The following table presents a reconciliation of earnings (loss) per share - diluted to FFO and Core FFO per share and unit for the three and ninesix months ended SeptemberJune 30, 20172022 and 2016:2021:
| | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 |
| 2017 | | 2016 | | 2017 | | 2016 | |
Earnings (loss) per share - diluted | $ | 0.03 |
| | $ | — |
| | $ | 0.09 |
| | $ | 0.25 |
| |
Earnings per share - diluted | | Earnings per share - diluted | $ | 0.24 | | | $ | 0.25 | | | $ | 0.48 | | | $ | 0.44 | |
Impact of the difference in weighted average number of shares(1) | (0.02 | ) | | — |
| | (0.04 | ) | | 0.09 |
| Impact of the difference in weighted average number of shares(1) | (0.07) | | | 0.04 | | | (0.14) | | | 0.09 | |
Impact of GAAP accounting for noncontrolling interests, two-class method and treasury stock method(2) | 0.14 |
| | 0.13 |
| | 0.41 |
| | — |
| Impact of GAAP accounting for noncontrolling interests, two-class method and treasury stock method(2) | 0.18 | | | — | | | 0.33 | | | — | |
Add real estate depreciation and amortization | 0.25 |
| | 0.22 |
| | 0.74 |
| | 0.68 |
| Add real estate depreciation and amortization | 0.44 | | | 0.33 | | | 0.89 | | | 0.63 | |
Add Company's share of unconsolidated venture real estate depreciation and amortization | 0.03 |
| | — |
| | 0.08 |
| | — |
| Add Company's share of unconsolidated venture real estate depreciation and amortization | 0.03 | | | 0.04 | | | 0.06 | | | 0.07 | |
Subtract gain on sale of self storage properties | — |
| | — |
| | (0.08 | ) | | — |
| Subtract gain on sale of self storage properties | — | | | — | | | (0.02) | | | — | |
FFO attributable to subordinated performance unitholders | (0.11 | ) | | (0.09 | ) | | (0.28 | ) | | (0.29 | ) | FFO attributable to subordinated performance unitholders | (0.12) | | | (0.11) | | | (0.23) | | | (0.20) | |
FFO per share and unit | 0.32 |
| | 0.26 |
| | 0.92 |
| | 0.73 |
| FFO per share and unit | 0.70 | | | 0.55 | | | 1.37 | | | 1.03 | |
Add acquisition costs, Company's share of unconsolidated real estate venture acquisition costs, and loss on early extinguishment of debt | 0.01 |
| | 0.03 |
| | 0.01 |
| | 0.09 |
| |
Add acquisition costs | | Add acquisition costs | 0.01 | | | — | | | 0.01 | | | 0.01 | |
Core FFO per share and unit | $ | 0.33 |
| | $ | 0.29 |
| | $ | 0.93 |
| | $ | 0.82 |
| Core FFO per share and unit | $ | 0.71 | | | $ | 0.55 | | | $ | 1.38 | | | $ | 1.04 | |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | |
(1) 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 and the treasury stock method for certain unvested LTIP units, and includesassumes the assumptionconversion of vested LTIP units into OP units on a one-for-one basis and the hypothetical conversion of subordinated performance units, and DownREIT subordinated performance 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, DownREIT subordinated performance units and LTIP units into OP units, see Note 9 in Item 1. 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. |
(2) Represents the effect of adjusting the numerator to consolidated net income (loss) prior to GAAP allocations for noncontrolling interests, after deducting preferred share and unit distributions, and before the application of the two-class method and treasury stock method, as described in footnote(1). |
NOI
We defineNet operating income, or NOI, as net income (loss), as determined under GAAP,represents rental revenue plus general and administrative expenses, depreciation and amortization, interest expense, loss on early extinguishment of debt, equity in earnings (losses) of unconsolidated real estate ventures, acquisition costs, organizational and offering expenses, income tax expense, impairment of long-lived assets, losses on the sale of properties and non-operating expense and by subtracting management fees and other property-related revenue gains on sale of properties, debt forgiveness, and non-operating income.less property operating expenses. NOI is not a measure of performance calculated in accordance with GAAP.
We believe NOI is useful to investors in evaluating our operating performance because:
•NOI is one of the primary measures used by our management and our PROs to evaluate the economic productivity of our properties, including our ability to lease our properties, increase pricing and occupancy and control our property operating expenses;
•NOI is widely used in the real estate industry and the self storage industry to measure the performance and value of real estate assets without regard to various items included in net income that do not relate to or are not indicative of operating performance, such as depreciation and amortization, which can vary depending upon accounting methods, the book value of assets, and the impact of our capital structure; and
•We believe NOI helps our investors to meaningfully compare the results of our operating performance from period to period by removing the impact of our capital structure (primarily interest expense on our outstanding indebtedness) and depreciation of the cost basis of our assets from our operating results.
There are material limitations to using a non-GAAP measure such as NOI, including the difficulty associated with comparing results among more than one company and the inability to analyze certain significant items, including depreciation and interest expense, that directly affect our net income (loss). We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income (loss). NOI should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues income from operations and net loss.income (loss).
The following table presents a reconciliation of net income (loss) to NOI for the three and ninesix months ended SeptemberJune 30, 20172022 and 20162021 (dollars in thousands):
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | | Three Months Ended June 30, | | Six Months Ended June 30, |
| 2017 | | 2016 | | 2017 | | 2016 | | 2022 | | 2021 | | 2022 | | 2021 |
Net income | $ | 11,226 |
| | $ | 7,944 |
| | $ | 33,983 |
| | $ | 18,791 |
| Net income | $ | 48,425 | | | $ | 35,675 | | | $ | 93,211 | | | $ | 63,310 | |
(Subtract) Add: | | | | | | | | (Subtract) Add: | |
Management fees and other revenue | (1,998 | ) | | — |
| | (5,978 | ) | | — |
| Management fees and other revenue | (7,913) | | | (6,107) | | | (14,462) | | | (11,835) | |
General and administrative expenses | 7,480 |
| | 5,259 |
| | 22,066 |
| | 14,431 |
| General and administrative expenses | 14,702 | | | 12,450 | | | 28,668 | | | 23,688 | |
Other | | Other | 525 | | | 310 | | | 995 | | | 707 | |
Depreciation and amortization | 18,463 |
| | 14,319 |
| | 54,946 |
| | 38,299 |
| Depreciation and amortization | 57,891 | | | 36,051 | | | 115,963 | | | 68,475 | |
Interest expense | 9,157 |
| | 6,265 |
| | 24,788 |
| | 17,050 |
| Interest expense | 24,448 | | | 17,339 | | | 47,095 | | | 34,131 | |
Equity in losses of unconsolidated real estate venture | 710 |
| | — |
| | 2,260 |
| | — |
| |
Loss on early extinguishment of debt | — |
| | — |
| | — |
| | 136 |
| |
Equity in earnings of unconsolidated real estate ventures | | Equity in earnings of unconsolidated real estate ventures | (1,962) | | | (1,174) | | | (3,456) | | | (1,933) | |
| Acquisition costs | 139 |
| | 1,737 |
| | 450 |
| | 4,733 |
| Acquisition costs | 682 | | | 118 | | | 1,235 | | | 410 | |
Income tax expense | 162 |
| | 80 |
| | 767 |
| | 301 |
| Income tax expense | 730 | | | 675 | | | 1,578 | | | 871 | |
Gain on sale of self storage properties | (106 | ) | | — |
| | (5,743 | ) | | — |
| Gain on sale of self storage properties | — | | | — | | | (2,134) | | | — | |
| Non-operating expense | 9 |
| | 15 |
| | 75 |
| | 77 |
| Non-operating expense | 261 | | | 148 | | | 373 | | | 321 | |
Net Operating Income | $ | 45,242 |
| | $ | 35,619 |
| | $ | 127,614 |
| | $ | 93,818 |
| Net Operating Income | $ | 137,789 | | | $ | 95,485 | | | $ | 269,066 | | | $ | 178,145 | |
Our consolidated NOI shown in the table above does not include our proportionate share of theNOI for our unconsolidated real estate venture's net operating income.ventures. For additional information about our unconsolidated real estate venture2018 Joint Venture and 2016 Joint Venture see Note 5 to the condensed consolidated financial statements in Item 1.
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss), as determined under GAAP, plus interest expense, loss on early extinguishment of debt, income taxes, depreciation and amortization expense and the Company's share of unconsolidated real estate venture depreciation and amortization. We define Adjusted EBITDA as EBITDA plus acquisition costs, the Company's share of unconsolidated real estate venture acquisition costs, organizational and offering expenses, equity-based compensation expense, losses on sale of properties and impairment of long-lived assets; and by subtractingassets, minus gains on sale of properties and debt forgiveness.forgiveness, and after adjustments for unconsolidated partnerships and joint ventures. These further adjustments eliminate the impact of items that we do not consider indicative of our core operating performance. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
We present EBITDA and Adjusted EBITDA because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. EBITDA and Adjusted EBITDA have limitations as an analytical tool. Some of these limitations are:
•EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures, contractual commitments or working capital needs;
•EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
•Adjusted EBITDA excludes equity-based compensation expense, which is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period;
•EBITDA and Adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
•other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting itstheir usefulness as a comparative measure.measures.
We compensate for these limitations by considering the economic effect of the excluded expense items independently as well as in connection with our analysis of net income (loss). EBITDA and Adjusted EBITDA should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as total revenues income from operations, and net income (loss).
The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the three and ninesix months ended SeptemberJune 30, 20172022 and 20162021 (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Net income | $ | 48,425 | | | $ | 35,675 | | | $ | 93,211 | | | $ | 63,310 | |
Add: | | | | | | | |
Depreciation and amortization | 57,891 | | | 36,051 | | | 115,963 | | | 68,475 | |
Company's share of unconsolidated real estate venture depreciation and amortization | 4,324 | | | 3,840 | | | 8,170 | | | 7,721 | |
Interest expense | 24,448 | | | 17,339 | | | 47,095 | | | 34,131 | |
Income tax expense | 730 | | | 675 | | | 1,578 | | | 871 | |
| | | | | | | |
EBITDA | 135,818 | | | 93,580 | | | 266,017 | | | 174,508 | |
Add: | | | | | | | |
Acquisition costs | 682 | | | 118 | | | 1,235 | | | 410 | |
| | | | | | | |
Gain on sale of self storage properties | — | | | — | | | (2,134) | | | — | |
| | | | | | | |
| | | | | | | |
Equity-based compensation expense | 1,580 | | | 1,348 | | | 3,124 | | | 2,634 | |
Adjusted EBITDA | $ | 138,080 | | | $ | 95,046 | | | $ | 268,242 | | | $ | 177,552 | |
| | | | | | | |
|
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended 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 and amortization | 2,042 |
| | — |
| | 5,832 |
| | — |
|
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: | | | | | | | |
Acquisition costs | 139 |
| | 1,737 |
| | 450 |
| | 4,733 |
|
Company's share of unconsolidated real estate venture acquisition costs | 1 |
| | — |
| | 22 |
| | — |
|
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 our consolidated statements of operations. |
Liquidity and Capital Resources
Liquidity Overview
Liquidity is the ability to meet present and future financial obligations. Our primary source of liquidity is cash flow from our operations. Additional sources are proceeds from equity and debt offerings, and debt financings including borrowingsadditional borrowing capacity under ourthe credit facility, and expansion options available under the 2023 Term Loan Facility, (as defined below).the 2028 Term Loan Facility, the June 2029 Term Loan Facility, and our credit facility.
Our short-term liquidity requirements consist primarily of property operating expenses, property acquisitions, capital expenditures, general and administrative expenses acquisition pursuit costs and principal and interest on our outstanding indebtedness. A further short-term liquidity requirement relates to distributions to our common and preferred shareholders and holders of preferred units, OP units, LTIP units, subordinated performance units, DownREIT OP units and DownREIT subordinated performance units. We expect to fund short-term liquidity requirements from our operating cash flow, cash on hand and borrowings under our credit facility.
As discussed in Note 8 in Item 1, on February 8, 2017, we entered into an Increase Agreement with a syndicated group of lenders to increase the total borrowing capacity under the credit facility by $170.0 million for a total credit facility of $895.0 million, which included entry into a new $105.0 million Term Loan C. We continue to have an expansion option under the credit facility, which, if exercised in full, would provide for a total credit facility of $1.0 billion.
As of September 30, 2017, $235.0 million was outstanding under the Term Loan A with an effective interest rate of 2.63%, $155.0 million was outstanding under the Term Loan B with an effective interest rate of 3.24%, $105.0 million was outstanding under the Term Loan C with an effective interest rate of 3.71% and $201.0 million was outstanding under the Revolver with an effective interest rate of 2.63%. As of September 30, 2017, we would have had the capacity to borrow remaining Revolver commitments of $194.3 million while remaining in compliance with the credit facility's financial covenants.
For a summary of our financial covenants and additional detail regarding our credit facility, Term Loan Facility (as defined below), and fixed rate mortgage payables, please see Note 8 to the Company's most recent Annual Report on Form10-K filed with the Securities and Exchange Commission.
Our long-term liquidity needs consist primarily of the repayment of debt, property acquisitions, and capital expenditures. We acquire properties through the use of cash, preferred units, OP units and subordinated performance units in our operating partnership or DownREIT partnerships. We expect to meet our long-term liquidity requirements with operating cash flow, cash on hand, secured and unsecured indebtedness, and the issuance of equity and debt securities.
WeThe availability of credit and its related effect on the overall economy may affect our liquidity and future financing activities, both through changes in interest rates and access to financing. Currently, interest rates are low compared to historical levels, but have a credit agreement with a syndicated groupincreased in recent periods. Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our liquidity needs, all of lenders for a term loan facility (the "Term Loan Facility") in an aggregate amount of $100.0 million, which amount is outstanding, with an effective interest rate of 3.08% as of September 30, 2017. We have an expansion option under the Term Loan Facility, which, if exercised in full, would provide for a total Term Loan Facility in an aggregate amount of $200.0 million.
are highly uncertain and cannot be predicted, could be affected by various risks and uncertainties. We believe that, as a publicly-traded REIT, we will have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of debt and additional equity securities. However, we cannot assure you that this will be the case.
Cash Flows
At SeptemberJune 30, 2017,2022, we had $13.7$32.3 million in cash and cash equivalents and $4.7$3.3 million of restricted cash, an increase in cash and cash equivalents of $1.1$7.3 million and ana increase in restricted cash of $1.9$0.4 million from December 31, 2016.2021. Restricted cash primarily consists of escrowed funds deposited with financial institutions for real estate taxes, insurance, and other reserves for capital improvements in accordance with our loan agreements. The following discussion relates to changes in cash due to operating, investing, and financing activities, which are presented in our condensed consolidated statements of cash flows included in Item 1 of this report.
Cash Flows From Operating Activities
Cash provided by our operating activities was $94.9$227.0 million for the ninesix months ended SeptemberJune 30, 20172022 compared to $68.3$144.3 million for the ninesix months ended SeptemberJune 30, 2016,2021, an increase of $26.6$82.7 million. Our operating cash flow increased primarily due to the 31186 self storage properties that were acquired between OctoberJuly 1, 20162021 and December 31, 20162021 that generated cash flow for the entire ninesix months ended SeptemberJune 30, 2017, and2022, an additional 3420 self storage properties acquired during the ninesix months ended SeptemberJune 30, 2017.2022 and same store NOI growth. Because these 65206 self storage properties were acquired after SeptemberJune 30, 2016,2021, our operating results for the ninesix months ended SeptemberJune 30, 20162021 were not impacted by them. In addition, we received $3.8 million of operating distributions from our unconsolidated real estate venture during the nine months ended September 30, 2017. The increase in our operating cash flows from these activities was partially offset by higher cash payments for general and administrative expenses and interest expense.
Cash Flows From Investing Activities
Cash used in investing activities was $217.1$244.9 million for the ninesix months ended SeptemberJune 30, 20172022 compared to $342.6$398.1 million for the ninesix months ended SeptemberJune 30, 2016.2021. The primary uses of cash for the ninesix months ended SeptemberJune 30, 20172022 were for our acquisition of 3420 self storage properties for cash consideration of $209.7$175.0 million, capital contributions of $53.3 million to fund the self storage property acquisitions of our 2016 Joint Venture, capital expenditures of $10.0 million, investments in our unconsolidated real estate venture of $12.6$20.3 million, and deposits for potential acquisitions of $2.3$1.9 million, partially offset by $17.5$6.2 million of proceeds from the saledisposition of threeone self storage propertiesproperty and an undeveloped land parcels. The primary uses of cash for the nine months ended September 30, 2016 were for our acquisition of 76 self storage properties for cash consideration of $323.8 million, capital expenditures of $8.0 million, and deposits for potential acquisitions of $5.4 million.parcel.
Capital expenditures totaled $10.0$20.3 million and $8.0$13.2 million during the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, respectively. We generally fund post-acquisition capital additions from cash provided by operating activities.
We categorize our capital expenditures broadly into three primary categories:
•recurring capital expenditures, which represent the portion of capital expenditures that are deemed to replace the consumed portion of acquired capital assets and extend their useful life;
revenue•value enhancing capital expenditures, which represent the portion of capital expenditures that are made to enhance the revenue and value of an asset from its original purchase condition; and
•acquisitions capital expenditures, which represent the portion of capital expenditures capitalized during the current period that were identified and underwritten prior to a property's acquisition.
A summary of the capital expenditures for these categories, along with a reconciliation of the total for these categories to the capital expenditures reported in the accompanying condensed consolidated statements of cash flows for the ninesix months ended SeptemberJune 30, 20172022 and 2016,2021, are presented below (dollars in thousands):
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2022 | | 2021 |
Recurring capital expenditures | $ | 4,972 | | | $ | 4,359 | |
Value enhancing capital expenditures | 5,968 | | | 4,880 | |
Acquisitions capital expenditures | 8,775 | | | 4,051 | |
Total capital expenditures | 19,715 | | | 13,290 | |
Change in accrued capital spending | 618 | | | (103) | |
Capital expenditures per statement of cash flows | $ | 20,333 | | | $ | 13,187 | |
| | | |
|
| | | | | | | |
| Nine Months Ended September 30, |
| 2017 | | 2016 |
Recurring capital expenditures | $ | 2,589 |
| | $ | 2,442 |
|
Revenue enhancing capital expenditures | 1,271 |
| | 2,315 |
|
Acquisitions capital expenditures | 6,149 |
| | 3,982 |
|
Total capital expenditures | 10,009 |
| | 8,739 |
|
Change in accrued capital spending | 2 |
| | (759 | ) |
Capital expenditures per statement of cash flows | $ | 10,011 |
| | $ | 7,980 |
|
| | | |
Cash Flows From Financing Activities
Cash provided by our financing activities was $125.3$25.6 million for the ninesix months ended SeptemberJune 30, 20172022 compared to cash provided by our financing activities of $281.0$258.2 million for the ninesix months ended SeptemberJune 30, 2016.2021. Our sources of financing cash flows for the ninesix months ended SeptemberJune 30, 20172022 primarily consisted of $455.5$454.0 million of borrowings under our credit facility, an $84.9 million secured debt financing and $7.0Revolver, $285.0 million of proceedsborrowings under our June 2029 Term Loan, and $125.0 million from the issuance of 300,043 subordinated performance units to an affiliate of Personal Mini.the November 2033 Notes. Our primary uses of financing cash flows for the ninesix months ended SeptemberJune 30, 20172022 were for principal payments on existing debt of $344.9$661.2 million (which included $331.0$659.0 million of principal repayments under the Revolver $10.4and $2.2 million of fixed rate mortgage principal payoffs and $3.5 million of scheduled fixed rate mortgage principal payments), distributions to noncontrolling interests of $41.8$69.8 million, payments of dividends to common shareholders of $96.2 million and distributions to commonpreferred shareholders of $33.6$6.7 million. Our sources
Credit Facility and Term Loan Facilities
As of financing cash flowsJune 30, 2022, our credit facility provided for total borrowings of $1.550 billion, consisting of six components: (i) a Revolver which provides for a total borrowing commitment up to $650.0 million, whereby we may borrow, repay and re-borrow amounts under the nine months ended SeptemberRevolver, (ii) a $125.0 million Term Loan A, (iii) a $250.0 million Term Loan B, (iv) a $225.0 million Term Loan C, (v) a $175.0 million Term Loan D and (vi) a $125.0 million Term Loan E. The Revolver matures in January 2024; provided that we may elect to extend the maturity to July 2024 by paying an extension fee of 0.075% of the total borrowing commitment thereunder at the time of extension and meeting other customary conditions with respect to compliance. The Term Loan A matures in January 2023, the Term Loan B matures in July 2024, the Term Loan C matures in January 2025, the Term Loan D matures in July 2026 and the Term Loan E matures in March 2027. The Revolver, Term Loan A, Term Loan B, Term Loan C, Term Loan D and Term Loan E are not subject to any scheduled reduction or amortization payments prior to maturity. As of June 30, 2016 primarily consisted2022, we have an expansion option under the credit facility, which, if exercised in full, would provide for a total credit facility of $237.5$1.750 billion. As of June 30, 2022, we would have had the capacity to borrow remaining Revolver commitments of $359.3 million while remaining in compliance with the credit facility's financial covenants.
We have a 2023 Term Loan Facility that matures in June 2023 and is separate from the credit facility in an aggregate amount of $175.0 million. As of June 30, 2022 the entire amount was outstanding under the 2023 Term Loan Facility with an effective interest rate of 2.83%. We have an expansion option under the 2023 Term Loan Facility, which, if exercised in full, would provide for total borrowings in an aggregate amount of $400.0 million.
We have a 2028 Term Loan Facility that matures in December 2028 and is separate from the credit facility and 2023 Term Loan Facility in an aggregate amount of $75.0 million. As of June 30, 2022 the entire amount was outstanding under the 2028 Term Loan Facility with an effective interest rate of 4.62%. We have an expansion option under the 2028 Term Loan Facility, which, if exercised in full, would provide for total borrowings in an aggregate amount up to $125.0 million.
We have a April 2029 Term Loan Facility that matures in April 2029 and is separate from the credit facility, 2023 Term Loan Facility and 2028 Term Loan Facility in an aggregate amount of $100.0 million. As of June 30, 2022 the entire amount was outstanding under the April 2029 Term Loan Facility with an effective interest rate of 4.27%.
We have a June 2029 Term Loan Facility that matures in June 2029 and is separate from the credit facility, 2023 Term Loan Facility, 2028 Term Loan Facility, and April 2029 Term Loan Facility in an aggregate amount of $285.0 million. As of June 30, 2022 the 2029 Term Loan Facility had a variable effective interest rate of 3.34%. We have an expansion option under the June 2029 Term Loan Facility, which, if exercised in full, would provide for total borrowings in an aggregate amount up to $300.0 million.
2029 and August 2031 Senior Unsecured Notes
On August 30, 2019, our operating partnership issued $100.0 million of proceeds from the completion of our follow-on common share offering, $398.53.98% senior unsecured notes due August 30, 2029 and $50.0 million of borrowings under4.08% senior unsecured notes due August 30, 2031 in a private placement to certain institutional investors.
August 2030 and 2032 Senior Unsecured Notes
On October 22, 2020, our credit facilityoperating partnership issued $150.0 million of 2.99% senior unsecured notes due August 5, 2030 and $100.0 million of borrowings under3.09% senior unsecured notes due August 5, 2032 in a private placement to certain institutional investors.
2026, May 2031 and May 2033Senior Unsecured Notes
On May 3, 2021, our Termoperating partnership entered into an agreement to issue the 2026 Notes, the May 2031 Notes and the May 2033 Notes to certain institutional investors. On May 26, 2021, our operating partnership issued $55.0 million of 3.10% senior unsecured notes due May 4, 2033. On July 26, 2021, our operating partnership issued $35.0 million of 2.16% senior unsecured notes due May 4, 2026 and $90.0 million of 3.00% senior unsecured notes due May 4, 2031.
November 2030, November 2031, November 2033, and 2036 Senior Unsecured Notes
On November 9, 2021, our operating partnership entered an agreement to issue $75.0 million of 2.72% senior unsecured notes due November 30, 2030, $175.0 million of 2.81% senior unsecured notes due November 30, 2031, $125.0 million of 2.96% senior unsecured notes due November 30, 2033, and $75.0 million of 3.06% senior unsecured notes due November 30, 2036. On December 14, 2021 the operating partnership issued the November 2030 Notes, November 2031 Notes and the 2036 Notes. On January 28, 2022, our operating partnership issued the November 2033 Notes.
Fixed Rate Mortgage Payable
On July 9, 2021, we entered into an agreement with a single lender for an $88.0 million debt financing secured by eight of our self storage properties. This interest-only loan facility. Our primary usesmatures in July 2028 and has a fixed interest rate of financing cash flows for2.77%.
Equity Transactions
Issuance of Common Shares
During the ninesix months ended SeptemberJune 30, 2016 were2022, after receiving notices of redemption from certain OP unitholders, we elected to issue 553,050 common shares to such holders in exchange for principal payments on existing debt553,050 OP units in satisfaction of $401.2 million (which included $376.0 millionthe operating partnership's redemption obligations.
Issuance of principal repayments under the Revolver, $22.0 million of fixed rate mortgage principal payoffs and $3.2 million of scheduled fixed rate mortgage principal payments), distributions to noncontrolling interests of $33.4 million, and distributions to common shareholders of $17.6 million.OP Equity
In connection with the 3420 properties acquired during the ninesix months ended SeptemberJune 30, 2017,2022, we issued $30.5 million of OP equity of $14.2 million (consisting of 473,533353,030 Series A-1 perpetual preferred units, 387,638 OP units 96,394and 15,061 subordinated performance units). We also issued $3.2 million of OP equity (consisting of 46,540 OP units) as consideration for Northwest's rights to property management contracts, brand, intellectual property, and certain intangible assets in connection with the PRO retirement.
During the six months ended June 30, 2022, we also issued (i) 3,911,260 OP units upon the non-voluntary conversion of 2,078,357 subordinated performance units in connection with Northwest's retirement, (ii) 235,241 OP units upon the conversion of 82,611 subordinated performance units and (iii) 192,296 OP units upon the vestingconversion of 36,400an equivalent number of LTIP units. We also issued 244,792 subordinated performance units previously issued)upon the conversion of 651,734 OP units.
Dividends and paid cash of $209.7 million.Distributions
On August 24, 2017,May 25, 2022, our board of trustees declared a cash dividend and distribution, respectively, of $0.26$0.55 per common share and OP unit. Such distributions were paid on September 29, 2017unit to shareholders and OP unitholders of record as of SeptemberJune 15, 2017.2022. On September 13, 2017,May 25, 2022, our board of trustees also declared cash distributions of $0.375 per Series A Preferred Share and Series A-1 preferred unit to shareholders and unitholders of record as of June 15, 2022. On March 11, 2022, our board of trustees declared cash distributions of $7.7$15.7 million, in the aggregate, to subordinated performance unitholders of record as of SeptemberJune 15, 2017.2022. Such dividends and distributions were paid on September 29, 2017.
During the nine months ended SeptemberJune 30, 2017, after receiving notices of redemption from certain holders of OP units, we elected to issue 1,189,801 common shares to such holders in exchange for 1,189,801 OP units in satisfaction of the operating partnership's redemption obligations.
As discussed in Note 13 in Item 1, on October 11, 2017, we completed an underwritten public offering of 6,900,000 of our 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 net proceeds to us of approximately $166.6 million, after deducting the underwriting discount and our other offering expenses. We used the net proceeds from the offering to repay amounts outstanding under our Revolver, and subsequently redrew under our Revolver to fund self storage property acquisitions.2022.
Cash Distributions from our Operating Partnership
Under the LP Agreement of our operating partnership, to the extent that we, as the general partner of our operating partnership, determine to make distributions to the partners of our operating partnership out of the operating cash flow or capital transaction proceeds generated by a real property portfolio managed by one of our PROs, the holders of the series of subordinated performance units that relate to such portfolio are entitled to share in such distributions. Under the LP Agreement of our operating partnership, operating cash flow with respect to a portfolio of properties managed by one of our PROs is generally an amount determined by us, as general partner of our operating partnership, equal to the excess of property revenues over property related expenses from that portfolio. In general, property revenue from the portfolio includes:
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(i) | all receipts, including rents and other operating revenues; |
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(ii) | any incentive, financing, break-up and other fees paid to us by third parties; |
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(iii) | amounts released from previously set aside reserves; and |
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(iv) | any other amounts received by us, which we allocate to the particular portfolio of properties. |
(i)all receipts, including rents and other operating revenues;
(ii)any incentive, financing, break-up and other fees paid to us by third parties;
(iii)amounts released from previously set aside reserves; and
(iv)any other amounts received by us, which we allocate to the particular portfolio of properties.
In general, property-related expenses include all direct expenses related to the operation of the properties in that portfolio, including real property taxes, insurance, property-level general and administrative expenses, employee costs, utilities, property marketing expense, property maintenance and property reserves and other expenses incurred at the
property level. In addition, other expenses incurred by our operating partnership maywill also be allocated by us, as general partner, to the property portfolio and will be included in the property-related expenses of that portfolio. Examples of such other expenses include:
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(i) | corporate-level general and administrative expenses; |
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(ii) | out-of-pocket costs, expenses and fees of our operating partnership, whether or not capitalized; |
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(iii) | the costs and expenses of organizing and operating our operating partnership; |
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(iv) | amounts paid or due in respect of any loan or other indebtedness of our operating partnership during such period; |
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(v) | extraordinary expenses of our operating partnership not previously or otherwise deducted under item (ii) above; |
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(vi) | any third-party costs and expenses associated with identifying, analyzing, and presenting a proposed property to us and/or our operating partnership; and |
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(vii) | reserves to meet anticipated operating expenditures, debt service or other liabilities, as determined by us. |
(i)corporate-level general and administrative expenses;
(ii)out-of-pocket costs, expenses and fees of our operating partnership, whether or not capitalized;
(iii)the costs and expenses of organizing and operating our operating partnership;
(iv)amounts paid or due in respect of any loan or other indebtedness of our operating partnership during such period;
(v)extraordinary expenses of our operating partnership not previously or otherwise deducted under item (ii) above;
(vi)any third-party costs and expenses associated with identifying, analyzing, and presenting a proposed property to us and/or our operating partnership; and
(vii)reserves to meet anticipated operating expenditures, debt service or other liabilities, as determined by us.
To the extent that we, as the general partner of our operating partnership, determine to make distributions to the partners of our operating partnership out of the operating cash flow of a real property portfolio managed by one of our PROs, operating cash flow from a property portfolio is required to be allocated to holders of OP unitsunitholders and to the holders of series of subordinated performance units that relate to such property portfolio as follows:
First, an amount is allocated to holders of OP unitsunitholders in order to provide holders of OP unitsunitholders (together with any prior allocations of capital transaction proceeds) with a cumulative preferred allocation on the unreturned capital contributions attributed to the OP units in respect of such property portfolio. The preferred allocation for all of our existing portfolios is 6%. As of SeptemberJune 30, 2017,2022, our operating partnership had an aggregate of $1,081.0$2,972.6 million of such unreturned capital contributions with respect to common shareholders and OP unitholders, andwith respect to the various property portfolios.
Second, an amount is allocated to the holders of the series of subordinated performance units relating to such property portfolio in order to provide such holders with an allocation (together with prior distributions of capital transaction proceeds) on their unreturned capital contributions. Although the subordinated allocation for the subordinated performance units is non-cumulative from period to period, if the operating cash flow from a property portfolio related to a series of subordinated performance units is sufficient, in the judgment of the general partner (with the approval of a majority of our independent trustees), to fund distributions to the holders of such series of subordinated performance units, but we, as the general partner of our operating partnership, decline to make distributions to such holders, the amount available but not paid as distributions will be added to the capital contributionssubordinated allocation corresponding to such series of subordinated performance units. The subordinated allocation for the outstanding subordinated performance units is 6%. As of SeptemberJune 30, 2017,2022, an aggregate of $188.3$218.6 million of unreturned capital contributions has been allocated to the various series of subordinated performance units.
Thereafter, any additional operating cash flow is allocated to holders of OP unitsunitholders and the applicable series of subordinated performance units equally.
Following the allocation described above, we as the general partner of our operating partnership, will generally cause our operating partnership to distribute the amounts allocated to the relevant series of subordinated performance units to the holders of such series of subordinated performance units. We, as the general partner, may cause our operating partnership to distribute the amounts allocated to holders of the OP unitsunitholders or may cause our operating partnership to retain such amounts to be used by our operating partnership for any purpose. Any operating cash flow that is attributable to amounts retained by our operating partnership pursuant to the preceding sentence will generally be available to be allocated as an additional capital contribution to the various property portfolios.
The foregoing description of the allocation of operating cash flow between the OP unit holdersunitholders and subordinated performance unit holdersunitholders is used for purposes of determining distributions to holders of subordinated performance units but does not necessarily represent the operating cash flow that will be distributed to holders of OP unitsunitholders (or paid as dividends to holders of our common shares). Any distribution of operating cash flow allocated to the holders of OP unitsunitholders will be made at our discretion (and paid as dividends to holders of our common shares at the discretion of our board of trustees).
Under the LP Agreement of our operating partnership, capital transactions are transactions that are outside the ordinary course of our operating partnership's business, involve the sale, exchange, other disposition, or refinancing
of any property, and are designated as capital transactions by us, as the general partner. To the extent the general partner determines to distribute capital transaction proceeds, the proceeds from capital transactions involving a particular property portfolio are required to be allocated to holders of OP unitsunitholders and to the series of subordinated performance units that relate to such property portfolio as follows:
First, an amount determined by us, as the general partner, of such capital transaction proceeds is allocated to holders of OP unitsunitholders in order to provide holders of OP unitsunitholders (together with any prior allocations of operating cash flow) with a cumulative preferred allocation on the unreturned capital contributions attributed to the holders of OP unitsunitholders in respect of such property portfolio that relate to such capital transaction plus an additional amount equal to such unreturned capital contributions.
Second, an amount determined by us, as the general partner, is allocated to the holders of the series of subordinated performance units relating to such property portfolio in order to provide such holders with a non-cumulative subordinated allocation on the unreturned capital contributions made by such holders in respect of such property portfolio that relatesrelate to such capital transaction plus an additional amount equal to such unreturned capital contributions.
The preferred allocation and subordinated allocation with respect to capital transaction proceeds for each portfolio is equal to the preferred allocation and subordinated allocation for distributions of operating cash flow with respect to that portfolio.
Thereafter, any additional capital transaction proceeds are equally allocated to holders of OP unitsunitholders and the applicable series of subordinated performance units.units equally.
Following the allocation described above, we, as the general partner of our operating partnership, will generally cause our operating partnership to distribute the amounts allocated to the relevant series of subordinated performance units to the holders of such series of subordinated performance units. We, as general partner of our operating partnership, may cause our operating partnership to distribute the amounts allocated to holders of the OP unitsunitholders or may cause our operating partnership to retain such amounts to be used by our operating partnership for any purpose, including additional acquisitions through the use of 1031 exchanges.purpose. Any capital transaction proceeds that are attributable to amounts retained by our operating partnership pursuant to the preceding sentence will generally be available to be allocated as an additional capital contribution to the various property portfolios.
The foregoing allocation of capital transaction proceeds between the OP unit holdersunitholders and subordinated performance unit holdersunitholders is used for purposes of determining distributions to holders of subordinated performance units but does not necessarily represent the capital transaction proceeds that will be distributed to holders of OP unitsunitholders (or paid as dividends to holders of our common shares). Any distribution of capital transaction proceeds allocated to the holders of OP unitsunitholders will be made at our discretion (and paid as dividends to holders of our common shares at the discretion of our board of trustees).
Allocation of Capital Contributions
We, as the general partner of our operating partnership, in our discretion, have the right to increase or decrease, as appropriate, the amount of capital contributions allocated to our operating partnership in general and to each series of subordinated performance units to reflect capital expenditures made by our operating partnership in respect of each portfolio, the sale or refinancing of all or a portion of the properties comprising the portfolio, the distribution of capital transaction proceeds by our operating partnership, the retention by our operating partnership of cash for working capital purposes and other events impacting the amount of capital contributions allocated to the holders. In addition, to avoid conflicts of interests, any decision by us to increase or decrease allocations of capital contributions must also be approved by a majority of our independent trustees.
Off-Balance Sheet Arrangements
Except as disclosed in the notes to our financial statements, as of SeptemberJune 30, 2017,2022, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purposes entities, which typically are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, except as disclosed in the notes to our financial statements, as of SeptemberJune 30, 2017,2022, we have not guaranteed any obligations of unconsolidated entities, nor do we havemade any commitments or intent to provide funding to any such entities. Accordingly, we are not materially exposedentities, that creates any material exposure to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.
risk.
Seasonality
The self storage business is subject to minor seasonal fluctuations. A greater portion of revenues and profits are generally realized from May through September. Historically, our highest level of occupancy has typically been in July, while our lowest level of occupancy has typically been in February. Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk refers to the risk of loss from adverse changes in market prices and interest rates. Our future income, cash flows, and fair values of financial instruments are dependent upon prevailing market interest rates. The primary market risk to which we believe we are exposed is interest rate risk. Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. We use interest rate swaps to moderate our exposure to interest rate risk by effectively converting the interest on variable rate debt to a fixed rate. We make limited use of other derivative financial instruments and we do not use them for trading or other speculative purposes.
As of SeptemberJune 30, 2017,2022, we had $201.0$695.0 million of debt subject to variable interest rates (excluding variable-rate debt subject to interest rate swaps). If our reference rates (currently one-month LIBOR and Term SOFR) were to increase or decrease by 100 basis points, the increase or decrease in interest expense on the variable-rate debt (excluding variable-rate debt subject to interest rate swaps) would increasedecrease or decreaseincrease future earnings and cash flows by approximately $2.0$7.0 million annually.
Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.
ITEM 4. Controls and Procedures
Disclosure Controls and Procedures
The Company's management, with the participation of the Company's chief executive officer and chief financial officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the chief executive officer and chief financial officer concluded that the Company's disclosure controls and procedures, as of the end of the period covered by this report, are effective.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended SeptemberJune 30, 20172022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
We are not currently subject to any legal proceedings that we consider to be material.
ITEM 1A. Risk Factors
For a discussion of our potential risks and uncertainties, see the Company's Annual Report on Form 10-K for the year ended December 31, 20162021 filed with the SEC on February 28, 2017 under the heading Item 1A. "Risk Factors" beginning on page 14,15, which is accessible on the SEC's website at www.sec.gov. During the nine months ended September 30, 2017, there have been no material changes to such risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on February 28, 2017.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
During the three months ended SeptemberJune 30, 2017,2022, the Company, in its capacity as general partner of its operating partnership, caused the operating partnership to issue 36,283294,573 common shares to satisfy redemption requests from certain limited partners.
On October 3, 2017,May 6, 2022, the operating partnership issued 26,04976,632 OP units to Nordhagen LLLP, an entity for which Arlen D. Nordhagen, the Company's chairman and chief executive officer, holds voting and/or investment power, 115,918 OP units each to JM Trust and Lamb Family Trust, each an affiliate of Guardian, one of the Company's existing PROs, and 2,605 OP units to an unrelated third partyparties as partial consideration for the acquisition of a self storage property.
On October 16, 2017,June 6, 2022, the operating partnership issued 22,214983 OP units to unrelated third parties as partial consideration for the acquisition of a self storage property.
On June 16, 2022, the operating partnership issued 217,456 OP units to unrelated third parties as partial consideration for the acquisition of a self storage property.
Effective as of July 1, 2022, 148,822 Class A OP units were converted into 148,822 Series BL subordinated performance units in a voluntary conversion.
On July 5, 2022, the operating partnership issued 19,523 subordinated performance units to SecurCare Self Storage Inc., an affiliatecertain affiliates of SecurCare,Blue Sky, one of the Company's existing PROs, and an affiliate of Arlen D. Nordhagen,in exchange for cash.
On July 11, 2022, the Company's chairman and chief executive officer and 23,121operating partnership issued 10,971 subordinated performance units to Move It B Units, LLC, an affiliate of Move It,Moove In, one of the Company's existing PROs.PROs, as partial consideration for the acquisition of a self storage property.
On July 20, 2022, the operating partnership issued 71,320 OP units to unrelated third parties as partial consideration for the acquisition of a self storage property.
Following a specified lock up period after the respective datesdate of issuance set forth above, the OP units issued by the operating partnership may be redeemed from time to time by holders for a cash amount per OP unit equal to the market value of an equivalent number of common shares of the Company.shares. The Company has the right, but not the obligation, to assume and satisfy the redemption obligation of itsthe operating partnership described above by issuing one common share in exchange for each OP unit tendered for redemption.
The Company has elected to report early the private placement of its common shares that may occur if the Company elects to assume the redemption obligation of itsthe operating partnership as described above in the event that OP units are in the future tendered for redemption.
Following a two-year lock-up period, holders of subordinated performance units may elect, only upon the achievement of certain performance thresholds relating to the properties to which such subordinated performance units relate, to convert all or a portion of such subordinated performance units into OP units one time each year by submitting a completed conversion notice prior to December 1 of such year. All duly submitted conversion notices will become effective on the immediately following January 1. For additional information about the conversion or exchange of subordinated performance units into OP units, see Note 9 in Item 1 of this report.
As of November 6, 2017,August 3, 2022, other than those OP units held by the Company, after reflecting the transactions described herein, 29,111,15338,022,594 OP units of its operating partnership were outstanding (including 771,396721,544 outstanding LTIP units in the operating partnership and 1,834,7861,924,918 outstanding OP units ("DownREIT OP units") in certain consolidated subsidiaries of the operating partnership, which are convertible into, or exchangeable for, OP units on a one-for-basis, subject to certain conditions) and 12,369,794 subordinated performance units (including 4,337,111 subordinated performance units in certain subsidiaries of the operating partnership ("DownREIT subordinated performance units").
These issuances were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Use of Proceeds
Not applicable.
Issuer Purchases of Equity Securities
Not applicable.During the three months ended June 30, 2022, certain of our employees surrendered common shares owned by them to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares issued to them. The table below summarizes all of our repurchases of common shares during the quarter ended June 30, 2022:
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Period | | Total number of shares purchased | | | | Total number of shares purchased as part of publicly announced plans or programs | | Maximum numbers of shares that may yet be purchased under the plans or programs |
April 1, 2022 - April 30, 2022 | | — | | | | | n/a | | n/a |
May 1 - May 31, 2022 | | — | | | | | n/a | | n/a |
June 1 - June 30, 2022 | | 178 | | (1) | | | n/a | | n/a |
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(1) The number of shares purchased represents restricted common shares surrendered by certain of our employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common shares issued to them. The price paid per share was $48.70 and is based on the closing price of our common shares as of June 10, 2022, the date prior to the date of withholding. |
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ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
Not applicable.On July 29, 2022, the Company, the operating partnership and certain of its subsidiaries entered into an amendment (the "Amendment") to its second amended and restated credit agreement dated as of July 29, 2019 (as amended, the "Credit Agreement") with KeyBank National Association, as Administrative Agent (the "Administrative Agent"), and the lenders party thereto, to permit the Company to repurchase the Company's common shares and other equity interests in connection with a general repurchase program or other repurchase authorized by the Company's board of trustees so long as immediately prior to the repurchase, and immediately after giving effect to the repurchase, no default or event of default has occurred or would result from the repurchase.Substantially similar amendments were made to each of the Company's term loans and senior unsecured notes.
The Amendment does not impact any of the Credit Agreement's previously disclosed terms, including its covenants, events of default, or terms of payment.
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The description above is only a summary of the material provisions of the Amendment and is qualified in its entirety by reference to a copy of the Amendment, which has been filed with the Company's Form 10‑Q for the three months ended June 30, 2022. The Credit Agreement was filed on November 1, 2019 as Exhibit 10.1 to the Company's quarterly report on Form 10‑Q for the three months ended September 30, 2019.
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ITEM 6. Exhibits |
The following exhibits are filed with this report: |
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Exhibit Number | Exhibit Description |
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| Fifth Amendment to Credit Agreement dated as of July 29, 2022 by and among NSA OP, LP, as Borrower, the lenders from time to time party thereto, and KeyBank National Association, as Administrative Agent, and joined in for certain purposes by certain Subsidiaries of the Borrower and National Storage Affiliates Trust, with Keybanc Capital Markets Inc., and PNC Capital Markets LLC, as Co-Bookrunners and Co-Lead Arrangers, PNC Bank, National Association, as Syndication Agent, U.S. Bank National Association and BMO Capital Markets Corp. as Co-Lead Arrangers and Co-Documentation Agents, Wells Fargo Securities, LLC as Co-Lead Arranger, Wells Fargo Bank, National Association, as Co-Documentation Agent, and CitiBank, N.A., as Co-Lead Arranger and Co-Documentation Agent for the Revolving Credit Facility |
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101*101.INS* | XBRL (Extensible Business Reporting Language). The following materials from NSA's Quarterly Report on Form 10-Q forInstance Document - the quarterly period ended September 30, 2017, taggedinstance document does not appear in XBRL: ((i) condensed consolidated balance sheets; (ii) condensed consolidated statements of operations; (iii) condensed consolidated statements of comprehensive income (loss); (iv) condensed consolidated statement of changes in equity; (v) condensed consolidated statements of cash flows; and (vi) notes to condensed consolidated financial statements.the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH* | Inline XBRL Taxonomy Extension Schema |
*101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase |
104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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* | Filed herewith. |
** | Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| National Storage Affiliates Trust |
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By: | /s/ TAMARA D. FISCHER |
| Tamara D. Fischer |
| chief executive officer |
| (principal executive officer) |
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By: | National Storage Affiliates Trust/s/ BRANDON S. TOGASHI |
| Brandon S. Togashi |
By: | /s/ ARLEN D. NORDHAGEN |
| Arlen D. Nordhagen |
| chairman of the board of trustees |
| and chief executive officer |
| (principal executive officer) |
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By: | /s/ TAMARA D. FISCHER |
| Tamara D. Fischer |
| chief financial officer |
| (principal accounting and financial officer) |
Date: November 7, 2017
August 4, 2022