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 National Storage Affiliates Trust Reports Third Quarter 2017 Results; Net Income Increases $3.3 million; Core FFO per Share Increases 13.8%; Same Store NOI Increases 6.7%; Acquired 19 Self Storage Properties
   Monday, November 06, 2017 4:01:00 PM ET

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

Key Highlights

-- Net income was $11.2 million for the third quarter of 2017, an increase of $3.3 million compared to $7.9 million for the third quarter of 2016.

-- Core funds from operations ("Core FFO") was $23.8 million, or $0.33 per share, for the third quarter of 2017, an increase of 13.8% per share compared to $18.2 million, or $0.29 per share, for the third quarter of 2016.

-- Same store NOI was $30.5 million for the third quarter of 2017, an increase of 6.7% compared to $28.6 million for the third quarter of 2016, driven by an increase of 5.4% in same store total revenues and a 2.4% increase in same store property operating expenses.

-- Same store average annualized rental revenue per occupied square foot was $11.83 for the third quarter of 2017, an increase of 5.7% compared to $11.19 for the third quarter of 2016.

-- Acquired 19 self storage properties during the third quarter of 2017 for $123.8 million.

Arlen Nordhagen, Chief Executive Officer and Chairman, commented, "As expected, we had another great quarter with strong year-over-year increases in same store NOI and Core FFO per share. We acquired 19 properties for $124 million during the third quarter and closed on an additional 28 properties for $175 million subsequent to September 30. When combined with the $59 million of joint venture acquisitions we’ve completed thus far in 2017, we’ve acquired and made investments in 67 properties totaling nearly $460 million in value. In October we completed our first public perpetual preferred share offering for gross proceeds of $173 million. We were very pleased by how well our first preferred offering was received as we further strengthen our balance sheet by broadening our sources of capital. The preferred offering and the $85 million of secured debt financing that we completed during the third quarter provide us the financial flexibility to continue to execute on our growth strategy as we close out 2017 and look ahead to 2018."

Financial Results
                                                                     
($ in thousands, except per share and unit data)                                                                                                                                   Three Months Ended September 30,
                                                                                                            -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         2017                                   2016                             Growth
                                                                                                            -------------------------------                                          ---------------------------------------                                          ---------------------
Net income                                                                                                   $ 11,226                                              $          7,944                                                       41.3 %
                                                                                                            == ====== ====================                                           == ============== ====================                                           ============== =====
                                                                                                                                                                                                                                                                       
Funds From Operations ("FFO")(1)                                                                             $ 23,650                                                                 $         16,510                                                                          43.2 %
Add back acquisition costs and NSA’s share of unconsolidated real                                                 140                                                         1,737                                                      (91.9 )%
estate venture acquisition costs
                                                                                                            --------  --------------------                                           ----------------  --------------------                                           -------------- -----
   Core FFO(1)                                                                                               $ 23,790                                              $         18,247                                                       30.4 %
                                                                                                            == ====== ====================                                           == ============== ====================                                           ============== =====
                                                                                                                                                                                                                                                                       
Earnings (loss) per share - basic                                                                            $   0.03                                              $ --                                             -- %
                                                                                                            == ====== ====================                                           == ============== ====================                                           ============== =====
Earnings (loss) per share - diluted                                                                          $   0.03                                              $ --                                             -- %
                                                                                                            == ====== ====================                                           == ============== ====================                                           ============== =====
                                                                                                                                                                                                                                                                       
FFO per share and unit(1)                                                                                    $   0.32                                              $           0.26                                                       23.1 %
                                                                                                            == ====== ====================                                           == ============== ====================                                           ============== =====
Core FFO per share and unit(1)                                                                               $   0.33                                              $           0.29                                                       13.8 %
                                                                                                            == ====== ====================                                           == ============== ====================                                           ============== =====
(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.
                          

Third quarter 2017 net income increased $3.3 million, driven primarily by incremental NOI generated from 65 self storage properties acquired between October 1, 2016 and September 30, 2017 and same store NOI growth, partially offset by increases in depreciation and amortization, interest expense and general and administrative expenses.

Third quarter 2017 basic earnings per share increased $0.03 per share and diluted earnings per share increased $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."

Third quarter 2017 FFO per share increased 23.1% and Core FFO per share increased 13.8%. The increases in FFO and Core FFO were primarily the result of $6.3 million of incremental NOI from 65 self storage properties acquired between October 1, 2016 and September 30, 2017, same store NOI growth of $1.9 million, $2.0 million of management fees and other revenue and $1.3 million of the Company’s share of FFO and Core FFO from its unconsolidated real estate venture, partially offset by increases of $2.2 million of general and administrative expenses, $2.9 million of interest expense and $2.1 million of distributions to subordinated performance unitholders.

Total Consolidated Portfolio Operating Results
 
($ in thousands, except per square foot data)                                                                                            Three Months Ended September 30,
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   2017                                2016                               Growth
                                                                                                     --------------------------------                                          --------------------------------                                          --------------------------------
Total rental and other property-related revenue                                                        $ 66,860                                                                  $ 52,949                                                                      26.3 %
Property operating expenses                                                                              21,618                                                 17,330                                                   24.7 %
                                                                                                     -------------------------------                                           -------------------------------                                           ---------- --------------------
Net Operating Income (NOI)                                                                             $ 45,242                                               $ 35,619                                                   27.0 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
                                                                                                                                                                                                                                                          
Average Occupancy                                                                                          90.4 %                                                                    91.0 %                                                                    (0.6 )%
                                                                                                     ===============================                                           ===============================                                           ========== ====================
Average Annualized Rental Revenue Per Occupied Square Foot                                             $  11.61                                               $  11.24                                                    3.3 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
                                                                                                                                                                                                                                                                     

Third quarter 2017 total rental and other property-related revenue increased 26.3%, driven by $9.6 million of incremental revenues from 65 self storage properties acquired between October 1, 2016 and September 30, 2017 and a $2.2 million increase in same store total revenues.

Third quarter 2017 total property operating expenses increased 24.7% resulting from $3.3 million of incremental property operating expenses generated by 65 self storage properties acquired between October 1, 2016 and September 30, 2017, and an increase of $0.3 million in same store property operating expenses.

Total consolidated portfolio NOI was $45.2 million for the third quarter of 2017, an increase of 27.0% compared to NOI of $35.6 million for the third quarter of 2016.

NSA’s consolidated portfolio included 413 self storage properties, approximately 25.2 million rentable square feet, with period-end occupancy of 89.9% as of September 30, 2017.

Same Store Operating Results (277 Properties)
 
($ in thousands, except per square foot data)                                                                                            Three Months Ended September 30,
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   2017                                2016                               Growth
                                                                                                     --------------------------------                                          --------------------------------                                          --------------------------------
Total rental and other property-related revenue                                                        $ 44,117                                                                  $ 41,875                                                                       5.4 %
Property operating expenses                                                                              13,595                                                 13,275                                                    2.4 %
                                                                                                     -------------------------------                                           -------------------------------                                           ---------- --------------------
Net Operating Income (NOI)                                                                             $ 30,522                                               $ 28,600                                                    6.7 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
NOI Margin                                                                                                 69.2 %                                                                    68.3 %                                                                     0.9 %
                                                                                                     ===============================                                           ===============================                                           ========== ====================
                                                                                                                                                                                                                                                          
Average Occupancy                                                                                          90.9 %                                                                    91.4 %                                                                    (0.5 )%
                                                                                                     ===============================                                           ===============================                                           ========== ====================
Average Annualized Rental Revenue Per Occupied Square Foot                                             $  11.83                                               $  11.19                                                    5.7 %
                                                                                                     === ====== ====================                                           === ====== ====================                                           ========== ====================
                                                                                                                                                                                                                                                                     

Year-over-year, third quarter 2017 same store total revenues increased 5.4%, driven by a 5.7% increase in average annualized rental revenue per occupied square foot partially offset by a 50 basis point decrease in average occupancy. Same store property operating expenses were $13.6 million for the third quarter of 2017, an increase of 2.4% compared to $13.3 million for the third quarter of 2016 driven primarily by property tax expense increases.

Investment Activity

During the third quarter of 2017, NSA invested $123.8 million in the acquisition of 19 self storage properties located in nine states, encompassing over 1.3 million rentable square feet configured in approximately 10,200 storage units.

Subsequent to September 30, 2017, NSA acquired 28 additional self storage properties located in eight states, for a total investment of approximately $174.5 million encompassing approximately 1.8 million rentable square feet configured in approximately 13,700 storage units. NSA’s unconsolidated real estate venture also invested approximately $9.3 million in a self storage property encompassing approximately 0.1 million rentable square feet configured in approximately 430 storage units.

Balance Sheet

In August 2017, NSA entered into an agreement with a single lender for an $84.9 million debt financing secured by 22 of the Company’s self storage properties. This interest-only loan matures in August 2027 and has a fixed interest rate of 4.14%. The net proceeds from the debt financing were used to repay amounts outstanding under NSA’s revolving line of credit.

In October 2017, NSA completed an underwritten public offering of 6,900,000 of its 6.000% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest ("Preferred Shares"), which included 900,000 Preferred Shares sold upon the exercise in full by the underwriters of their option to purchase additional Preferred Shares, resulting in gross proceeds to the Company of approximately $173 million. Generally, the Preferred Shares become redeemable by the Company beginning in October 2022 for a cash redemption price of $25.00 per share. NSA used the net proceeds from the offering to repay amounts outstanding under its revolving line of credit, and subsequently redrew under its revolving line of credit to fund the self storage property acquisitions described above.

Dividends

On August 24, 2017, NSA’s Board of Trustees declared a quarterly cash dividend of $0.26 per common share, which was paid on September 29, 2017 to shareholders of record as of September 15, 2017.

2017 Guidance

NSA reaffirms its previously provided guidance estimates for the year ended December 31, 2017.

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 November 6, 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 Tuesday, November 7, 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: Tuesday, November 7, 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 Tuesday, November 14, 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 upcoming NAREIT REITWorld 2017 Annual Convention in Dallas, Texas on November 14 - 16, 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 512 self storage properties located in 29 states with approximately 32 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                                                                                   Nine Months Ended
                                                                                                                                                             September 30,                                                                                                          September 30,
                                                                                                                -----------------------------------------------------------------------------------------------                            ----------------------------------------------------------------------------------------
                                                                                                                                2017                                       2016                                                         2017                                   2016
                                                                                                                -------------------------------------                     --------------------------------------------                     -------------------------------------                     -------------------------------------
REVENUE
    Rental revenue                                                                                                    $  64,715                                                 $         51,263                                                 $ 182,713                                                 $ 135,548
    Other property-related revenue                                                                                        2,145                                                            1,686                                                     6,071                                                     4,334
    Management fees and other revenue                                                                                     1,998                                --                                  5,978                         --  
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
        Total revenue                                                                                                    68,858                                        52,949                                194,762                                139,882  
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
OPERATING EXPENSES
    Property operating expenses                                                                                          21,618                                                           17,330                                                    61,170                                                    46,064
    General and administrative expenses                                                                                   7,480                                                            5,259                                                    22,066                                                    14,431
    Depreciation and amortization                                                                                        18,463                                        14,319                                 54,946                                 38,299  
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
        Total operating expenses                                                                                         47,561                                        36,908                                138,182                                 98,794  
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
        Income from operations                                                                                           21,297                                                           16,041                                                    56,580                                                    41,088
OTHER (EXPENSE) INCOME
    Interest expense                                                                                                     (9,157 )                                                         (6,265 )                                                 (24,788 )                                                 (17,050 )
    Loss on early extinguishment of debt                                                                         --                                                   --                                            --                                                      (136 )
    Equity in losses of unconsolidated real estate venture                                                                 (710 )                                                 --                                                    (2,260 )                                          --
    Acquisition costs                                                                                                      (139 )                                                         (1,737 )                                                    (450 )                                                  (4,733 )
    Non-operating expense                                                                                                    (9 )                                                            (15 )                                                     (75 )                                                     (77 )
    Gain on sale of self storage properties                                                                                 106                                --                                  5,743                         --  
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
        Other expense                                                                                                    (9,909 )                                                         (8,017 )                                                 (21,830 )                                                 (21,996 )
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
        Income before income taxes                                                                                       11,388                                                            8,024                                                    34,750                                                    19,092
    Income tax expense                                                                                                     (162 )                                                            (80 )                                                    (767 )                                                    (301 )
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
        Net income                                                                                                       11,226                                                            7,944                                                    33,983                                                    18,791
    Net income attributable to noncontrolling interests                                                                  (9,955 )                                                         (7,955 )                                                 (29,790 )                                                  (9,222 )
                                                                                                                ------------------------------------                      -------------------------------------------                      ------------------------------------                      ------------------------------------
        Net income (loss) attributable to National Storage Affiliates                                                 $   1,271                              $            (11 )                                               $   4,193                              $   9,569  
        Trust
                                                                                                                ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                      
Earnings (loss) per share - basic                                                                                     $    0.03                              $ --                              $    0.09                              $    0.35  
                                                                                                                ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================                      ======= ======= ====================
Earnings (loss) per share - diluted                                                                                   $    0.03                              $ --                              $    0.09                              $    0.25  
                                                                                                                ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                      
Weighted average shares outstanding - basic                                                                              44,269                                        35,080                                 43,967                                 27,084  
                                                                                                                ====================================                      ===========================================                      ====================================                      ====================================
Weighted average shares outstanding - diluted                                                                            44,269                                        35,080                                 43,967                                 75,492  
                                                                                                                ====================================                      ===========================================                      ====================================                      ====================================
                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                      
                                                                                                                          National Storage Affiliates Trust
                                                                                                                             Consolidated Balance Sheets
                                                                                                                  (dollars in thousands, except per share amounts)
                                                                                                                                     (unaudited)
 
                                                                                                 September 30,                             December 31,
                                                                                                                                                                                 2017                                                                            2016
                                                                                                                                                                ---------------------------------------                                          ------------------------------------
ASSETS
    Real estate
        Self storage properties                                                                                                                                       $ 2,075,845                                                                   $ 1,844,336
        Less accumulated depreciation                                                                                                                                    (153,783 )                                                                    (110,803 )
                                                                                                                                                                --------------------------------------                                           -----------------------------------
            Self storage properties, net                                                                                                                                1,922,062                                                                     1,733,533
    Cash and cash equivalents                                                                                                                                              13,673                                                                        12,570
    Restricted cash                                                                                                                                                         4,683                                                                         2,767
    Debt issuance costs, net                                                                                                                                                2,427                                                                         3,069
    Investment in unconsolidated real estate venture                                                                                                                       88,224                                                                        81,486
    Other assets, net                                                                                                                                                      41,928                                                                        44,730
    Assets held for sale                                                                                                                                           --                                                     13,937  
                                                                                                                                                                --------------------------------------                                           -----------------------------------
            Total assets                                                                                                                                              $ 2,072,997                                                $ 1,892,092  
                                                                                                                                                                ======= ========= ====================                                           ==== ========= ====================
LIABILITIES AND EQUITY
    Liabilities
        Debt financing                                                                                                                                                $ 1,071,854                                                                   $   878,954
        Accounts payable and accrued liabilities                                                                                                                           27,894                                                                        21,616
        Deferred revenue                                                                                                                                                   12,711                                                     12,454  
                                                                                                                                                                --------------------------------------                                           -----------------------------------
    Total liabilities                                                                                                                                                   1,112,459                                                                       913,024
    Equity
        Common shares of beneficial interest, par value $0.01 per share.                                                                                                      443                                                                           431
        250,000,000 shares authorized, 44,316,107 and 43,110,362 shares
        issued and outstanding at September 30, 2017 and December 31, 2016,
        respectively
        Additional paid-in capital                                                                                                                                        595,354                                                                       576,365
        Distributions in excess of earnings                                                                                                                               (38,117 )                                                                      (8,719 )
        Accumulated other comprehensive income                                                                                                                              8,724                                                      9,025  
                                                                                                                                                                --------------------------------------                                           -----------------------------------
            Total shareholders’ equity                                                                                                                                    566,404                                                                       577,102
        Noncontrolling interests                                                                                                                                          394,134                                                    401,966  
                                                                                                                                                                --------------------------------------                                           -----------------------------------
            Total equity                                                                                                                                                  960,538                                                    979,068  
                                                                                                                                                                --------------------------------------                                           -----------------------------------
                Total liabilities and equity                                                                                                                          $ 2,072,997                                                $ 1,892,092  
                                                                                                                                                                ======= ========= ====================                                           ==== ========= ====================
                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                 
Reconciliation of Net Income to FFO and Core FFO
(in thousands, except per share and unit amounts) (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                                    Three Months Ended                                                                                  Nine Months Ended
                                                                                                                                                             September 30,                                                                                                                            September 30,
                                                                                                                    ----------------------------------------------------------------------------------------                                                 ----------------------------------------------------------------------------------------
                                                                                                                                    2017                                   2016                                                                           2017                                   2016
                                                                                                                    -------------------------------------                     -------------------------------------                                          -------------------------------------                     -------------------------------------
Net income                                                                                                                $  11,226                                                 $   7,944                                                                      $  33,983                                                 $  18,791
Add (subtract):
    Real estate depreciation and amortization                                                                                18,187                                                    14,117                                                                         53,773                                                    37,831
    Company’s share of unconsolidated real estate venture real estate                                                         2,042                                            --                                                                          5,832                                            --
    depreciation and amortization
    Gain on sale of self storage properties                                                                                    (106 )                                          --                                                                         (5,743 )                                          --
    FFO attributable to subordinated performance unitholders (1)                                                             (7,699 )                                                  (5,551 )                                                                      (20,743 )                                                 (16,044 )
                                                                                                                    ------------------------------------                      ------------------------------------                                           ------------------------------------                      ------------------------------------
        FFO attributable to common shareholders, OP unitholders, and LTIP                                                    23,650                                                    16,510                                                                         67,102                                                    40,578
        unitholders
Add:
    Acquisition costs                                                                                                           139                                                     1,737                                                                            450                                                     4,733
    Company’s share of unconsolidated real estate venture acquisition                                                             1                                            --                                                                             22                                            --
    costs
    Loss on early extinguishment of debt                                                                             --                         --                                              --                                    136  
                                                                                                                    ------------------------------------                      ------------------------------------                                           ------------------------------------                      ------------------------------------
        Core FFO attributable to common shareholders, OP unitholders, and                                                 $  23,790                              $  18,247                                                   $  67,574                              $  45,447  
        LTIP unitholders
                                                                                                                    ======= ======= ====================                      ======= ======= ====================                                           ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                        
Weighted average shares and units outstanding - FFO and Core FFO:(2)
Weighted average shares outstanding - basic                                                                                  44,269                                                    35,080                                                                         43,967                                                    27,084
Weighted average restricted common shares outstanding                                                                            27                                                        19                                                                             24                                                        18
Weighted average OP units outstanding                                                                                        26,361                                                    24,310                                                                         25,984                                                    23,761
Weighted average DownREIT OP unit equivalents outstanding                                                                     1,835                                                     1,835                                                                          1,835                                                     1,835
Weighted average LTIP units outstanding                                                                                         603                                  2,556                                                       1,095                                  2,523  
                                                                                                                    ------------------------------------                      ------------------------------------                                           ------------------------------------                      ------------------------------------
    Total weighted average shares and units outstanding - FFO and                                                            73,095                                 63,800                                                      72,905                                 55,221  
    Core FFO
                                                                                                                    ==============  ====================                      ==============  ====================                                           ==============  ====================                      ==============  ====================
                                                                                                                                                                                                                                                                                                                        
FFO per share and unit                                                                                                    $    0.32                                                 $    0.26                                                                      $    0.92                                                 $    0.73
Core FFO per share and unit                                                                                               $    0.33                                                 $    0.29                                                                      $    0.93                                                 $    0.82
(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                                                                                                                        Nine Months Ended
                                                                                                                                                                September 30,                                                                                                                            September 30,
                                                                                                                   -----------------------------------------------------------------------------------------------                                                 ---------------------------------------------------------------------------------
                                                                                                                                   2017                                                          2016                                                                           2017                                                  2016
                                                                                                                   -------------------------------------                     --------------------------------------------                                          ------------------------------                     -------------------------------------
Earnings (loss) per share - diluted                                                                                      $    0.03                                                 $ --                                                                  $ 0.09                                                 $    0.25
    Impact of the difference in weighted average number of shares(3)                                                         (0.02 )                                                 --                                                                   (0.04 )                                                    0.09
    Impact of GAAP accounting for noncontrolling interests, two-class                                                         0.14                                                             0.13                                                                    0.41                                            --
    method and treasury stock method(4)
    Add real estate depreciation and amortization                                                                             0.25                                                             0.22                                                                    0.74                                                      0.68
    Add Company’s share of unconsolidated real estate venture real                                                            0.03                                                   --                                                                    0.08                                            --
    estate depreciation and amortization
    Subtract gain on sale of self storage properties                                                                --                                                   --                                                                   (0.08 )                                          --
    FFO attributable to subordinated performance unitholders                                                                 (0.11 )                                                          (0.09 )                                                                 (0.28 )                                                   (0.29 )
                                                                                                                   ------------------------------------                      -------------------------------------------                                           -----------------------------                      ------------------------------------
        FFO per share and unit                                                                                                0.32                                                             0.26                                                                    0.92                                                      0.73
    Add acquisition costs, Company’s share of unconsolidated real estate                                                      0.01                                          0.03                                                 0.01                                   0.09  
    venture acquisition costs, and loss on early extinguishment of debt
                                                                                                                   --------------  --------------------                      ---------------------  --------------------                                           -------  --------------------                      --------------  --------------------
        Core FFO per share and unit                                                                                      $    0.33                              $           0.29                                               $ 0.93                              $    0.82  
                                                                                                                   ======= ======= ====================                      ======= ============== ====================                                           === ==== ====================                      ======= ======= ====================
(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                                                                        Nine Months Ended
                                                                                                                                                          September 30,                                                                                                                  September 30,
                                                                                                                 ----------------------------------------------------------------------------------------                                                 --------------------------------------------------------------------
                                                                                                                                 2017                                   2016                                                                           2017                         2016
                                                                                                                 -------------------------------------                     -------------------------------------                                          -------------------------------------                     ----------------
Net income                                                                                                             $  11,226                                                 $   7,944                                                                      $  33,983                                                 $  18,791
(Subtract) add:
    Management fees and other revenue                                                                                     (1,998 )                                          --                                                                         (5,978 )                                          --
    General and administrative expenses                                                                                    7,480                                                     5,259                                                                         22,066                                                    14,431
    Depreciation and amortization                                                                                         18,463                                                    14,319                                                                         54,946                                                    38,299
    Interest expense                                                                                                       9,157                                                     6,265                                                                         24,788                                                    17,050
    Equity in losses of unconsolidated real estate venture                                                                   710                                            --                                                                          2,260                                            --
    Loss on early extinguishment of debt                                                                          --                                            --                                                                 --                                                       136
    Acquisition costs                                                                                                        139                                                     1,737                                                                            450                                                     4,733
    Income tax expense                                                                                                       162                                                        80                                                                            767                                                       301
    Gain on sale of self storage properties                                                                                 (106 )                                          --                                                                         (5,743 )                                          --
    Non-operating expense                                                                                                      9                                     15                                                          75                                     77
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      ----------------
        Net Operating Income                                                                                           $  45,242                              $  35,619                                                   $ 127,614                              $  93,818
                                                                                                                 ======= ======= ====================                      ======= ======= ====================                                           ======= ======= ====================                      ======= =======
 
 
EBITDA and Adjusted EBITDA
(dollars in thousands) (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                                                                       Three Months Ended                                                                                                              Nine Months Ended
                                                                                                                                                          September 30,                                                                                                                  September 30,
                                                                                                                 ----------------------------------------------------------------------------------------                                                 --------------------------------------------------------------------
                                                                                                                                 2017                                                      2016                                                                           2017                                            2016
                                                                                                                 -------------------------------------                     -------------------------------------                                          -------------------------------------                     ----------------
Net income                                                                                                             $  11,226                                                 $   7,944                                                                      $  33,983                                                 $  18,791
Add:
    Depreciation and amortization                                                                                         18,463                                                    14,319                                                                         54,946                                                    38,299
    Company’s share of unconsolidated real estate venture depreciation                                                     2,042                                            --                                                                          5,832                                            --
    and amortization
    Interest expense                                                                                                       9,157                                                     6,265                                                                         24,788                                                    17,050
    Income tax expense                                                                                                       162                                                        80                                                                            767                                                       301
    Loss on early extinguishment of debt                                                                          --                         --                                              --                                    136
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      ----------------
        EBITDA                                                                                                            41,050                                                    28,608                                                                        120,316                                                    74,577
Add (subtract):
    Acquisition costs                                                                                                        139                                                     1,737                                                                            450                                                     4,733
    Company’s share of unconsolidated real estate venture acquisition                                                          1                                            --                                                                             22                                            --
    costs
    Gain on sale of self storage properties                                                                                 (106 )                                          --                                                                         (5,743 )                                          --
    Equity-based compensation expense(1)                                                                                     921                                    685                                                       2,844                                  1,913
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      ----------------
        Adjusted EBITDA                                                                                                $  42,005                              $  31,030                                                   $ 117,889                              $  81,223
                                                                                                                 ======= ======= ====================                      ======= ======= ====================                                           ======= ======= ====================                      ======= =======
(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=20171106006288r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20171106006288/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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