UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM10-K

(Mark One)

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

2016

OR

¨
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 .

Commission File Number:001-32269

EXTRA SPACE STORAGE INC.

(Exact name of registrant as specified in its charter)

Maryland 20-1076777

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

2795 East Cottonwood Parkway, Suite 400

Salt Lake City, Utah 84121

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code:(801) 365-4600

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

 

Name of exchange on which registered

Common Stock, $0.01 par value New York Stock Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment of thisForm 10-K.  x¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” inRule 12b-2 of the Exchange Act.

Large accelerated filer x  Accelerated filer ¨o
Non-accelerated filer 
¨o  (Do not check if a smaller reporting company)
  Smaller reporting company ¨o

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).    Yes  ¨    No  x.

The aggregate market value of the common stock held bynon-affiliates of the registrant was $5,891,902,482$11,138,435,421 based upon the closing price on the New York Stock Exchange on June 30, 2014,2016, the last business day of the registrant’s most recently completed second fiscal quarter. This calculation does not reflect a determination that persons whose shares are excluded from the computation are affiliates for any other purpose.

The number of shares outstanding of the registrant’s common stock, $0.01 par value per share, as of February 18, 201521, 2017 was 116,393,006.

125,912,481.

Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement to be issued in connection with the registrant’s annual stockholders’ meeting to be held in 20152017 are incorporated by reference into Part III of this Annual Report onForm 10-K.

EXTRA SPACE STORAGE INC.



Extra Space Storage Inc.
Annual Report on Form 10-K
For the Year Ended December 31, 2016
Table of Contents

PART I

4

Item 1.

Business
4

Item 1A.

Risk Factors
8
7

Item 1B.

Unresolved Staff Comments
20
17

Item 2.

Properties
20
17

Item 3.

Legal Proceedings
24
17

Item 4.

Mine Safety Disclosures
24
17

PART II

25
17

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
25
17

Item 6.

Selected Financial Data
26
18

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
28
20

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk
47
39

Item 8.

Financial Statements and Supplementary Data
48
40

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
110
95

Item 9A.

Controls and Procedures
110
95

Item 9B.

Other Information
112
96

PART III

113
97

Item 10.

Directors, Executive Officers and Corporate Governance
113
97

Item 11.

Executive Compensation
113
97

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
113
97

Item 13.

Certain Relationships and Related Transactions, and Director Independence
113
97

Item 14.

Principal Accounting Fees and Services
113
97

PART IV

114
98

Item 15.

Exhibits and Financial Statement Schedules
114
98

SIGNATURES

118
101



Statements RegardingForward-Looking Information

Certain information set forth in this report contains“forward-looking “forward-looking statements” within the meaning of the federal securities laws.Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases,forward-looking statements can be identified by terminology such as “believes,” “expects,” “estimates,” “may,” “will,” “should,” “anticipates,” or “intends” or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additionalforward-looking statements from time to time. All such subsequentforward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

Allforward-looking statements, including without limitation, management’s examination of historical operating trends and estimates of future earnings, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management’s expectations, beliefs and projections will result or be achieved. Allforward-looking statements apply only as of the date made. We undertake no obligation to publicly update or reviseforward-looking statements which may be made to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

There are a number of risks and uncertainties that could cause our actual results to differ materially from theforward-looking statements contained in or contemplated by this report. Anyforward-looking statements should be considered in light of the risks referenced in “Part I. Item 1A. Risk Factors” below. Such factors include, but are not limited to:

•adverse changes in general economic conditions, the real estate industry and in the markets in which we operate;

•failure to close pending acquisitions on expected terms, or at all;

•the effect of competition from new and existing stores or other storage alternatives, which could cause rents and occupancy rates to decline;

•difficulties in our ability to evaluate, finance, complete and integrate acquisitions and developments successfully and to lease up those stores, which could adversely affect our profitability;

•potential liability for uninsured losses and environmental contamination;

•the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing Real Estate Investment Trusts (“REITs”), tenant reinsurance and other aspects of our business, which could adversely affect our results;

•disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all, which could impede our ability to grow;

•increased interest rates and operating costs;

•reductions in asset valuations and related impairment charges;

•the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;

•the failure to maintain our REIT status for federal income tax purposes;

•economic uncertainty due to the impact of war or terrorism, which could adversely affect our business plan; and

•difficulties in our ability to attract and retain qualified personnel and management members.

adverse changes in general economic conditions, the real estate industry and in the markets in which we operate;
failure to close pending acquisitions on expected terms, or at all;
the effect of competition from new and existing stores or other storage alternatives, which could cause rents and occupancy rates to decline;
difficulties in our ability to evaluate, finance, complete and integrate acquisitions and developments successfully and to lease up those stores, which could adversely affect our profitability;
potential liability for uninsured losses and environmental contamination;
the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing real estate investment trusts (“REITs”), tenant reinsurance and other aspects of our business, which could adversely affect our results;
disruptions in credit and financial markets and resulting difficulties in raising capital or obtaining credit at reasonable rates or at all, which could impede our ability to grow;
increased interest rates and operating costs;
the failure to effectively manage our growth and expansion into new markets or to successfully operate acquired properties and operations;
reductions in asset valuations and related impairment charges;
the failure of our joint venture partners to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;
the failure to maintain our REIT status for U.S. federal income tax purposes;
economic uncertainty due to the impact of war or terrorism, which could adversely affect our business plan; and
difficulties in our ability to attract and retain qualified personnel and management members.
Theforward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in ourforward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our securities.

We disclaim any duty or obligation to update or revise anyforward-looking statements set forth in this Annual Report onForm 10-K to reflect new information, future events or otherwise.



PART I

Item 1.Business

Item 1.     Business
General

Extra Space Storage Inc. (“we,” “our,” “us” or the “Company”) is a fully integrated,self-administered andself-managed real estate investment trust (“REIT”) formed as a Maryland corporation on April 30, 2004, to own, operate, manage, acquire, develop and redevelop professionally managed self-storage properties (“stores”). We closed our initial public offering (“IPO”) on August 17, 2004. Our common stock is traded on the New York Stock Exchange under the symbol “EXR.”

We were formed to continue the business of Extra Space Storage LLC and its subsidiaries, which had engaged in theself-storage business since 1977. These companies were reorganized after the consummation of our IPO and various formation transactions. As of December 31, 2014,2016, we held ownership interests in 8281,016 operating stores. Of these operating stores, 557836 arewholly-owned and 271180 are owned in joint venture partnerships. An additional 260411 operating stores are owned by third parties and operated by us in exchange for a management fee, bringing the total number of operating stores which we own and/or manage to 1,088.1,427. These operating stores are located in 3538 states, Washington, D.C. and Puerto Rico and contain approximately 80.4107 million square feet of net rentable space in approximately 725,000960,000 units and currently serve a customer base of approximately 650,000850,000 tenants.

We operate in three distinct segments: (1) rental operations; (2) tenant reinsurance; and (3) property management, acquisition and development. Our rental operations activities include rental operations of stores in which we have an ownership interest. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the Company’sour stores. Our property management, acquisition and development activities include managing, acquiring, developing and selling stores.

Substantially all of our business is conducted through Extra Space Storage LP (the “Operating Partnership”). Our primary assets are general partner and limited partner interests in the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT. We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). To the extent we continue to qualify as a REIT we will not be subject to tax, with certain exceptions, on our net taxable income that is distributed to our stockholders.

We file our annual report onForm 10-K, quarterly reports onForm 10-Q, current reports onForm 8-K, and all amendments to those reports with the Securities and Exchange Commission (the “SEC”). You may obtain copies of these documents by visiting the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, by calling the SEC at1-800-SEC-0330 or by accessing the SEC’s website at www.sec.gov. In addition, as soon as reasonably practicable after such materials are furnished to the SEC, we make copies of these documents available to the public free of charge through our website at www.extraspace.com, or by contacting our Secretary at our principal offices, which are located at 2795 East Cottonwood Parkway, Suite 400,300, Salt Lake City, Utah 84121, telephone number (801) 365-4600.

Management

Members of our executive management team have significant experience in all aspects of theself-storage industry, having acquired and/or developed a significant number of stores since before our IPO. Our executive management team and their years of industry experience are as follows: Spencer F. Kirk,Joseph D. Margolis, Chief Executive Officer, 1712 years; Scott Stubbs, Executive Vice President and Chief Financial Officer, 1416 years; Samrat Sondhi, Executive Vice President of Operations, 11and Chief Operating Officer, 13 years; Gwyn McNeal, Executive Vice President and Chief Legal Officer, 911 years; James Overturf, Executive Vice President and Chief Marketing Officer, 16 years; Charles L. Allen, Executive Vice President and Chief Investment Officer, 1718 years; and Kenneth M. Woolley, Executive Chairman, 3436 years.

Spencer F. Kirk served as our Chief Executive Officer through December 31, 2016 and continues to serve on the Company's board of directors. Joseph D. Margolis succeeded Mr. Kirk as the Company's Chief Executive Officer effective January 1, 2017.

Our executive management team and board of directors have a significant ownership position in the Company with executive officers and directors owning approximately 5,297,3544,665,566 shares or 4.6%3.7% of our outstanding common stock as of February 18, 2015.

21, 2017.



Industry & Competition

Self-storage stores

Stores offermonth-to-month storage space rental for personal or business use and are acost-effective and flexible storage alternative. Tenants rent fully enclosed spaces that can vary in size according to their specific needs and to which they have unlimited, exclusive access. Tenants have responsibility for moving their items into and out of their units.Self-storage unit sizes typically range from 5 feet by 5 feet to 20 feet by 20 feet, with an interior height of 8 feet to 12 feet. Stores generally haveon-site managers who supervise and run theday-to-day operations, providing tenants with assistance as needed.

Self-storage provides a convenient way for individuals and businesses to store their possessions due to life changes, or simply because of a need for storage space. The mix of residential tenants using a store is determined by a store’s local demographics and often includes people who are looking to downsize their living space or others who are not yet settled into a permanent residence. Items that residential tenants place inself-storage range from cars, boats and recreational vehicles, to furniture, household items and appliances. Commercial tenants tend to include small business owners who require easy and frequent access to their goods, records, inventory or storage for seasonal goods.

Our research has shown that tenants choose a store based primarily on the convenience of the site to their home or business, makinghigh-density,high-traffic population centers ideal locations for stores. A self-storage store’s perceived security and the general professionalism of the site managers and staff are also contributing factors to a site’s ability to successfully secure rentals. Although most stores are leased to tenants on amonth-to-month basis, tenants tend to continue their leases for extended periods of time.

Theself-storage business is subject to seasonal fluctuations. A greater portion of revenues and profits are realized from May through September. Historically, our highest level of occupancy has been at the end of July, while our lowest level of occupancy has been in late February and early March.

Since inception in the early 1970’s, theself-storage industry has experienced significant growth. The self-storage industry has also seen increases in occupancy over the past several years. According to theSelf-Storage Almanac (the “Almanac”), in 2008, there were only 41,100 stores in the United States, with annational average physical occupancy rate of 83.0%was 80.3% of net rentable square feet, compared to 51,475 stores in 2014 with an average physical occupancy rate of 89.1% of net rentable square feet.

We91.2% in 2016.

Recently we have encountered competition when we have sought to acquire stores, especially for brokered portfolios. AggressiveCompetitive bidding practices have been commonplace between both public and private entities, and this competition will likely continue.

The industry is also characterized by fragmented ownership. According to the Almanac, the top tenself-storage companies in the United States ownedoperated approximately 13.1%19.4% of the total U.S. self-storage stores, and the top 50self-storage companies ownedoperated approximately 17.1%28.6% of the total U.S. self-storage stores as of

December 31, 2014.2016. We believe this fragmentation will contribute to continued consolidation at some level in the future. We also believe that we are well positioned to compete for acquisitions given our historical reputation for closing deals.

acquisitions.

We are the second largestself-storage operator in the United States. We are one of fourfive publicself-storage REITs along with CubeSmart, National Storage Affiliates, Life Storage and Public Storage Inc., CubeSmart and SovranSelf-Storage, Inc.

Storage.

Long-Term Growth and Investment Strategies

Our primary business objectives are to maximize cash flow available for distribution to our stockholders and to achieve sustainablelong-term growth in cash flow per share in order to maximizelong-term stockholder value. We continue to evaluate a range of growth initiatives and opportunities, including the following:

•Maximize the performance of our stores through strategic, efficient and proactive management. We pursuerevenue-generating andexpense-minimizing opportunities in our operations. Our revenue management team seeks to maximize revenue by responding to changing market conditions through our technology system’s ability to providereal-time, interactive rental rate and discount management. Our size allows us greater ability than the majority of our competitors to implement more effective online marketing programs, which we believe will attract more customers to our stores at a lower net cost.

•Acquire self-storage stores. Our acquisitions team continues to pursue the acquisition ofmulti-store portfolios and single stores that we believe can provide stockholder value. We have established a reputation as a reliable, ethical buyer, which we believe enhances our ability to negotiate and close acquisitions. In addition, we believe our status as an UPREIT enables flexibility when structuring deals. We continue to bid on available acquisitions and are seeing increasing prices. However, we remain a disciplined buyer and look for acquisitions that will strengthen our portfolio and increase stockholder value.

•Expand our management business. Our management business enables us to generate increased revenues through management fees and expand our geographic footprint. We believe this expanded footprint enables us to reduce our operating costs through economies of scale. In addition, we see our management business as a future acquisition pipeline. We pursue strategic relationships with owners whose stores would enhance our portfolio in the event an opportunity arises to acquire such stores.

Maximize the performance of our stores through strategic, efficient and proactive management. We pursue revenue-generating and expense-minimizing opportunities in our operations. Our revenue management team seeks to maximize revenue by responding to changing market conditions through our advanced technology system’s ability to provide real-time, interactive rental rate and discount management. Our size allows us greater ability than the majority of our competitors to implement more effective online marketing programs, which we believe will attract more customers to our stores at a lower net cost.
Acquire self storage stores. Our acquisitions team continues to pursue the acquisition of multi-store portfolios and single stores that we believe can provide stockholder value. We have established a reputation as a reliable, ethical buyer, which we believe enhances our ability to negotiate and close acquisitions. In addition, we believe our status as an UPREIT enables flexibility when structuring deals. We continue to review available acquisitions. As interest rates increase, our expectation is that capitalization rates will also increase and that prices will begin to decrease. We remain


a disciplined buyer and only execute acquisitions that we believe will strengthen our portfolio and increase stockholder value.
Expand our management business. Our management business enables us to generate increased revenues through management fees and expand our geographic footprint. We believe this expanded footprint enables us to reduce our operating costs through economies of scale. In addition, we see our management business as a future acquisition pipeline. We pursue strategic relationships with owners whose stores would enhance our portfolio in the event an opportunity arises to acquire such stores.

Financing of OurLong-Term Growth Strategies

Acquisition and Development Financing

The following table presents information on our revolving lines of credit (the “Credit Lines”) for the periods indicated. All of our Credit Lines are guaranteed by us and secured by mortgages on certain real estate assets.

   As of December 31, 2014              

Line of Credit

  Amount
Drawn (1)		   Capacity (1)   Interest
Rate		  Origination
Date		   Maturity   Basis Rate (2)  Notes

Credit Line 1

  $7,000    $85,000     2.1%   6/4/2010     6/3/2016     LIBOR plus 1.9%  (3)

Credit Line 2

   41,000     50,000     1.9%   11/16/2010     2/13/2017     LIBOR plus 1.8%  (4)

Credit Line 3

   50,000     80,000     1.9%   4/29/2011     11/18/2016     LIBOR plus 1.7%  (4)

Credit Line 4

   40,000     50,000     1.8%   9/29/2014     9/29/2017     LIBOR plus 1.7%  (4)
  

 

 

   

 

 

         
$138,000  $265,000  
  

 

 

   

 

 

         

(1)Amounts in thousands
(2)30-day USD LIBOR
(3)One two-year extension available
(4)Two one-year extensions available

(amounts in thousands).

 As of December 31, 2016      
Revolving Lines of CreditAmount Drawn Capacity Interest Rate Origination Date Maturity 
Basis Rate (1)
Credit Line 1 (2)
$3,000
 $100,000
 2.40% 6/4/2010 6/30/2018 LIBOR plus 1.7%
Credit Line 2 (3)(4)
362,000
 500,000
 2.20% 10/14/2016 10/14/2020 LIBOR plus 1.4%
 $365,000
 $600,000
        
(1) 30-day USD LIBOR
(2) Secured by mortgages on certain real estate assets. One two-year extension available.
(3) Unsecured. Two six-month extensions available.
(4) Basis Rate as of December 31, 2016. Rate is subject to change based on our consolidated leverage ratio.
We expect to maintain a flexible approach in financing new self-storage store acquisitions. We plan to finance future acquisitions through a combination of cash, borrowings under the Credit Lines, traditional secured and unsecured mortgage financing, joint ventures and additional debt or equity offerings.

Joint Venture Financing

We

As of December 31, 2016, we own 271180 of our stores through joint ventures with third parties, including affiliates of Prudential Financial, Inc. In each joint venture, weparties. We generally manage theday-to-day operations of the underlying stores owned in these joint ventures and have the right to participate in major decisions relating to sales of stores or financings by the applicable joint venture. Our joint venture partners typically provide most of the equity capital required for the operation of the respective business. Under the operating agreements for the joint ventures, we maintain the right to receive between 2.0%4.0% and 99.0%80.0% of the available cash flow from operations after our joint venture partners and the Company have received a predetermined return, and between 17.0%4.0% and 99.0%75.0% of the available cash flow from capital transactions after our joint venture partners and the Company have received a return of their capital plus such predetermined return. Most joint venture agreements includebuy-sell rights, as well as rights of first refusaloffer in connection with the sale of stores by the joint venture.

Disposition of Self-Storage Stores

We will continue to review our portfolio for stores or groups of stores that are underperforming or are not strategically located, and determine whether to dispose of these stores to fund other growth.

As of December 31, 2016, we had two parcels of land that were categorized as held for sale.

Regulation

Generally, stores are subject to various laws, ordinances and regulations, including regulations relating to lien sale rights and procedures. Changes in any of these laws or regulations, as well as changes in laws, such as the Comprehensive Environmental Response and Compensation Liability Act, which increase the potential liability for environmental conditions or circumstances existing or created by tenants or others on stores, or laws affecting development, construction, operation, upkeep, safety and taxation may result in significant unanticipated expenditures, loss ofself-storage stores or other impairments to operations, which would adversely affect our financial position, results of operations or cash flows.



Under the Americans with Disabilities Act of 1990 (the “ADA”), places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. These requirements became effective in 1992. A number of additional U.S. federal, state and local laws also exist that may require modifications to the stores, or restrict further renovations thereof, with respect to access thereto by disabled persons. Noncompliance with the ADA could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct anynon-complying feature, thereby requiring substantial capital expenditures. To the extent our stores are not in compliance, we are likely to incur additional costs to comply with the ADA.

Insurance activities are subject to state insurance laws and regulations as determined by the particular insurance commissioner for each state in accordance with theMcCarran-Ferguson Act, and are subject to theGramm-Leach-Bliley Act and the privacy regulations promulgated by the Federal Trade Commission pursuant thereto.

Store management activities are often subject to state real estate brokerage laws and regulations as determined by the particular real estate commission for each state.

Changes in any of the laws governing our conduct could have an adverse impact on our ability to conduct our business or could materially affect our financial position, results of operations or cash flows.

Employees

As of February 18, 2015,21, 2017, we had 2,6433,287 employees and believe our relationship with our employees is good. Our employees are not represented by a collective bargaining agreement.

Item 1A.Risk Factors

Item 1A.     Risk Factors
An investment in our securities involves various risks. All investors should carefully consider the following risk factors in conjunction with the other information contained in this Annual Report before trading in our securities. If any of the events set forth in the following risks actually occur, our business, operating results, prospects and financial condition could be harmed.

Our performance is subject to risks associated with real estate investments. We are a real estate company that derives our income from operation of our stores. There are a number of factors that may adversely affect the income that our stores generate, including the following:

Risks Related to Our Stores and Operations

Adverse economic or other conditions in the markets in which we do business could negatively affect our occupancy levels and rental rates and therefore our operating results.

Our operating results are dependent upon our ability to maximize occupancy levels and rental rates in our stores. Adverse economic or other conditions in the markets in which we operate may lower our occupancy levels and limit our ability to increase rents or require us to offer rental discounts. If our stores fail to generate revenues sufficient to meet our cash requirements, including operating and other expenses, debt service and capital expenditures, our net income, funds from operations (“FFO”), cash flow, financial condition, ability to make cash distributions to stockholders and the trading price of our securities could be adversely affected. The following factors, among others, may adversely affect the operating performance of our stores:

the national economic climate and the local or regional economic climate in the markets in which we operate, which may be adversely impacted by, among other factors, industry slowdowns, relocation of businesses and changing demographics;

periods of economic slowdown or recession, rising interest rates, or declining demand forself-storage or the public perception that any of these events may occur could result in a general decline in rental rates or an increase in tenant defaults;

a decline of the current economic environment;

local or regional real estate market conditions, such as competing stores, the oversupply ofself-storage or a reduction in demand forself-storage in a particular area;

perceptions by prospective users of our stores of the safety, convenience and attractiveness of our stores and the neighborhoods in which they are located;



increased operating costs, including the need for capital improvements, insurance premiums, real estate taxes and utilities;

the impact of environmental protection laws;

changes in tax, real estate and zoning laws; and

earthquakes, hurricanes and other natural disasters, terrorist acts, civil disturbances or acts of war which may result in uninsured or underinsured losses.

If we are unable to promptlyre-let our units or if the rates upon suchre-letting are significantly lower than expected, our business and results of operations would be adversely affected.

Virtually all of our leases are on amonth-to-month basis. Any delay inre-letting units as vacancies arise would reduce our revenues and harm our operating results. In addition, lower than expected rental rates uponre-letting could adversely affect our revenues and impede our growth.

We depend upon ouron-site personnel to maximize tenant satisfaction at each of our stores, and any difficulties we encounter in hiring, training and maintaining skilled field personnel may harm our operating performance.

We had 2,2282,723 field personnel as of February 18, 201521, 2017 in the management and operation of our stores. The general professionalism of our sitestore managers and staff are contributing factors to a site’sstore’s ability to successfully secure rentals and retain tenants. We also rely upon our field personnel to maintain clean and secure stores. If we are unable to successfully recruit, train and retain qualified field personnel, the quality of service we strive to provide at our stores could be adversely affected which could lead to decreased occupancy levels and reduced operating performance.

Uninsured losses or losses in excess of our insurance coverage could adversely affect our financial condition and our cash flow.

We maintain comprehensive liability, fire, flood, earthquake, wind (as deemed necessary or as required by our lenders), extended coverage and rental loss insurance with respect to our stores. Certain types of losses, however, may be either uninsurable or not economically insurable, such as losses due to earthquakes, hurricanes, tornadoes, riots, acts of war or terrorism. Should an uninsured loss occur, we could lose both our investment in and anticipated profits and cash flow from a store. In addition, if any such loss is insured, we may be required to pay significant amounts on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may exceed our coverage for the loss. As a result, our operating results may be adversely affected.

Increases in taxes and regulatory compliance costs may reduce our income.

Costs resulting from changes in real estate tax laws generally are not passed through to tenants directly and will affect us. Increases in income, property or other taxes generally are not passed through to tenants under leases and may reduce our net income, FFO, cash flow, financial condition, ability to pay or refinance our debt obligations, ability to make cash distributions to stockholders, and the trading price of our securities. Similarly, changes in laws increasing the potential liability for environmental conditions existing on stores or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures, which could similarly adversely affect our business and results of operations.

Environmental compliance costs and liabilities associated with operating our stores may affect our results of operations.

Under various U.S. federal, state and local laws, ordinances and regulations, owners and operators of real estate may be liable for the costs of investigating and remediating certain hazardous substances or other regulated materials on or in such property. Such laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such substances or materials. The presence of such substances or materials, or the failure to properly remediate such substances, may adversely affect the owner’s or operator’s ability to lease, sell or rent such property or to borrow using such property as collateral. Persons who arrange for the disposal or treatment of hazardous substances or other regulated materials may be liable for the costs of removal or remediation of such substances at a disposal or treatment facility, whether or not such facility is owned or operated by such person. Certain environmental laws impose liability for release of asbestos-containing materials into the air and third parties may seek recovery from owners or operators of real stores for personal injury associated withasbestos-containing materials.

Certain environmental laws also impose liability, without regard to knowledge or fault, for removal or remediation of hazardous substances or other regulated materials upon owners and operators of contaminated property even after they no


longer own or operate the property. Moreover, the past or present owner or operator from which a release emanates could be liable for any personal injuries or property damages that may result from such releases, as well as any damages to natural resources that may arise from such releases.

Certain environmental laws impose compliance obligations on owners and operators of real property with respect to the management of hazardous materials and other regulated substances. For example, environmental laws govern the management ofasbestos-containing materials andlead-based paint. Failure to comply with these laws can result in penalties or other sanctions.

No assurances can be given that existing environmental studies with respect to any of our stores reveal all environmental liabilities, that any prior owner or operator of our stores did not create any material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any one or more of our stores. There also exists the risk that material environmental conditions, liabilities or compliance concerns may have arisen after the review was completed or may arise in the future. Finally, future laws, ordinances or regulations and future interpretations of existing laws, ordinances or regulations may impose additional material environmental liability.

Costs associated with complying with the Americans with Disabilities Act of 1990 may result in unanticipated expenses.

Under the ADA, places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. These requirements became effective in 1992. A number of additional U.S. federal, state and local laws may also require modifications to our stores, or restrict certain further renovations of the stores, with respect to access thereto by disabled persons. Noncompliance with the ADA could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct anynon-complying feature, which could result in substantial capital expenditures. We have not conducted an audit or investigation of all of our stores to determine our compliance and we cannot predict the ultimate cost of compliance with the ADA or other legislation. If one or more of our stores is not in compliance with the ADA or other legislation, then we would be required to incur additional costs to bring the facility into compliance. If we incur substantial costs to comply with the ADA or other legislation, our financial condition, results of operations, cash flow, per share trading price of our securities and our ability to satisfy our debt service obligations and to make cash distributions to our stockholders could be adversely affected.

Our tenant reinsurance business is subject to significant governmental regulation, which may adversely affect our results.

Our tenant reinsurance business is subject to significant governmental regulation. The regulatory authorities generally have broad discretion to grant, renew and revoke licenses and approvals, to promulgate, interpret and implement regulations, and to evaluate compliance with regulations through periodic examinations, audits and investigations of the affairs of insurance providers. As a result of regulatory or private action in any jurisdiction, we may be temporarily or permanently suspended from continuing some or all of our reinsurance activities, or otherwise fined or penalized or suffer an adverse judgment, which could adversely affect our business and results of operations.

We face competition for the acquisition of stores and other assets, which may impede our ability to make future acquisitions or may increase the cost of these acquisitions.

We compete with many other entities engaged in real estate investment activities for acquisitions of stores and other assets, including national, regional and local operators and developers of stores. These competitors may drive up the price we pay for stores or other assets we seek to acquire or may succeed in acquiring those stores or

assets themselves. In addition, our potential acquisition targets may find our competitors to be more attractive suitors because they may have greater resources, may be willing to pay more or may have a more compatible operating philosophy. In addition, the number of entities and the amount of funds competing for suitable investment in stores may increase. This competition would result in increased demand for these assets and therefore increased prices paid for them. Because of an increased interest insingle-store acquisitions amongtax-motivated individual purchasers, we may pay higher prices if we purchase single stores in comparison with portfolio acquisitions. If we pay higher prices for stores or other assets, our profitability will be reduced.

We may not be successful in identifying and consummating suitable acquisitions that meet our criteria, which may impede our growth.

Our ability to expand through acquisitions is integral to our business strategy and requires us to identify suitable acquisition candidates or investment opportunities that meet our criteria and are compatible with our growth strategy. We may not be successful in identifying suitable stores or other assets that meet our acquisition criteria or in consummating acquisitions


or investments on satisfactory terms or at all. Failure to identify or consummate acquisitions will slow our growth, which could in turn adversely affect our stock price.

Our ability to acquire stores on favorable terms and successfully integrate and operate them may be constrained by the following significant risks:

competition from local investors and other real estate investors with significant capital, including otherpublicly-traded REITs and institutional investment funds;

competition from other potential acquirers may significantly increase the purchase price which could reduce our profitability;

the inability to achieve satisfactory completion of due diligence investigations and other customary closing conditions;

failure to finance an acquisition on favorable terms or at all;

we may spend more than the time and amounts budgeted to make necessary improvements or renovations to acquired stores; and

we may acquire stores subject to liabilities without any recourse, or with only limited recourse, with respect to unknown liabilities such as liabilities forclean-up of undisclosed environmental contamination, claims by persons dealing with the former owners of the stores and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the stores.

In addition, strategic decisions by us, such as acquisitions, may adversely affect the price of our securities.

We may not be successful in integrating and operating acquired self-storage stores.

We have acquired many stores in the past, and we expect to make future acquisitions of self-storage stores.continue acquiring stores in the future. If we acquire any stores, we will be required to integrate them into our existing portfolio. The acquired stores may turn out to be less compatible with our growth strategy than originally anticipated, may cause disruptions in our operations or may divert management’s attention away fromday-to-day operations, which could impair our operating results as a whole.

We do not always obtain independent appraisals of our stores, and thus the consideration paid for these stores may exceed the value that may be indicated bythird-party appraisals.

We do not always obtainthird-party appraisals in connection with our acquisition of stores and the consideration being paid by us in exchange for those stores may exceed the value determined bythird-party appraisals. In such cases, the value of the stores was determined by our senior management team.

Our investments in development and redevelopment projects may not yield anticipated returns, which would harm our operating results and reduce the amount of funds available for distributions.

To the extent that we engage in development and redevelopment activities, we will be subject to the following risks normally associated with these projects:

we may be unable to obtain financing for these projects on favorable terms or at all;

we may not complete development or redevelopment projects on schedule or within budgeted amounts;

we may encounter delays or refusals in obtaining all necessary zoning, land use, building, occupancy and other required governmental permits and authorizations; and

occupancy rates and rents at newly developed or redeveloped stores may fluctuate depending on a number of factors, including market and economic conditions, and may result in our investment not being profitable.

In deciding whether to develop or redevelop a particular property, we make certain assumptions regarding the expected future performance of the store. We may underestimate the costs necessary to bring the property up to the standards established for its intended market position or may be unable to increase occupancy at a newly developed store as quickly as expected or at all. Any substantial unanticipated delays or expenses could adversely affect the investment returns from these development or redevelopment projects and harm our operating results, liquidity and financial condition, which could result in a decline in the value of our securities.

We may rely on the investments of our joint venture partners for funding certain of our development and redevelopment projects. If our reputation in theself-storage industry changes or the number of investors considering us an attractive strategic partner is otherwise reduced, our ability to develop or redevelop stores could be affected, which would limit our growth.

We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.

We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personally


identifiable information, and tenant and lease data. We purchase some of our information technology from vendors, on whom our systems depend. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential tenant and other sensitive information. Although we have taken commercially reasonable effortssteps to protect the security of our information systems and the data maintained in those systems, it is possible that our safety and security measures will not be able to prevent the systems’ improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. While, to date, we have not experienced a security breach, this risk has generally increased as the number, intensity and sophistication of such breaches and attempted breaches from around the world have increased. Any failure to maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, divert significant management attention and resources to remedy any damages that result, subject us to liability claims or regulatory penalties and have a material adverse effect on our business and results of operations.

Risks Related to Our Organization and Structure

Our business could be harmed if key personnel withlong-standing business relationships in theself-storage industry terminate their employment with us.

Our success depends on the continued services of members of our executive management team, who have substantial experience in theself-storage industry. In addition, our ability to acquire or develop stores in the

future depends on the significant relationships our executive management team has developed with our institutional joint venture partners, such as affiliates of Prudential Financial, Inc. There is no guarantee that any of them will remain employed by us. We do not maintain key person life insurance on any of our officers. The loss of services of one or more members of our executive management team could harm our business and our prospects.

We may change our investment and financing strategies and enter into new lines of business without stockholder consent, which may subject us to different risks.

We may change our investment and financing strategies and enter into new lines of business at any time without the consent of our stockholders, which could result in our making investments and engaging in business activities that are different from, and possibly riskier than, the investments and businesses described in this document. A change in our investment strategy or our entry into new lines of business may increase our exposure to other risks or real estate market fluctuations.

If otherself-storage companies convert to an UPREIT structure or if tax laws change, we may no longer have an advantage in competing for potential acquisitions.

Because we are structured as an UPREIT, we are a more attractive acquirer of stores totax-motivated sellers than our competitors that are not structured as UPREITs. However, if otherself-storage companies restructure their holdings to become UPREITs, this competitive advantage will disappear. In addition, new legislation may be enacted or new interpretations of existing legislation may be issued by the Internal Revenue Service (“IRS”), or the U.S. Treasury Department that could affect the attractiveness of our UPREIT structure so that it may no longer assist us in competing for acquisitions.

Tax indemnification obligations may require the Operating Partnership to maintain certain debt levels.

We have provided certain tax protections to various third parties in connection with their property contributions to the Operating Partnership upon acquisition by the Company, including making available the opportunity to (1) guarantee debt or (2) enter into a special loss allocation and deficit restoration obligation. We have agreed to these provisions in order to assist these contributors in preserving their tax position after their contributions. These obligations may require us to maintain certain indebtedness levels that we would not otherwise require for our business.


Our joint venture investments could be adversely affected by our lack of soledecision-making authority.

As of December 31, 2014,2016, we held interests in 271180 operating self-storage stores through joint ventures. Some of these arrangements could be adversely affected by our lack of soledecision-making authority, our reliance onco-venturers financial conditions and disputes between us and ourco-venturers. We expect to continue our joint venture strategy by entering into more joint ventures for the purpose of developing new stores and acquiring existing stores. In such event, we would not be in a position to exercise soledecision-making authority regarding the property, partnership, joint venture or other entity. Thedecision-making authority regarding the stores we currently hold through joint ventures is either vested exclusively with our joint venture partners, is subject to a majority vote of the joint venture partners or equally shared by us and the joint venture partners. In addition,


investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners orco-venturers might become bankrupt or fail to fund their share of required capital contributions. Partners orco-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner orco-venturer would have full control over the partnership or joint venture. Disputes between us and partners orco-venturers may result in litigation or arbitration that would increase our expenses and prevent our

officers and/or directors from focusing their time and efforts on our business. Consequently, actions by or disputes with partners orco-venturers might result in subjecting stores owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of ourthird-party partners orco-venturers, which could harm our financial condition.

Conflicts of interest could arise as a result of our relationship with our Operating Partnership.

Conflicts of interest could arise in the future as a result of the relationships between us and our affiliates, and our Operating Partnership or any partner thereof. Our directors and officers have duties to our Company under applicable Maryland law in connection with their management of our Company. At the same time, we, through ourwholly-owned subsidiary, have fiduciary duties, as a general partner, to our Operating Partnership and to the limited partners under Delaware law in connection with the management of our Operating Partnership. Our duties, through ourwholly-owned subsidiary, as a general partner to our Operating Partnership and its partners may come into conflict with the duties of our directors and officers to our Company. The partnership agreement of our Operating Partnership does not require us to resolve such conflicts in favor of either our Company or the limited partners in our Operating Partnership. Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of good faith, fairness, and loyalty and which generally prohibit such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest.

Additionally, the partnership agreement expressly limits our liability by providing that neither we, our directwholly-owned Massachusetts business trust subsidiary, as the general partner of the Operating Partnership, nor any of our or their trustees, directors or officers, will be liable or accountable in damages to our Operating Partnership, the limited partners or assignees for errors in judgment, mistakes of fact or law or for any act or omission if we, or such trustee, director or officer, acted in good faith. In addition, our Operating Partnership is required to indemnify us, our affiliates and each of our respective trustees, officers, directors, employees and agents to the fullest extent permitted by applicable law against any and all losses, claims, damages, liabilities (whether joint or several), expenses (including, without limitation, attorneys’ fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Operating Partnership, provided that our Operating Partnership will not indemnify for (1) willful misconduct or a knowing violation of the law, (2) any transaction for which such person received an improper personal benefit in violation or breach of any provision of the partnership agreement, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful.


The provisions of Delaware law that allow the common law fiduciary duties of a general partner to be modified by a partnership agreement have not been resolved in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties that would be in effect under common law were it not for the partnership agreement.

Certain provisions of Maryland law and our organizational documents, including the stock ownership limit imposed by our charter, may inhibit market activity in our stock and could prevent or delay a change in control transaction.

Our charter, subject to certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT and to limit any person to actual or constructive ownership of no more than 7.0% (by value or by number of shares, whichever is more restrictive) of our outstanding common stock or 7.0% (by value or by number of shares, whichever is more restrictive) of our outstanding capital stock. Our board of directors, in its sole discretion, may exempt a proposed transferee from the ownership limit. However, our board of directors may not grant an exemption from the ownership limit to any proposed transferee whose ownership could jeopardize our qualification as a REIT. These restrictions on ownership will not apply if

our board of directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT. The ownership limit may delay or impede a transaction or a change of control that might involve a premium price for our securities or otherwise be in the best interests of our stockholders. Different ownership limits apply to the family of Kenneth M. Woolley, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing; to Spencer F. Kirk, certain of his affiliates, family members and estates and trusts formed for the benefit of the foregoing; and to certain designated investment entities as defined in our charter.



Our board of directors has the power to issue additional shares of our stock in a manner that may not be in the best interest of our stockholders.

Our charter authorizes our board of directors to issue additional authorized but unissued shares of common stock or preferred stock and to increase the aggregate number of authorized shares or the number of shares of any class or series without stockholder approval. In addition, our board of directors may classify or reclassify any unissued shares of common stock or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares. Our board of directors could issue additional shares of our common stock or establish a series of preferred stock that could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for our securities or otherwise not be in the best interests of our stockholders.

Our rights and the rights of our stockholders to take action against our directors and officers are limited.

Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our charter eliminates our directors’ and officers’ liability to us and our stockholders for money damages except for liability resulting from actual receipt of an improper benefit in money, property or services or active and deliberate dishonesty established by a final judgment and which is material to the cause of action. Our bylaws require us to indemnify our directors and officers for liability resulting from actions taken by them in those capacities to the maximum extent permitted by Maryland law. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our directors and officers.

To the extent our distributions represent a return of capital for U.S. federal income tax purposes, our stockholders could recognize an increased capital gain upon a subsequent sale of common stock.

Distributions in excess of our current and accumulated earnings and profits and not treated by us as a dividend will not be taxable to a U.S. stockholder under current U.S. federal income tax law to the extent those distributions do not exceed the stockholder’s adjusted tax basis in his, her, or its common stock, but instead will constitute a return of capital and will reduce such adjusted basis. If distributions result in a reduction of a stockholder’s adjusted basis in such holder’s common stock, subsequent sales of such holder’s common stock will result in recognition of an increased capital gain or decreased capital loss due to the reduction in such adjusted basis.

Risks Related to the Real Estate Industry

Our primary business involves the ownership and operation ofself-storage stores.

Our current strategy is to own, operate, manage, acquire, develop and redevelop only self-storage stores. Consequently, we are subject to risks inherent in investments in a single industry. Because investments in real estate are inherently illiquid, this strategy makes it difficult for us to diversify our investment portfolio and to limit our risk when economic conditions change. Decreases in market rents, negative tax, real estate and zoning

law changes and changes in environmental protection laws may also increase our costs, lower the value of our investments and decrease our income, which would adversely affect our business, financial condition and operating results.

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our stores.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more stores in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any store for the price or on the terms set by us or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a store.

We may be required to expend funds to correct defects or to make improvements before a store can be sold. We cannot assure you that we will have funds available to correct those defects or to make those improvements. In acquiring a store, we may agree to transfer restrictions that materially restrict us from selling that store for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that store. These transfer restrictions would impede our ability to sell a store even if we deem it necessary or appropriate.



Any investments in unimproved real property may take significantly longer to yieldincome-producing returns, if at all, and may result in additional costs to us to comply withre-zoning restrictions or environmental regulations.

We have invested in the past, and may invest in the future, in unimproved real property. Unimproved properties generally take longer to yieldincome-producing returns based on the typical time required for development. Any development of unimproved property may also expose us to the risks and uncertainties associated withre-zoning the land for a higher use or development and environmental concerns of governmental entities and/or community groups. Any unsuccessful investments or delays in realizing anincome-producing return or increased costs to develop unimproved real estate could restrict our ability to earn our targeted rate of return on an investment or adversely affect our ability to pay operating expenses which would harm our financial condition and operating results.

Any negative perceptions of theself-storage industry generally may result in a decline in our stock price.

To the extent that the investing public has a negative perception of theself-storage industry, the value of our securities may be negatively impacted, which could result in our securities trading below the inherent value of our assets.


Risks Related to Our Debt Financings

Disruptions in the financial markets could affect our ability to obtain debt financing on reasonable terms and have other adverse effects on us.

Uncertainty in the credit markets may negatively impact our ability to access additional debt financing or to refinance existing debt maturities on favorable terms (or at all), which may negatively affect our ability to make acquisitions and fund development projects. A downturn in the credit markets may cause us to seek alternative sources of potentially less attractive financing, and may require us to adjust our business plan accordingly. In addition, these factors may make it more difficult for us to sell stores or may adversely affect the price we receive for stores that we do sell, as prospective buyers may experience increased costs of debt financing or difficulties in obtaining debt financing.

Required payments of principal and interest on borrowings may leave us with insufficient cash to operate our stores or to pay the distributions currently contemplated or necessary to maintain our qualification as a REIT and may expose us to the risk of default under our debt obligations.

As of December 31, 2014,2016, we had approximately $2.4$4.4 billion of outstanding indebtedness. We may incur additional debt in connection with future acquisitions and development. We may borrow under our Credit Lines or borrow new funds to finance these future stores. Additionally, we do not anticipate that our internally generated cash flow will be adequate to repay our existing indebtedness upon maturity and, therefore, we expect to repay our indebtedness through refinancings and equity and/or debt offerings. Further, we may need to borrow funds in order to make cash distributions to maintain our qualification as a REIT or to make our expected distributions.

If we are required to utilize our Credit Lines for purposes other than acquisition activity, this will reduce the amount available for acquisitions and could slow our growth. Therefore, our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following:

our cash flow may be insufficient to meet our required principal and interest payments;

we may be unable to borrow additional funds as needed or on favorable terms, including to make acquisitions or to continue to make distributions required to maintain our qualification as a REIT;

we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness;

because a portion of our debt bears interest at variable rates, an increase in interest rates could materially increase our interest expense;

we may be forced to dispose of one or more of our stores, possibly on disadvantageous terms;

after debt service, the amount available for cash distributions to our stockholders is reduced;

our debt level could place us at a competitive disadvantage compared to our competitors with less debt;

we may experience increased vulnerability to economic and industry downturns, reducing our ability to respond to changing business and economic conditions;

we may default on our obligations and the lenders or mortgagees may foreclose on our stores that secure their loans and receive an assignment of rents and leases;

we may default on our obligations and the lenders or mortgages may enforce our guarantees;



we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; and

our default under any one of our mortgage loans withcross-default orcross-collateralization provisions could result in a default on other indebtedness or result in the foreclosures of other stores.


Increases in interest rates may increase our interest expense and adversely affect our cash flow and our ability to service our indebtedness and make cash distributions to our stockholders.

As of December 31, 2014,2016, we had approximately $2.4$4.4 billion of debt outstanding, of which approximately $846 million$1.3 billion, or 35.5%30.0% was subject to variable interest rates (excluding debt with interest rate swaps). This variable rate debt had a weighted average interest rate of approximately 2.0%2.3% per annum. Increases in interest rates on this variable rate debt would increase our interest expense, which could harm our cash flow and our ability to pay cash distributions. For example, if market rates of interest on this variable rate debt increased by 100 basis points, (excluding variable rate debt with interest rate floors), the increase in interest expense would decrease future earnings and cash flows by approximately $8.1$13.1 million annually.

Failure to hedge effectively against interest rate changes may adversely affect our results of operations.

In certain cases we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements. Hedging involves risks, such as the risk that the counterparty may fail to honor its obligations under an arrangement. Failure to hedge effectively against interest rate changes may adversely affect our financial condition, results of operations and ability to make cash distributions to our stockholders.

Risks Related to Qualification and Operation as a REIT

To maintain our qualification as a REIT, we may be forced to borrow funds on ashort-term basis during unfavorable market conditions.

To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our net taxable income each year, excluding net capital gains, and we are subject to regular corporate income taxes to the extent that we distribute less than 100% of our net taxable income each year. In addition, we are subject to a 4% nondeductible excise tax on the amount, if any, by which distributions made by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. While historically we have satisfied these distribution requirements by making cash distributions to our stockholders, a REIT is permitted to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, its own stock. Assuming we continue to satisfy these distributions requirements with cash, we may need to borrow funds on ashort-term basis, or possiblylong-term, to meet the REIT distribution requirements even if the then prevailing market conditions are not favorable for these borrowings. These borrowing needs could result from a difference in timing between the actual receipt of cash and inclusion of income for U.S. federal income tax purposes, or the effect ofnon-deductible capital expenditures, the creation of reserves or required debt amortization payments.

Dividends payable by REITs generally do not qualify for reduced tax rates.

The maximum U.S. federal income tax rate for dividends paid by domestic corporations to individual U.S. stockholders is 20%. Dividends paid by REITs, however, are generally not eligible for the reduced rates. The more favorable rates applicable to regular corporate dividends could cause stockholders who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stocks ofnon-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including our securities.

In addition, the relative attractiveness of real estate in general may be adversely affected by the favorable tax treatment given to corporate dividends, which could negatively affect the value of our stores.

Possible legislative or other actions affecting REITs could adversely affect our stockholders.

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely affect our stockholders. It cannot be predicted whether, when, in what forms, or with what effective dates, the tax laws applicable to us or our stockholders will be changed.



The power of our board of directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders.

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to U.S. federal income tax on our taxable income and would no longer be required to distribute most of our net taxable income to our stockholders, which may have adverse consequences on the total return to our stockholders.

Our failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock.

We believe we operate in a manner that allows us to qualify as a REIT for U.S. federal income tax purposes under the Internal Revenue Code. If we fail to qualify as a REIT or lose our qualification as a REIT at any time, we will face serious tax consequences that would substantially reduce the funds available for distribution for each of the years involved because:

we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;

we also could be subject to the U.S. federal alternative minimum tax and possibly increased state and local taxes; and

unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following a year during which we were disqualified.

In addition, if we fail to qualify as a REIT, we will not be required to make distributions to stockholders, and all distributions to stockholders will be subject to tax as regular corporate dividends to the extent of our current and accumulated earnings and profits. This means that our U.S. individual stockholders would be taxed on our dividends at capital gains rates, and our U.S. corporate stockholders would be entitled to the dividends received deduction with respect to such dividends, subject, in each case, to applicable limitations under the Internal Revenue Code. If we fail to qualify as a REIT for federal income tax purposes and are able to avail ourselves of one or more of the relief provisions under the Internal Revenue Code in order to maintain our REIT status, we may nevertheless be required to pay penalty taxes of $50,000 or more for each such failure. As a result of all these factors, our failure to qualify as a REIT also could impair our ability to expand our business and raise capital, and could adversely affect the value of our securities.

Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial and administrative interpretations. The complexity of these provisions and of the applicable Treasury regulations that have been promulgated under the Internal Revenue Code is greater in the case of a REIT that, like us, holds its assets through a partnership. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. In order to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the composition of our assets, the sources of our gross income and the owners of our stock. Our ability to satisfy the asset tests depends upon our analysis of the fair market value of our assets, some of which are not susceptible to precise determination, and for which we will not obtain independent appraisals. Also, we must make distributions to stockholders aggregating annually at least 90% of our net taxable income, excluding capital gains, and we will be subject to income tax at regular corporate rates to the extent we distribute less than 100% of our net taxable income including capital gains. In addition, legislation, new regulations, administrative interpretations or court decisions may adversely affect our investors, our ability to qualify as a REIT for U.S. federal income tax purposes or the desirability of an investment in a REIT relative to other investments. Although we believe that we have been organized and have operated in a manner that is intended to allow us to qualify for taxation as a REIT, we can give no assurance that we have qualified or will continue to qualify as a REIT for tax purposes. We have not requested and do not plan to request a ruling from the Internal Revenue Service regarding our qualification as a REIT.

We will pay some taxes.

Even though we qualify as a REIT for U.S. federal income tax purposes, we will be required to pay some U.S. federal, state and local taxes on our income and property. Extra Space Management, Inc. manages stores for our joint ventures and stores owned by third parties. We, jointly with Extra Space Management, Inc., elected to treat Extra Space Management, Inc. as a taxable REIT subsidiary (“TRS”) of our Company for U.S. federal income tax purposes. A taxable REIT subsidiary is a fully taxable corporation, and may be limited in its ability to

deduct interest payments made to us. ESM Reinsurance Limited, awholly-owned subsidiary of Extra Space Management, Inc., generates income from insurance premiums that are subject to federal income tax and state insurance premiums tax. In addition, we will be subject to a 100% penalty tax on certain amounts if the economic arrangements among our tenants, our taxable REIT subsidiary and us are not comparable to similar arrangements among unrelated parties or if we receive payments for inventory or property held for sale to customers in the



ordinary course of business. Also, if we sell property as a dealer (i.e., to customers in the ordinary course of our trade or business), we will be subject to a 100% penalty tax on any gain arising from such sales. While we don’tdo not intend to sell stores as a dealer, the IRS could take a contrary position. To the extent that we are, or our taxable REIT subsidiary is, required to pay U.S. federal, state or local taxes, we will have less cash available for distribution to stockholders.

Complying with REIT requirements may cause us to foregoforgo otherwise attractive opportunities.

To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. In order to meet these tests, we may be required to foregoforgo attractive business or investment opportunities. Thus, compliance with the REIT requirements may adversely affect our ability to operate solely to maximize profits.

Item 1B.Unresolved Staff Comments

Item 1B.     Unresolved Staff Comments
None.

Item 2.Properties

Item 2.     Properties
As of December 31, 2014,2016, we owned or had ownership interests in 8281,016 operating self-storage stores. Of these stores, 557836 arewholly-owned and 271180 are held in joint ventures. In addition, we managed an additional 260411 stores for third parties bringing the total number of stores which we own and/or manage to 1,088.1,427. These stores are located in 3538 states, Washington, D.C. and Puerto Rico. We receive a management fee generally equal to approximately 6.0% of cash collected from total revenues to manage the joint venture and third party sites. As of December 31, 2014,2016, we owned and/or managed approximately 80.4107 million square feet of rentable space configured in approximately 725,000960,000 separate storage units. Approximately 70% of our stores are clustered around large population centers, such as Atlanta, Baltimore/Washington, D.C., Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, New York City, Orlando, Philadelphia, Phoenix, St. Petersburg/Tampa and San Francisco/Oakland. These markets containabove-average population and income demographics for stores. The clustering of assets around these population centers enables us to reduce our operating costs through economies of scale. Our acquisitions have given us an increased scale in many core markets as well as a foothold in many markets where we had no previous presence.

We consider a store to be in thelease-up stage after it has been issued a certificate of occupancy, but before it has achieved stabilization. We consider a store to be stabilized once it has achieved either an 80% occupancy rate for a full year measured as of January 1 of the current year, or has been open for three years.

years prior to the January 1 of the current year.


As of December 31, 2014,2016, approximately 650,000850,000 tenants were leasing storage units at the 1,0881,427 operating stores that we own and/or manage, primarily on amonth-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit. Existing tenants generally receive rate increases at least annually, for which no direct correlation has been drawn to our vacancy trends. Although leases areshort-term in duration, the typical tenant tends to remain at our stores for an extended period of time. For stores that were stabilized as of December 31, 2014,2016, the average length of stay was approximately 12.914.3 months.

The average annual rent per square foot for our existing customers at stabilized stores, net of discounts and bad debt, was $14.41$15.88 for the year ended December 31, 2014,2016, compared to $13.81$14.92 for the year ended

December 31, 2013.2015. Average annual rent per square foot for new leases was $14.53$17.02 for the year ended December 31, 2014,2016, compared to $14.18$15.91 for the year ended December 31, 2013.2015. The average discounts, as a percentage of rental revenues, during these periods were 3.8%3.3% and 4.4%3.2%, respectively.

Our store portfolio is made up of different types of construction and building configurations depending on the site and the municipality where it is located. Most often sites are what we consider “hybrid” facilities, a mix of bothdrive-up buildings andmulti-floor buildings. We have a number ofmulti-floor buildings with elevator access only, and a number of facilities featuringground-floor access only.

The following table presents additional information regarding the occupancy of our stabilized stores by state as of December 31, 20142016 and 2013.2015. The information as of December 31, 2013,2015, is on a pro forma basis as though all the stores owned at December 31, 2014,2016, were under our control as of December 31, 2013.

2015.

Stabilized Store Data Based on Location

     Company  Pro forma  Company  Pro forma  Company  Pro forma 

Location

 Number of
Stores		  Number of
Units as of
December 31,
2014 (1)		  Number of
Units as of
December 31,
2013		  Net Rentable
Square Feet
as of
December 31,
2014 (2)		  Net Rentable
Square Feet
as of
December 31,
2013		  Square Foot
Occupancy %
December 31,
2014		  Square Foot
Occupancy %
December 31,
2013		 

Wholly-Owned Stores

       
Alabama  5    2,903    2,888    342,971    342,796    84.2%   83.6% 
Arizona  11    6,954    6,949    814,433    814,933    91.3%   87.8% 
California  121    90,462    89,920    9,368,905    9,373,563    92.7%   88.1% 
Colorado  12    5,913    5,827    739,274    737,345    87.6%   86.7% 
Connecticut  5    3,132    3,130    299,734    301,174    90.7%   89.3% 
Florida  57    39,142    39,286    4,198,104    4,232,112    92.1%   88.6% 
Georgia  22    12,963    13,048    1,633,500    1,633,869    89.8%   87.1% 
Hawaii  5    5,626    5,708    336,872    338,210    93.1%   83.2% 
Illinois  18    12,293    12,166    1,270,379    1,267,164    89.9%   90.3% 
Indiana  9    4,754    4,711    555,335    553,158    89.6%   86.4% 
Kansas  1    507    504    50,361    50,360    89.6%   91.7% 
Kentucky  4    2,180    2,156    253,741    254,141    90.7%   89.4% 
Louisiana  2    1,408    1,414    149,990    150,065    92.4%   91.5% 
Maryland  23    17,301    17,234    1,817,090    1,817,305    90.4%   89.9% 
Massachusetts  35    21,472    21,327    2,175,301    2,173,269    91.4%   91.7% 
Michigan  3    1,799    1,792    254,239    252,784    91.7%   89.2% 
Missouri  6    3,224    3,208    386,151    376,256    90.4%   88.0% 
Nevada  5    3,194    3,219    548,910    546,574    92.3%   88.4% 
New Hampshire  2    1,013    1,002    125,748    125,773    94.2%   91.8% 
New Jersey  49    37,937    37,785    3,683,524    3,678,943    92.1%   91.3% 
New Mexico  3    1,575    1,573    217,074    216,154    85.9%   85.0% 
New York  19    16,812    16,534    1,360,668    1,351,830    90.6%   90.0% 
North Carolina  7    4,814    4,764    507,954    502,474    89.4%   82.4% 
Ohio  19    10,426    10,254    1,365,074    1,353,710    89.9%   88.7% 
Oregon  3    2,152    2,144    250,450    250,410    93.4%   92.5% 
Pennsylvania  9    5,758    5,724    651,136    648,885    89.8%   88.9% 
Rhode Island  2    1,198    1,183    131,291    131,321    94.7%   91.6% 
South Carolina  6    3,340    3,326    418,445    418,430    90.5%   90.5% 
Tennessee  10    5,590    5,487    755,023    753,427    92.3%   88.9% 
Texas  32    20,863    20,919    2,438,266    2,456,062    90.2%   86.0% 
Utah  8    4,242    4,024    523,056    502,931    88.9%   90.1% 

     Company  Pro forma  Company  Pro forma  Company  Pro forma 

Location

 Number of
Stores		  Number of
Units as of
December 31,
2014 (1)		  Number of
Units as of
December 31,
2013		  Net Rentable
Square Feet
as of
December 31,
2014 (2)		  Net Rentable
Square Feet
as of
December 31,
2013		  Square Foot
Occupancy %
December 31,
2014		  Square Foot
Occupancy %
December 31,
2013		 
Virginia  29    22,150    22,367    2,385,358    2,383,499    85.9%   84.9% 
Washington  6    3,576    3,535    427,783    427,573    88.8%   84.7% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Wholly-Owned Stabilized

 548   376,673   375,108   40,436,140   40,416,500   91.0%  88.4% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Joint-Venture Stores

Alabama

 2   1,153   1,148   145,146   145,153   88.2%  90.3% 

Arizona

 7   4,253   4,224   492,578   492,831   92.4%  90.4% 

California

 71   51,213   50,909   5,259,033   5,253,108   93.6%  91.4% 

Colorado

 2   1,318   1,323   159,220   158,863   94.1%  89.9% 

Connecticut

 7   5,307   5,296   611,625   611,790   92.2%  92.7% 

Delaware

 1   591   590   71,705   71,705   93.2%  92.4% 

Florida

 19   15,265   15,189   1,533,406   1,526,503   91.9%  89.4% 

Georgia

 2   1,069   1,056   152,794   151,524   91.6%  86.6% 

Illinois

 5   3,471   3,442   365,183   364,933   92.0%  90.4% 

Indiana

 5   2,206   2,166   288,028   284,826   90.3%  90.5% 

Kansas

 2   844   843   109,375   109,605   92.0%  83.4% 

Kentucky

 4   2,274   2,228   257,439   254,769   87.0%  87.6% 

Maryland

 12   9,776   9,731   955,190   954,975   90.6%  90.2% 

Massachusetts

 13   6,946   6,904   784,024   782,515   90.6%  90.9% 

Michigan

 8   4,816   4,781   613,403   611,243   92.1%  89.8% 

Missouri

 1   534   531   61,075   61,225   91.3%  83.8% 

Nevada

 5   3,037   3,046   327,993   327,113   88.2%  87.7% 

New Hampshire

 2   792   781   84,391   83,615   90.4%  91.4% 

New Jersey

 16   12,976   12,947   1,356,864   1,357,003   89.9%  90.3% 

New Mexico

 7   3,602   3,605   397,494   398,245   89.5%  85.4% 

New York

 13   14,171   14,177   1,106,187   1,107,419   92.2%  91.0% 

Ohio

 8   3,984   3,963   531,197   531,522   88.1%  88.6% 

Oregon

 1   653   652   64,970   64,970   91.8%  90.4% 

Pennsylvania

 10   7,980   7,961   805,238   802,240   90.4%  89.6% 

Tennessee

 17   9,454   9,354   1,241,742   1,240,082   92.2%  89.7% 

Texas

 17   10,619   10,563   1,388,575   1,387,706   93.9%  92.2% 

Virginia

 13   9,378   9,359   994,659   994,449   91.0%  89.7% 

Washington, DC

 1   1,530   1,530   102,017   102,017   92.8%  91.3% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Joint-Venture Stabilized

 271   189,212   188,299   20,260,551   20,231,949   91.9%  90.4% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Managed Stores

Alabama

 7   2,339   2,339   355,310   355,310   84.8%  84.8% 

Arizona

 3   1,216   1,225   228,131   228,847   91.6%  86.4% 

California

 60   40,380   40,464   5,361,785   5,351,908   87.4%  79.1% 

Colorado

 15   7,899   7,867   1,013,722   1,009,232   90.9%  90.5% 

Connecticut

 1   465   477   61,865   61,600   91.6%  88.3% 

Florida

 32   19,838   19,767   2,369,188   2,365,253   89.0%  84.6% 

Georgia

 10   5,269   5,275   837,151   836,748   88.7%  85.5% 

Hawaii

 6   5,043   5,056   350,155   345,174   87.0%  82.3% 

Illinois

 6   3,778   3,760   390,381   384,091   88.7%  89.6% 

Indiana

 9   5,042   5,035   618,727   618,777   90.0%  86.5% 

     Company  Pro forma  Company  Pro forma  Company  Pro forma 

Location

 Number of
Stores		  Number of
Units as of
December 31,
2014 (1)		  Number of
Units as of
December 31,
2013		  Net Rentable
Square Feet
as of
December 31,
2014 (2)		  Net Rentable
Square Feet
as of
December 31,
2013		  Square Foot
Occupancy %
December 31,
2014		  Square Foot
Occupancy %
December 31,
2013		 

Kentucky

  1    551    547    67,268    67,268    91.6%   85.7% 

Louisiana

  1    999    1,006    133,490    135,035    85.2%   77.0% 

Maryland

  11    6,579    6,562    652,981    653,501    89.6%   86.1% 

Mississippi

  2    1,886    1,893    281,558    281,823    86.5%   79.2% 

Missouri

  2    1,119    1,209    127,821    152,021    88.4%   85.5% 

Nevada

  4    3,028    3,058    317,215    316,940    77.9%   76.5% 

New Jersey

  3    1,635    1,621    181,588    181,138    90.2%   91.5% 

New Mexico

  2    1,121    1,119    131,112    131,112    89.9%   87.0% 

North Carolina

  3    1,600    1,571    205,218    205,981    90.7%   83.9% 

Ohio

  8    2,956    2,947    429,161    428,739    87.0%   83.3% 

Pennsylvania

  15    6,945    6,948    861,472    859,332    88.0%   85.1% 

South Carolina

  2    1,187    1,222    157,535    157,535    83.4%   83.5% 

Tennessee

  4    1,990    1,968    280,686    280,621    86.0%   85.1% 

Texas

  22    11,601    11,314    1,570,516    1,535,062    84.4%   83.4% 

Utah

  3    1,596    1,607    257,090    256,860    84.9%   82.3% 

Virginia

  3    1,764    1,763    177,969    177,969    87.4%   87.3% 

Washington, DC

  2    1,267    1,262    112,334    112,409    92.8%   91.8% 

Puerto Rico

  4    2,666    2,701    287,133    288,190    87.5%   84.2% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Managed Stabilized

 241   141,759   141,583   17,818,562   17,778,476   87.7%  83.3% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Stabilized Stores

 1,060   707,644   704,990   78,515,253   78,426,925   90.5%  87.8% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

    Company  Pro forma  Company  Pro forma Company Pro forma
 Location Number of Stores 
Number of Units as of
December 31, 2016 (1)
 Number of Units as of
December 31, 2015		 
Net Rentable Square Feet as of December 31, 2016 (2)
 Net Rentable Square Feet as of December 31, 2015  Square Foot Occupancy % December 31, 2016  Square Foot Occupancy % December 31, 2015
 Wholly-Owned Stores

 

 

 

 

 

 

Alabama8
 4,635
 4,585
 556,241
 559,526
 89.3% 88.3%
Arizona21
 12,795
 12,677
 1,408,358
 1,414,864
 91.7% 90.4%
California143
 109,771
 108,156
 11,425,653
 11,399,051
 93.8% 94.8%
Colorado13
 6,685
 6,562
 823,284
 822,499
 89.6% 89.4%
Connecticut6
 3,856
 3,847
 395,257
 395,411
 91.4% 92.7%
Florida77
 55,459
 54,612
 5,873,089
 5,848,836
 92.6% 92.8%
Georgia48
 28,956
 28,281
 3,715,001
 3,698,127
 90.4% 90.1%
Hawaii9
 8,534
 8,445
 602,171
 599,373
 95.2% 92.1%
Illinois25
 17,359
 17,139
 1,913,921
 1,930,543
 90.1% 89.6%
Indiana15
 7,848
 7,718
 940,069
 944,399
 91.2% 88.5%
Kansas1
 533
 532
 49,999
 49,991
 97.6% 91.9%
Kentucky10
 5,874
 5,840
 756,870
 755,610
 90.0% 86.2%
Louisiana2
 1,406
 1,406
 149,930
 150,090
 93.7% 92.1%
Maryland28
 21,372
 21,271
 2,189,772
 2,191,424
 90.6% 91.3%
Massachusetts37
 23,124
 22,891
 2,295,634
 2,305,068
 91.0% 92.2%
Minnesota1
 765
 765
 74,400
 74,400
 73.2% 76.7%
Mississippi3
 1,510
 1,477
 217,922
 221,482
 87.2% 81.9%
Missouri6
 3,292
 3,238
 386,161
 385,961
 90.7% 93.2%
Nevada15
 9,110
 9,132
 1,313,820
 1,314,665
 92.9% 89.9%
New Hampshire2
 1,045
 1,029
 126,053
 126,133
 91.9% 93.0%
New Jersey58
 45,721
 45,213
 4,498,968
 4,495,243
 92.6% 91.5%
New Mexico12
 6,590
 6,575
 748,843
 750,433
 91.7% 91.9%
New York22
 20,088
 20,022
 1,651,030
 1,648,534
 90.1% 91.7%
North Carolina11
 6,876
 6,806
 761,677
 761,323
 90.5% 92.0%
Ohio17
 9,534
 9,460
 1,248,860
 1,246,238
 91.7% 91.0%
Oregon3
 2,140
 2,156
 250,180
 250,130
 91.2% 92.7%
Pennsylvania14
 9,667
 9,651
 1,047,731
 1,044,720
 90.3% 87.3%
Rhode Island2
 1,280
 1,235
 131,421
 131,356
 93.9% 91.4%
South Carolina20
 11,331
 11,228
 1,509,641
 1,515,789
 88.3% 87.5%
Tennessee23
 12,869
 12,723
 1,764,606
 1,781,216
 90.6% 89.1%
Texas85
 55,509
 54,871
 7,151,963
 7,112,255
 88.7% 89.3%
Utah8
 4,394
 4,231
 543,202
 523,056
 88.8% 94.1%
Virginia39
 29,909
 29,484
 3,164,742
 3,163,910
 90.4% 89.5%
Washington7
 4,301
 4,285
 509,278
 509,358
 95.2% 91.1%
Washington, DC1
 1,220
 1,214
 99,689
 99,439
 93.8% 91.5%
Total Wholly-Owned Stabilized796
 547,748
 541,116
 60,618,052
 60,543,119
 91.4% 91.3%

             
 Joint-Venture Stores

 

 

 

 

 

 

Alabama1
 619
 601
 75,356
 74,866
 91.2% 93.4%
Arizona6
 3,745
 3,689
 429,173
 428,724
 94.9% 93.6%
California47
 34,034
 33,526
 3,283,592
 3,277,679
 94.4% 95.2%
Colorado2
 1,313
 1,308
 157,986
 158,375
 89.2% 93.9%
Connecticut5
 3,762
 3,763
 403,910
 404,790
 92.2% 92.8%
Delaware1
 518
 597
 64,510
 71,610
 93.0% 81.2%
Florida12
 10,010
 9,894
 1,003,254
 1,002,944
 91.8% 93.8%
Georgia1
 611
 605
 81,820
 81,950
 85.5% 89.5%
Illinois4
 2,691
 2,695
 288,115
 287,400
 90.6% 89.6%
Indiana1
 445
 446
 56,650
 57,114
 94.7% 91.4%
Kansas2
 846
 846
 109,375
 109,165
 91.4% 90.5%
Kentucky3
 1,377
 1,449
 153,895
 171,525
 91.6% 85.5%
Maryland7
 5,896
 5,860
 529,369
 529,527
 90.6% 91.7%
Massachusetts9
 5,111
 5,008
 534,107
 536,027
 92.1% 91.7%
Michigan5
 3,203
 3,166
 396,179
 395,764
 92.7% 92.7%
Missouri1
 543
 538
 61,375
 61,075
 89.2% 91.7%
Nevada2
 1,209
 1,203
 123,565
 123,495
 94.2% 94.5%
New Hampshire2
 796
 801
 83,685
 85,111
 90.5% 94.8%
New Jersey13
 10,377
 10,288
 1,030,147
 1,028,267
 91.2% 92.2%
New Mexico2
 1,046
 1,048
 134,371
 134,115
 90.5% 91.3%
New York8
 7,721
 7,668
 650,917
 648,615
 93.1% 93.1%
Ohio5
 2,879
 2,860
 381,432
 381,462
 90.5% 89.6%
Oregon1
 651
 655
 64,970
 64,970
 93.7% 94.0%
Pennsylvania4
 2,684
 2,680
 312,895
 311,091
 90.9% 88.2%
Tennessee6
 3,824
 3,774
 474,790
 474,875
 92.2% 91.5%
Texas10
 5,795
 5,725
 672,669
 673,611
 89.8% 93.9%
Virginia7
 5,091
 5,074
 514,037
 513,932
 88.0% 89.6%
Washington, DC1
 1,694
 1,547
 104,450
 102,488
 88.1% 89.4%
Total Joint-Venture Stabilized168
 118,491
 117,314
 12,176,594
 12,190,567
 92.2% 92.8%

             
 Managed Stores

 

 

 

 

 

 

Alabama11
 5,755
 5,596
 754,204
 738,753
 90.5% 88.0%
Arizona2
 1,122
 1,055
 156,791
 166,623
 92.8% 96.0%
California72
 49,282
 48,538
 5,897,368
 5,826,771
 93.5% 92.2%
Colorado16
 8,988
 8,733
 1,067,294
 1,035,678
 86.8% 85.5%
Connecticut2
 1,414
 1,312
 182,140
 171,775
 92.4% 93.4%
Florida46
 31,743
 31,622
 3,823,063
 3,838,650
 92.5% 92.4%
Georgia8
 4,069
 3,921
 578,752
 580,042
 93.0% 92.5%
Hawaii6
 4,578
 4,817
 352,453
 349,952
 91.9% 92.5%
Illinois11
 6,489
 6,518
 698,319
 698,247
 90.4% 83.8%
Indiana4
 2,022
 2,017
 238,283
 237,493
 91.0% 84.6%
Kentucky2
 1,331
 1,333
 218,707
 219,777
 89.0% 90.8%
Louisiana1
 987
 985
 133,325
 131,865
 95.0% 90.9%
Maryland19
 14,008
 13,924
 1,370,012
 1,366,149
 91.2% 87.5%
Massachusetts3
 1,546
 1,531
 182,945
 182,735
 93.3% 94.7%
Michigan6
 3,352
 3,335
 416,434
 416,290
 92.4% 86.3%
Missouri4
 2,154
 2,215
 253,639
 251,792
 92.3% 80.5%
Nevada10
 7,956
 7,986
 944,870
 944,420
 91.8% 87.1%
New Jersey5
 3,181
 3,176
 307,035
 309,529
 91.8% 88.9%
New Mexico1
 819
 806
 107,695
 103,535
 92.7% 86.4%
New York3
 2,675
 2,679
 219,448
 220,248
 89.5% 91.2%
North Carolina17
 7,264
 7,212
 1,013,263
 1,012,737
 92.7% 91.3%
Ohio5
 2,268
 2,206
 274,870
 272,915
 90.5% 92.7%
Oklahoma11
 5,771
 5,768
 959,984
 960,786
 80.7% 80.5%
Oregon1
 447
 455
 39,430
 39,419
 91.1% 97.7%
Pennsylvania18
 10,747
 10,649
 1,247,860
 1,244,340
 91.3% 90.4%
South Carolina4
 2,619
 2,609
 351,148
 348,771
 93.1% 89.2%
Tennessee4
 2,152
 2,125
 282,263
 290,183
 94.0% 90.4%
Texas34
 19,788
 19,545
 2,808,646
 2,730,806
 85.9% 87.5%
Utah5
 2,760
 2,532
 404,827
 380,047
 93.6% 92.2%
Virginia7
 4,245
 4,242
 437,319
 437,929
 89.3% 89.3%
Washington3
 1,552
 1,561
 181,697
 181,769
 89.1% 87.9%
Puerto Rico4
 2,735
 2,676
 289,704
 286,772
 87.3% 87.4%
Total Managed Stabilized345
 215,819
 213,679
 26,193,788
 25,976,798
 90.9% 89.7%
Total Stabilized Stores1,309
 882,058
 872,109
 98,988,434
 98,710,484
 91.4% 91.0%

(1)Represents unit count as of December 31, 2014,2016, which may differ from unit count as of December 31, 2013,2015, due to unit conversions or expansions.
(2)Represents net rentable square feet as of December 31, 2014,2016, which may differ from net rentable square feet as of December 31, 2013,2015, due to unit conversions or expansions.


The following table presents additional information regarding the occupancy of ourlease-up stores by state as of December 31, 20142016 and 2013.2015. The information as of December 31, 2013,2015, is on a pro forma basis as though all the stores owned at December 31, 2014,2016, were under our control as of December 31, 2013.

2015.


Lease-up Store Data Based on Location

     Company  Pro forma  Company  Pro forma  Company  Pro forma 

Location

 Number of
Stores		  Number of
Units as of
December 31,
2014 (1)		  Number of
Units as of
December 31,
2013		  Net Rentable
Square Feet
as of
December 31,
2014 (2)		  Net Rentable
Square Feet
as of
December 31,
2013		  Square Foot
Occupancy %
December 31,
2014		  Square Foot
Occupancy %
December 31,
2013		 

Wholly-Owned Stores

       

Arizona

  1    615    631    71,115    71,355    89.9%   73.0% 

California

  1    —      568    —      57,893    0.0%   95.0% 

Connecticut

  1    1,121    —      90,565    —      51.8%   0.0% 

Florida

  1    534    558    75,591    —      79.0%   0.0% 

Georgia

  1    598    595    52,365    51,590    91.0%   43.9% 

Maryland

  1    988    988    103,171    102,777    74.5%   37.3% 

Massachusetts

  1    687    686    72,880    72,465    81.3%   72.5% 

New York

  1    822    822    100,480    100,480    91.8%   78.9% 

Texas

  1    840    836    93,565    93,220    57.1%   9.1% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Wholly-Owned in Lease-up

 9   6,205   5,684   659,732   549,780   75.8%  56.1% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Managed Stores

Colorado

 1   488   488   54,985   54,992   83.2%  78.5% 

Florida

 1   629   619   68,015   68,015   89.1%  80.1% 

Georgia

 1   598   604   76,197   75,927   88.6%  74.1% 

Illinois

 1   673   675   46,417   46,599   55.1%  10.8% 

Maryland

 3   2,248   2,256   214,860   215,035   86.3%  76.2% 

New York

 1   348   —     33,764   —     32.9%  0.0% 

South Carolina

 3   2,248   —     229,652   —     32.2%  0.0% 

Texas

 3   2,129   2,237   264,227   273,368   84.3%  56.9% 

Utah

 2   952   —     124,217   57,180   75.6%  40.7% 

Virginia

 2   1,058   600   106,126   54,640   60.3%  51.3% 

Washington

 1   600   —     54,935   —     4.9%  0.0% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Managed in Lease-up

 19   11,971   7,479   1,273,395   845,756   67.0%  62.6% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total Lease-up Stores

 28   18,176   13,163   1,933,127   1,395,536   70.0%  60.0% 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

    Company  Pro forma  Company  Pro forma Company Pro forma
 Location Number of Stores 
Number of Units as of
December 31, 2016 (1)
 Number of Units as of
December 31, 2015		 
Net Rentable Square Feet as of December 31, 2016 (2)
 Net Rentable Square Feet as of December 31, 2015  Square Foot Occupancy % December 31, 2016  Square Foot Occupancy % December 31, 2015
 Wholly-Owned Stores

 

 

 

 

 

 

Arizona2
 1,496
 894
 185,887
 122,092
 90.5% 72.9%
California (3)
4
 2,633
 1,210
 260,216
 133,252
 73.1% 37.7%
Connecticut1
 1,108
 1,107
 89,820
 89,820
 92.3% 90.0%
Florida2
 1,238
 1,235
 153,893
 158,283
 92.9% 67.5%
Georgia5
 3,115
 1,898
 352,755
 219,515
 67.4% 63.5%
Illinois4
 3,568
 1,667
 308,723
 134,464
 56.7% 69.8%
Maryland1
 988
 988
 103,135
 103,135
 94.2% 89.8%
Massachusetts3
 2,719
 754
 206,276
 67,431
 68.4% 79.8%
North Carolina3
 2,517
 1,986
 231,083
 187,024
 73.1% 52.3%
Oregon1
 597
 597
 76,797
 76,347
 96.2% 67.9%
South Carolina2
 1,366
 1,344
 137,295
 137,350
 82.2% 65.7%
Texas10
 6,112
 6,131
 788,381
 716,894
 84.8% 68.0%
Utah1
 617
 —
 77,336
 —
 20.7% —%
Virginia1
 558
 502
 55,900
 56,405
 93.6% 89.2%
Total Wholly-Owned in Lease-up40
 28,632
 20,313
 3,027,497
 2,202,012
 76.9% 67.4%



 

 

 

 

 

 

 Joint-Venture Stores

 

 

 

 

 

 

Arizona1
 603
 606
 62,200
 62,200
 87.1% 39.2%
Colorado1
 816
 —
 84,830
 —
 38.1% —%
Florida1
 637
 —
 66,816
 —
 1.5% —%
New Jersey1
 869
 873
 74,152
 74,521
 92.8% 45.3%
New York3
 3,853
 1,109
 209,522
 66,950
 49.6% 25.7%
Oregon2
 795
 285
 71,605
 27,100
 45.1% 31.8%
South Carolina1
 669
 649
 78,085
 70,570
 66.4% 28.0%
Texas1
 533
 —
 55,275
 —
 58.6% —%
Washington1
 634
 —
 82,485
 —
 66.8% —%
Total Joint-Venture in Lease-up12
 9,409
 3,522
 784,970
 301,341
 55.0% 34.4%



 

 

 

 

 

 

 Managed Stores

 

 

 

 

 

 

Arizona1
 836
 —
 89,695
 —
 62.9% —%
California5
 3,920
 1,608
 491,191
 209,030
 66.1% 58.4%
Colorado4
 2,417
 1,173
 273,520
 134,844
 64.1% 59.0%
Connecticut1
 360
 —
 37,436
 —
 71.6% —%
Florida3
 1,994
 1,407
 194,571
 150,438
 88.1% 60.3%
Georgia3
 1,922
 553
 225,376
 69,367
 43.5% 54.4%
Illinois8
 4,919
 672
 492,235
 46,417
 34.3% 83.6%
Indiana2
 964
 —
 111,112
 —
 45.3% —%
Kentucky2
 1,439
 —
 138,076
 —
 8.0% —%
Maryland3
 1,726
 1,318
 144,230
 115,650
 84.8% 75.7%
Massachusetts2
 1,920
 902
 153,533
 70,106
 48.0% 56.7%
Minnesota1
 626
 —
 62,597
 —
 93.8% —%
Missouri1
 608
 —
 63,100
 —
 41.6% —%
Nevada1
 1,450
 1,470
 197,351
 196,486
 88.8% 66.2%
New Hampshire1
 372
 —
 35,196
 —
 47.6% —%
New Jersey2
 882
 —
 126,396
 —
 43.6% —%
New York1
 534
 344
 56,150
 33,684
 77.0% 91.0%
North Carolina7
 4,284
 1,611
 464,431
 199,433
 55.1% 54.2%
Ohio2
 736
 528
 87,663
 64,500
 60.7% 59.3%
Oklahoma1
 360
 —
 68,235
 —
 13.6% —%
South Carolina4
 2,905
 1,616
 325,511
 165,011
 48.6% 65.6%
Texas7
 4,846
 570
 534,569
 65,409
 22.8% 2.4%
Utah1
 375
 —
 44,149
 —
 62.9% —%
Virginia1
 455
 455
 51,299
 51,289
 91.0% 93.2%
Wisconsin2
 1,935
 —
 226,813
 —
 21.0% —%
Total Managed in Lease-up66
 42,785
 14,227
 4,694,435
 1,571,664
 50.6% 61.1%
              
Total Lease-up Stores118
 80,826
 38,062
 8,506,902
 4,075,017
 60.4% 62.5%

(1)Represents unit count as of December 31, 2014,2016, which may differ from unit count as of December 31, 2013,2015, due to unit conversions or expansions.
(2)Represents net rentable square feet as of December 31, 2014,2016, which may differ from net rentable square feet as of December 31, 2013,2015, due to unit conversions or expansions.

Item 3.Legal Proceedings
(3)In October 2014, a store located in Venice, California was damaged by fire. In 2016, the store was re-opened for operation and is continuing to lease up.

Item 3.     Legal Proceedings
We are involved in various litigationlegal proceedings and legal proceedingsare subject to various claims and complaints arising in the ordinary course of business. Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. Therefore, any estimate(s) of loss disclosed below represents what management believes to be an estimate of loss only for certain matters meeting these criteria and does not represent our maximum loss exposure. We are not a party to any material litigation or legal proceedings, or to the best of our knowledge, any threatened litigation or legal proceedings which,could in the opinionfuture incur judgments or enter into settlements of management, willclaims that could have a material adverse effect on our financial condition or results of operations either individually or in any particular period, notwithstanding the aggregate.

Item 4.Mine Safety Disclosures

fact that we are currently vigorously defending any legal proceedings against us.

We currently have several legal proceedings pending against us that include causes of action alleging wrongful foreclosure, violations of various state specific self-storage statutes, and violations of various consumer fraud acts. As a result of these litigation matters, we have recorded a liability of $5.6 million which is included in other liabilities on the consolidated balance sheets.
Item 4. Mine Safety Disclosures
Not Applicable.

PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5.     Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information

Our common stock has been traded on the New York Stock Exchange (“NYSE”) under the symbol “EXR” since our IPO on August 17, 2004. Prior to that time there was no public market for our common stock.

The following table presents, for the periods indicated, the high and low sales price for our common stock as reported by the NYSE and the per share dividends declared:

      Range   Dividends
Declared		 

Year

  

Quarter

  High   Low   

2013

  1st  $40.97    $36.50    $0.25  
  2nd   45.29     38.87     0.40  
  3rd   47.11     39.98     0.40  
  4th   49.29     40.32     0.40  

2014

  1st   50.10     41.48     0.40  
  2nd   54.44     47.57     0.47  
  3rd   54.87     50.11     0.47  
  4th   60.56     51.10     0.47  

   Range Dividends Declared
YearQuarter High Low 
20151st $67.65
 $57.11
 $0.47
 2nd 70.50
 63.54
 0.59
 3rd 77.51
 65.82
 0.59
 4th 90.22
 75.55
 0.59
        
20161st 93.46
 78.42
 0.59
 2nd 94.04
 84.95
 0.78
 3rd 94.38
 76.17
 0.78
 4th 77.66
 68.78
 0.78
On February 18, 2015,21, 2017, the closing price of our common stock as reported by the NYSE was $65.45.$78.37. At February 18, 2015,21, 2017, we had 280355 holders of record of our common stock. Certain shares of the Company are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

Holders of shares of common stock are entitled to receive distributions when declared by our board of directors out of any assets legally available for that purpose. As a REIT, we are required to distribute at least 90% of our “REIT taxable


income,” which is generally equivalent to our net taxable ordinary income, determined without regard to the deduction for dividends paid to our stockholders annually in order to maintain our REIT qualification for U.S. federal income tax purposes.

We have historically made regular quarterly distributions to our stockholders.

Information about our equity compensation plans is incorporated by reference in Item 12 of Part III of this Annual Report onForm 10-K.

Unregistered Sales of Equity Securities


On December 23, 2014November 8, 2016, our Operating Partnership acquired four storesissued 486,244 Series D-4 Preferred Units in connection with the acquisition of a store located in Florida as part of a portfolio acquisition. These stores wereIllinois. This store was acquired in exchange for approximately $19.1 million of cash and the issuance of 548,390 Series D RedeemableD-4 Preferred Units, (“Series D Units”) valued at $13.7$12.2 million.

On November 2, 2016, our Operating Partnership issued 77,575 common OP units ("OP Units") in connection with the acquisition of a store located in Maryland. The Series Dstore was acquired in exchange for the OP units, valued at $5.8 million, and approximately $9.0 million in cash.
The terms of the common and preferred OP Units have a liquidation valueare governed by the Operating Partnership’s Fourth Amended and Restated Agreement of $25.00 per unit.Limited Partnership. The Series DOP Units will be redeemable, at the option of the holder afterholders following the first anniversaryexpiration of a lock-up period commencing on the date of issuance and ending on August 15, 2018, which redemption obligation may be satisfied, at our option, in cash or shares of our common stock.

On December 9, 2014, our Operating Partnership issued 50,620 common Operating Partnership units (“OP Units”) in connection with the acquisition of a single store in California. The store was acquired in exchange for the common OP Units, valued at $3.0 million, and approximately $6.3 million of cash.

The OP Units and Series D Units were issued in private placements in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Item 6.Selected Financial Data


All other unregistered sales of equity securities during the year ended December 31, 2016 have previously been disclosed in filings with the SEC.
Item 6.     Selected Financial Data
The following table presents selected financial data and should be read in conjunction with the financial statements and notes thereto included in Item 8, “Financial Statements and Supplementary Data” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in thisForm 10-K (amounts in thousands, except share and per share data).

  For the Year Ended December 31, 
  2014  2013  2012  2011  2010 

Revenues:

     

Property rental

 $559,868   $446,682   $346,874   $268,725   $232,447  

Tenant reinsurance and management fees

  87,287    73,931    62,522    61,105    49,050  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total revenues

 647,155   520,613   409,396   329,830   281,497  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Expenses:

Property operations

 172,416   140,012   114,028   95,481   86,165  

Tenant reinsurance

 10,427   9,022   7,869   6,143   6,505  

Acquisition related costs, loss on sublease and severance

 9,826   8,618   5,351   5,033   3,235  

General and administrative

 60,942   54,246   50,454   49,683   44,428  

Depreciation and amortization

 115,076   95,232   74,453   58,014   50,349  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total expenses

 368,687   307,130   252,155   214,354   190,682  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Income from operations

 278,468   213,483   157,241   115,476   90,815  

Interest expense

 (84,013)  (73,034)  (72,294)  (69,062)  (65,780) 

Interest income

 6,457   5,599   6,666   5,877   5,748  

Loss on extinguishment of debt related to portfolio acquisition, gain (loss) on sale of real estate, earnout from prior acquisitions and property casualty loss, net

 (12,009)  (8,193)  —     —     —    
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Income before equity in earnings of real estate ventures and income tax expense

 188,903   137,855   91,613   52,291   30,783  

Equity in earnings of real estate ventures

 10,541   11,653   10,859   7,287   6,753  

Equity in earnings of unconsolidated real estate ventures—gain on sale of real estate assets and purchase of joint venture partners’ interests

 4,022   46,032   30,630   —     —    

Income tax expense

 (7,570)  (9,984)  (5,413)  (1,155)  (4,162) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income

 195,896   185,556   127,689   58,423   33,374  

Noncontrolling interests in Operating Partnership and other noncontrolling interests

 (17,541)  (13,480)  (10,380)  (7,974)  (7,043) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income attributable to common stockholders

$178,355  $172,076  $117,309  $50,449  $26,331  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Earnings per common share

Basic

$1.54  $1.54  $1.15  $0.55  $0.30  

Diluted

$1.53  $1.53  $1.14  $0.54  $0.30  

Weighted average number of shares

Basic

 115,713,807   111,349,361   101,766,385   92,097,008   87,324,104  

Diluted

 121,435,267   113,105,094   103,767,365   96,683,508   92,050,453  

Cash dividends paid per common share

$1.81  $1.45  $0.85  $0.56  $0.40  

  As of December 31, 
  2014  2013  2012  2011  2010 

Balance Sheet Data

     

Total assets

 $4,402,107   $3,977,140   $3,223,477   $2,517,524   $2,249,820  

Total notes payable, notes payable to trusts, exchangeable senior notes and lines of credit

 $2,369,884   $1,946,647   $1,577,599   $1,363,656   $1,246,918  

Noncontrolling interests

 $174,558   $173,425   $53,524   $54,814   $57,670  

Total stockholders’ equity

 $1,737,425   $1,758,470   $1,491,807   $1,018,947   $881,401  

Other Data

     

Net cash provided by operating activities

 $337,581   $271,259   $215,879   $144,164   $104,815  

Net cash used in investing activities

 $(564,948)  $(366,976)  $(606,938)  $(251,919)  $(83,706) 

Net cash provided by (used in) financing activities

 $148,307   $191,655   $395,360   $87,489   $(106,309) 

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations



 For the Year Ended December 31,
 2016 2015 2014 2013 2012
Revenues:         
Property rental$864,742
 $676,138
 $559,868
 $446,682
 $346,874
Tenant reinsurance, management fees and other income127,133
 106,132
 87,287
 73,931
 62,522
Total revenues991,875
 782,270
 647,155
 520,613
 409,396
Expenses:         
Property operations250,005
 203,965
 172,416
 140,012
 114,028
Tenant reinsurance15,555
 13,033
 10,427
 9,022
 7,869
Acquisition related costs and other12,111
 69,401
 9,826
 8,618
 5,351
General and administrative81,806
 67,758
 60,942
 54,246
 50,454
Depreciation and amortization182,560
 133,457
 115,076
 95,232
 74,453
Total expenses542,037
 487,614
 368,687
 307,130
 252,155
Income from operations449,838
 294,656
 278,468
 213,483
 157,241
Interest expense(138,459) (98,992) (84,013) (73,034) (72,294)
Interest income10,998
 8,311
 6,457
 5,599
 6,666
Loss on extinguishment of debt related to portfolio acquisition, gain (loss) on real estate transactions, earnout from prior acquisitions, sale of other assets and property casualty loss, net8,465
 1,501
 (12,009) (8,193) —
Income before equity in earnings of real estate ventures and income tax expense330,842
 205,476
 188,903
 137,855
 91,613
Equity in earnings of unconsolidated real estate ventures12,895
 12,351
 10,541
 11,653
 10,859
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners' interests69,199
 2,857
 4,022
 46,032
 30,630
Income tax expense(15,847) (11,148) (7,570) (9,984) (5,413)
Net income397,089
 209,536
 195,896
 185,556
 127,689
Noncontrolling interests in Operating Partnership and other noncontrolling interests(30,962) (20,062) (17,541) (13,480) (10,380)
Net income attributable to common stockholders$366,127
 $189,474
 $178,355
 $172,076
 $117,309
          
Earnings per common share         
Basic$2.92
 $1.58
 $1.54
 $1.54
 $1.15
Diluted$2.91
 $1.56
 $1.53
 $1.53
 $1.14
Weighted average number of shares         
Basic125,087,554
 119,816,743
 115,713,807
 111,349,361
 101,766,385
Diluted125,948,076
 126,918,869
 121,435,267
 113,105,094
 103,767,365
Cash dividends paid per common share$2.93
 $2.24
 $1.81
 $1.45
 $0.85


 As of December 31,
 2016 2015 2014 2013 2012
Balance Sheet Data         
Total assets$7,091,446
 $6,071,407
 $4,381,987
 $3,977,140
 $3,223,477
Total notes payable, notes payable to trusts, exchangeable senior notes and revolving lines of credit, net$4,306,223
 $3,535,621
 $2,349,764
 $1,946,647
 $1,577,599
Noncontrolling interests$351,274
 $283,527
 $174,558
 $173,425
 $53,524
Total stockholders' equity$2,244,892
 $2,089,077
 $1,737,425
 $1,758,470
 $1,491,807
Other Data         
Net cash provided by operating activities$539,263
 $367,329
 $337,581
 $271,259
 $215,879
Net cash used in investing activities$(1,032,035) $(1,625,664) $(564,948) $(366,976) $(606,938)
Net cash provided by financing activities$460,831
 $1,286,471
 $148,307
 $191,655
 $395,360
Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. We make statements in this section that areforward-looking statements within the meaning of the federal securities laws. For a complete discussion offorward-looking statements, see the section in thisForm 10-K entitled “Statements RegardingForward-Looking Information.” Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in thisForm 10-K entitled “Risk Factors.” Amounts in thousands, except share and per share data.

Overview

We are a fully integrated,self-administered andself-managed real estate investment trust, or REIT, formed to continue the business commenced in 1977 by Extra Space Storage LLC and its subsidiaries to own, operate, manage, acquire, develop and redevelop professionally managed self-storage stores.

At December 31, 2014,2016, we owned, had ownership interests in, or managed 1,0881,427 operating stores in 3538 states, Washington, D.C. and Puerto Rico. Of these 1,0881,427 operating stores, we owned 557,836, we held joint venture interests in 271180 stores, and our taxable REIT subsidiary, Extra Space Management, Inc., operated an additional 260411 stores that are owned by third parties. These operating stores contain approximately 80.4107 million square feet of rentable space in approximately 725,000960,000 units and currently serve a customer base of approximately 650,000850,000 tenants.

Our stores are generally situated in convenient, highly visible locations clustered around large population centers such as Atlanta, Baltimore/Washington, D.C., Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, New York City, Orlando, Philadelphia, Phoenix, St. Petersburg/Tampa and San Francisco/Oakland. These areas all enjoy above average population growth and income levels. The clustering of our assets around these population centers enables us to reduce our operating costs through economies of scale. We consider a store to be in thelease-up stage after it has been issued a certificate of occupancy, but before it has achieved stabilization. AWe consider a store is considered to be stabilized once it has achieved either an 80% occupancy rate for a full year measured as of January 1 of the current year, or has been open for three years.

years prior to the January 1 of the current year.

To maximize the performance of our stores, we employindustry-leading revenue management systems. Developed by our management team, these systems enable us to analyze, set and adjust rental rates in real time across our portfolio in order to respond to changing market conditions. We believe our systems and processes allow us to more proactively manage revenues.

We derive substantially all of our revenues from rents received from tenants under leases at each of ourwholly-owned stores, from management fees on the stores we manage forjoint-venture partners and unaffiliated third parties, and from our tenant reinsurance program. Our management fee is generally equal to approximately 6.0% of cash collected from total revenues generated by the managed stores. We also receive an asset management fee of 0.5% of the total asset value from one of our joint ventures.

We operate in competitive markets, often where consumers have multiple stores from which to choose. Competition has impacted, and will continue to impact, our store results. We experience seasonal fluctuations in occupancy levels, with occupancy levels generally higher in the summer months due to increased moving activity. Our operating results depend materially on our ability to lease availableself-storage units, to actively manage unit rental rates, and on the ability of our


tenants to make required rental payments. We believe that we are able to respond quickly and effectively to changes in local, regional and national economic conditions by adjusting rental rates through the combination of our revenue management team and ourindustry-leading technology systems.


We continue to evaluate a range of new initiatives and opportunities in order to enable us to maximize stockholder value. Our strategies to maximize stockholder value include the following:

•Maximize the performance of our stores through strategic, efficient and proactive management. We pursuerevenue-generating andexpense-minimizing opportunities in our operations. Our revenue management team seeks to maximize revenue by responding to changing market conditions through our technology system’s ability to providereal-time, interactive rental rate and discount management. Our size allows us greater ability than the majority of our competitors to implement more effective online marketing programs, which we believe will attract more customers to our stores at a lower net cost.

•Acquire self-storage stores. Our acquisitions team continues to pursue the acquisition ofmulti-store portfolios and single stores that we believe can provide stockholder value. We have established a reputation as a reliable, ethical buyer, which we believe enhances our ability to negotiate and close acquisitions. In addition, we believe our status as an UPREIT enables flexibility when structuring deals. We continue to see available acquisitions on which to bid and are seeing increasing prices. However, we remain a disciplined buyer and look for acquisitions that will strengthen our portfolio and increase stockholder value.

•Expand our management business. Our management business enables us to generate increased revenues through management fees and expand our geographic footprint. We believe this expanded footprint enables us to reduce our operating costs through economies of scale. In addition, we see our management business as a future acquisition pipeline. We pursue strategic relationships with owners whose stores would enhance our portfolio in the event an opportunity arises to acquire such stores.

Maximize the performance of our stores through strategic, efficient and proactive management. We pursue revenue-generating and expense-minimizing opportunities in our operations. Our revenue management team seeks to maximize revenue by responding to changing market conditions through our advanced technology system’s ability to provide real-time, interactive rental rate and discount management. Our size allows us greater ability than the majority of our competitors to implement more effective online marketing programs, which we believe will attract more customers to our stores at a lower net cost.
Acquire self-storage stores. Our acquisitions team continues to pursue the acquisition of multi-store portfolios and single stores that we believe can provide stockholder value. We have established a reputation as a reliable, ethical buyer, which we believe enhances our ability to negotiate and close acquisitions. In addition, we believe our status as an UPREIT enables flexibility when structuring deals. We continue to review available acquisitions. As interest rates increase, our expectation is that capitalization rates will also increase and that prices will begin to decrease. We remain a disciplined buyer and only execute acquisitions that we believe will strengthen our portfolio and increase stockholder value.
Expand our management business. Our management business enables us to generate increased revenues through management fees and expand our geographic footprint. We believe this expanded footprint enables us to reduce our operating costs through economies of scale. In addition, we see our management business as a future acquisition pipeline. We pursue strategic relationships with owners whose stores would enhance our portfolio in the event an opportunity arises to acquire such stores.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates and assumptions, including those that impact our most critical accounting policies. We base our estimates and assumptions on historical experience and on various other factors that we believe are reasonable under the circumstances. A summary of significant accounting policies is also provided in
the notes to our consolidated financial statements (see Note 2 to our consolidated financial statements). Actual results may differ from these estimates. We believe the following are our most critical accounting policies:

CONSOLIDATION: Arrangements that are not controlled through voting or similar rights are accounted for as variable interest entities (“VIEs”). An enterprise is required to consolidate a VIE if it is the primary beneficiary of the VIE.

A VIE is created when (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) the entity’s equity holders as a group either: (a) lack the power, through voting or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance, (b) are not obligated to absorb expected losses of the entity if they occur, or (c) do not have the right to receive expected residual returns of the entity if they occur. If an entity is deemed to be a VIE, the enterprise that is deemed to have a variable interest, or combination of variable interests, that provides the enterprise with a controlling financial interest in the VIE is considered the primary beneficiary and must consolidate the VIE.

We have concluded that under certain circumstances when we (1) enter into option agreements for the purchase of land or facilities from an entity and pay anon-refundable deposit, or (2) enter into arrangements for the formation of joint ventures, a VIE may be created under condition (i), or (ii)(b) or (ii)(c) of the previous paragraph. For each VIE created, we have performed a qualitative analysis, including considering which party, if any, has the power to direct the activities most significant to the economic performance of each VIE and whether that

party has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If we are determined to be the primary beneficiary of the VIE, the assets, liabilities and operations of the VIE are consolidated with our financial statements. As of December 31, 2014,2016, we had no consolidated VIEs. Additionally, our Operating Partnership has notes payable to three trusts that are VIEs under condition (ii)(a) above. Since the Operating Partnership is not the primary beneficiary of the trusts, these VIEs are not consolidated.



REAL ESTATE ASSETS: Real estate assets are stated at cost, less accumulated depreciation. Direct and allowable internal costs associated with the development, construction, renovation, and improvement of real estate assets are capitalized. Interest, property taxes, and other costs associated with development incurred during the construction period are capitalized.

Expenditures for maintenance and repairs are charged to expense as incurred. Major replacements and betterments that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives. Depreciation is computed using thestraight-line method over the estimated useful lives of the buildings and improvements, which are generally between 5 and 39 years.

In connection with our acquisition of operating stores, the purchase price is allocated to the tangible and intangible assets and liabilities acquired based on their fair values, which are estimated using significant unobservable inputs. The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Intangible assets, which represent the value of existing tenant relationships, are recorded at their fair values based on the avoided cost to replace the current leases. We measure the value of tenant relationships based on the rent lost due to the amount of time required to replace existing customers, which is based on our historical experience with turnover in our facilities. Debt assumed as part of an acquisition is recorded at fair value based on current interest rates compared to contractual rates.Acquisition-related transaction costs are expensed as incurred.

Stores purchased at the time of certificate of occupancy issuance are considered asset acquisitions. As such, the purchase price is allocated to the land and buildings acquired based on their fair values. Any debt assumed as part of the acquisition is recorded at fair value based on current interest rates compared to contractual rates. Acquisition-related transactions costs are capitalized as part of the purchase price.
Intangible lease rights include: (1) purchase price amounts allocated to leases on three stores that cannot be classified as ground or building leases; these rights are amortized to expense over the term of the leases; and (2) intangibles related to ground leases on fiveeight stores where the ground leases were assumed by the Companyus at rates that were different than the current market rates for similar leases. The value associated with these assumed leases were recorded as intangibles, which will be amortized over the lease terms.

EVALUATION OF ASSET IMPAIRMENT: Long lived assets held for use are evaluated for impairment when events or circumstances indicate that there may be impairment. We review each store at least annually to determine if any such events or circumstances have occurred or exist. We focus on stores where occupancy and/or rental income have decreased by a significant amount. For these stores, we determine whether the decrease is temporary or permanent and whether the store will likely recover the lost occupancy and/or revenue in the short term. In addition, we review stores in thelease-up stage and compare actual operating results to original projections.

When we determine that an event that may indicate impairment has occurred, we compare the carrying value of the relatedlong-lived assets to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the assets exceeds the undiscounted future net operating cash flows attributable to the assets. The impairment loss recognized equals the excess of net carrying value over the related fair value of the assets.

When real estate assets are identified as held for sale, we discontinue depreciating the assets and estimate the fair value of the assets, net of selling costs. If the estimated fair values,value, net of selling costs, of the assets that have been identified as held for sale areis less than the net carrying value of the assets, thenwe would recognize a valuation allowance is established.loss on the disposal group classified as held for sale. The operations of assets held for sale or sold during the period are generally presented as discontinuedpart of normal operations for all periods presented.

INVESTMENTS IN UNCONSOLIDATED REAL ESTATE VENTURES: Our investments in real estate joint ventures where we have significant influence but not control, and joint ventures which are VIEs in which we are not the primary beneficiary, are recorded under the equity method of accounting on the accompanying consolidated financial statements.

Under the equity method, our investment in real estate ventures is stated at cost and adjusted for our share of net earnings or losses and reduced by distributions. Equity in earnings of real estate ventures is generally recognized based on our ownership interest in the earnings of each of the unconsolidated real estate ventures. For the purposes of presentation in the statement of cash flows, we follow the “look through” approach for classification of distributions from joint ventures. Under this approach, distributions are reported under operating cash flow unless the facts and circumstances of a specific distribution clearly indicate that it is a return of capital (e.g., a liquidating dividend or distribution of the proceeds from the joint venture’s sale of assets) in which case it is reported as an investing activity.



Our management assesses annually whether there are any indicators that the value of our investments in unconsolidated real estate ventures may be impaired and when events or circumstances indicate that there may be impairment. An investment is impaired if management’s estimate of the fair value of the investment, using significant unobservable inputs, is less than its carrying value. To the extent impairment has occurred and is considered to be other than temporary, the loss is measured as the excess of the carrying amount of the investment over the fair value of the investment.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income, outside of earnings and subsequently reclassified to earnings when the hedged transaction affects earnings.

REVENUE AND EXPENSE RECOGNITION: Rental revenues are recognized as earned based upon amounts that are currently due from tenants. Leases are generally onmonth-to-month terms. Prepaid rents are recognized on astraight-line basis over the term of the leases. Promotional discounts are recognized as a reduction to rental income over the promotional period. Late charges, administrative fees, merchandise sales and truck rentals are recognized in income when earned. Management fee revenues are recognized monthly as services are performed and in accordance with the terms of the related management agreements. Equity in earnings of real estate entities is recognized based on our ownership interest in the earnings of each of the unconsolidated real estate entities. Interest income is recognized as earned.

Property expenses, including utilities, property taxes, repairs and maintenance and other costs to manage the facilities are recognized as incurred. We accrue for property tax expense based upon invoice amounts, estimates and historical trends. If these estimates are incorrect, the timing of expense recognition could be affected.

Tenant reinsurance premiums are recognized as revenue over the period of insurance coverage. We record an unpaid claims liability at the end of each period based on existing unpaid claims and historical claims payment history. The unpaid claims liability represents an estimate of the ultimate cost to settle all unpaid claims as of each period end, including both reported but unpaid claims and claims that may have been incurred but have not been reported. We use a third party claims administrator to adjust all tenant reinsurance claims received. The administrator evaluates each claim to determine the ultimate claim loss and includes an estimate for claims that may have been incurred but not reported. Annually, a third party actuary evaluates the adequacy of the unpaid

claims liability. Prior year claim reserves are adjusted as experience develops or new information becomes known. The impact of such adjustments is included in the current period operations. The unpaid claims liability is not discounted to its present value. Each tenant chooses the amount of insurance coverage they want through the tenant reinsurance program. Tenants can purchase policies in amounts of two thousand dollars to ten thousand dollars of insurance coverage in exchange for a monthly fee. Our exposure per claim is limited by the maximum amount of coverage chosen by each tenant. We purchase reinsurance for losses exceeding a set amount on any one event. We do not currently have any amounts recoverable under the reinsurance arrangements.

INCOME TAXES: We have elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain our qualification as a REIT, among other things, we are required to distribute at least 90% of our REIT taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to federal income tax with respect to that portion of our income which meets certain criteria and is distributed annually to our stockholders. We plan to continue to operate so that we meet the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. If we were to fail to meet these requirements, we would be subject to federal income tax. We are subject to certain state and local taxes. Provision for such taxes has been included in income tax expense in our consolidated statements of operations.

We have elected to treat one of our corporate subsidiaries, Extra Space Management, Inc., as a taxable REIT subsidiary (“TRS”). In general, our TRS may perform additional services for tenants and generally may engage in any real estate ornon-real estate related business. A TRS is subject to corporate federal income tax. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred.



RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FinancialACCOUNT PRONOUNCEMENTS: For a discussion of recent accounting pronouncements affecting our business, see Item 8, “Financial Statements and Supplementary Data–Recently Issued Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with CustomersStandards.” (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. ASU 2014-09 outlines a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact of the adoption of ASU 2014-09 on our consolidated financial statements.

RESULTS OF OPERATIONS

Comparison of the Year Ended December 31, 20142016 to the Year Ended December 31, 2013

2015

Overview

Results for the year ended December 31, 2014,2016 included the operations of 8281,016 stores (576(836 wholly-owned, one in a consolidated joint venture, and 179 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2015, which included the operations of 999 stores (746 wholly-owned, one in a consolidated joint venture, and 252 in joint ventures accounted for using the equity method).
Revenues
The following table presents information on revenues earned for the years indicated:
 For the Year Ended December 31,    
 2016 2015 $ Change % Change
Revenues:       
Property rental$864,742
 $676,138
 $188,604
 27.9%
Tenant reinsurance87,291
 71,971
 15,320
 21.3%
Management fees and other income39,842
 34,161
 5,681
 16.6%
Total revenues$991,875
 $782,270
 $209,605
 26.8%

Property Rental—The increase in property rental revenues for the year ended December 31, 2016 was primarily the result of an increase of $144,985 associated with acquisitions completed in 2016 and 2015. We acquired 99 stores during the year ended December 31, 2016 and 171 stores during the year ended December 31, 2015. Property rental revenue also increased by $42,171 during the year ended December 31, 2016 as a result of increases in rental rates to new and existing customers at our stabilized stores. Revenues at our lease-up stores increased by $3,439 for the year ended December 31, 2016 due primarily to increases in occupancy. The achieved rental rate to new tenants on wholly owned properties for the year ended December 31, 2016 increased an average of approximately 7.0% over the prior year. These increases were offset by decreases in property revenue of $1,991 for the year ended December 31, 2016 related to the sales of stores during 2016.
Tenant Reinsurance—The increase in tenant reinsurance revenues was due primarily to the increase in stores operated. We operated 1,427 stores at December 31, 2016, compared to 1,347 stores at December 31, 2015.
Management Fees and Other Income—Our TRS manages stores owned by our joint ventures and third parties. Management fees generally represent 6.0% of cash collected from stores owned by third parties and unconsolidated joint ventures. We also earn an asset management fee from the Storage Portfolio I (“SPI”) joint venture, equal to 0.50% multiplied by the total asset value, provided certain conditions are met. The increase in management fees is due primarily to an increase in the revenues at the stores we managed. At December 31, 2016, we managed 591 stores for third parties and non-consolidated joint ventures, compared to 601 stores at December 31, 2015. The decrease in the number of stores managed is due primarily to our acquisition of 40 stores from our joint ventures during 2016.


Expenses
The following table presents information on expenses for the years indicated:
 For the Year Ended December 31,    
 2016 2015 $ Change % Change
Expenses:       
Property operations$250,005
 $203,965
 $46,040
 22.6 %
Tenant reinsurance15,555
 13,033
 2,522
 19.4 %
Acquisition related costs and other12,111
 69,401
 (57,290) (82.5)%
General and administrative81,806
 67,758
 14,048
 20.7 %
Depreciation and amortization182,560
 133,457
 49,103
 36.8 %
Total expenses$542,037
 $487,614
 $54,423
 11.2 %
Property Operations—The increase in property operations expense consists primarily of an increase of $45,055 related to acquisitions completed in 2016 and 2015. We acquired 99 operating stores during the year ended December 31, 2016 and 171 stores during the year ended December 31, 2015.
Tenant Reinsurance—Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance. The change is due primarily to the increase in the number of stores we owned and/or managed. At December 31, 2016, we owned and/or managed 1,427 stores compared to 1,347 stores at December 31, 2015.

Acquisition Related Costs and Other—These costs relate primarily to acquisition activities during the periods indicated. The decrease in these expenses for the year ended December 31, 2016 compared to the prior year was due to a decrease in the number of acquisitions. We acquired 99 properties during the year ended December 31, 2016 compared to 171 during the prior year. Included in the acquisitions completed in 2015 was the acquisition of SmartStop Self Storage Inc. ("SmartStop") on October 1, 2015. As part of this acquisition, we recorded an expense of $38,360 related to defeasance costs and prepayment penalties incurred related to the repayment of SmartStop's existing debt as of the acquisition date. We incurred $8,053 of professional fess/closing costs, $6,338 of severance-related costs, $1,327 of other payroll-related costs and $9,043 of other acquisition related costs as a result of the acquisition of SmartStop, for a total of $63,121.

General and Administrative—General and administrative expenses primarily include all expenses not directly related to our stores, including corporate payroll, travel and professional fees. These expenses are recognized as incurred. General and administrative expenses for the year ended December 31, 2016 increased when compared to the same periods in the prior year primarily due to the overall cost associated with the management of additional stores. At December 31, 2016, we owned and/or managed 1,427 stores compared to 1,347 stores at December 31, 2015. Additionally, during 2016, we accrued a $4,000 expense related to the potential settlement of a legal action. We did not observe any material trends in specific payroll, travel or other expenses that contributed significantly to the increase in general and administrative expenses apart from the increase due to the management of additional stores.
Depreciation and Amortization—Depreciation and amortization expense increased as a result of the acquisition of new stores. We acquired 99 operating stores during the year ended December 31, 2016, and 171 operating stores during the year ended December 31, 2015.


Other Income and Expenses
The following table presents information on other revenues and expenses for the years indicated:
 For the Year Ended December 31,    
 2016 2015 $ Change % Change
Other income and expenses:       
Gain on real estate transactions, earnout from prior acquisition and sale of other assets$8,465
 $1,501
 $6,964
 464.0 %
Interest expense(133,479) (95,682) (37,797) 39.5 %
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes(4,980) (3,310) (1,670) 50.5 %
Interest income6,148
 3,461
 2,687
 77.6 %
Interest income on note receivable from Preferred Operating Partnership unit holder4,850
 4,850
 —
 —
Equity in earnings of unconsolidated real estate ventures12,895
 12,351
 544
 4.4 %
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners' interests69,199
 2,857
 66,342
 2,322.1 %
Income tax expense(15,847) (11,148) (4,699) 42.2 %
Total other expense, net$(52,749) $(85,120) $32,371
 (38.0)%
        

Gain on Real Estate Transactions, Earnout from Prior Acquisition and Sale of Other Assets— During the year ended December 31, 2016, through various transactions, we sold a total of nine stores located in Indiana, Ohio and Texas. We received a total of $22,002 in cash and 85,452 of our OP Units valued at $7,689 in exchange for these stores. The Operating Partnership has canceled the OP Units received. We recognized a total gain of $11,358 related to these dispositions.

During 2014, we acquired a portfolio of five stores. As part of this acquisition, we agreed to make an additional cash payment to the sellers if the acquired stores exceeded a specified amount of net operating income for the years ending December 31, 2015 and 2016. At the acquisition date, we recorded an estimated liability related to this provision. As the operating income of these stores during the earnout period was higher than originally estimated, an additional payment was due to the sellers of $4,284, which was recorded as a loss during 2016.

In 2011, we acquired a single store in Florida. As part of the acquisition, we agreed to make an additional cash payment to the sellers if the acquired store exceeded a specified amount of net rental income for the period of 12 consecutive months ending June 30, 2015. During 2014, we recorded a liability of $2,500 as an estimate of the payment that would become due. The $400 gain recorded during 2015 represents the adjustment needed to true up the existing liability to the amount owed to the sellers as of June 30, 2015.

During 2015, we determined that one of our acquisitions was purchased at below its market value, and therefore recorded a $1,101 gain at the time of the acquisition, which represents the excess of the fair value of the store acquired over the consideration paid.

Interest Expense—The increase in interest expense during the year ended December 31, 2016 was primarily the result of higher debt balances when compared to the prior year. The total face value of our debt, including our lines of credit, was $4,363,697 at December 31, 2016 compared to $3,598,254 at December 31, 2015.

Non-cash Interest Expense Related to Amortization of Discount on Equity Component of Exchangeable Senior Notes—Represents the amortization of the discounts related to the equity components of the exchangeable senior notes issued by our Operating Partnership. Our Operating Partnership has issued and outstanding 2.375% Exchangeable Senior Notes due 2033 (the "2013 Notes") and 3.125% Exchangeable Senior Notes due 2035 (the "2015 Notes.") The 2013 Notes and the 2015 Notes both have an effective interest rate of 4.0% relative to the carrying amount of the liability. The increase for the year ended December 31, 2016 when compared to the same period in the prior year is due to the issuance of $575,000 principal amount of the 2015 Notes in September 2015 and related discount of $22,597.



Interest Income—Interest income represents amounts earned on cash and cash equivalents deposited with financial institutions and interest earned on notes receivable. The increase for the year ended December 31, 2016 is related primarily to the increase in the average notes receivable balances outstanding when compared to the prior year. The majority of the increase in interest income related to the $84,331 of notes receivable issued in conjunction with the acquisition of SmartStop in October 2015. These notes have a 7.0% interest rate which increases to 9.0% in February 2017. As of December 31, 2016, the remaining principal balance was $52,201.
Interest Income on Note Receivable from Preferred Operating Partnership Unit Holder—Represents interest on a $100,000 loan to the holder of the Operating Partnership’s Series A Participating Redeemable Preferred Units (the “Series A Units”).

Equity in Earnings of Unconsolidated Real Estate Ventures—Equity in earnings of unconsolidated real estate ventures represents the income earned through our ownership interests in unconsolidated joint ventures. The increase for the year ended December 31, 2016 compared to the same period in the prior year was primarily the result of an increase in our ownership interest from 2.0% to approximately 4.0% in the ESS PRISA LLC ("PRISA") joint venture and from 2.0% to approximately 4.4% in the ESS PRISA II LLC ("PRISA II") joint venture, as well as an increase in revenue at the stores owned by our joint ventures. These increases were offset by an overall decrease in the number of stores owned by our joint ventures, primarily due to our acquisition of 40 of these stores as noted below.

On April 25, 2016, we and affiliates of Prudential Financial, Inc. ("Prudential") entered into the “Second Amendment to Amended and Restated Operating Agreement of ESS PRISA LLC” and the “First Amendment to Amended and Restated Operating Agreement of ESS PRISA II LLC” (the “Amendments”). The Amendments are deemed effective as of April 1, 2016. Under the Amendments, we gave up any future rights to receive distributions from these joint ventures at the higher “excess profit participation” percentage of 17.0% in exchange for a higher equity ownership percentage. Our equity ownership in ESS PRISA LLC increased from 2.0% to 4.0%, and our equity ownership in ESS PRISA II LLC increased from 2.0% to 4.4%.

Equity in Earnings of Unconsolidated Real Estate Ventures—Gain on Sale of Real Estate Assets and Purchase of Joint Venture Partners’ Interests—On November 17, 2016, we acquired 11 stores from our ESS WCOT LLC joint venture ("WCOT") in a step acquisition. We owned 5.0% of WCOT, with the other 95.0% owned by affiliates of Prudential. WCOT created a new subsidiary, Extra Space Storage 132 LLC ("ESS 132"), and transferred 11 stores into ESS 132. WCOT then distributed ESS 132 to Prudential and us on a pro rata basis. This distribution was accounted for as a spinoff, and was therefore recorded at the net carrying amount of the properties of $68,814 . Immediately after the distribution, we acquired Prudential's 95.0% interest in ESS 132 for $153,304, resulting in 100% ownership of ESS 132 and the related 11 stores. Based on the purchase price of Prudential's share of ESS 132, we determined that the fair value of our investment in ESS 132 immediately prior to the acquisition of Prudential's share was $8,119, and we recorded a gain of $4,651 as a result of re-measuring to fair value our existing equity interest in ESS 132.

On September 16, 2016, we acquired 23 stores from PRISA II in a step acquisition. We owned 4.4% of PRISA II, with the other 95.6% owned by affiliates of Prudential. PRISA II created a new subsidiary, Extra Space Properties 131 LLC ("ESP 131"), and transferred 23 stores into ESP 131. PRISA II then distributed ESP 131 to Prudential and us on a pro rata basis. This distribution was accounted for as a spinoff, and was therefore recorded at the net carrying amount of the properties of $4,326. Immediately after the distribution, we acquired Prudential's 95.6% interest in ESP 131 for $238,679, resulting in 100% ownership of ESP 131 and the related 23 stores. Based on the purchase price of Prudential's share of ESP 131, we determined that the fair value of our investment in ESP 131 immediately prior to the acquisition of Prudential's share was $10,988, and we recorded a gain of $6,778 as a result of re-measuring to fair value our existing equity interest in ESP 131. Subsequent to these transactions, PRISA II owned 42 stores. We then sold our remaining interest in PRISA II to Prudential for $34,758 in cash. As a result of this sale, we recognized a gain of $30,846.

On February 2, 2016, we acquired six stores from our VRS Self Storage LLC joint venture (“VRS”) in a step acquisition. We owned 45.0% of VRS, with the other 55.0% owned by Prudential. VRS created a new subsidiary, Extra Space Properties 122 LLC (“ESP 122”) and transferred six stores into ESP 122. VRS then distributed ESP 122 to Prudential and us on a pro rata basis. This distribution was accounted for as a spinoff, and was therefore recorded at the net carrying amount of the properties of $17,261, Immediately after the distribution, we acquired Prudential’s 55.0% interest in ESP 122 for $53,940, resulting in 100% ownership of ESP 122 and the related six stores. Based on the purchase price of Prudential’s share of ESP 122, we determined that the fair value of our investment in ESP 122 immediately prior to the acquisition of Prudential’s share was $44,184, and we recorded a gain of $26,923 as a result of re-measuring to fair value our existing equity interest in ESP 122.

In March 2015, one of our joint ventures sold a store located in New York to a third party and recognized a gain of $60,495. We recognized our 2.0% share of this gain, or $1,228.



In March 2015 we acquired a joint venture partner’s 82.4% equity interest in an existing joint venture which had one store. We previously held the remaining 17.6% equity interest in this joint venture. Prior to the acquisition, we accounted for our equity interest in this joint venture as an equity-method investment. We recognized a non-cash gain of $1,629 as a result of re-measuring the fair value of our equity interest in this joint venture held before the acquisition.

Income Tax Expense—Income tax expense is the result of income earned by our TRS which includes income from our management company and reinsurance activities.

Net Income Allocated to Noncontrolling Interests
The following table presents information on net income allocated to noncontrolling interests for the years indicated:
 For the Year Ended December 31,    
 2016 2015 $ Change % Change
Net income allocated to noncontrolling interests:       
Net income allocated to Preferred Operating Partnership noncontrolling interests$(14,700) $(11,718) $(2,982) 25.4%
Net income allocated to Operating Partnership and other noncontrolling interests(16,262) (8,344) (7,918) 94.9%
Total income allocated to noncontrolling interests:$(30,962) $(20,062) $(10,900) 54.3%

Net Income Allocated to Preferred Operating Partnership Noncontrolling Interests—Income allocated to the Preferred Operating Partnership noncontrolling interests for the year ended December 31, 2016 represents the fixed distributions paid to the preferred unit holders as follows: the Series A Redeemable Preferred Units (“Series A Units”) receive distributions at an annual rate of 5.0%, plus approximately 0.70% of net income after the allocation of the fixed distributions, the Series B Redeemable Preferred Units (“Series B Units”) receive distributions at an annual rate of 6.0%, the Series C Convertible Redeemable Preferred Units (“Series C Units”) receive, from issuance until the fifth anniversary of issuance, an annual rate of $0.18 plus the then-payable quarterly distribution per OP Unit, and the Series D Redeemable Preferred Units (“Series D Units”) receive distributions at an annual rate of 5.0%.

Net Income Allocated to Operating Partnership and Other Noncontrolling Interests—Income allocated to the Operating Partnership represents approximately 4.2% and 4.2% of net income after the allocation of the fixed distribution paid to the Preferred Operating Partnership unit holders for the years ended December 31, 2016 and 2015, respectively.

Comparison of the Year Ended December 31, 2015 to the Year Ended December 31, 2014
Overview
Results for the year ended December 31, 2015, included the operations of 999 stores (747 of which were consolidated and 252 of which were in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2013,2014, which included the operations of 779828 stores (525(576 of which were consolidated and 254252 of which were in joint ventures accounted for using the equity method).

Revenues

The following table presents information on revenues earned for the years indicated:

   For the Year Ended
December 31,		         
            2014                     2013            $ Change   % Change 

Revenues:

        

Property rental

  $559,868    $446,682    $113,186     25.3% 

Tenant reinsurance

   59,072     47,317     11,755     24.8% 

Management fees

   28,215     26,614     1,601     6.0% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

$647,155  $520,613  $126,542   24.3% 
  

 

 

   

 

 

   

 

 

   

 

 

 

 
For the Year Ended
December 31,
    
 2015 2014 $ Change % Change
Revenues:       
Property rental$676,138
 $559,868
 $116,270
 20.8%
Tenant reinsurance71,971
 59,072
 12,899
 21.8%
Management fees and other income34,161
 28,215
 5,946
 21.1%
Total revenues$782,270
 $647,155
 $135,115
 20.9%


Property Rental—The change in property rental revenues consists primarily of an increase of $83,651$69,622 associated with acquisitions completed in 20142015 and 2013.2014. We acquired 51171 operating stores during 20142015 and 78 operating51 stores during 2013.2014. In addition, revenues increased by $29,531$47,560 as a result of increases in occupancy and rental rates to new and existing customers at our stabilized stores. We have seensaw no significant increase in overall customer renewal rates and our average length of stay iswas approximately 12.913.7 months. For existing customers we generally seek to increase rental rates approximately 7% to 10% at least annually. Occupancy at our stabilized stores increased to 91.0% at December 31, 2014, as compared to 88.4% at December 31, 2013. Rental rates to new tenants increased by approximately 3.9%8.9% over the same period in the prior year.

Occupancy at our stabilized stores increased to 91.1% at December 31, 2015, as compared to 89.6% at December 31, 2014.

Tenant Reinsurance—The increase in tenant reinsurance revenues was partially due to the increase in overall customer participation to approximately 72.8% at December 31, 2015, compared to approximately 70.7% at December 31, 2014, compared to approximately 68.7%2014. In addition, we operated 1,347 stores at December 31, 2013. In addition, we operated2015, compared to 1,088 stores at December 31, 2014, compared to 1,029 stores at December 31, 2013.

2014.

Management Fees and Other Income—Our taxable REIT subsidiary, Extra Space Management, Inc.,TRS manages stores owned by our joint ventures and third parties. Management fees generally represent 6.0% of cash collected from stores owned by third parties and unconsolidated joint ventures. The CompanyWe also earnsearn an asset management fee from the Storage Portfolio I (“SPI”) joint venture, equal to 0.50% multiplied by the total asset value, provided certain conditions are met. The increase in management fees is due to increased revenuesan increase in the number of properties managed. At December 31, 2015, we managed 348 stores, compared to 260 stores at the managed stores.

December 31, 2014.

Expenses

The following table presents information on expenses for the years indicated:

   For the Year Ended
December 31,		         
            2014                     2013            $ Change   % Change 

Expenses:

        

Property operations

  $172,416    $140,012    $32,404     23.1% 

Tenant reinsurance

   10,427     9,022     1,405     15.6% 

Acquisition related costs

   9,826     8,618     1,208     14.0% 

General and administrative

   60,942     54,246     6,696     12.3% 

Depreciation and amortization

   115,076     95,232     19,844     20.8% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

$368,687  $307,130  $61,557   20.0% 
  

 

 

   

 

 

   

 

 

   

 

 

 

 
For the Year Ended
December 31,
    
 2015 2014 $ Change % Change
Expenses:       
Property operations$203,965
 $172,416
 $31,549
 18.3%
Tenant reinsurance13,033
 10,427
 2,606
 25.0%
Acquisition related costs69,401
 9,826
 59,575
 606.3%
General and administrative67,758
 60,942
 6,816
 11.2%
Depreciation and amortization133,457
 115,076
 18,381
 16.0%
Total expenses$487,614
 $368,687
 $118,927
 32.3%
Property Operations—The increase in property operations expense consists primarily of an increase of $30,036$26,236 related to acquisitions completed in 20142015 and 2013.2014. We acquired 51171 operating stores during the year ended December 31, 20142015 and 78 operating51 stores during the year ended December 31, 2013.

2014.

Tenant Reinsurance—Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance. The change is due primarily to the increase in the number of stores we owned and/or managed. At December 31, 2014,2015, we owned and/or managed 1,0881,347 stores compared to 1,0291,088 stores at December 31, 2013.2014. In addition, there was an increase in overall customer participation to approximately 72.8% at December 31, 2015 from approximately 70.7% at December 31, 2014 from approximately 68.7% at December 31, 2013.

2014.

Acquisition Related Costs—These costs relate to acquisition activities during the periods indicated. The increase for the year ended December 31, 20142015 when compared to the prior year was related primarily to the acquisition of SmartStop on October 1, 2015. As part of this acquisition, we recorded an expense of $3,550 of$38,360 related to defeasance costs paid in anand prepayment penalties incurred related to the repayment of SmartStop’s existing debt as of the acquisition indate. We incurred $8,053 of professional fees/closing costs, $6,338 of severance-related costs, $1,327 of other payroll-related costs and $9,043 of other acquisition related costs as a result of the acquisition of SmartStop, for a total of $63,121. Additionally, we acquired 49 other properties during the year ended December 2014. This increase was offset by a decrease in the number of stores acquired. We acquired 51 operating stores during 2014, compared to 78 operating stores acquired during 2013.

31, 2015.

General and Administrative—General and administrative expenses primarily include all expenses not related to our stores, including corporate payroll, travel and professional fees. The expenses are recognized as incurred. General and administrative expense increased over the prior year primarily as a result of the costs related to the management of additional stores. During the year ended December 31, 2014,2015, we acquired 52171 stores, 30161 of which we did not previously manage. During the year ended December 31, 2013,2014, we acquired 7851 stores, 4730 of which we did not previously manage. We did not observe any


material trends specific to payroll, travel or other expense that contributed significantly to the increase in general and administrative expenses apart from the increase due to the management of additional stores.

Depreciation and Amortization—Depreciation and amortization expense increased as a result of the acquisition of new stores. We acquired 171 operating stores during the year ended December 31, 2015, and 51 operating stores during the year ended December 31, 2014, and 78 operating stores during the year ended December 31, 2013.

2014.

Other Income and Expenses

The following table presents information on other revenues and expenses for the years indicated:

   For the Year Ended
December 31,		       
            2014                    2013           $ Change  % Change 

Other income and expenses:

     

Gain (loss) on sale of real estate and earnout from prior acquisitions

  $(10,285)  $960   $(11,245)   (1,171.4%) 

Property casualty loss, net

   (1,724)   —      (1,724)   100.0% 

Loss on extinguishment of debt related to portfolio acquisition

   —      (9,153)   9,153    (100.0%) 

Interest expense

   (81,330)   (71,630)   (9,700)   13.5% 

Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes

   (2,683)   (1,404)   (1,279)   91.1% 

Interest income

   1,607    749    858    114.6% 

Interest income on note receivable from Preferred Operating Partnership unit holder

   4,850    4,850    —      —    

Equity in earnings of unconsolidated real estate ventures

   10,541    11,653    (1,112)   (9.5%) 

Equity in earnings of unconsolidated real estate ventures—gain on sale of real estate assets and purchase of joint venture partners’ interests

   4,022    46,032    (42,010)   (91.3%) 

Income tax expense

   (7,570)   (9,984)   2,414    (24.2%) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total other expense, net

$(82,572) $(27,927) $(54,645)  195.7% 
  

 

 

  

 

 

  

 

 

  

 

 

 

 
For the Year Ended
December 31,
    
 2015 2014 $ Change % Change
Other income and expenses:       
Gain (loss) on real estate transactions, earnout from prior acquisitions and sale of other assets$1,501
 $(10,285) $11,786
 (114.6)%
Property casualty loss, net—
 (1,724) 1,724
 (100.0)%
Interest expense(95,682) (81,330) (14,352) 17.6 %
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes(3,310) (2,683) (627) 23.4 %
Interest income3,461
 1,607
 1,854
 115.4 %
Interest income on note receivable from Preferred Operating Partnership unit holder4,850
 4,850
 —
 — %
Equity in earnings of unconsolidated real estate ventures12,351
 10,541
 1,810
 17.2 %
Equity in earnings of unconsolidated real estate ventures—gain on sale of real estate assets and purchase of joint venture partners’ interests2,857
 4,022
 (1,165) (29.0)%
Income tax expense(11,148) (7,570) (3,578) 47.3 %
Total other expense, net$(85,120) $(82,572) $(2,548) 3.1 %
Gain (Loss) on Sale of Real Estate andTransactions, Earnout from Prior Acquisitions— and Sale of Other Assets—During 2011, we acquired a store located in Florida. As part of this acquisition, we agreed to make an additional cash payment to the sellers if the acquired store exceeded a specified amount of net rental income for any twelve-month period prior to June 30, 2015. At the acquisition date, $133 was recorded as the estimated amount that would be due, and we believed that it was unlikely that any significant additional payment would be made as a result of this earnout provision. Because the rental growth of the stores trended significantly higher than expected, we recorded additional liability of $2,500. This amount is included in gain (loss) on sale of real estate and earnout from prior acquisitions on our consolidated statements of operations for the year ended December 31, 2014. The $400 gain recorded during the year ended December 31, 2015 represents the adjustment needed to true up the existing liability to the amount owed to the sellers as of June 30, 2015.

During the year ended December 31, 2015, we determined that one of our acquisitions was purchased at below its market value, and we therefore recorded a $1,101 gain, which represents the excess of the fair value of the store acquired over the consideration paid.
During 2012, we acquired a portfolio of ten stores located in New Jersey and New York.stores. As part of this acquisition, we agreed to make an additional cash payment to the sellers if the acquired stores exceeded a specified amount of net rental income two years after the acquisition date. At the acquisition date, we believed that it was unlikely that any significant payment would be made as a result of this earnout provision. The rental growth of the stores was significantly higher than expected, resulting in a payment to the sellers of $7,785. This amount is included in gain (loss) on sale of real estate and earnout from prior acquisitions on our consolidated statements of operations for the year ended December 31, 2014.

During 2011, we acquired a store located in Florida. As part of this acquisition, we agreed to make an additional cash payment to the sellers if the acquired store exceeded a specified amount of net rental income for any twelve-month period prior to June 30, 2015. At the acquisition date, $133 was recorded as the estimated amount that would be due, and we believed that it was unlikely that any significant additional payment would be made as a result of this earnout provision. Because the rental growth of the stores is trending significantly higher than expected, we estimated that an additional earnout payment of $2,500 will be due to the seller. This amount is included in gain (loss) on sale of real estate and earnout from prior acquisitions on our consolidated statements of operations for the year ended December 31, 2014.

The gain on sale of real estate assets recorded for the year ended December 31, 2013 was related to two transactions: (1) we recorded a gain of $800 as a result of the condemnation of a portion of land in California that resulted from eminent domain, and (2) we recorded a gain of $160 as a result of the sale of one store in Florida for $3,250 in cash.

Property Casualty Loss, Net—In October 2014, a store located in Venice, California, was damaged by a fire. As a result, we recorded a loss, net of insurance recoveries, of $1,724.

Loss on Extinguishment of Debt Related to Portfolio Acquisition—The loss on extinguishment of debt occurred as part of a loan assumption and immediate defeasance upon closing of a portfolio acquisition during the year ended December 31, 2013.



Interest Expense—Interest expense increased due to the increase in total amount of debt outstanding. This increase was partially offset by a decrease in the average interest rate. At December 31, 2014,2015, our total face value of debt was $2,379,657$3,598,254, compared to a total face value of debt of $1,958,586$2,379,657 at December 31, 2013.2014. The average interest rate was 3.1% as of December 31, 2015, compared to 3.4% as of December 31, 2014, compared to 3.8% as of December 31, 2013.

2014.

Non-cash Interest Expense Related to Amortization of Discount on Equity Component of Exchangeable Senior Notes—Represents the amortization of the discount related to the equity component of the exchangeable senior notes issued by our Operating Partnership, which reflects the 4.0% effective interest rate relative to the carrying amount of the liability.Partnership. In June 2013, our Operating Partnership issued $250,000 of its 2.375% Exchangeable Senior2013 Notes. In September 2015, our Operating Partnership issued $575,000 of its 2015 Notes, due 2033 (the “Notes due 2033”)and repurchased $164,636 principal amount of the 2013 Notes. Both the 2013 Notes and the 2015 Notes have effective interest rates of 4.0%.

Interest Income—Interest income represents amounts earned on cash and cash equivalents deposited with financial institutions and interest earned on notes receivable. The increase relates primarily to the increase in the average balance of notes receivable when compared to the prior year.

year and an increase in our average cash balance. As part of the SmartStop acquisition on October 1, 2015, we issued an $84,331 note receivable that accrues interest at 7.0% annually. We recorded approximately $1,476 of interest income related to this note receivable during the year ended December 31, 2015.

Interest Income on Note Receivable from Preferred Operating Partnership Unit Holder—Represents interest on a $100,000 loan to the holder of the Operating Partnership’s Series A Participating Redeemable Preferred Units (the “Series A Units”).

Units.

Equity in Earnings of Unconsolidated Real Estate Ventures—Equity in earnings of unconsolidated real estate ventures represents the income earned through our ownership interests in unconsolidated joint ventures. The decreaseincrease in equity in earnings for the year ended December 31, 2015 was due primarily to the acquisition of our joint venture partners’ interestsincreases in several joint ventures during 2013. There were 252 operatingrevenue at the stores owned by unconsolidated real estate ventures as of December 31, 2014, compared to 254 stores as of December 31, 2013, and 280 as of December 31, 2012.

the joint ventures.

Equity in Earnings of Unconsolidated Real Estate Ventures—Gain on Sale of Real Estate Assets and Purchase of Joint Venture Partners’ Interests—Between During March 2015, one of our joint ventures sold a store located in New York to a third party and recognized a gain of $60,495. We recognized our 2.0% share of this gain, or $1,228. Additionally, in March 2015 we acquired a joint venture partner’s 82.4% equity interest in an existing joint venture. We previously held the remaining 17.6% equity interest in this joint venture. Prior to the acquisition, we accounted for our equity interest in this joint venture as an equity-method investment. We recognized a non-cash gain of $1,629 during the three months ended March 31, 2015 as a result of re-measuring the fair value of our equity interest in this joint venture held before the acquisition.

In December 2013 and May 2014, as part of a larger acquisition, we acquired our joint venture partners’ 60% to 65% equity interests in six stores located in California. We previously held the remaining 35% to 40% interests in these stores through six separate joint ventures with affiliates of Grupe Properties Co. Inc. (“Grupe”). Prior to the acquisition, we accounted for our interests in these joint ventures as equity-method investments. We recognized a non-cash gain of $3,438 during the year ended December 31, 2014, as a result of re-measuring the fair value of our equity interest in one of these joint ventures held before the acquisition. During the year ended December 31, 2014, we recorded an additional gain of $584 as a result of the final cash distributions received from the other five joint ventures associated with the acquisitions that were completed during 2013. We recognized non-cash gains of $9,339 during the year ended December 31, 2013, which represented the increase in the fair values of our prior interests in the Grupe joint ventures from their formations to the acquisition dates.

On November 1, 2013, we acquired an additional 49% equity interest from our joint venture partners, which retained a 1% interest in the

HSRE-ESP IA, LLC joint venture (“HSRE”) that owns 19 stores. This transaction resulted in anon-cash gain of $34,136, which represents the increase in the fair value of our 50% interest in HSRE from the formation of the joint venture to the acquisition date.

In February 2013, we acquired our partners’ equity interests in two joint ventures that each held one store. As a result of the acquisitions, we recognizednon-cash gains of $2,556, which represents the increase in the fair values of our prior interests in the joint ventures from their formations to the acquisition dates.

Income Tax Expense—The decreaseincrease in income tax expense relates primarily to an increase in income earned by our TRS when compared to the same periods in the prior year. Additionally, during the year ended December 31, 2014, we recorded the initial tax benefit related to a royalty chargedfee that we charge quarterly to our captive insurance subsidiary, which reduced the insurance captive by the Operating Partnershiptax expense for access to and use of customer lists and intellectual property. The effect of this change lowered the taxable income of the TRS.

that period.



Net Income Allocated to Noncontrolling Interests

The following table presents information on net income allocated to noncontrolling interests for the years indicated:

   For the Year Ended
December 31,		       
            2014                    2013           $ Change  % Change 

Net income allocated to noncontrolling interests:

     

Net income allocated to Preferred Operating Partnership noncontrolling interests

  $(10,991)  $(8,006)  $(2,985)   37.3% 

Net income allocated to Operating Partnership and other noncontrolling interests

   (6,550)   (5,474)   (1,076)   19.7% 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total income allocated to noncontrolling interests:

$(17,541) $(13,480) $(4,061)  30.1% 
  

 

 

  

 

 

  

 

 

  

 

 

 

 
For the Year Ended
December 31,
    
 2015 2014 $ Change % Change
Net income allocated to noncontrolling interests:       
Net income allocated to Preferred Operating Partnership noncontrolling interests$(11,718) $(10,991) $(727) 6.6%
Net income allocated to Operating Partnership and other noncontrolling interests(8,344) (6,550) (1,794) 27.4%
Total income allocated to noncontrolling interests:$(20,062)
$(17,541) $(2,521) 14.4%
Net Income Allocated to Preferred Operating Partnership Noncontrolling Interests—In December 2014, as part of the acquisition of a single store, our Operating Partnership issued 548,390 Series D Units.Redeemable Preferred Units (“Series D Units”). The Series D Units have a liquidation value of $25.00 per unit, and receive distributions at an annual rate of 5.0%.

Between

In December 2013 and May 2014, as part of a portfolio acquisition, our Operating Partnership issued 704,016 Series C Convertible Redeemable Preferred Units (“Series C Units”). The Series C Units have a liquidation value of $42.10 per unit. From issuance until the fifth anniversary of issuance, the Series C Units receive distributions at an annual rate of $0.18 plus thethen-payable quarterly distribution per common OP Unit.

In April 2014, as part of a single store acquisition, our Operating Partnership issued 333,360 Series B Redeemable Preferred Units (“Series B Units”). During August and September 2013, as part of a portfolio acquisition, our Operating Partnership issued 1,342,727 Series B Units. The Series B Units have a liquidation value of $25.00 per unit and receive distributions at an annual rate of 6.0%.

Income allocated to the Preferred Operating Partnership noncontrolling interests for the yearyears ended December 31, 2015 and 2014 represents the fixed distributions paid to the holders of the Series A Units, Series B Units, Series C Units and Series D Units, plus approximately 0.7% of the remaining net income allocated to the holders of the Series A Units.

Net Income Allocated to Operating Partnership and Other Noncontrolling Interests—Income allocated to the Operating Partnership represents approximately 3.5%4.2% and 3.6%3.5% of net income after the allocation of the fixed distribution paid to the Preferred Operating Partnership unit holders for the years ended December 31, 2015 and 2014, and 2013, respectively.

Comparison of the Year Ended December 31, 2013 to the Year Ended December 31, 2012

Overview

Results for the year ended December 31, 2013, included the operations of 779 stores (525 of which were consolidated and 254 of which were in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2012, which included the operations of 729 stores (449 of which were consolidated and 280 of which were in joint ventures accounted for using the equity method).

Revenues

The following table presents information on revenues earned for the years indicated:

   For the Year Ended
December 31,		         
   2013   2012   $ Change   % Change 

Revenues:

        

Property rental

  $446,682    $346,874    $99,808     28.8% 

Tenant reinsurance

   47,317     36,816     10,501     28.5% 

Management fees

   26,614     25,706     908     3.5% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

$520,613  $409,396  $111,217   27.2% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Property Rental—The change in property rental revenues consists primarilypercentage of an increase of $75,401 associated with acquisitions completed in 2013 and 2012. We acquired 78 stores during 2013 and 91 stores during 2012. In addition, revenues increased by $21,551 as a result of increases in occupancy and rental rates to existing customers at our stabilized stores. We have seen no significant increase in overall customer renewal rates; our average length of stay is approximately twelve months. For existing customers we generally seek to increase rental rates approximately 7% to 10% at least annually. Occupancy at our stabilized stores increased to 88.0% at December 31, 2013, as compared to 86.3% at December 31, 2012. Rental rates to new tenants increased by approximately 2.7% over the same period in the prior year.

Tenant Reinsurance—The increase in tenant reinsurance revenues was partially due to the increase in overall customer participation to approximately 68.7% at December 31, 2013, compared to approximately 67.0% at December 31, 2012. In addition, we operated 1,029 stores at December 31, 2013, compared to 910 stores at December 31, 2012.

Management Fees—Our taxable REIT subsidiary, Extra Space Management, Inc., manages stores owned by our joint ventures and third parties. Management fees generally represent 6.0% of cash collected from stores owned by third parties and unconsolidated joint ventures. We also earn an asset management fee from the SPI joint venture, equal to 0.50% multiplied by the total asset value, provided certain conditions are met.

Expenses

The following table presents information on expenses for the years indicated:

   For the Year Ended
December 31,		         
            2013                     2012            $ Change   % Change 

Expenses:

        

Property operations

  $140,012    $114,028    $25,984     22.8% 

Tenant reinsurance

   9,022     7,869     1,153     14.7% 

Acquisition related costs

   8,618     5,351     3,267     61.1% 

General and administrative

   54,246     50,454     3,792     7.5% 

Depreciation and amortization

   95,232     74,453     20,779     27.9% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

$307,130  $252,155  $54,975   21.8% 
  

 

 

   

 

 

   

 

 

   

 

 

 

Property Operations—The increase in property operations expense consists primarily of an increase of $24,335 related to acquisitions completed in 2013 and 2012. We acquired 78 stores during the year ended December 31, 2013 and 91 stores during the year ended December 31, 2012.

Tenant Reinsurance—Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance. The change is due primarily to the increase in the number of stores we owned and/or managed. At December 31, 2013, we owned and/or managed 1,029 stores compared to 910 stores at December 31, 2012. In addition, there was an increase in overall customer participation to approximately 68.7% at December 31, 2013 from approximately 67.0% at December 31, 2012.

Acquisition Related Costs—These costs relate to acquisition activities during the periods indicated. The increase for the year ended December 31, 2013 when compared to the prior year was related primarily to the expense of $2,441 of defeasance reimbursement costs paid to the seller in a store acquisition in December 2013.

General and Administrative—General and administrative expenses primarily include all expenses not related to our stores, including corporate payroll, travel and professional fees. The expenses are recognized as incurred. General and administrative expenses increased over the prior year primarily as a result of the costs related to the management of additional stores. During the year ended December 31, 2013, we acquired 78 stores, 47 of which we did not previously manage. We did not observe any material trends specific to payroll, travel or other expenses that contributed significantly to the increase in general and administrative expenses apart from the increase due to the management of additional stores.

Depreciation and Amortization—Depreciation and amortization expense increased as a result of the acquisition of new stores. We acquired 78 stores during the year ended December 31, 2013, and 91 stores during the year ended December 31, 2012.

Other Income and Expenses

The following table presents information on other revenues and expenses for the years indicated:

   For the Year Ended
December 31,		         
           2013                   2012           $ Change   % Change 

Other income and expenses:

        

Gain (loss) on sale of real estate and earnout from prior acquisitions

  $960    $—      $960     100.0%  

Loss on extinguishment of debt related to portfolio acquisition

   (9,153)     —       (9,153)     100.0%  

Interest expense

   (71,630)     (71,850)     220     (0.3%)  

Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes

   (1,404)     (444)     (960)     216.2%  

Interest income

   749     1,816     (1,067)     (58.8%)  

Interest income on note receivable from Preferred Operating Partnership unit holder

   4,850     4,850     —       —    

Equity in earnings of unconsolidated real estate ventures

   11,653     10,859     794     7.3%  

Equity in earnings of unconsolidated real estate ventures—gain on sale of real estate assets and purchase of joint venture partners' interests

   46,032     30,630     15,402     50.3%  

Income tax expense

   (9,984)     (5,413)     (4,571)     84.4%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense, net

$(27,927)  $(29,552)  $1,625   (5.5%)  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gain (Loss) on Sale of Real Estate Assets and earnout from prior acquisitions—The gain on sale of real estate assets recorded for the year ended December 31, 2013 was related to two transactions: (1) we recorded a gain of $800 as a result of the condemnation of a portion of land in California that resulted from eminent domain, and (2) we recorded a gain of $160 as a result of the sale of one store in Florida for $3,250 in cash.

Loss on Extinguishment of Debt Related to Portfolio Acquisition—The loss on extinguishment of debt occurred as part of a loan assumption and immediate defeasance upon closing of a portfolio acquisition during the year ended December 31, 2013.

Interest Expense—Interest expense remained fairly constant as the increase in the total amount of debt outstanding was offset by a decrease in the average interest rate. At December 31, 2013, our total face value of debt was $1,958,586, compared to total face value of debt of $1,574,280 at December 31, 2012. The average interest rate was 3.8% as of December 31, 2013, compared to 4.2% as of December 31, 2012.

Non-cash Interest Expense Related to Amortization of Discount on Equity Component of Exchangeable Senior Notes—Our Operating Partnership had $87,663 of its 3.625% Exchangeable Senior Notes due 2027 (the “Notes due 2027”) outstanding prior to April 2012, when all of the Notes due 2027 were surrendered for exchange. In June 2013, our Operating Partnership issued $250,000 of its Notes due 2033.

Interest Income—Interest income represents amounts earned on cash and cash equivalents deposited with financial institutions and interest earned on notes receivable. The decrease relates primarily to the payoff of two note receivables in December 2012 when the related stores were purchased by us.

Interest Income on Note Receivable from Preferred Operating Partnership Unit Holder—Represents interest on a $100,000 loan to the holder of the Series A Units.

Equity in Earnings of Unconsolidated Real Estate Ventures—The increase in equity in earnings of unconsolidated real estate ventures was due primarily to an increase in revenues at joint ventures, which resulted from higher occupancy and rental rates to new and existing customers. This increase was partially offset by a slight decrease in equity in earnings due to the acquisition of our joint venture partners’ interests in several joint ventures during 2012 and 2013.

Equity in Earnings of Unconsolidated Real Estate Ventures—Gain on Sale of Real Estate Assets and Purchase of Joint Venture Partners’ Interests—In December 2013, we acquired our partners’ equity interest in five joint ventures that each held one store. Each of these joint venture partners was associated with Grupe. As a result of these transactions, we recordednon-cash gains of $9,339, which represents the increase in the fair values of our prior interests in the Grupe joint ventures from their formations to the acquisition dates.

On November 1, 2013, we acquired an additional 49% equity interest from our joint venture partners, which retained a 1% interest in HSRE. This transaction resulted in anon-cash gain of $34,136, which represents the increase in the fair value of our 50% interest in HSRE from the formation of the joint venture to the acquisition date.

In February 2013, we acquired our partners’ equity interests in two joint ventures that each held one store. As a result of the acquisitions, we recognizednon-cash gains of $2,556, which represents the increase in the fair values of our prior interests in the joint ventures from their formations to the acquisition dates.

In December 2012, two joint ventures in which we held a 20% equity interest, each sold its only store. As a result of the sales, the joint ventures were dissolved, and we received cash proceeds which resulted in a gain of $1,409.

On November 30, 2012, we acquired our joint venture partner’s 80% interest in the Storage Portfolio Bravo II LLC joint venture (“SPB II”). This transaction resulted in anon-cash gain of $10,171, which represents the increase in fair value of our 20% interest in SPB II from the formation of the joint venture to the acquisition date.

On July 2, 2012, we acquired Prudential Real Estate Investors’ (“PREI®”) 94.9% interest in the ESS PRISA III LLC joint venture (“PRISA III”). This transaction resulted in anon-cash gain of $13,499, which represents the increase in fair value of our 5.1% interest in PRISA III from the formation of the joint venture to the acquisition date.

In February 2012, a joint venture in which we held a 40% equity interest sold its only store. As a result of the sale, the joint venture was dissolved, and we received cash proceeds which resulted in a gain of $5,550.

Income Tax Expense—The increase in income tax expense relates primarily to increased tenant reinsurance income earned by our taxable REIT subsidiary and lower solar tax credits when compared to the prior year.

Net Income Allocated to Noncontrolling Interests

The following table presents information on net income allocated to noncontrolling interests for the years indicated:

   For the Year Ended
December 31,		       
            2013                    2012           $ Change  % Change 

Net income allocated to noncontrolling interests:

     

Net income allocated to Preferred Operating Partnership noncontrolling interests

  $(8,006)  $(6,876)  $(1,130)   16.4% 

Net income allocated to Operating Partnership and other noncontrolling interests

   (5,474)   (3,504)   (1,970)   56.2% 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total income allocated to noncontrolling interests:

$(13,480) $(10,380) $(3,100)  29.9% 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net Income Allocated to Preferred Operating Partnership Noncontrolling Interests—In December 2013, as part of a portfolio acquisition, our Operating Partnership issued 407,996 Series C Units. The Series C Units have a liquidation value of $42.10 per unit. From issuance until the fifth anniversary of issuance, the Series C Units receive distributions at an annual rate of $0.18 plus thethen-payable quarterly distribution per common OP Unit.

During August and September 2013, as part of a portfolio acquisition, our Operating Partnership issued 1,342,727 Series B Units. The Series B Units have a liquidation value of $25.00 per unit and receive distributions at an annual rate of 6.0%.

Income allocated to the Preferred Operating Partnership noncontrolling interests for the year ended December 31, 2013 represents the fixed distributions paid to the holders of the Series A Units, Series B Units, and Series C Units plus approximately 0.9% of the remaining net income allocated after adjustment for the fixed distribution paid.

For the year ended December 31, 2012, income allocated to the Preferred Operating Partnership noncontrolling interest equals the fixed distribution paid to the Series A Unit holder, plus approximately 0.9% of the remaining net income allocated after the adjustment for the fixed distribution paid. The increase in the percentage was primarily a result of the issuance of the Series B Units and Series C Units as noted above.

Net Income Allocated to Operating Partnership and Other Noncontrolling Interests—Income allocated to the Operating Partnership represents approximately 3.6% and 2.9% of net income after the allocation of the fixed distribution paidnoncontrolling interest increased due to the Preferred Operating Partnership unit holders for the years ended December 31, 2013 and 2012, respectively.

OP Units issued in conjunction with acquisitions during 2015.

FUNDS FROM OPERATIONS

FFO provides relevant and meaningful information about our operating performance that is necessary, along with net income and cash flows, for an understanding of our operating results. We believe FFO is a meaningful disclosure as a supplement to net earnings. Net earnings assume that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The values of real estate assets fluctuate due to market conditions and we believe FFO more accurately reflects the value of our real estate assets. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income computed in accordance with U.S. generally accepted accounting principles (“GAAP”), excluding gains or losses on sales of operating stores and impairmentwrite-downs of depreciable real estate assets, plus real estate related depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. We believe that to further understand our performance, FFO should be considered along with the reported net income and cash flows in accordance with GAAP, as presented in the consolidated financial statements.

FFO should not be considered a replacement of net income computed in accordance with GAAP.

The computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net income as an indication of our performance, as an alternative to net cash flow from operating activities as a measure of our liquidity, or as an indicator of our ability to make cash distributions.



The following table presents the calculation of FFO for the periods indicated:

   For the Year Ended December 31, 
   2014  2013  2012 

Net income attributable to common stockholders

  $178,355   $172,076   $117,309  

Adjustments:

    

Real estate depreciation

   96,819    78,943    64,301  

Amortization of intangibles

   12,394    11,463    6,763  

(Gain) loss on sale of real estate and earnout from prior acquisitions

   10,285    (960)   —    

Unconsolidated joint venture real estate depreciation and amortization

   4,395    5,676    7,014  

Unconsolidated joint venture gain on purchase of partners’ interests

   (4,022)   (46,032)   (30,630) 

Distributions paid on Series A Preferred Operating Partnership units

   (5,750)   (5,750)   (5,750) 

Income allocated to Operating Partnership noncontrolling interests

   17,530    13,431    10,349  
  

 

 

  

 

 

  

 

 

 

Funds from operations

$310,006  $228,847  $169,356  
  

 

 

  

 

 

  

 

 

 

  For the Year Ended December 31,
  2016 2015 2014
Net income attributable to common stockholders $366,127
 $189,474
 $178,355
       
Adjustments:      
Real estate depreciation 155,358
 115,924
 96,819
Amortization of intangibles 20,467
 11,094
 12,394
(Gain) loss on real estate transactions, earnout from prior acquisition and sale of other assets (8,465) (1,501) 10,285
Unconsolidated joint venture real estate depreciation and amortization 4,505
 4,233
 4,395
Unconsolidated joint venture gain on sale of real estate and purchase of partners' interests (69,199) (2,857) (4,022)
Distributions paid on Series A Preferred Operating Partnership units (5,085) (5,088) (5,750)
Income allocated to Operating Partnership noncontrolling interests 30,962
 20,064
 17,530
       
Funds from operations attributable to common stockholders and unit holders $494,670
 $331,343
 $310,006
SAME-STORE RESULTS

We consider our


Our same-store portfolio to consist of only those stores which werewholly-owned at pool for the beginning and at the end of the applicable periods presented consists of 564 stores that had achieved stabilization as ofare wholly-owned and operated and that were stabilized by the first day of such period.the earliest calendar year presented. We consider a store to be stabilized once it has been open for three years or has sustained average square foot occupancy of 80% or more for one calendar year. We believe that by providing same-store results from a stabilized pool of stores, with accompanying operating metrics including, but not limited to: occupancy, rental revenue growth, operating expense growth, net operating income growth, etc., stockholders and potential investors are able to evaluate operating performance without the effects of non-stabilized occupancy levels, rent levels, expense levels, acquisitions or completed developments. Same-store results should not be used as a basis for future same-store performance or for the performance of our stores as a whole. The following tables presenttable presents operating data for oursame-store portfolio. We consider the followingsame-store presentation to be meaningful in regards to the stores shown below because these results provide information relating to store level operating changes without the effects of acquisitions or completed developments.



Comparison of the Year Ended December 31, 20142016 to the Year Ended December 31, 2013

   For the Three Months
Ended December 31,		  Percent
Change		  For the Year Ended
December 31,		  Percent
Change		 
   2014  2013   2014  2013  

Same-store rental and tenant reinsurance revenues

  $121,819   $113,546    7.3%  $477,884   $444,353    7.5% 

Same-store operating and tenant reinsurance expenses

   34,669    33,942    2.1%   139,835    135,547    3.2% 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Same-store net operating income

$87,150  $79,604   9.5% $338,049  $308,806   9.5% 

Non same-store rental and tenant reinsurance revenues

$38,317  $21,684   76.7% $141,056  $49,646   184.1% 

Non same-store operating and tenant reinsurance expenses

$10,971  $5,832   88.1% $43,008  $13,487   218.9% 

Total rental and tenant reinsurance revenues

$160,136  $135,230   18.4% $618,940  $493,999   25.3% 

Total operating and tenant reinsurance expenses

$45,640  $39,774   14.7% $182,843  $149,034   22.7% 

Same-store square foot occupancy as of quarter end

 91.4%  89.5%  91.4%  89.5% 

Properties included in same-store

 442   442   442   442  

2015

The following table presents a reconciliation of same-store net operating income to income from operations as presented on our consolidated statements of operations for the periods indicated:

 For the Three Months Ended December 31, Percent For the Year Ended December 31, Percent
 2016 2015 Change 2016 2015 Change
Same-store rental and tenant reinsurance revenues$179,003
 $170,234
 5.2% $708,063
 $662,213
 6.9%
Non same-store rental and tenant reinsurance revenues72,364
 45,333
 59.6% 243,970
 85,896
 184.0%
Total property rental and tenant reinsurance revenues251,367
 215,567
 16.6% 952,033
 748,109
 27.3%
            
Same-store operating and tenant reinsurance expenses46,169
 47,142
 (2.1)% 189,973
 187,939
 1.1%
Non same-store operating and tenant reinsurance expenses21,163
 15,706
 34.7% 75,587
 29,059
 160.1%
Total property operating and tenant reinsurance expenses67,332
 62,848
 7.1% 265,560
 216,998
 22.4%
            
Same-store net operating income132,834
 123,092
 7.9% 518,090
 474,274
 9.2%
Non same-store net operating income51,201
 29,627
 72.8% 168,383
 56,837
 196.3%
Total net operating income184,035
 152,719
 20.5% 686,473
 531,111
 29.3%
Management fees and other income9,649
 10,192
   39,842
 34,161
  
Acquisition related costs and other(2,987) (63,698)   (12,111) (69,401)  
General and administrative(18,355) (18,138)   (81,806) (67,758)  
Depreciation and amortization(49,158) (40,766)   (182,560) (133,457)  
Income from operations$123,184
 $40,309
   $449,838
 $294,656
  
            
Same-store square foot occupancy as of quarter end92.0% 92.8%   92.0% 92.8%  
            
Properties included in same-store564 564   564 564  
The increases insame-store rental and tenant reinsurance revenues for the three months and year ended December 31, 2014,2016, as compared to the same periods ended December 31, 2013,2015, were due primarily to an increase in occupancy, a decrease in discounts tohigher rental rates for both new customers, and an average increase of 4.0% to 5.0% in incoming rates to new tenants.existing customers. Expenses were lower for the three months ended December 31, 2016 due to decreases year-over-year across most expense categories, primarily due to comparably higher forexpenses in the three months ended December 31, 2015. The most significant decreases were in repairs and maintenance and utilities. Decreases in these expenses were partially offset by increases in property taxes. For the year ended December 31, 20142016, expenses were higher due to increases in office expense, property taxes and repairs and maintenance.credit card processing fees. These increases in expenses were partially offset by a decreasedecreases in property insurance in the three monthsutilities and year ended December 31, 2014.

repairs and maintenance expense.



Comparison of the Year Ended December 31, 20132015 to the Year Ended December 31, 2012

   For the Three Months
Ended December 31,		  Percent
Change		  For the Year Ended
December 31,		  Percent
Change		 
   2013  2012   2013  2012  

Same-store rental and tenant reinsurance revenues

  $88,056   $82,603    6.6%  $345,825   $321,962    7.4% 

Same-store operating and tenant reinsurance expenses

   26,071    25,704    1.4%   104,377    102,379    2.0% 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Same-store net operating income

$61,985  $56,899   8.9% $241,448  $219,583   10.0% 

Nonsame-store rental and tenant reinsurance revenues

$47,174  $24,834   90.0% $148,174  $61,728   140.0% 

Nonsame-store operating and tenant reinsurance expenses

$13,703  $8,819   55.4% $44,657  $19,518   128.8% 

Total rental and tenant reinsurance revenues

$135,230  $107,437   25.9% $493,999  $383,690   28.7% 

Total operating and tenant reinsurance expenses

$39,774  $34,523   15.2% $149,034  $121,897   22.3% 

Same-store square foot occupancy as of quarter end

 89.2%  87.9%  89.2%  87.9% 

2014

The following table presents a reconciliation of same-store net operating income to income from operations as presented on our consolidated statements of operations for the periods indicated:
 For the Three Months Ended December 31, Percent For the Year Ended December 31, Percent
 2015 2014 Change 2015 2014 Change
Same-store rental and tenant reinsurance revenues$151,761
 $138,471
 9.6% $590,979
 $540,664
 9.3%
Non same-store rental and tenant reinsurance revenues63,806
 21,665
 194.5% 157,130
 78,276
 100.7%
Total property rental and tenant reinsurance revenues215,567
 160,136
 34.6% 748,109
 618,940
 20.9%
            
Same-store operating and tenant reinsurance expenses41,702
 39,802
 4.8% 166,166
 161,135
 3.1%
Non same-store operating and tenant reinsurance expenses21,146
 5,838
 262.2% 50,832
 21,708
 134.2%
Total property operating and tenant reinsurance expenses62,848
 45,640
 37.7% 216,998
 182,843
 18.7%
            
Same-store net operating income110,059
 98,669
 11.5% 424,813
 379,529
 11.9%
Non same-store net operating income42,660
 15,827
 169.5% 106,298
 56,568
 87.9%
Total net operating income152,719
 114,496
 33.4% 531,111
 436,097
 21.8%
Management fees and other income10,192
 5,048
   34,161
 28,215
  
Acquisition related costs and other(63,698) (5,941)   (69,401) (9,826)  
General and administrative(18,138) (14,506)   (67,758) (60,942)  
Depreciation and amortization(40,766) (29,181)   (133,457) (115,076)  
Income from operations$40,309
 $69,916
   $294,656
 $278,468
  
            
Same-store square foot occupancy as of quarter end92.9% 91.4%   92.9% 91.4%  
            
Properties included in same-store503 503   503 503  
The increases insame-store rental and tenant reinsurance revenues for the three months and year ended December 31, 2013,2015, as compared to the same periods ended December 31, 2012,2014, were due primarily to an increase in average occupancy, a decreasean increase in discounts to new customers, and an average increase of 2.0% to 3.0% in incomingrental rates to new tenants. The increases insame-store operating and tenant reinsurance expensesexisting customers, and reduced customer discounts. Expenses were higher for the three months and year ended December 31, 2013 were primarily2015 due to increases in payroll,tenant reinsurance expense, credit card merchant fees and property taxestaxes. Increases were offset by decreases in utility expenses and repairs and maintenance expenses.

property insurance expense.

CASH FLOWS

Comparison of the Year Ended December 31, 20142016 to the Year Ended December 31, 2013

2015

Cash provided by operating activities was $337,581$539,263 and $271,259$367,329 for the years ended December 31, 20142016 and 2013,2015, respectively. The change when compared to the prior year was primarily due to a decrease of $42,594 in non-cash gains related to purchases of joint venture partners’ interests. There was also a $10,340$187,553 increase in net income and an increase in depreciation and amortization expense of $19,844.$49,103. These increases were offset by an increase in the gain on sale of real estate assets and purchase joint venture partners’ interests of $66,342. This gain was primarily the result of three step acquisitions of stores that were previously owned by our VRS, PRISA II and WCOT joint ventures, along with the gain on the sale of our remaining interest in the PRISA II joint venture to Prudential.



Cash used in investing activities was $1,032,035 and $1,625,664, for the years ended December 31, 2016 and 2015, respectively. The decrease was primarily due to a decrease in total cash paid for the acquisition of real estate assets of $464,227. We purchased 99 stores during the year ended December 31, 2016, compared to 171 stores purchased during 2015. There was also an increase in proceeds from sale of real estate assets, investments in real estate ventures and other assets of $60,013, a decrease in cash paid on the purchase/issuance of notes receivable of $57,902 and an increase in cash received from principal payments on notes receivable of $42,785 for the year ended December 31, 2016 when compared to 2015.

Cash provided by financing activities was $460,831 and $1,286,471, for the years ended December 31, 2016 and 2015, respectively. The change related primarily to a decrease in proceeds from notes payable and revolving lines of credit of $221,445, a decrease in net proceeds from the issuance of exchangeable senior notes of $563,500, and a decrease in net proceeds from the sale of common stock of $323,453 for the year ended December 31, 2016 when compared to the prior year. These decreases were partially offset by a decrease in the loss on extinguishment of debt related to portfolio acquisition of $9,153.

Cash used in investing activities was $564,948 and $366,976 for the years ended December 31, 2014 and 2013, respectively. The change was primarily the result of an increase of $153,579 in the amount of cash used to acquire new stores in 2014 when compared to 2013. There was also an increase of $24,258 in cash used to purchase/issue notes receivable, and an increase of $17,062 in cash used in the development and redevelopment of real estate assets.

Cash provided by financing activities was $148,307 and $191,655 for the years ended December 31, 2014 and 2013, respectively. The net decrease was due to a number of factors, including a decrease of $205,988 in the cash proceeds received from the sale of common stock, a decrease of $246,250 in the proceeds from issuance of

exchangeable senior notes, and an increase of $47,077 in cash paid as dividends on common stock. These decreases were offset by an increase of $335,479 in the proceeds from notes payable and lines of credit, and a decrease of $131,244 in principal payments on notes payable and revolving lines of credit.

credit of $191,128 and a decrease in the cash paid for the repurchase of exchangeable senior notes of $205,017.


Comparison of the Year Ended December 31, 20132015 to the Year Ended December 31, 2012

2014

Cash provided by operating activities was $271,259$367,329 and $215,879$337,581 for the years ended December 31, 20132015 and 2012,2014, respectively. The change when compared to the prior year was primarily due to a $57,867$13,640 increase in net income. There was alsoincome and an increase in depreciation and amortization expense of $20,779 and an increase of $9,153 in loss on extinguishment of debt related to portfolio acquisition.$18,381. These increases were partially offset by an increasea decrease in thenon-cash gain on the purchase change in accounts payable and accrued liabilities of joint venture partners’ interests of $22,362.

$4,812.

Cash used in investing activities was $366,976$1,625,664 and $606,938$564,948 for the years ended December 31, 20132015 and 2012,2014, respectively. The change was primarily the result of a decreasean increase of $249,061$1,200,853 paid for the acquisition of SmartStop in the amountOctober 2015. There was also an increase of $55,073 in cash used to acquire new storespurchase/issue notes receivable. These increases in 2013 when compared to 2012.

cash outflows were partially offset by an increase of $45,080 in cash received as returns of investments in unconsolidated real estate ventures.

Cash provided by financing activities was $191,655$1,286,471 and $395,360$148,307 for the years ended December 31, 20132015 and 2012,2014, respectively. The net decreaseincrease was due to a number of factors, including a decreasean increase of $223,600$1,204,138 in the cash proceeds received from the issuance of notes payable and revolving lines of credit, an increase of $446,877 in the cash proceeds received from the sale of common stock, a decrease of $492,078 in the proceeds from notes payable and lines of credit, and an increase of $563,500 in the net proceeds from the issuance of exchangeable senior notes. These increases in cash paid for dividends of $74,727. These decreases in cashinflows were partially offset by an increase of $246,250 in proceeds received from the issuance$780,442 of the Notes due 2033, a decrease of $257,459 in cash usedpaid for principal payments on notes payable and revolving lines of credit, including defeasance, and an increase of $87,663$227,212 in cash paid to repurchase the Notes due 2027.

existing exchangeable senior notes, and an increase of $59,211 in cash paid as dividends on our common stock.


LIQUIDITY AND CAPITAL RESOURCES


As of December 31, 2014,2016, we had $47,663$43,858 available in cash and cash equivalents. We intend to use this cash for acquisitions, to repay debt scheduled to mature in 2015 and for general corporate purposes. We are required to distribute at least 90% of our net taxable income, excluding net capital gains, to our stockholders on an annual basis to maintain our qualification as a REIT.


Our cash and cash equivalents are held in accounts managed by third party financial institutions and consist of invested cash and cash in our operating accounts. During 2014,2016 and 2015, we experienced no loss or lack of access to our cash or cash equivalents; however, there can be no assurance that access to our cash and cash equivalents will not be impacted by adverse conditions in the financial markets.




The following table presents information on our lines of credit for the period presented. All of our lines of credit are guaranteed by us and secured by mortgages on certain real estate assets.

   As of December 31, 2014               

Line of Credit

  Amount
Drawn (1)		   Capacity (1)   Interest
Rate		  Origination
Date		   Maturity   Basis Rate (2)   Notes

Credit Line 1

  $7,000    $85,000     2.1%   6/4/2010     6/3/2016     LIBOR plus 1.9%    (3)

Credit Line 2

   41,000     50,000     1.9%   11/16/2010     2/13/2017     LIBOR plus 1.8%    (4)

Credit Line 3

   50,000     80,000     1.9%   4/29/2011     11/18/2016     LIBOR plus 1.7%    (4)

Credit Line 4

   40,000     50,000     1.8%   9/29/2014     9/29/2017     LIBOR plus 1.7%    (4)
  

 

 

   

 

 

          
$138,000  $265,000  
  

 

 

   

 

 

          

(1)Amounts in thousands
(2)30-day USD LIBOR
(3)One two-year extension available
(4)Two one-year extensions available

us.

 As of December 31, 2016      
Revolving Lines of CreditAmount Drawn Capacity Interest Rate Origination Date Maturity 
Basis Rate (1)
Credit Line 1 (2)
$3,000
 $100,000
 2.4% 6/4/2010 6/30/2018 LIBOR plus 1.7%
Credit Line 2 (3)(4)
362,000
 500,000
 2.2% 10/14/2016 10/14/2020 LIBOR plus 1.4%
 $365,000
 $600,000
        
(1) 30-day USD LIBOR
(2) Secured by mortgages on certain real estate assets. One two-year extension available.
(3) Unsecured. Two six-month extensions available.
(4) Basis Rate as of December 31, 2016. Rate is subject to change based on our consolidated leverage ratio.

As of December 31, 2014,2016, we had $2,379,657$4,363,697 face value of debt, resulting in a debt to total capitalizationenterprise value ratio of 24.8%29.6%. As of December 31, 2014,2016, the ratio of total fixed ratefixed-rate debt and other instruments to total debt was 64.5%70.0% (including $771,533$2,198,275 on which we have interest rate swaps that have been included asfixed-rate debt). The weighted average interest rate of the total of fixedfixed- and variable ratevariable-rate debt at December 31, 20142016 was 3.4%3.0%. Certain of our real estate assets are pledged as collateral for our debt. We are subject to certain restrictive covenants relating to our outstanding debt. We were in compliance with all financial covenants at December 31, 2014.

2016.


We expect to fund ourshort-term liquidity requirements, including operating expenses, recurring capital expenditures, dividends to stockholders, distributions to holders of OP UnitsOperating Partnership units and interest on our outstanding indebtedness, out of our operating cash flow, cash on hand and borrowings under our Credit Lines.revolving lines of credit, including undrawn portions of our unsecured facility. In addition, we are pursuing additional term loans secured by unencumbered stores.

sources of financing based on anticipated funding needs.


Our liquidity needs consist primarily of cash distributions to stockholders, store acquisitions, principal payments under our borrowings andnon-recurring capital expenditures. We may from time to time seek to repurchase our outstanding debt, shares of common stock or other securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In addition, we evaluate, on an ongoing basis, the merits of strategic acquisitions and other relationships, which may require us to raise additional funds. We do not expect that our operating cash flow or cash balances will be sufficient to fund our liquidity needs and instead expect to fund such needs out of additional borrowings of secured or unsecured indebtedness, joint ventures with third parties, and from the proceeds of public and private offerings of equity and debt. Additional capital may not be available on terms favorable to us or at all. Any additional issuance of equity orequity-linked securities may result in dilution to our stockholders. In addition, any new securities we issue could have rights, preferences and privileges senior to holders of our common stock. We may also use OP UnitsOperating Partnership units as currency to fund acquisitions fromself-storage owners who desiretax-deferral in their exiting transactions.

OFF-BALANCE SHEET ARRANGEMENTS

Except as disclosed in the notes to our financial statements, we do not currently 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 facilitatingoff-balance sheet arrangements or other contractually narrow or limited purposes. Further, except as disclosed in the notes to our financial statements, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitments or intent to provide funding to any such entities. Accordingly, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

CONTRACTUAL OBLIGATIONS

The following table presents information on future payments due by period as of December 31, 2014:

   Payments due by Period: 
   Total   Less Than
1 Year		   1-3 Years   3-5 Years   After
5 Years		 

Operating leases

  $65,386    $6,125    $8,782    $5,186    $45,293  

Notes payable, notes payable to trusts and lines of credit

          

Interest

   349,846     74,769     108,613     60,603     105,861  

Principal

   2,379,657     251,466     799,641     824,089     504,461  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total contractual obligations

$2,794,889  $332,360  $917,036  $889,878  $655,615  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

2016:



 Payments due by Period:
   Less Than     After
 Total 1 Year 1-3 Years 3-5 Years 5 Years
Operating leases$120,926
 $6,123
 $12,801
 $11,977
 $90,025
Notes payable, notes payable to trusts and revolving lines of credit         
   Interest573,411
 127,630
 218,184
 109,191
 118,406
   Principal4,363,697
 311,075
 936,309
 2,432,353
 683,960
Total contractual obligations$5,058,034
 $444,828
 $1,167,294
 $2,553,521
 $892,391
The operating leases above include minimum future lease payments on leases for 1722 of our operating stores as well as leases of our corporate offices. TwoThree ground leases include additional contingent rental payments based on the level of revenue achieved at the store.

As of December 31, 2014,2016, the weighted average interest rate for all fixed rate loans was 4.1%3.3%, and the weighted average interest rate on all variable rate loans was 2.0%2.3%.

FINANCING STRATEGY

We will continue to employ leverage in our capital structure in amounts reviewed from time to time by our board of directors. Although our board of directors has not adopted a policy which limits the total amount of indebtedness that we may incur, we will consider a number of factors in evaluating our level of indebtedness from time to time, as well as the amount of such indebtedness that will be either fixed or variable rate. In making financing decisions, we will consider factors including but not limited to:

the interest rate of the proposed financing;

the extent to which the financing impacts flexibility in managing our stores;

prepayment penalties and restrictions on refinancing;

the purchase price of stores acquired with debt financing;

long-term objectives with respect to the financing;

target investment returns;

the ability of particular stores, and our Company as a whole, to generate cash flow sufficient to cover expected debt service payments;

overall level of consolidated indebtedness;

timing of debt and lease maturities;

provisions that require recourse andcross-collateralization;

corporate credit ratios including debt service coverage, debt to total capitalization and debt to undepreciated assets; and

the overall ratio of fixed and variable rate debt.

Our indebtedness may be recourse,non-recourse, cross-collateralized, cross-defaulted, secured orcross-collateralized. unsecured. If the indebtedness isnon-recourse, the collateral will be limited to the particular stores to which the indebtedness relates. In addition, we may invest in stores subject to existing loans collateralized by mortgages or similar liens on our stores, or may refinance stores acquired on a leveraged basis. We may use the proceeds from any borrowings to refinance existing indebtedness, to refinance investments, including the redevelopment of existing stores, for general working capital or to purchase additional interests in partnerships or joint ventures or for other purposes when we believe it is advisable.

We may from time to time seek to retire or repurchase our outstanding debt, as well as shares of common stock or other securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.



SEASONALITY

Theself-storage business is subject to seasonal fluctuations. A greater portion of revenues and profits are realized from May through September. Historically, our highest level of occupancy has been at the end of July, while our lowest level of occupancy has been in late February and early March. Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year.

Item 7a.
Item 7a.     Quantitative and Qualitative Disclosures About Market Risk

Market Risk

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.

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.

As of December 31, 2014,2016, we had approximately $2,379,657$4.4 billion in total face value debt, of which approximately $845,764$1.3 billion was subject to variable interest rates (excluding debt with interest rate swaps). If LIBOR 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 with interest rate floors) would increase or decrease future earnings and cash flows by approximately $8,081$13.1 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 8.Financial Statements and Supplementary Data



Item 8.     Financial Statements and Supplementary Data
EXTRA SPACE STORAGE INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND SCHEDULES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm

49
41

CONSOLIDATED BALANCE SHEETSConsolidated Balance Sheets as of December 31, 2016 and 2015

50
42

CONSOLIDATED STATEMENTS OF OPERATIONSConsolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014

51
43

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEConsolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014

52
44

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYConsolidated Statements of Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014

53
45

CONSOLIDATED STATEMENTS OF CASH FLOWSConsolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014

56
48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNotes to Consolidated Financial Statements

57
50

SCHEDULESchedule III - Real Estate and Accumulated Depreciation

94
89

All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or notes thereto.



Report of Independent Registered Public Accounting Firm


The Board of Directors and Stockholders of Extra Space Storage Inc.

We have audited the accompanying consolidated balance sheets of Extra Space Storage Inc. (“the Company”) as of December 31, 20142016 and 2013,2015, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2014.2016. Our audits also included the financial statement schedule listed in the indexIndex at Item 8. These financial statements and schedule are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the CompanyExtra Space Storage Inc. at December 31, 20142016 and 2013,2015, and the consolidated results of itstheir operations and itstheir cash flows for each of the three years in the period ended December 31, 2014,2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’sExtra Space Storage Inc.’s internal control over financial reporting as of December 31, 2014,2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework”)(2013 framework) and our report dated March 2, 2015February 27, 2017 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Salt Lake City, Utah

March 2, 2015

February 27, 2017


Extra Space Storage Inc.

Consolidated Balance Sheets

(dollars in thousands, except share data)

   December 31, 2014  December 31, 2013 

Assets:

   

Real estate assets, net

  $4,135,696   $3,636,544  

Investments in unconsolidated real estate ventures

   85,711    88,125  

Cash and cash equivalents

   47,663    126,723  

Restricted cash

   25,245    21,451  

Receivables from related parties and affiliated real estate joint ventures

   11,778    7,542  

Other assets, net

   96,014    96,755  
  

 

 

  

 

 

 

Total assets

$4,402,107  $3,977,140  
  

 

 

  

 

 

 

Liabilities, Noncontrolling Interests and Equity:

Notes payable

$1,872,067  $1,588,596  

Premium on notes payable

 3,281   4,948  

Exchangeable senior notes

 250,000   250,000  

Discount on exchangeable senior notes

 (13,054)  (16,487) 

Notes payable to trusts

 119,590   119,590  

Lines of credit

 138,000   —    

Accounts payable and accrued expenses

 65,521   60,601  

Other liabilities

 54,719   37,997  
  

 

 

  

 

 

 

Total liabilities

 2,490,124   2,045,245  
  

 

 

  

 

 

 

Commitments and contingencies

Noncontrolling Interests and Equity:

Extra Space Storage Inc. stockholders’ equity:

Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued or outstanding

 —     —    

Common stock, $0.01 par value, 500,000,000 shares authorized, 116,360,239 and 115,755,527 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively

 1,163   1,157  

Paid-in capital

 1,995,484   1,973,159  

Accumulated other comprehensive income (loss)

 (1,484)  10,156  

Accumulated deficit

 (257,738)  (226,002) 
  

 

 

  

 

 

 

Total Extra Space Storage Inc. stockholders’ equity

 1,737,425   1,758,470  

Noncontrolling interest represented by Preferred Operating Partnership units, net of $120,230 notes receivable

 81,152   80,947  

Noncontrolling interests in Operating Partnership

 92,422   91,453  

Other noncontrolling interests

 984   1,025  
  

 

 

  

 

 

 

Total noncontrolling interests and equity

 1,911,983   1,931,895  
  

 

 

  

 

 

 

Total liabilities, noncontrolling interests and equity

$4,402,107  $3,977,140  
  

 

 

  

 

 

 

 December 31, 2016 December 31, 2015
Assets:   
Real estate assets, net$6,770,447
 $5,689,309
Investments in unconsolidated real estate ventures79,570
 103,007
Cash and cash equivalents43,858
 75,799
Restricted cash13,884
 30,738
Receivables from related parties and affiliated real estate joint ventures16,611
 2,205
Other assets, net167,076
 170,349
Total assets$7,091,446
 $6,071,407
Liabilities, Noncontrolling Interests and Equity:   
Notes payable, net$3,213,588
 $2,758,567
Exchangeable senior notes, net610,314
 623,863
Notes payable to trusts, net117,321
 117,191
Revolving lines of credit365,000
 36,000
Accounts payable and accrued expenses101,388
 82,693
Other liabilities87,669
 80,489
Total liabilities4,495,280
 3,698,803
Commitments and contingencies
 
Noncontrolling Interests and Equity:   
Extra Space Storage Inc. stockholders' equity:   
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued or outstanding—
 —
Common stock, $0.01 par value, 500,000,000 shares authorized, 125,881,460 and 124,119,531 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively1,259
 1,241
Additional paid-in capital2,566,120
 2,431,754
Accumulated other comprehensive income (loss)16,770
 (6,352)
Accumulated deficit(339,257) (337,566)
Total Extra Space Storage Inc. stockholders' equity2,244,892
 2,089,077
Noncontrolling interest represented by Preferred Operating Partnership units, net of $120,230 notes receivable147,920
 80,531
Noncontrolling interests in Operating Partnership203,354
 202,834
Other noncontrolling interests—
 162
Total noncontrolling interests and equity2,596,166
 2,372,604
Total liabilities, noncontrolling interests and equity$7,091,446
 $6,071,407
See accompanying notes.



Extra Space Storage Inc.

Consolidated Statements of Operations

(dollars in thousands, except share data)

   For the Year Ended December 31, 
   2014  2013  2012 

Revenues:

    

Property rental

  $559,868   $446,682   $346,874  

Tenant reinsurance

   59,072    47,317    36,816  

Management fees

   28,215    26,614    25,706  
  

 

 

  

 

 

  

 

 

 

Total revenues

 647,155   520,613   409,396  
  

 

 

  

 

 

  

 

 

 

Expenses:

Property operations

 172,416   140,012   114,028  

Tenant reinsurance

 10,427   9,022   7,869  

Acquisition related costs

 9,826   8,618   5,351  

General and administrative

 60,942   54,246   50,454  

Depreciation and amortization

 115,076   95,232   74,453  
  

 

 

  

 

 

  

 

 

 

Total expenses

 368,687   307,130   252,155  
  

 

 

  

 

 

  

 

 

 

Income from operations

 278,468   213,483   157,241  

Gain (loss) on sale of real estate and earnout from prior acquisitions

 (10,285)  960   —    

Property casualty loss, net

 (1,724)  —     —    

Loss on extinguishment of debt related to portfolio acquisition

 —     (9,153)  —    

Interest expense

 (81,330)  (71,630)  (71,850) 

Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes

 (2,683)  (1,404)  (444) 

Interest income

 1,607   749   1,816  

Interest income on note receivable from Preferred Operating Partnership unit holder

 4,850   4,850   4,850  
  

 

 

  

 

 

  

 

 

 

Income before equity in earnings of unconsolidated real estate ventures and income tax expense

 188,903   137,855   91,613  

Equity in earnings of unconsolidated real estate ventures

 10,541   11,653   10,859  

Equity in earnings of unconsolidated real estate ventures—gain on sale of real estate assets and purchase of joint venture partners’ interests

 4,022   46,032   30,630  

Income tax expense

 (7,570)  (9,984)  (5,413) 
  

 

 

  

 

 

  

 

 

 

Net income

 195,896   185,556   127,689  

Net income allocated to Preferred Operating Partnership noncontrolling interests

 (10,991)  (8,006)  (6,876) 

Net income allocated to Operating Partnership and other noncontrolling interests

 (6,550)  (5,474)  (3,504) 
  

 

 

  

 

 

  

 

 

 

Net income attributable to common stockholders

$178,355  $172,076  $117,309  
  

 

 

  

 

 

  

 

 

 

Earnings per common share

Basic

$1.54  $1.54  $1.15  
  

 

 

  

 

 

  

 

 

 

Diluted

$1.53  $1.53  $1.14  
  

 

 

  

 

 

  

 

 

 

Weighted average number of shares

Basic

 115,713,807   111,349,361   101,766,385  

Diluted

 121,435,267   113,105,094   103,767,365  

 For the Year Ended December 31,
 2016 2015 2014
Revenues:     
Property rental$864,742
 $676,138
 $559,868
Tenant reinsurance87,291
 71,971
 59,072
Management fees and other income39,842
 34,161
 28,215
Total revenues991,875
 782,270
 647,155
Expenses:     
Property operations250,005
 203,965
 172,416
Tenant reinsurance15,555
 13,033
 10,427
Acquisition related costs and other12,111
 69,401
 9,826
General and administrative81,806
 67,758
 60,942
Depreciation and amortization182,560
 133,457
 115,076
Total expenses542,037
 487,614
 368,687
Income from operations449,838
 294,656
 278,468
Gain (loss) on real estate transactions, earnout from prior acquisition and sale of other assets8,465
 1,501
 (10,285)
Property casualty loss, net—
 —
 (1,724)
Interest expense(133,479) (95,682) (81,330)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes(4,980) (3,310) (2,683)
Interest income6,148
 3,461
 1,607
Interest income on note receivable from Preferred Operating Partnership unit holder4,850
 4,850
 4,850
Income before equity in earnings of unconsolidated real estate ventures and income tax expense330,842
 205,476
 188,903
Equity in earnings of unconsolidated real estate ventures12,895
 12,351
 10,541
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners' interests69,199
 2,857
 4,022
Income tax expense(15,847) (11,148) (7,570)
Net income397,089
 209,536
 195,896
Net income allocated to Preferred Operating Partnership noncontrolling interests(14,700) (11,718) (10,991)
Net income allocated to Operating Partnership and other noncontrolling interests(16,262) (8,344) (6,550)
Net income attributable to common stockholders$366,127
 $189,474
 $178,355
Earnings per common share     
Basic$2.92
 $1.58
 $1.54
Diluted$2.91
 $1.56
 $1.53
Weighted average number of shares     
Basic125,087,554
 119,816,743
 115,713,807
Diluted125,948,076
 126,918,869
 121,435,267
See accompanying notes.



Extra Space Storage Inc.

Consolidated Statements of Comprehensive Income

(dollarsamounts in thousands)

   For the Year Ended December 31, 
   2014  2013   2012 

Net income

  $195,896   $185,556    $127,689  

Other comprehensive income (loss):

     

Change in fair value of interest rate swaps

   (12,061)   25,335     (6,587) 
  

 

 

  

 

 

   

 

 

 

Total comprehensive income

 183,835   210,891   121,102  

Less: comprehensive income attributable to noncontrolling interests

 17,120   14,386   10,130  
  

 

 

  

 

 

   

 

 

 

Comprehensive income attributable to common stockholders

$166,715  $196,505  $110,972  
  

 

 

  

 

 

   

 

 

 

 For the Year Ended December 31,
 2016 2015 2014
Net income$397,089
 $209,536
 $195,896
Other comprehensive income (loss):     
   Change in fair value of interest rate swaps24,598
 (4,929) (12,061)
Total comprehensive income421,687
 204,607
 183,835
   Less: comprehensive income attributable to noncontrolling interests32,438
 20,001
 17,120
Comprehensive income attributable to common stockholders$389,249
 $184,606
 $166,715
See accompanying notes



Extra Space Storage Inc.
Consolidated Statements of Stockholders' Equity
(amounts in thousands, except share data)
      
 Noncontrolling Interests Extra Space Storage Inc. Stockholders’ Equity  
 Preferred Operating Partnership Operating
Partnership		 Other     Additional
Paid-in
Capital		 Accumulated
Other
Comprehensive
Income (Loss)		 Accumulated
Deficit		 Total
Noncontrolling
Interests and
Equity
 Series A Series B Series C Series D  Shares Par Value 
Balances at December 31, 2013$30,202
 $33,568
 $17,177
 $—
 $91,453
 $1,025
 115,755,527
 $1,157
 $1,973,159
 $10,156
 $(226,002) $1,931,895
Issuance of common stock upon the exercise of options—
 —
 —
 —
 —
 —
 211,747
 2
 3,093
 —
 —
 3,095
Restricted stock grants issued—
 —
 —
 —
 —
 —
 117,370
 1
 —
 —
 —
 1
Restricted stock grants cancelled—
 —
 —
 —
 —
 —
 (23,595) —
 —
 —
 —
 —
Compensation expense related to stock-based awards—
 —
 —
 —
 —
 —
 —
 —
 4,984
 —
 —
 4,984
Issuance of Operating Partnership units in conjunction with store acquisitions—
 8,334
 13,783
 13,710
 2,982
 —
 —
 —
 —
 —
 —
 38,809
Redemption of Operating Partnership units for common stock(10,240) —
 —
 —
 (398) —
 299,190
 3
 10,635
 —
 —
 —
Redemption of Operating Partnership units for cash(4,794) —
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (4,794)
Issuance of note receivable to Series C unit holders—
 —
 (20,230) —
 —
 —
 —
 —
 —
 —
 —
 (20,230)
Net income7,036
 2,387
 1,551
 17
 6,538
 12
 —
 —
 —
 —
 178,355
 195,896
Other comprehensive income(74) —
 —
 —
 (347) —
 —
 —
 —
 (11,640) —
 (12,061)
Tax effect from vesting of restricted stock grants and stock option exercises—
 —
 —
 —
 —
 —
 —
 —
 3,613
 —
 —
 3,613
Distributions to Operating Partnership units held by noncontrolling interests(7,321) (2,386) (1,551) (17) (7,806) —
 —
 —
 —
 —
 —
 (19,081)
Distributions to other noncontrolling interests—
 —
 —
 —
 —
 (53) —
 —
 —
 —
 —
 (53)
Dividends paid on common stock at $1.81 per share—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (210,091) (210,091)
Balances at December 31, 2014$14,809
 $41,903
 $10,730
 $13,710
 $92,422
 $984
 116,360,239
 $1,163
 $1,995,484
 $(1,484) $(257,738) $1,911,983


Extra Space Storage Inc.
Consolidated Statements of Stockholders' Equity
(amounts in thousands, except share data)
      
 Noncontrolling Interests Extra Space Storage Inc. Stockholders’ Equity  
 Preferred Operating Partnership Operating
Partnership		 Other     Additional
Paid-in
Capital		 Accumulated
Other
Comprehensive
Income (Loss)		 Accumulated
Deficit		 Total
Noncontrolling
Interests and
Equity
 Series A Series B Series C Series D  Shares Par Value 
Issuance of common stock upon the exercise of options$—
 $—
 $—
 $—
 $—
 $—
 79,974
 $1
 $1,541
 $—
 $—
 $1,542
Restricted stock grants issued—
 —
 —
 —
 —
 —
 174,558
 2
 —
 —
 —
 2
Restricted stock grants cancelled—
 —
 —
 —
 —
 —
 (18,090) —
 —
 —
 —
 —
Issuance of common stock, net of offering costs—
 —
 —
 —
 —
 —
 6,735,000
 67
 446,810
 —
 —
 446,877
Compensation expense related to stock-based awards—
 —
 —
 —
 —
 —
 —
 —
 6,055
 —
 —
 6,055
Purchase of remaining equity interest in existing consolidated joint venture—
 —
 —
 —
 —
 (822) —
 —
 (446) —
 —
 (1,268)
Issuance of Operating Partnership units in conjunction with acquisitions—
 —
 —
 —
 142,399
 —
 —
 —
 —
 —
 —
 142,399
Redemption of Operating Partnership units for common stock—
 —
 —
 —
 (28,106) —
 787,850
 8
 28,098
 —
 —
 —
Repurchase of equity portion of 2013 exchangeable senior notes—
 —
 —
 —
 —
 —
 —
 —
 (70,112) —
 —
 (70,112)
Issuance of 2015 exchangeable senior notes - equity component—
 —
 —
 —
 —
 —
 —
 —
 22,597
 —
 —
 22,597
Net income6,445
 2,514
 2,074
 685
 8,344
 —
 —
 —
 —
 —
 189,474
 209,536
Other comprehensive income (loss)(15) —
 —
 —
 (46) —
 —
 —
 —
 (4,868) —
 (4,929)
Tax effect from vesting of restricted stock grants and stock option exercises—
 —
 —
 —
 —
 —
 —
 —
 1,727
 —
 —
 1,727
Distributions to Operating Partnership units held by noncontrolling interests(7,050) (2,515) (2,074) (685) (12,179) —
 —
 —
 —
 —
 —
 (24,503)
Dividends paid on common stock at $2.24 per share—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (269,302) (269,302)
Balances at December 31, 2015$14,189
 $41,902
 $10,730
 $13,710
 $202,834
 $162
 124,119,531
 $1,241
 $2,431,754
 $(6,352) $(337,566) $2,372,604


Extra Space Storage Inc.
Consolidated Statements of Stockholders' Equity
(amounts in thousands, except share data)
      
 Noncontrolling Interests Extra Space Storage Inc. Stockholders’ Equity  
 Preferred Operating Partnership Operating
Partnership		 Other     Additional
Paid-in
Capital		 Accumulated
Other
Comprehensive
Income (Loss)		 Accumulated
Deficit		 Total
Noncontrolling
Interests and
Equity
 Series A Series B Series C Series D  Shares Par Value 
Issuance of common stock upon the exercise of options$—
 $—
 $—
 $—
 $—
 $—
 97,855
 $—
 $1,444
 $—
 $—
 $1,444
Restricted stock grants issued—
 —
 —
 —
 —
 —
 119,931
 2
 

 —
 —
 2
Restricted stock grants cancelled—
 —
 —
 —
 —
 —
 (9,947) —
 —
 —
 —
 —
Issuance of common stock, net of offering costs—
 —
 —
 —
 —
 —
 1,381,300
 14
 123,408
 —
 —
 123,422
Compensation expense related to stock-based awards—
 —
 —
 —
 —
 —
 —
 —
 8,045
 —
 —
 8,045
Purchase of remaining equity interest in existing consolidated joint venture—
 —
 —
 —
 800
 (162) —
 —
 (638) —
 —
 —
Issuance of Operating Partnership units in conjunction with acquisitions—
 —
 —
 —
 7,247
 —
 —
 —
 —
 —
 —
 7,247
Redemption of Operating Partnership units for sale of property—
 —
 —
 —
 (7,689) —
 —
 —
 —
 —
 —
 (7,689)
Redemption of Operating Partnership units for common stock and cash—
 —
 —
 —
 (1,083) —
 23,850
 —
 577
 —
 —
 (506)
Issuance of Preferred D Units in the Operating Partnership in conjunction with acquisitions—
 —
 —
 67,193
 —
 —
 —
 —
 —
 —
 —
 67,193
Repurchase of equity portion of 2013 exchangeable senior notes—
 —
 —
 —
 —
 —
 148,940
 2
 (874) —
 —
 (872)
Net income7,645
 2,514
 2,570
 1,971
 16,262
 —
 —
 —
 —
 —
 366,127
 397,089
Other comprehensive income loss201
 —
 —
 —
 1,275
 —
 —
 —
 —
 23,122
 —
 24,598
Tax effect from vesting of restricted stock grants and stock option exercises—
 —
 —
 —
 —
 —
 —
 —
 2,404
 —
 —
 2,404
Distributions to Operating Partnership units held by noncontrolling interests(7,650) (2,514) (2,570) (1,971) (16,292) —
 —
 —
 —
 —
 —
 (30,997)
Dividends paid on common stock at $2.93 per share—
 —
 —
 —
 —
 —
 —
 —
 —
 —
 (367,818) (367,818)
Balances at December 31, 2016$14,385
 $41,902
 $10,730
 $80,903
 $203,354
 $—
 125,881,460
 $1,259
 $2,566,120
 $16,770
 $(339,257) $2,596,166
See accompanying notes.


Extra Space Storage Inc.

Consolidated Statements of Stockholders’ Equity

(dollars in thousands, except share data)

  Noncontrolling Interests  Extra Space Storage Inc. Stockholders’ Equity    
  Preferred Operating Partnership  

Operating

              

Accumulated
Other
Comprehensive

  

Accumulated

  

Total
Noncontrolling
Interests and

 
          
  Series A  Series B  Series C  Series D  Partnership  Other  Shares  Par Value  Paid-in Capital  Income  Deficit  Equity 

Balances at December 31, 2011

 $29,695   $—     $—     $—     $24,018   $1,101    94,783,590   $948   $1,290,021   $(7,936)  $(264,086)  $1,073,761  

Issuance of common stock upon the exercise of options

  —      —      —      —      —      —      768,853    7    10,260    —      —      10,267  

Restricted stock grants issued

  —      —      —      —      —      —      182,052    2    —      —      —      2  

Restricted stock grants cancelled

  —      —      —      —      —      —      (16,792)   —      —      —      —      —    

Issuance of common stock, net of offering costs

  —      —      —      —      —      —      14,030,000    140    429,448    —      —      429,588  

Issuance of common stock related to settlement of exchangeable senior notes

  —      —      —      —      —      —      684,685    7    —      —      —      7  

Compensation expense related to stock-based awards

  —      —      —      —      —      —      —      —      4,356    —      —      4,356  

New issuance of Operating Partnership units

  —      —      —      —      429    —      —      —      —      —      —      429  

Redemption of Operating Partnership units for common stock

  —      —      —      —      (2,479)   —      304,817    3    2,476    —      —      —    

Redemption of Operating Partnership units for cash

  —      —      —      —      (155)   —      —      —      —      —      —      (155) 

Net income

  6,876    —      —      —      3,473    31    —      —      —      —      117,309    127,689  

Other comprehensive loss

  (61)   —      —      —      (189)   —      —      —      —      (6,337)   —      (6,587) 

Tax effect from vesting of restricted stock grants and stock option exercises

  —      —      —      —      —      —      —      —      3,476    —      —      3,476  

Distributions to Operating Partnership units held by noncontrolling interests

  (6,592)   —      —      —      (2,605)   —      —      —      —      —      —      (9,197) 

Distributions to other noncontrolling interests

  —      —      —      —      —      (18)   —      —      —      —      —      (18) 

Dividends paid on common stock at $0.85 per share

  —      —      —      —      —      —      —      —      —      —      (88,287)   (88,287) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balances at December 31, 2012

 $29,918   $—     $—     $—     $22,492   $1,114    110,737,205   $1,107   $1,740,037   $(14,273)  $(235,064)  $1,545,331  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Extra Space Storage Inc.

Consolidated Statements of Stockholders’ Equity

(dollars in thousands, except share data)

  Noncontrolling Interests  Extra Space Storage Inc. Stockholders’ Equity    
  Preferred Operating Partnership  

Operating

              

Accumulated
Other
Comprehensive

  

Accumulated

  

Total
Noncontrolling
Interests and

 
          
  Series A  Series B  Series C  Series D  Partnership  Other  Shares  Par Value  Paid-in Capital  Income  Deficit  Equity 

Issuance of common stock upon the exercise of options

  —      —      —      —      —      —      391,543    4    5,892    —      —      5,896  

Restricted stock grants issued

  —      —      —      —      —      —      137,602    1    —      —      —      1  

Restricted stock grants cancelled

  —      —      —      —      —      —      (23,323)   —      —      —      —      —    

Issuance of common stock, net of offering costs

  —      —      —      —      —      —      4,500,000    45    205,943    —      —      205,988  

Compensation expense related to stock-based awards

  —      —      —      —      —      —      —      —      4,819    —      —      4,819  

Purchase of additional equity interests in existing consolidated joint ventures

  —      —      —      —      —      (1,008)   —      —      (1,481)   —      —      (2,489) 

Noncontrolling interest related to consolidated joint venture

  —      —      —      —      —      870    —      —      —      —      —      870  

Issuance of exchangeable senior notes—equity component

  —      —      —      —      —      —      —      —      14,496    —      —      14,496  

Issuance of Operating Partnership units in conjunction with store acquisitions

  —      33,568    17,177    —      68,471    —      —      —      —      —      —      119,216  

Redemption of Operating Partnership units for common stock

  —      —      —      —      (260)   —      12,500    —      260    —      —      —    

Redemption of Operating Partnership units for cash

  —      —      —      —      (41)   —      —      —      —      —      —      (41) 

Net income

  7,255    673    78    —      5,425    49    —      —      —      —      172,076    185,556  

Other comprehensive income

  214    —      —      —      692    —      —      —      —      24,429    —      25,335  

Tax effect from vesting of restricted stock grants and stock option exercises

  —      —      —      —      —      —      —      —      3,193    —      —      3,193  

Distributions to Operating Partnership units held by noncontrolling interests

  (7,185)   (673)   (78)   —      (5,326)   —      —      —      —      —      —      (13,262) 

Distributions to other noncontrolling interests

  —      —      —      —      —      —      —      —      —      —      —      —    

Dividends paid on common stock at $1.45 per share

  —      —      —      —      —      —      —      —      —      —      (163,014)   (163,014) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balances at December 31, 2013

 $30,202   $33,568   $17,177   $—     $91,453   $1,025    115,755,527   $1,157   $1,973,159   $10,156   $(226,002)  $1,931,895  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Extra Space Storage Inc.

Consolidated Statements of Stockholders’ Equity

(dollars in thousands, except share data)

  Noncontrolling Interests  Extra Space Storage Inc. Stockholders’ Equity    
  Preferred Operating Partnership  

Operating

              

Accumulated
Other
Comprehensive

  

Accumulated

  

Total
Noncontrolling
Interests and

 
          
  Series A  Series B  Series C  Series D  Partnership  Other  Shares  Par Value  Paid-in Capital  Income  Deficit  Equity 

Issuance of common stock upon the exercise of options

  —      —      —      —      —      —      211,747    2    3,093    —      —      3,095  

Restricted stock grants issued

  —      —      —      —      —      —      117,370    1    —      —      —      1  

Restricted stock grants cancelled

  —      —      —      —      —      —      (23,595)   —      —      —      —      —    

Compensation expense related to stock-based awards

  —      —      —      —      —      —      —      —      4,984    —      —      4,984  

Issuance of Operating Partnership units in conjunction with store acquisitions

  —      8,334    13,783    13,710    2,982    —      —      —      —      —      —      38,809  

Redemption of Operating Partnership units for common stock

  (10,240)   —      —      —      (398)   —      299,190    3    10,635    —      —      —    

Redemption of Operating Partnership units for cash

  (4,794)   —      —      —      —      —      —      —      —      —      —      (4,794) 

Issuance of note receivable to Series C unit holders

  —      —      (20,230)   —      —      —      —      —      —      —      —      (20,230) 

Net income

  7,036    2,387    1,551    17    6,538    12    —      —      —      —      178,355    195,896  

Other comprehensive income

  (74)   —      —      —      (347)   —      —      —      —      (11,640)   —      (12,061) 

Tax effect from vesting of restricted stock grants and stock option exercises

  —      —      —      —      —      —      —      —      3,613    —      —      3,613  

Distributions to Operating Partnership units held by noncontrolling interests

  (7,321)   (2,386)   (1,551)   (17)   (7,806)   —      —      —      —      —      —      (19,081) 

Distributions to other noncontrolling interests

  —      —      —      —      —      (53)   —      —      —      —      —      (53) 

Dividends paid on common stock at $1.81 per share

  —      —      —      —      —      —      —      —      —      —      (210,091)   (210,091) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balances at December 31, 2014

 $14,809   $41,903   $10,730   $13,710   $92,422   $984    116,360,239   $1,163   $1,995,484   $(1,484)  $(257,738)  $1,911,983  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

See accompanying notes.

Extra Space Storage Inc.

Consolidated Statements of Cash Flows

(dollarsamounts in thousands)

   For the Year Ended December 31, 
   2014  2013  2012 

Cash flows from operating activities:

    

Net income

  $195,896   $185,556   $127,689  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

   115,076    95,232    74,453  

Amortization of deferred financing costs

   6,592    5,997    5,889  

Loss on earnout related to prior acquisition

   2,500    —      —    

Property casualty loss

   1,724    —      —    

Loss on extinguishment of debt related to portfolio acquisition

   —      9,153    —    

Gain on sale of real estate assets

   —      (960)   —    

Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes

   2,683    1,404    444  

Non-cash interest benefit related to amortization of premium on notes payable

   (3,079)   (1,194)   (1,270) 

Compensation expense related to stock-based awards

   4,984    4,819    4,356  

Gain on purchase of joint venture partners’ interests

   (3,438)   (46,032)   (23,670) 

Distributions from unconsolidated real estate ventures in excess of earnings

   4,510    4,838    2,581  

Changes in operating assets and liabilities:

    

Receivables from related parties and affiliated real estate joint ventures

   71    1,277    7,439  

Other assets

   (1,498)   8,725    8,746  

Accounts payable and accrued expenses

   4,920    8,302    7,220  

Other liabilities

   6,640    (5,858)   2,002  
  

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

   337,581    271,259    215,879  
  

 

 

  

 

 

  

 

 

 

Cash flows from investing activities:

    

Acquisition of real estate assets

   (503,538)   (349,959)   (601,727) 

Development and redevelopment of real estate assets

   (23,528)   (6,466)   (3,759) 

Proceeds from sale of real estate assets

   —      6,964    —    

Investments in unconsolidated real estate ventures

   —      (1,516)   (1,423) 

Return of investment in unconsolidated real estate ventures

   —      —      2,421  

Change in restricted cash

   (3,794)   (4,475)   8,792  

Issuance of notes receivable

   (29,258)   (5,000)   (7,875) 

Purchase of equipment and fixtures

   (4,830)   (6,524)   (3,367) 
  

 

 

  

 

 

  

 

 

 

Net cash used in investing activities

   (564,948)   (366,976)   (606,938) 
  

 

 

  

 

 

  

 

 

 

Cash flows from financing activities:

    

Proceeds from the sale of common stock, net of offering costs

   —      205,988    429,588  

Net proceeds from the issuance of exchangeable senior notes

   —      246,250    —    

Proceeds from notes payable and lines of credit

   917,664    582,185    1,074,263  

Principal payments on notes payable and lines of credit

   (533,128)   (664,372)   (921,831) 

Deferred financing costs

   (5,305)   (7,975)   (11,607) 

Repurchase of exchangeable senior notes

   —      —      (87,663) 

Redemption of Operating Partnership units held by noncontrolling interest

   (4,794)   (41)   (155) 

Net proceeds from exercise of stock options

   3,095    5,896    10,267  

Dividends paid on common stock

   (210,091)   (163,014)   (88,287) 

Distributions to noncontrolling interests

   (19,134)   (13,262)   (9,215) 
  

 

 

  

 

 

  

 

 

 

Net cash provided by financing activities

   148,307    191,655    395,360  
  

 

 

  

 

 

  

 

 

 

Net (decrease) increase in cash and cash equivalents

   (79,060)   95,938    4,301  

Cash and cash equivalents, beginning of the period

   126,723    30,785    26,484  
  

 

 

  

 

 

  

 

 

 

Cash and cash equivalents, end of the period

  $47,663   $126,723   $30,785  
  

 

 

  

 

 

  

 

 

 

Supplemental schedule of cash flow information

    

Interest paid

  $75,218   $66,705   $65,687  

Income taxes paid

   3,418    1,916    831  

Supplemental schedule of noncash investing and financing activities:

    

Redemption of Operating Partnership units held by noncontrolling interests for common stock

    

Noncontrolling interests in Operating Partnership

  $10,638   $260   $2,479  

Common stock and paid-in capital

   (10,638)   (260)   (2,479) 

Tax effect from vesting of restricted stock grants and option exercises

    

Other assets

  $3,613   $3,193   $3,476  

Paid-in capital

   (3,613)   (3,193)   (3,476) 

Acquisitions of real estate assets

    

Real estate assets, net

  $77,156   $331,230   $159,297  

Notes payable assumed

   (38,347)   (110,803)   (150,284) 

Notes payable assumed and immediately defeased

   —      (98,960)   —    

Notes payable issued to seller

   —      —      (8,584) 

Value of Operating Partnership units issued

   (38,809)   (119,216)   (429) 

Receivables from related parties and affiliated real estate joint ventures

   —      (2,251)   —    

 For the Year Ended December 31,
 2016 2015 2014
Cash flows from operating activities:     
Net income$397,089
 $209,536
 $195,896
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization182,560
 133,457
 115,076
Amortization of deferred financing costs12,922
 7,779
 6,592
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes4,980
 3,310
 2,683
Non-cash interest expense related to amortization of premium on notes payable(872) (2,409) (3,079)
Compensation expense related to stock-based awards8,045
 6,055
 4,984
Gain on sale of real estate assets and purchase of joint venture partners' interests(69,199) (2,857) (3,438)
Loss (gain) on real estate transactions, earnout from prior acquisition and sale of other assets(8,465) (1,501) 2,500
Property casualty loss—
 —
 1,724
Distributions from unconsolidated real estate ventures in excess of earnings3,534
 4,531
 4,510
Changes in operating assets and liabilities:     
Receivables from related parties and affiliated real estate joint ventures1,367
 (1,436) 71
Other assets(2,981) (1,172) (1,498)
Accounts payable and accrued expenses10,075
 108
 4,920
Other liabilities208
 11,928
 6,640
Net cash provided by operating activities539,263
 367,329
 337,581
Cash flows from investing activities:     
Acquisition of SmartStop, net of cash acquired—
 (1,200,853) —
Acquisition of real estate assets(1,086,523) (349,897) (503,538)
Development and redevelopment of real estate assets(23,279) (26,931) (23,528)
Proceeds from sale of real estate assets, investments in real estate ventures and other assets60,813
 800
 —
Change in restricted cash16,854
 1,282
 (3,794)
Investment in unconsolidated real estate ventures(28,241) (3,434) —
Return of investment in unconsolidated real estate ventures16,953
 45,080
 —
Purchase/issuance of notes receivable(26,429) (84,331) (29,258)
Principal payments received from notes receivable42,785
 —
 —
Purchase of equipment and fixtures(4,968) (7,380) (4,830)
Net cash used in investing activities(1,032,035) (1,625,664) (564,948)
Cash flows from financing activities:     
Proceeds from the sale of common stock, net of offering costs123,424
 446,877
 —
Net proceeds from the issuance of 2015 exchangeable senior notes—
 563,500
 —
Repurchase of exchangeable senior notes(22,195) (227,212) —
Proceeds from notes payable and revolving lines of credit1,900,357
 2,121,802
 917,664
Principal payments on notes payable and revolving lines of credit(1,122,442) (1,313,570) (533,128)
Deferred financing costs(17,486) (9,779) (5,305)
Net proceeds from exercise of stock options1,444
 1,542
 3,095
Proceeds from termination of interest rate cap1,650
 —
 —
Purchase of interest rate cap—
 (2,884) —
Payment of earnout from prior acquisition(4,600) —
 —
Redemption of Operating Partnership units held by noncontrolling interests(506) —
 (4,794)
Dividends paid on common stock(367,818) (269,302) (210,091)
Distributions to noncontrolling interests(30,997) (24,503) (19,134)
Net cash provided by financing activities460,831
 1,286,471
 148,307
Net increase (decrease) in cash and cash equivalents(31,941) 28,136
 (79,060)
Cash and cash equivalents, beginning of the period75,799
 47,663
 126,723
Cash and cash equivalents, end of the period$43,858
 $75,799
 $47,663
Supplemental schedule of cash flow information     
Interest paid122,265
 89,507
 75,218
Income taxes paid14,864
 1,782
 3,418
Supplemental schedule of noncash investing and financing activities:     
Redemption of Operating Partnership units held by noncontrolling interests for common stock     
Noncontrolling interests in Operating Partnership$(577) $(28,106) $(10,638)
Common stock and paid-in capital577
 28,106
 10,638
Tax effect from vesting of restricted stock grants and option exercises     
Other assets$2,404
 $1,727
 $3,613
Additional paid-in capital(2,404) (1,727) (3,613)
Acquisitions of real estate assets     
Real estate assets, net$84,163
 $158,009
 $77,158
Value of Operating Partnership units issued(74,440) (142,399) (38,811)
Notes payable assumed(9,723) —
 (38,347)


Receivables from related parties and affiliated real estate joint ventures—
 (15,610) —
Accrued construction costs and capital expenditures     
Acquisition of real estate assets$8,497
 $2,332
 $2,799
Development and redevelopment of real estate assets125
 —
 —
Other liabilities(8,622) (2,332) (2,799)
Distribution of real estate from investments in unconsolidated real estate ventures     
Real estate assets, net$25,055
 $—
 $—
Investments in unconsolidated real estate ventures(25,055) —
 —
Disposition of real estate assets     
Real estate assets, net$(7,689) $—
 $—
Operating Partnership units redeemed7,689
 —
 —
Acquisition of noncontrolling interests     
Operating Partnership units issued$(800) $—
 $—
Other noncontrolling interests162
 —
 —
Additional paid-in capital638
 —
 —
See accompanying notes.

Extra Space Storage Inc.

Notes to Consolidated Financial Statements

December 31, 2014

(amounts

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amounts in thousands, except store and share data)

1.DESCRIPTION OF BUSINESS

data, unless otherwise stated




1.     DESCRIPTION OF BUSINESS
Extra Space Storage Inc. (the “Company”) is a fully integrated,self-administered andself-managed real estate investment trust (“REIT”), formed as a Maryland Corporation on April 30, 2004, to own, operate, manage, acquire, develop and redevelop professionally managed self-storage properties located throughout the United States. The Company continues the business of Extra Space Storage LLC and its subsidiaries, which had engaged in theself-storage business since 1977. The Company’s interest in its stores is held through its operating partnership, Extra Space Storage LP (the “Operating Partnership”), which was formed on May 5, 2004. The Company’s primary assets are general partner and limited partner interests in the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT. The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). To the extent the Company continues to qualify as a REIT, it will not be subject to tax, with certain limited exceptions, on the taxable income that is distributed to its stockholders.

The Company invests in stores by acquiringwholly-owned stores or by acquiring an equity interest in real estate entities. At December 31, 2014,2016, the Company had direct and indirect equity interests in 8281,016 storage facilities. In addition, the Company managed 260411 stores for third parties bringing the total number of stores which it owns and/or manages to 1,088.1,427. These stores are located in 3538 states, Washington, D.C. and Puerto Rico.

The Company operates in three distinct segments: (1) rental operations; (2) tenant reinsurance; and (3) property management, acquisition and development. The rental operations activities include rental operations of stores in which we havethe Company has an ownership interest. No single tenant accounts for more than 5.0% of rental income. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the Company’s stores. The Company’s property management, acquisition and development activities include managing, acquiring, developing and selling stores.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation

The consolidated financial statements are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and itswholly- ormajority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.


Certain prior year amounts have been reclassified to conform to the current year’s presentation. In our Segment Information in Note 19, $2,857 and $4,022 of equity in earnings of unconsolidated real estate ventures-gain on sale of real estate assets and purchase of partners’ interests was reclassified from the rental operations segment to the property management, acquisition and development segment for the years ended December 31, 2015 and 2014, respectively.
Variable Interest Entities

The Company accounts for arrangements that are not controlled through voting or similar rights as variable interest entities (“VIEs”). An enterprise is required to consolidate a VIE if it is the primary beneficiary of the VIE. A VIE is created when (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) the entity’s equity holders as a group either: (a) lack the power, through voting or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance, (b) are not obligated to absorb expected losses of the entity if they occur, or (c) do not have the right to receive expected residual returns of the entity if they occur. If an entity is deemed to be a VIE, the enterprise that is deemed to have a variable interest, or combination of variable interests, that provides the enterprise with a controlling financial interest in the VIE, is considered the primary beneficiary and must consolidate the VIE.


The Company has concluded that under certain circumstances when the Company (1) enters into option agreements for the purchase of land or facilities from an entity and pays anon-refundable deposit, or (2) enters into arrangements for the formation of joint ventures, a VIE may be created under condition (i), (ii) (b) or (c) of the previous paragraph. For each VIE created, the Company has performed a qualitative analysis, including considering which party, if any, has the power to direct the activities most significant to the economic performance of each VIE and whether that party has the obligation to absorb
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If the Company is determined to be the primary beneficiary of the VIE, the assets, liabilities and operations of the VIE are consolidated with the Company’s financial statements. Additionally, the Operating Partnership has notes payable to three trusts that are VIEs under condition (ii)(a) above. Since the Operating Partnership is not the primary beneficiary of the trusts, these VIEs are not consolidated.

The Company’s investments in real estate joint ventures, where the Company has significant influence, but not control, and joint ventures which are VIEs in which the Company is not the primary beneficiary, are recorded under the equity method of accounting on the accompanying consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the financial statements and supporting note disclosures have been reclassified to conform to the current year presentation. Such reclassifications did not impact previously reported net income or accumulated deficit.

Fair Value Disclosures

Derivative financial instruments

Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observablemarket-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate forward curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the Financial Accounting Standard Board’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize

Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2014,2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.


The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2014,2016, aggregated by the level in the fair value hierarchy within which those measurements fall.

   Fair Value Measurements at Reporting Date Using 

Description

  December 31, 2014  Quoted Prices in Active
Markets for Identical
Assets (Level 1)		   Significant Other
Observable Inputs
(Level 2)		  Significant
Unobservable Inputs
(Level 3)		 

Other assets—Cash Flow Hedge Swap Agreements

  $3,583   $  —      $3,583   $  —    

Other liabilities—Cash Flow Hedge Swap Agreements

  $(3,533)  $  —      $(3,533)  $  —    

   Fair Value Measurements at Reporting Date Using
DescriptionDecember 31, 2016 Quoted Prices in Active Markets for Identical Assets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)
Other assets - Cash Flow Hedge Swap Agreements$23,844
 $—
 $23,844
 $—
Other liabilities - Cash Flow Hedge Swap Agreements$(2,447) $—
 $(2,447) $—
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


There were no transfers of assets and liabilities between Level 1 and Level 2 during the year ended December 31, 2014.2016. The Company did not have any significant assets or liabilities that arere-measured on a recurring basis using significant unobservable inputs as of December 31, 20142016 or 2013.

2015.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-lived assets held for use are evaluated by the Company for impairment when events or circumstances indicate that there may be impairment. The Company reviews each store at least annually to determine if any such events or circumstances have occurred or exist. The Company focuses on stores where occupancy and/or rental income have decreased by a significant amount. For these stores, the Company determines whether the decrease is temporary or permanent, and whether the store will likely recover the lost occupancy and/or revenue in the short term. In addition, the Company reviews stores in thelease-up stage and compares actual operating results to original projections.

When the Company determines that an event that may indicate impairment has occurred, the Company compares the carrying value of the relatedlong-lived assets to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the assets exceeds the undiscounted future net operating cash flows attributable to the assets. The impairment loss recognized equals the excess of net carrying value over the related fair value of the assets.

When real estate assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the fair value of the assets, net of selling costs. If the estimated fair value, net of selling costs, of the assets that have been identified as held for sale is less than the net carrying value of the assets, thenthe Company would recognize a valuation allowance is established.loss on the assets held for sale. The operations of assets held for sale or sold during the period are generally presented as discontinuedpart of normal operations for all periods presented.

 As of December 31, 2016, the Company had two parcels of undeveloped land classified as held for sale. The estimated fair value less selling costs of these assets is greater than the carrying value of the assets, and therefore no loss has been recorded.

The Company assesses annually whether there are any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be impaired annually and when events or circumstances indicate that there may be impairment. An investment is impaired if management’s estimate of the fair value of the investment is less than its carrying value. To the extent impairment has occurred, and is considered to be other than temporary, the loss is measured as the excess of the carrying amount of the investment over the fair value of the investment.

As of December 31, 20142016 and 2013,2015, the Company did not have any assets or liabilities measured at fair value on a nonrecurring basis.


Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, receivables, other financial instruments included in other assets, accounts payable and accrued expenses,variable-rate notes payable, revolving lines of credit and other liabilities reflected in the consolidated balance sheets at December 31, 20142016 and 2013,2015, approximate fair value.

The fair values of the Company’s notes receivable from Preferred Operating Partnership unit holders wasand other fixed rate notes receivable were based on the discounted estimated future cash flow of the notes (categorized within Level 3 of the fair value hierarchy); the discount rate used approximated the current market rate for loans with similar maturities and credit quality. The fair values of the Company’s fixed rate notes payable and notes payable to trusts were estimated using the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximated current market rates for loans, or groups of loans, with similar maturities and credit quality. The fair value of the Company’s exchangeable senior notes was estimated using an average market price for similar securities obtained from a third party.

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


The fair values of the Company’sfixed-rate assets and liabilities were as follows for the periods indicated:

   December 31, 2014   December 31, 2013 
   Fair
Value		   Carrying
Value		   Fair
Value		   Carrying
Value		 

Notes receivable from Preferred Operating Partnership unit holders

  $126,380    $120,230    $103,491    $100,000  

Fixed rate notes payable and notes payable to trusts

  $1,320,370    $1,283,893    $1,365,290    $1,368,885  

Exchangeable senior notes

  $276,095    $250,000    $251,103    $250,000  

 December 31, 2016 December 31, 2015
 Fair
Value		 Carrying
Value		 Fair
Value		 Carrying
Value
Notes receivable from Preferred Operating Partnership unit holders$125,642
 $120,230
 $128,216
 $120,230
Fixed rate notes receivable$53,450
 $52,201
 $86,814
 $84,331
Fixed rate notes payable and notes payable to trusts$2,404,996
 $2,417,558
 $1,828,486
 $1,806,904
Exchangeable senior notes$706,827
 $638,170
 $770,523
 $660,364
Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation. Direct and allowable internal costs associated with the development, construction, renovation, and improvement of real estate assets are capitalized. Interest, property taxes, and other costs associated with development incurred during the construction period are capitalized. The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress. The construction period ends when the asset is substantially complete and ready for its intended use.

Expenditures for maintenance and repairs are charged to expense as incurred. Major replacements and betterments that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives. Depreciation is computed using thestraight-line method over the estimated useful lives of the buildings and improvements, which are generally between five and 39 years.

In connection with the Company’s acquisition of operating stores, the purchase price is allocated to the tangible and intangible assets and liabilities acquired based on their fair values, which are estimated using significant unobservable inputs. The value of the tangible assets, consisting of land and buildings, areis determined as if vacant. Intangible assets, which represent the value of existing tenant relationships, are recorded at their fair values based on the avoided cost to replace the current leases. The Company measures the value of tenant relationships based on the rent lost due to the amount of time required to replace existing customers, which is based on the Company’s historical experience with turnover in its facilities.stores. Debt assumed as part of an acquisition is recorded at fair value based on current interest rates compared to contractual rates.
Stores purchased at the time of certificate of occupancy issuance are considered asset acquisitions. As such, the purchase price is allocated to the land and buildings acquired based on their fair values. Any debt assumed as part of the acquisition is recorded at fair value based on current interest rates compared to contractual rates. Acquisition-related transaction transactions costs are expensedcapitalized as incurred.

part of the purchase price.


Intangible lease rights represent: (1) purchase price amounts allocated to leases on three stores that cannot be classified as ground or building leases; these rights are amortized to expense over the life of the leases and (2) intangibles related to ground leases on fiveeight stores where the leases were assumed by the Company at rates

that were lower than the current market rates for similar leases. The values associated with these assumed leases were recorded as intangibles, which will be amortized over the lease terms.

Investments in Unconsolidated Real Estate Ventures

The Company’s investments in real estate joint ventures, where the Company has significant influence, but not control and joint ventures which are VIEs in which the Company is not the primary beneficiary, are recorded under the equity method of accounting in the accompanying consolidated financial statements.

Under the equity method, the Company’s investment in real estate ventures is stated at cost and adjusted for the Company’s share of net earnings or losses and reduced by distributions. Equity in earnings of real estate ventures is generally recognized based on the Company’s ownership interest in the earnings of each of the unconsolidated real estate ventures. For the purposes of presentation in the statement of cash flows, the Company follows the “look through” approach for classification of distributions from joint ventures. Under this approach, distributions are reported under operating cash flow unless the facts and circumstances of a specific distribution clearly indicate that it is a return of capital (e.g., a liquidating dividend or distribution of the proceeds from the joint venture’s sale of assets), in which case it is reported as an investing activity.

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


Cash and Cash Equivalents

The Company’s cash is deposited with financial institutions located throughout the United States and at times may exceed federally insured limits. The Company considers all highly liquid debt instruments with a maturity date of three months or less to be cash equivalents.

Restricted Cash

Restricted cash is comprised of letters of credit and escrowed funds deposited with financial institutions located throughout the United States relating to earnest money deposits on potential acquisitions, real estate taxes, insurance and capital expenditures.

Other Assets

Other assets consist primarily of equipment and fixtures, deferred financing costs, customer accountsrents receivable by our tenants, investments in trusts, notes receivable, other intangible assets, income taxes receivable, deferred tax assets, prepaid expenses and the fair value of interest rate swaps. Depreciation of equipment and fixtures is computed on astraight-line basis over three3 to five5 years. Deferred financing costs are amortized to interest expense using the effective interest method over the terms of the respective debt agreements.

Derivative Instruments and Hedging Activities

The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Risk Management and Use of Financial Instruments

In the normal course of its ongoing business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk on itsinterest-bearing liabilities. Credit risk is the risk of inability or unwillingness of tenants to make contractually required payments. Market risk is the risk of declines in the value of stores due to changes in rental rates, interest rates or other market factors affecting the value of stores held by the Company. The Company has entered into interest rate swap agreements to manage a portion of its interest rate risk.

Exchange of Common Operating Partnership Units

Redemption of common Operating Partnership units for shares of common stock, when redeemed under the original provisions of the Operating Partnership agreement, are accounted for by reclassifying the underlying net book value of the units from noncontrolling interest to the Company’s equity. The difference between the fair value of the consideration paid and the adjustment to the carrying amount of the noncontrolling interest is recognized as additional paid in capital for the Company.

Revenue and Expense Recognition

Rental revenues are recognized as earned based upon amounts that are currently due from tenants. Leases are generally onmonth-to-month terms. Prepaid rents are recognized on astraight-line basis over the term of the leases. Promotional discounts are recognized as a reduction to rental income over the promotional period. Late charges, administrative fees, merchandise sales and truck rentals are recognized as income when earned. Management fee revenues are recognized monthly as services are performed and in accordance with the terms of the related management agreements. Equity in earnings of unconsolidated real
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


estate entities is recognized based on ourthe Company's ownership interest in the earnings of each of the unconsolidated real estate entities. Interest income is recognized as earned.

Property expenses, including utilities, property taxes, repairs and maintenance and other costs to manage the facilities are recognized as incurred. The Company accrues for property tax expense based upon invoice amounts, estimates and historical trends. If these estimates are incorrect, the timing of expense recognition could be affected.

Tenant reinsurance premiums are recognized as revenue over the period of insurance coverage. The Company records an unpaid claims liability at the end of each period based on existing unpaid claims and historical claims payment history. The unpaid claims liability represents an estimate of the ultimate cost to settle all unpaid claims as of each period end, including both reported but unpaid claims and claims that may have been incurred but have not been reported. The Company uses a third party claims administrator to adjust all tenant reinsurance claims received. The administrator evaluates each claim to determine the ultimate claim loss and includes an estimate for claims that may have been incurred but not reported. Annually, a third party actuary evaluates the adequacy of the unpaid claims liability. Prior year claim reserves are adjusted as experience develops or new information becomes known. The impact of such adjustments is included in the current period operations. The unpaid claims liability is not discounted to its present value. Each tenant chooses the amount of insurance coverage they want through the tenant reinsurance program. Tenants can purchase policies in amounts of two thousand dollars to ten thousand dollars of insurance coverage in exchange for a monthly fee. As of December 31, 2014,2016, the average insurance coverage for tenants was approximately $2,540.two thousand eight hundred dollars. The Company’s exposure per claim is limited by the maximum amount of coverage chosen by each tenant. The Company purchases reinsurance for losses exceeding a set amount for any one event. The Company does not currently have any amounts recoverable under the reinsurance arrangements.

Real Estate Sales

In general, sales of real estate and related profits/losses are recognized when all consideration has changed hands and risks and rewards of ownership have been transferred. Certain types of continuing involvement preclude sale treatment and related profit recognition; other forms of continuing involvement allow for sale recognition but require deferral of profit recognition.

Advertising Costs

The Company incurs advertising costs primarily attributable to internet, directory and other advertising. These costs are expensed as incurred. The Company recognized $8,370, $6,482,$12,867, $10,528, and $6,026$8,843 in advertising expense for the years ended December 31, 2016, 2015 and 2014, 2013 and 2012, respectively.

respectively, which are included in property operating expenses on the Company’s consolidated statements of operations.

Income Taxes

The Company has elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain its qualification as a REIT, among other things, the Company is required to distribute at least 90% of its REIT taxable income to its stockholders and meet certain tests regarding the nature of its income and assets. As a REIT, the Company is not subject to federal income tax with respect to that portion of its income which meets certain criteria and is distributed annually to stockholders. The Company plans to continue to operate so that it meets the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. If the Company were to fail to meet these requirements, it would be subject to federal income tax. The Company is subject to certain state and local taxes. Provision for such taxes has been included in income tax expense on the Company’s consolidated statements of operations. For the year ended December 31, 2014, 0.0%2016, 0% (unaudited) of all distributions to stockholders qualified as a return of capital.

The Company has elected to treat its corporate subsidiary, Extra Space Management, Inc. (“ESMI”), as a taxable REIT subsidiary (“TRS”). In general, the Company’s TRS may perform additional services for tenants and may engage in any real estate ornon-real estate related business. A TRS is subject to corporate federal income tax. ESM Reinsurance Limited, awholly-owned subsidiary of ESMI, generates income from insurance premiums that are subject to corporate federal income tax and state insurance premiums tax.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. At December 31, 20142016 and 2013,2015, there were no material unrecognized tax benefits. Interest and penalties relating
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


to uncertain tax positions will be recognized in income tax expense when incurred. As of December 31, 20142016 and 2013,2015, the Company had no interest or penalties related to uncertain tax provisions.

Stock-Based Compensation

The measurement and recognition of compensation expense for allshare-based payment awards to employees and directors are based on estimated fair values. Awards granted are valued at fair value and any compensation element is recognized on a straight line basis over the service periods of each award.

Earnings Per Common Share

Basic earnings per common share is computed using the two-class method by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted stock awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common stockholders; accordingly, they are considered participating securities that are included in the two-class method. Diluted earnings per common share measures the performance of the Company over the reporting period while giving effect to all potential common shares that were dilutive and outstanding during the period. The denominator includes the weighted average number of basic shares and the number of additional common shares that would have been outstanding if the potential common

shares that were dilutive had been issued, and is calculated using either the two-class, treasury stock or as if-converted method, whichever is most dilutive. Potential common shares are securities (such as options, convertible debt, Series A Participating Redeemable Preferred Units (“Series A Units”), Series B Redeemable Preferred Units (“Series B Units”), Series C Convertible Redeemable Preferred Units (“Series C Units”), Series D Redeemable Preferred Units (“Series D Units”) and common Operating Partnership units (“OP Units”)) that do not have a current right to participate in earnings of the Company but could do so in the future by virtue of their option, redemption or conversion right.

In computing the dilutive effect of convertible securities, net income is adjusted to add back any changes in earnings in the period associated with the convertible security. The numerator also is adjusted for the effects of any other non-discretionary changes in income or loss that would result from the assumed conversion of those potential common shares. In computing diluted earnings per common share, only potential common shares that are dilutive (those that reduce earnings per common share) are included. For the years ended December 31, 2014, 20132016, 2015 and 2012,2014, options to purchase approximately 27,374 shares, 44,958 shares88,552, 62,254, and 57,33527,374 shares of common stock, respectively, were excluded from the computation of earnings per share as their effect would have beenanti-dilutive. As
For the purposes of computing the diluted impact of the potential exchange of the Preferred Operating Partnership Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the intent and ability to settle the redemption in shares, The Company divided the total value of the Preferred Operating Partnership units by the average share price of $83.81 for the year ended December 31, 2014, 764,385 Series B Units, 489,366 Series C2016.
The following table presents the number of weighted OP Units and 6,492 Series D UnitsPreferred Operating Partnership units, and the potential common shares, that were excluded from the computation of earnings per share as their effect would have been anti-dilutive:
 For the Year Ended December 31,
 2016 2015 2014
 Number of Units Equivalent Shares (if converted) Number of Units Equivalent Shares (if converted) Number of Units Equivalent Shares (if converted)
Common OP Units5,564,631
 5,564,631
 —
 —
 —
 —
Series A Units (Variable Only)875,480
 875,480
 —
 —
 —
 —
Series B Units1,676,087
 499,966
 1,676,087
 579,640
 1,592,062
 764,385
Series C Units704,016
 353,646
 704,016
 410,002
 605,256
 489,366
Series D Units1,853,193
 552,796
 548,390
 189,649
 13,522
 6,492
 10,673,407
 7,846,519
 2,928,493
 1,179,291
 2,210,840
 1,260,243
EXTRA SPACE STORAGE INC.
anti-dilutive.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013, 3,334,956 OP Units, 257,266 Series B Units (continued)
Amounts in thousands, except store and 33,302 Series C Units were excluded from the computation of earnings per share as their effect would have been anti-dilutive. As of December 31, 2012, 2,755,650 OP Units were excluded from the computation of earnings per share as their effect would have beenanti-dilutive.

data, unless otherwise stated



The Company’s Operating Partnership had $250,000$63,170 of its 2.375% Exchangeable Senior Notes due 2033 (the “Notes due 2033”“2013 Notes”) issued and outstanding as of December 31, 2014.2016. The 2013 Notes due 2033 could potentially have a dilutive impact on the Company’s earnings per share calculations. The 2013 Notes due 2033 are exchangeable by holders into shares of the Company’s common stock under certain circumstances per the terms of the indenture governing the Notes due 2033.2013 Notes. The exchange price of the 2013 Notes due 2033 was $55.62$54.09 per share as of December 31, 2014,2016, and could change over time as described in the indenture. The Company has irrevocably agreed to pay only cash for the accreted principal amount of the 2013 Notes due 2033 relative to its exchange obligations, but retained the right to satisfy the exchange obligation in excess of the accreted principal amount in cash and/or common stock.
The Operating Partnership had $575,000 of its 3.125% Exchangeable Senior Notes due 2035 (the “2015 Notes”) issued and outstanding as of December 31, 2016. The 2015 Notes could potentially have a dilutive impact on the Company’s earnings per share calculations. The 2015 Notes are exchangeable by holders into shares of the Company’s common stock under certain circumstances per the terms of the indenture governing the 2015 Notes. The exchange price of the 2015 Notes was $94.71 per share as of December 31, 2016, and could change over time as described in the indenture. The Company has irrevocably agreed to pay only cash for the accreted principal amount of the 2015 Notes relative to its exchange obligations, but retained the right to satisfy the exchange obligation in excess of the accreted principal amount in cash and/or common stock.
Though the Company has retained that right, Accounting Standards Codification (“ASC”) 260,“Earnings per Share,” requires an assumption that shares would be used to pay the exchange obligation in excess of the accreted principal amount, and requires that those shares be included in the Company’s calculation of weighted average common shares outstanding for the diluted earnings per share computation. For the yearyears ended December 31, 2016, 2015 and 2014, 309,730 shares, 513,040 shares, and 130,883 shares, respectively, related to the 2013 Notes due 2033 were included in the computation for diluted earnings per share. For the yearyears ended December 31, 2013,2016, 2015, and 2014, no shares related to the 2015 Notes due 2033 were included in the computation for diluted earnings per share as the exchange price exceeded the per share price of the Company’s common stock during this period.

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series A Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the positive intent and ability to settle at least $115,000 of the instrument in cash (or net settle a portion of the Series A Units against the related outstanding note receivable), only the amount of the instrument in excess of $115,000 is considered in the calculation of shares contingently issuable for the purposes of computing diluted earnings per share as allowed by ASC 260-10-45-46.
EXTRA SPACE STORAGE INC.
260-10-45-46.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the purposes of computing the diluted impact on earnings per (continued)

Amounts in thousands, except store and share of the potential exchange of Series B Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company hasdata, unless otherwise stated the intent and ability to settle the redemption in shares, the Company divided the total value of the Series B Units outstanding as of December 31, 2014 of $41,902 by the closing price of the Company’s common stock as of December 31, 2014 of $58.64 per share. Assuming full exchange for common shares as of December 31, 2014, 714,566 shares would have been issued to the holders of the Series B Units.

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series C Units into common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the intent and ability to settle the redemption in shares, the Company divided the total value of the Series C Units outstanding as of December 31, 2014 of $29,639 by the closing price of the Company’s common stock as of December 31, 2014 of $58.64 per share. Assuming full exchange for common shares as of December 31, 2014, 505,441 shares would have been issued to the holders of the Series C Units.

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series D Units into common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the intent and ability to settle the redemption in shares, the Company divided the total value of the Series D Units outstanding as of December 31, 2014 of $13,710 by the closing price of the Company’s common stock as of December 31, 2014 of $58.64 per share. Assuming full exchange for common shares as of December 31, 2014, 233,795 shares would have been issued to the holders of Series D Units.




The computation of earnings per share is as follows for the periods presented:

   For the Year Ended December 31, 
   2014  2013  2012 

Net income attributable to common stockholders

  $178,355   $172,076   $117,309  

Earnings and dividends allocated to participating securities

   (490)   (567)   (279) 
  

 

 

  

 

 

  

 

 

 

Earnings for basic computations

 177,865   171,509   117,030  

Earnings and dividends allocated to participating securities

 —     567   279  

Income allocated to noncontrolling interest—Preferred Operating Partnership (Series A Units) and Operating Partnership

 13,575   7,255   6,876  

Fixed component of income allocated to noncontrolling interest—Preferred Operating Partnership (Series A Units)

 (5,586)  (5,750)  (5,750) 
  

 

 

  

 

 

  

 

 

 

Net income for diluted computations

$185,854  $173,581  $118,435  
  

 

 

  

 

 

  

 

 

 

Weighted average common shares outstanding:

Average number of common shares outstanding—basic

 115,713,807   111,349,361   101,766,385  

Series A Units

 961,747   989,980   989,980  

OP Units

 4,335,837   —     —    

Unvested restricted stock awards included for treasury stock method

 —     425,705   523,815  

Shares related to exchangeable senior notes and dilutive stock options

 423,876   340,048   487,185  
  

 

 

  

 

 

  

 

 

 

Average number of common shares outstanding—diluted

 121,435,267   113,105,094   103,767,365  

Earnings per common share

Basic

$1.54  $1.54  $1.15  

Diluted

$1.53  $1.53  $1.14  

 For the Year Ended December 31,
 2016 2015 2014
Net income attributable to common stockholders$366,127
 $189,474
 $178,355
Earnings and dividends allocated to participating securities(792) (601) (490)
Earnings for basic computations365,335
 188,873
 177,865
Earnings and dividends allocated to participating securities792
 —
 —
Income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units) and Operating Partnership—
 14,790
 13,575
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)—
 (5,088) (5,586)
Net income for diluted computations$366,127
 $198,575
 $185,854
Weighted average common shares outstanding:     
Average number of common shares outstanding - basic125,087,554
 119,816,743
 115,713,807
OP Units—
 5,451,357
 4,335,837
Series A Units—
 875,480
 961,747
Unvested restricted stock awards included for treasury stock method299,585
 —
 —
Shares related to exchangeable senior notes and dilutive stock options560,937
 775,289
 423,876
Average number of common shares outstanding - diluted125,948,076
 126,918,869
 121,435,267
Earnings per common share     
Basic$2.92
 $1.58
 $1.54
Diluted$2.91
 $1.56
 $1.53
Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards BoardFASB issued Accounting Standards Update 2014-09,ASU 2014-9, “RevenuesRevenue from Contracts with Customers”(“ASU 2014-09”). ASU 2014-09Customers,” which amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. ASU 2014-092014-9 outlines a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues

and cash flows from contracts with customers. ASU 2014-09 is2014-9 includes all contracts with customers to provide goods and services in the ordinary course of business, except for certain contracts that are specifically excluded from the scope, such as lease contracts and insurance contracts. ASU 2014-9 was originally effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited.2016. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. ManagementIn July 2015, the FASB approved a one-year deferral of the effective date of the standard. The new standard will now become effective for annual and interim periods beginning after December 15, 2017 with early adoption on the original effective date permitted. The Company has determined that its property rental revenue and tenant reinsurance revenue will not be subject to the guidance in ASU 2014-9, as they qualify as lease contract and insurance contracts, which are excluded from its scope. The Company's management fee revenue will be included in the scope of ASU 2014-9, however, based on the Company's initial assessment, it appears that revenue recognized under ASU 2014-9 will not differ materially from revenue recognized under existing guidance. We continue to assess all potential impacts of ASU 2014-9. The Company anticipates adopting the standard using the modified retrospective transition method as of January 1, 2018.

In April 2015, the FASB issued ASU 2015-3, “Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs related to a recognized debt liability to be presented as a direct deduction from the carrying amount of that debt liability. The new guidance only impacts financial statement presentation. The guidance is effective in the first quarter of 2016 and allows for early adoption. The Company adopted this guidance October 1, 2015. The Company adopted ASU 2015-3 on a retrospective basis.
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


In August 2015, the FASB issued ASU 2015-15, “Interest—Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” which provides guidance regarding the classification of debt issuance costs associated with lines of credit. Specifically, deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement is allowed. The Company adopted this guidance effective October 1, 2015. The Company continued to present the debt issuance costs and related accumulated amortization relating to its lines of credit as assets.
In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which modifies the accounting for leases, intending to increase transparency and comparability of organizations by requiring balance sheet presentation of leased assets and increased financial statement disclosure of leasing arrangements. ASU 2016-02 will require entities to recognize a liability for their lease obligations and a corresponding asset representing the right to use the underlying asset over the lease term. Lease obligations are to be measured at the present value and accounted for using the effective interest method. The accounting for the leased asset will differ slightly depending on whether the agreement is deemed to be a financing or operating lease. For finance leases, the leased asset is depreciated on a straight-line basis and recorded separately from the interest expense in the statements of operations, resulting in higher expense in the earlier part of the lease term. For operating leases, the depreciation and interest expense components are combined, recognized evenly over the term of the lease, and presented as a reduction to operating income. ASU 2016-02 requires that assets and liabilities be presented or disclosed separately, and requires additional disclosure of certain qualitative and quantitative information related to these lease agreements. ASU 2016-02 is effective for annual periods beginning after December 15, 2018. The Company is currently assessing the impact of the adoption ofon ASU 2014-092016-02 on the Company’sCompany's consolidated financial statements.

3.REAL ESTATE ASSETS

In January 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805) - Clarifying the Definition of a Business," which provides guidance on whether transactions should be accounted for as acquisitions or disposals of assets or businesses. Specifically, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. Additionally, ASU 2017-01 also provides other guidance providing a more robust framework to use in determining whether a set of assets and activities is a business. This guidance is effective for annual periods beginning after December 15, 2017. Early application of ASU 2017-01 is permitted for transactions for which the acquisition or disposition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued. The Company plans to apply the guidance in ASU 2017-01 to new acquisitions beginning on January 1, 2017. The adoption of this guidance will result in a decrease in acquisition related costs, as the Company's acquisition of operating stores will likely be considered asset acquisitions rather than business combinations under ASU 2017-01.
3.     REAL ESTATE ASSETS
The components of real estate assets are summarized as follows:

   December 31, 2014   December 31, 2013 

Land—operating

  $1,132,175    $1,009,500  

Land—development

   21,062     10,421  

Buildings and improvements

   3,487,935     3,032,218  

Intangible assets—tenant relationships

   72,293     65,811  

Intangible lease rights

   8,697     8,698  
  

 

 

   

 

 

 
 4,722,162   4,126,648  

Less: accumulated depreciation and amortization

 (604,336)  (496,754) 
  

 

 

   

 

 

 

Net operating real estate assets

 4,117,826   3,629,894  

Real estate under development/redevelopment

 17,870   6,650  
  

 

 

   

 

 

 

Net real estate assets

$4,135,696  $3,636,544  
  

 

 

   

 

 

 

Real estate assets held for sale included in net real estate assets

$—    $5,625  
  

 

 

   

 

 

 

 December 31, 2016 December 31, 2015
Land - operating$1,664,659
 $1,384,009
Land - development26,982
 17,313
Buildings, improvements and other intangibles5,833,836
 4,886,397
Intangible assets - tenant relationships111,528
 95,891
Intangible lease rights12,443
 8,877
 7,649,448
 6,392,487
Less: accumulated depreciation and amortization(900,861) (728,087)
Net operating real estate assets6,748,587
 5,664,400
Real estate under development/redevelopment21,860
 24,909
Net real estate assets$6,770,447
 $5,689,309
Real estate assets held for sale included in net real estate assets$1,970
 $10,774

As of December 31, 2016, the Company had two parcels of undeveloped land classified as held for sale. The estimated fair value less selling costs of each of these assets is greater than the carrying value of the assets, and therefore no loss has been
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


recorded. These assets held for sale are included in the property management, acquisition and development segment of the Company’s segment information. The Company expects this land to be sold by the end of 2017.
The Company amortizes to expense intangible assets—tenant relationships on astraight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months). The Company amortizes to expense the intangible lease rights over the terms of the related leases. Amortization related to the tenant relationships and lease rights was $12,996, $12,065$21,133, $11,695, and $7,177,$12,996 for the years ended December 31, 2014, 20132016, 2015 and 2012,2014, respectively. The remaining balance of the unamortized lease rights will be amortized over the next 42 years to 4745 years.

4.PROPERTY ACQUISITIONS AND DISPOSITIONS

4.     PROPERTY ACQUISITIONS AND DISPOSITIONS

The following table shows the Company’s acquisitionacquisitions of operating stores for the years ended December 31, 20142016 and 2013, and does not include2015. The table excludes purchases of raw land or improvements made to existing assets:

      Consideration Paid  Acquisition Date Fair Value    

Property Location

 Number
of
Stores		 Date of
Acquisition		 Total  Cash
Paid		  Loan
Assumed		  Non-cash
gain		  Notes
Issued
to/
from
Seller		  Previous
equity
interest		  Net
Liabilities/
(Assets)
Assumed		  Value of
OP Units
Issued		  Number
of OP
Units
Issued		  Land  Building  Intangible  Closing
costs -
expensed (1)		  Notes 

Florida

 4 12/23/2014 $32,954   $19,122   $— ��   $—     $—     $—     $122   $13,710    548,390   $12,502   $19,640   $482   $330   

New Jersey, Virginia

 5 12/18/2014  47,747    42,167    —      —      —      —      5,580    —      —      4,259    42,440    688    360    (2) 

New York

 1 12/11/2014  20,115    20,125    —      —      —      —      (10)   —      —      12,085    7,665    —      365    (3) 

North Carolina, South Carolina, Texas

 7 12/11/2014  60,279    60,086    —      —      —      —      193    —      —      19,661    36,339    876    3,403    (4) 

California

 1 12/9/2014  9,298    6,300    —      —      —      —      15    2,983    50,620    4,508    4,599    178    13   

Colorado

 1 10/24/2014  6,253    6,202    —      —      —      —      51    —      —      2,077    4,087    82    7   

Georgia

 1 10/22/2014  11,030    11,010    —      —      —      —      20    —      —      588    10,295    121    26   

Florida

 1 9/3/2014  4,259    4,225    —      —      —      —      34    —      —      529    3,604    81    45   

Texas

 1 8/8/2014  11,246    6,134    5,157    —      —      —      (45)   —      —      1,047    9,969    181    49   

Georgia

 1 8/6/2014  11,337    11,290    —      —      —      —      47    —      —      1,132    10,080    111    14   

North Carolina

 1 6/18/2014  7,310    7,307    —      —      —      —      3    —      —      2,940    4,265    93    12   

California

 1 5/28/2014  17,614    294    14,079    —      —      —      (92)   3,333    69,735    4,707    12,604    265    38   

Washington

 1 4/30/2014  4,388    4,388    —      —      —      —      —      —      —      437    3,808    102    41   

California

 3 4/25/2014  35,275    2,726    19,111    3,438    —      129    (580)   10,451    226,285    6,853    27,666    579    177    (5) 

Florida

 1 4/15/2014  10,186    10,077    —      —      —      —      109    —      —      1,640    8,358    149    39   

Georgia

 1 4/3/2014  23,649    15,158    —      —      —      —      157    8,334    333,360    2,961    19,819    242    627   

Alabama

 1 3/20/2014  13,813    13,752    —      —      —      —      61    —      —      2,381    11,224    200    8   

Connecticut

 1 3/17/2014  15,138    15,169    —      —      —      —      (31)   —      —      1,072    14,028    —      38   

California

 1 3/4/2014  7,000    6,974    —      —      —      —      26    —      —      2,150    4,734    113    3    (6) 

Texas

 1 2/5/2014  14,191    14,152    —      —      —      —      39    —      —      1,767    12,368    38    18   

Virginia

 17 1/7/2014  200,588    200,525    —      —      —      —      63    —      —      53,878    142,840    2,973    897   
 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

2014 Totals

 52  $563,670   $477,183   $38,347   $3,438   $—     $129   $5,762   $38,811    1,228,390   $139,174   $410,432   $7,554   $6,510   
 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Texas

 1 12/9/2013 $4,616   $4,610   $—     $—     $—     $—     $6   $—      —     $2,033   $2,495   $70   $18   

Hawaii

 1 12/6/2013  8,029    7,987    —      —      —      —      42    —      —      —      7,776    218    35   

California

 2 12/3/2013  24,334    16,588    —      4,208    —      (1,263)   67    4,734    112,446    6,061    15,402    392    2,479    (7) 

California

 6 12/2/2013  48,514    26,114    4,342    5,131    —      311    173    12,443    295,550    8,859    38,347    864    444    (7) 

Florida

 2 11/8/2013  27,547    27,572    —      —      —      —      (25)   —      —      3,909    23,221    374    43   

Florida

 1 11/7/2013  10,500    10,460    —      —      —      —      40    —      —      2,108    8,028    161    203   

Various states

 16 11/4/2013  96,711    98,424    —      —      —      —      (1,713)   —      —      24,248    70,160    1,874    429   

Various states

 19 11/1/2013  187,825    43,475    99,339    34,137    —      12,373    (1,499)   —      —      85,123    99,500    3,203    1    (8) 

Georgia

 1 10/15/2013  12,414    12,382    —      —      —      —      32    —      —      1,773    10,456    174    11   

North Carolina

 1 10/15/2013  5,535    5,519    —      —      —      —      16    —      —      3,614    1,788    126    7   

California

 1 9/26/2013  10,928    4,791    —      —      —      —      51    6,086    177,107    3,138    7,429    181    180    (9) 

California

 19 8/29/2013  186,427    96,085    —      —      —      —      519    89,823    2,613,728    100,446    81,830    2,997    1,154    (9) 

Arizona

 2 7/25/2013  9,313    9,183    —      —      —      —      130    —      —      2,001    7,110    192    10   

Maryland

 1 6/10/2013  13,688    419    7,122    —      —      —      17    6,130    143,860    2,160    11,340    —      188   

Texas

 1 5/8/2013  7,104    7,057    —      —      —      —      47    —      —      1,374    5,636    86    8   

Hawaii

 2 5/3/2013  27,560    27,491    —      —      —      —      69    —      —      5,991    20,976    438    155   

Illinois

 1 2/13/2013  11,083    7,592    —      341    2,251    1,173    (274)   —      —      1,318    9,485    190    90   

Maryland

 1 2/13/2013  12,321    8,029    —      2,215    —      2,273    (196)   —      —      1,266    10,789    260    6   
 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

2013 Totals

 78  $704,449   $413,778   $110,803   $46,032   $2,251   $14,867   $(2,498)  $119,216    3,342,691   $255,422   $431,768   $11,800   $5,461   
 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

assets.

     Consideration Paid Fair Value
Property LocationNumber of Stores Date of Acquisition Total Cash Paid Loan AssumedNotes issued to/from SellerNet Liabilities/(Assets) AssumedValue of OP Units IssuedNumber of OP Units Issued Real estate assets
Arizona1 12/21/2016 $9,513
 $9,500
 $—
$—
$13
$—
—
 $9,513
Washington1 11/22/2016 12,743
 12,726
 —
—
17
—
—
 12,743
Hawaii2 11/18/2016 15,394
 15,356
 —
—
38
—
—
 15,394
Georgia1 11/17/2016 7,998
 8,009
 —
—
(11)—
—
 7,998
Various states (1)
11 11/17/2016 152,953
 153,017
 —
—
(64)—
—
 161,072
California1 11/17/2016 17,892
 17,860
 —
—
32
—
—
 17,892
North Carolina1 11/14/2016 13,242
 13,241
 —
—
1
—
—
 13,242
Illinois1 11/8/2016 12,304
 9
 —
—
139
12,156
486,244
 12,304
Maryland1 11/2/2016 14,807
 9,040
 —
—
(75)5,842
77,575,000
 14,807
Texas1 10/25/2016 6,743
 6,685
 —
—
58
—
—
 6,743
Minnesota1 10/12/2016 17,744
 17,729
 —
—
15
—
—
 17,744
Texas3 10/6/2016 22,302
 22,131
 —
—
171
—
—
 22,302
Utah1 10/4/2016 8,429
 3,750
 —
—
4,679
—
—
 8,429
California1 10/4/2016 8,500
 8,516
 —
—
(16)—
—
 8,500
California1 9/21/2016 13,800
 13,782
 —
—
18
—
—
 13,800
Various states(2)
23 9/16/2016 237,542
 237,800
 —
—
(258)—
—
 248,530
California1 8/31/2016 3,990
 3,998
 —
—
(8)—
—
 3,990
Texas1 8/12/2016 9,993
 9,915
 —
—
78
—
—
 9,993
Hawaii1 7/14/2016 30,955
 30,850
 —
—
105
—
—
 30,955
Massachusetts1 6/30/2016 13,807
 13,751
 —
—
56
—
—
 13,807
Georgia1 6/30/2016 7,900
 6,696
 —
—
4
1,200
13,764
 7,900
Illinois4 6/10/2016 55,851
 —
 —
—
814
55,037
2,201,467
 55,851
Texas4 6/2/2016 37,478
 37,246
 —
—
232
—
—
 37,478
South Carolina1 5/10/2016 8,249
 8,230
 —
—
19
—
—
 8,249
Washington, DC1 5/5/2016 32,968
 23,163
 9,723
—
82
—
—
 32,968
Indiana5 4/22/2016 26,983
 26,849
 —
—
134
—
—
 26,983
Colorado1 4/19/2016 7,904
 7,869
 —
—
35
—
—
 7,904
Arizona1 4/18/2016 8,154
 8,029
 —
—
125
—
—
 8,154
Texas1 4/15/2016 10,978
 10,922
 —
—
56
—
—
 10,978
Arizona1 4/5/2016 5,000
 4,999
 —
—
1
—
—
 5,000
Hawaii1 4/5/2016 28,992
 28,935
 —
—
57
—
—
 28,992
New Mexico1 3/29/2016 10,958
 10,928
 —
—
30
—
—
 10,958
New Mexico1 3/29/2016 17,940
 17,905
 —
—
35
—
—
 17,940
Georgia3 3/29/2016 25,087
 25,069
 —
—
18
—
—
 25,087
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


     Consideration Paid Fair Value
Property LocationNumber of Stores Date of Acquisition Total Cash Paid Loan AssumedNotes issued to/from SellerNet Liabilities/(Assets) AssumedValue of OP Units IssuedNumber of OP Units Issued Real estate assets
Texas1 3/21/2016 9,994
 9,969
 —
—
25
—
—
 9,994
Illinois1 2/25/2016 16,721
 16,738
 —
—
(17)—
—
 16,721
Massachusetts1 2/16/2016 16,169
 16,174
 —
—
(5)—
—
 16,169
Various states (3)
6 2/2/2016 53,898
 53,940
 —
—
(42)—
—
 98,082
Texas3 1/14/2016 22,625
 22,523
 —
—
102
—
—
 22,625
Florida1 1/12/2016 9,001
 8,980
 —
—
21
—
—
 9,001
Texas3 1/7/2016 27,537
 27,435
 —
—
102
—
—
 27,537
New Mexico2 1/7/2016 15,607
 15,495
 —
—
112
—
—
 15,607
2016 Totals99   $1,086,645
 $995,759
 $9,723
$—
$6,928
$74,235
2,779,050
 $1,149,936
                
California1 12/11/2015 $9,708
 $9,712
 $—
$—
$(4)$—
$—
 $9,708
North Carolina1 12/8/2015 5,301
 5,327
 —
—
(26)—
—
 5,301
Oregon1 11/24/2015 9,992
 9,994
 —
—
(2)—
—
 9,992
Florida3 11/19/2015 20,003
 19,951
 —
—
52
—
—
 20,003
Texas1 11/16/2015 14,396
 7,115
 —
—
60
7,221
91,434
 14,396
Texas1 10/23/2015 8,700
 8,678
 —
—
22
—
—
 8,700
New Jersey1 10/7/2015 7,240
 7,204
 —
—
36
—
—
 7,240
Various (4)
122 10/1/2015 1,176,893
 1,218,173
 —
—
(69,936)28,656
376,848
 1,176,898
Maryland1 9/10/2015 6,091
 6,109
 —
—
(18)—
—
 6,091
North Carolina1 6/19/2015 6,976
 6,915
 —
—
61
—
—
 6,976
Florida1 6/18/2015 17,547
 12,567
 —
—
207
4,773
71,054
 17,547
Florida (5)
1 6/17/2015 4,923
 359
 —
4,601
(37)—
—
 6,023
Illinois1 6/8/2015 10,049
 9,973
 —
—
76
—
—
 10,049
Massachusetts1 5/13/2015 12,500
 12,503
 —
—
(3)—
—
 12,500
Georgia1 5/7/2015 6,496
 6,456
 —
—
40
—
—
 6,496
North Carolina1 5/5/2015 10,994
 10,963
 —
—
31
—
—
 10,994
Georgia1 4/24/2015 6,498
 6,449
 —
—
49
—
—
 6,498
Arizona, Texas22 4/15/2015 177,673
 75,102
 —
—
822
101,749
1,504,277
 177,673
Texas1 4/14/2015 8,640
 8,570
 —
—
70
—
—
 8,640
California (6)
1 3/30/2015 12,334
 1,700
 —
11,009
(375)—
—
 12,699
South Carolina2 3/30/2015 13,136
 13,114
 —
—
22
—
—
 13,136
Virginia1 3/17/2015 4,996
 4,988
 —
—
8
—
—
 4,996
Texas1 2/24/2015 13,554
 13,503
 —
—
51
—
—
 13,554
Texas3 1/13/2015 41,869
 41,771
 —
—
98
—
—
 41,869
2015 Totals171   $1,606,509
 $1,517,196
 $—
$15,610
$(68,696)$142,399
2,043,613
 $1,607,979
                
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


(1)On November 17, 2016, the Company acquired 11 stores from its ESS WCOT LLC joint venture ("WCOT") in a step acquisition. These stores are located in California, Georgia, Maryland, New Mexico, Tennessee and Virginia. The Company owns 5.0% of WCOT, with the other 95.0% owned by affiliates of Prudential Global Investment Management ("Prudential"). WCOT created a new subsidiary, Extra Space Properties 132 LLC ("ESP 132") and transferred 11 stores into ESP 132. WCOT then distributed ESP 132 to the Company and Prudential on a pro rata basis. This column represents costs paiddistribution was accounted for as a spinoff, and was therefore recorded at closing. The amounts shown exclude other acquisition costs paid before orthe net carrying amount of the properties of $68,814. Immediately after the closing date.distribution, the Company acquired Prudential's 95.0% interest in ESP 132 for $153,304, resulting in 100% ownership of ESP 132 and the related 11 stores. Based on the purchase price of Prudential's share of ESP 132, the Company determined that the fair value of its investment in ESP 132 immediately prior to the acquisition of Prudential's share was $8,119, and the Company recorded a gain of $4,651 as a result of remeasuring to fair value its existing equity interest in ESP 132. This gain is included in equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners' interests on the Company's consolidated statements of operations. The Company recorded fixed assets related to this acquisition of $161,072, which includes total cash paid, the investment in ESP 132, and the step acquisition gain, less net assets acquired.
(2)IncludedOn September 16, 2016, the Company acquired 23 stores from its ESS PRISA II LLC joint venture ("PRISA II") in Net Liabilities/(Assets) Assumeda step acquisition. These stores are located in Arizona, California, Connecticut, Florida, Indiana, Kentucky, Massachusetts, Maryland, Michigan, New Jersey, New Mexico, Ohio, Tennessee and Virginia. The Company owned 4.4% of PRISA II, with the other 95.6% owned by affiliates of Prudential. PRISA II created a new subsidiary, Extra Space Properties 131 LLC ("ESP 131"), and transferred 23 stores into ESP 131. PRISA II then distributed ESP 131 to the Company and Prudential on a pro rata basis. This distribution was accounted for as a spinoff, and was therefore recorded at the net carrying amount of the properties of $4,326. Immediately after the distribution, the Company acquired Prudential's 95.6% interest in ESP 131 for $238,679, resulting in 100% ownership of ESP 131 and the related 23 stores. Based on the purchase price of Prudential's share of ESP 131, the Company determined that the fair value of its investment in ESP 131 immediately prior to the acquisition of Prudential's share was $10,988, and the Company recorded a gain of $6,778 as a result of re-measuring to fair value its existing equity interest in ESP 131. This gain is a $5,400 liabilityincluded in equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners' interests on the Company's consolidated statements of operations. The Company recorded fixed assets related to an earnout provision.this acquisition of $248,530, which includes total cash paid, the investment in ESP 131, and the step acquisition gain, less net assets acquired. Subsequent to these transactions, PRISA II owned 42 stores. The Company sold its 4.4% interest in PRISA II to Prudential immediately following these transactions, as disclosed in Note 5.
(3)On February 2, 2016, the Company acquired six stores from its VRS Self Storage LLC joint venture (“VRS”) in a step acquisition. These stores are located in Florida, Maryland, Nevada, New York, and Tennessee. The Company owns 45.0% of VRS, with the other 55.0% owned by affiliates of Prudential. VRS created a new subsidiary, Extra Space Properties 122 LLC (“ESP 122”) and transferred six stores into ESP 122. VRS then distributed ESP 122 to the Company and Prudential on a pro rata basis. This distribution was accounted for as a spinoff, and was therefore recorded at the net carrying amount of the properties of $17,261. Immediately after the distribution, the Company acquired Prudential’s 55.0% interest in ESP 122 for $53,940, resulting in 100% ownership of ESP 122 and the related six stores. Based on the purchase price of Prudential’s share of ESP 122, the Company determined that the fair value of its investment in ESP 122 immediately prior to the acquisition of Prudential’s share was $44,184, and the Company recorded a gain of $26,923 as a result of re-measuring to fair value its existing equity interest in ESP 122. This gain is included in equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners’ interests on the Company’s consolidated statements of operations. The Company recorded fixed assets related to this acquisition of $98,082, which includes total cash paid, the investment in ESP 122, and the step acquisition gain, less net assets acquired.
(4)This represents the acquisition of SmartStop Self Storage, Inc. (“SmartStop”). See below for more detailed information about this acquisition.
(5)The Company determined the consideration paid for this store was below its market value, and recognized a $1,100 gain, representing the difference between the fair value of the store and the consideration paid.
(6)This represents the acquisition of a non-operating property that the Company plans to convert to a self-storage store.
(4)Included in closing costs is approximately $3,271 of defeasance costs.
(5)The Company previously held no equityjoint venture partners’ interest in twoExtra Space of the three properties acquired. The Company acquired its joint venture partner’s 60% interest inSacramento One LLC (“Sacramento One”), an existing joint venture, for $1,700 in cash. The result of the acquisition is that the Company owns 100% of Sacramento One, which heldowned one propertystore located in California, resulting in full ownership by the Company.California. Prior to the acquisition date, the Company accounted for its 40% interest in this joint ventureSacramento One as an equity method investment.equity-method investment, and the Company also held mortgage notes receivable from Sacramento One totaling $11,009, including related interest. The total acquisition date fair value of the Company’s previous equity interest was approximately $3,567$365 and is included asin consideration transferred.transfered. The Company recognized a non-cash gain of $3,438$1,629 as a result of remeasuring its prior equity interest in this joint venture held before the acquisition. The three properties were acquired in exchange for approximately $2,726 of cash and 226,285 Series C Units valued at $10,451.
(6)This property was owned by Spencer F. Kirk, the Company’s Chief Executive Officer, and Kenneth M. Woolley, the Company’s Executive Chairman. The Company acquired the building on March 4, 2014. In a separate transaction on March 5, 2014, the Company acquired the land for $2,150 from a third party unrelated to the Company’s executives and terminated the existing ground lease.
(7)This represents the acquisition of eight properties. The Company previously held no equity interest in three of the properties. For the remaining five, the Company acquired its joint venture partners’ 65% interests in five joint ventures, each of which held one property in California, resulting in full ownership by the Company. Prior to the acquisition date the Company accounted for its 35% interests in these joint ventures as equity-method investments. The total acquisition date fair value of the previous equity interests was approximately $8,400 and is included as consideration transferred. The Company recognized non-cash gains of $9,339 as a result of re-measuring its prior equity interests in these joint ventures held before the acquisition. The eight were acquired in exchange for approximately $42,702 of cash and 407,996 Series C Units valued at $17,177.
(8)This represents the acquisition of a joint venture partner’s 49% interest in HSRE-ESP IA, LLC (“HSRE”), an existing joint venture, for $43,475 in cash and the assumption of a $96,516 loan. The result of this acquisition is that the Company owns a 99% interest in HSRE. The joint venture partner retained a 1% interest, which is included in other noncontrolling interests on the Company’s consolidated balance sheets. HSRE owns 19 properties in California, Florida, Nevada, Ohio, Pennsylvania, Tennessee, Texas and Virginia. prior to the acquisition date, the Company accounted for its 50% interest in the joint venture as an equity-method investment. The acquisition date fair value of the previous equity interest was approximately $43,500 which was calculated based on the fair value of the assets in the joint venture, and is included as consideration transferred. The Company recognized a non-cash gain of $34,137 as a result of re-measuring its prior equity interest in HSRE held before the acquisition.

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


interest held prior to the acquisition. The properties are nowstore is consolidated subsequent to the acquisition as the Company owns 100% of the majoritystore.

Acquisition of SmartStop
On October 1, 2015, the Company completed the acquisition of SmartStop, a public non-traded REIT (the “Transaction”), pursuant to an Agreement and Plan of Merger, dated June 15, 2015 (the “Merger Agreement”). The Company completed the Transaction as part of its strategy to acquire stores and portfolios of stores that can increase stockholder value. Under the terms of the Merger Agreement, SmartStop shareholders received $13.75 per share in cash, which represented a total purchase price of approximately $1,391,272.
In connection with the Transaction, it was agreed that certain assets would be excluded from the Company’s acquisition of SmartStop (the “Excluded Assets”). The Company had determined that the Excluded Assets were not complementary to the Company’s business or otherwise not of primary interest to the Company. These Excluded Assets were instead sold by SmartStop to Strategic 1031, LLC, a Delaware limited liability company (“Strategic 1031”), prior to the Transaction. The Excluded Assets included five SmartStop stores located in Canada, one parcel of land located in California that is under development, and SmartStop’s non-traded REIT platform. Strategic 1031 is owned by and controlled by SmartStop’s former Chief Executive Officer, President and Chairman of the Board of Directors.
The following table reconciles the purchase price to cash paid by the Company and total consideration transferred to acquire SmartStop:
Total purchase price$1,391,272
Less: amount paid for Excluded Assets by Strategic 1031(90,360)
Total purchase price attributable to the Company$1,300,912
Total cash paid by the Company$1,272,256
Fair value of OP Units issued to certain SmartStop unit holders28,656
 1,300,912
Less: Cash paid for transaction costs8,053
Less: Cash paid for defeasance and prepayment fees38,360
Less: Severance and share-based compensation to SmartStop employees7,665
Total consideration transferred$1,246,834
As part of this acquisition, the Company recorded an expense of $38,360 related to defeasance costs and prepayment penalties incurred related to the repayment of SmartStop’s existing debt as of the acquisition date. The Company incurred $8,053 of professional fees/closing costs, $6,338 of severance-related costs, and $1,327 of other payroll-related costs for a total of $54,078 that was paid at closing. Another $9,043 of other acquisition related costs were incurred that were not paid in connection with the closing for a total of $63,121.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company’s allocation of consideration transferred for SmartStop is as follows:
Land$179,700
Buildings978,368
Intangibles18,830
Investments in unconsolidated real estate ventures60,981
Other assets34,500
Total assets acquired1,272,379
Accounts payable and accrued liabilities assumed17,064
Other liabilities assumed8,481
Total net assets acquired$1,246,834
The Company agreed to loan Strategic 1031 $84,331 to finance the purchase of the Excluded Assets. The loans are secured by an interest in the joint venture. A premiumExcluded Assets and accrue interest at 7.0% per annum until February 1, 2017, when the interest
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


rate increases to 9.0%. The loans are due May 30, 2018. As of $2,823 onDecember 31, 2016, the debt assumedremaining principal balance was recorded in order to record the loan at fair value on the date of purchase. This premium is$52,201. These loans receivable are included in premiums on notes payable in the consolidated balance sheets and will be amortized to interest expense over the remaining term of the loan.

(9)On August 29, 2013, the Operating Partnership completed the purchase of 19 out of 20 self-storage facilities affiliated with All Aboard Mini Storage, all of which are located in California. On September 26, 2013, the Operating Partnership completed the purchase of the remaining facility. These properties were acquired in exchange for $100,876 in cash (including $98,960 of debt assumed and immediately defeased at closing), 1,342,727 Series B Units valued at $33,568 and 1,448,108 common OP Units valued at $62,341. In accordance with ASC 805, “Business Combinations,” the assumed debt was recorded at its fair value as of the closing date. The difference between the price paid to extinguish the debt, which included $9,153 of defeasance costs, and the carrying value of the debt was recorded as loss on extinguishment of debt related to portfolio acquisition on the Company’s Consolidated Statements of Operations.

On December 11, 2013, the Company sold 50% of its ownership in a parcel of undeveloped land held for sale located in California for $2,025. The buyer holds their 50% interest as a tenant in common. No gain or loss was recorded as a result of the sale. As the Company’s interest is now held as a tenant in common, the value of the land was reclassified from land to investment in unconsolidated real estate venturesOther assets on the Company’s consolidated balance sheets.

On December 6, 2013, the Company sold a store located in Florida for $3,250 in cash. As a result of this transaction, a gain of $160 was recorded.

In June 2013, the Company recorded a gain of $800 due to the condemnation of a portion of land at one store in California that resulted from eminent domain.

On May 16, 2013, the Company sold a store located in New York for $950. No gain or loss was recorded as a result of the sale.

On July 31, 2012, the Company acquired the land it had previously been leasing associated with a store in Bethesda, Maryland for a cash payment of $3,671.

As noted above, during

Pro Forma Information
During the year ended December 31, 2014,2016, the Company acquired 5199 operating stores. The following pro forma financial information includes 3966 of the 5199 operating stores acquired. Twelve33 stores were excluded as it was impractical to obtain the historical information from the previous owners and in total they represent anand immaterial amount of total revenues.

The following pro forma financial information is based on the combined historical financial statements of the Company and 3966 of the stores acquired, and presents the Company’s results as if the acquisitions had occurred as of January 1, 2013:

   For the Year Ended December 31, 
         2014               2013       

Total revenues

  $659,804    $550,687  

Net income attributable to common stockholders

   183,643     179,792  

Earnings per common share

    

Basic

  $1.58    $1.61  

Diluted

  $1.57    $1.60  

2015 (unaudited):

 For the Year Ended December 31,
 2016 2015
 Pro Forma Pro Forma
Total revenues$1,025,639
 $831,730
Net income attributable to common stockholders$381,883
 $212,313

The following table summarizes the revenues and earnings related to the acquisitions99 stores acquired during 2016 since thetheir acquisition dates, which are included in the Company’s consolidated income statementstatements of operations for the year ended December 31, 2014:

   For the
Year Ended
December 31, 2014		 

Total revenues

  $25,783  

Net income attributable to common stockholders

  $6,671  

2016:

 Year Ended
December 31, 2016
Total revenues$44,712
Net income attributable to common stockholders$12,560
Store Disposals

On July 26, 2016, the Company completed the sale of an operating store located in Indiana that had been classified as held for sale for $4,447 in cash. The Company recognized no gain or loss related to this disposition.

On April 20, 2016, the Company completed the sale of seven operating stores located in Ohio and Indiana that had been classified as held for sale for $17,555 in cash. The Company recognized a gain of $11,265 related to this disposition, which is included in gain (loss) on real estate transactions, earnout from prior acquisitions, and sale of other assets on the Company's consolidated statements of operations.

On April 1, 2016, the Company disposed of a single store in Texas in exchange for 85,452 of the Company's OP Units valued at $7,689. The Operating Partnership canceled the OP Units received in this disposition. The Company recognized a gain of $93 related to this disposition, which is included in gain (loss) on real estate transactions, earnout from prior acquisitions, and sale of other assets on the Company's consolidated statements of operations.

Losses on Earnouts from Prior Acquisitions

On December 2014, the Company acquired a portfolio of five stores located in New Jersey and Virginia. As part of this acquisition, the Company agreed to make an additional cash payment to the sellers if the acquired stores exceeded a specified amount of net operating income for the years ending December 31, 2015 and 2016. At the acquisition date, the Company recorded an estimated liability related to this earnout provision. The operating income of these stores during the earnout period has been higher than expected, resulting in an increase in the estimate of the amount due to the sellers of $4,284, which was recorded as a loss and included in gain (loss) on real estate transactions, earnout from prior acquisition and sale of other assets on the Company's consolidated statements of operations for the year ended December 31, 2016.
During 2011, the Company acquired a store located in Florida. As part of this acquisition, the Company agreed to make an additional cash payment to the sellers if the acquired store exceeded a specified amount of net rental income for any twelve-month period prior to June 30, 2015. At the acquisition date, $133 was recorded as the estimated amount that would be due, and
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


the Company believed that it was unlikely that any significant additional payment would be made as a result of this earnout provision. Because the rental growth of the stores was trending significantly higher than expected, the Company estimated that an additional earnout payment of $2,500 would be due to the seller as of December 31, 2014. This amount is included in gain (loss) on real estate transactions, earnout from prior acquisitions and sale of other assets on the Company’s consolidated statements of operations for the year ended December 31, 2014. During the year ended December 31, 2015, the Company recorded a gain of $400 to adjust the existing liability to the actual amount owed to the sellers as of June 30, 2015. This gain is included in gain (loss) on real estate transactions, earnout from prior acquisition and sale of other assets on the Company’s consolidated statements of operations for the year ended December 31, 2015.
During 2012, the Company acquired a portfolio of ten stores located in New Jersey and New York. As part of this acquisition, the Company agreed to make an additional cash payment to the sellers if the acquired stores exceeded a specified amount of net rental income two years after the acquisition date. At the acquisition date, the Company believed that it was unlikely that any significant payment would be made as a result of this earnout provision. The rental growth of the stores was significantly higher than expected, resulting in a payment to the sellers of $7,785. This amount is included in gain (loss) on sale of real estate andtransactions, earnout from prior acquisitionsacquisition and sale of other assets on the Company’s consolidated statements of operations for the year ended December 31, 2014.

During 2011, the Company acquired a store located in Florida. As part of this acquisition, the Company agreed to make an additional cash payment to the sellers if the acquired store exceeded a specified amount of net rental income for any twelve-month period prior to June 30, 2015. At the acquisition date, $133 was recorded as the estimated amount that would be due, and the Company believed that it was unlikely that any significant additional payment would be made as a result of this earnout provision. Because the rental growth of the stores iswas trending significantly higher than expected, the Company estimated that an additional earnout payment of $2,500 willwould be due to the seller.seller as of December 31, 2014. This amount is included in gain (loss) on sale of real estate andtransactions, earnout from prior acquisitions and sale of other assets on the Company’s consolidated statements of operations for the year ended December 31, 2014.

5.INVESTMENTS IN UNCONSOLIDATED REAL ESTATE VENTURES

During the year ended December 31, 2015, the Company recorded a gain of $400 to adjust the existing liability to the actual amount owed to the sellers as of June 30, 2015. This gain is included in gain (loss) on real estate transactions, earnout from prior acquisition and sale of other assets on the Company’s consolidated statements of operations for the year ended December 31, 2015.

5.     INVESTMENTS IN UNCONSOLIDATED REAL ESTATE VENTURES
Investments in unconsolidated real estate ventures consist of the following:

   Equity
Ownership %		 Excess Profit
Participation %		 Investment Balance at December 31, 
             2014                  2013         

Extra Space West One LLC (“ESW”)

  5% 40% $(95)  $138  

Extra Space West Two LLC (“ESW II”)

  5% 40%  4,197    4,286  

Extra Space Northern Properties Six LLC (“ESNPS”)

  10% 35%  (87)   263  

Extra Space of Santa Monica LLC (“ESSM”)

  48% 48%  1,153    2,541  

Clarendon Storage Associates Limited Partnership (“Clarendon”)

  50% 50%  3,148    3,155  

PRISA Self Storage LLC (“PRISA”)

  2% 17%  10,520    10,737  

PRISA II Self Storage LLC (“PRISA II”)

  2% 17%  9,008    9,143  

VRS Self Storage LLC (“VRS”)

  45% 54%  40,363    41,810  

WCOT Self Storage LLC (“WCOT”)

  5% 20%  3,972    4,145  

Storage Portfolio I LLC (“SP I”)

  25% 25-40%  12,042    12,343  

Other minority owned properties

  18-50% 19-50%  1,490    (436) 
    

 

 

  

 

 

 
$85,711  $88,125  
    

 

 

  

 

 

 

 Equity
Ownership %		 Excess Profit
Participation %		 December 31,
 2016 2015
VRS Self Storage LLC ("VRS")45% 54% $20,433
 $39,091
PR EXR Self Storage, LLC ("PREXR")25% 40% 12,430
 —
Storage Portfolio I LLC ("SP I")25% 25-40% 11,782
 11,813
PRISA Self Storage LLC ("PRISA")4% 4% 10,152
 10,309
Extra Space West Two LLC ("ESW II")5% 40% 4,048
 4,122
Clarendon Storage Associates Limited Partnership ("Clarendon")50% 50% 3,111
 3,131
Extra Space of Santa Monica LLC ("ESSM")48% 48% 1,202
 1,200
WCOT Self Storage LLC ("WCOT")5% 20% 160
 3,783
PRISA II Self Storage LLC ("PRISA II")—% —% —
 8,323
Extra Space West One LLC ("ESW")5% 40% (546) (405)
Extra Space Northern Properties Six LLC ("ESNPS")10% 35% (905) (470)
Other minority owned properties10-50% 19-50% 17,703
 6,148
     79,570
 87,045
Investments in Strategic Storage Growth Trust "SSGT"    —
 15,962
Total    $79,570
 $103,007
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash/profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash/profits than its equity interest.

In accordance with ASC 810, the Company reviews all of its joint venture relationships quarterly to ensure that there are no entities that require consolidation. As of December 31, 2014,2016, there were no previously unconsolidated entities that were required to be consolidated as a result of this review.

Between

The Company has entered into several new real estate ventures. The Company accounts for its investment in the following ventures under the equity method of accounting. Information about these real estate ventures is summarized as follows:
Joint ventureDate of initial contribution Initial Investment Equity Ownership % Number of operating stores owned
BH Ridgelake LLC12/21/2016 $1,301
 20.0% 1
ESS-GS Portland & Broadway LLC10/19/2016 1,250
 25.0% 1
ESS-GS Vancouver-139th LLC9/14/2016 806
 25.0% 1
ESS-H Elmont Associates LLC8/16/2016 4,712
 50.0% 1
ESS-GS Hillsboro-73rd LLC7/8/2016 376
 25.0% 1
BH Storage Columbia LLC5/20/2016 1,034
 20.0% 1
PR EXR Self-Storage, LLC4/8/2016 12,114
 25.0% 1
ESS-H Baychester Investments LLC3/31/2016 4,794
 44.4% 1
ESS-H Bloomfield Investment LLC12/30/2015 2,885
 50.0% 1

On September 16, 2016, subsequent to its acquisition of 23 properties as outlined in Note 4, the Company sold its 4.42% interest in PRISA II to Prudential for $34,758 in cash. The carrying value of the Company's investment prior to the acquisition was $3,912, and the Company recorded a gain on the sale of $30,846. This gain is included in equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners' interests on the Company's consolidated statements of operations.

On April 25, 2016, the Company and Prudential entered into the “Second Amendment to Amended and Restated Operating Agreement of ESS PRISA LLC” and the “First Amendment to Amended and Restated Operating Agreement of ESS PRISA II LLC” (the “Amendments”). The Amendments are deemed effective as of April 1, 2016. Under the Amendments, the Company gave up any future rights to receive distributions from these joint ventures at the higher “excess profit participation” percentage of 17.0% in exchange for a higher equity ownership percentage. The Company’s equity ownership in ESS PRISA LLC increased from 2.0% to 4.0%, and the Company’s equity ownership in ESS PRISA II LLC increased from 2.0% to 4.4%. The Company continues to account for its investment in PRISA under the equity method of accounting. The Company subsequently sold its interest in PRISA II as noted above.
In December 2013 and May 2014, the Company acquired twelve stores located in California from entities associated with Grupe Properties Co. Inc. (“Grupe.”) As part of the Grupe acquisition, the Company acquired its joint venture partners’ 60% to 65% equity interests in six stores. The Company previously held the remaining 35% to 40% interests in these stores through six separate joint ventures with Grupe. Prior to the acquisition, the Company accounted for its interests in these joint ventures as equity-method investments. The Company recognized a non-cash gain of $3,438 during the year ended December 31, 2014 as a result of re-measuring the fair value of its equity interest in one of these joint ventures held before the acquisition. During the year ended December 31, 2014, the Company recorded a gain of $584 as a result of the final cash distributions received from the other five joint ventures associated with the acquisitions that were completed during 2013. The Company recognized non-cash gains of $9,339 during the year ended December 31, 2013 as a result of
EXTRA SPACE STORAGE INC.
re-measuringNOTES TO CONSOLIDATED FINANCIAL STATEMENTS its prior equity interests (continued)
Amounts in five joint ventures held before the acquisition.

On November 1, 2013, the Company acquired its joint venture partner’s 49% interest inHSRE-ESP IA, LLC (“HSRE”), an existing joint venture, for $43,475 in cashthousands, except store and the assumption of a $96,516 loan. The result of this acquisition is that the Company owns a 99% interest in HSRE. The joint venture partner retained a 1% interest, valued at $870, which was recorded at fair value based on the fair value of the assets in the joint venture and is included in other noncontrolling interests on the Company’s consolidated balance sheets. HSRE owns 19 stores in various states. The stores are now consolidated as the Company owns the majority interest in the joint venture. Prior to the acquisition date, the Company accounted for its 50% interest in the joint venture as anequity-method investment. The acquisition date fair value of the previous equity interest was approximately $43,500, and is included as consideration transferred. The Company recognized anon-cash gain of $34,137 as a result ofre-measuring its prior equity interest in HSRE held before the acquisition.

On February 13, 2013, the Company acquired its joint venture partner’s 48% equity interest in Extra Space of Eastern Avenue LLC (“Eastern Avenue”), which owned one store located in Maryland, for approximately $5,979. Prior to the acquisition, the remaining 52% interest was owned by the Company, which accounted for its investment in Eastern Avenue using the equity method. The Company recorded anon-cash gain of $2,215 related to this transaction, which represents the increase in fair value of the Company’s interest in Eastern Avenue from its formation to the acquisition date.

On February 13, 2013, the Company acquired its joint venture partner’s 61% equity interest in Extra Space of Montrose Avenue LLC (“Montrose”), which owned one store located in Illinois, for approximately $6,878. Prior to the acquisition, the remaining 39% interest was owned by the Company, which accounted for its investment in Montrose using the equity method. The Company recorded anon-cash gain of $341 related to this transaction, which represents the increase in fair value of the Company’s interest in the joint venture from its formation to the acquisition date.

On December 20, 2012 two joint ventures in which the Company held 20% interests each sold their only self-storage stores. Both stores were located in Illinois. As a result of the sale, the joint ventures were dissolved, and the Company received cash proceeds which resulted in a gain of $1,409.

On November 30, 2012, the Company completed the acquisition of its joint venture partner’s 80% interest in SPB II, which owned 21 stores located in eleven states. Prior to the acquisition, the remaining 20% interest was owned by the Company, which accounted for its investment in SPB II using the equity method. Subsequent to the acquisition, the Company had full ownership. GAAP requires an entity that completes a business combination in stages tore-measure its previously held equity interest in the acquiree at its acquisition date fair value and recognize the resulting gain or loss, if any, in earnings. The Company recorded a gain of $10,171 related to this transaction, which represents the increase in fair value of the Company’s 20% interest in SPB II from the time the Company purchased its interest in the joint venture to the acquisition date.

On July 2, 2012, the Company completed the acquisition of PREI®’s 94.9% interest in PRISA III, which was formed in 2005 and owned 36 stores located in 18 states. Prior to the acquisition, the remaining 5.1% interest was owned by the Company, which accounted for its investment in PRISA III using the equity method. Subsequent to the acquisition, the Company had full ownership. GAAP requires an entity that completes a business combination in stages tore-measure its previously held equity interest in the acquiree at its acquisition date fair value and recognize the resulting gain or loss, if any, in earnings. The Company recorded a gain of $13,499 related to this transaction, which represents the increase in fair value of the Company’s 5.1% interest in PRISA III from the formation of the joint venture to the acquisition date.

On February 17, 2012, a joint venture in which the Company held a 40% equity interest sold its only store. The store was located in New York. As a result of the sale, the joint venture was dissolved, and the Company received cash proceeds which resulted in a gain of $5,550.

On January 15, 2012, the Company sold its 40% equity interest inU-Storage de Mexico S.A. and related entities to its joint venture partners for $4,841. The Company received cash of $1,492 and a note receivable of $3,349. No gain or loss was recorded on the sale. The note receivable was due December 15, 2014, and has been paid in full.

share data, unless otherwise stated



Equity in earnings of unconsolidated real estate ventures consists of the following:

   For the Year Ended December 31, 
   2014   2013   2012 

Equity in earnings of ESW

  $1,571    $1,406    $1,263  

Equity in earnings of ESW II

   102     50     26  

Equity in earnings of ESNPS

   513     461     382  

Equity in earnings of ESSM

   424     369     314  

Equity in earnings of Clarendon

   551     516     471  

Equity in earnings of HSRE-ESP IA, LLC (“HSRE”)

   —       1,428     1,298  

Equity in earnings of PRISA

   929     890     821  

Equity in earnings of PRISA II

   764     703     643  

Equity in earnings of VRS

   3,510     3,464     2,849  

Equity in earnings of WCOT

   498     448     370  

Equity in earnings of SP I

   1,541     1,243     1,103  

Equity in earnings of other minority owned properties

   138     675     1,319  
  

 

 

   

 

 

   

 

 

 
$10,541  $11,653  $10,859  
  

 

 

   

 

 

   

 

 

 

 For the Year Ended December 31,
 2016 2015 2014
Equity in earnings of VRS$2,919
 $4,041
 $3,510
Equity in earnings of PREXR(172) —
 —
Equity in earnings of SP I2,380
 1,951
 1,541
Equity in earnings of PRISA1,912
 1,013
 929
Equity in earnings of ESW II174
 145
 102
Equity in earnings of Clarendon620
 581
 551
Equity in earnings of ESSM596
 493
 424
Equity in earnings of WCOT614
 569
 498
Equity in earnings of PRISA II1,016
 793
 764
Equity in earnings of ESW2,269
 1,875
 1,571
Equity in earnings of ESNPS823
 633
 513
Equity in earnings of other minority owned properties(256) 257
 138
 $12,895
 $12,351
 $10,541
Equity in earnings of ESW II, SP I and SPB IIVRS includes the amortization of the Company’s excess purchase price of $25,713$26,806 of these equity investments over its original basis. The excess basis is amortized over 40 years.


Information (unaudited) related to the real estate ventures’ debt at December 31, 2014,2016, is presented below:

   Loan Amount   Current
Interest Rate		  Debt
Maturity

ESNPS—Fixed

  $34,500     5.27%  June 2015

ESW—Fixed

   16,700     5.00%  September 2015

SP I—Fixed

   91,543     4.66%  April 2018

Clarendon—Swapped to fixed

   7,888     5.93%  September 2018

ESW II—Swapped to fixed

   18,924     3.57%  February 2019

VRS—Swapped to fixed

   52,100     3.34%  July 2019

WCOT—Swapped to fixed

   87,500     3.34%  August 2019

ESSM—Variable

   13,878     4.19%  May 2021

PRISA

   —       —     Unleveraged

PRISA II

   —       —     Unleveraged

Other minority owned properties

   10,296     Various   Various

 Loan Amount Current Interest Rate Debt Maturity
VRS - Swapped to fixed$52,100
 3.19% June 2020
PREXR—
 —% Unleveraged
SP I - Fixed86,285
 4.66% April 2018
PRISA—
 —% Unleveraged
ESW II - Swapped to fixed18,072
 3.57% February 2019
Clarendon - Swapped to fixed7,596
 5.93% September 2018
ESSM - Variable13,374
 2.52% May 2021
WCOT - Swapped to fixed87,500
 3.34% August 2019
ESW - Variable17,150
 2.02% August 2020
ESNPS - Variable35,500
 2.12% July 2025
Other minority owned properties67,087
 Various
 Various
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


Combined, condensed unaudited financial information of ESW,VRS, PREXR, SP I, PRISA, ESW II, ESNPS, PRISA, PRISA II, PRISA III, VRS, WCOT, ESW and SP IESNPS as of December 31, 20142016 and 2013,2015, and for the years ended December 31, 2016, 2015 and 2014, 2013 and 2012, follows:

   December 31, 
   2014   2013 
Balance Sheets:    

Assets:

    

Net real estate assets

  $1,442,755    $1,474,754  

Other

   34,636     33,642  
  

 

 

   

 

 

 
$1,477,391  $1,508,396  
  

 

 

   

 

 

 

Liabilities and members’ equity:

Notes payable

$301,267  $304,121  

Other liabilities

 23,490   22,488  

Members’ equity

 1,152,634   1,181,787  
  

 

 

   

 

 

 
$1,477,391  $1,508,396  
�� 

 

 

   

 

 

 

   For the Year Ended December 31, 
   2014   2013   2012 (a) 

Statements of Income:

      

Rents and other income

  $273,231    $260,487    $266,222  

Expenses

   153,973     149,595     164,285  
  

 

 

   

 

 

   

 

 

 

Net income

$119,258  $110,892  $101,937  
  

 

 

   

 

 

   

 

 

 

(a)The income statement information for the year ended December 31, 2012 includes results from PRISA III and SPB II, which were acquired by the Company during 2012. Balance sheet and income statement information as of December 31, 2013 and 2014 does not include PRISA III or SPB II.

Variable Interests in Unconsolidated Real Estate Joint Ventures:

The Company has an interest in one unconsolidated joint venture with an unrelated third party which is a variable interest entity (“VIE”). The Company holds an 18% equity interest and a 50% profit interest in the VIE joint venture (“VIE JV”), and has 50% of the voting rights in the VIE JV. Qualification as a VIE was based on the determination that the equity investment at risk for the joint venture was not sufficient based on a qualitative and quantitative analysis performed by the Company. The Company performed a qualitative analysis for the joint venture to determine which party was the primary beneficiary of each VIE. The Company determined that since the powers to direct the activities most significant to the economic performance of the entity is shared equally by the Company and its joint venture partner, there is no primary beneficiary. Accordingly, the interest is recorded using the equity method.

The VIE JV owns

 December 31,
 2016 2015
Balance Sheets:   
Assets:   
Net real estate assets$906,637
 $1,389,974
Other34,116
 33,703
 $940,753
 $1,423,677
Liabilities and members' equity:   
Notes payable$296,607
 $299,730
Other liabilities19,878
 25,715
Members' equity624,268
 1,098,232
 $940,753
 $1,423,677
 For the Year Ended December 31,
 2016 2015 2014
Statements of Income:     
Rents and other income$269,858
 $286,857
 $273,231
Expenses(143,805) (155,851) (153,973)
Gain on sale of real estate—
 60,495
 —
Net income$126,053
 $191,501
 $119,258
In March 2015, PRISA II sold a single store. This joint venture is financed throughstore located in New York and recorded a combinationgain of (1) equity contributions from the Company and its joint venture partner and (2) amounts payable to the Company. The amounts payable to the Company consist of amounts owed for expenses paid on behalf of the joint venture by the Company as manager and mortgage notes payable to the Company. The Company performs management services for the VIE JV in exchange for a management fee of approximately 6.0% of cash collected by the store. The Company completed the purchase of the VIE JV’s mortgage loan on April 3, 2014. The mortgage notes payable were in default as of December 31, 2014. Except as disclosed, the Company has not provided financial or other support during the periods presented to the VIE JV that it was not previously contractually obligated to provide.

The Company’s maximum exposure to loss for this joint venture as of December 31, 2014, is the total of the amounts payable to the Company and the Company’s investment balances in the joint venture. The Company believes that the risk of incurring a material loss as a result of having to perform on the loan guarantee is unlikely and, therefore, no liability has been recorded related to this guarantee. Also, repossessing and/or selling the store and land that collateralize the amounts payable to the Company could provide funds sufficient to reimburse the Company.

The following table compares the liability balance and the maximum exposure to loss related to the Company’s VIE JV as of December 31, 2014:

   Liability
Balance		   Investment
Balance		  Amounts
Payable to the
Company		   Maximum
Exposure
to Loss		   Difference 

Extra Space of Sacramento One LLC

  $ —      $(1,264)  $10,590    $9,326    $(9,326) 
  

 

 

   

 

 

  

 

 

   

 

 

   

 

 

 

$60,495.

The Company had no consolidated VIEs for the yearyears ended December 31, 2014.

6.OTHER ASSETS

The components of other assets are summarized as follows:

   December 31, 2014   December 31, 2013 

Equipment and fixtures

  $24,913    $21,774  

Less: accumulated depreciation

   (15,183)    (12,805) 

Other intangible assets

   7,130     6,460  

Deferred financing costs, net

   21,483     21,881  

Prepaid expenses and deposits

   8,891     8,355  

Receivables, net

   31,946     26,278  

Notes receivable

   9,661     5,747  

Investments in Trusts

   3,590     3,590  

Income taxes receivable

   —       1,845  

Fair value of interest rate swaps

   3,583     13,630  
  

 

 

   

 

 

 
$96,014  $96,755  
  

 

 

   

 

 

 

In September 2014, the Company established a credit facility with an existing partner. Under the credit facility, the Company has agreed to fund a series of loans to a variety of the partner’s subsidiaries, with a total not exceeding $100,000. The loans will be secured by mortgages of stores that are subject to approval by the Company. The loans are expected to close over the next three years, will bear interest at Libor plus 2.55%, and have terms of five years each. The closing of each loan is intended to be accompanied by a simultaneous put/call option agreement, under which the partner’s subsidiaries can require the Company to buy the store, and whereby the Company can require the partner’s subsidiaries to sell the stores. No amounts have been drawn on this credit facility as of December 31, 2014.

7.NOTES PAYABLE

2016 or 2015.

6.     NOTES PAYABLE AND REVOLVING LINES OF CREDIT
The components of notes payable are summarized as follows:

   December 31, 2014   December 31, 2013 

Fixed Rate

    

Mortgage loans with banks (including loans subject to interest rate swaps) bearing interest at fixed rates between 2.8% and 6.7%. The loans are collateralized by mortgages on real estate assets and the assignment of rents. Principal and interest payments are made monthly with all outstanding principal and interest due between May 2015 and February 2023.

  $1,164,303    $1,249,295  

Variable Rate

    

Mortgage loans with banks bearing floating interest rates based on LIBOR. Interest rates based on LIBOR are between LIBOR plus 1.65% (1.82% at December 31, 2014 and 1.97% December 31, 2013) and LIBOR plus 2.0% (2.17% at December 31, 2014 and 2.26% December 31, 2013). The loans are collateralized by mortgages on real estate assets and the assignment of rents. Principal and interest payments are made monthly with all outstanding principal and interest due between May 2015 and March 2021.

   707,764     339,301  
  

 

 

   

 

 

 
$1,872,067  $1,588,596  
  

 

 

   

 

 

 

Notes PayableDecember 31, 2016 December 31, 2015 Fixed Rate Variable Rate Basis Rate Maturity Dates
Secured fixed rate notes payable (1)
$2,297,968
 $1,613,490
 2.8 - 6.1%     March 2017 - September 2026
Secured variable rate notes payable (1)
642,970
 1,094,985
   2.4 - 2.8% Libor plus 1.6 - 2.0% January 2017 - October 2023
Unsecured fixed rate notes payable—
 73,825
 3.1%     March 2020
Unsecured variable rate notes payable300,000
 —
   2.1% Libor plus 1.4% October 2021 - October 2023
Total3,240,938
 2,782,300
        
Plus: Premium on notes payable—
 872
        
Less: unamortized debt issuance costs(27,350) (24,605)        
Total$3,213,588
 $2,758,567
        
            
(1) The loans are collateralized by mortgages on real estate assets and the assignment of rents.

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


On October 14, 2016, the Company entered into a credit agreement (the “Credit Agreement”) which provides for aggregate borrowings of up to $1.15 billion, consisting of a senior unsecured four-year revolving credit facility of $500 million (the “Revolving Credit Facility”), a senior unsecured five-year term loan of up to $430 million (the “Five-Year Term Loan Facility”) and a senior unsecured seven-year term loan of up to $220 million (the “Seven-Year Term Loan Facility” and, together with the Revolving Credit Facility and the Five-Year Term Loan Facility, the “Credit Facility”). The Company may request an increase in the amount of the commitments under the Credit Facility up to an aggregate of $1.5 billion, and extend the term of the Revolving Credit Facility for up to two additional periods of six months each, after satisfying certain conditions. The latest date by which capacity may be drawn on The Five-Year Term Loan Facility and Seven-Year Term Loan Facility are October 13, 2017 and April 4, 2017, respectively. Costs incurred in connection with the Credit Facility were approximately $8,000. These costs are being amortized as an adjustment to interest expense over the terms of each loan.

Amounts outstanding under the Credit Facility bear interest at floating rates, at the Company’s option, equal to either (i) LIBOR plus the applicable Eurodollar rate margin or (ii) the applicable base rate which is the applicable margin plus the highest of (a) 0.0%, (b) the federal funds rate plus 0.50%, (c) U.S. Bank’s prime rate or (d) the Eurodollar rate plus 1.00%. The applicable Eurodollar rate margin will range from 1.35% to 2.50% per annum and the applicable base rate margin will range from 0.35% to 1.50% per annum, in each case depending on the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement, and the type of loan. If the Operating Partnership obtains a specified investment grade rating from two or more specified credit rating agencies, and elects to use the alternative rates based on the Company’s debt rating, the applicable Eurodollar rate margin will range from 0.85% to 2.45% per annum and the applicable base rate margin will range from 0.00% to 1.45% per annum, in each case depending on the rating achieved and the type of loan.

The Credit Agreement is guaranteed by the Company and is not secured by any assets of the Company.

 As of December 31, 2016, the Company was in compliance with all of its financial covenants.

The following table summarizes the scheduled maturities of notes payable at December 31, 2014:

2015

  $251,466  

2016

   185,732  

2017

   475,910  

2018

   127,078  

2019

   447,012  

Thereafter

   384,869  
  

 

 

 
$1,872,067  
  

 

 

 

Certain mortgage and construction loans with variable interest rates are subject to interest rate floors starting at 1.90%. 2016:

  
2017$311,075
2018356,018
2019514,121
2020831,289
2021664,064
Thereafter564,371
 $3,240,938
Real estate assets are pledged as collateral for the notes payable.secured loans. Of the Company’s $1,872,067$3,240,938 principal amount in notes payable outstanding at December 31, 2014, $1,207,8172016, $2,660,814 were recourse due to guarantees or other security provisions. The Company is subject to certain restrictive covenants relating to the outstanding notes payable. The Company was in compliance with all financial covenants at December 31, 2014.

8.DERIVATIVES

2016.


EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


All of the Company’s lines of credit are guaranteed by the Company. The following table presents information on the Company’s lines of credit, the proceeds of which are used to repay debt and for general corporate purposes, for the periods indicated:
 As of December 31, 2016      
Revolving Lines of CreditAmount Drawn Capacity Interest Rate Origination Date Maturity 
Basis Rate (1)
Credit Line 1 (2)
$3,000
 $100,000
 2.4% 6/4/2010 6/30/2018 LIBOR plus 1.7%
Credit Line 2 (3)(4)
362,000
 500,000
 2.2% 10/14/2016 10/14/2020 LIBOR plus 1.4%
 $365,000
 $600,000
        
(1) 30-day USD LIBOR
(2) Secured by mortgages on certain real estate assets. One two-year extension available.
(3) Unsecured. Two six-month extensions available.
(4) Basis Rate as of December 31, 2016. Rate is subject to change based on our consolidated leverage ratio.


7.     DERIVATIVES
The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company makingfixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive deficitincome (“OCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. A portion of these changes is excluded from accumulated other comprehensive income as it is allocated to noncontrolling interests. During the years ended December 31, 2014, 20132016, 2015 and 2012,2014, such derivatives were used to hedge the variable cash flows associated with existingvariable-rate debt. During 2015,2017, the Company estimates that an additional $7,417$9,244 will be reclassified as an increase to interest expense.

The following table summarizes the terms of the Company’s 1931 derivative financial instruments, which have a total combined notional amount of $717,353,$2,109,486 as of December 31, 2014:

2016:

Hedge Product

  Range of Notional
Amounts		  Strike  Effective Dates  Maturity Dates

Swap Agreements

  $5,120 – $94,636 $4,873 - $267,431  2.79% – 5.80%0.84% - 3.84%  6/11/2010 – 1/1/201410/3/2011 - 10/3/2016  6/9/20/2018 - 2/1/2015 – 4/1/20212024


EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


Fair Values of Derivative Instruments

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets:

   Asset (Liability) Derivatives 
   December 31, 2014   December 31, 2013 

Derivatives designated as hedging instruments:

  Balance Sheet
Location		  Fair
Value		   Balance Sheet
Location		  Fair
Value		 

Swap Agreements

  Other assets  $3,583    Other assets  $13,630  

Swap Agreements

  Other liabilities  $(3,533)   Other liabilities  $(3,684) 

 Asset (Liability) Derivatives
 December 31, 2016 December 31, 2015
Derivatives designated as hedging instruments:Fair Value
Other assets$23,844
 $4,996
Other liabilities$(2,447) $(6,991)
Effect of Derivative Instruments

The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations for the periods presented. No tax effect has been presented as the derivative instruments are held by the Company:

Type

  Classification of
Income (Expense)		   For the Year Ended December 31, 2014 
    2014   2013   2012 

Swap Agreements

   Interest expense    $(8,780)   $(8,917)   $(6,758) 
    

 

 

   

 

 

   

 

 

 

   Gain (loss)
recognized in OCI		   Location of amounts
reclassified from OCI
into income		   Gain (loss) reclassified
from OCI		 

Type

  December 31, 2014     For the Year Ended
December 31, 2014		 

Swap Agreements

  $(18,557)    Interest expense    $(8,780) 
  

 

 

     

 

 

 

   Gain (loss)
recognized in OCI		   Location of amounts
reclassified from OCI
into income		   Gain (loss) reclassified
from OCI		 

Type

  December 31, 2013     For the Year Ended
December 31, 2013		 

Swap Agreements

  $13,718     Interest expense    $(8,917) 
  

 

 

     

 

 

 

  Gain (loss) recognized in OCI For the Year Ended December 31, Location of amounts reclassified from OCI into income Gain (loss) reclassified from OCI For the Year Ended December 31,
Type 2016 2015 2016 2015 2014
Swap Agreements $6,388
 $(17,669) Interest expense $(18,800) $(12,487) $(8,780)
Credit-Risk-Related Contingent Features

The Company has agreements with some of its derivative counterparties that contain provisions pursuant to which, the Company could be declared in default of its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender.

The Company also has an agreement with some of its derivative counterparties that incorporates the loan covenant provisions of the Company’s indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

As of December 31, 2014,2016, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $3,532.$2,836. As of December 31, 2014,2016, the Company had not posted any collateral related to these agreements. If the Company had breached any of these provisions as of December 31, 2014,2016, it could have been required to cash settle its obligations under thethese agreements at their termination value of $3,757.

9.NOTES PAYABLE TO TRUSTS

$2,836.

8.     NOTES PAYABLE TO TRUSTS
During July 2005, ESS Statutory Trust III (the “Trust III”), a newly formed Delaware statutory trust and awholly-owned, unconsolidated subsidiary of the Operating Partnership, issued an aggregate of $40,000 of preferred securities which mature on July 31, 2035. In addition, the Trust III issued 1,238 of Trust common securities to the Operating Partnership for a purchase price of $1,238. On July 27, 2005, the proceeds from the sale of the preferred and common securities of $41,238 were loaned in the form of a note to the Operating Partnership (“Note 3”). Note 3 had a fixed rate of 6.91% through July 31, 2010, and then was payable at a variable rate equal to thethree-month three month LIBOR plus 2.40%2.4% per annum. Effective July 11, 2011, the Trust III entered into an interest rate swap that fixes the interest rate to be paid at 4.99%5.0% per annum and matures July 11, 2018. The interest on Note 3, payable quarterly, will be used by the Trust III to pay dividends on the trust preferred securities. The trust preferred securities became redeemable by the Trust III with no prepayment premium on July 27, 2010.

During May 2005, ESS Statutory Trust II (the “Trust II”), a newly formed Delaware statutory trust and awholly-owned, unconsolidated subsidiary of the Operating Partnership of the Company, issued an aggregate of $41,000 of preferred securities which mature on June 30, 2035. In addition, the Trust II issued 1,269 of Trust common securities to the Operating Partnership for a purchase price of $1,269. On May 24, 2005, the proceeds from the sale of the preferred and common securities of $42,269
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


were loaned in the form of a note to the Operating Partnership (“Note 2”). Note 2 had a fixed rate of 6.67%6.7% through June 30, 2010, and then was payable at a variable rate equal to thethree-month three month LIBOR plus 2.40%2.4% per annum. Effective July 11, 2011, the Trust II entered into an interest rate swap that fixes the interest rate to be paid at 4.99%5.0% per annum and matures July 11, 2018. The interest on Note 2, payable quarterly, will be used by the Trust II to pay dividends on the trust preferred securities. The trust preferred securities became redeemable by the Trust II with no prepayment premium on June 30, 2010.

During April 2005, ESS Statutory Trust I (the “Trust”), a newly formed Delaware statutory trust and awholly-owned, unconsolidated subsidiary of the Operating Partnership of the Company issued an aggregate of $35,000 of trust preferred securities which mature on June 30, 2035. In addition, the Trust issued 1,083 of Trust common securities to the Operating Partnership for a purchase price of $1,083. On April 8, 2005, the proceeds from the sale of the trust preferred and common securities of $36,083 were loaned in the form of a note to the Operating Partnership (the “Note”). The Note has a variable rate equal to thethree-month three month LIBOR plus 2.25%2.3% per annum. Effective June 30, 2010, the Trust entered into an interest rate swap that fixes the interest rate to be paid at 5.14%5.1% per annum and matures on June 30, 2018. The interest on the Note, payable quarterly, will be used by the Trust to pay dividends on the trust preferred securities. The trust preferred securities are redeemable by the Trust with no prepayment premium.

Trust, Trust II and Trust III (together, the “Trusts”) are VIEs because the holders of the equity investment at risk (the trust preferred securities) do not have the power to direct the activities of the entities that most significantly affect the entities’ economic performance because of their lack of voting or similar rights. Because the Operating Partnership’s investment in the Trusts’ common securities was financed directly by the Trusts as a result of its loan of the proceeds to the Operating Partnership, that investment is not considered to be an equity investment at risk. The Operating Partnership’s investment in the Trusts is not a variable interest because equity interests are variable interests only to the extent that the investment is considered to be at risk, and therefore the Operating Partnership cannot be the primary beneficiary of the Trusts. Since the Company is not the primary beneficiary of the Trusts, they have not been consolidated. A debt obligation has been recorded in the form of notes as discussed above for the proceeds, which are owed to the Trusts by the Company. The Company has also recorded its investment in the Trusts’ common securities as other assets.

The Company has not provided financing or other support during the periods presented to the Trusts that it was not previously contractually obligated to provide. The Company’s maximum exposure to loss as a result of its involvement with the Trusts is equal to the total amount of the notes discussed above less the amounts of the

Company’s investments in the Trusts’ common securities. The net amount is the notes payable that the Trusts owe to third parties for their investments in the Trusts’ preferred securities.

The notes payable to trusts are presented net of unamortized deferred financing costs of $2,269 and $2,399 as of December 31, 2016 and 2015, respectively.

Following is a tabular comparison of the liabilities the Company has recorded as a result of its involvements with the Trusts to the maximum exposure to loss the Company is subject to related to the Trusts as of December 31, 2014:

   Notes payable
to Trusts		   Investment
Balance		   Maximum
exposure to loss		   Difference 

Trust

  $36,083    $1,083    $35,000    $—    

Trust II

   42,269     1,269     41,000     —    

Trust III

   41,238     1,238     40,000     —    
  

 

 

   

 

 

   

 

 

   

 

 

 
$119,590  $3,590  $116,000  $—    
  

 

 

   

 

 

   

 

 

   

 

 

 

10.EXCHANGEABLE SENIOR NOTES

2016:

 Notes payable
to Trusts		 Investment
Balance		 Maximum
exposure to loss		 Difference
Trust$36,083
 $1,083
 $35,000
 $—
Trust II42,269
 1,269
 41,000
 —
Trust III41,238
 1,238
 40,000
 —
 119,590
 3,590
 116,000
 —
Unamortized debt issuance costs(2,269) 
 
 
 $117,321
 $3,590
 $116,000
 $—
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


9.     EXCHANGEABLE SENIOR NOTES
In September 2015, the Operating Partnership issued $575,000 of its 3.125% Exchangeable Senior Notes due 2035. Costs incurred to issue the 2015 Notes were approximately $11,992, consisting primarily of a 2.0% underwriting fee. These costs are being amortized as an adjustment to interest expense over five years, which represents the estimated term based on the first available redemption date, and are included in other assets in the consolidated balance sheets. The 2015 Notes are general unsecured senior obligations of the Operating Partnership and are fully guaranteed by the Company. Interest is payable on April 1 and October 1 of each year beginning April 1, 2016, until the maturity date of October 1, 2035. The Notes bear interest at 3.125% per annum and contain an exchange settlement feature, which provides that the 2015 Notes may, under certain circumstances, be exchangeable for cash (for the principal amount of the 2015 Notes) and, with respect to any excess exchange value, for cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s option. The exchange rate of the 2015 Notes as of December 31, 2016 was approximately 10.56 shares of the Company’s common stock per $1,000 principal amount of the 2015 Notes.
The Operating Partnership may redeem the 2015 Notes at any time to preserve the Company’s status as a REIT. In addition, on or after October 5, 2020, the Operating Partnership may redeem the 2015 Notes for cash, in whole or in part, at 100% of the principal amount plus accrued and unpaid interest, upon at least 30 days but not more than 60 days prior written notice to the holders of the 2015 Notes. The holders of the 2015 Notes have the right to require the Operating Partnership to repurchase the 2015 Notes for cash, in whole or in part, on October 1 of the years 2020, 2025 and 2030, (unless the Operating Partnership has called the 2015 Notes for redemption), and upon the occurrence of certain designated events, in each case for a repurchase price equal to 100% of the principal amount of the 2015 Notes plus accrued and unpaid interest. Certain events are considered “Events of Default,” as defined in the indenture governing the 2015 Notes, which may result in the accelerated maturity of the 2015 Notes.
On June 21, 2013, the Operating Partnership issued $250,000 of its 2.375% Exchangeable Senior Notes due 2033 at a 1.5% discount, or $3,750. Costs incurred to issue the 2013 Notes due 2033 were approximately $1,672. These costs are being amortized as an adjustment to interest expense over five years, which represents the estimated term based on the first available redemption date, and are included in other assets in the consolidated balance sheet.sheets. The 2013 Notes due 2033 are general unsecured senior obligations of the Operating Partnership and are fully guaranteed by the Company. Interest is payable on January 1 and July 1 of each year beginning January 1, 2014, until the maturity date of July 1, 2033. The 2013 Notes due 2033 bear interest at 2.375% per annum and contain an exchange settlement feature, which provides that the 2013 Notes due 2033 may, under certain circumstances, be exchangeable for cash (for the principal amount of the Notes due 2033)2013 Notes) and, with respect to any excess exchange value, for cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial exchange rate of the 2013 Notes due 2033 isas of December 31, 2016 was approximately 17.9818.49 shares of the Company’s common stock per $1,000 principal amount of the 2013 Notes.

Additionally, the 2013 Notes due 2033.

and the 2015 Notes can be exchanged during any calendar quarter, if the last reported sale price of the common stock of the Company is greater than or equal to 130% of the exchange price for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter. The price of the Company’s common stock exceeded 130% of the exchange price for the required time period for the 2013 Notes during the quarter ended December 31, 2016. Therefore, holders of the 2013 Notes may elect to exchange such notes during the quarter ending March 31, 2017. The price of the Company’s common stock did not exceed 130% of the exchange price for the required time period for the 2015 Notes during the quarter ended December 31, 2016.

The Operating Partnership may redeem the 2013 Notes due 2033 at any time to preserve the Company’s status as a REIT. In addition, on or after July 5, 2018, the Operating Partnership may redeem the 2013 Notes due 2033 for cash, in whole or in part, at 100% of the principal amount plus accrued and unpaid interest, upon at least 30 days but not more than 60 days prior written notice to the holders of the Notes due 2033.2013 Notes. The holders of the 2013 Notes due 2033 have the right to require the Operating Partnership to repurchase the 2013 Notes due 2033 for cash, in whole or in part, on July 1 of the years 2018, 2023 and 2028, and upon the occurrence of certain designated events, in each case for a repurchase price equal to 100% of the principal amount of the 2013 Notes due 2033 plus accrued and unpaid interest. Certain events are considered “Events of Default,” as defined in the indenture governing the 2013 Notes, due 2033, which may result in the accelerated maturity of the Notes due 2033.

2013 Notes.

GAAP requires entities with convertible debt instruments that may be settled entirely or partially in cash upon conversion to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s economic interest cost. The Company therefore accounts for the liability and equity components of the 2013 Notes due 2033and 2015 Notes separately. The equity component iscomponents are included inpaid-in capital in stockholders’ equity in the consolidated balance sheet,sheets, and
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


the value of the equity component iscomponents are treated as original issue discount for purposes of accounting for the debt component.components. The discount isdiscounts are being amortized as interest expense over the remaining period of the debt through its first redemption date, July 1, 2018.2018 for the 2013 Notes and October 1, 2020 for the 2015 Notes. The effective interest rate on the liability componentcomponents of both the 2013 Notes and the 2015 Notes is 4.0%.

, which approximates the market rate of interest of similar debt without exchange features (i.e. nonconvertible debt) at the time of issuance.

Information about the carrying amount of the equity component, the principal amount of the liability component, its unamortized discount and its net carrying amount were as follows for the periods indicated:

   December 31, 2014   December 31, 2013 

Carrying amount of equity component

  $14,496    $14,496  
  

 

 

   

 

 

 

Principal amount of liability component

$250,000  $250,000  

Unamortized discount—equity component

 (10,448)  (13,131) 

Unamortized cash discount

 (2,606)  (3,356) 
  

 

 

   

 

 

 

Net carrying amount of liability component

$236,946  $233,513  
  

 

 

   

 

 

 

On March 27, 2007, the Company’s Operating Partnership issued $250,000 of 3.625% Exchangeable Senior Notes due 2027. The Notes due 2027 bore interest at 3.625% per annum and contained an exchange settlement feature, which provided that under certain circumstances, the Notes due 2027 could have been exchanged for cash (up to the principal amount) and, with respect to any excess exchange value, for cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock at the option of the Operating Partnership. The Company accounted for the liability and equity components of the Notes due 2027 separately as required under GAAP. The effective interest rate on the liability component of the Notes due 2027 was 5.75%.

On March 1, 2012, the Company announced that the holders of the Operating Partnership’sthen-outstanding $87,663 principal amount of the Notes due 2027 had the right to surrender their notes for repurchase by the Operating Partnership on April 1, 2012 for 100% of the principal amount, pursuant to the holders’ rights under the indenture governing the Notes due 2027.

As of April 3, 2012, the Company received notice that the holders of the entire $87,663 principal amount of the Notes due 2027 had surrendered their notes for exchange. On April 26, 2012, the Company settled the exchange by paying cash for the principal amount, as required by the indenture, and issuing 684,685 shares of common stock for the value in excess of the principal amount. The issuance of shares was reflected as an increase inpaid-in-capital with a corresponding decrease inpaid-in-capital attributable to the reacquisition of the equity component of the convertible debt.

 December 31, 2016 December 31, 2015
Carrying amount of equity component - 2013 Notes$—
 $—
Carrying amount of equity component - 2015 Notes22,597
 22,597
Carrying amount of equity components$22,597
 $22,597
Principal amount of liability component - 2013 Notes$63,170
 $85,364
Principal amount of liability component - 2015 Notes575,000
 575,000
Unamortized discount - equity component - 2013 Notes(1,187) (2,605)
Unamortized discount - equity component - 2015 Notes(17,355) (21,565)
Unamortized cash discount - 2013 Notes(281) (633)
Unamortized debt issuance costs(9,033) (11,698)
Net carrying amount of liability components$610,314
 $623,863

The amount of interest cost recognized relating to the contractual interest rate and the amortization of the discount on the liability component for the 2013 Notes due 2033 and the2015 Notes due 2027 was as follows for the periods presented:

   For the Year Ended December 31, 
       2014           2013           2012     

Contractual interest

  $5,936    $3,134    $790  

Amortization of discount

   2,683     1,404     444  
  

 

 

   

 

 

   

 

 

 

Total interest expense recognized

$8,619  $4,538  $1,234  
  

 

 

   

 

 

   

 

 

 

11.LINES OF CREDIT

Allindicated:

 For the Year Ended December 31,
 2016 2015 2014
Contractual interest$19,483
 $9,939
 $5,936
Amortization of discount4,980
 3,310
 2,683
Total interest expense recognized$24,463
 $13,249
 $8,619
Repurchase of 2013 Notes
During April 2016, the Company repurchased a total principal amount of $2,555 of the Company’s lines2013 Notes. The Company paid cash for the principal amount and issued a total of credit are guaranteed by18,031 shares of common stock valued at $1,686 for the exchange value in excess of the principal amount.
During February 2016, the Company and secured by mortgages on certain real estate assets.repurchased a total principal amount of $19,639 of the 2013 Notes. The following table presents information on the Company’s lines of credit, the proceeds of which are used to repay debt and for general corporate purposes,Company paid cash for the periods indicated:

   As of December 31, 2014          

Line of Credit

  Amount
Drawn (1)		   Capacity (1)   Interest
Rate		 Origination
Date		  Maturity  Basis Rate (2) Notes

Credit Line 1

  $7,000    $85,000    2.1% 6/4/2010  6/3/2016  LIBOR plus 1.9% (3)

Credit Line 2

   41,000     50,000    1.9% 11/16/2010  2/13/2017  LIBOR plus 1.8% (4)

Credit Line 3

   50,000     80,000    1.9% 4/29/2011  11/18/2016  LIBOR plus 1.7% (4)

Credit Line 4

   40,000     50,000    1.8% 9/29/2014  9/29/2017  LIBOR plus 1.7% (4)
  

 

 

   

 

 

         
$138,000  $265,000  
  

 

 

   

 

 

         

(1)Amounts in thousands
(2)30-day USD LIBOR
(3)One two-year extension available
(4)Two one-year extensions available

12.OTHER LIABILITIES

principal amount, and issued a total of 130,909 shares of common stock valued at $11,380 for the exchange value in excess of the principal amount.

As part of the 2015 Notes offering, the Company repurchased $164,636 of the 2013 Notes for $227,212 on September 15, 2015. The Company allocated the value of the consideration paid to repurchase the 2013 Notes (1) to the extinguishment of the liability component and (2) to the reacquisition of the equity component. The amount allocated to the extinguishment of the liability component is equal to the fair value of that component immediately prior to extinguishment. The difference between the consideration attributed to the extinguishment of the liability component and the sum of (a) the net carrying amount of the repurchased liability component, and (b) the related unamortized debt issuance costs, is recognized as a gain on debt extinguishment. The remaining settlement consideration is allocated to the reacquisition of the equity component of the repurchased 2013 Notes and recognized as a reduction of stockholders’ equity.
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


Information about the repurchases is as follows:
 February 2016 April 2016 September 2015
Principal amount repurchased$19,639
 $2,555
 $164,636
Amount allocated to:     
  Extinguishment of liability component$18,887
 $2,476
 $157,100
  Reacquisition of equity component12,132
 1,766
 70,112
Total consideration paid for repurchase$31,019
 $4,242
 $227,212
Exchangeable senior notes repurchased$19,639
 $2,555
 $164,636
Extinguishment of liability component(18,887) (2,476) (157,100)
Discount on exchangeable senior notes(716) (72) (6,931)
Related debt issuance costs(36) (7) (605)
Gain/(loss) on repurchase$—
 $—
 $—
10.         OTHER LIABILITIES
The components of other liabilities are summarized as follows:

   December 31, 2014   December 31, 2013 

Deferred rental income

  $28,485    $24,037  

Lease obligation liability

   713     2,076  

Fair value of interest rate swaps

   3,533     3,684  

Income taxes payable

   672     671  

Deferred tax liability

   5,367     3,481  

Earnout provisions on acquisitions

   8,033     133  

Unpaid claims liability

   1,832     1,236  

Other miscellaneous liabilities

   6,084     2,679  
  

 

 

   

 

 

 
$54,719  $37,997  
  

 

 

   

 

 

 

 December 31, 2016 December 31, 2015
Deferred rental income$43,923
 $35,904
Fair value of interest rate swaps2,447
 6,991
Income taxes payable1,695
 2,223
Deferred tax liability9,838
 10,728
Earnout provisions on acquisitions5,184
 5,510
Unpaid claims liability10,134
 11,313
Other miscellaneous liabilities14,448
 7,820
 $87,669
 $80,489
Included in the lease obligationunpaid claims liability is approximately $609 and $2,352 as of December 31, 2014 and 2013, respectively, related to minimum rentals to be received in the future undernon-cancelable subleases.

Included in other miscellaneous liabilities is unpaidare claims related to the Company’s tenant reinsurance program. For the years ended December 31, 2014, 20132016, 2015 and 2012,2014, the number of claims made were 2,942, 2,3164,055, 3,959 and 2,060,2,942, respectively. The following table presents information on the portion of the Company’s unpaid claims liability that relates to tenant insurance for the periods presented:

   For the Year Ended
December 31,		 

Tenant Reinsurance Claims:

  2014  2013  2012 

Unpaid claims liability at beginning of year

  $1,236   $1,414   $715  

Claims and claim adjustment expense for claims incurred in the current year

   5,126    3,817    3,417  

Claims and claim adjustment expense for claims incurred in the prior years

   (345)   (116)   22  

Payments for current year claims

   (3,367)   (2,627)   (2,028) 

Payments for prior year claims

   (818)   (1,252)   (712) 
  

 

 

  

 

 

  

 

 

 

Unpaid claims liability at the end of the year

$1,832  $1,236  $1,414  
  

 

 

  

 

 

  

 

 

 

13.RELATED PARTY AND AFFILIATED REAL ESTATE JOINT VENTURE TRANSACTIONS

indicated:

 For the Year Ended December 31,
Tenant Reinsurance Claims:2016 2015 2014
Unpaid claims liability at beginning of year$3,908
 $3,121
 $2,112
Claims and claim adjustment expense for claims incurred in the current year7,250
 6,421
 5,126
Claims and claim adjustment expense (benefit) for claims incurred in the prior years87
 —
 (345)
Payments for current year claims(5,423) (4,283) (2,954)
Payments for prior year claims(1,926) (1,351) (818)
Unpaid claims liability at the end of the year$3,896
 $3,908
 $3,121
11.     RELATED PARTY AND AFFILIATED REAL ESTATE JOINT VENTURE TRANSACTIONS
The Company provides management services to certain joint ventures, third parties and other related party stores. Management agreements provide generally for management fees of 6.0% of cash collected from total revenues for the management of operations at the stores. In addition, the Company receives an asset management fee equal to 50 basis points0.5% multiplied by the total asset value of the stores owned by the SPI joint venture, provided certain requirements are met.

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


Management fee revenues for related party and affiliated real estate joint ventures and other income are summarized as follows:

      For the Year Ended December 31, 

Entity

  

Type

  2014   2013   2012 
ESW  Affiliated real estate joint ventures  $480    $450    $430  
ESW II  Affiliated real estate joint ventures   410     382     354  
ESNPS  Affiliated real estate joint ventures   550     528     498  
ESSM  Affiliated real estate joint ventures   132     117     107  
HSRE  Affiliated real estate joint ventures   1,201     1,146     1,094  
PRISA  Affiliated real estate joint ventures   5,466     5,215     5,174  
PRISA II  Affiliated real estate joint ventures   4,635     4,397     4,138  
VRS  Affiliated real estate joint ventures   1,326     1,286     1,207  
WCOT  Affiliated real estate joint ventures   1,680     1,601     1,520  
SP I  Affiliated real estate joint ventures   1,999     1,953     1,885  
Other  Franchisees, third parties and other   10,336     9,539     9,299  
    

 

 

   

 

 

   

 

 

 
$28,215  $26,614  $25,706  
    

 

 

   

 

 

   

 

 

 

    For the Year Ended December 31,
Entity Type 2016 2015 2014
VRS Affiliated real estate joint ventures $1,053
 $1,398
 $1,326
PREXR Affiliated real estate joint ventures 20
 —
 —
SP I Affiliated real estate joint ventures 2,160
 2,075
 1,999
PRISA Affiliated real estate joint ventures 6,117
 5,809
 5,466
ESW II Affiliated real estate joint ventures 482
 452
 410
ESSM Affiliated real estate joint ventures 162
 152
 132
WCOT Affiliated real estate joint ventures 1,819
 1,799
 1,680
PRISA II Affiliated real estate joint ventures 3,469
 4,703
 4,635
ESW Affiliated real estate joint ventures 555
 515
 480
ESNPS Affiliated real estate joint ventures 620
 584
 550
HSRE-ESP IA, LLC ("HSRE") Affiliated real estate joint ventures —
 —
 1,201
Other Franchisees, third parties and other 23,385
 16,674
 10,336
    $39,842
 $34,161
 $28,215

Receivables from related parties and affiliated real estate joint ventures balances are summarized as follows:

   December 31, 2014   December 31, 2013 

Mortgage notes receivable

  $10,590    $5,818  

Other receivables from stores

   1,188     1,724  
  

 

 

   

 

 

 
$11,778  $7,542  
  

 

 

   

 

 

 

  December 31, 2016 December 31, 2015
Mortgage notes receivable $15,860
 $—
Other receivables from stores 751
 2,205
  $16,611
 $2,205
Mortgage notes receivable consist of short-term mortgage notes to joint ventures and one three-year revolving line of credit to a joint venture. These short-term mortgage notes have a maturity of less than a year and the Company believes they are fully collectible. Other receivables from stores consist of amounts due for management fees, asset management fees and expenses paid on behalf of the stores that the Company manages. The Company believes that all of these related party and affiliated real estate joint venture receivables are fully collectible. The Company does not have any payables to related parties at December 31, 2014 and 2013.

Centershift, a related party service provider, was partially owned by one of the Company’s board members, whose interest was sold in February 2014. Effective January 1, 2004, the Company entered into a license agreement with Centershift which secured a perpetual right for continued use of STORE (the site management software used at all sites operated by the Company) in all aspects of the Company’s property acquisition, development, redevelopment and operational activities. On October 1, 2013, the Company bought out the remainder of its three year contract with Centershift for $1,500, which was included in general and administrative expense for the year ended December 31, 2013. In addition, during the year ended December 31, 2013, the Company purchased a copy of the STORE source code and some equipment from Centershift for $2,600. Subsequent to these purchases, the Company no longer has any contractual liability to Centershift. During the years ended December 31, 2014, 2013 and 2012, the Company paid Centershift $0, $1,095 and $1,235, respectively, relating to the purchase of software and license agreements.

2016, or 2015.

The Company has entered into an annual aircraft dry lease and service and management agreement with SpenAero, L.C. (“SpenAero”), an affiliate of Spencer F. Kirk, who was the Company’sCompany's Chief Executive Officer.Officer through December 31, 2016 and continues to serve as a member of the Company's Board of Directors. Under the

terms of the agreement, the Company pays a defined hourly rate for use of the aircraft. During the years ended December 31, 2014, 20132016, 2015 and 2012,2014, the Company paid SpenAero $1,059, $803$1,180, $1,163 and $649,$1,059, respectively. The services that the Company receives from SpenAero are similar in nature and comparable in price to those that are provided to other outside third parties.

14.STOCKHOLDERS’ EQUITY

12.     STOCKHOLDERS’ EQUITY
The Company’s charter provides that it can issue up to 500,000,000 shares of common stock, $0.01 par value per share and 50,000,000 shares of preferred stock, $0.01 par value per share. As of December 31, 2014, 116,360,2392016, 125,881,460 shares of common stock were issued and outstanding, and no shares of preferred stock were issued or outstanding.


All holders of the Company’sCompany's common stock are entitled to receive dividends and to one vote on all matters submitted to a vote of stockholders. The transfer agent and registrar for the Company’s common stock is American Stock Transfer & Trust Company.


On November 8, 2013,August 28, 2015, the Company filed a $400,000 “at the market” equity program with the Securities and Exchange Commission, and entered into separate equity distribution agreements with five sales agents. On May 6, 2016, the Company
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


filed its current $400,000 "at the market" equity program with the Securities and Exchange Commission using a new shelf registration statement on Form S-3, and entered into separate equity distribution agreements with five sales agents. Under the terms of the current equity distribution agreements, the Company may from time to time offer and sell shares of common stock, up to the aggregate offering price of $400,000, through its sales agents. The current equity distribution agreements, dated May 6, 2016, replaced and superseded the previous equity distribution agreements, dated August 28, 2015.

During July 2016, the Company sold 550,000 shares of common stock under the current “at the market” equity program at an average sales price of $92.04 per share, resulting in net proceeds of $50,062. At December 31, 2016, the Company had $349,375 available for issuance under the existing equity distribution agreements.

From January 1, 2016, through May 6, 2016, the Company sold 831,300 shares of common stock under the previous “at the market” equity program at an average sales price of $89.66 per share, resulting in net proceeds of $73,360.

During September 2015, the Company sold 410,000 shares of common stock under the previous “at the market” equity program at an average sales price of $75.17 per share, resulting in net proceeds of $30,266.

On June 22, 2015, the Company issued and sold 4,500,0006,325,000 shares of its common stock in a public offering at a price to the underwriter of $45.81$68.15 per share. The Company received gross proceeds of $206,145. Transaction$431,049. The underwriting discount and transaction costs were $157,$14,438, resulting in net proceeds of $205,988.

On November 9, 2012, the Company issued and sold 5,980,000 shares of its common stock in a public offering at a price to the underwriter of $33.98 per share. The Company received gross proceeds of $203,200. Transaction costs were $300, resulting in net proceeds of $202,900.

On April 16, 2012, the Company issued and sold 8,050,000 shares of its common stock in a public offering at a price to the underwriter of $28.22 per share. The Company received gross proceeds of $227,171. Transaction costs were $483, resulting in net proceeds of $226,688.

15.NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS

$416,611.

13.     NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS
Classification of Noncontrolling Interests

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the Operating Partnership’s preferred units and classifies the noncontrolling interest represented by such preferred units as stockholders’ equity in the accompanying consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount, or (2) its redemption value as of the end of the period in which the determination is made.

Series A Participating Redeemable Preferred Units

On June 15, 2007, the Operating Partnership entered into a Contribution Agreement with various limited partnerships affiliated with AAAAARent-A-Space to acquire ten stores in exchange for 989,980 Series A Units. The stores are located in California and Hawaii.

The partnership agreement of the Operating Partnership (as amended, the “Partnership Agreement”) provides for the designation and issuance of the Series A Units. The Series A Units have priority over all other partnership interests of the Operating Partnership with respect to distributions and liquidation.
Under the Partnership Agreement, Series A Units in the amount of $115,000 bear a fixed priority return of 5.0% and have a fixed liquidation value of $115,000. The remaining balance participates in distributions with, and has a liquidation value equal to, that of the common OP Units. The Series A Units became redeemable at the option of the holder on September 1, 2008, which redemption obligation may be satisfied, at the Company’s option, in cash or shares of its common stock.
On June 25, 2007, the Operating Partnership loaned the holders of the Series A Units $100,000. The note receivable bears interest at 4.85%. During 2013, a loan amendment was signed extending the maturity date to September 1, 2020. The loan is secured by the borrower’s Series A Units. The holders of the Series A Units could redeem up to 114,500 Series A Units prior to the maturity date of the loan. If any redemption in excess of 114,500 Series A Units occurs prior to the maturity date, the holder
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


of the Series A Units is required to repay the loan as of the date of that redemption. On October 3, 2014, the holders of the Series A Units redeemed 114,500 Series A Units for $4,794 in cash and 280,331 shares of common stock. No additional redemption of Series A Units can be made without repayment of the loan. The Series A Units are shown on the balance sheet net of the $100,000 loan because the borrower under the loan receivable is also the holder of the Series A Units.

The partnership agreement of the Operating Partnership (as amended, the “Partnership Agreement”) provides for the designation and issuance of the Series A Units. The Series A Units have priority over all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

Under the Partnership Agreement, Series A Units in the amount of $115,000 bear a fixed priority return of 5.0% and have a fixed liquidation value of $115,000. The remaining balance participates in distributions with, and has a liquidation value equal to, that of the common OP Units. The Series A Units became redeemable at the option of the holder on September 1, 2008, which redemption obligation may be satisfied, at the Company’s option, in cash or shares of its common stock.

Series B Redeemable Preferred Units

On April 3, 2014, the Operating Partnership completed the purchase of a store located in Georgia. This store was acquired in exchange for $15,158 of cash and 333,360 Series B Units valued at $8,334.

On August 29, 2013, the Operating Partnership completed the purchase of 19 out of 20 stores affiliated with All Aboard Mini Storage, all of which are located in California. On September 26, 2013, the Operating Partnership completed the purchase of the remaining facility. These stores were acquired in exchange for $100,876 in cash (including $98,960 of debt assumed and immediately defeased at closing), 1,342,727 Series B Units valued at $33,568, and 1,448,108 common OP Units valued at $62,341.

The Partnership Agreement provides for the designation and issuance of the Series B Units. The Series B Units rank junior to the Series A Units, on parity with the Series C Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series B Units have a liquidation value of $25.00 per unit for a fixed liquidation value of $41,902.$41,903. Holders of the Series B Units receive distributions at an annual rate of 6.0%. These distributions are cumulative. The Series B Units are redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligations may be satisfied at the Company’s option in cash or shares of its common stock.

Series C Convertible Redeemable Preferred Units

On November 19, 2013, the Operating Partnership entered into Contribution Agreements with various entities affiliated with Grupe, under which the Company agreed to acquire twelve stores, all of which are located in California. The Company completed the purchase of these self-storage stores between December 2013 and May 2014. The Company previously held a 35% interest in five of these stores and a 40% interest in one store all through six separate joint ventures with Grupe. These stores were acquired in exchange for a total of approximately $45,722 of cash, the assumption of $37,532 in existing debt, and the issuance of 704,016 Series C Units valued at $30,960.

The Partnership Agreement provides for the designation and issuance of the Series C Units. The Series C Units rank junior to the Series A Units, on parity with the Series B Units and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series C Units have a liquidation value of $42.10 per unit.unit for a fixed liquidation value of $29,639. From issuance to the fifth anniversary of issuance, each Series C Unit holder will receive quarterly distributions equal to the quarterly distribution for common OP Unit plus $0.18. Beginning on the fifth anniversary of issuance, each Series C Unit holder will receive a fixed quarterly distribution equal to the aggregate quarterly distribution payable in respect of such Series C Unit during the four quarters immediately preceding the fifth anniversary of issuance divided by four. These distributions are cumulative. The Series C Units will become redeemable at the option of the holder one year from the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock. The Series C Units will also become convertible into common OP Units at the option of the holder one year from the date of issuance, at a rate of 0.9145 common OP Units per Series C Unit converted. This conversion option expires upon the fifth anniversary of the date of issuance.

In December 2014, the Operating Partnership loaned holders of the Series C Units $20,230. The notes receivable, which are collateralized by the Series C Units, bear interest at 5.0% and mature on December 15, 2024. The Series C Units are shown on the balance sheet net of the $20,230 loan because the borrower under the loan receivable is also the holder of the Series C units.

Units.

Series D Redeemable Preferred Units

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


On November 8, 2016, the Operating Partnership completed the acquisition of a store located in Illinois. This store was acquired in exchange for 486,244 Series D-4 Preferred Units ("D-4 Units") valued at $12,156.
On May 21, 2016, the Operating Partnership completed the acquisition of four stores located in Illinois. These stores were acquired in exchange for 2,201,467 Series D-3 Preferred Units ("D-3 Units") valued at $55,037.
In December 2014, the Operating Partnership completed the acquisition of a store located in Florida. This store was acquired in exchange for $5,621 in cash and 548,390 Series D-1 Preferred Units ("D-1 Units," and together with the D-4 Units and D-3 Units, "Series D UnitsUnits") valued at $13,710.

The Partnership Agreement provides for the designation and issuance of the Series D Units. The Series D Units rank junior to the Series A Units, on parity with the Series B Units and Series C Units, and senior to all other partnership interest of the Operating Partnership with respect to distributions and liquidation.


The Series D Units have a liquidation value of $25.00 per unit, for a fixed liquidation value of $13,710.$80,903. Holders of the Series D Units receive distributions at an annual rate ofbetween 3.5% and 5.0%. These distributions are cumulative. The Series D Units will become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock.

16.NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP

In addition, the D-3 Units are exchangeable for common OP Units until the tenth anniversary of the date of issuance. The D-1 Units and D-4 Units are not exchangeable for common OP Units.

14.     NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP
The Company’s interest in its stores is held through the Operating Partnership. ESS Holding Business Trust I, awholly-owned subsidiary of the Company, is the sole general partner of the Operating Partnership. ESS Business Trust II, also awholly-owned subsidiary of the Company, is a limited partner of the Operating Partnership. Between its general partner and limited partner interests, the Company held a 93.4%91.2% majority ownership interest therein as of December 31, 2014.2016. The remaining ownership interests in the Operating Partnership (including Preferred Operating Partnership units) of 6.6%8.8% are held by certain former owners of assets acquired by the Operating Partnership. As of December 31, 2014, the Operating Partnership had 4,365,879 OP Units outstanding.

The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company. In conjunction with the formation of the Company and as a result of subsequent acquisitions, certain persons and entities contributing interests in stores to the Operating Partnership received limited partnership units in the form of OP units.Units. Limited partners who received OP Units in the formation transactions or in exchange for contributions for interests in stores have the right to require the Operating Partnership to redeem part or all of their OP Units for cash based upon the fair market value of an equivalent number of shares of the Company’s common stock (10 day average)(based on the ten-day average trading price) at the time of the redemption. Alternatively, the Company may, at its sole discretion, elect to acquire those OP Units in exchange for shares of its common stock on aone-for-one basis, subject toanti-dilution adjustments provided in the Operating Partnership agreement. The ten dayten-day average closing stock price at December 31, 2014,2016, was $59.26$74.87 and there were 4,365,8795,608,038 OP Units outstanding.
Assuming

that all of the unitOP Unit holders exercised their right to redeem all of their OP Units on December 31, 20142016 and the Company elected to pay thenon-controlling members OP Unit holders cash, the Company would have paid $258,722$419,874 in cash consideration to redeem the units.

In

During the years ended December 31, 2016, 2015, and 2014, the Company purchased a single store in California. As parttotal of the consideration, 50,62023,850 OP Units, were issued for a value of $2,983.

In October 2014, 6,859787,850 OP unitsUnits, and 18,859 OP Units, respectively, were redeemed in exchange for the Company’s common stock. In December 2014, 12,000 OP units were redeemed in exchange for the Company’s common stock.

In October 2013, 12,500

During November 2016, 6,760 OP Units were redeemed for $506 in exchangecash.
On November 2, 2016, the Company purchased one store located in Maryland. As part of the consideration for this acquisition, 77,575 OP units were issued with a total value of $5,842.
On June 30, 2016, the Company’s common stock. In March and April 2013, 1,000Company purchased one store located in Georgia. As part of the consideration for this acquisition, 13,764 OP Units were redeemed in exchange for $41 in cash.

issued with a total value of $1,200.

On August 29, 2013 and September 26, 2013,May 31, 2016, the Company purchased 20 stores50% undivided interest in vacant land in California. As part of the consideration 1,448,108for this acquisition, 2,230 OP Units were issued forwith a total value of $62,341.

In December 2012, 304,817$205.

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


On November 13, 2015, the Company purchased one store located in Texas. As part of the consideration for this acquisition, 91,434 OP Units were redeemed in exchangeissued with a total value of $7,221.
On October 1, 2015, the Company acquired SmartStop. As part of the consideration for the Company’s common stock. In April 2012, 5,475this acquisition, 376,848 OP Units were redeemedissued with a total value of $28,656.
On June 18, 2015, the Company purchased one store located in Florida. As part of the consideration for $155this acquisition, 71,054 OP Units were issued with a total value of $4,773.
On April 15, 2015, the Company purchased 22 stores located in cash.

Arizona and Texas. As part of the consideration for this acquisition, 1,504,277 OP Units were issued with a total value of $101,749.

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the common OP Units and classifies the noncontrolling interest represented by the common OP Units as stockholders’ equity in the accompanying consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount, or (2) its redemption value as of the end of the period in which the determination is made.

17.OTHER NONCONTROLLING INTERESTS

15.     OTHER NONCONTROLLING INTERESTS
Other noncontrolling interests represent the ownership interestsinterest of variousa third partiesparty in twoone consolidated joint venturesventure as of December 31, 2014. One of these consolidated joint ventures owns one store which was under construction at December 31, 2014. The second consolidated2016. This joint venture owns 19 stores.an operating store in Texas. The ownership interestsvoting interest of the third party owners range from 1.0% to 3.3%third-party owner is 20.0%. Other noncontrolling interests are included in the stockholders’ equity section of the Company’s consolidated balance sheet.sheets. The income or losses attributable to these third party ownersthis third-party owner based on theirits ownership percentagespercentage are reflected in net income allocated to the Operating Partnership and other noncontrolling interests in the consolidated statementstatements of operations.

In November 2013,

On August 1, 2016, the Company purchased its joint venture partner’s 10% membershippartner's remaining 3.3% interest in an existing joint venture in exchange for $1,292. The8,889 OP Units, valued at $800. This joint venture owned a singleone store located in California, and as a result of this purchase, this store became wholly-owned by the Company. Prior to this acquisition, the store becamewholly-owned by the Company.partner's interest was reported in other noncontrolling interests. Since the Company retained its controlling financial interest in the subsidiary,joint venture, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the difference between the price paid by the Company and the adjustment to the carrying value of the noncontrolling interest was recorded as an adjustment to equity attributable to the parent.

In May 2013,Company.

On June 11, 2015, the Company purchased one of its joint venture partner’s 27.6% capital interest and 35% profitremaining 1% interest in a previously unconsolidatedthe HSRE joint venture for $950.$1,267. The joint venture owned 19 properties in California, Florida, Nevada, Ohio, Pennsylvania, Tennessee, Texas and Virginia, and as a result of this purchase, these properties became wholly-owned by the Company. Prior to this acquisition, the partner’s interest was reported in other noncontrolling interests prior to the purchase. As a result of the acquisition, the store becamewholly-owned by the Company.interests. Since the Company retained its controlling financial interest in the subsidiary, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to zero to reflect the purchase, and the difference between the price paid by the Company and the carrying value of the noncontrolling interest was recorded as an adjustment to equity attributable to the parent.

In February 2013, the Company purchased oneCompany.


16.     STOCK-BASED COMPENSATION
As of its joint venture partner’s 1.7% capital interest and 17% profit interest in a consolidated store for $200. As a result, the Company’s capital interest percentage in this joint venture increased from 95% to 96.7%. Since the Company retained its controlling financial interest in the subsidiary, this transaction was accounted for as an equity transaction. The carrying amount of the noncontrolling interest was reduced to reflect the purchase and the difference between the price paid by the Company and the adjustment to the carrying value of the noncontrolling interest was recorded as an adjustment to equity attributable to the parent.

18.STOCK-BASED COMPENSATION

The Company has the following plans under whichDecember 31, 2016, 1,934,735 shares were available for grant at December 31, 2014:

The 2004Long-Termissuance under the Company’s 2015 Incentive CompensationAward Plan as amended(the “Plan”).
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and restated, andshare data, unless otherwise stated

The 2004

Non-Employee Directors’ Share Plan (together, the “Plans”).

Option grants are issued with an exercise price equal to the closing price of stock on the date of grant. Unless otherwise determined by the Compensation, Nominating and Governance Committee (“CNG Committee”) at the time of grant, options shall vest ratably over afour-year period beginning on the date of grant. Each option willwill be exercisable once it has vested. Options are exercisable at such times and subject to such terms as determineddetermined by the CNG Committee, but under no circumstances may be exercised if such exercise would cause a violation of the ownership limit in the Company’s charter. Options expire 10 years from the date of grant.

Also as defined under the terms of the Plans,Plan, restricted stock grants may be awarded. The stock grants are subject to a vesting period over which the restrictions are released and the stock certificates are given to the grantee. During the performance or vesting period, the grantee is not permitted to sell, transfer, pledge, encumber or assign shares of restricted stock granted under the Plans;Plan; however, the grantee has the ability to vote the shares and receive nonforfeitable dividends paid on shares. Unless otherwise determined by the CNG Committee at the time of grant, the forfeiture and transfer restrictions on the shares lapse over afour-year period beginning on the date of grant.

As of December 31, 2014, 2,270,790 shares were available for issuance under the Plans.

Option Grants

A summary of stock option activity is as follows:

Options

  Number of Shares  Weighted Average
Exercise Price		   Weighted Average
Remaining
Contractual Life
(Years)		   Aggregate Intrinsic
Value as of
December 31, 2014		 

Outstanding at December 31, 2011

   1,798,861   $13.25      

Granted

   67,084    27.18      

Exercised

   (768,853)   13.55      

Forfeited

   —      —        
  

 

 

  

 

 

     

Outstanding at December 31, 2012

 1,097,092  $13.89  

Granted

 49,075   38.40  

Exercised

 (391,543)  14.81  

Forfeited

 —     —    
  

 

 

  

 

 

     

Outstanding at December 31, 2013

 754,624  $15.01  

Granted

 31,000   47.50  

Exercised

 (211,747)  14.85  

Forfeited

 (5,150)  28.28  
  

 

 

  

 

 

     

Outstanding at December 31, 2014

 568,727  $16.62   4.77  $23,898  
  

 

 

  

 

 

     

Vested and Expected to Vest

 563,432  $16.40   4.73  $23,798  

Ending Exercisable

 457,131  $12.26   4.03  $21,204  

OptionsNumber of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value as of December 31, 2016
Outstanding at December 31, 2013754,624
 $15.01
    
Granted31,000
 47.50
    
Exercised(211,747) 14.85
    
Forfeited(5,150) 28.28
    
Outstanding at December 31, 2014568,727
 $16.62
    
Granted89,575
 69.93
    
Exercised(79,974) 18.79
    
Forfeited(5,699) 39.83
    
Outstanding at December 31, 2015572,629
 $24.42
    
Granted35,800
 85.99
    
Exercised(97,855) 14.75
    
Forfeited—
 —
    
Outstanding at December 31, 2016510,574
 $30.60
 4.78 $24,129
Vested and Expected to Vest494,881
 $29.20
 4.65 $24,038
Ending Exercisable384,810
 $17.82
 3.62 $22,865

The aggregate intrinsic value in the table above represents the total value (the difference between the Company’s closing stock price on the last trading day of 20142016 and the exercise price, multiplied by the number ofin-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2014.2016. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock.

The weighted average fair value of stock options granted in 2016, 2015 and 2014, 2013was $20.30, $16.89 and 2012, was $12.03, $9.74 and $6.64, respectively. The fair value of each option grant is estimated on the date of grant using theBlack-Scholesoption-pricing Black-Scholes option-pricing model with the following weighted average assumptions:

   For the Year Ended December 31, 
   2014  2013  2012 

Expected volatility

   40%   42%   44% 

Dividend yield

   4%   4%   5% 

Risk-free interest rate

   1.5%   0.9%   0.9% 

Average expected term (years)

   5    5    5  

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


 For the Year Ended December 31,
 2016 2015 2014
Expected volatility37.0% 38.0% 40.0%
Dividend yield3.6% 3.6% 3.8%
Risk-free interest rate1.3% 1.5% 1.5%
Average expected term (years)5
 5
 5
TheBlack-Scholes model incorporates assumptions to valuestock-based awards. Therisk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the estimated life of the option. The Company uses actual historical data to calculate the expected price volatility, dividend yield and average expected term. The forfeiture rate, which is estimated at aweighted-average of 5.0% of unvested options outstanding as of December 31, 2014,2016, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimates.

A summary of stock options outstanding and exercisable as of December 31, 2014,2016, is as follows:

   Options Outstanding   Options Exercisable 

Exercise Price

  Shares   Weighted Average
Remaining
Contractual Life		   Weighted Average
Exercise Price		   Shares   Weighted Average
Exercise Price		 

$6.22—$6.22

   174,765     4.13    $6.22     174,765    $6.22  

$11.59—$12.85

   113,910     4.96     12.07     113,910     12.07  

$13.04—$16.83

   118,750     2.22     15.24     118,750     15.24  

$19.60—$38.40

   132,552     6.83     28.78     48,956     26.47  

$47.50—$47.50

   28,750     8.90     47.50     750     47.50  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

$6.22—$47.50

 568,727   4.77  $16.62   457,131  $12.26  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

  Options Outstanding Options Exercisable
Exercise Price Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Weighted Average Exercise Price
$6.22 - $6.22 157,750
 2.13 $6.22
 157,750
 $6.22
$11.59 - $11.59 28,080
 3.13 11.59
 28,080
 11.59
$12.21 - $12.21 77,400
 3.18 12.21
 77,400
 12.21
$19.6 - $28.11 59,660
 4.78 24.23
 59,660
 24.23
$28.79 - $38.4 37,659
 6.05 37.44
 27,197
 37.08
$47.5 - $47.5 24,650
 7.14 47.50
 12,328
 47.50
$65.36 - $65.36 20,395
 8.15 65.36
 5,100
 65.36
$65.45 - $65.45 19,180
 8.14 65.45
 4,795
 65.45
$73.52 - $73.52 50,000
 8.59 73.52
 12,500
 73.52
$85.99 - $85.99 35,800
 9.15 85.99
 —
 —
$6.22 - $85.99 510,574
 4.78 $30.60
 384,810
 $17.82
The Company recorded compensation expense relating to outstanding options of $456, $536$729, $510 and $585$456 in general and administrative expense for the years ended December 31, 2014, 20132016, 2015 and 2012,2014, respectively. Total cash received for the years ended December 31, 2014, 20132016, 2015 and 2012,2014, related to option exercises was $3,095, $5,896$1,444, $1,542 and $10,267,$3,095, respectively. At December 31, 2014,2016, there was $585$1,442 of total unrecognized compensation expense related tonon-vested stock options under the Company’s 2004Long-Term Incentive Compensation Plan. That cost is expected to be recognized over aweighted-average period of 1.792.30 years. The valuation model applied in this calculation utilizes subjective assumptions that could potentially change over time, including the expected forfeiture rate. Therefore, the amount of unrecognized compensation expense at December 31, 2014,2016, noted above does not necessarily represent the expense that will ultimately be realized by the Company in the statement of operations.


Common Stock Granted to Employees and Directors

The Company recorded $4,528, $4,283$7,316, $5,545 and $3,771$4,528 of expense in general and administrative expense in its statement of operations related to outstanding shares of common stock granted to employees and directors for the years ended December 31, 2014, 20132016, 2015 and 2012,2014, respectively. The forfeiture rate, which is estimated at aweighted-average of 10.21%10.1% of unvested awards outstanding as of December 31, 2014,2016, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimates. At December 31, 20142016 there was $7,010$14,141 of total unrecognized compensation expense related tonon-vested restricted stock awards under the Company’s 2004Long-Term Incentive Compensation Plan. That cost is expected to be recognized over aweighted-average period of 2.092.37 years.

The fair value of common stock awards is determined based on the closing trading price of the Company’s common stock on the grant date.

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


A summary of the Company’s employee and director share grant activity is as follows:

Restricted Stock Grants

  Shares   Weighted-Average
Grant-Date Fair
Value		 

Unreleased at December 31, 2011

   662,766    $12.81  

Granted

   182,052     28.39  

Released

   (287,754)    12.98  

Cancelled

   (16,792)    14.03  
  

 

 

   

 

 

 

Unreleased at December 31, 2012

 540,272  $17.93  

Granted

 137,602   39.51  

Released

 (259,191)  15.11  

Cancelled

 (23,323)  23.62  
  

 

 

   

 

 

 

Unreleased at December 31, 2013

 395,360  $26.96  

Granted

 117,370   49.25  

Released

 (197,386)  23.07  

Cancelled

 (23,595)  37.19  
  

 

 

   

 

 

 

Unreleased at December 31, 2014

 291,749  $37.73  
  

 

 

   

 

 

 

19.EMPLOYEE BENEFIT PLAN

Restricted Stock GrantsShares Weighted-Average Grant-Date Fair Value
Unreleased at December 31, 2013395,360
 $26.96
Granted117,370
 49.25
Released(197,386) 23.07
Cancelled(23,595) 37.19
Unreleased at December 31, 2014291,749
 $37.73
Granted174,558
 69.18
Released(129,808) 34.86
Cancelled(18,090) 44.54
Unreleased at December 31, 2015318,409
 $55.75
Granted119,931
 87.61
Released(128,808) 50.05
Cancelled(9,947) 67.36
Unreleased at December 31, 2016299,585
 $70.57
17.     EMPLOYEE BENEFIT PLAN
The Company has a retirement savings plan under Section 401(k) of the Internal Revenue Code under which eligible employees can contribute up to 15%60% of their annual salary, subject to a statutory prescribed annual limit. For the years ended December 31, 2014, 20132016, 2015 and 2012,2014, the Company made matching contributions to the plan of $1,529, $1,013$1,944, $1,680 and $894,$1,529, respectively, based on 100% of the first 3% and up to 50% of the next 2% of an employee’s compensation.

20.INCOME TAXES

18.     INCOME TAXES
As a REIT, the Company is generally not subject to federal income tax with respect to that portion of its income which is distributed annually to its stockholders. However, the Company has elected to treat one of its corporate subsidiaries, Extra Space Management, Inc., as a taxable REIT subsidiary. In general, the Company’s TRS may perform additional services for tenants and generally may engage in any real estate ornon-real estate related business. A TRS is subject to corporate federal income tax. The Company accounts for income taxes in accordance with the provisions of ASC 740,“Income Taxes.” Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. The Company has elected to use theTax-Law-Ordering approach to determine when excess tax benefits will be realized.


The income tax provision for the years ended December 31, 2014, 20132016, 2015 and 2012,2014, is comprised of the following components:

   For the Year Ended December 31, 2014 
         Federal               State               Total       

Current expense

  $6,020    $1,374    $7,394  

Tax credits

   (2,176)    —       (2,176) 

Change in deferred benefit

   803     1,549     2,352  
  

 

 

   

 

 

   

 

 

 

Total tax expense

$4,647  $2,923  $7,570  
  

 

 

   

 

 

   

 

 

 

   For the Year Ended December 31, 2013 
         Federal               State               Total       

Current expense

  $9,572    $615    $10,187  

Tax credits

   (4,556)    —       (4,556) 

Change in deferred benefit

   4,353     —       4,353  
  

 

 

   

 

 

   

 

 

 

Total tax expense

$9,369  $615  $9,984  
  

 

 

   

 

 

   

 

 

 

   For the Year Ended December 31, 2012 
         Federal               State               Total       

Current expense

  $8,240    $612    $8,852  

Tax credits

   (5,528)    —       (5,528) 

Change in deferred benefit

   2,089     —       2,089  
  

 

 

   

 

 

   

 

 

 

Total tax expense

$4,801  $612  $5,413  
  

 

 

   

 

 

   

 

 

 

 For the Year Ended December 31, 2016
 Federal       State       Total      
Current expense$14,627
 $2,368
 $16,995
Tax credits/true-up(312) —
 (312)
Change in deferred benefit(369) (467) (836)
Total tax expense$13,946
 $1,901
 $15,847
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


 For the Year Ended December 31, 2015
 Federal       State       Total      
Current expense$3,736
 $1,640
 $5,376
Tax credits/true-up274
 —
 274
Change in deferred benefit7,016
 (1,518) 5,498
Total tax expense$11,026
 $122
 $11,148
 For the Year Ended December 31, 2014
 Federal       State       Total      
Current expense$6,020
 $1,374
 $7,394
Tax credits/true-up(2,176) —
 (2,176)
Change in deferred benefit803
 1,549
 2,352
Total tax expense$4,647
 $2,923
 $7,570
A reconciliation of the statutory income tax provisions to the effective income tax provisions for the periods presentedindicated is as follows:

   For the Year Ended December 31, 
   2014  2013 

Expected tax at statutory rate

  $71,215     35.0%  $67,012     35.0% 

Non-taxable REIT income

   (64,402)    (31.7%)   (53,519)    (27.9%) 

State and local tax expense—net of federal benefit

   1,109     0.6%   615     0.3% 

Change in valuation allowance

   1,663     0.8%   435     0.2% 

Tax Credits (WOTC & Solar)

   (2,176)    (1.1%)   (4,562)    (2.4%) 

Miscellaneous

   161     0.1%   3     0.0% 
  

 

 

   

 

 

  

 

 

   

 

 

 

Total provision

$7,570   3.7% $9,984   5.2% 
  

 

 

   

 

 

  

 

 

   

 

 

 

 For the Year Ended December 31,
 2016 2015 2014
Expected tax at statutory rate$144,708
 35.0 % $77,151
 35.0 % $71,215
 35.0 %
Non-taxable REIT income(131,112) (31.7)% (67,084) (30.4)% (64,402) (31.7)%
State and local tax expense - net of federal benefit2,399
 0.6 % 1,249
 0.6 % 1,109
 0.6 %
Change in valuation allowance(845) (0.2)% (624) (0.3)% 1,663
 0.8 %
Tax credits/true-up(312) (0.1)% 274
 0.1 % (2,176) (1.1)%
Miscellaneous1,009
 0.2 % 182
 0.1 % 161
 0.1 %
Total provision$15,847
 3.8 % $11,148
 5.1 % $7,570
 3.7 %

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


The major sources of temporary differences stated at their deferred tax effects are as follows:

   December 31,
2014		   December 31,
2013		 

Deferred Tax Liabilities:

    

Fixed Assets

  $(16,586)   $(14,557) 

Other

   (269)    (663) 

State Deferred Taxes

   (1,576)    —    
  

 

 

   

 

 

 

Total Deferred Tax Liabilities

 (18,431)  (15,220) 
  

 

 

   

 

 

 

Deferred Tax Assets:

Capitive Insurance Subsidiary

 447   400  

Accrued liabilities

 1,232   1,043  

Stock compensation

 1,176   1,394  

Solar Credit

 9,342   8,480  

Other

 840   422  

State Deferred Taxes

 6,260   4,570  
  

 

 

   

 

 

 

Total Deferred Tax Assets

 19,297   16,309  
  

 

 

   

 

 

 

Valuation Allowance

 (6,233)  (4,570) 
  

 

 

   

 

 

 

Net deferred income tax liability

$(5,367) $(3,481) 
  

 

 

   

 

 

 

 December 31, 2016 December 31, 2015
Deferred tax liabilities:   
Fixed assets$(16,488) $(17,360)
Other(201) (221)
State deferred taxes(1,242) (1,523)
Total deferred tax liabilities(17,931) (19,104)
    
Deferred tax assets:   
Captive insurance subsidiary413
 429
Accrued liabilities2,741
 2,633
Stock compensation1,713
 1,346
Solar credit—
 2,167
Other1,548
 309
SmartStop TRS365
 1,085
State deferred taxes6,078
 6,016
Total deferred tax assets12,858
 13,985
    
Valuation allowance(4,765) (5,609)
    
Net deferred income tax liabilities$(9,838) $(10,728)
The state income tax net operating losses expire between 20152017 and 2032.2034. The valuation allowance is associated with the state income tax net operating losses. The solar tax credit carryforwards expire between 2030 and 2034. The tax years 20102012 through 20132015 remain open related to the state returns, and 20112013 through 20132015 for the federal returns.

21.SEGMENT INFORMATION

19.     SEGMENT INFORMATION
The Company operates in three distinct segments: (1) rental operations; (2) tenant reinsurance; and (3) property management, acquisition and development. Management fees collected forwholly-owned stores are eliminated in consolidation. Financial information for the Company’s business segments is set forth below:

   December 31,
2014		   December 31,
2013		 

Balance Sheet

    

Investment in unconsolidated real estate ventures

    

Rental operations

  $85,711    $88,125  
  

 

 

   

 

 

 

Total assets

Rental operations

$4,109,673  $3,641,746  

Tenant reinsurance

 39,383   34,393  

Property management, acquisition and development

 253,051   301,001  
  

 

 

   

 

 

 
$4,402,107  $3,977,140  
  

 

 

   

 

 

 

   For The Year Ended December 31, 
   2014  2013  2012 

Statement of Operations

    

Total revenues

    

Rental operations

  $559,868   $446,682   $346,874  

Tenant reinsurance

   59,072    47,317    36,816  

Property management, acquisition and development

   28,215    26,614    25,706  
  

 

 

  

 

 

  

 

 

 
$647,155  $520,613  $409,396  
  

 

 

  

 

 

  

 

 

 

Operating expenses, including depreciation and amortization

Rental operations

$279,497  $229,229  $184,540  

Tenant reinsurance

 10,427   9,022   7,869  

Property management, acquisition and development

 78,763   68,879   59,746  
  

 

 

  

 

 

  

 

 

 
$368,687  $307,130  $252,155  
  

 

 

  

 

 

  

 

 

 

Income (loss) from operations

Rental operations

$280,371  $217,453  $162,334  

Tenant reinsurance

 48,645   38,295   28,947  

Property management, acquisition and development

 (50,548)  (42,265)  (34,040) 
  

 

 

  

 

 

  

 

 

 
$278,468  $213,483  $157,241  
  

 

 

  

 

 

  

 

 

 

Gain (loss) on sale of real estate and earnout from prior acquisitions

Property management, acquisition and development

$(10,285) $960  $—    

Property casualty loss, net

Rental operations

$(1,724) $—    $—    

Loss on extinguishment of debt related to portfolio acquisition

Property management, acquisition and development

$—    $(9,153) $—    

Interest expense

Rental operations

$(80,160) $(69,702) $(70,472) 

Property management, acquisition and development

 (1,170)  (1,928)  (1,378) 
  

 

 

  

 

 

  

 

 

 
$(81,330) $(71,630) $(71,850) 
  

 

 

  

 

 

  

 

 

 

Non-cash interest expense related to the amortization of discount on equity component of exchangeable senior notes

Property management, acquisition and development

$(2,683) $(1,404) $(444) 

Interest income

Tenant reinsurance

$17  $17  $12  

Property management, acquisition and development

 1,590   732   1,804  
  

 

 

  

 

 

  

 

 

 
$1,607  $749  $1,816  
  

 

 

  

 

 

  

 

 

 

Interest income on note receivable from Preferred Operating Partnership unit holder

Property management, acquisition and development

$4,850  $4,850  $4,850  

Equity in earnings of unconsolidated real estate ventures

Rental operations

$10,541  $11,653  $10,859  

Equity in earnings of unconsolidated real estate ventures—gain on sale of real estate assets and purchase of joint venture partners’ interests

Rental operations

$4,022  $46,032  $30,630  

Income tax (expense) benefit

Rental operations

$(1,157) $(149) $(660) 

Tenant reinsurance

 (8,662)  (13,409)  (10,399) 

Property management, acquisition and development

 2,249   3,574   5,646  
  

 

 

  

 

 

  

 

 

 
$(7,570) $(9,984) $(5,413) 
  

 

 

  

 

 

  

 

 

 

Net income (loss)

Rental operations

$211,893  $205,287  $132,691  

Tenant reinsurance

 40,000   24,903   18,560  

Property management, acquisition and development

 (55,997)  (44,634)  (23,562) 
  

 

 

  

 

 

  

 

 

 
$195,896  $185,556  $127,689  
  

 

 

  

 

 

  

 

 

 

Depreciation and amortization expense

Rental operations

$107,081  $89,217  $70,512  

Property management, acquisition and development

 7,995   6,015   3,941  
  

 

 

  

 

 

  

 

 

 
$115,076  $95,232  $74,453  
  

 

 

  

 

 

  

 

 

 

Statement of Cash Flows

Acquisition of real estate assets

Property management, acquisition and development

$(503,538) $(349,959) $(601,727) 
  

 

 

  

 

 

  

 

 

 

Development and redevelopment of real estate assets

Property management, acquisition and development

$(23,528) $(6,466) $(3,759) 
  

 

 

  

 

 

  

 

 

 

22.COMMITMENTS AND CONTINGENCIES

 December 31, 2016 December 31, 2015
Balance Sheet   
Investment in unconsolidated real estate ventures   
Rental operations$79,570
 $103,007
Total assets   
Rental operations$6,731,292
 $5,674,030
Tenant reinsurance44,524
 37,696
Property management, acquisition and development315,630
 359,681
 $7,091,446
 $6,071,407







EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


 For the Year Ended December 31,
 2016 2015 2014
Statement of Operations     
Total revenues     
Rental operations$864,742
 $676,138
 $559,868
Tenant reinsurance87,291
 71,971
 59,072
Property management, acquisition and development39,842
 34,161
 28,215
 991,875
 782,270
 647,155
Operating expenses, including depreciation and amortization     
Rental operations423,575
 328,380
 279,497
Tenant reinsurance15,555
 13,033
 10,427
Property management, acquisition and development102,907
 146,201
 78,763
 542,037
 487,614
 368,687
Income (loss) from operations     
Rental operations441,167
 347,758
 280,371
Tenant reinsurance71,736
 58,938
 48,645
Property management, acquisition and development(63,065) (112,040) (50,548)
 449,838
 294,656
 278,468
Gain (loss) on real estate transactions, earnout from prior acquisition and sale of other assets     
Property management, acquisition and development8,465
 1,501
 (10,285)
      
Property casualty loss, net     
Rental operations—
 —
 (1,724)
      
Interest expense     
Rental operations(129,907) (93,711) (80,160)
Property management, acquisition and development(3,572) (1,971) (1,170)
 (133,479) (95,682) (81,330)
Non-cash interest expense related to the amortization of discount on equity component of exchangeable senior notes     
Property management, acquisition and development(4,980) (3,310) (2,683)
      
Interest income     
Property management, acquisition and development6,148
 3,461
 1,607
      
Interest income on note receivable from Preferred Operating Partnership unit holder     
Property management, acquisition and development4,850
 4,850
 4,850
      
Equity in earnings of unconsolidated real estate ventures     
Rental operations12,895
 12,351
 10,541
      
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of partners' interests     
Property management, acquisition and development69,199
 2,857
 4,022
      
Income tax (expense) benefit     
Rental operations(2,320) (1,729) (1,157)
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


Tenant reinsurance(12,610) (9,780) (8,662)
Property management, acquisition and development(917) 361
 2,249
 (15,847) (11,148) (7,570)
Net income (loss)     
Rental operations321,835
 264,669
 207,871
Tenant reinsurance59,138
 49,173
 40,000
Property management, acquisition and development16,116
 (104,306) (51,975)
 $397,089
 $209,536
 $195,896
Depreciation and amortization expense     
Rental operations$173,570
 $124,415
 $107,081
Property management, acquisition and development8,990
 9,042
 7,995
 $182,560
 $133,457
 $115,076
Statement of Cash Flows     
Acquisition of real estate assets     
Property management, acquisition and development$(1,086,523) $(1,550,750) $(503,538)
Development and redevelopment of real estate assets     
Property management, acquisition and development$(23,279) $(26,931) $(23,528)
      
20.     COMMITMENTS AND CONTINGENCIES
The Company has operating leases on its corporate offices and owns 1722 stores that are subject to leases. At December 31, 2014,2016, future minimum rental payments under thesenon-cancelable operating leases were as follows (unaudited):

Less than 1 year

$6,125  

Year 2

 5,054  

Year 3

 3,728  

Year 4

 2,899  

Year 5

 2,287  

Thereafter

 45,293  
  

 

 

 
$65,386  
  

 

 

 

Less than 1 year$6,123
Year 26,677
Year 36,124
Year 46,080
Year 55,897
Thereafter90,025
 $120,926
The monthly rental amounts for twothree of the ground leases include contingent rental payments based on the level of revenue achieved at the stores. The Company recorded expense of $3,345, $2,983$4,578, $3,858 and $2,830$3,406 related to these ground leases in the years ended December 31, 2016, 2015 and 2014, 2013 and 2012, respectively.

As of December 31, 2014, the

The Company was notis involved in any material litigation nor,various legal proceedings and is subject to its knowledge, is any material litigation threatened against it which,various claims and complaints arising in the opinionordinary course of business. Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss, if any, is expectedbased upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. Therefore, any estimate(s) of loss disclosed below represents what management believes to be an estimate of loss only for certain matters meeting these criteria and does not represent the Company's maximum loss exposure. The Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period, notwithstanding the Company’sfact that the Company is currently vigorously defending any legal proceedings against it.
The Company currently has several legal proceedings pending against it that include causes of action alleging wrongful foreclosure, violations of various state specific self-storage statutes, and violations of various consumer fraud acts. As a result of these litigation matters, the Company has a liability of $5,600 as of December 31, 2016, which is included in other liabilities on the consolidated balance sheets.
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


As of December 31, 2016, the Company was under contract to acquire four operating stores and 12 stores to be acquired upon the completion of construction. The total purchase price of all stores with commitments was $183,581. Of these stores, seven are scheduled to close in 2017. The remaining stores will close upon completion of construction, expected to occur on various dates in 2018 and 2019. Additionally, the Company is under contract to acquire 16 stores with joint venture partners, for a net investment of $74,708. Eight of these stores are scheduled to close in 2017 while the remaining eight stores are expected to close in 2018.
Although there can be no assurance, the Company is not aware of any material environmental liability, for which it believes it will be ultimately responsible, that could have a material adverse effect on its financial condition or results of operations.

23.SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)

   For the Three Months Ended 
   March 31,
2014		   June 30,
2014		   September 30,
2014		   December 31,
2014		 

Revenues

  $152,180    $160,240    $167,368    $167,367  

Cost of operations

   91,782     89,579     89,875     97,451  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues less cost of operations

$60,398  $70,661  $77,493  $69,916  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

$41,209  $46,008  $59,193  $49,486  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common stockholders

$37,340  $41,665  $54,228  $45,122  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share—basic

$0.32  $0.36  $0.47  $0.39  

Earnings per common share—diluted

$0.32  $0.36  $0.47  $0.39  
   For the Three Months Ended 
   March 31,
2013		   June 30,
2013		   September 30,
2013		   December 31,
2013		 

Revenues

  $119,322    $126,246    $133,111    $141,934  

Cost of operations

   72,593     72,871     77,047     84,619  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues less cost of operations

$46,729  $53,375  $56,064  $57,315  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

$33,931  $37,101  $32,352  $82,172  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common stockholders

$31,425  $34,466  $29,245  $76,940  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share—basic

$0.28  $0.31  $0.26  $0.68  

Earnings per common share—diluted

$0.28  $0.31  $0.26  $0.67  

24.SUBSEQUENT EVENTS

On January 13, 2015, However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to its properties could result in future material environmental liabilities.

21.     SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)
 For the Three Months Ended
 March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016
Revenues$229,403
 $244,273
 $257,183
 $261,016
Cost of operations135,775
 133,971
 134,459
 137,832
Revenues less cost of operations$93,628
 $110,302
 $122,724
 $123,184
Net income$89,407
 $90,040
 $127,226
 $90,416
Net income attributable to common stockholders$82,592
 $83,044
 $118,088
 $82,403
Earnings per common share—basic$0.66
 $0.66
 $0.94
 $0.65
Earnings per common share—diluted$0.66
 $0.66
 $0.93
 $0.65
 For the Three Months Ended
 March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015
Revenues$173,154
 $185,860
 $197,497
 $225,759
Cost of operations97,718
 104,253
 100,193
 185,450
Revenues less cost of operations$75,436
 $81,607
 $97,304
 $40,309
Net income$58,636
 $60,956
 $78,200
 $11,744
Net income attributable to common stockholders$53,742
 $55,339
 $71,718
 $8,675
Earnings per common share—basic$0.46
 $0.47
 $0.58
 $0.07
Earnings per common share—diluted$0.46
 $0.47
 $0.58
 $0.07
22.     SUBSEQUENT EVENTS
Subsequent to year end the Company has purchased three self-storagetwo stores for a total of $25,500. These stores are located in Texas for $41,900.

Georgia and Illinois.

On February 24, 2015,1, 2017, the Company purchased one self-storage store in Texas for $13,550.

received a cash payment of $33,071 related to its loans receivable from Strategic 1031 leaving a remaining principal balance of $20,608.



Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

08/23/2010

 Auburn / Dean Rd AL $2,460   $324   $1,895   $122    $325   $2,016   $2,341   $265  

08/23/2010

 Auburn / Opelika Rd AL  —      92    138    163     92    301    393    77  

07/02/2012

 Birmingham / Grace Baker Rd AL  4,586    790    9,369    36     790    9,405    10,195    596  

03/20/2014

 Birmingham / Lorna Rd AL  —      2,381    11,224    55     2,381    11,279    13,660    229  

08/31/2007

 Hoover AL  2,670    1,313    2,858    647     1,313    3,505    4,818    1,047  

07/25/2013

 Chandler AZ  4,250    547    4,213    165     547    4,378    4,925    173  

08/18/2004

 Mesa / Madero Ave AZ  3,235    849    2,547    194     849    2,741    3,590    781  

07/02/2012

 Mesa / N. Alma School Rd AZ  3,184    1,129    4,402    51     1,129    4,453    5,582    286  

12/27/2012

 Mesa / E Southern Ave AZ  5,435    2,973    5,545    253     2,973    5,798    8,771    311  

07/25/2013

 Mesa / Southern Ave AZ  —      1,453    2,897    130     1,453    3,027    4,480    117  

04/01/2006

 Peoria / 75th Ave AZ  4,268    652    4,105    148     652    4,253    4,905    971  

01/31/2011

 Peoria / W Beardsley Rd AZ  —      1,060    4,731    15     1,060    4,746    5,806    482  

07/01/2005

 Phoenix / East Bell Rd AZ  6,936    1,441    7,982    678     1,441    8,660    10,101    2,331  

06/30/2006

 Phoenix / N Cave Creek Rd AZ  3,315    552    3,530    255     551    3,786    4,337    925  

01/02/2007

 Phoenix / E Greenway Pkwy AZ  —      669    4,135    318     669    4,453    5,122    995  

11/30/2012

 Phoenix / N 32nd St AZ  7,006    2,257    7,820    156     2,257    7,976    10,233    438  

11/30/2012

 Tucson AZ  —      1,090    7,845    45     1,090    7,890    8,980    435  

06/25/2007

 Alameda CA  —      2,919    12,984    2,063     2,919    15,047    17,966    3,582  

08/29/2013

 Alhambra CA  —      10,109    6,065    224     10,109    6,289    16,398    205  

08/29/2013

 Anaheim / S Adams St CA  —      3,593    3,330    198     3,593    3,528    7,121    125  

08/29/2013

 Anaheim / S State College Blvd CA  —      2,519    2,886    179     2,519    3,065    5,584    108  

04/25/2014

 Anaheim / Old Canal Rd CA  —      2,765    12,680    98     2,765    12,778    15,543    232  

07/01/2008

 Antelope CA  4,105    1,525    8,345    (282)  (b)  1,185    8,403    9,588    1,361  

10/19/2011

 Bellflower CA  1,247    640    1,350    92     639    1,443    2,082    123  

05/15/2007

 Belmont CA  —      3,500    7,280    82     3,500    7,362    10,862    1,406  

06/25/2007

 Berkeley CA  19,363    1,716    19,602    1,963     1,716    21,565    23,281    4,516  

10/19/2011

 Bloomington / Bloomington Ave CA  —      934    1,937    167     934    2,104    3,038    226  

10/19/2011

 Bloomington / Linden Ave CA  —      647    1,303    157     647    1,460    2,107    147  

08/10/2000

 Burbank / W Verdugo Ave CA  13,837    3,199    5,082    1,803     3,618    6,466    10,084    2,467  

08/29/2013

 Burbank / Thornton Ave CA  —      4,061    5,318    214     4,061    5,532    9,593    187  

04/08/2011

 Burlingame CA  5,327    2,211    5,829    131     2,211    5,960    8,171    586  

03/14/2011

 Carson CA  —      —      9,709    99     —      9,808    9,808    958  

06/25/2007

 Castro Valley CA  —      —      6,346    395     —      6,741    6,741    1,326  

10/19/2011

 Cerritos CA  16,947    8,728    15,895    594     8,728    16,489    25,217    1,443  

11/01/2013

 Chatsworth CA  10,497    9,922    7,599    249     9,922    7,848    17,770    1,096  

06/01/2004

 Claremont / South Mills Ave CA  2,949    1,472    2,012    262     1,472    2,274    3,746    691  

10/19/2011

 Claremont / W Arrow Hwy CA  —      1,375    1,434    202     1,375    1,636    3,011    149  

06/25/2007

 Colma CA  22,769    3,947    22,002    2,290     3,947    24,292    28,239    5,290  

09/01/2008

 Compton CA  4,692    1,426    7,582    43     1,426    7,625    9,051    1,242  

08/29/2013

 Concord CA  —      3,082    2,822    171     3,082    2,993    6,075    97  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

09/21/2009

 El Cajon CA  —      1,100    6,380    87     1,100    6,467    7,567    869  

06/25/2007

 El Sobrante CA  —      1,209    4,018    1,572     1,209    5,590    6,799    1,352  

12/02/2013

 Elk Grove / Power Inn Rd CA  —      894    6,949    44     894    6,993    7,887    187  

12/02/2013

 Elk Grove / Stockton Blvd CA  —      640    8,640    16     640    8,656    9,296    232  

05/01/2010

 Emeryville CA  —      3,024    11,321    160     3,024    11,481    14,505    1,364  

12/02/2013

 Fair Oaks CA  4,275    644    11,287    4     644    11,291    11,935    302  

09/15/2002

 Fontana / Valley Blvd 1 CA  3,189    961    3,846    420     1,001    4,226    5,227    1,391  

10/15/2003

 Fontana / Valley Blvd 2 CA  5,287    1,246    3,356    463     1,300    3,765    5,065    1,119  

10/19/2011

 Fontana / Foothill Blvd CA  3,914    684    3,951    216     684    4,167    4,851    360  

10/19/2011

 Fontana / Baseline Ave CA  —      778    4,723    129     777    4,853    5,630    430  

10/19/2011

 Fontana / Foothill Blvd CA  —      768    4,208    173     768    4,381    5,149    380  

06/01/2004

 Gardena CA  —      3,710    6,271    2,260     4,110    8,131    12,241    2,075  

06/01/2004

 Glendale CA  —      —      6,084    254     —      6,338    6,338    1,814  

07/02/2012

 Hawaiian Gardens CA  9,323    2,964    12,478    198     2,964    12,676    15,640    839  

06/01/2004

 Hawthorne CA  3,803    1,532    3,871    251     1,532    4,122    5,654    1,217  

06/26/2007

 Hayward CA  8,461    3,149    8,006    3,081     3,149    11,087    14,236    2,586  

07/01/2005

 Hemet CA  4,967    1,146    6,369    319     1,146    6,688    7,834    1,742  

10/19/2011

 Hesperia CA  —      156    430    149     156    579    735    76  

07/02/2012

 Hollywood CA  10,074    4,555    10,590    66     4,555    10,656    15,211    679  

08/10/2000

 Inglewood CA  5,396    1,379    3,343    963     1,529    4,156    5,685    1,683  

10/19/2011

 Irvine CA  4,989    3,821    3,999    88     3,821    4,087    7,908    354  

05/28/2014

 La Quinta CA  13,242    4,706    12,604    113     4,706    12,717    17,423    207  

10/19/2011

 Lake Elsinore / Central Ave CA  3,224    587    4,219    228     587    4,447    5,034    378  

10/19/2011

 Lake Elsinore / Collier Ave CA  —      294    2,105    86     294    2,191    2,485    194  

07/28/2006

 Lancaster / West Ave J-8 CA  5,627    1,347    5,827    283     1,347    6,110    7,457    1,440  

10/17/2009

 Lancaster / 23rd St W CA  —      1,425    5,855    98     1,425    5,953    7,378    781  

06/01/2004

 Livermore CA  —      1,134    4,615    272     1,134    4,887    6,021    1,381  

10/19/2011

 Long Beach / E Artesia Blvd CA  2,697    1,772    2,539    160     1,772    2,699    4,471    242  

11/01/2013

 Long Beach / W Wardlow Rd CA  5,811    5,859    4,992    12     5,859    5,004    10,863    775  

03/23/2000

 Los Angeles / Casitas Ave CA  8,838    1,431    2,976    765     1,611    3,561    5,172    1,362  

12/31/2007

 Los Angeles / La Cienega CA  10,079    3,991    9,774    89     3,991    9,863    13,854    1,790  

09/01/2008

 Los Angeles / S Central Ave CA  4,787    2,200    8,108    50     2,200    8,158    10,358    1,333  

07/02/2012

 Los Angeles / Fountain Ave CA  5,138    3,099    4,889    73     3,099    4,962    8,061    320  

12/02/2013

 Los Angeles / S Western Ave CA  —      287    2,011    186     287    2,197    2,484    58  

04/25/2014

 Los Angeles / Slauson Ave CA  7,487    2,400    8,605    61     2,401    8,665    11,066    158  

07/17/2012

 Los Gatos CA  —      2,550    8,257    59     2,550    8,316    10,866    618  

01/01/2004

 Manteca CA  3,625    848    2,543    171     848    2,714    3,562    796  

11/01/2013

 Marina Del Rey CA  17,245    19,928    18,742    48     19,928    18,790    38,718    2,105  

08/29/2013

 Menlo Park CA  —      7,675    1,812    186     7,675    1,998    9,673    65  

06/01/2007

 Modesto / Crows Landing CA  3,153    909    3,043    287     909    3,330    4,239    748  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

08/29/2013

 Modesto / Sylvan Ave CA  —      1,647    4,215    157     1,647    4,372    6,019    143  

07/02/2012

 Moreno Valley CA  2,084    482    3,484    40     482    3,524    4,006    226  

11/01/2013

 North Highlands CA  2,062    799    2,801    11     799    2,812    3,611    379  

05/01/2006

 North Hollywood / Van Owen CA  6,867    3,125    9,257    201     3,125    9,458    12,583    2,111  

08/29/2013

 North Hollywood / Coldwater Canyon CA  —      4,501    4,465    302     4,501    4,767    9,268    160  

08/29/2013

 Northridge CA  —      3,641    2,872    260     3,641    3,132    6,773    107  

04/24/2000

 Oakland / Fallon St CA  4,187    —      3,777    1,037     —      4,814    4,814    1,906  

08/29/2013

 Oakland / 29th Ave CA  —      6,359    5,753    257     6,359    6,010    12,369    200  

12/02/2013

 Oakland / San Leandro St CA  —      1,668    7,652    123     1,668    7,775    9,443    210  

07/01/2005

 Oceanside / Oceanside Blvd 1 CA  9,091    3,241    11,361    872     3,241    12,233    15,474    3,235  

12/09/2014

 Oceanside / Oceanside Blvd 2 CA  —      4,508    4,599    —       4,508    4,599    9,107    —    

11/30/2012

 Orange CA  12,392    4,847    12,341    227     4,847    12,568    17,415    699  

12/02/2013

 Oxnard CA  —      5,421    6,761    77     5,421    6,838    12,259    183  

08/01/2009

 Pacoima CA  2,211    3,050    7,597    94     3,050    7,691    10,741    1,057  

01/01/2005

 Palmdale CA  4,746    1,225    5,379    2,229     1,225    7,608    8,833    1,938  

10/19/2011

 Paramount CA  2,596    1,404    2,549    159     1,404    2,708    4,112    246  

08/31/2000

 Pico Rivera / Beverly Blvd CA  4,073    1,150    3,450    185     1,150    3,635    4,785    1,265  

03/04/2014

 Pico Rivera / San Gabriel River Pkwy CA  —      2,150    4,734    —       2,150    4,734    6,884    96  

10/19/2011

 Placentia CA  6,743    4,798    5,483    225     4,798    5,708    10,506    492  

05/24/2007

 Pleasanton CA  6,955    1,208    4,283    431     1,208    4,714    5,922    1,134  

06/01/2004

 Richmond / Lakeside Dr CA  4,872    953    4,635    613     953    5,248    6,201    1,579  

09/26/2013

 Richmond / Meeker Ave CA  —      3,139    7,437    213     3,139    7,650    10,789    250  

08/18/2004

 Riverside CA  —      1,075    4,042    544     1,075    4,586    5,661    1,363  

12/02/2013

 Rocklin CA  —      1,745    8,005    42     1,745    8,047    9,792    214  

11/04/2013

 Rohnert Park CA  —      990    8,094    50     990    8,144    9,134    235  

07/01/2005

 Sacramento / Auburn Blvd CA  3,936    852    4,720    519     852    5,239    6,091    1,444  

12/31/2007

 Sacramento / Stockton Blvd CA  2,886    952    6,936    447     1,075    7,260    8,335    803  

10/01/2010

 Sacramento / Franklin Blvd CA  3,035    1,738    5,522    117     1,844    5,533    7,377    618  

06/01/2004

 San Bernardino / W Club Center Dr CA  —      1,213    3,061    135     1,173    3,236    4,409    932  

06/01/2006

 San Bernardino / Sterling Ave. CA  —      750    5,135    109     750    5,244    5,994    1,114  

08/29/2013

 San Diego CA  —      5,919    6,729    300     5,919    7,029    12,948    234  

10/19/2011

 San Dimas CA  5,394    1,867    6,354    173     1,867    6,527    8,394    559  

06/14/2007

 San Francisco / Folsom CA  12,203    8,457    9,928    1,806     8,457    11,734    20,191    2,746  

08/29/2013

 San Francisco / Egbert Ave CA  —      5,098    4,054    253     5,098    4,307    9,405    140  

09/01/2009

 San Jose / N 10th St CA  10,784    5,340    6,821    250     5,340    7,071    12,411    943  

07/26/2012

 San Jose / Charter Park Dr CA  2,455    2,428    2,323    228     2,428    2,551    4,979    182  

08/01/2007

 San Leandro / Doolittle Dr CA  14,454    4,601    9,777    3,486     4,601    13,263    17,864    2,870  

10/01/2010

 San Leandro / Washington Ave CA  —      3,343    6,630    (73)  (f)  3,291    6,609    9,900    729  

08/29/2013

 San Ramon CA  —      4,819    5,819    197     4,819    6,016    10,835    195  

08/29/2013

 Santa Ana CA  —      3,485    2,382    197     3,485    2,579    6,064    87  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

07/30/2009

 Santa Clara CA  8,082    4,750    8,218    32     4,750    8,250    13,000    1,130  

07/02/2012

 Santa Cruz CA  8,596    1,588    11,160    71     1,588    11,231    12,819    713  

10/04/2007

 Santa Fe Springs CA  6,467    3,617    7,022    318     3,617    7,340    10,957    1,505  

10/19/2011

 Santa Maria / Farnel Rd CA  2,944    1,556    2,740    292     1,556    3,032    4,588    278  

10/19/2011

 Santa Maria / Skyway Dr CA  3,186    1,310    3,526    107     1,309    3,634    4,943    310  

08/31/2004

 Sherman Oaks CA  16,513    4,051    12,152    469     4,051    12,621    16,672    3,398  
 Simi Valley CA  —      5,533    —      (5,533)  (d,b g)  —      —      —      —    

08/29/2013

 Stanton CA  —      5,022    2,267    219     5,022    2,486    7,508    89  

05/19/2002

 Stockton / Jamestown CA  2,436    649    3,272    241     649    3,513    4,162    1,168  

12/02/2013

 Stockton / Pacific Ave CA  —      3,619    2,443    63     3,619    2,506    6,125    68  

04/25/2014

 Sunland CA  5,039    1,688    6,381    37     1,688    6,418    8,106    117  

08/29/2013

 Sunnyvale CA  —      10,732    5,004    193     10,732    5,197    15,929    172  

05/02/2008

 Sylmar CA  —      3,058    4,671    255     3,058    4,926    7,984    973  
 Thousand Oaks CA  —      4,500    —      (1,000)  (d)  3,500    —      3,500    —    

07/15/2003

 Tracy / E 11th St 1 CA  5,035    778    2,638    779     911    3,284    4,195    997  

04/01/2004

 Tracy / E 11th St 2 CA  3,101    946    1,937    280     946    2,217    3,163    733  

06/25/2007

 Vallejo CA  2,934    1,177    2,157    1,075     1,177    3,232    4,409    928  

08/29/2013

 Van Nuys CA  —      7,939    2,576    335     7,939    2,911    10,850    98  

08/31/2004

 Venice CA  —      2,803    8,410    (3,057)  (h)  2,803    5,353    8,156    1,442  

08/29/2013

 Ventura CA  —      3,453    2,837    188     3,453    3,025    6,478    107  

10/19/2011

 Victorville CA  —      151    751    155     151    906    1,057    94  

07/01/2005

 Watsonville CA  3,187    1,699    3,056    252     1,699    3,308    5,007    895  

09/01/2009

 West Sacramento CA  —      2,400    7,425    97     2,400    7,522    9,922    1,030  

06/19/2002

 Whittier CA  3,328    —      2,985    186     —      3,171    3,171    1,048  

08/29/2013

 Wilmington CA  —      6,792    10,726    17     6,792    10,743    17,535    357  

09/15/2000

 Arvada CO  1,808    286    1,521    683     286    2,204    2,490    1,008  

05/25/2011

 Castle Rock CO  1,091    407    3,077    183     407    3,260    3,667    327  

08/31/2007

 Colorado Springs / Dublin Blvd CO  3,811    781    3,400    255     781    3,655    4,436    788  

11/25/2008

 Colorado Springs / S 8th St CO  4,123    1,525    4,310    304     1,525    4,614    6,139    809  

06/10/2011

 Colorado Springs / Austin Bluffs Pkwy CO  1,726    296    4,199    261     296    4,460    4,756    451  

10/24/2014

 Colorado Springs / Stetson Hills Blvd CO  —      2,077    4,087    32     2,077    4,119    6,196    —    

09/15/2000

 Denver / E 40th Ave CO  2,559    602    2,052    1,369     745    3,278    4,023    1,283  

07/01/2005

 Denver / W 96th Ave CO  3,659    368    1,574    262     368    1,836    2,204    546  

07/18/2012

 Fort Carson CO  —      —      6,945    99     —      7,044    7,044    452  

09/01/2006

 Parker CO  4,822    800    4,549    780     800    5,329    6,129    1,330  

09/15/2000

 Thornton CO  2,804    212    2,044    1,141     248    3,149    3,397    1,303  

09/15/2000

 Westminster CO  2,115    291    1,586    1,081     299    2,659    2,958    1,241  

03/17/2014

 Bridgeport CT  —      1,072    14,028    107     1,072    14,135    15,207    286  

07/02/2012

 Brookfield CT  5,099    991    7,891    119     991    8,010    9,001    522  

01/15/2004

 Groton CT  —      1,277    3,992    406     1,277    4,398    5,675    1,420  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

12/31/2007

 Middletown CT  2,789    932    2,810    195     932    3,005    3,937    576  

11/04/2013

 Newington CT  —      1,363    2,978    407     1,363    3,385    4,748    94  

08/16/2002

 Wethersfield CT  4,069    709    4,205    227     709    4,432    5,141    1,451  

05/02/2012

 Auburndale FL  1,271    470    1,076    142     470    1,218    1,688    98  

07/15/2009

 Bonita Springs FL  —      2,198    8,215    107     2,198    8,322    10,520    1,128  

12/23/2014

 Bradenton FL  —      1,333    3,677    —       1,333    3,677    5,010    —    

11/30/2012

 Brandon FL  4,609    1,327    5,656    128     1,327    5,784    7,111    327  

06/19/2008

 Coral Springs FL  6,288    3,638    6,590    274     3,638    6,864    10,502    1,275  

01/06/2006

 Deland FL  2,780    1,318    3,971    303     1,318    4,274    5,592    1,038  

08/26/2004

 Fort Lauderdale / NW 31st Ave FL  —      1,587    4,205    353     1,587    4,558    6,145    1,333  

05/04/2011

 Fort Lauderdale / S State Rd 7 FL  7,046    2,750    7,002    561     2,750    7,563    10,313    749  

11/30/2012

 Fort Lauderdale / Commercial Blvd FL  5,094    1,576    5,397    275     1,576    5,672    7,248    319  

08/26/2004

 Fort Myers / Cypress Lake Dr FL  2,776    1,691    4,711    320     1,691    5,031    6,722    1,436  

07/01/2005

 Fort Myers / San Carlos Blvd FL  4,124    1,985    4,983    479     1,985    5,462    7,447    1,510  

03/08/2005

 Greenacres FL  2,575    1,463    3,244    146     1,463    3,390    4,853    915  

08/01/2008

 Hialeah / Okeechobee Rd FL  —      2,800    7,588    127     2,800    7,715    10,515    1,278  

01/01/2010

 Hialeah / E 65th Street FL  —      1,750    7,150    105     1,750    7,255    9,005    933  

09/01/2010

 Hialeah / W 84th St FL  —      1,678    6,807    75     1,678    6,882    8,560    761  

11/20/2007

 Hollywood FL  6,741    3,214    8,689    326     3,214    9,015    12,229    1,762  

12/28/2012

 Kenneth City FL  2,389    805    3,345    41     805    3,386    4,191    182  

05/02/2012

 Lakeland / Harden Blvd FL  3,847    593    4,701    168     593    4,869    5,462    370  

05/02/2012

 Lakeland / South Florida Ave FL  5,526    871    6,905    211     871    7,116    7,987    508  

09/03/2014

 Lakeland / US Hwy 98 FL  —      529    3,604    55     529    3,659    4,188    28  

12/27/2012

 Land O Lakes FL  —      798    4,490    (7)  (e)  799    4,482    5,281    246  

08/26/2004

 Madeira Beach FL  3,695    1,686    5,163    248     1,686    5,411    7,097    1,517  

08/10/2000

 Margate FL  3,329    430    3,139    707     469    3,807    4,276    1,467  

08/10/2000

 Miami / NW 12th St FL  —      1,325    4,395    947     1,440    5,227    6,667    2,036  

08/10/2000

 Miami / SW 72nd Street FL  7,893    5,315    4,305    1,385     5,859    5,146    11,005    1,937  

05/31/2007

 Miami / SW 186th St FL  4,439    1,238    7,597    317     1,238    7,914    9,152    1,673  

02/04/2011

 Miami / SW 147th Ave FL  —      2,375    5,543    98     2,374    5,642    8,016    516  

10/25/2011

 Miami / Hammocks Blvd FL  —      521    5,198    129     521    5,327    5,848    477  

07/02/2012

 Miami / NW 2nd Ave FL  5,676    1,979    6,513    154     1,979    6,667    8,646    440  

07/02/2012

 Miami / Coral Way FL  8,006    3,257    9,713    116     3,257    9,829    13,086    638  

11/08/2013

 Miami / SW 68th Ave FL  10,079    3,305    11,997    23     3,305    12,020    15,325    347  

11/30/2009

 Miami Gardens FL  6,757    4,798    9,475    129     4,798    9,604    14,402    1,254  

12/27/2012

 N Fort Myers FL  —      799    2,372    (3,171)  (a)  —      —      —      —    

11/01/2013

 Naples FL  5,061    1,990    4,887    310     1,990    5,197    7,187    485  

11/08/2013

 Naranja FL  8,645    603    11,223    28     603    11,251    11,854    325  

08/10/2000

 North Lauderdale FL  4,101    428    3,516    1,013     459    4,498    4,957    1,869  

06/01/2004

 North Miami FL  8,645    1,256    6,535    583     1,256    7,118    8,374    2,128  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

03/08/2005

 Ocoee FL  3,047    872    3,642    240     872    3,882    4,754    1,089  

08/26/2004

 Orlando / LB McLeod Rd FL  4,272    1,216    5,008    422     1,216    5,430    6,646    1,556  

03/08/2005

 Orlando / Hunters Creek FL  4,026    2,233    9,223    375     2,233    9,598    11,831    2,616  

03/08/2005

 Orlando / Metrowest FL  5,688    1,474    6,101    278     1,474    6,379    7,853    1,715  

03/08/2005

 Orlando / Waterford Lakes FL  3,834    1,166    4,816    1,286     1,166    6,102    7,268    1,553  

07/15/2010

 Orlando / Orange Blossom Trail FL  —      625    2,133    82     625    2,215    2,840    284  

11/07/2013

 Palm Springs FL  —      2,108    8,028    110     2,108    8,138    10,246    242  
 Plantation FL  —      3,850    —      (1,504)  (d)  2,346    —      2,346    —    

08/26/2004

 Port Charlotte FL  —      1,389    4,632    228     1,389    4,860    6,249    1,359  

08/26/2004

 Riverview FL  2,351    654    2,953    271     654    3,224    3,878    934  

11/30/2012

 Sarasota / Clark Rd FL  7,896    4,666    9,016    233     4,666    9,249    13,915    518  

12/23/2014

 Sarasota / Washington Blvd FL  —      1,192    2,919    —       1,192    2,919    4,111    —    

12/03/2012

 Seminole FL  2,473    1,133    3,017    165     1,133    3,182    4,315    177  

12/23/2014

 South Pasadena FL  —      8,890    10,106    —       8,890    10,106    18,996    —    

04/15/2014

 Stuart FL  —      1,640    8,358    130     1,640    8,488    10,128    157  

11/01/2013

 Tamiami FL  5,718    5,042    7,164    216     5,042    7,380    12,422    792  

11/22/2006

 Tampa / Cypress St FL  3,601    883    3,533    149     881    3,684    4,565    828  

03/27/2007

 Tampa / W Cleveland St FL  3,779    1,425    4,766    309     1,425    5,075    6,500    1,160  

12/23/2014

 Tampa / W Hillsborough Ave FL  —      1,086    2,937    —       1,086    2,937    4,023    —    

08/26/2004

 Valrico FL  4,476    1,197    4,411    258     1,197    4,669    5,866    1,335  

01/13/2006

 Venice FL  6,811    1,969    5,903    316     1,969    6,219    8,188    1,564  

08/10/2000

 West Palm Beach / N Military Trail 1 FL  —      1,312    2,511    948     1,416    3,355    4,771    1,335  

08/10/2000

 West Palm Beach / Forest Hill Bl FL  —      1,164    2,511    730     1,246    3,159    4,405    1,239  

07/01/2005

 West Palm Beach / Southern Blvd FL  3,749    1,752    4,909    423     1,752    5,332    7,084    1,535  

12/01/2011

 West Palm Beach / S Military Trail FL  3,399    1,729    4,058    99     1,730    4,156    5,886    341  

11/01/2013

 West Palm Beach / N Military Trail 2 FL  2,437    1,595    2,833    74     1,595    2,907    4,502    329  

08/08/2006

 Alpharetta GA  2,528    1,893    3,161    170     1,893    3,331    5,224    787  

08/26/2004

 Atlanta / Cheshire Bridge Rd NE GA  7,820    3,737    8,333    646     3,737    8,979    12,716    2,497  

08/26/2004

 Atlanta / Roswell Rd GA  —      1,665    2,028    256     1,665    2,284    3,949    689  

02/28/2005

 Atlanta / Virginia Ave GA  6,432    3,319    8,325    556     3,319    8,881    12,200    2,442  

04/03/2014

 Atlanta / Mt Vernon Hwy GA  —      2,961    19,819    71     2,961    19,890    22,851    362  

08/06/2014

 Atlanta / Chattahoochee Ave GA  —      1,132    10,080    77     1,132    10,157    11,289    98  

10/22/2014

 Atlanta / Edgewood Ave SE GA  —      588    10,295    1     588    10,296    10,884    —    

11/04/2013

 Augusta GA  2,064    710    2,299    51     710    2,350    3,060    69  

01/17/2006

 Dacula GA  3,723    1,993    3,001    155     1,993    3,156    5,149    765  

06/17/2010

 Douglasville GA  —      1,209    719    326     1,209    1,045    2,254    179  

06/14/2007

 Duluth GA  3,448    1,454    4,151    148     1,454    4,299    5,753    876  

11/30/2012

 Eastpoint GA  5,584    1,718    6,388    111     1,718    6,499    8,217    361  

06/17/2010

 Kennesaw GA  —      673    1,151    157     673    1,308    1,981    183  

11/04/2013

 Lawrenceville GA  3,400    2,117    2,784    282     2,117    3,066    5,183    93  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

11/12/2009

 Lithonia GA  —      1,958    3,645    120     1,958    3,765    5,723    518  

06/17/2010

 Marietta GA  —      887    2,617    306     887    2,923    3,810    383  

08/26/2004

 Snellville GA  —      2,691    4,026    314     2,691    4,340    7,031    1,252  

08/26/2004

 Stone Mountain / Annistown Rd GA  2,828    1,817    4,382    296     1,817    4,678    6,495    1,323  

07/01/2005

 Stone Mountain / S Hairston Rd GA  2,573    925    3,505    331     925    3,836    4,761    1,036  

06/14/2007

 Sugar Hill / Nelson Brogdon Blvd 1 GA  —      1,371    2,547    208     1,371    2,755    4,126    597  

06/14/2007

 Sugar Hill / Nelson Brogdon Blvd 2 GA  —      1,368    2,540    231     1,368    2,771    4,139    597  

10/15/2013

 Tucker GA  —      1,773    10,456    49     1,773    10,505    12,278    326  

08/26/2004

 Alpharetta GL  —      1,973    1,587    262     1,973    1,849    3,822    558  

05/03/2013

 Honolulu HI  —      4,674    18,350    58     4,674    18,408    23,082    771  

06/25/2007

 Kahului HI  —      3,984    15,044    692     3,984    15,736    19,720    3,291  

06/25/2007

 Kapolei / Farrington Hwy 1 HI  9,495    —      24,701    449     —      25,150    25,150    5,018  

12/06/2013

 Kapolei / Farrington Hwy 2 HI  —      —      7,776    11     —      7,787    7,787    208  

05/03/2013

 Wahiawa HI  —      1,317    2,626    77     1,317    2,703    4,020    116  

11/04/2013

 Bedford Park IL  2,469    922    3,289    125     922    3,414    4,336    100  

07/01/2005

 Chicago / South Wabash IL  4,124    621    3,428    2,312     621    5,740    6,361    1,384  

07/01/2005

 Chicago / West Addison IL  2,999    449    2,471    776     449    3,247    3,696    1,000  

07/01/2005

 Chicago / West Harrison IL  2,718    472    2,582    733     472    3,315    3,787    1,055  

02/13/2013

 Chicago / Montrose IL  8,459    1,318    9,485    61     1,318    9,546    10,864    464  

11/04/2013

 Chicago / 60th Street IL  —      1,363    5,850    129     1,363    5,979    7,342    173  

11/04/2013

 Chicago / 87th St IL  —      2,881    6,324    9     2,881    6,333    9,214    183  

11/04/2013

 Chicago / Pulaski Rd IL  3,743    1,143    6,138    111     1,143    6,249    7,392    180  
 Chicago / Stony Island IL  —      1,925    —      —       1,925    —      1,925    —    

07/15/2003

 Crest Hill IL  2,377    847    2,946    786     968    3,611    4,579    1,074  

10/01/2007

 Gurnee IL  —      1,374    8,296    125     1,374    8,421    9,795    1,580  

12/01/2011

 Highland Park IL  7,120    5,798    6,016    86     5,798    6,102    11,900    499  

11/04/2013

 Lincolnshire IL  3,585    1,438    5,128    2     1,438    5,130    6,568    148  

12/01/2008

 Naperville / Ogden Avenue IL  —      2,800    7,355    (724)  (d)  1,950    7,481    9,431    1,183  

12/01/2011

 Naperville / State Route 59 IL  4,834    1,860    5,793    91     1,860    5,884    7,744    475  

05/03/2008

 North Aurora IL  2,447    600    5,833    141     600    5,974    6,574    1,043  

07/02/2012

 Skokie IL  3,996    1,119    7,502    206     1,119    7,708    8,827    501  

10/15/2002

 South Holland IL  2,464    839    2,879    349     865    3,202    4,067    1,047  

08/01/2008

 Tinley Park IL  —      1,823    4,794    981     1,548    6,050    7,598    825  

10/10/2008

 Carmel IN  —      1,169    4,393    263     1,169    4,656    5,825    853  

06/27/2011

 Connersville IN  1,114    472    315    109     472    424    896    60  

10/31/2008

 Ft Wayne IN  3,974    1,899    3,292    290     1,899    3,582    5,481    688  

08/31/2007

 Indianapolis / E 65th St IN  —      588    3,457    306     588    3,763    4,351    844  

10/10/2008

 Indianapolis / Dandy Trail-Windham Lake Dr IN  —      850    4,545    387     850    4,932    5,782    949  

10/10/2008

 Indianapolis / Southport Rd-Kildeer Dr IN  —      426    2,903    333     426    3,236    3,662    646  

11/30/2012

 Indianapolis / E 86th St IN  1,083    646    1,294    159     646    1,453    2,099    94  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

10/10/2008

 Mishawaka IN  2,607    630    3,349    290     630    3,639    4,269    691  

06/27/2011

 Richmond IN  —      723    482    428     723    910    1,633    107  

04/13/2006

 Wichita KS  2,075    366    1,897    376     366    2,273    2,639    662  

06/27/2011

 Covington KY  1,992    839    2,543    128     839    2,671    3,510    272  

07/01/2005

 Louisville / Bardstown Rd KY  2,812    586    3,244    389     586    3,633    4,219    1,024  

07/01/2005

 Louisville / Warwick Ave KY  4,403    1,217    4,611    211     1,217    4,822    6,039    1,281  

12/01/2005

 Louisville / Wattbourne Ln KY  4,714    892    2,677    232     892    2,909    3,801    728  

08/26/2004

 Metairie LA  3,768    2,056    4,216    184     2,056    4,400    6,456    1,235  

08/26/2004

 New Orleans LA  5,327    4,058    4,325    688     4,058    5,013    9,071    1,490  

06/01/2003

 Ashland MA  —      474    3,324    346     474    3,670    4,144    1,339  

05/01/2004

 Auburn MA  —      918    3,728    325     918    4,053    4,971    1,543  

11/04/2013

 Billerica MA  —      3,023    6,697    108     3,023    6,805    9,828    196  

05/01/2004

 Brockton / Centre St - Rte 123 MA  —      647    2,762    178     647    2,940    3,587    1,053  

11/04/2013

 Brockton / Oak St MA  —      829    6,195    327     829    6,522    7,351    187  

11/09/2012

 Danvers MA  7,662    3,115    5,736    149     3,115    5,885    9,000    323  

03/04/2002

 Dedham / Milton St MA  —      2,127    3,041    626     2,127    3,667    5,794    1,407  

02/06/2004

 Dedham / Allied Dr MA  —      2,443    7,328    1,393     2,443    8,721    11,164    2,659  

02/06/2004

 East Somerville MA  —      —      —      152     —      152    152    107  

07/01/2005

 Everett MA  —      692    2,129    786     692    2,915    3,607    942  

05/01/2004

 Foxboro MA  —      759    4,158    466     759    4,624    5,383    1,886  

07/02/2012

 Framingham MA  —      —      —      35     —      35    35    7  

05/01/2004

 Hudson MA  3,328    806    3,122    404     806    3,526    4,332    1,471  

12/31/2007

 Jamaica Plain MA  9,469    3,285    11,275    599     3,285    11,874    15,159    2,179  

10/18/2002

 Kingston MA  —      555    2,491    155     555    2,646    3,201    995  

06/22/2001

 Lynn MA  —      1,703    3,237    432     1,703    3,669    5,372    1,366  

03/31/2004

 Marshfield MA  4,602    1,039    4,155    243     1,026    4,411    5,437    1,285  

11/14/2002

 Milton MA  —      2,838    3,979    6,642     2,838    10,621    13,459    2,458  

11/04/2013

 North Andover MA  —      773    4,120    120     773    4,240    5,013    123  

10/15/1999

 North Oxford MA  —      482    1,762    470     526    2,188    2,714    924  

02/28/2001

 Northborough MA  4,544    280    2,715    537     280    3,252    3,532    1,339  

08/15/1999

 Norwood MA  6,626    2,160    2,336    1,783     2,220    4,059    6,279    1,434  

07/01/2005

 Plainville MA  4,991    2,223    4,430    434     2,223    4,864    7,087    1,580  

02/06/2004

 Quincy MA  6,910    1,359    4,078    424     1,359    4,502    5,861    1,320  

05/15/2000

 Raynham MA  —      588    2,270    737     669    2,926    3,595    1,109  

12/01/2011

 Revere MA  4,963    2,275    6,935    154     2,275    7,089    9,364    575  

06/01/2003

 Saugus MA  —      1,725    5,514    577     1,725    6,091    7,816    2,013  

06/15/2001

 Somerville MA  11,922    1,728    6,570    779     1,731    7,346    9,077    2,531  

07/01/2005

 Stoneham MA  5,918    944    5,241    179     944    5,420    6,364    1,415  

05/01/2004

 Stoughton MA  —      1,754    2,769    315     1,754    3,084    4,838    1,221  

07/02/2012

 Tyngsboro MA  3,463    1,843    5,004    45     1,843    5,049    6,892    327  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

02/06/2004

 Waltham MA  5,176    3,770    11,310    1,115     3,770    12,425    16,195    3,613  

09/14/2000

 Weymouth MA  —      2,806    3,129    231     2,806    3,360    6,166    1,328  

02/06/2004

 Woburn MA  —      —      —      267     —      267    267    119  

05/01/2004

 Worcester / Millbury St MA  4,476    896    4,377    3,172     896    7,549    8,445    2,504  

12/01/2006

 Worcester / Ararat St MA  4,086    1,350    4,433    162     1,350    4,595    5,945    998  

04/17/2007

 Annapolis / Trout Rd MD  6,437    5,248    7,247    204     5,248    7,451    12,699    1,550  

08/31/2007

 Annapolis / Renard Ct - Annex MD  6,039    1,375    8,896    325     1,375    9,221    10,596    1,899  

07/01/2005

 Arnold MD  8,904    2,558    9,446    453     2,558    9,899    12,457    2,559  

11/01/2008

 Baltimore / Moravia Rd MD  4,424    800    5,955    113     800    6,068    6,868    990  

06/01/2010

 Baltimore / N Howard St MD  —      1,900    5,277    136     1,900    5,413    7,313    654  

05/31/2012

 Baltimore / Eastern Ave 1 MD  4,540    1,185    5,051    130     1,185    5,181    6,366    358  

02/13/2013

 Baltimore / Eastern Ave 2 MD  7,108    1,266    10,789    79     1,266    10,868    12,134    531  

07/01/2005

 Bethesda MD  11,997    3,671    18,331    1,400     3,671    19,731    23,402    5,407  

10/20/2010

 Capitol Heights MD  8,276    1,461    9,866    208     1,461    10,074    11,535    1,145  

03/07/2012

 Cockeysville MD  3,853    465    5,600    204     465    5,804    6,269    449  

07/01/2005

 Columbia MD  7,873    1,736    9,632    282     1,736    9,914    11,650    2,542  
 Edgewood MD  —      1,000    —      (575)  (d)  425    —      425    —    

01/11/2007

 Ft. Washington MD  9,040    4,920    9,174    227     4,920    9,401    14,321    1,997  

07/02/2012

 Gambrills MD  4,842    1,905    7,104    102     1,905    7,206    9,111    456  

07/08/2011

 Glen Burnie MD  4,514    1,303    4,218    309     1,303    4,527    5,830    469  

06/10/2013

 Hanover MD  7,437    2,160    11,340    55     2,160    11,395    13,555    454  

02/06/2004

 Lanham MD  12,121    3,346    10,079    621     2,618    11,428    14,046    3,442  

12/27/2007

 Laurel MD  5,977    3,000    5,930    92     3,000    6,022    9,022    1,149  

12/27/2012

 Lexington Park MD  —      4,314    8,412    131     4,314    8,543    12,857    455  

09/17/2008

 Pasadena / Fort Smallwood Rd MD  3,751    1,869    3,056    703     1,869    3,759    5,628    840  

03/24/2011

 Pasadena / Mountain Rd MD  —      3,500    7,407    130     3,500    7,537    11,037    705  

08/01/2011

 Randallstown MD  4,548    764    6,331    280     764    6,611    7,375    612  

09/01/2006

 Rockville MD  12,185    4,596    11,328    322     4,596    11,650    16,246    2,568  

07/01/2005

 Towson / East Joppa Rd 1 MD  3,843    861    4,742    221     861    4,963    5,824    1,331  

07/02/2012

 Towson / East Joppa Rd 2 MD  6,125    1,094    9,598    117     1,094    9,715    10,809    619  

07/02/2012

 Belleville MI  3,898    954    4,984    84     954    5,068    6,022    325  

07/01/2005

 Grandville MI  1,593    726    1,298    408     726    1,706    2,432    572  

07/01/2005

 Mt Clemens MI  1,968    798    1,796    477     798    2,273    3,071    653  

08/31/2007

 Florissant MO  3,412    1,241    4,648    328     1,241    4,976    6,217    1,118  

07/01/2005

 Grandview MO  1,031    612    1,770    404     612    2,174    2,786    713  

06/01/2000

 St Louis / Forest Park MO  2,564    156    1,313    617     173    1,913    2,086    833  

06/01/2000

 St Louis / Halls Ferry Rd MO  2,593    631    2,159    622     690    2,722    3,412    1,093  

08/31/2007

 St Louis / Gravois Rd MO  2,664    676    3,551    325     676    3,876    4,552    879  

08/31/2007

 St Louis / Old Tesson Rd MO  6,624    1,444    4,162    350     1,444    4,512    5,956    1,006  

10/15/2013

 Cary NC  4,311    3,614    1,788    3     3,614    1,791    5,405    55  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

12/11/2014

 Greensboro / High Point Rd NC  —      1,069    4,199    —       1,069    4,199    5,268    —    

12/11/2014

 Greensboro / Lawndale Drive NC  —      3,725    7,036    —       3,723    7,038    10,761    —    

12/11/2014

 Hickory NC  —      875    5,418    3     875    5,421    6,296    —    

06/18/2014

 Raleigh NC  —      2,940    4,265    26     2,940    4,291    7,231    60  

12/11/2014

 Winston-Salem / Peters Creek Pkwy NC  —      1,548    3,495    —       1,548    3,495    5,043    —    

12/11/2014

 Winston-Salem / University Pkwy NC  —      1,131    5,084    —       1,131    5,084    6,215    —    

04/15/1999

 Merrimack NH  3,840    754    3,299    599     817    3,835    4,652    1,289  

07/01/2005

 Nashua NH  —      —      755    102     —      857    857    328  

01/01/2005

 Avenel NJ  7,612    1,518    8,037    383     1,518    8,420    9,938    2,289  

12/28/2004

 Bayville NJ  3,747    1,193    5,312    389     1,193    5,701    6,894    1,595  

09/01/2008

 Bellmawr NJ  3,296    3,600    4,765    307     3,675    4,997    8,672    760  

07/18/2012

 Berkeley Heights NJ  6,981    1,598    7,553    93     1,598    7,646    9,244    494  

12/18/2014

 Burlington NJ  —      477    6,534    10     477    6,544    7,021    —    

11/30/2012

 Cherry Hill / Marlton Pike NJ  2,600    2,323    1,549    157     2,323    1,706    4,029    108  

12/18/2014

 Cherry Hill / Rockhill Rd NJ  —      536    3,407    20     536    3,427    3,963    —    

11/30/2012

 Cranbury NJ  6,910    3,543    5,095    295     3,543    5,390    8,933    307  

12/18/2014

 Denville NJ  —      584    14,398    —       584    14,398    14,982    —    

12/31/2001

 Edison NJ  —      2,519    8,547    733     2,519    9,280    11,799    3,257  

12/31/2001

 Egg Harbor Township NJ  4,088    1,724    5,001    718     1,724    5,719    7,443    2,140  

03/15/2007

 Ewing NJ  —      1,552    4,720    (61)  (c, d)  1,562    4,649    6,211    1,000  

07/18/2012

 Fairfield NJ  6,083    —      9,402    93     —      9,495    9,495    610  

11/30/2012

 Fort Lee NJ  —      4,402    9,831    251     4,402    10,082    14,484    557  

03/15/2001

 Glen Rock NJ  —      1,109    2,401    558     1,222    2,846    4,068    962  

07/01/2005

 Hackensack / South River St NJ  —      2,283    11,234    862     2,283    12,096    14,379    3,299  

12/18/2014

 Hackensack / Railroad Ave NJ  —      2,053    9,882    13     2,053    9,895    11,948    —    

08/23/2012

 Hackettstown NJ  5,960    2,144    6,660    138     2,144    6,798    8,942    426  

07/02/2012

 Harrison NJ  3,592    300    6,003    367     300    6,370    6,670    405  

12/31/2001

 Hazlet NJ  7,700    1,362    10,262    605     1,362    10,867    12,229    3,784  

07/02/2002

 Hoboken NJ  7,876    2,687    6,092    309     2,687    6,401    9,088    2,117  

12/31/2001

 Howell NJ  3,310    2,440    3,407    446     2,440    3,853    6,293    1,435  

12/31/2001

 Iselin NJ  4,764    505    4,524    564     505    5,088    5,593    1,890  

11/30/2012

 Lawnside NJ  —      1,249    5,613    214     1,249    5,827    7,076    330  

02/06/2004

 Lawrenceville NJ  5,421    3,402    10,230    493     3,402    10,723    14,125    3,165  

07/01/2005

 Linden NJ  3,731    1,517    8,384    253     1,517    8,637    10,154    2,199  

12/22/2004

 Lumberton NJ  4,094    831    4,060    249     831    4,309    5,140    1,264  

03/15/2001

 Lyndhurst NJ  —      2,679    4,644    1,019     2,928    5,414    8,342    1,796  

08/23/2012

 Mahwah NJ  11,084    1,890    13,112    218     1,890    13,330    15,220    846  

12/16/2011

 Maple Shade NJ  4,161    1,093    5,492    143     1,093    5,635    6,728    463  

12/07/2001

 Metuchen NJ  5,663    1,153    4,462    341     1,153    4,803    5,956    1,654  

08/28/2012

 Montville NJ  8,083    1,511    11,749    107     1,511    11,856    13,367    734  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

02/06/2004

 Morrisville NJ  —      2,487    7,494    1,214     2,487    8,708    11,195    2,600  

07/02/2012

 Mt Laurel NJ  3,046    329    5,217    109     329    5,326    5,655    354  

11/02/2006

 Neptune NJ  7,340    4,204    8,906    358     4,204    9,264    13,468    2,029  

07/18/2012

 Newark NJ  7,430    806    8,340    107     806    8,447    9,253    547  

07/25/2003

 North Bergen / River Rd NJ  9,178    2,100    6,606    307     2,100    6,913    9,013    2,162  

07/01/2005

 North Bergen / 83rd St NJ  10,160    2,299    12,728    496     2,299    13,224    15,523    3,381  

10/06/2011

 North Bergen / Kennedy Blvd NJ  —      861    17,127    170     861    17,297    18,158    1,438  

07/18/2012

 North Brunswick NJ  6,212    2,789    4,404    125     2,789    4,529    7,318    304  

12/31/2001

 Old Bridge NJ  5,605    2,758    6,450    1,001     2,758    7,451    10,209    2,691  

05/01/2004

 Parlin / Cheesequake Rd NJ  —      —      5,273    432     —      5,705    5,705    2,249  

07/01/2005

 Parlin / Route 9 North NJ  —      2,517    4,516    523     2,517    5,039    7,556    1,562  

07/18/2012

 Parsippany NJ  6,409    2,353    7,798    113     2,354    7,910    10,264    521  

06/02/2011

 Pennsauken NJ  3,712    1,644    3,115    228     1,644    3,343    4,987    365  

12/09/2009

 South Brunswick NJ  2,983    1,700    5,835    143     1,700    5,978    7,678    776  

07/01/2005

 Toms River NJ  4,920    1,790    9,935    385     1,790    10,320    12,110    2,772  

12/28/2004

 Union / Green Ln NJ  6,416    1,754    6,237    402     1,754    6,639    8,393    1,872  

11/30/2012

 Union / Route 22 West NJ  —      1,133    7,239    153     1,133    7,392    8,525    410  

11/30/2012

 Watchung NJ  —      1,843    4,499    191     1,843    4,690    6,533    261  

08/31/2007

 Albuquerque / Calle Cuervo NW NM  4,643    1,298    4,628    633     1,298    5,261    6,559    1,153  

11/30/2012

 Albuquerque / Airport Dr NW NM  1,908    755    1,797    46     755    1,843    2,598    105  

07/02/2012

 Santa Fe NM  5,815    3,066    7,366    338     3,066    7,704    10,770    505  

11/30/2012

 Henderson NV  8,260    2,934    8,897    169     2,934    9,066    12,000    501  

02/22/2000

 Las Vegas / N Lamont St NV  1,169    251    717    530     278    1,220    1,498    567  

06/22/2011

 Las Vegas / Jones Blvd NV  2,432    1,441    1,810    136     1,441    1,946    3,387    205  

11/30/2012

 Las Vegas / W Sahara Ave NV  4,417    773    6,006    103     773    6,109    6,882    345  

11/30/2012

 Las Vegas / W Tropicana Ave NV  —      400    4,936    79     400    5,015    5,415    284  

11/01/2013

 Las Vegas / North Lamb Blvd NV  3,655    279    3,900    15     279   ��3,915    4,194    544  

07/02/2012

 Amsterdam NY  —      715    241    (956)  (a)  —      —      —      —    

12/19/2007

 Bohemia NY  —      1,456    1,398    375     1,456    1,773    3,229    383  

08/26/2004

 Bronx / Fordham Rd NY  9,422    3,995    11,870    775     3,995    12,645    16,640    3,584  

12/01/2011

 Bronx / Edson Av NY  17,879    3,450    21,210    376     3,450    21,586    25,036    1,729  

10/02/2008

 Brooklyn / 3rd Ave NY  19,604    12,993    10,405    338     12,993    10,743    23,736    1,797  

05/21/2010

 Brooklyn / Atlantic Ave NY  7,977    2,802    6,536    231     2,802    6,767    9,569    860  

07/02/2012

 Brooklyn / 64th St NY  21,565    16,188    23,309    333     16,257    23,573    39,830    1,518  

12/11/2014

 Brooklyn / Avenue M NY  —      12,085    7,665    —       12,085    7,665    19,750    —    

10/02/2008

 Centereach NY  4,132    2,226    1,657    216     2,226    1,873    4,099    357  

08/10/2012

 Central Valley NY  —      2,800    12,173    447     2,800    12,620    15,420    810  

11/23/2010

 Freeport NY  —      5,676    3,784    802     5,676    4,586    10,262    627  

07/02/2012

 Hauppauge NY  5,580    1,238    7,095    345     1,238    7,440    8,678    489  

07/02/2012

 Hicksville NY  8,787    2,581    10,677    62     2,581    10,739    13,320    682  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

07/02/2012

 Kingston NY  4,874    837    6,199    91     837    6,290    7,127    405  

11/26/2002

 Mt Vernon / N Mac Questen Pkwy NY  8,167    1,926    7,622    935     1,926    8,557    10,483    2,692  

07/01/2005

 Mt Vernon / Northwest St NY  —      1,585    6,025    2,940     1,585    8,965    10,550    2,305  

02/07/2002

 Nanuet NY  3,640    2,072    4,644    1,722     2,739    5,699    8,438    1,924  

07/01/2005

 New Paltz NY  4,451    2,059    3,715    431     2,059    4,146    6,205    1,232  

07/01/2005

 New York NY  18,847    3,060    16,978    739     3,060    17,717    20,777    4,593  

12/04/2000

 Plainview NY  7,583    4,287    3,710    689     4,287    4,399    8,686    1,741  

07/18/2012

 Poughkeepsie NY  5,960    1,038    7,862    94     1,038    7,956    8,994    518  

07/02/2012

 Ridge NY  6,157    1,762    6,934    34     1,762    6,968    8,730    442  

06/27/2011

 Cincinnati / Glencrossing Way OH  —      1,217    1,941    131     1,217    2,072    3,289    214  

06/27/2011

 Cincinnati / Glendale-Milford Rd OH  4,541    1,815    5,733    253     1,815    5,986    7,801    619  

06/27/2011

 Cincinnati / Hamilton Ave OH  —      2,941    2,177    228     2,941    2,405    5,346    283  

06/27/2011

 Cincinnati / Wooster Pk OH  —      1,445    3,755    234     1,445    3,989    5,434    423  

07/01/2005

 Columbus / Innis Rd OH  2,718    483    2,654    636     483    3,290    3,773    1,058  

11/01/2013

 Columbus / Kenny Rd OH  3,562    1,227    5,057    76     1,227    5,133    6,360    643  

11/04/2013

 Fairfield OH  —      904    3,856    284     904    4,140    5,044    122  

06/27/2011

 Greenville OH  —      189    302    77     189    379    568    49  

06/27/2011

 Hamilton OH  —      673    2,910    112     673    3,022    3,695    299  

11/30/2012

 Hilliard OH  2,065    1,613    2,369    240     1,613    2,609    4,222    171  

07/01/2005

 Kent OH  1,406    220    1,206    248     220    1,454    1,674    483  

06/27/2011

 Lebanon OH  —      1,657    1,566    313     1,657    1,879    3,536    208  

07/02/2012

 Mentor / Mentor Ave OH  1,299    409    1,609    110     409    1,719    2,128    128  

11/30/2012

 Mentor / Heisley Rd OH  1,253    658    1,267    224     658    1,491    2,149    97  

06/27/2011

 Middletown OH  1,267    534    1,047    114     533    1,162    1,695    129  

06/27/2011

 Sidney OH  —      201    262    66     201    328    529    48  

06/27/2011

 Troy OH  —      273    544    119     273    663    936    87  

06/27/2011

 Washington Court House OH  1,409    197    499    69     197    568    765    68  

11/01/2013

 Whitehall OH  1,406    726    1,965    102     726    2,067    2,793    228  

07/02/2012

 Willoughby OH  1,072    155    1,811    44     155    1,855    2,010    120  

06/27/2011

 Xenia OH  1,629    302    1,022    62     302    1,084    1,386    118  

07/01/2005

 Aloha / NW 185th Ave OR  6,117    1,221    6,262    285     1,221    6,547    7,768    1,754  

07/02/2012

 Aloha / SW 229th Ave OR  4,650    2,014    5,786    82     2,014    5,868    7,882    380  

09/15/2009

 King City OR  3,019    2,520    6,845    66     2,520    6,911    9,431    901  

12/28/2004

 Bensalem / Bristol Pike PA  3,258    1,131    4,525    303     1,131    4,828    5,959    1,373  

03/30/2006

 Bensalem / Knights Rd. PA  —      750    3,015    194     750    3,209    3,959    801  

11/15/1999

 Doylestown PA  —      220    3,442    1,095     520    4,237    4,757    1,457  

05/01/2004

 Kennedy Township PA  2,560    736    3,173    258     736    3,431    4,167    1,332  

02/06/2004

 Philadelphia / Roosevelt Bl PA  5,559    1,965    5,925    1,116     1,965    7,041    9,006    2,146  

11/01/2013

 Philadelphia / Wayne Ave PA  8,435    596    10,368    14     596    10,382    10,978    855  

08/03/2000

 Pittsburgh / E Entry Dr PA  2,560    991    1,990    901     1,082    2,800    3,882    1,052  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

05/01/2004

 Pittsburgh / Penn Ave PA  3,776    889    4,117    562     889    4,679    5,568    1,831  

01/01/2011

 Willow Grove PA  5,120    1,297    4,027    219     1,297    4,246    5,543    491  

07/01/2005

 Johnston / Hartford Ave RI  6,655    2,658    4,799    615     2,658    5,414    8,072    1,519  

12/01/2011

 Johnston / Plainfield RI  1,880    533    2,127    70     533    2,197    2,730    179  

08/26/2004

 Charleston SC  3,470    1,279    4,171    237     1,279    4,408    5,687    1,239  

08/26/2004

 Columbia / Harban Ct SC  2,781    838    3,312    252     838    3,564    4,402    1,047  

07/19/2012

 Columbia / Decker Blvd SC  3,259    1,784    2,745    75     1,784    2,820    4,604    182  

08/26/2004

 Goose Creek SC  —      1,683    4,372    1,071     1,683    5,443    7,126    1,431  

08/26/2004

 Summerville SC  —      450    4,454    196     450    4,650    5,100    1,307  

12/11/2014

 Taylors SC  —      1,433    6,071    —       1,433    6,071    7,504    —    

07/02/2012

 Bartlett TN  2,430    632    3,798    81     632    3,879    4,511    248  

07/01/2005

 Cordova / N Germantown Pkwy 1 TN  2,531    852    2,720    282     852    3,002    3,854    890  

01/05/2007

 Cordova / Patriot Cove TN  —      894    2,680    159     894    2,839    3,733    637  

04/15/2011

 Cordova / Houston Levee Rd TN  2,014    652    1,791    91     652    1,882    2,534    202  

11/01/2013

 Cordova / N Germantown Pkwy 2 TN  6,467    8,187    4,628    35     8,187    4,663    12,850    936  

11/30/2012

 Franklin TN  7,184    3,357    8,984    178     3,357    9,162    12,519    522  

07/02/2012

 Memphis / Covington Way TN  1,657    274    2,623    29     274    2,652    2,926    173  

07/02/2012

 Memphis / Raleigh-LaGrange TN  1,007    110    1,280    33     110    1,313    1,423    86  

11/30/2012

 Memphis / Summer Ave TN  3,463    1,040    3,867    165     1,040    4,032    5,072    229  

11/30/2012

 Memphis / Mt Moriah TN  2,573    1,617    2,875    145     1,617    3,020    4,637    169  

11/01/2013

 Memphis / Mt Moriah Terrace TN  1,968    1,313    2,928    5     1,313    2,933    4,246    341  

11/01/2013

 Memphis / Riverdale Bend TN  2,905    803    4,635    124     803    4,759    5,562    451  

04/13/2006

 Nashville TN  2,852    390    2,598    924     390    3,522    3,912    1,090  

11/22/2006

 Allen TX  4,507    901    5,553    253     901    5,806    6,707    1,296  

08/26/2004

 Arlington TX  2,159    534    2,525    426     534    2,951    3,485    948  

08/26/2004

 Austin / Burnet Rd TX  5,044    870    4,455    351     870    4,806    5,676    1,401  

11/01/2013

 Austin / McNeil Dr TX  2,249    3,411    4,502    50     3,411    4,552    7,963    485  

08/08/2014

 Austin / North Lamar Blvd TX  5,129    1,047    9,969    6     1,047    9,975    11,022    96  

08/26/2004

 Dallas / E NW Hwy TX  10,541    4,432    6,181    1,174     4,432    7,355    11,787    2,016  

04/13/2006

 Dallas / Garland Rd TX  2,004    337    2,216    611     337    2,827    3,164    836  

05/04/2006

 Dallas / Inwood Rd TX  11,274    1,980    12,501    556     1,980    13,057    15,037    3,003  

07/02/2012

 Dallas / Preston Rd 1 TX  5,194    921    7,656    103     921    7,759    8,680    503  

08/10/2012

 Dallas / Preston Rd 2 TX  3,866    2,542    3,274    266     2,542    3,540    6,082    246  

11/01/2013

 Dallas / N Central Expressway TX  4,124    7,143    6,353    41     7,143    6,394    13,537    833  

12/11/2014

 Dallas / N Central Expressway—Annex TX  —      6,249    8,666    —       6,249    8,666    14,915    —    

04/01/2011

 Euless / W Euless Blvd TX  2,880    671    3,213    655     671    3,868    4,539    485  

05/08/2013

 Euless / Mid-Cities Blvd TX  4,453    1,374    5,636    76     1,374    5,712    7,086    247  

11/04/2013

 Fort Worth / White Settlement Rd TX  3,734    3,158    2,512    76     3,158    2,588    5,746    78  

12/09/2013

 Fort Worth / Mandy Lane TX  —      2,033    2,495    120     2,033    2,615    4,648    75  

08/26/2004

 Ft. Worth TX  4,507    631    5,794    294     631    6,088    6,719    1,727  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

11/04/2013

 Garland TX  —      1,424    2,209    109     1,424    2,318    3,742    69  

08/26/2004

 Grand Prairie / N Hwy 360 1 TX  2,333    551    2,330    338     551    2,668    3,219    789  

08/10/2012

 Grand Prairie / N Hwy 360 2 TX  3,201    2,327    1,551    174     2,327    1,725    4,052    124  

04/13/2006

 Houston / Southwest Freeway TX  8,768    2,596    8,735    405     2,596    9,140    11,736    2,135  

12/14/2010

 Houston / Ryewater Dr TX  —      402    1,870    192     402    2,062    2,464    253  

02/29/2012

 Houston / Space Center Blvd TX  5,829    1,036    8,133    94     1,036    8,227    9,263    625  

11/01/2013

 Houston / South Main TX  3,187    2,017    4,181    30     2,017    4,211    6,228    516  

02/05/2014

 Houston / Katy Fwy TX  —      1,767    12,368    28     1,767    12,396    14,163    279  

11/04/2013

 Killeen TX  —      1,207    1,688    334     1,207    2,022    3,229    55  

12/14/2010

 La Porte TX  —      1,608    2,351    273     1,608    2,624    4,232    348  

11/22/2006

 Plano / Plano Parkway TX  5,160    1,010    6,203    390     1,010    6,593    7,603    1,455  

11/22/2006

 Plano / Spring Creek TX  4,483    614    3,775    283     614    4,058    4,672    929  

11/01/2013

 Plano / Wagner Way TX  3,093    2,753    4,353    40     2,753    4,393    7,146    549  

08/10/2006

 Rowlett TX  2,138    1,002    2,601    325     1,002    2,926    3,928    710  

08/26/2004

 San Antonio / Culebra Rd TX  2,425    1,269    1,816    697     1,269    2,513    3,782    838  

08/26/2004

 San Antonio / Westchase Dr TX  2,458    253    1,496    210     253    1,706    1,959    514  

12/14/2007

 San Antonio / DeZavala Rd TX  6,315    2,471    3,556    (179)  (e)  2,471    3,377    5,848    694  

04/13/2006

 South Houston TX  3,145    478    4,069    808     478    4,877    5,355    1,277  

08/02/2011

 Spring / Treaschwig Rd TX  1,920    978    1,347    170     979    1,516    2,495    154  

07/02/2012

 Spring / I-45 North TX  3,259    506    5,096    194     506    5,290    5,796    356  

10/20/2010

 East Millcreek UT  2,988    986    3,455    165     986    3,620    4,606    420  

11/23/2010

 Murray UT  —      571    986    2,125     571    3,111    3,682    311  

04/01/2011

 Orem UT  2,041    841    2,335    189     841    2,524    3,365    265  

06/01/2004

 Salt Lake City UT  —      642    2,607    367     642    2,974    3,616    900  

07/01/2005

 Sandy / South 700 East 1 UT  5,408    1,349    4,372    504     1,349    4,876    6,225    1,313  

09/28/2012

 Sandy / South 700 East 2 UT  —      2,063    5,202    1,477     2,063    6,679    8,742    331  

11/23/2010

 West Jordan UT  2,079    735    2,146    409     735    2,555    3,290    310  

07/01/2005

 West Valley City UT  2,756    461    1,722    190     461    1,912    2,373    543  

06/06/2007

 Alexandria / S Dove St VA  —      1,620    13,103    588     1,620    13,691    15,311    3,026  

07/02/2012

 Alexandria / N Henry St VA  13,366    5,029    18,943    47     5,029    18,990    24,019    1,206  

10/20/2010

 Arlington VA  —      —      4,802    144     —      4,946    4,946    1,768  

11/01/2013

 Burke VA  4,780    11,534    7,347    36     11,534    7,383    18,917    1,103  

01/07/2014

 Chesapeake / Bruce Rd VA  —      1,074    9,464    98     1,074    9,562    10,636    234  

01/07/2014

 Chesapeake / Military Hwy VA  —      332    4,106    88     332    4,194    4,526    103  

01/07/2014

 Chesapeake / Poplar Hill Rd VA  —      540    9,977    103     541    10,079    10,620    247  

01/07/2014

 Chesapeake / Woodlake Dr VA  —      4,014    14,872    81     4,014    14,953    18,967    367  

05/26/2011

 Dumfries VA  5,179    932    9,349    174     932    9,523    10,455    934  

07/01/2005

 Falls Church / Seminary Rd VA  5,811    1,259    6,975    405     1,259    7,380    8,639    1,963  

11/30/2012

 Falls Church / Hollywood Rd VA  9,006    5,703    13,307    272     5,713    13,569    19,282    751  

07/02/2012

 Fredericksburg / Plank Road VA  4,265    2,128    5,398    82     2,128    5,480    7,608    350  

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation (Continued)

(Dollars in thousands)

Date acquired

or development

completed

 

Store Name

 State Debt  Land
initial cost		  Building and
improvements
initial cost		  Adjustments and
costs subsequent
to acquisition		  Notes Gross carrying amount at December 31, 2014  Accumulated
depreciation		 
              Land        Building and
    improvements    		        Total        

11/30/2012

 Fredericksburg / Jefferson Davis Hwy VA  2,973    1,438    2,459    170     1,438    2,629    4,067    155  

12/18/2014

 Glen Allen VA  —      609    8,220    —       609    8,220    8,829    —    

01/07/2014

 Hampton VA  —      7,849    7,040    62     7,849    7,102    14,951    174  

01/07/2014

 Newport News / Denbigh Blvd VA  5,723    4,619    5,870    121     4,619    5,991    10,610    148  

01/07/2014

 Newport News / J Clyde Morris Blvd VA  —      4,838    6,124    136     4,838    6,260    11,098    154  

01/07/2014

 Newport News / Tyler Ave VA  —      2,740    4,955    111     2,740    5,066    7,806    125  

01/07/2014

 Norfolk / Granby St VA  —      1,785    8,543    85     1,785    8,628    10,413    212  

01/07/2014

 Norfolk / Naval Base Rd VA  —      4,078    5,975    133     4,078    6,108    10,186    149  

08/26/2004

 Richmond / W Broad St VA  4,516    2,305    5,467    344     2,305    5,811    8,116    1,583  

01/07/2014

 Richmond / Hull St VA  —      2,016    9,425    83     2,016    9,508    11,524    234  

01/07/2014

 Richmond / Laburnum Ave VA  —      5,945    7,613    141     5,945    7,754    13,699    190  

01/07/2014

 Richmond / Midlothian Turnpike VA  —      2,735    5,699    92     2,735    5,791    8,526    143  

01/07/2014

 Richmond / Old Staples Mill Rd VA  —      5,905    6,869    119     5,905    6,988    12,893    172  

01/23/2009

 Stafford / SUSA Dr VA  4,373    2,076    5,175    123     2,076    5,298    7,374    831  

09/20/2012

 Stafford / Jefferson Davis Hwy VA  4,377    1,172    5,562    137     1,172    5,699    6,871    351  

01/07/2014

 Virginia Beach / General Booth Blvd VA  —      1,142    11,721    38     1,142    11,759    12,901    289  

01/07/2014

 Virginia Beach / Kempsville Rd VA  —      3,934    11,413    32     3,934    11,445    15,379    282  

01/07/2014

 Virginia Beach / Village Dr VA  —      331    13,175    75     331    13,250    13,581    327  

02/15/2006

 Lakewood / 80th St WA  4,412    1,389    4,780    310     1,389    5,090    6,479    1,238  

02/15/2006

 Lakewood / Pacific Hwy WA  4,415    1,917    5,256    220     1,917    5,476    7,393    1,314  

04/30/2014

 Puyallup WA  —      437    3,808    2     437    3,810    4,247    69  

07/01/2005

 Seattle WA  7,272    2,727    7,241    236     2,727    7,477    10,204    1,945  

02/15/2006

 Tacoma WA  3,427    1,031    3,103    152     1,031    3,255    4,286    812  

07/02/2012

 Vancouver WA  3,079    709    4,280    75     709    4,355    5,064    280  

Various

 Other corporate assets   —      849    2,202    73,752     —      76,803    76,803    12,845  

Various

 Construction in progress   —      —      —      17,870     —      17,870    17,870    —    

Various

 Intangible tenant relationships and lease rights   —      —      60,011    20,979     —      80,990    80,990    72,740  
   

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

  

 

 

  

 

 

  

 

 

 
   $1,872,067   $1,161,721   $3,286,329   $291,982    $1,153,237   $3,586,795   $4,740,032   $604,336  
   

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

  

 

 

  

 

 

  

 

 

 

Date acquired
or development
completed
Store Name State Debt 
Land
initial cost
 
Building and
improvements
initial cost
 
Adjustments
and costs subsequent
to acquisition
 Notes Gross carrying amount at December 31, 2016 
Accumulated
depreciation
Land       Building and improvements     Total      
8/23/2010Auburn / Dean Rd AL $4,512 $324 $1,895 $163   $325 $2,057 $2,382 $408
8/23/2010Auburn / Opelika Rd AL 1,751 92 138 203   92 341 433 125
7/2/2012Birmingham / Grace Baker Rd AL 4,424 790 9,369 160   790 9,529 10,319 1,108
3/20/2014Birmingham / Lorna Rd AL 7,211 2,381 11,224 108   2,381 11,332 13,713 820
10/1/2015Daphne AL — 970 4,182 249   970 4,431 5,401 148
8/31/2007Hoover AL 3,973 1,313 2,858 744   1,313 3,602 4,915 1,275
10/1/2015Montgomery / Carmichael Rd AL 4,898 540 9,048 233   540 9,281 9,821 304
10/1/2015Montgomery / Monticello Dr AL — 1,280 4,056 637   1,280 4,693 5,973 154
12/21/2016Chandler / Arizona Ave AZ — 1,964 7,432 —   1,964 7,432 9,396 16
10/1/2015Chandler / W Chandler Blvd AZ — 950 3,707 272   950 3,979 4,929 133
7/25/2013Chandler / W Elliot Rd AZ 4,081 547 4,213 230   547 4,443 4,990 443
4/15/2015Glendale AZ — 608 8,461 249   608 8,710 9,318 400
10/1/2015Mesa / E Guadalupe Rd AZ — 1,350 6,290 307   1,350 6,597 7,947 224
12/27/2012Mesa / E Southern Ave AZ 5,435 2,973 5,545 353   2,973 5,898 8,871 657
4/5/2016Mesa / Greenfield Road AZ — 360 4,655 30   360 4,685 5,045 90
8/18/2004Mesa / Madero Ave AZ — 849 2,547 347   849 2,894 3,743 977
7/2/2012Mesa / N. Alma School Rd AZ — 1,129 4,402 264   1,129 4,666 5,795 548
7/25/2013Mesa / Southern Ave AZ 4,049 1,453 2,897 170   1,453 3,067 4,520 301
4/1/2006Peoria / 75th Ave AZ 4,337 652 4,105 173   652 4,278 4,930 1,228
1/31/2011Peoria / W Beardsley Rd AZ — 1,060 4,731 48   1,060 4,779 5,839 751
1/2/2007Phoenix / E Greenway Pkwy AZ — 669 4,135 507   668 4,643 5,311 1,283
7/1/2005Phoenix / East Bell Rd AZ 8,019 1,441 7,982 1,057   1,441 9,039 10,480 2,850
10/1/2015Phoenix / Missouri Ave AZ — 470 1,702 582   470 2,284 2,754 82
11/30/2012Phoenix / N 32nd St AZ 6,984 2,257 7,820 364   2,257 8,184 10,441 892
6/30/2006Phoenix / N Cave Creek Rd AZ 2,814 552 3,530 288   551 3,819 4,370 1,147
10/1/2015Phoenix / Washington AZ 3,105 1,200 3,767 438   1,200 4,205 5,405 146
9/16/2016Phoenix / West Peoria AZ — 1,545 7,135 —   1,545 7,135 8,680 61
10/1/2015Tempe / S Priest Dr AZ — 850 3,283 175   850 3,458 4,308 115
10/1/2015Tempe / W Broadway Rd AZ 2,711 1,040 3,562 333   1,040 3,895 4,935 144
11/30/2012Tucson / N Oracle Rd AZ — 1,090 7,845 134   1,090 7,979 9,069 868
4/18/2016Tucson / N Tucson Blvd AZ — 786 7,233 235   786 7,468 8,254 143
6/25/2007Alameda CA — 2,919 12,984 2,133   2,919 15,117 18,036 4,613
8/29/2013Alhambra CA — 10,109 6,065 402   10,109 6,467 16,576 606
4/25/2014Anaheim / Old Canal Rd CA 10,062 2,765 12,680 189   2,765 12,869 15,634 922
8/29/2013Anaheim / S Adams St CA 6,966 3,593 3,330 262   3,593 3,592 7,185 358
8/29/2013Anaheim / S State College Blvd CA 6,365 2,519 2,886 223   2,519 3,109 5,628 312
7/1/2008Antelope CA — 1,525 8,345 (251)  (a) 1,185 8,434 9,619 1,822
10/19/2011Bellflower CA 2,025 640 1,350 104   639 1,455 2,094 211
5/15/2007Belmont CA — 3,500 7,280 131   3,500 7,411 10,911 1,800
6/25/2007Berkeley CA 20,351 1,716 19,602 2,107   1,715 21,710 23,425 5,762
11/17/2016Bermuda Dunes CA — 2,593 15,049 —   2,593 15,049 17,642 64
10/19/2011Bloomington / Bloomington Ave CA 2,692 934 1,937 171   934 2,108 3,042 381
10/19/2011Bloomington / Linden Ave CA — 647 1,303 202   647 1,505 2,152 266
8/29/2013Burbank / Thornton Ave CA — 4,061 5,318 299   4,061 5,617 9,678 538
8/10/2000Burbank / W Verdugo Ave CA 18,864 3,199 5,082 2,111   3,617 6,775 10,392 2,891
4/8/2011Burlingame CA 5,230 2,211 5,829 151   2,211 5,980 8,191 921
3/14/2011Carson CA — — 9,709 116   — 9,825 9,825 1,474
6/25/2007Castro Valley CA — — 6,346 500   — 6,846 6,846 1,684
10/19/2011Cerritos CA 25,224 8,728 15,895 2,737   8,728 18,632 27,360 2,589
11/1/2013Chatsworth CA 11,974 9,922 7,599 559   9,922 8,158 18,080 1,558
6/1/2004Claremont / South Mills Ave CA 2,949 1,472 2,012 284   1,472 2,296 3,768 835
10/19/2011Claremont / W Arrow Hwy CA 3,325 1,375 1,434 233   1,375 1,667 3,042 264
6/25/2007Colma CA 23,134 3,947 22,002 2,781   3,947 24,783 28,730 6,742
9/1/2008Compton CA — 1,426 7,582 188   1,426 7,770 9,196 1,645
8/29/2013Concord CA 5,089 3,082 2,822 328   3,082 3,150 6,232 299
9/21/2009El Cajon CA — 1,100 6,380 128   1,100 6,508 7,608 1,232
6/25/2007El Sobrante CA — 1,209 4,018 1,598   1,209 5,616 6,825 1,782
12/2/2013Elk Grove / Power Inn Rd CA 5,657 894 6,949 119   894 7,068 7,962 562
12/2/2013Elk Grove / Stockton Blvd CA 6,541 640 8,640 76   640 8,716 9,356 687
5/1/2010Emeryville CA — 3,024 11,321 337   3,024 11,658 14,682 1,980
12/2/2013Fair Oaks CA 4,141 644 11,287 150   644 11,437 12,081 892
11/17/2016Fallbrook CA — 1,638 7,361 —   1,638 7,361 8,999 31
10/19/2011Fontana / Baseline Ave CA 4,700 778 4,723 134   777 4,858 5,635 710
10/19/2011Fontana / Foothill Blvd 1 CA — 768 4,208 236   768 4,444 5,212 652
10/19/2011Fontana / Foothill Blvd 2 CA — 684 3,951 275   684 4,226 4,910 614
9/15/2002Fontana / Valley Blvd 1 CA 2,997 961 3,846 475   1,000 4,282 5,282 1,635
10/15/2003Fontana / Valley Blvd 2 CA 5,372 1,246 3,356 553   1,300 3,855 5,155 1,363
6/1/2004Gardena CA — 3,710 6,271 2,314   4,110 8,185 12,295 2,654
10/1/2015Gilroy CA 8,222 1,140 14,265 295   1,140 14,560 15,700 489
6/1/2004Glendale / San Fernando Rd 1 CA — — 6,084 253   — 6,337 6,337 2,152
9/21/2016Glendale / San Fernando Rd 2 CA — 4,416 9,672 36   4,416 9,708 14,124 83
7/2/2012Hawaiian Gardens CA 9,994 2,964 12,478 276   2,964 12,754 15,718 1,559
10/1/2015Hawthorne / La Cienega Blvd CA 12,075 2,500 18,562 289   2,500 18,851 21,351 611
6/1/2004Hawthorne / Rosselle Ave CA 3,681 1,532 3,871 327   1,532 4,198 5,730 1,458
6/26/2007Hayward CA 8,191 3,149 8,006 3,471   3,148 11,478 14,626 3,462
8/31/2016Hemet / Acacia Ave CA — 301 3,609 16   301 3,625 3,926 39
7/1/2005Hemet / S Sanderson CA 3,085 1,146 6,369 408   1,146 6,777 7,923 2,130
10/19/2011Hesperia CA — 156 430 188   156 618 774 147
7/2/2012Hollywood CA — 4,555 10,590 162   4,555 10,752 15,307 1,253
8/10/2000Inglewood CA 5,482 1,379 3,343 975   1,530 4,167 5,697 1,922
10/19/2011Irvine CA 9,034 3,821 3,999 182   3,821 4,181 8,002 595
5/28/2014La Quinta CA 10,938 4,706 12,604 152   4,706 12,756 17,462 890
10/1/2015Ladera Ranch CA — 6,440 24,500 8,705   6,440 33,205 39,645 850
10/19/2011Lake Elsinore / Central Ave CA — 587 4,219 229   587 4,448 5,035 647
10/19/2011Lake Elsinore / Collier Ave CA — 294 2,105 263   294 2,368 2,662 334
10/1/2015Lake Forest CA 18,122 15,093 18,895 273   15,090 19,171 34,261 621
10/17/2009Lancaster / 23rd St W CA — 1,425 5,855 107   1,425 5,962 7,387 1,108
7/28/2006Lancaster / West Ave J/8 CA 4,466 1,347 5,827 324   1,348 6,150 7,498 1,771
6/1/2004Livermore CA — 1,134 4,615 357   1,134 4,972 6,106 1,686
10/19/2011Long Beach / E Artesia Blvd CA — 1,772 2,539 430   1,772 2,969 4,741 431
10/1/2015Long Beach / E Wardlow Rd CA 13,274 6,340 17,050 331   6,340 17,381 23,721 563
11/1/2013Long Beach / W Wardlow Rd CA 6,861 5,859 4,992 54   5,859 5,046 10,905 1,054
11/17/2016Los Alamitos CA — 10,107 15,874 66   10,107 15,940 26,047 68
3/23/2000Los Angeles / Casitas Ave CA — 1,431 2,976 829   1,611 3,625 5,236 1,566
7/2/2012Los Angeles / Fountain Ave CA — 3,099 4,889 122   3,099 5,011 8,110 601
12/31/2007Los Angeles / La Cienega CA 9,678 3,991 9,774 146   3,992 9,919 13,911 2,314
9/1/2008Los Angeles / S Central Ave CA 8,038 2,200 8,108 243   2,200 8,351 10,551 1,772
12/2/2013Los Angeles / S Western Ave CA 1,434 287 2,011 388   287 2,399 2,686 251
4/25/2014Los Angeles / Slauson Ave CA — 2,400 8,605 340   2,401 8,944 11,345 655
7/17/2012Los Gatos CA — 2,550 8,257 74   2,550 8,331 10,881 1,054
1/1/2004Manteca CA 4,725 848 2,543 210   848 2,753 3,601 968
11/1/2013Marina Del Rey CA 34,478 19,928 18,742 250   19,928 18,992 38,920 3,128
8/29/2013Menlo Park CA 9,371 7,675 1,812 275   7,675 2,087 9,762 216
6/1/2007Modesto / Crows Landing CA 3,203 909 3,043 397   909 3,440 4,349 944
8/29/2013Modesto / Sylvan Ave CA 4,192 1,647 4,215 211   1,647 4,426 6,073 408
7/2/2012Moreno Valley CA 2,011 482 3,484 188   482 3,672 4,154 423
10/1/2015Morgan Hill CA 7,354 1,760 11,772 247   1,760 12,019 13,779 397
11/1/2013North Highlands CA 3,274 799 2,801 135   799 2,936 3,735 568
8/29/2013North Hollywood / Coldwater Canyon CA — 4,501 4,465 376   4,501 4,841 9,342 471
5/1/2006North Hollywood / Van Owen CA 6,444 3,125 9,257 327   3,125 9,584 12,709 2,622
8/29/2013Northridge CA 6,514 3,641 2,872 308   3,641 3,180 6,821 327
8/29/2013Oakland / 29th Ave CA 9,880 6,359 5,753 385   6,359 6,138 12,497 567
4/24/2000Oakland / Fallon St CA — — 3,777 1,167   — 4,944 4,944 2,207
12/2/2013Oakland / San Leandro St CA 7,719 1,668 7,652 338   1,668 7,990 9,658 658
7/1/2005Oceanside / Oceanside Blvd 1 CA — 3,241 11,361 909   3,241 12,270 15,511 3,921
12/9/2014Oceanside / Oceanside Blvd 2 CA 5,890 4,508 4,599 52   4,508 4,651 9,159 251
11/30/2012Orange CA 11,856 4,847 12,341 343   4,847 12,684 17,531 1,411
12/2/2013Oxnard CA 8,452 5,421 6,761 342   5,421 7,103 12,524 598
8/1/2009Pacoima CA 2,120 3,050 7,597 218   3,050 7,815 10,865 1,471
1/1/2005Palmdale CA 4,453 1,225 5,379 2,405   1,225 7,784 9,009 2,367
10/19/2011Paramount CA 4,440 1,404 2,549 254   1,404 2,803 4,207 419
8/31/2000Pico Rivera / Beverly Blvd CA — 1,150 3,450 233   1,150 3,683 4,833 1,486
9/16/2016Pico Rivera / East Slauson Ave CA — — 11,750 66   — 11,816 11,816 101
3/4/2014Pico Rivera / San Gabriel River Pkwy CA 4,376 2,150 4,734 47   2,150 4,781 6,931 349
10/19/2011Placentia CA 11,245 4,798 5,483 346   4,798 5,829 10,627 831
5/24/2007Pleasanton CA 7,067 1,208 4,283 640   1,208 4,923 6,131 1,401
6/1/2004Richmond / Lakeside Dr CA 4,716 953 4,635 1,497   953 6,132 7,085 1,913
9/26/2013Richmond / Meeker Ave CA — 3,139 7,437 227   3,139 7,664 10,803 690
8/18/2004Riverside CA 4,674 1,075 4,042 796   1,075 4,838 5,913 1,643
12/2/2013Rocklin CA 6,297 1,745 8,005 88   1,745 8,093 9,838 639
11/4/2013Rohnert Park CA 6,289 990 8,094 186   990 8,280 9,270 676
7/1/2005Sacramento / Auburn Blvd CA 4,446 852 4,720 1,011   852 5,731 6,583 1,795
3/31/2015Sacramento / B Street CA 7,611 1,025 11,479 459   1,025 11,938 12,963 571
10/1/2010Sacramento / Franklin Blvd CA 3,390 1,738 5,522 306   1,844 5,722 7,566 923
12/31/2007Sacramento / Stockton Blvd CA 2,784 952 6,936 481   1,075 7,294 8,369 1,194
6/1/2006San Bernardino / Sterling Ave. CA — 750 5,135 212   750 5,347 6,097 1,414
6/1/2004San Bernardino / W Club Center Dr CA — 1,213 3,061 141   1,173 3,242 4,415 1,121
8/29/2013San Diego / Cedar St CA 13,188 5,919 6,729 450   5,919 7,179 13,098 673
12/11/2015San Diego / Del Sol Blvd CA — 2,679 7,029 171   2,679 7,200 9,879 197
10/19/2011San Dimas CA — 1,867 6,354 276   1,867 6,630 8,497 948
8/29/2013San Francisco / Egbert Ave CA 10,355 5,098 4,054 334   5,098 4,388 9,486 413
6/14/2007San Francisco / Folsom CA 17,828 8,457 9,928 1,859   8,457 11,787 20,244 3,502
10/1/2015San Francisco / Otis Street CA — 5,460 18,741 340   5,460 19,081 24,541 620
7/26/2012San Jose / Charter Park Dr CA 4,652 2,428 2,323 288   2,428 2,611 5,039 366
9/1/2009San Jose / N 10th St CA 10,784 5,340 6,821 303   5,340 7,124 12,464 1,345
8/1/2007San Leandro / Doolittle Dr CA 14,686 4,601 9,777 3,479   4,601 13,256 17,857 3,811
10/1/2010San Leandro / Washington Ave CA — 3,343 6,630 10  (f) 3,291 6,692 9,983 1,103
10/1/2015San Lorenzo CA — — 8,784 292   — 9,076 9,076 298
8/29/2013San Ramon CA — 4,819 5,819 290   4,819 6,109 10,928 558
8/29/2013Santa Ana CA 4,075 3,485 2,382 236   3,485 2,618 6,103 272
7/30/2009Santa Clara CA 7,746 4,750 8,218 46   4,750 8,264 13,014 1,558
7/2/2012Santa Cruz CA — 1,588 11,160 142   1,588 11,302 12,890 1,318
10/4/2007Santa Fe Springs CA 7,249 3,617 7,022 382   3,617 7,404 11,021 1,921
10/19/2011Santa Maria / Farnel Rd CA 2,872 1,556 2,740 504   1,556 3,244 4,800 515
10/19/2011Santa Maria / Skyway Dr CA 6,241 1,310 3,526 109   1,309 3,636 4,945 514
11/17/2016Santa Rosa CA — 9,526 15,282 —   9,526 15,282 24,808 65
11/17/2016Santee CA — 7,058 12,121 —   7,058 12,121 19,179 52
11/17/2016Scotts Valley CA — 5,006 5,806 —   5,006 5,806 10,812 25
8/31/2004Sherman Oaks CA 25,176 4,051 12,152 630   4,051 12,782 16,833 4,130
8/29/2013Stanton CA 6,791 5,022 2,267 226   5,022 2,493 7,515 271
5/19/2002Stockton / Jamestown CA 2,290 649 3,272 269   649 3,541 4,190 1,374
12/2/2013Stockton / Pacific Ave CA 5,360 3,619 2,443 86   3,619 2,529 6,148 211
4/25/2014Sunland CA — 1,688 6,381 110   1,688 6,491 8,179 465
8/29/2013Sunnyvale CA — 10,732 5,004 260   10,732 5,264 15,996 492
5/2/2008Sylmar CA 6,111 3,058 4,671 288   3,058 4,959 8,017 1,253
2/28/2013Thousand Oaks CA — 4,500 8,834 (965)  (d) 3,500 8,869 12,369 354
7/15/2003Tracy / E 11th St 1 CA 5,115 778 2,638 828   911 3,333 4,244 1,192
4/1/2004Tracy / E 11th St 2 CA 3,053 946 1,937 311   946 2,248 3,194 897
6/25/2007Vallejo / Sonoma Blvd CA 2,758 1,177 2,157 1,083   1,177 3,240 4,417 1,202
10/1/2015Vallejo / Tennessee St CA 8,695 2,640 13,870 352   2,640 14,222 16,862 469
8/29/2013Van Nuys CA — 7,939 2,576 387   7,939 2,963 10,902 316
8/31/2004Venice CA — 2,803 8,410 2  (b) 2,803 8,412 11,215 1,479
8/29/2013Ventura CA — 3,453 2,837 259   3,453 3,096 6,549 315
10/19/2011Victorville CA — 151 751 165   151 916 1,067 168
7/1/2005Watsonville CA 4,365 1,699 3,056 373   1,699 3,429 5,128 1,107
9/1/2009West Sacramento CA — 2,400 7,425 151   2,400 7,576 9,976 1,441
6/19/2002Whittier CA 3,184 — 2,985 217   — 3,202 3,202 1,233
8/29/2013Wilmington CA — 6,792 10,726 398   6,792 11,124 17,916 930
9/15/2000Arvada CO 1,697 286 1,521 706   286 2,227 2,513 1,179
5/25/2011Castle Rock / Industrial Way 1 CO — 407 3,077 295   407 3,372 3,779 534
7/23/2015Castle Rock / Industrial Way 2 CO — 531 — —   531 — 531 —
4/19/2016Colorado Springs / Arlington Dr CO — 2,140 5,660 385   2,140 6,045 8,185 122
6/10/2011Colorado Springs / Austin Bluffs Pkwy CO — 296 4,199 349   296 4,548 4,844 739
8/31/2007Colorado Springs / Dublin Blvd CO 3,582 781 3,400 450   781 3,850 4,631 1,019
11/25/2008Colorado Springs / S 8th St CO 5,935 1,525 4,310 641   1,525 4,951 6,476 1,114
10/24/2014Colorado Springs / Stetson Hills Blvd CO 3,919 2,077 4,087 369   2,077 4,456 6,533 281
9/15/2000Denver / E 40th Ave CO 2,402 602 2,052 1,733   745 3,642 4,387 1,524
7/1/2005Denver / W 96th Ave CO 3,417 368 1,574 528   368 2,102 2,470 689
7/18/2012Fort Carson CO — — 6,945 125   — 7,070 7,070 835
9/1/2006Parker CO 6,919 800 4,549 853   800 5,402 6,202 1,701
9/15/2000Thornton CO 2,631 212 2,044 1,169   248 3,177 3,425 1,522
9/15/2000Westminster CO 1,985 291 1,586 1,343   299 2,921 3,220 1,485
3/17/2014Bridgeport CT — 1,072 14,028 142   1,072 14,170 15,242 1,027
7/2/2012Brookfield CT 4,919 991 7,891 134   991 8,025 9,016 960
1/15/2004Groton CT 5,112 1,277 3,992 463   1,276 4,456 5,732 1,684
12/31/2007Middletown CT 2,653 932 2,810 225   932 3,035 3,967 752
11/4/2013Newington CT 2,282 1,363 2,978 682   1,363 3,660 5,023 335
9/16/2016Wethersfield / Olesen Rd CT — 2,502 7,588 81   2,502 7,669 10,171 66
8/16/2002Wethersfield / Silas Deane Hwy CT 6,533 709 4,205 231   709 4,436 5,145 1,701
5/5/2016Washington DC 9,559 14,394 18,172 216   14,394 18,388 32,782 319



Date acquired
or development
completed		Store Name State Debt Land
initial cost		 Building and
improvements
initial cost		 Adjustments
and costs subsequent
to acquisition		 Notes Gross carrying amount at December 31, 2016 Accumulated
depreciation
Land       Building and
improvements    		 Total      
11/19/2015Apopka / Park Ave FL 2,742 613 5,228 277   613 5,505 6,118 170
11/19/2015Apopka / Semoran Blvd FL 2,742 888 5,737 439   888 6,176 7,064 190
5/2/2012Auburndale FL 1,218 470 1,076 155   470 1,231 1,701 182
7/15/2009Bonita Springs FL — 2,198 8,215 129   2,198 8,344 10,542 1,577
12/23/2014Bradenton FL 3,728 1,333 3,677 565   1,333 4,242 5,575 274
11/30/2012Brandon FL 4,595 1,327 5,656 190   1,327 5,846 7,173 658
6/19/2008Coral Springs FL 5,923 3,638 6,590 462   3,638 7,052 10,690 1,664
10/1/2015Davie FL 7,993 4,890 11,679 474   4,890 12,153 17,043 421
1/6/2006Deland FL 3,087 1,318 3,971 369   1,318 4,340 5,658 1,312
11/30/2012Fort Lauderdale / Commercial Blvd FL 5,078 1,576 5,397 363   1,576 5,760 7,336 655
8/26/2004Fort Lauderdale / NW 31st Ave FL 7,246 1,587 4,205 501   1,587 4,706 6,293 1,601
5/4/2011Fort Lauderdale / S State Rd 7 FL — 2,750 7,002 564   2,750 7,566 10,316 1,163
8/26/2004Fort Myers / Cypress Lake Dr FL 5,902 1,691 4,711 572   1,691 5,283 6,974 1,733
7/1/2005Fort Myers / San Carlos Blvd FL 4,756 1,985 4,983 663   1,985 5,646 7,631 1,846
3/8/2005Greenacres FL 2,765 1,463 3,244 182   1,463 3,426 4,889 1,125
10/1/2015Gulf Breeze / Gulf Breeze Pkwy FL 2,900 620 2,886 247   620 3,133 3,753 107
10/1/2015Gulf Breeze / McClure Dr FL 6,256 660 12,590 277   660 12,867 13,527 416
1/1/2010Hialeah / E 65th Street FL 5,643 1,750 7,150 157   1,750 7,307 9,057 1,328
8/1/2008Hialeah / Okeechobee Rd FL — 2,800 7,588 135   2,800 7,723 10,523 1,701
9/1/2010Hialeah / W 84th St FL 5,643 1,678 6,807 98   1,678 6,905 8,583 1,132
11/20/2007Hollywood FL 12,328 3,214 8,689 376   3,214 9,065 12,279 2,275
1/12/2016Jacksonville / Girvin Rd FL — 841 8,102 159   841 8,261 9,102 215
10/1/2015Jacksonville / Monument Rd FL 5,609 490 10,708 385   490 11,093 11,583 378
10/1/2015Jacksonville / Timuquana Rd FL 4,600 1,000 3,744 304   1,000 4,048 5,048 146
12/28/2012Kenneth City FL 4,000 805 3,345 86   805 3,431 4,236 369
5/2/2012Lakeland / Harden Blvd FL 3,687 593 4,701 224   593 4,925 5,518 670
5/2/2012Lakeland / South Florida Ave FL 5,297 871 6,905 272   871 7,177 8,048 908
9/3/2014Lakeland / US Hwy 98 FL — 529 3,604 134   529 3,738 4,267 243
12/27/2012Land O Lakes FL 6,207 798 4,490 10   799 4,499 5,298 509
8/26/2004Madeira Beach FL 5,661 1,686 5,163 316   1,686 5,479 7,165 1,826
8/10/2000Margate FL 3,136 430 3,139 1,498   469 4,598 5,067 1,740
7/2/2012Miami / Coral Way FL 7,777 3,257 9,713 195   3,257 9,908 13,165 1,179
10/25/2011Miami / Hammocks Blvd FL 6,114 521 5,198 133   521 5,331 5,852 785
8/10/2000Miami / NW 12th St FL 7,475 1,325 4,395 2,172   1,419 6,473 7,892 2,420
7/2/2012Miami / NW 2nd Ave FL 8,742 1,979 6,513 201   1,979 6,714 8,693 825
9/16/2016Miami / NW 79th Ave FL — 4,872 9,846 8   4,872 9,854 14,726 84
2/4/2011Miami / SW 147th Ave FL — 2,375 5,543 117   2,374 5,661 8,035 818
5/31/2007Miami / SW 186th St FL 4,181 1,238 7,597 506   1,238 8,103 9,341 2,131
11/8/2013Miami / SW 68th Ave FL 9,678 3,305 11,997 68   3,305 12,065 15,370 974
8/10/2000Miami / SW 72nd Street FL — 5,315 4,305 2,117   5,859 5,878 11,737 2,276
11/30/2009Miami Gardens / 183rd Street FL 6,564 4,798 9,475 149   4,798 9,624 14,422 1,777
2/2/2016Miami Gardens / 2nd Ave FL 2,633 1,052 2,716 32   1,052 2,748 3,800 65
6/18/2015Naples / Goodlette Road FL 13,148 — 17,220 169   — 17,389 17,389 674
11/1/2013Naples / Old US 41 FL 6,098 1,990 4,887 644   1,990 5,531 7,521 835
11/8/2013Naranja FL 8,231 603 11,223 109   603 11,332 11,935 920
8/10/2000North Lauderdale FL 3,931 428 3,516 1,947   459 5,432 5,891 2,141
6/1/2004North Miami FL 8,231 1,256 6,535 659   1,256 7,194 8,450 2,562
10/1/2015Oakland Park FL 9,862 2,030 19,241 407   2,030 19,648 21,678 658
3/8/2005Ocoee FL 3,000 872 3,642 529   872 4,171 5,043 1,337
11/19/2015Orlando / Hoffner Ave FL 2,793 512 6,697 328   512 7,025 7,537 214
3/8/2005Orlando / Hunters Creek FL 9,563 2,233 9,223 679   2,233 9,902 12,135 3,159
8/26/2004Orlando / LB McLeod Rd FL 8,284 1,216 5,008 528   1,216 5,536 6,752 1,903
6/17/2015Orlando / Lee Rd FL 3,979 535 5,364 21   535 5,385 5,920 203
3/8/2005Orlando / Metrowest FL 5,600 1,474 6,101 323   1,474 6,424 7,898 2,077
7/15/2010Orlando / Orange Blossom Trail FL 2,632 625 2,133 109   625 2,242 2,867 415
3/8/2005Orlando / Waterford Lakes FL 6,293 1,166 4,816 1,341   1,166 6,157 7,323 1,911
11/7/2013Palm Springs FL 5,544 2,108 8,028 2,355   2,108 10,383 12,491 709
5/31/2013Plantation FL — 3,850 — (1,504)  (d) 2,346 — 2,346 —
8/26/2004Port Charlotte FL — 1,389 4,632 318   1,389 4,950 6,339 1,639
8/26/2004Riverview FL 4,503 654 2,953 328   654 3,281 3,935 1,129
11/30/2012Sarasota / Clark Rd FL — 4,666 9,016 523   4,666 9,539 14,205 1,061
12/23/2014Sarasota / Washington Blvd FL 3,883 1,192 2,919 63   1,192 2,982 4,174 162
12/3/2012Seminole FL 3,918 1,133 3,017 326   1,133 3,343 4,476 374
12/23/2014South Pasadena FL 10,078 8,890 10,106 132   8,890 10,238 19,128 548
4/15/2014Stuart / Gran Park Way FL 6,791 1,640 8,358 163   1,640 8,521 10,161 627
10/1/2015Stuart / Kanner Hwy FL — 1,250 5,007 324   1,250 5,331 6,581 199
10/1/2015Stuart / NW Federal Hwy 1 FL — 760 3,125 277   760 3,402 4,162 131
10/1/2015Tallahassee FL — 1,460 21,471 259   1,460 21,730 23,190 692
11/1/2013Tamiami FL 5,016 5,042 7,164 384   5,042 7,548 12,590 1,248
11/22/2006Tampa / Cypress St FL 3,445 883 3,533 191   881 3,726 4,607 1,033
3/27/2007Tampa / W Cleveland St FL 5,511 1,425 4,766 489   1,425 5,255 6,680 1,464
12/23/2014Tampa / W Hillsborough Ave FL 2,319 1,086 2,937 402   1,086 3,339 4,425 194
8/26/2004Valrico FL 4,235 1,197 4,411 307   1,197 4,718 5,915 1,617
1/13/2006Venice FL — 1,969 5,903 332   1,970 6,234 8,204 1,927
8/10/2000West Palm Beach / Forest Hill Bl FL 3,467 1,164 2,511 1,056   1,246 3,485 4,731 1,443
8/10/2000West Palm Beach / N Military Trail 1 FL 4,345 1,312 2,511 1,906   1,416 4,313 5,729 1,548
11/1/2013West Palm Beach / N Military Trail 2 FL 3,659 1,595 2,833 111   1,595 2,944 4,539 528
12/1/2011West Palm Beach / S Military Trail FL 3,280 1,729 4,058 129   1,730 4,186 5,916 585
7/1/2005West Palm Beach / Southern Blvd FL 5,346 1,752 4,909 514   1,752 5,423 7,175 1,851
10/1/2015Weston FL 7,039 1,680 11,342 355   1,680 11,697 13,377 391
11/17/2016Acworth GA — 2,805 4,519 —   2,805 4,519 7,324 19
8/26/2004Alpharetta / Holcomb Bridge Rd GA — 1,973 1,587 329   1,973 1,916 3,889 694
10/1/2015Alpharetta / Jones Bridge Rd GA 5,827 1,420 8,902 278   1,420 9,180 10,600 295
8/8/2006Alpharetta / North Main St GA 5,429 1,893 3,161 232   1,894 3,392 5,286 984
8/6/2014Atlanta / Chattahoochee Ave GA — 1,132 10,080 118   1,132 10,198 11,330 640
8/26/2004Atlanta / Cheshire Bridge Rd NE GA 12,613 3,737 8,333 760   3,738 9,092 12,830 3,033
10/22/2014Atlanta / Edgewood Ave SE GA 7,544 588 10,295 251   588 10,546 11,134 593
4/3/2014Atlanta / Mt Vernon Hwy GA — 2,961 19,819 173   2,961 19,992 22,953 1,400
8/26/2004Atlanta / Roswell Rd GA — 1,665 2,028 473   1,665 2,501 4,166 844
2/28/2005Atlanta / Virginia Ave GA 6,315 3,319 8,325 780   3,319 9,105 12,424 2,973
11/4/2013Augusta GA 1,982 710 2,299 88   710 2,387 3,097 200
10/1/2015Austell GA 3,361 540 6,550 257   540 6,807 7,347 226
10/1/2015Buford / Buford Dr GA — 500 5,484 321   500 5,805 6,305 192
3/29/2016Buford / Gravel Springs Rd GA — 895 7,625 180   895 7,805 8,700 169
5/7/2015Dacula / Auburn Rd GA 4,378 2,087 4,295 141   2,077 4,446 6,523 176
1/17/2006Dacula / Braselton Hwy GA 4,965 1,993 3,001 228   1,993 3,229 5,222 964
6/17/2010Douglasville GA — 1,209 719 597   1,209 1,316 2,525 315
10/1/2015Duluth / Berkeley Lake Rd GA 4,055 1,350 5,718 336   1,350 6,054 7,404 192
10/1/2015Duluth / Breckinridge Blvd GA 3,864 1,160 6,336 271   1,160 6,607 7,767 212
10/1/2015Duluth / Peachtree Industrial Blvd GA 4,216 440 7,516 260   440 7,776 8,216 253
11/30/2012Eastpoint GA 5,566 1,718 6,388 200   1,718 6,588 8,306 726
10/1/2015Ellenwood GA 2,679 260 3,992 398   260 4,390 4,650 140
6/14/2007Johns Creek GA 3,298 1,454 4,151 187   1,454 4,338 5,792 1,127
10/1/2015Jonesboro GA — 540 6,174 312   540 6,486 7,026 220
6/17/2010Kennesaw / Cobb Parkway NW GA — 673 1,151 206   673 1,357 2,030 293
10/1/2015Kennesaw / George Busbee Pkwy GA 4,730 500 9,126 202   500 9,328 9,828 304
11/4/2013Lawrenceville / Hurricane Shoals Rd GA 3,265 2,117 2,784 371   2,117 3,155 5,272 296
10/1/2015Lawrenceville / Lawrenceville Hwy 1 GA — 730 3,058 542   730 3,600 4,330 116
10/1/2015Lawrenceville / Lawrenceville Hwy 2 GA 3,073 1,510 4,674 263   1,510 4,937 6,447 162
10/1/2015Lawrenceville / Old Norcross Rd GA — 870 3,705 375   870 4,080 4,950 131
11/12/2009Lithonia GA — 1,958 3,645 904   1,958 4,549 6,507 739
3/29/2016Loganville GA — 814 5,494 422   814 5,916 6,730 130
10/1/2015Marietta / Austell Rd SW GA — 1,070 3,560 483   1,070 4,043 5,113 131
6/17/2010Marietta / Cobb Parkway N GA — 887 2,617 355   887 2,972 3,859 596
10/1/2015Marietta / Powers Ferry Rd GA 5,442 430 9,242 249   430 9,491 9,921 307
10/1/2015Marietta / West Oak Pkwy GA 4,370 500 6,395 192   500 6,587 7,087 217
10/1/2015Peachtree City GA — 1,080 8,628 438   1,080 9,066 10,146 289
4/24/2015Powder Springs GA 4,503 370 6,014 66   370 6,080 6,450 237
6/30/2016Roswell GA — 1,043 6,981 —   1,043 6,981 8,024 119
10/1/2015Sandy Springs GA 7,000 1,740 11,439 337   1,740 11,776 13,516 382
10/1/2015Savannah / King George Blvd 1 GA 2,963 390 4,889 301   390 5,190 5,580 170
10/1/2015Savannah / King George Blvd 2 GA — 390 3,370 270   390 3,640 4,030 122
10/1/2015Sharpsburg GA 4,899 360 8,455 255   360 8,710 9,070 282
10/1/2015Smyrna / Cobb Parkway SE GA 4,580 1,360 7,002 353   1,360 7,355 8,715 242
11/17/2016Smyrna / Oakdale Rd GA — 588 7,362 —   588 7,362 7,950 31
8/26/2004Snellville GA — 2,691 4,026 381   2,691 4,407 7,098 1,516
3/29/2016Stockbridge GA — 2,899 7,098 457   2,899 7,555 10,454 165
8/26/2004Stone Mountain / Annistown Rd GA 2,738 1,817 4,382 338   1,817 4,720 6,537 1,604
7/1/2005Stone Mountain / S Hairston Rd GA 2,533 925 3,505 458   925 3,963 4,888 1,286
6/14/2007Sugar Hill / Nelson Brogdon Blvd 1 GA — 1,371 2,547 252   1,371 2,799 4,170 771
6/14/2007Sugar Hill / Nelson Brogdon Blvd 2 GA — 1,368 2,540 413   1,367 2,954 4,321 786
10/15/2013Tucker GA 5,713 1,773 10,456 87   1,773 10,543 12,316 875
10/1/2015Wilmington Island GA 5,631 760 9,423 341   760 9,764 10,524 318
11/18/2016Hilo HI — 2,859 5,429 7   2,859 5,436 8,295 23
4/5/2016Honolulu / Ahua Street HI — 2,325 26,376 390   2,325 26,766 29,091 463
5/3/2013Honolulu / Kalakaua Ave HI 17,140 4,674 18,350 313   4,674 18,663 23,337 1,758
7/14/2016Honolulu / Kalanianaole Hwy HI — — 29,211 115   — 29,326 29,326 378
6/25/2007Kahului HI — 3,984 15,044 1,226   3,984 16,270 20,254 4,180
6/25/2007Kapolei / Farrington Hwy 1 HI 9,084 — 24,701 798   — 25,499 25,499 6,370
12/6/2013Kapolei / Farrington Hwy 2 HI 7,029 — 7,776 116   — 7,892 7,892 620
11/18/2016Lihue HI — 2,504 4,357 2   2,504 4,359 6,863 19
5/3/2013Wahiawa HI 3,504 1,317 2,626 345   1,317 2,971 4,288 287
11/4/2013Bedford Park IL 2,469 922 3,289 363   922 3,652 4,574 329
6/8/2015Berwyn IL — 965 9,085 148   965 9,233 10,198 379
11/4/2013Chicago / 60th St IL 4,842 1,363 5,850 173   1,363 6,023 7,386 502
11/4/2013Chicago / 87th St IL 5,765 2,881 6,324 116   2,881 6,440 9,321 523
10/1/2015Chicago / 95th St IL — 750 7,828 414   750 8,242 8,992 283
2/13/2013Chicago / Montrose IL 8,093 1,318 9,485 213   1,318 9,698 11,016 977
11/4/2013Chicago / Pulaski Rd IL 3,488 1,143 6,138 529   1,143 6,667 7,810 537
7/1/2005Chicago / South Wabash IL 11,436 621 3,428 2,245   621 5,673 6,294 1,846
11/10/2004Chicago / Stony Island IL — 1,925 — —   1,925 — 1,925 —
7/1/2005Chicago / West Addison IL 5,324 449 2,471 810   449 3,281 3,730 1,241
2/25/2016Chicago / West Devon Ave IL — 1,327 15,535 2   1,327 15,537 16,864 362
7/1/2005Chicago / West Harrison 1 IL 4,477 472 2,582 2,823   472 5,405 5,877 1,440
6/10/2016Chicago / West Harrison 2 IL — 4,502 21,672 52   4,502 21,724 26,226 325
10/1/2015Chicago / Western Ave IL — 670 4,718 342   670 5,060 5,730 176
10/1/2015Cicero / Ogden Ave IL — 1,590 9,371 397   1,590 9,768 11,358 328
10/1/2015Cicero / Roosevelt Rd IL — 910 3,224 354   910 3,578 4,488 126
6/10/2016Country Club Hills IL — 195 8,650 85   195 8,735 8,930 130
7/15/2003Crest Hill IL 2,301 847 2,946 1,040   968 3,865 4,833 1,307
11/8/2016Des Plaines IL — 1,645 10,630 7   1,645 10,637 12,282 45
10/1/2007Gurnee IL — 1,374 8,296 135   1,374 8,431 9,805 2,028
6/10/2016Harwood Heights IL — 1,724 14,543 125   1,724 14,668 16,392 219
12/1/2011Highland Park IL 12,678 5,798 6,016 269   5,798 6,285 12,083 844
11/4/2013Lincolnshire IL 3,585 1,438 5,128 102   1,438 5,230 6,668 422
12/1/2008Naperville / Ogden Avenue IL — 2,800 7,355 (710)  (d) 1,950 7,495 9,445 1,588
12/1/2011Naperville / State Route 59 IL 4,633 1,860 5,793 136   1,860 5,929 7,789 801
5/3/2008North Aurora IL 2,711 600 5,833 176   600 6,009 6,609 1,377
6/10/2016Round Lake Beach IL — 796 2,977 150   796 3,127 3,923 46
7/2/2012Skokie IL — 1,119 7,502 3,250   1,119 10,752 11,871 937
10/15/2002South Holland IL 2,301 839 2,879 386   865 3,239 4,104 1,248
8/1/2008Tinley Park IL — 1,823 4,794 1,010   1,548 6,079 7,627 1,148
10/10/2008Carmel IN 4,860 1,169 4,393 313   1,169 4,706 5,875 1,119
9/16/2016Greenwood IN — 457 2,954 9   457 2,963 3,420 26
9/16/2016Indianapolis / Crawfordsville Rd IN — 287 3,251 21   287 3,272 3,559 29
10/10/2008Indianapolis / Dandy Trail/Windham Lake Dr IN 5,460 850 4,545 714   850 5,259 6,109 1,269
8/31/2007Indianapolis / E 65th St IN — 588 3,457 530   588 3,987 4,575 1,089
11/30/2012Indianapolis / E 86th St IN — 646 1,294 195   646 1,489 2,135 195
9/16/2016Indianapolis / E Stop 11 Rd IN — 1,923 5,925 2   1,923 5,927 7,850 51
4/22/2016Indianapolis / Emerson Ave IN — 876 4,778 236   876 5,014 5,890 97
9/16/2016Indianapolis / Fulton Dr IN — 663 4,434 10   663 4,444 5,107 38
4/22/2016Indianapolis / Georgetown Road IN — 1,326 6,164 327   1,326 6,491 7,817 125
10/10/2008Indianapolis / Southport Rd/Kildeer Dr IN — 426 2,903 418   426 3,321 3,747 853
4/22/2016Indianapolis / Washington Street IN — 172 3,066 213   172 3,279 3,451 62
4/22/2016Indianapolis/ Lafayette Road IN — 903 3,658 305   903 3,963 4,866 74
4/22/2016Indianapolis/ Rockville Road IN — 1,531 4,076 247   1,531 4,323 5,854 82
10/10/2008Mishawaka IN 5,201 630 3,349 347   630 3,696 4,326 910
4/13/2006Wichita KS — 366 1,897 466   366 2,363 2,729 834
6/27/2011Covington KY 1,909 839 2,543 169   839 2,712 3,551 448
10/1/2015Crescent Springs KY — 120 5,313 289   120 5,602 5,722 187
10/1/2015Erlanger KY 3,799 220 7,132 258   220 7,390 7,610 244
10/1/2015Florence / Centennial Circle KY — 240 8,234 666   240 8,900 9,140 305
10/1/2015Florence / Steilen Dr KY 6,326 540 13,616 674   540 14,290 14,830 473
7/1/2005Louisville / Bardstown Rd KY 3,586 586 3,244 583   586 3,827 4,413 1,250
9/16/2016Louisville / Preston Hwy KY — 2,970 8,237 24   2,970 8,261 11,231 71
7/1/2005Louisville / Warwick Ave KY 6,745 1,217 4,611 393   1,217 5,004 6,221 1,557
12/1/2005Louisville / Wattbourne Ln KY 4,510 892 2,677 539   892 3,216 4,108 927
10/1/2015Walton KY — 290 6,245 330   290 6,575 6,865 216
8/26/2004Metairie LA 3,699 2,056 4,216 331   2,056 4,547 6,603 1,497
8/26/2004New Orleans LA 5,230 4,058 4,325 850   4,059 5,174 9,233 1,814


Date acquired
or development
completed		Store Name State Debt Land
initial cost		 Building and
improvements
initial cost		 Adjustments
and costs subsequent
to acquisition		 Notes Gross carrying amount at December 31, 2016 Accumulated
depreciation
Land       Building and improvements    Total      
6/1/2003Ashland MA 5,455 474 3,324 384   474 3,708 4,182 1,566
5/1/2004Auburn MA — 918 3,728 540   919 4,267 5,186 1,805
11/4/2013Billerica MA 7,897 3,023 6,697 238   3,023 6,935 9,958 582
5/1/2004Brockton / Centre St / Rte 123 MA — 647 2,762 347   647 3,109 3,756 1,234
11/4/2013Brockton / Oak St MA 4,929 829 6,195 486   829 6,681 7,510 589
11/9/2012Danvers MA 7,662 3,115 5,736 195   3,115 5,931 9,046 656
2/6/2004Dedham / Allied Dr MA — 2,443 7,328 1,587   2,443 8,915 11,358 3,242
3/4/2002Dedham / Milton St MA 5,737 2,127 3,041 984   2,127 4,025 6,152 1,687
5/13/2015Dedham / Providence Highway MA — 1,625 10,875 114   1,625 10,989 12,614 420
2/6/2004East Somerville MA — — — 173   — 173 173 130
7/1/2005Everett MA — 692 2,129 1,120   692 3,249 3,941 1,196
5/1/2004Foxboro MA — 759 4,158 505   759 4,663 5,422 2,174
7/2/2012Framingham MA — — — 56   — 56 56 19
5/1/2004Hudson MA 3,247 806 3,122 671   806 3,793 4,599 1,719
12/31/2007Jamaica Plain MA 9,015 3,285 11,275 766   3,285 12,041 15,326 2,873
10/18/2002Kingston MA 5,173 555 2,491 209   555 2,700 3,255 1,158
6/22/2001Lynn MA — 1,703 3,237 450   1,703 3,687 5,390 1,608
3/31/2004Marshfield MA — 1,039 4,155 273   1,026 4,441 5,467 1,545
11/14/2002Milton MA — 2,838 3,979 6,893   2,838 10,872 13,710 3,089
11/4/2013North Andover MA 3,628 773 4,120 146   773 4,266 5,039 359
10/15/1999North Oxford MA 3,704 482 1,762 671   527 2,388 2,915 1,067
2/28/2001Northborough MA 4,433 280 2,715 704   280 3,419 3,699 1,552
8/15/1999Norwood MA 7,116 2,160 2,336 1,841   2,221 4,116 6,337 1,705
7/1/2005Plainville MA 4,832 2,223 4,430 485   2,223 4,915 7,138 1,856
2/16/2016Quincy / Liberty St MA — 1,567 14,595 41   1,567 14,636 16,203 344
6/30/2016Quincy / Old Colony Ave MA — 1,238 12,362 338   1,238 12,700 13,938 165
2/6/2004Quincy / Weston Ave MA 6,910 1,359 4,078 541   1,360 4,618 5,978 1,582
5/15/2000Raynham MA — 588 2,270 929   670 3,117 3,787 1,297
12/1/2011Revere MA 4,675 2,275 6,935 361   2,275 7,296 9,571 984
6/1/2003Saugus MA 9,015 1,725 5,514 611   1,725 6,125 7,850 2,396
6/15/2001Somerville MA 11,406 1,728 6,570 948   1,731 7,515 9,246 2,987
7/1/2005Stoneham MA 5,729 944 5,241 326   944 5,567 6,511 1,716
5/1/2004Stoughton / Washington St 1 MA — 1,754 2,769 365   1,755 3,133 4,888 1,405
9/16/2016Stoughton / Washington St 2 MA — 2,189 7,047 61   2,189 7,108 9,297 62
7/2/2012Tyngsboro MA 3,341 1,843 5,004 94   1,843 5,098 6,941 602
2/6/2004Waltham MA — 3,770 11,310 1,121   3,770 12,431 16,201 4,344
9/14/2000Weymouth MA — 2,806 3,129 232   2,806 3,361 6,167 1,518
2/6/2004Woburn MA — — — 285   — 285 285 168
12/1/2006Worcester / Ararat St MA 3,889 1,350 4,433 398   1,350 4,831 6,181 1,269
5/1/2004Worcester / Millbury St MA 4,290 896 4,377 3,249   896 7,626 8,522 3,001
8/31/2007Annapolis / Renard Ct / Annex MD 8,957 1,375 8,896 425   1,376 9,320 10,696 2,409
4/17/2007Annapolis / Trout Rd MD — 5,248 7,247 381   5,247 7,629 12,876 1,966
7/1/2005Arnold MD 9,640 2,558 9,446 691   2,558 10,137 12,695 3,133
5/31/2012Baltimore / Eastern Ave 1 MD 4,327 1,185 5,051 177   1,185 5,228 6,413 649
2/13/2013Baltimore / Eastern Ave 2 MD 7,085 1,266 10,789 155   1,266 10,944 12,210 1,116
11/1/2008Baltimore / Moravia Rd MD 4,297 800 5,955 160   800 6,115 6,915 1,339
6/1/2010Baltimore / N Howard St MD — 1,900 5,277 156   1,900 5,433 7,333 962
7/1/2005Bethesda MD 25,193 3,671 18,331 1,422   3,671 19,753 23,424 6,751
11/17/2016Burtonsville MD — 10,136 11,756 —   10,136 11,756 21,892 50
10/20/2010Capitol Heights MD 7,932 1,461 9,866 259   1,461 10,125 11,586 1,711
3/7/2012Cockeysville MD 3,629 465 5,600 312   465 5,912 6,377 805
7/1/2005Columbia MD 10,990 1,736 9,632 386   1,736 10,018 11,754 3,090
12/2/2005Edgewood / Pulaski Hwy 1 MD — 1,000 — (575)  (d) 425 — 425 —
9/10/2015Edgewood / Pulaski Hwy 2 MD — 794 5,178 253   794 5,431 6,225 200
11/2/2016Forestville MD — 3,590 11,003 70   3,590 11,073 14,663 48
1/11/2007Ft. Washington MD — 4,920 9,174 327   4,920 9,501 14,421 2,508
7/2/2012Gambrills MD 4,672 1,905 7,104 207   1,905 7,311 9,216 851
9/16/2016Germantown MD — 7,114 11,316 —   7,114 11,316 18,430 97
7/8/2011Glen Burnie MD 6,331 1,303 4,218 361   1,303 4,579 5,882 782
6/10/2013Hanover MD — 2,160 11,340 88   2,160 11,428 13,588 1,048
2/6/2004Lanham MD 11,373 3,346 10,079 1,595   2,618 12,402 15,020 4,171
12/27/2007Laurel MD 5,868 3,000 5,930 215   3,000 6,145 9,145 1,498
12/27/2012Lexington Park MD — 4,314 8,412 194   4,314 8,606 12,920 923
9/17/2008Pasadena / Fort Smallwood Rd MD 5,926 1,869 3,056 772   1,869 3,828 5,697 1,095
3/24/2011Pasadena / Mountain Rd MD — 3,500 7,407 169   3,500 7,576 11,076 1,120
8/1/2011Randallstown MD 4,465 764 6,331 344   764 6,675 7,439 1,008
9/1/2006Rockville MD 11,950 4,596 11,328 564   4,596 11,892 16,488 3,216
7/1/2005Towson / East Joppa Rd 1 MD 10,861 861 4,742 269   861 5,011 5,872 1,609
7/2/2012Towson / East Joppa Rd 2 MD 5,909 1,094 9,598 175   1,094 9,773 10,867 1,151
2/2/2016Wheaton MD — 12,738 12,894 397   12,738 13,291 26,029 310
7/2/2012Belleville MI — 954 4,984 315   954 5,299 6,253 613
7/1/2005Grandville MI — 726 1,298 472   726 1,770 2,496 711
7/1/2005Mt Clemens MI 2,824 798 1,796 563   798 2,359 3,157 827
9/16/2016Southgate MI — 960 7,247 33   960 7,280 8,240 63
10/12/2016Plymouth MN — 1,528 16,030 5   1,528 16,035 17,563 103
8/31/2007Florissant MO 3,207 1,241 4,648 356   1,241 5,004 6,245 1,392
7/1/2005Grandview MO 3,081 612 1,770 594   612 2,364 2,976 854
6/1/2000St Louis / Forest Park MO 2,395 156 1,313 691   113 2,047 2,160 967
8/31/2007St Louis / Gravois Rd MO 2,615 676 3,551 357   676 3,908 4,584 1,107
6/1/2000St Louis / Halls Ferry Rd MO 2,422 631 2,159 791   690 2,891 3,581 1,267
8/31/2007St Louis / Old Tesson Rd MO 6,173 1,444 4,162 483   1,444 4,645 6,089 1,274
10/1/2015Biloxi MS — 770 3,947 349   770 4,296 5,066 134
10/1/2015Canton MS — 1,240 7,767 465   1,240 8,232 9,472 268
10/1/2015Ridgeland MS — 410 9,135 426   410 9,561 9,971 307
10/15/2013Cary NC 4,139 3,614 1,788 20   3,614 1,808 5,422 149
5/5/2015Charlotte / Monroe Rd NC 4,637 4,050 6,867 181   4,050 7,048 11,098 282
12/8/2015Charlotte / S Tryon St NC — 1,372 3,931 29   1,372 3,960 5,332 109
11/14/2016Charlotte / South Blvd NC — 2,790 10,364 2   2,790 10,366 13,156 44
6/19/2015Charlotte / Wendover Rd NC — 1,408 5,461 220   1,408 5,681 7,089 227
10/1/2015Concord NC — 770 4,873 633   770 5,506 6,276 186
12/11/2014Greensboro / High Point Rd NC 3,637 1,069 4,199 134   1,069 4,333 5,402 234
12/11/2014Greensboro / Lawndale Drive NC 6,412 3,725 7,036 208   3,723 7,246 10,969 391
12/11/2014Hickory / 10th Ave NC 3,252 875 5,418 107   875 5,525 6,400 298
10/1/2015Hickory / 18th Street NC — 400 5,844 320   400 6,164 6,564 202
10/1/2015Morganton NC — 600 5,724 291   600 6,015 6,615 193
6/18/2014Raleigh NC — 2,940 4,265 107   2,940 4,372 7,312 295
12/11/2014Winston/Salem / Peters Creek Pkwy NC 2,941 1,548 3,495 136   1,548 3,631 5,179 200
12/11/2014Winston/Salem / University Pkwy NC 4,207 1,131 5,084 129   1,131 5,213 6,344 278
4/15/1999Merrimack NH 3,747 754 3,299 615   817 3,851 4,668 1,520
7/1/2005Nashua NH — — 755 136   — 891 891 405
1/1/2005Avenel NJ — 1,518 8,037 593   1,518 8,630 10,148 2,780
12/28/2004Bayville NJ 3,545 1,193 5,312 641   1,193 5,953 7,146 1,943
9/1/2008Bellmawr NJ 3,296 3,600 4,765 421   3,675 5,111 8,786 1,060
7/18/2012Berkeley Heights NJ 6,792 1,598 7,553 210   1,598 7,763 9,361 921
12/18/2014Burlington NJ 3,793 477 6,534 248   477 6,782 7,259 366
10/7/2015Cherry Hill / Church Rd NJ — 1,057 6,037 313   1,057 6,350 7,407 206
11/30/2012Cherry Hill / Marlton Pike NJ — 2,323 1,549 318   2,323 1,867 4,190 245
9/16/2016Cherry Hill / Old Cuthbert Rd NJ — 1,295 4,125 8   1,295 4,133 5,428 35
12/18/2014Cherry Hill / Rockhill Rd NJ 1,960 536 3,407 58   536 3,465 4,001 190
11/30/2012Cranbury NJ 6,910 3,543 5,095 1,196   3,543 6,291 9,834 693
12/18/2014Denville NJ 8,802 584 14,398 120   584 14,518 15,102 767
12/31/2001Edison NJ 8,591 2,519 8,547 1,788   2,518 10,336 12,854 3,867
12/31/2001Egg Harbor Township NJ 3,868 1,724 5,001 1,631   1,724 6,632 8,356 2,482
3/15/2007Ewing NJ — 1,552 4,720 (42)  (c, d) 1,562 4,668 6,230 1,274
7/18/2012Fairfield NJ 5,919 — 9,402 167   — 9,569 9,569 1,119
11/30/2012Fort Lee / Bergen Blvd NJ 12,227 4,402 9,831 347   4,402 10,178 14,580 1,124
10/1/2015Fort Lee / Main St NJ — 2,280 27,409 357   2,280 27,766 30,046 899
3/15/2001Glen Rock NJ — 1,109 2,401 576   1,222 2,864 4,086 1,130
12/18/2014Hackensack / Railroad Ave NJ 7,476 2,053 9,882 99   2,053 9,981 12,034 532
7/1/2005Hackensack / South River St NJ — 2,283 11,234 919   2,283 12,153 14,436 3,994
8/23/2012Hackettstown NJ 5,799 2,144 6,660 176   2,144 6,836 8,980 814
7/2/2012Harrison NJ 3,465 300 6,003 261   300 6,264 6,564 754
12/31/2001Hazlet NJ 7,454 1,362 10,262 1,796   1,362 12,058 13,420 4,484
9/16/2016Ho Ho Kus NJ — 13,054 31,770 39   13,054 31,809 44,863 274
7/2/2002Hoboken NJ 17,029 2,687 6,092 340   2,687 6,432 9,119 2,489
12/31/2001Howell NJ — 2,440 3,407 1,198   2,440 4,605 7,045 1,683
12/31/2001Iselin NJ 4,628 505 4,524 603   505 5,127 5,632 2,203
10/1/2015Jersey City NJ — 8,050 16,342 484   8,050 16,826 24,876 551
11/30/2012Lawnside NJ 4,930 1,249 5,613 403   1,249 6,016 7,265 675
2/6/2004Lawrenceville NJ 5,096 3,402 10,230 822   3,402 11,052 14,454 3,766
7/1/2005Linden NJ 3,612 1,517 8,384 323   1,517 8,707 10,224 2,679
12/22/2004Lumberton NJ 3,875 831 4,060 338   831 4,398 5,229 1,526
3/15/2001Lyndhurst NJ — 2,679 4,644 1,063   2,928 5,458 8,386 2,107
8/23/2012Mahwah NJ 10,784 1,890 13,112 325   1,890 13,437 15,327 1,609
12/16/2011Maple Shade NJ 3,920 1,093 5,492 208   1,093 5,700 6,793 803
12/7/2001Metuchen NJ 5,314 1,153 4,462 373   1,153 4,835 5,988 1,933
8/28/2012Montville NJ 8,583 1,511 11,749 164   1,511 11,913 13,424 1,378
2/6/2004Morrisville NJ — 2,487 7,494 2,450   1,688 10,743 12,431 3,219
7/2/2012Mt Laurel NJ 2,939 329 5,217 236   329 5,453 5,782 671
11/2/2006Neptune NJ 7,130 4,204 8,906 471   4,204 9,377 13,581 2,570
7/18/2012Newark NJ 7,229 806 8,340 167   806 8,507 9,313 1,007
7/1/2005North Bergen / 83rd St NJ 10,744 2,299 12,728 567   2,299 13,295 15,594 4,145
10/6/2011North Bergen / Kennedy Blvd NJ — 861 17,127 432   861 17,559 18,420 2,377
7/25/2003North Bergen / River Rd NJ 8,684 2,100 6,606 417   2,100 7,023 9,123 2,571
7/18/2012North Brunswick NJ 6,044 2,789 4,404 207   2,789 4,611 7,400 572
12/31/2001Old Bridge NJ 5,445 2,758 6,450 2,051   2,758 8,501 11,259 3,149
5/1/2004Parlin / Cheesequake Rd NJ — — 5,273 496   — 5,769 5,769 2,585
7/1/2005Parlin / Route 9 North NJ — 2,517 4,516 605   2,517 5,121 7,638 1,881
7/18/2012Parsippany NJ 6,235 2,353 7,798 142   2,354 7,939 10,293 960
6/2/2011Pennsauken NJ 3,622 1,644��3,115 409   1,644 3,524 5,168 617
10/1/2015Riverdale NJ 7,217 2,000 14,541 217   2,000 14,758 16,758 476
12/9/2009South Brunswick NJ 2,846 1,700 5,835 215   1,700 6,050 7,750 1,118
7/1/2005Toms River / Route 37 East 1 NJ 4,762 1,790 9,935 486   1,790 10,421 12,211 3,340
10/1/2015Toms River / Route 37 East 2 NJ — 1,800 10,765 323   1,800 11,088 12,888 362
10/1/2015Toms River / Route 9 NJ — 980 4,717 299   980 5,016 5,996 169
10/1/2015Trenton NJ — 2,180 8,007 219   2,180 8,226 10,406 269
12/28/2004Union / Green Ln NJ 6,021 1,754 6,237 432   1,754 6,669 8,423 2,247
11/30/2012Union / Route 22 West NJ 6,678 1,133 7,239 221   1,133 7,460 8,593 818
11/30/2012Watchung NJ 6,584 1,843 4,499 262   1,843 4,761 6,604 556
11/30/2012Albuquerque / Airport Dr NW NM — 755 1,797 84   755 1,881 2,636 219
8/31/2007Albuquerque / Calle Cuervo NW NM 4,364 1,298 4,628 753   1,298 5,381 6,679 1,458
1/7/2016Albuquerque / Eagle Ranch Rd NM — 1,346 5,558 156   1,346 5,714 7,060 157
9/16/2016Albuquerque / Ellison Rd NW NM — 1,182 5,813 39   1,182 5,852 7,034 51
9/16/2016Albuquerque / Eubank SE NM — 1,446 7,647 71   1,446 7,718 9,164 67
9/16/2016Albuquerque / Legion Rd NE NM — — 4,861 —   — 4,861 4,861 42
11/17/2016Albuquerque / Lomas Blvd NE NM — 544 3,081 —   544 3,081 3,625 13
9/16/2016Albuquerque / Montgomery Blvd NE 1 NM — 1,601 5,013 1   1,601 5,014 6,615 43
3/29/2016Albuquerque / Montgomery Blvd NE 2 NM — 2,842 7,965 153   2,842 8,118 10,960 176
1/7/2016Rio Rancho / Golf Course Rd NM — 1,667 6,836 247   1,667 7,083 8,750 188
3/29/2016Santa Fe / Pacheco St NM — 9,079 8,620 289   9,079 8,909 17,988 194
7/2/2012Santa Fe / West San Mateo Rd NM 6,263 3,066 7,366 558   3,066 7,924 10,990 949
10/1/2015Henderson / Racetrack Rd NV 4,705 1,470 6,348 343   1,470 6,691 8,161 221
11/30/2012Henderson / Stephanie Pl NV — 2,934 8,897 293   2,934 9,190 12,124 1,026
10/1/2015Las Vegas / Bonanza Rd NV 4,011 820 6,716 209   820 6,925 7,745 228
10/1/2015Las Vegas / Durango Dr NV — 1,140 4,384 319   1,140 4,703 5,843 157
6/22/2011Las Vegas / Jones Blvd NV 2,373 1,441 1,810 176   1,441 1,986 3,427 340
10/1/2015Las Vegas / Las Vegas Blvd NV — 2,830 6,834 369   2,830 7,203 10,033 238
2/22/2000Las Vegas / N Lamont St NV — 251 717 553   278 1,243 1,521 653
11/1/2013Las Vegas / North Lamb Blvd NV 2,601 279 3,900 199   279 4,099 4,378 764
10/1/2015Las Vegas / Pecos Rd NV — 1,420 5,900 411   1,420 6,311 7,731 209
10/1/2015Las Vegas / Rancho Dr NV — 590 5,899 159   590 6,058 6,648 198
10/1/2015Las Vegas / W Charleston Blvd NV — 550 1,319 109   550 1,428 1,978 50
2/2/2016Las Vegas / W Oakey Blvd NV 3,776 645 4,568 —   645 4,568 5,213 107
11/30/2012Las Vegas / W Sahara Ave NV 4,226 773 6,006 313   773 6,319 7,092 699
11/30/2012Las Vegas / W Tropicana Ave NV 4,110 400 4,936 109   400 5,045 5,445 568
10/1/2015North Las Vegas NV — 1,260 4,589 184   1,260 4,773 6,033 157
10/1/2015Ballston Spa NY — 890 9,941 59   890 10,000 10,890 321
12/19/2007Bohemia NY — 1,456 1,398 408   1,456 1,806 3,262 495
12/1/2011Bronx / Edson Av NY 16,840 3,450 21,210 453   3,450 21,663 25,113 2,918
8/26/2004Bronx / Fordham Rd NY — 3,995 11,870 3,140   3,995 15,010 19,005 4,324
10/2/2008Brooklyn / 3rd Ave NY 18,550 12,993 10,405 405   12,993 10,810 23,803 2,422
7/2/2012Brooklyn / 64th St NY 20,805 16,188 23,309 471   16,257 23,711 39,968 2,780
5/21/2010Brooklyn / Atlantic Ave NY 7,598 2,802 6,536 351   2,802 6,887 9,689 1,269
12/11/2014Brooklyn / Avenue M NY — 12,085 7,665 —   12,085 7,665 19,750 —
10/2/2008Centereach NY 4,014 2,226 1,657 236   2,226 1,893 4,119 496
8/10/2012Central Valley NY — 2,800 12,173 596   2,800 12,769 15,569 1,564
11/23/2010Freeport NY — 5,676 3,784 908   5,676 4,692 10,368 1,063
7/2/2012Hauppauge NY 5,383 1,238 7,095 364   1,238 7,459 8,697 905
7/2/2012Hicksville NY 8,477 2,581 10,677 132   2,581 10,809 13,390 1,252
7/2/2012Kingston NY 4,703 837 6,199 182   837 6,381 7,218 766
2/2/2016Long Island City NY — 32,361 24,017 40   32,362 24,056 56,418 566
11/26/2002Mt Vernon / N Mac Questen Pkwy NY 7,726 1,926 7,622 1,075   1,926 8,697 10,623 3,199
7/1/2005Mt Vernon / Northwest St NY — 1,585 6,025 2,850   1,585 8,875 10,460 3,065
2/7/2002Nanuet NY 9,581 2,072 4,644 1,779   2,738 5,757 8,495 2,261
7/1/2005New Paltz NY 4,215 2,059 3,715 700   2,059 4,415 6,474 1,499
7/1/2005New York NY 17,825 3,060 16,978 795   3,060 17,773 20,833 5,579
12/4/2000Plainview NY 7,367 4,287 3,710 751   4,287 4,461 8,748 2,037
7/18/2012Poughkeepsie NY 5,799 1,038 7,862 281   1,038 8,143 9,181 959
7/2/2012Ridge NY 5,940 1,762 6,934 243   1,762 7,177 8,939 822


Date acquired
or development
completed
Store Name State Debt 
Land
initial cost
 
Building and
improvements
initial cost
 
Adjustments and
costs subsequent
to acquisition
 Notes Gross carrying amount at December 31, 2016 
Accumulated
depreciation
Land       Building and improvements     Total      
6/27/2011Cincinnati / Glencrossing Way OH — 1,217 1,941 270   1,217 2,211 3,428 355
6/27/2011Cincinnati / Glendale/Milford Rd OH 4,458 1,815 5,733 278   1,815 6,011 7,826 989
6/27/2011Cincinnati / Hamilton Ave OH — 2,941 2,177 300   2,941 2,477 5,418 470
6/27/2011Cincinnati / Wooster Pk OH 5,275 1,445 3,755 301   1,445 4,056 5,501 693
9/16/2016Columbus / E Main St OH — 652 2,147 23   652 2,170 2,822 19
7/1/2005Columbus / Innis Rd OH 4,655 483 2,654 993   483 3,647 4,130 1,309
11/1/2013Columbus / Kenny Rd OH 4,718 1,227 5,057 275   1,227 5,332 6,559 942
11/4/2013Fairfield OH 3,717 904 3,856 331   904 4,187 5,091 382
6/27/2011Hamilton OH — 673 2,910 164   673 3,074 3,747 481
11/30/2012Hilliard OH 2,033 1,613 2,369 269   1,613 2,638 4,251 350
7/1/2005Kent OH 2,301 220 1,206 281   220 1,487 1,707 591
6/27/2011Lebanon OH 3,983 1,657 1,566 346   1,657 1,912 3,569 357
11/30/2012Mentor / Heisley Rd OH 1,233 658 1,267 358   658 1,625 2,283 228
7/2/2012Mentor / Mentor Ave OH — 409 1,609 195   409 1,804 2,213 252
6/27/2011Middletown OH — 534 1,047 131   533 1,179 1,712 213
11/1/2013Whitehall OH 1,958 726 1,965 131   726 2,096 2,822 366
7/2/2012Willoughby OH — 155 1,811 118   155 1,929 2,084 232
7/1/2005Aloha / NW 185th Ave OR 5,922 1,221 6,262 317   1,221 6,579 7,800 2,125
7/2/2012Aloha / SW 229th Ave OR 4,486 2,014 5,786 183   2,014 5,969 7,983 712
11/24/2015Hillsboro OR — 732 9,158 167   732 9,325 10,057 277
9/15/2009King City OR 2,894 2,520 6,845 83   2,520 6,928 9,448 1,263
12/28/2004Bensalem / Bristol Pike PA 3,117 1,131 4,525 505   1,131 5,030 6,161 1,648
3/30/2006Bensalem / Knights Rd. PA — 750 3,015 252   750 3,267 4,017 990
10/1/2015Collegeville PA — 490 6,947 258   490 7,205 7,695 241
11/15/1999Doylestown PA — 220 3,442 1,168   521 4,309 4,830 1,728
5/1/2004Kennedy Township PA 2,498 736 3,173 329   736 3,502 4,238 1,533
2/6/2004Philadelphia / Roosevelt Bl PA 5,386 1,965 5,925 1,596   1,965 7,521 9,486 2,605
11/1/2013Philadelphia / Wayne Ave PA — 596 10,368 75   596 10,443 11,039 1,438
8/3/2000Pittsburgh / E Entry Dr PA 2,498 991 1,990 946   1,082 2,845 3,927 1,257
10/1/2015Pittsburgh / Landings Dr PA — 400 3,936 412   400 4,348 4,748 145
5/1/2004Pittsburgh / Penn Ave PA 3,684 889 4,117 689   889 4,806 5,695 2,156
10/1/2015Skippack PA — 720 4,552 245   720 4,797 5,517 162
10/1/2015West Mifflin PA — 840 8,931 400   840 9,331 10,171 302
1/1/2011Willow Grove PA 4,995 1,297 4,027 370   1,297 4,397 5,694 761
7/1/2005Johnston / Hartford Ave RI 6,226 2,658 4,799 669   2,658 5,468 8,126 1,857
12/1/2011Johnston / Plainfield RI 1,771 533 2,127 241   533 2,368 2,901 315
10/1/2015Bluffton SC — 1,010 8,673 181   1,010 8,854 9,864 288
10/1/2015Charleston / Ashley River Rd SC — 500 5,390 326   500 5,716 6,216 196
8/26/2004Charleston / Glenn McConnell Pkwy SC 3,359 1,279 4,171 386   1,279 4,557 5,836 1,509
10/1/2015Charleston / Maybank Hwy SC 5,631 600 9,364 432   600 9,796 10,396 321
10/1/2015Charleston / Savannah Hwy SC — 370 3,794 250   370 4,044 4,414 129
3/30/2015Columbia / Clemson Rd SC — 1,483 5,415 77   1,483 5,492 6,975 254
7/19/2012Columbia / Decker Blvd SC 3,482 1,784 2,745 304   1,784 3,049 4,833 352
8/26/2004Columbia / Harban Ct SC 2,692 838 3,312 371   839 3,682 4,521 1,260
10/1/2015Columbia / Percival Rd SC — 480 2,115 264   480 2,379 2,859 82
8/26/2004Goose Creek SC — 1,683 4,372 1,102   1,683 5,474 7,157 1,758
10/1/2015Greenville / Laurens Rd SC — 620 8,467 330   620 8,797 9,417 281
5/10/2016Greenville / Woodruff Rd SC — 1,258 6,912 108   1,258 7,020 8,278 121
10/1/2015Lexington / Northpoint Dr SC — 780 5,732 303   780 6,035 6,815 204
10/1/2015Lexington / St Peters Church Rd SC — 750 1,481 96   750 1,577 2,327 51
10/1/2015Mt Pleasant / Bowman Rd SC — 1,740 3,094 238   1,740 3,332 5,072 111
10/1/2015Mt Pleasant / Hwy 17 N SC 4,729 4,600 2,342 287   4,600 2,629 7,229 100
10/1/2015Mt Pleasant / Stockade Ln SC 14,472 11,680 19,626 488   11,680 20,114 31,794 646
10/1/2015Myrtle Beach SC — 510 3,921 260   510 4,181 4,691 137
3/30/2015North Charleston / Dorchester Road SC 3,213 280 5,814 82   280 5,896 6,176 273
10/1/2015North Charleston / Rivers Ave SC 6,176 1,250 8,753 682   1,250 9,435 10,685 307
8/26/2004Summerville SC — 450 4,454 267   450 4,721 5,171 1,580
12/11/2014Taylors SC 5,323 1,433 6,071 183   1,433 6,254 7,687 335
9/16/2016Antioch TN — 2,056 3,921 17   2,056 3,938 5,994 35
7/2/2012Bartlett TN — 632 3,798 147   632 3,945 4,577 470
4/15/2011Cordova / Houston Levee Rd TN 1,977 652 1,791 131   652 1,922 2,574 331
7/1/2005Cordova / N Germantown Pkwy 1 TN 3,306 852 2,720 521   852 3,241 4,093 1,084
11/1/2013Cordova / N Germantown Pkwy 2 TN 6,794 8,187 4,628 227   8,187 4,855 13,042 1,223
1/5/2007Cordova / Patriot Cove TN — 894 2,680 235   894 2,915 3,809 797
11/30/2012Franklin TN — 3,357 8,984 278   3,357 9,262 12,619 1,039
10/1/2015Knoxville / Ebenezer Rd TN 7,392 470 13,299 211   470 13,510 13,980 436
10/1/2015Knoxville / Lovell Rd TN 5,202 1,360 8,475 209   1,360 8,684 10,044 279
10/1/2015Lenoir City TN 5,550 850 10,738 453   850 11,191 12,041 363
7/2/2012Memphis / Covington Way TN — 274 2,623 88   274 2,711 2,985 323
2/2/2016Memphis / Gateway Dr TN — 305 3,345 40   305 3,385 3,690 82
10/1/2015Memphis / Hollywood St TN — 570 8,893 315   570 9,208 9,778 294
11/17/2016Memphis / Kirby Pkwy TN — 907 2,873 1   907 2,874 3,781 12
2/2/2016Memphis / Madison Ave TN — 193 2,070 1   193 2,071 2,264 48
11/30/2012Memphis / Mt Moriah TN 2,533 1,617 2,875 478   1,617 3,353 4,970 358
11/1/2013Memphis / Mt Moriah Terrace TN 7,925 1,313 2,928 296   1,313 3,224 4,537 530
7/2/2012Memphis / Raleigh/LaGrange TN — 110 1,280 86   110 1,366 1,476 170
11/1/2013Memphis / Riverdale Bend TN 4,236 803 4,635 236   803 4,871 5,674 728
11/30/2012Memphis / Summer Ave 1 TN 3,313 1,040 3,867 423   1,040 4,290 5,330 473
9/16/2016Memphis / Summer Ave 2 TN — 578 2,548 10   578 2,558 3,136 22
11/17/2016Memphis / Winchester Rd TN — 1,301 4,722 4   1,301 4,726 6,027 20
4/13/2006Nashville TN 8,263 390 2,598 1,279   390 3,877 4,267 1,341
11/22/2006Allen TX 4,312 901 5,553 309   901 5,862 6,763 1,626
8/26/2004Arlington / E Pioneer Pkwy TX 3,181 534 2,525 619   534 3,144 3,678 1,165
10/1/2015Arlington / Randol Mill Rd TX — 630 5,214 365   630 5,579 6,209 187
4/15/2015Arlington / US 287 Frontage Rd TX 2,633 567 5,340 353   567 5,693 6,260 272
4/15/2015Arlington / Watson Rd TX 2,647 698 3,862 258   698 4,120 4,818 209
1/13/2015Austin / 1st Street TX 4,139 807 7,689 170   807 7,859 8,666 406
1/13/2015Austin / Brodie Lane TX 5,717 1,155 8,552 187   1,155 8,739 9,894 461
8/26/2004Austin / Burnet Rd TX 8,759 870 4,455 532   870 4,987 5,857 1,686
1/13/2015Austin / Capital of Texas Hwy TX 10,175 10,117 13,248 163   10,117 13,411 23,528 693
11/1/2013Austin / McNeil Dr TX 4,846 3,411 4,502 83   3,411 4,585 7,996 740
8/8/2014Austin / North Lamar Blvd TX 4,949 1,047 9,969 186   1,047 10,155 11,202 638
1/14/2016Austin / Slaughter Creek Dr TX — 2,039 8,006 443   2,039 8,449 10,488 214
4/14/2015Baytown TX 6,486 619 7,861 90   619 7,951 8,570 311
1/14/2016Belton TX — 801 2,550 444   801 2,994 3,795 83
1/14/2016Cedar Park TX — 655 8,191 119   655 8,310 8,965 215
4/15/2015Coppell / Belt Line Rd TX 4,295 724 5,743 206   724 5,949 6,673 271
10/1/2015Coppell / Denton Tap Rd TX — 2,270 9,333 158   2,270 9,491 11,761 307
4/15/2015Dallas / Clark Rd TX 4,910 1,837 8,426 395   1,837 8,821 10,658 407
8/26/2004Dallas / E Northwest Hwy TX 15,213 4,432 6,181 1,371   4,432 7,552 11,984 2,514
4/13/2006Dallas / Garland Rd TX 4,475 337 2,216 642   337 2,858 3,195 1,056
4/15/2015Dallas / Haskell Ave TX — 275 11,183 278   275 11,461 11,736 516
5/4/2006Dallas / Inwood Rd TX 13,330 1,980 12,501 565   1,979 13,067 15,046 3,721
4/15/2015Dallas / Lyndon B Johnson Freeway TX 4,546 1,729 7,876 437   1,729 8,313 10,042 384
11/1/2013Dallas / N Central Expressway TX 16,794 13,392 15,019 778   13,392 15,797 29,189 1,351
7/2/2012Dallas / Preston Rd 1 TX 5,113 921 7,656 140   921 7,796 8,717 939
8/10/2012Dallas / Preston Rd 2 TX 4,278 2,542 3,274 283   2,542 3,557 6,099 485
4/15/2015Dallas / Shiloh Rd TX 3,243 781 7,104 317   781 7,421 8,202 342
10/1/2015Dallas / W Northwest Hwy TX — 1,320 6,547 460   1,320 7,007 8,327 233
4/15/2015Dallas / Walton Walker Blvd TX 2,904 547 5,970 301   547 6,271 6,818 290
4/15/2015DeSoto TX 5,322 821 8,298 234   821 8,532 9,353 387
4/15/2015Duncanville / E Hwy 67 TX 3,991 1,328 4,997 251   1,328 5,248 6,576 245
4/15/2015Duncanville / E Wheatland Rd TX 3,650 793 7,062 233   793 7,295 8,088 341
10/1/2015El Paso / Desert Blvd TX — 890 3,207 288   890 3,495 4,385 109
10/1/2015El Paso / Dyer St TX — 1,510 5,034 433   1,510 5,467 6,977 179
10/1/2015El Paso / Joe Battle Blvd 1 TX — 1,010 5,238 251   1,010 5,489 6,499 181
10/1/2015El Paso / Joe Battle Blvd 2 TX — 850 2,775 262   850 3,037 3,887 102
10/1/2015El Paso / Woodrow Bean Dr TX — 420 1,752 176   420 1,928 2,348 65
5/8/2013Euless / Mid/Cities Blvd TX 4,240 1,374 5,636 137   1,374 5,773 7,147 571
4/1/2011Euless / W Euless Blvd TX 2,810 671 3,213 2,036   671 5,249 5,920 811
12/9/2013Fort Worth / Mandy Lane TX 2,060 2,033 2,495 154   2,033 2,649 4,682 239
10/25/2016Fort Worth / Mansfield Hwy TX — 772 5,880 63   772 5,943 6,715 38
8/26/2004Fort Worth / W Rosedale St TX 4,000 631 5,794 425   630 6,220 6,850 2,093
11/4/2013Fort Worth / White Settlement Rd TX 3,585 3,158 2,512 89   3,158 2,601 5,759 229
11/4/2013Garland / Beltline Rd TX 3,267 1,424 2,209 217   1,424 2,426 3,850 226
4/15/2015Garland / Texas 66 TX 4,598 991 6,999 200   991 7,199 8,190 335
1/7/2016Georgetown / Dawn Dr TX — 1,055 5,843 482   1,055 6,325 7,380 161
8/26/2004Grand Prairie / N Hwy 360 1 TX 2,370 551 2,330 609   551 2,939 3,490 996
8/10/2012Grand Prairie / N Hwy 360 2 TX 3,048 2,327 1,551 189   2,327 1,740 4,067 242
3/21/2016Houston / Eldridge Pwy TX — 3,428 6,423 252   3,428 6,675 10,103 143
10/6/2016Houston / Fuqua St TX — 931 5,864 94   931 5,958 6,889 39
2/5/2014Houston / Katy Fwy 1 TX — 1,767 12,368 55   1,767 12,423 14,190 921
11/13/2015Houston / Katy Fwy 2 TX — 6,643 7,551 603   6,643 8,154 14,797 248
12/14/2010Houston / Ryewater Dr TX — 402 1,870 240   402 2,110 2,512 402
10/1/2015Houston / Senate Ave TX — 1,510 5,235 342   1,510 5,577 7,087 180
11/1/2013Houston / South Main TX 4,196 2,017 4,181 304   2,017 4,485 6,502 772
4/13/2006Houston / Southwest Freeway TX 8,555 2,596 8,735 419   2,596 9,154 11,750 2,650
2/29/2012Houston / Space Center Blvd TX 5,470 1,036 8,133 288   1,036 8,421 9,457 1,079
4/15/2015Irving / N State Hwy 161 TX — 951 5,842 265   951 6,107 7,058 276
4/15/2015Irving / Story Rd TX — 585 5,445 262   585 5,707 6,292 260
10/1/2015Kemah TX 12,305 2,720 26,547 434   2,720 26,981 29,701 871
1/7/2016Killeen / Fort Hood St TX — 1,683 6,447 353   1,683 6,800 8,483 172
11/4/2013Killeen / Jasper Rd TX 2,601 1,207 1,688 456   1,207 2,144 3,351 216
12/14/2010La Porte TX — 1,608 2,351 353   1,608 2,704 4,312 544
8/12/2016Lewisville / Interstate 35 E TX — 1,804 8,056 25   1,804 8,081 9,885 86
4/15/2015Lewisville / State Hwy 121 TX 4,929 2,665 6,399 272   2,665 6,671 9,336 305
1/7/2016Manor / Harris Branch Pkwy TX — 2,501 9,582 403   2,501 9,985 12,486 258
4/15/2015Mansfield TX 4,243 925 7,411 225   925 7,636 8,561 356
4/15/2015Mesquite TX 5,536 1,910 6,580 401   1,910 6,981 8,891 309
6/2/2016Midland / 2504 N Loop 250 W TX — 1,469 5,666 281   1,469 5,947 7,416 84
10/1/2015Midland / Andrews Hwy TX — 1,430 8,353 501   1,430 8,854 10,284 290
6/2/2016Midland / Caldera Blvd TX — 2,263 7,451 192   2,263 7,643 9,906 112
10/1/2015Midland / Loop 250 N TX — 1,320 10,291 323   1,320 10,614 11,934 345
6/2/2016Odessa / Grandview Ave TX — 2,084 7,844 178   2,084 8,022 10,106 110
6/2/2016Odessa / Kermit Hwy TX — 2,228 7,855 163   2,228 8,018 10,246 113
10/1/2015Pearland TX 5,738 3,400 7,812 213   3,400 8,025 11,425 260
4/15/2015Plano / 14th Street TX 5,354 1,681 7,606 231   1,681 7,837 9,518 358
4/15/2015Plano / K Ave 1 TX 5,445 1,631 8,498 507   1,631 9,005 10,636 425
4/15/2015Plano / K Ave 2 TX 4,041 1,298 5,293 175   1,298 5,468 6,766 248
11/22/2006Plano / Plano Parkway TX 5,080 1,010 6,203 564   1,010 6,767 7,777 1,885
11/22/2006Plano / Spring Creek TX 4,413 614 3,775 379   613 4,155 4,768 1,180
11/1/2013Plano / Wagner Way TX 5,890 2,753 4,353 151   2,753 4,504 7,257 824
10/6/2016Rosenberg TX — 1,308 5,687 28   1,308 5,715 7,023 36
8/10/2006Rowlett TX 2,046 1,002 2,601 1,490   1,003 4,090 5,093 915
8/26/2004San Antonio / Culebra Rd TX 2,152 1,269 1,816 739   1,270 2,554 3,824 1,032
12/14/2007San Antonio / DeZavala Rd TX 6,063 2,471 3,556 1,439  (e) 2,471 4,995 7,466 896
10/6/2016San Antonio / Loop 1604 W TX — 1,549 6,604 30   1,549 6,634 8,183 42
10/23/2015San Antonio / San Pedro Ave TX — 1,140 7,560 225   1,140 7,785 8,925 246
8/26/2004San Antonio / Westchase Dr TX 2,420 253 1,496 280   253 1,776 2,029 637
10/1/2015Seabrook TX — 1,910 8,564 246   1,910 8,810 10,720 291
4/13/2006South Houston TX 2,791 478 4,069 857   478 4,926 5,404 1,620
7/2/2012Spring / I/45 North TX 3,544 506 5,096 493   506 5,589 6,095 685
8/2/2011Spring / Treaschwig Rd TX 1,873 978 1,347 249   979 1,595 2,574 271
2/24/2015The Woodlands TX 7,744 1,511 11,861 221   1,511 12,082 13,593 603
4/8/2015Trenton TX — 300 2,375 3,696   300 6,071 6,371 129
10/1/2015Weatherford TX — 630 5,932 485   630 6,417 7,047 228
4/15/2016West Spicewood TX — 2,722 8,122 76   2,722 8,198 10,920 158


Date
acquired
or
development
completed
Store Name State Debt Land
initial cost		 Building and
improvements
initial cost		 Adjustments and
costs subsequent
to acquisition		 Notes Gross carrying amount at December 31, 2016 Accumulated
depreciation
Land       Building and improvements     Total      
10/20/2010East Millcreek UT 2,934 986 3,455 2,658   986 6,113 7,099 639
11/23/2010Murray / Cottonwood St UT 3,611 571 986 2,340   571 3,326 3,897 576
10/4/2016Murray / Van Winkle Expressway UT — — 8,511 3   — 8,514 8,514 84
4/1/2011Orem UT 1,918 841 2,335 308   841 2,643 3,484 434
6/1/2004Salt Lake City UT 3,293 642 2,607 459   642 3,066 3,708 1,086
7/1/2005Sandy / South 700 East 1 UT 5,051 1,349 4,372 795   1,349 5,167 6,516 1,620
9/28/2012Sandy / South 700 East 2 UT 8,688 2,063 5,202 1,539   2,063 6,741 8,804 681
11/23/2010West Jordan UT 2,041 735 2,146 484   735 2,630 3,365 503
7/1/2005West Valley City UT 2,574 461 1,722 193   461 1,915 2,376 658
7/2/2012Alexandria / N Henry St VA 15,659 5,029 18,943 1,641   5,029 20,584 25,613 2,198
6/6/2007Alexandria / S Dove St VA — 1,620 13,103 1,870   1,620 14,973 16,593 3,766
10/20/2010Arlington VA — — 4,802 937   — 5,739 5,739 2,643
11/1/2013Burke VA 11,779 11,534 7,347 75   11,534 7,422 18,956 1,503
10/1/2015Chantilly VA 6,261 1,100 10,606 450   1,100 11,056 12,156 359
1/7/2014Chesapeake / Bruce Rd VA 5,906 1,074 9,464 141   1,074 9,605 10,679 751
1/7/2014Chesapeake / Military Hwy VA 2,468 332 4,106 172   332 4,278 4,610 341
1/7/2014Chesapeake / Poplar Hill Rd VA 5,826 540 9,977 146   541 10,122 10,663 782
1/7/2014Chesapeake / Woodlake Dr VA 8,512 4,014 14,872 133   4,014 15,005 19,019 1,154
5/26/2011Dumfries VA 12,001 932 9,349 184   932 9,533 10,465 1,468
11/30/2012Falls Church / Hollywood Rd VA 8,574 5,703 13,307 337   5,703 13,644 19,347 1,523
7/1/2005Falls Church / Seminary Rd VA 9,097 1,259 6,975 706   1,259 7,681 8,940 2,398
11/30/2012Fredericksburg / Jefferson Davis Hwy VA 2,963 1,438 2,459 189   1,438 2,648 4,086 325
7/2/2012Fredericksburg / Plank Rd 1 VA 4,115 2,128 5,398 122   2,128 5,520 7,648 655
10/1/2015Fredericksburg / Plank Rd 2 VA — 3,170 6,717 156   3,170 6,873 10,043 224
12/18/2014Glen Allen VA 4,921 609 8,220 116   609 8,336 8,945 439
10/1/2015Hampton / Big Bethel Rd VA 4,075 550 6,697 222   550 6,919 7,469 232
10/1/2015Hampton / LaSalle Ave VA — 610 8,883 170   610 9,053 9,663 302
1/7/2014Hampton / Pembroke Ave VA 7,703 7,849 7,040 164   7,849 7,204 15,053 565
9/16/2016Herndon / Spring St VA — 7,435 12,713 50   7,435 12,763 20,198 109
10/1/2015Manassas VA — 750 6,242 337   750 6,579 7,329 216
1/7/2014Newport News / Denbigh Blvd VA 5,495 4,619 5,870 184   4,619 6,054 10,673 480
1/7/2014Newport News / J Clyde Morris Blvd VA 5,266 4,838 6,124 177   4,838 6,301 11,139 503
1/7/2014Newport News / Tyler Ave VA 4,435 2,740 4,955 158   2,740 5,113 7,853 421
1/7/2014Norfolk / Granby St VA 4,723 1,785 8,543 120   1,785 8,663 10,448 675
1/7/2014Norfolk / Naval Base Rd VA 4,214 4,078 5,975 155   4,078 6,130 10,208 497
3/17/2015Portsmouth VA 2,633 118 4,797 287   118 5,084 5,202 260
11/17/2016Reston VA — 13,957 12,526 —   13,957 12,526 26,483 54
1/7/2014Richmond / Hull St VA 6,363 2,016 9,425 136   2,016 9,561 11,577 745
1/7/2014Richmond / Laburnum Ave VA 8,216 5,945 7,613 197   5,945 7,810 13,755 625
1/7/2014Richmond / Midlothian Turnpike VA 4,851 2,735 5,699 160   2,735 5,859 8,594 467
1/7/2014Richmond / Old Staples Mill Rd VA 6,702 5,905 6,869 148   5,905 7,017 12,922 563
8/26/2004Richmond / W Broad St 1 VA 4,371 2,305 5,467 435   2,305 5,902 8,207 1,937
9/16/2016Richmond / W Broad St 2 VA — 5,810 13,177 58   5,810 13,235 19,045 115
10/1/2015Sandston VA 6,511 570 10,525 229   570 10,754 11,324 357
9/20/2012Stafford / Jefferson Davis Hwy VA 4,691 1,172 5,562 161   1,172 5,723 6,895 673
1/23/2009Stafford / SUSA Dr VA 4,233 2,076 5,175 156   2,076 5,331 7,407 1,120
1/7/2014Virginia Beach / General Booth Blvd VA 7,119 1,142 11,721 152   1,142 11,873 13,015 919
1/7/2014Virginia Beach / Kempsville Rd VA 7,363 3,934 11,413 116   3,934 11,529 15,463 890
1/7/2014Virginia Beach / Village Dr VA 9,398 331 13,175 163   331 13,338 13,669 1,038
11/22/2016Kent WA — 1,937 10,640 15   1,937 10,655 12,592 45
2/15/2006Lakewood / 80th St WA 5,501 1,389 4,780 322   1,390 5,101 6,491 1,549
2/15/2006Lakewood / Pacific Hwy WA 5,501 1,917 5,256 265   1,918 5,520 7,438 1,622
4/30/2014Puyallup WA — 437 3,808 101   437 3,909 4,346 278
7/1/2005Seattle WA 7,040 2,727 7,241 491   2,727 7,732 10,459 2,364
2/15/2006Tacoma WA 3,279 1,031 3,103 157   1,031 3,260 4,291 988
7/2/2012Vancouver WA 2,970 709 4,280 184   709 4,464 5,173 534
VariousOther corporate assets   — — 2,202 79,378   — 81,580 81,580 20,941
VariousConstruction in progress   — — — 21,860   — 21,860 21,860 —
VariousUndeveloped land   — 9,368 — —   9,368 — 9,368 —
VariousIntangible tenant relationships and lease rights   — — 93,695 30,276   — 123,971 123,971 101,120
     $2,960,387 $1,693,124 $5,487,194 $490,990 — $1,691,641 $5,979,667 $7,671,308 $900,861
____________________
(a)Adjustments relate to sale of property
(b)(a)Adjustment relates to partial disposition of land
(b)Adjustment relates to property casualty loss
(c)Adjustment relates to asset transfers between land, building and/or equipment
(d)Adjustment relates to impairment charge
(e)Adjustment relates to a purchase price adjustment
(f)Adjustment relates to the acquisition of a joint venture partner’s interest
(g)Adjustment relates to asset reclassification as an investment
(h)Adjustment relates to property casualty loss




Activity in real estate facilities during the years ended December 31, 2014, 20132016, 2015 and 20122014 is as follows:

   2014   2013   2012 

Operating facilities

      

Balance at beginning of year

  $4,126,648    $3,379,512    $2,573,731  

Acquisitions

   557,158     711,710     761,977  

Improvements

   32,861     37,949     34,964  

Transfers from construction in progress

   12,308     3,643     8,957  

Dispositions and other

   (6,813)    (6,166)    (117) 
  

 

 

   

 

 

   

 

 

 

Balance at end of year

$4,722,162  $4,126,648  $3,379,512  
  

 

 

   

 

 

   

 

 

 

Accumulated depreciation:

Balance at beginning of year

$496,754  $391,928  $319,302  

Depreciation expense

 109,531   104,963   72,626  

Dispositions and other

 (1,949)  (137)  —    
  

 

 

   

 

 

   

 

 

 

Balance at end of year

$604,336  $496,754  $391,928  
  

 

 

   

 

 

   

 

 

 

Real estate under development/redevelopment:

Balance at beginning of year

$6,650  $4,138  $9,366  

Current development

 23,528   6,466   3,759  

Transfers to operating facilities

 (12,308)  (3,954)  (8,987) 
  

 

 

   

 

 

   

 

 

 

Balance at end of year

$17,870  $6,650  $4,138  
  

 

 

   

 

 

   

 

 

 

Net real estate assets

$4,135,696  $3,636,544  $2,991,722  
  

 

 

   

 

 

   

 

 

 

 2016 2015 2014
Operating facilities     
Balance at beginning of year$6,392,487
 $4,722,162
 $4,126,648
Acquisitions1,159,304
 1,609,608
 557,158
Improvements92,480
 46,696
 32,861
Transfers from construction in progress26,400
 19,971
 12,308
Dispositions and other(21,223) (5,950) (6,813)
Balance at end of year$7,649,448

$6,392,487

$4,722,162
Accumulated depreciation:     
Balance at beginning of year$728,087
 $604,336
 $496,754
Depreciation expense174,906
 123,751
 109,531
Dispositions and other(2,132) —
 (1,949)
Balance at end of year$900,861

$728,087

$604,336
Real estate under development/redevelopment:     
Balance at beginning of year$24,909
 $17,870
 $6,650
Current development23,404
 27,010
 23,528
Transfers to operating facilities(26,400) (19,971) (12,308)
Dispositions and other(53) —
 —
Balance at end of year$21,860

$24,909

$17,870
Net real estate assets$6,770,447
 $5,689,309
 $4,135,696
The aggregate cost of real estate for U.S. federal income tax purposes is $4,135,696.

$6,513,574.



Item 9.     Changes in an Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.     Controls and Procedures
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.Controls and Procedures

(i)Disclosure Controls and Procedures

We maintain disclosure controls and procedures to ensure that information required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” inRule 13a-15(e) of the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating thecost-benefit relationship of possible controls and procedures.

We have a disclosure committee that is responsible for considering the materiality of information and determining the disclosure obligations of the Company on a timely basis. The disclosure committee meets quarterly and reports directly to our Chief Executive Officer and Chief Financial Officer.

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

(ii)Internal Control over Financial Reporting


(a)Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined inRule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.Commission (2013 framework). Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2014.

2016. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our independent registered public accounting firm, Ernst & Young LLP, has issued the following attestation report over our internal control over financial reporting.


(b)Attestation Report of the Registered Public Accounting Firm


Report of Independent Registered Public Accounting Firm


The Board of Directors and Stockholders of Extra Space Storage Inc.

We have audited Extra Space Storage Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2014,2016, based on criteria established in Internal Control—IntegratedControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992(2013 framework) (the COSO criteria). Extra Space Storage Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.



We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Extra Space Storage Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014,2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Extra Space Storage Inc. as of December 31, 2014,2016 and 20132015, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 20142016 of Extra Space Storage Inc. and our report dated March 2, 2015February 27, 2017 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Salt Lake City, Utah

March 2, 2015

February 27, 2017

(c)Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as such term is defined in Exchange ActRule 13a-15(f)) that occurred during our most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.Other Information

None.

Item 9B.     Other Information
None.


PART III

Item 10.Directors, Executive Officers and Corporate Governance

Item 10.     Directors, Executive Officers and Corporate Governance
Information required by this item is incorporated by reference to the information set forth under the captions “Executive Officers,” and “Information About the Board of Directors and its Committees” in our definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, 2014.

2016.

We have adopted a Code of Business Conduct and Ethics in compliance with rules of the SEC that applies to all of our personnel, including our board of directors, Chief Executive Officer, Chief Financial Officer and principal accounting officer. The Code of Business Conduct and Ethics is available free of charge on the “Investor Relations—Corporate Governance” section of our web site at www.extraspace.com. We intend to satisfy any disclosure requirements under Item 5.05 ofForm 8-K regarding amendment to, or waiver from, a provision of this Code of Business Conduct and Ethics by posting such information on our web site at the address and location specified above.

The board of directors has adopted Corporate Governance Guidelines and charters for our Audit Committee and Compensation, Nominating and Governance Committee, each of which is posted on our website at the address and location specified above. Investors may obtain a free copy of the Code of Business Conduct and Ethics, the Corporate Governance Guidelines and the committee charters by contacting the Investor Relations Department at 2795 East Cottonwood Parkway, Suite 400, Salt Lake City, Utah 84121, Attn: Clint HalversonJeff Norman or by telephoning(801) 365-4600.

Item 11.Executive Compensation

Item 11.     Executive Compensation
Information with respect to executive compensation is incorporated by reference to the information set forth under the caption “Executive Compensation” in our definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, 2014.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

2016.

Item 12.     Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information with respect to security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference to the information set forth under the captions “Executive Compensation” and “Security Ownership of Directors and Officers” in our definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, 2014.

Item 13.Certain Relationships and Related Transactions, and Director Independence

2016.

Item 13.     Certain Relationships and Related Transactions, and Director Independence
Information with respect to certain relationships and related transactions is incorporated by reference to the information set forth under the captions “Information about the Board of Directors and its Committees” and “Certain Relationships and Related Transactions” in our Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, 2014.

Item 14.Principal Accounting Fees and Services

2016.

Item 14.     Principal Accounting Fees and Services
Information with respect to principal accounting fees and services is incorporated by reference to the information set forth under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, 2014.

2016.



PART IV

Item 15.     Exhibits and Financial Statement Schedules
Item 15.Exhibits and Financial Statement Schedules

(a)Documents filed as part of this report:

(1) and (2). All Financial Statements and Financial Statement Schedules filed as part of this Annual Report on10-K are included in Item 8—“Financial Statements and Supplementary Data” of this Annual Report on10-K and reference is made thereto.

(3) The following documents are filed or incorporated by references as exhibits to this report:

Exhibit
Number

  

Description

2.1  Purchase and Sale Agreement, dated May 5, 2005 by and among Security Capital Self Storage Incorporated, as seller and Extra Space Storage LLC, PRISA Self Storage LLC, PRISA II Self Storage LLC, PRISA III Self Storage LLC, VRS Self Storage LLC, WCOT Self Storage LLC and Extra Space Storage LP, as purchaser parties and The Prudential Insurance Company of America (incorporated by reference to Exhibit 2.1 ofForm 8-K filed on May 11, 2005).
2.2Agreement and Plan of Merger, dated as of June 15, 2015, among Extra Space Storage Inc., Extra Space Storage LP, Edgewater REIT Acquisition (MD) LLC, Edgewater Partnership Acquisition (DE) LLC, SmartStop Self Storage, Inc. and SmartStop Self Storage Operating Partnership, L.P. (incorporated by reference to Exhibit 2.1 of Form 8-K filed on June 15, 2015).
2.3Amendment No. 1 to Agreement and Plan of Merger, dated as of July 16, 2015, among Extra Space Storage Inc., Extra Space Storage LP, Edgewater REIT Acquisition (MD) LLC, Edgewater Partnership Acquisition (DE) LLC, SmartStop Self Storage, Inc. and SmartStop Self Storage Operating Partnership, L.P. (incorporated by reference to Exhibit 2.1 of Form 8-K filed on July 16, 2015).
3.1  Amended and Restated Articles of Incorporation of Extra Space Storage Inc.(1)
3.2  Articles of Amendment of Extra Space Storage Inc., dated September 28, 2007 (incorporated by reference to Exhibit 3.1 ofForm 8-K filed on October 3, 2007).
3.3  Articles of Amendment of Extra Space Storage Inc., dated August 29, 2013 (incorporated by reference to Exhibit 3.1 ofForm 8-K filed on August 29, 2013).
3.4  Amended and Restated Bylaws of Extra Space Storage Inc.(incorporated by reference to Exhibit 3.1 ofForm 8-K filed on May 26, 2009)
3.5Amendment No. 1 to Amended and Restated Bylaws of Extra Space Storage Inc. (incorporated by reference to Exhibit 3.1 of Form 8-K filed December 23, 2014).
    3.53.6  Fourth Amended and Restated Agreement of Limited Partnership of Extra Space Storage LP (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on December 6, 2013).
    3.6Declaration of Trust of ESS Holdings Business Trust I.(1)
3.7  Declaration of Trust of ESS Holdings Business Trust II.(1)
4.1  Junior Subordinated Indenture dated as of July 27, 2005, between Extra Space Storage LP and JPMorgan Chase Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 ofForm 8-K filed on August 2, 2005).
4.2  Amended and Restated Trust Agreement, dated as of July 27, 2005, among Extra Space Storage LP, as depositor and JPMorgan Chase Bank, National Association, as property trustee, Chase Bank USA, National Association, as Delaware trustee, the Administrative Trustees named therein and the holders of undivided beneficial interest in the assets of ESS Statutory Trust III (incorporated by reference to Exhibit 4.2 ofForm 8-K filed on August 2, 2005).
4.3  Junior Subordinated Note (incorporated by reference to Exhibit 4.3 ofForm 10-K filed on February 26, 2010)
4.4  Trust Preferred Security Certificates (incorporated by reference to Exhibit 4.4 ofForm 10-K filed on February 26, 2010)
    4.5Indenture, dated March 27, 2007, among Extra Space Storage LP, Extra Space Storage Inc. and Wells Fargo Bank, N.A., as trustee, including the form of 3.625% Exchangeable Senior Notes due 2027 and form of guarantee (incorporated by reference to Exhibit 4.1 ofForm 8-K filed on March 28, 2007).
4.6  Indenture, dated June 21, 2013, among Extra Space Storage LP, Extra Space Storage Inc. and Wells Fargo Bank, National Association, as trustee, including the form of 2.375% Exchangeable Senior Notes due 2033 and form of guarantee (incorporated by reference to Exhibit 4.1 ofForm 8-K filed on June 21, 2013).

Exhibit
Number

4.7		  

Description

Indenture, dated September 21, 2015, among Extra Space Storage LP, as issuer, Extra Space Storage Inc., as guarantor, and Wells Fargo Bank, National Association, as trustee, including the form of 3.125% Exchangeable Senior Notes due 2035 and the form of guarantee (incorporated by reference to Exhibit 4.1 of Form 8-K filed on September 21, 2015).
10.1  Registration Rights Agreement, by and among Extra Space Storage Inc. and the parties listed on Schedule I thereto.(1)



  10.2
Exhibit
Number
  License between Centershift Inc. and Extra Space Storage LP.(1)Description
  10.32004Long-Term Compensation Incentive Plan as amended and restated effective March 25, 2008 (incorporated by reference to the Definitive Proxy Statement on Schedule 14A filed on April 14, 2008)
  10.4Extra Space Storage Performance Bonus Plan.(1)
  10.5Form of 2004 Long Term Incentive Compensation Plan Option Award Agreement for Employees with employment agreements. (incorporated by reference to Exhibit 10.11 ofForm 10-K filed on February 26, 2010)
  10.6Form of 2004 Long Term Incentive Compensation Plan Option Award Agreement for employees without employment agreements. (incorporated by reference to Exhibit 10.12 ofForm 10-K filed on February 26, 2010)
  10.7Form of 2004Non-Employee Directors Share Plan Option Award Agreement for Directors. (incorporated by reference to Exhibit 10.13 ofForm 10-K filed on February 26, 2010)
  10.810.2  Joint Venture Agreement, dated June 1, 2004, by and between Extra Space Storage LLC and Prudential Financial, Inc.(1)
  10.9Extra Space StorageNon-Employee Directors’ Share Plan (incorporated by reference to Exhibit 10.22 ofForm 10-K/A filed on March 22, 2007).
  10.1010.3  Registration Rights Agreement, dated June 20, 2005, among Extra Space Storage Inc. and the investors named therein (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on June 24, 2005).
  10.1110.4  Purchase Agreement, dated as of July 27, 2005, among Extra Space Storage LP, ESS Statutory Trust III and the Purchaser named therein (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on August 2, 2005).
  10.1210.5  Registration Rights Agreement, dated March 27, 2007, among Extra Space Storage LP, Extra Space Storage Inc., Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on March 28, 2007).
  10.13Contribution Agreement, dated June 15, 2007, among Extra Space Storage LP and various limited partnerships affiliated with AAAAARent-A-Space. (incorporated by reference to Exhibit 10.23 ofForm 10-K filed on February 26, 2010)
  10.1410.6  Promissory Note, dated June 25, 2007, among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.2 ofForm 8-K filed on June 26, 2007).
  10.1510.7  Pledge Agreement, dated June 25, 2007, among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.3 ofForm 8-K filed on June 26, 2007).
  10.1610.8  Registration Rights Agreement among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe. (incorporated by reference to Exhibit 10.26 ofForm 10-K filed on February 26, 2010)
  10.17First Amendment to Contribution Agreement and to Agreement Regarding Transfer of Series A units among Extra Space Storage LP, various limited partnerships affiliated with AAAAARent-A-Space, H. James Knuppe and Barbara Knuppe, dated September 28, 2007. (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on October 3, 2007).
  10.1810.9  Membership Interest Purchase Agreement, dated as of April 13, 2012, between Extra Space Properties Sixty Three LLC and PRISA IIICo-Investment LLC (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on April 16, 2012).

Exhibit
Number

Description

  10.192004 Long Term Incentive Compensation Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 ofForm 10-Q filed on November 7, 2007).
  10.20First Amendment to Extra Space Storage Inc. 2004Non-Employee Directors’ Share Plan (incorporated by reference to Exhibit 10.4 ofForm 10-Q filed on November 7, 2007).
  10.21Loan Agreement between ESP Seven Subsidiary LLC as Borrower and General Electric Capital Corporation as Lender, dated October 16, 2007. (incorporated by reference to Exhibit 10.30 ofForm 10-K filed on February 26, 2010)
  10.22Subscription Agreement, dated December 31, 2007, among Extra Space Storage LLC and Extra Space Development, LLC. (incorporated by reference to Exhibit 10.31 ofForm 10-K filed on February 26, 2010)
  10.23Revolving Promissory Note between Extra Space Properties Thirty LLC and Bank of America as Lender, dated February 13, 2009 (incorporated by reference to Exhibit 10.33 ofForm 10-K filed on February 26, 2010)
  10.24Revolving Line of Credit between Extra Space Properties Thirty LLC and Bank of America as Lender, dated February 13, 2009 (incorporated by reference to Exhibit 10.34 ofForm 10-K filed on February 26, 2010)
  10.25First Loan and Note Modification Agreement between Extra Space Properties Thirty LLC and Bank of America as lender, dated April 9, 2009 (incorporated by reference to Exhibit 10.27 ofForm 10-K filed on February 29, 2012).
  10.26Second Loan and Note Modification Agreement between Extra Space Properties Thirty LLC and Bank of America as lender, dated May 4, 2009 (incorporated by reference to Exhibit 10.28 ofForm 10-K filed on February 29, 2012).
  10.27Third Loan and Note Modification Agreement between Extra Space Properties Thirty LLC and Bank of America as lender, dated August 27, 2010 (incorporated by reference to Exhibit 10.29 ofForm 10-K filed on February 29, 2012).
  10.28Fourth Loan and Note Modification Agreement between Extra Space Properties Thirty LLC and Bank of America as lender, dated October 19, 2011 (incorporated by reference to Exhibit 10.30 ofForm 10-K filed on February 29, 2012).
  10.2910.10  Extra Space Storage Inc. Executive Change in Control Plan (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on August 31, 2011).
  10.3010.11  Registration Rights Agreement, dated June 21, 2013, among Extra Space Storage LP, Extra Space Storage Inc., Citigroup Global Markets Inc. and Wells Fargo Securities, LLC (incorporated by reference to Exhibit 10.1 ofForm 8-K filed on June 21, 2013).
  10.3110.12  Letter Agreement, dated as of November 22, 2013, amending the Contribution Agreement, dated June 15, 2007, among Extra Space Storage LP and various limited partnerships affiliated with AAAAA Rent-A-Space, and the Promissory Note, dated June 25, 2007, among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.1 of Form 10-Q filed on May 8, 2014).
10.13*2015 Incentive Award Plan (incorporated by reference to the Definitive Proxy Statement on Schedule 14A filed on April 14, 2015)
10.14Registration Rights Agreement, dated September 21, 2015, among Extra Space Storage LP, Extra Space Storage Inc., Citigroup Global Markets Inc. and Wells Fargo Securities, LLC, as representatives of the initial purchasers (incorporated by reference to Exhibit 10.1 of Form 8-K filed on September 21, 2015).
10.15Credit Agreement, dated as of October 14, 2016, by and among Extra Space Storage Inc., Extra Space Storage LP, U.S. Bank National Association, as administrative agent, certain other financial institutions acting as syndication agents, documentation agents, senior management agents and lead arrangers and book runners, and certain lenders party thereto (incorporated by reference to Exhibit 10.1 of Form 8-K
10.16*2004 Long-Term Compensation Incentive Plan as amended and restated effective March 25, 2008 (incorporated by reference to the Definitive Proxy Statement on Schedule 14A filed on April 14, 2008)
10.17*Form of 2004 Long Term Incentive Compensation Plan Option Award Agreement for Employees with employment agreements. (incorporated by reference to Exhibit 10.11 of Form 10-K filed on February 26, 2010)
10.18*Form of 2004 Long Term Incentive Compensation Plan Option Award Agreement for employees without employment agreements. (incorporated by reference to Exhibit 10.12 of Form 10-K filed on February 26, 2010)
10.19*Form of 2004 Non-Employee Directors Share Plan Option Award Agreement for Directors. (incorporated by reference to Exhibit 10.13 of Form 10-K filed on February 26, 2010)
10.20*2004 Long Term Incentive Compensation Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 of Form 10-Q filed on November 7, 2007).
10.21*First Amendment to Extra Space Storage Inc. 2004 Non-Employee Directors’ Share Plan (incorporated by reference to Exhibit 10.4 of Form 10-Q filed on November 7, 2007).
10.22*Extra Space Storage Non-Employee Directors’ Share Plan (incorporated by reference to Exhibit 10.22 of Form 10-K/A filed on March 22, 2007).
21.1  Subsidiaries of the Company(2)
23.1  Consent of Ernst & Young LLP(2)
31.1  Certification of Chief Executive Officer pursuant to Section 302 of theSarbanes-Oxley Act of 2002.(2)
31.2  Certification of Chief Financial Officer pursuant to Section 302 of theSarbanes-Oxley Act of 2002.(2)



Exhibit
Number

  

Description

32.1  Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002.(2)
101  The following financial information from Registrant’s Annual Report onForm 10-K for the period ended December 31, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2014 and 2013; (ii) Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012; (iv) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2014, 2013 and 2012; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012; and (vi) Notes to Consolidated Financial Statements(2).

(1)Incorporated by reference to Registration Statement onForm S-11 (FileNo. 333-115436 dated August 11, 2004).
(2)Filed herewith.
(c)See Item 15(a)(2) above.


*     Management compensatory plan or arrangement
(1)Incorporated by reference to Registration Statement on Form S-11 (File No. 333-115436 dated August 11, 2004).
(2)Filed herewith.
(3)See Item 15(a)(2) above.



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date: March 2, 2015EXTRASPACESTORAGEINC. INC.
Date: February 27, 2017By:/S/ JOSEPH D. MARGOLIS
By: 

/S/SPENCERF.KIRK

Spencer F. Kirk

Joseph D. Margolis
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Date: March 2, 2015February 27, 2017By:

/S/SPENCERF.KIRK

Spencer F. Kirk

S/ JOSEPH D. MARGOLIS

Joseph D. Margolis
Chief Executive Officer

(Principal Executive Officer)

Date: March 2, 2015February 27, 2017By:

/s/P.S/ P. SCOTTSTUBBS

P. Scott Stubbs

Executive Vice President and Chief Financial

Officer (Principal Financial Officer)

Date: March 2, 2015February 27, 2017By:

/s/S/ GRACEKUNDE

Grace Kunde

Senior Vice President, Accounting and Finance (Principal
(Principal Accounting Officer)

Date: March 2, 2015February 27, 2017By:

/s/S/ KENNETHM. M. WOOLLEY

Kenneth M. Woolley

Executive Chairman

Date: March 2, 2015February 27, 2017By:

/s/JOSEPHD.MARGOLIS

Joseph D. Margolis

Director

S/ KARL HAAS
Karl Haas
Director
Date: March 2, 2015February 27, 2017By:

/s/ROGERB.PORTER

Roger B. Porter

Director

S/ SPENCER F. KIRK
Spencer F. Kirk
Director
Date: March 2, 2015February 27, 2017By:

/s/K.FREDSKOUSEN

K. Fred Skousen

Director

S/ DENNIS LETHAM
Dennis Letham
Director
Date: March 2, 2015February 27, 2017By:

/s/S/ DIANEOLMSTEAD

Diane Olmstead


Director

Date: February 27, 2017By:/S/ ROGER B. PORTER
Roger B. Porter
Director
Date: February 27, 2017By:/S/ K. FRED SKOUSEN
K. Fred Skousen
Director

118



101