial Results
                                                                                 
($ in thousands, except per share and unit data)                                                                                       Three Months Ended June 30,
                                                                                ----------------------------------------------------------------------------------------------------------------------------------------
                                                                                   2017          2016                    Growth
                                                                                ----------                                          ----------                                          --------------------------------
Net income                                                                       $ 15,576                                            $  6,045                                                157.7 %
                                                                                == ======                                           == ======                                           ========== ====================
                                                                                                                                                                                         
Funds From Operations ("FFO")(1)                                                 $ 22,297                                            $ 12,830                                                 73.8 %
Add back acquisition costs, NSA’s share of unconsolidated
   real estate venture acquisition costs and loss on early
   extinguishment of debt                                                             169                                               1,844                                                (90.8 )%
                                                                                ----------                                          ----------                                          ---------- --------------------
   Core FFO(1)                                                                   $ 22,466                                            $ 14,674                                                 53.1 %
                                                                                == ======                                           == ======                                           ========== ====================
                                                                                                                                                                                         
Earnings (loss) per share - basic                                                $   0.05                                            $   0.32                                                (84.4 )%
                                                                                == ======                                           == ======                                           ========== ====================
Earnings (loss) per share - diluted                                              $   0.05                                            $   0.08                                                (37.5 )%
                                                                                == ======                                           == ======                                           ========== ====================
                                                                                                                                                                                         
FFO per share and unit(1)                                                        $   0.31                                            $   0.25                                                 24.0 %
                                                                                == ======                                           == ======                                           ========== ====================
Core FFO per share and unit(1)                                                   $   0.31                                            $   0.28                                                 10.7 %
                                                                                == ======                                           == ======                                           ========== ====================
                                                                                                                                                                                                    
(1)   Non-GAAP financial measures, including FFO, Core FFO and NOI,
                         are reconciled to their most directly comparable GAAP measure and
                         defined (together with other words and phrases used herein) in the
                         Schedules to this press release and in the supplemental financial
                         information.
                          

Second quarter 2017 net income increased $9.6 million, driven primarily by incremental NOI generated from 80 self storage properties acquired between July 1, 2016 and June 30, 2017, gains from the sale of two self storage properties and same store NOI growth, partially offset by increases in depreciation and amortization, interest expense and general and administrative expenses.

Second quarter 2017 basic earnings per share decreased $0.27 per share and diluted earnings per share decreased $0.03 per share. In addition to the items affecting net income described above, the comparison of earnings per share amounts between periods is affected by the allocation of net income to noncontrolling interests pursuant to GAAP. Additional information on NSA’s allocation of net income (loss) can be found in the Glossary to the supplemental financial information under "Hypothetical Liquidation at Book Value Method."

Second quarter 2017 FFO per share increased 24.0% and Core FFO per share increased 10.7%. The increases in FFO and Core FFO were primarily the result of $7.8 million of incremental NOI from 80 self storage properties acquired between July 1, 2016 and June 30, 2017, same store NOI growth of $2.3 million, $2.1 million of management fees and other revenue and $1.2 million of the Company’s share of FFO and Core FFO from its unconsolidated real estate venture, partially offset by increases of $2.6 million of general and administrative expenses, $2.3 million of interest expense and $0.8 million of distributions to subordinated performance unitholders.

                                                              
Total Consolidated Portfolio Operating Results
                                                                                                      
($ in thousands, except per square foot data)                                                                                                                                     Three Months Ended June 30,
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   2017                                2016                               Growth
                                                                                                     --------------------------------                                          --------------------------------                                          --------------------------------
Total rental and other property-related revenue                                                        $ 62,199                                                                  $ 47,284                                                                      31.5 %
Property operating expenses                                                                              19,803                                                 15,457                                                   28.1 %
                                                                                                     -------------------------------                                           -------------------------------                                           ---------- --------------------
Net Operating Income (NOI)                                                                             $ 42,396                                               $ 31,827                                                   33.2 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
                                                                                                                                                                                                                                                          
Average Occupancy                                                                                          89.4 %                                                                    90.4 %                                                                    (1.0 )%
                                                                                                     ===============================                                           ===============================                                           ========== ====================
Average Annualized Rental Revenue Per Occupied Square Foot                                             $  11.49                                               $  10.98                                                    4.6 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
                                                                                                                                                                                                                                                                     

Second quarter 2017 total rental and other property-related revenue increased 31.5%, driven by $12.0 million of incremental revenues from 80 self storage properties acquired between July 1, 2016 and June 30, 2017 and a $2.3 million increase in same store total revenues.

Second quarter 2017 total property operating expenses increased 28.1% resulting from $4.2 million of incremental property operating expenses generated by 80 self storage properties acquired between July 1, 2016 and June 30, 2017, and an increase of $0.1 million in same store property operating expenses.

Total consolidated portfolio NOI was $42.4 million for the second quarter of 2017, an increase of 33.2% compared to NOI of $31.8 million for the second quarter of 2016.

NSA’s consolidated portfolio included 394 self storage properties, approximately 23.9 million rentable square feet, with period-end occupancy of 90.5% as of June 30, 2017.

                                                              
Same Store Operating Results (277 Properties)
                                                                                                      
($ in thousands, except per square foot data)                                                                                                                                     Three Months Ended June 30,
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   2017                                2016                               Growth
                                                                                                     --------------------------------                                          --------------------------------                                          --------------------------------
Total rental and other property-related revenue                                                        $ 42,687                                                                  $ 40,342                                                                       5.8 %
Property operating expenses                                                                              13,016                                                 12,966                                                    0.4 %
                                                                                                     -------------------------------                                           -------------------------------                                           ---------- --------------------
Net Operating Income (NOI)                                                                             $ 29,671                                               $ 27,376                                                    8.4 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
NOI Margin                                                                                                 69.5 %                                                                    67.9 %                                                                     1.6 %
                                                                                                     ===============================                                           ===============================                                           ========== ====================
                                                                                                                                                                                                                                                          
Average Occupancy                                                                                          90.2 %                                                                    90.8 %                                                                    (0.6 )%
                                                                                                     ===============================                                           ===============================                                           ========== ====================
Average Annualized Rental Revenue Per Occupied Square Foot                                             $  11.54                                               $  10.86                                                    6.3 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
                                                                                                                                                                                                                                                                     

Investment Activity

During the second quarter of 2017, NSA invested $70.0 million in the acquisition of 10 consolidated self storage properties located in five states, encompassing 0.7 million rentable square feet configured in over 4,900 storage units.

NSA’s unconsolidated real estate venture invested $49.8 million in the acquisition of four self storage properties located in two states, encompassing 0.3 million rentable square feet configured in approximately 3,100 storage units. NSA owns a 25% interest in its unconsolidated real estate venture and contributed approximately $12.5 million to the venture to fund the acquisitions.

Additionally, during the second quarter of 2017, NSA sold two self storage properties to an unrelated third party for gross proceeds of $10.3 million.

Subsequent to June 30, 2017, NSA acquired four additional self storage properties for a total investment of approximately $41 million encompassing approximately 0.3 million rentable square feet configured in approximately 2,500 storage units.

Dividends

On May 25, 2017, NSA’s Board of Trustees declared a quarterly cash dividend of $0.26 per common share, which was paid on June 30, 2017 to shareholders of record as of June 15, 2017, and represents an 8% increase over the first quarter 2017 dividend.

2017 Guidance Updates

The following table outlines updates to NSA’s guidance estimates for the year ended December 31, 2017:

                                                                                                            Ranges for Full Year 2017
                                                                                                --------------------------------------------------------------------------------------
                                                                                                          Low                               High
                                                                                                ----------------------                       -----------------------------------------
    Same store operations (277 stores)
      Total rental and other property-related revenue growth                                             5.0%                                        6.0%
      Property operating expenses growth                                                                 1.5%                                        2.5%
      NOI growth                                                                                         7.0%                                        8.0%
                                                                                                                                                                  
    General and administrative expenses (as a percent of revenue)                                        10.5%                                       12.0%
    General and administrative expenses (excluding equity-based
      compensation)                                                                                      9.5%                                        10.5%
      Equity-based compensation                                                                          1.0%                                        1.5%
                                                                                                                                                                  
    Management fees and other revenue, in millions                                                       $7.5                                        $8.0
    Core FFO from unconsolidated real estate venture, in millions                                        $4.5                                        $5.0
                                                                                                  
    Subordinated performance unit distributions, in millions                                             $28.0                                       $30.0
                                                                                                                                                                  
    Consolidated acquisitions, in millions                                                              $250.0                                      $350.0
    Unconsolidated real estate venture acquisitions, in millions                                         $50.0                                      $100.0
                                                                                                                                                                  
    Core FFO per share(1)                                                                                $1.23                                       $1.27
                                                                                                                                                                  
(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. See "Hypothetical Liquidation at Book
     Value Method" in the Glossary to the supplemental financial
     information for additional information regarding earnings (loss)
     per share.
                                                                                                                                                                  
                                                                                                                               Ranges for Full Year 2017
                                                                                                --------------------------------------------------------------------------------------
                                                                                                          Low                                                  High
                                                                                                ----------------------                       -----------------------------------------
    Earnings (loss) per share - diluted                                                                  $       0.09                                $      0.14
      Impact of the difference in weighted average number of shares and
      GAAP accounting for noncontrolling
         interests, two-class method and treasury stock method                                                   0.53                                       0.51
      Add real estate depreciation and amortization, including NSA’s share
      of unconsolidated real estate
         venture real estate depreciation and amortization                                                       1.07                                       1.11
      Subtract gain on sale of self storage properties                                                          (0.08 )                                    (0.08 )
      FFO attributable to subordinated performance unitholders                                                  (0.38 )                                    (0.41 )
                                                                                                --------------------                         ------------------
         Core FFO per share and unit                                                                     $       1.23                                $      1.27
                                                                                                                                                                  

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 2, 2017.

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 presentation 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 1:00pm Eastern Time on Thursday, August 3, 2017 to discuss its 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: Thursday, August 3, 2017, 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: 13646795

A replay of the call will be available for one week through Thursday, August 10, 2017. 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 Self Storage Association 2017 Fall Conference & Trade Show in Las Vegas, Nevada on September 5 - 8, 2017 and the BMO Capital Markets 12th Annual Real Estate Conference in Chicago, Illinois on September 25 - 26, 2017.

About National Storage Affiliates Trust

National Storage Affiliates Trust is a Maryland real estate investment trust focused on the ownership, operation and acquisition of self storage properties located within the top 100 metropolitan statistical areas throughout the United States. The Company currently holds ownership interests in and operates 468 self storage properties located in 26 states with approximately 29 million rentable square feet. NSA is the sixth largest owner and operator of self storage properties among public and private companies in the U.S. 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 SmallCap 600 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; and the acquisition of properties, including the timing of acquisitions. For a further list and description of such risks and uncertainties, see the Company’s most recent Annual Report on Form 10-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 30,                                                                                          Six Months Ended June 30,
                                                                                   -----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                                   2017                                   2016                                                      2017                                   2016
                                                                                   -------------------------------------                     -------------------------------------                     -------------------------------------                     -------------------------------------
REVENUE
   Rental revenue                                                                        $  60,154                                                 $  45,784                                                 $ 117,998                                                 $  84,285
   Other property-related revenue                                                            2,045                                                     1,500                                                     3,926                                                     2,648
   Management fees and other revenue                                                         2,142                         --                                  3,980                         --  
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Total revenue                                                                          64,341                                 47,284                                125,904                                 86,933  
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
OPERATING EXPENSES
   Property operating expenses                                                              19,803                                                    15,457                                                    39,552                                                    28,734
   General and administrative expenses                                                       7,405                                                     4,837                                                    14,586                                                     9,172
   Depreciation and amortization                                                            17,800                                 13,088                                 36,483                                 23,980  
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Total operating expenses                                                               45,008                                 33,382                                 90,621                                 61,886  
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Income from operations                                                                 19,333                                                    13,902                                                    35,283                                                    25,047
OTHER (EXPENSE) INCOME
   Interest expense                                                                         (8,160 )                                                  (5,844 )                                                 (15,631 )                                                 (10,785 )
   Loss on early extinguishment of debt                                             --                                                      (136 )                                          --                                                      (136 )
   Equity in losses of unconsolidated real estate venture                                     (765 )                                          --                                                    (1,550 )                                          --
   Acquisition costs                                                                          (167 )                                                  (1,708 )                                                    (311 )                                                  (2,996 )
   Non-operating expense                                                                       (14 )                                                     (57 )                                                     (66 )                                                     (62 )
   Gain on sale of self storage properties                                                   5,637                         --                                  5,637                         --  
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Other expense                                                                          (3,469 )                                                  (7,745 )                                                 (11,921 )                                                 (13,979 )
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Income before income taxes                                                             15,864                                                     6,157                                                    23,362                                                    11,068
   Income tax expense                                                                         (288 )                                                    (112 )                                                    (605 )                                                    (221 )
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Net income                                                                             15,576                                                     6,045                                                    22,757                                                    10,847
   Net (income) loss attributable to noncontrolling interests                              (13,209 )                                                   1,325                                (19,835 )                                                  (1,267 )
                                                                                   ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Net income attributable to National Storage
                                                                                         $   2,367                              $   7,370                              $   2,922                              $   9,580  
       Affiliates Trust
                                                                                   ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                  
Earnings (loss) per share - basic                                                        $    0.05                              $    0.32                              $    0.07                              $    0.42  
                                                                                   ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
Earnings (loss) per share - diluted                                                      $    0.05                              $    0.08                              $    0.07                              $    0.15  
                                                                                   ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                  
Weighted average shares outstanding - basic                                                 44,223                                 23,078                                 43,814                                 23,041  
                                                                                   ====================================                      ====================================                      ====================================                      ====================================
Weighted average shares outstanding - diluted                                               44,223                                 73,531                                 43,814                                 70,763  
                                                                                   ====================================                      ====================================                      ====================================                      ====================================
                                                                                                                                                                                                                                                                                  
                                                                             National Storage Affiliates Trust
                                                                                       Consolidated
                                                                                      Balance Sheets
                                                                          (dollars in thousands, except per share
                                                                                         amounts)
                                                                                        (unaudited)
                                                                                                                
                                                                                                          June 30,                                                 December 31,
                                                                                                            2017                                                       2016
                                                                                           ---------------------------------------                     ------------------------------------
ASSETS
   Real estate
     Self storage properties                                                                     $ 1,954,056                                              $ 1,844,336
     Less accumulated depreciation                                                                  (138,726 )                                               (110,803 )
                                                                                           --------------------------------------                      -----------------------------------
       Self storage properties, net                                                                1,815,330                                                1,733,533
   Cash and cash equivalents                                                                          13,591                                                   12,570
   Restricted cash                                                                                    13,954                                                    2,767
   Debt issuance costs, net                                                                            2,668                                                    3,069
   Investment in unconsolidated real estate venture                                                   89,916                                                   81,486
   Other assets, net                                                                                  42,083                                                   44,730
   Assets held for sale                                                                       --                                13,937  
                                                                                           --------------------------------------                      -----------------------------------
       Total assets                                                                              $ 1,977,542                           $ 1,892,092  
                                                                                           ======= ========= ====================                      ==== ========= ====================
LIABILITIES AND EQUITY
   Liabilities
     Debt financing                                                                              $   969,140                                              $   878,954
     Accounts payable and accrued liabilities                                                         21,050                                                   21,616
     Deferred revenue                                                                                 12,685                                12,454  
                                                                                           --------------------------------------                      -----------------------------------
   Total liabilities                                                                               1,002,875                               913,024  
                                                                                           --------------------------------------                      -----------------------------------
   Equity
     Common shares of beneficial interest, par value $0.01 per share.
     250,000,000
       shares authorized, 44,279,824 and 43,110,362 shares issued and
       outstanding
       at June 30, 2017 and December 31, 2016, respectively                                              443                                                      431
     Additional paid-in capital                                                                      594,192                                                  576,365
     Distributions in excess of earnings                                                             (27,870 )                                                 (8,719 )
     Accumulated other comprehensive income                                                            8,748                                 9,025  
                                                                                           --------------------------------------                      -----------------------------------
       Total shareholders’ equity                                                                    575,513                                                  577,102
     Noncontrolling interests                                                                        399,154                               401,966  
                                                                                           --------------------------------------                      -----------------------------------
       Total equity                                                                                  974,667                               979,068  
                                                                                           --------------------------------------                      -----------------------------------
                                                                                                 $ 1,977,542                           $ 1,892,092  
         Total liabilities and equity
                                                                                           ======= ========= ====================                      ==== ========= ====================
                                                           
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,
                                                                               -----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                     2017                                   2016                                   2017                                   2016       
                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Net income                                                                           $  15,576                                                 $   6,045                                                 $  22,757                                                 $  10,847
Add (subtract):
                                                                                        17,343                                                    12,935                                                    35,586                                                    23,714
  Real estate depreciation and amortization
  Company’s share of unconsolidated real estate venture
    real estate depreciation and amortization                                            1,918                                            --                                                     3,790                                            --
  Gain on sale of self storage properties                                               (5,637 )                                          --                                                    (5,637 )                                          --
  FFO attributable to subordinated performance
                                                                                        (6,903 )                                                  (6,150 )                                                 (13,044 )                                                 (10,493 )
    unitholders(1)
                                                                               --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------
      FFO attributable to common shareholders, OP
        unitholders, and LTIP unitholders                                               22,297                                                    12,830                                                    43,452                                                    24,068
Add:
  Acquisition costs                                                                        167                                                     1,708                                                       311                                                     2,996
  Company’s share of unconsolidated real estate venture
    acquisition costs                                                                        2                                            --                                                        21                                            --
  Loss on early extinguishment of debt                                          --                                    136                         --                                    136  
                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
      Core FFO attributable to common shareholders,
        OP unitholders, and LTIP unitholders                                         $  22,466                              $  14,674                              $  43,784                              $  27,200  
                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                              
Weighted average shares and units outstanding - FFO and Core
FFO:(2)
Weighted average shares outstanding - basic                                             44,223                                                    23,078                                                    43,814                                                    23,041
Weighted average restricted common shares outstanding                                       27                                                        19                                                        22                                                        18
Weighted average OP units outstanding                                                   25,628                                                    24,733                                                    25,793                                                    23,484
Weighted average DownREIT OP unit equivalents outstanding                                1,835                                                     1,835                                                     1,835                                                     1,835
Weighted average LTIP units outstanding                                                  1,224                                  2,558                                  1,345                                  2,507  
                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Total weighted average shares and units outstanding
                                                                                        72,937                                 52,223                                 72,809                                 50,885  
    - FFO and Core FFO
                                                                               ==============  ====================                      ==============  ====================                      ==============  ====================                      ==============  ====================
                                                                                                                                                                                                                                                              
FFO per share and unit                                                               $    0.31                                                 $    0.25                                                 $    0.60                                                 $    0.47
Core FFO per share and unit                                                          $    0.31                                                 $    0.28                                                 $    0.60                                                 $    0.53
     
(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(3) 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.
                          
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,
                                                                                -----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                      2017                                   2016                                   2017                                   2016       
                                                                                ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Earnings (loss) per share - diluted                                                   $    0.05                                                 $    0.08                                                 $    0.07                                                 $    0.15
   Impact of the difference in weighted average number of
                                                                                          (0.02 )                                                    0.04                                                     (0.02 )                                                    0.06
     shares(3)
   Impact of GAAP accounting for noncontrolling interests,
                                                                                           0.18                                            --                                                      0.27                                            --
     two-class method and treasury stock method(4)
   Add real estate depreciation and amortization                                           0.24                                                      0.25                                                      0.49                                                      0.47
   Add Company’s share of unconsolidated real estate
     venture real estate depreciation and amortization                                     0.03                                            --                                                      0.05                                            --
   Subtract gain on sale of self storage properties                                       (0.08 )                                          --                                                     (0.08 )                                          --
   FFO attributable to subordinated performance
     unitholders                                                                          (0.09 )                                                   (0.12 )                                                   (0.18 )                                                   (0.21 )
                                                                                ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
       FFO per share and unit                                                              0.31                                                      0.25                                                      0.60                                                      0.47
   Add acquisition costs, Company’s share of
     unconsolidated real estate venture acquisition costs,
     and loss on early extinguishment of debt                                    --                                   0.03                         --                                   0.06  
                                                                                ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
       Core FFO per share and unit                                                    $    0.31                              $    0.28                              $    0.60                              $    0.53  
                                                                                ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
     
(3)                      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, the treasury stock method for certain unvested LTIP
                         units, and includes the assumption of a hypothetical conversion of
                         subordinated performance units, DownREIT subordinated performance
                         units and LTIP 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.
                          
(4)                      Represents the effect of adjusting the numerator to
                         consolidated net income (loss) prior to GAAP allocations for
                         noncontrolling interests and the application of the two-class
                         method and treasury stock method, as described in footnote (3).
                          
Net Operating Income                                       
(dollars in thousands) (unaudited)
--------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                           
                                                                                                       Three Months Ended June 30,                                                                           Six Months Ended June 30,
                                                                               --------------------------------------------------------------------------                     ---------------------------------------------------------------------------------------
                                                                                               2017                                            2016                                           2017                                                  2016
                                                                               -------------------------------------                     ----------------                     -------------------------------------                     -----------------------------
Net income                                                                           $  15,576                                                 $   6,045                            $  22,757                                                 $               10,847
(Subtract) add:
   Management fees and other revenue                                                    (2,142 )                                          --                               (3,980 )                                                       --
   General and administrative expenses                                                   7,405                                                     4,837                               14,586                                                                  9,172
   Depreciation and amortization                                                        17,800                                                    13,088                               36,483                                                                 23,980
   Interest expense                                                                      8,160                                                     5,844                               15,631                                                                 10,785
   Equity in losses of unconsolidated real estate venture                                  765                                            --                                1,550                                                         --
   Loss on early extinguishment of debt                                         --                                                       136                       --                                                                    136
   Acquisition costs                                                                       167                                                     1,708                                  311                                                                  2,996
   Income tax expense                                                                      288                                                       112                                  605                                                                    221
   Gain on sale of self storage properties                                              (5,637 )                                          --                               (5,637 )                                                       --
   Non-operating expense                                                                    14                                     57                                   66                                                  62
                                                                               ------------------------------------                      ----------------                     ------------------------------------                      -----------------------------
      Net Operating Income                                                           $  42,396                              $  31,827                            $  82,372                              $               58,199
                                                                               ======= ======= ====================                      ======= =======                      ======= ======= ====================                      ======= ====================
                                                                                                                                                                                                                                                 
EBITDA and Adjusted EBITDA                                                                                
(dollars in thousands)
(unaudited)
--------------------------------------------------------- -------------------- ----------------------------------   -------------------- --------------------  -------------------- ----------------------------------   -------------------- ------------------------------
                                                                                                                                                                 
                                                                                                          Three Months Ended June 30,                                                                                Six Months Ended June 30,
                                                                               --------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------
                                                                                     2017                                      2016                                    2017                                           2016
                                                                               ------------------------------------                      ----------------------                     ------------------------------------                      --------------------------------
Net income                                                                           $  15,576                                                    $      6,045                            $  22,757                                                    $               10,847
Add:
    Depreciation and amortization                                                       17,800                                                          13,088                               36,483                                                                    23,980
    Company’s share of unconsolidated real estate venture
      depreciation and amortization                                                      1,918                                                  --                                3,790                                                            --
    Interest expense                                                                     8,160                                                           5,844                               15,631                                                                    10,785
    Income tax expense                                                                     288                                                             112                                  605                                                                       221
    Loss on early extinguishment of debt                                        --                                          136                       --                                                    136
                                                                               ------------------------------------                      ----------------------                     ------------------------------------                      --------------------------------
       EBITDA                                                                           43,742                                                          25,225                               79,266                                                                    45,969
Add:
    Acquisition costs                                                                      167                                                           1,708                                  311                                                                     2,996
    Company’s share of unconsolidated real estate venture
      acquisition costs                                                                      2                                                  --                                   21                                                            --
    Gain on sale of self storage properties                                             (5,637 )                                                --                               (5,637 )                                                          --
                                                                                           940                                          630                                1,923                                                  1,228
    Equity-based compensation expense(1)
                                                                               --------------  --------------------                      --------------------                       --------------  --------------------                      ------------------------------
       Adjusted EBITDA                                                               $  39,214                                 $     27,563                            $  75,884                                 $               50,193
                                                                               ======= ======= ====================                      ========== ==========                      ======= ======= ====================                      ========== ====================
                                                                                                                                                                                                                                                          
(1)   Equity-based compensation expense is a non-cash item that is
                         included in general and administrative expenses in NSA’s
                         consolidated statements of operations.
                          

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170802006310r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170802006310/en/

SOURCE: National Storage Affiliates Trust

National Storage Affiliates Trust 
Investor/Media Relations 
Marti Dowling, 720-630-2624 
Director - Investor Relations 
mdowling@nsareit.net


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