UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-K
 
(Mark One)
x☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20162019
OR
o☐TRANSITION 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 400300
Salt Lake City, Utah84121
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (801) (801) 365-4600
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Classeach classTrading symbolName of each exchange on which registered
Common Stock, $0.01 par valueEXRNew York Stock Exchange Inc.
Securities registered pursuant to Section 12(g) of the Act: None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yesx    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  ¨Nox
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.    Yesx    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 of Regulation 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).    Yesx    No  ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation 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 this Form 10-K or any amendment of this Form 10-K.  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” and "emerging growth company" in Rule 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☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  x☒.
The aggregate market value of the common stock held by non-affiliates of the registrant was $11,138,435,421$13,214,610,280 based upon the closing price on the New York Stock Exchange on June 30, 2016,28, 2019, 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 21, 201719, 2020 was 125,912,481.129,613,332.
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 20172020 are incorporated by reference into Part III of this Annual Report on Form 10-K.






Extra Space Storage Inc.
Annual Report on Form 10-K
For the Year Ended December 31, 20162019
Table of Contents
 
PART I
4
Item 1.
Business
4
Item 1A.
Risk Factors
7
Item 1B.
Unresolved Staff Comments
1714
Item 2.
Properties
1714
Item 3.
Legal Proceedings
1715
Item 4.
Mine Safety Disclosures
1715
PART II
1715
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
1715
Item 6.
Selected Financial Data
1815
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
2016
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
3926
Item 8.
Financial Statements and Supplementary Data
4027
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
9572
Item 9A.
Controls and Procedures
9572
Item 9B.
Other Information
9673
PART III
9774
Item 10.
Directors, Executive Officers and Corporate Governance
9774
Item 11.
Executive Compensation
9774
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
9774
Item 13.
Certain Relationships and Related Transactions, and Director Independence
9774
Item 14.
Principal Accounting Fees and Services
9774
PART IV
9875
Item 15.
Exhibits and Financial Statement Schedules
9875
Item 16.
Form 10-K Summary
75
SIGNATURES
10178

2





Statements Regarding Forward-Looking Information
Certain information set forth in this report contains “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 additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.
All forward-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. All forward-looking statements apply only as of the date made. We undertake no obligation to publicly update or revise forward-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 the forward-looking statements contained in or contemplated by this report. Any forward-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 and developments 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;rates;
reductions in asset valuations and related impairment charges;
the failureour lack of sole decision-making authority with respect to our joint venture partnersinvestments;
the effect of recent or future changes to fulfill their obligations to us or their pursuit of actions that are inconsistent with our objectives;U.S. tax laws;
the failure to maintain our REIT status for U.S. federal income tax purposes; and
economic uncertainty due to the impact of natural disasters, war or terrorism, which could adversely affect our business plan; and
difficulties in our ability to attract and retain qualified personnel and management members.plan.
The forward-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 our forward-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 any forward-looking statements set forth in this Annual Report on Form 10-K to reflect new information, future events or otherwise.

3





PART I
Item 1.     Business
General
Extra Space Storage Inc. (“we,” “our,” “us” or the “Company”) is a fully integrated, self-administered and self-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 the self-storage business since 1977. These companies were reorganized after the consummation of our IPO and various formation transactions. As of December 31, 2016,2019 we held ownership interestsowned and/or operated 1,817 stores in 1,016 operating stores. Of these operating stores, 836 are wholly-owned and 180 are owned in joint venture partnerships. An additional 411 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 1,427. These operating stores are located in 3840 states, Washington, D.C. and Puerto Rico, and containcomprising approximately 107140 million square feet of net rentable space in approximately 960,000 units and currently serve a customer base of approximately 850,000 tenants.1.3 million units.
We operate in threetwo distinct segments: (1) rentalself-storage operations; and (2) tenant reinsurance; and (3) property management, acquisition and development.reinsurance. Our rentalself-storage operations activities include rental operations of stores in which we have an ownership interest.wholly-owned stores. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in our stores. Our property management, acquisitionFor more information and development activities include managing, acquiring, developingcomparative financial and selling stores.other information on our reportable business segments, refer to the segment information footnote in the notes to the consolidated financial statements in Item 8 of this Form 10-K.
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 U.S. federal tax, with certain exceptions, on our netREIT taxable income that is distributed to our stockholders.
We file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 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 at 1-800-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 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 the self-storage industry, having acquired and/or developed a significant number of stores since before our IPO.industry. Our executive management team and their years of industry experience are as follows: Joseph D. Margolis, Chief Executive Officer, 1215 years; Scott Stubbs, Executive Vice President and Chief Financial Officer, 1619 years; Samrat Sondhi, Executive Vice President and Chief Operating Officer, 1317 years; Gwyn McNeal, Executive Vice President and Chief Legal Officer, 1114 years; James Overturf, Executive Vice President and Chief Marketing Officer, 18 years; and Kenneth M. Woolley, Executive Chairman, 3621 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 significantan ownership position in the Company with executive officers and directors owning approximately 4,665,5663,418,462 shares or 3.7%2.6% of our outstanding common stock as of February 21, 2017.


19, 2020.
Industry & Competition
Stores offer month-to-month rental of storage space rental for personal or business use and are a cost-effective and flexible storage alternative.use. Tenants typically 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. Tenants have responsibility for moving their items into and out of their units. Stores generally have on-site managers who supervise and run the day-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 downsizeexperiencing life changes such as downsizing their living space or others who are not yet settled into a permanent residence. Items that residential tenants place in self-storage range from cars, boats and recreational vehicles, toare typically 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, making high-density, high-traffic population centers ideal locations for stores. A store’s visibility on the internet, price, perceived security, cleanliness, and the general professionalism of the sitestore managers and staff are also contributing factors to a site’sstore’s ability to successfully secure rentals. Although most stores are leased to tenants on a month-to-month basis, tenants tend to continue their leases for extended periods of time.
The self-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, the self-storage industry has experienced significant growth. The self-storage industry has also seen increases in occupancy over the past several years. According to the Self-Storage Almanac (the “Almanac”), in 2008,2014, the national average physical occupancy rate was 80.3%89.1% of net rentable square feet, compared to an average physical occupancy rate of 91.2%91.0% in 2016.2019.
RecentlyThe industry is also characterized by fragmented ownership. According to the Almanac, as of the end of 2019, the top ten self-storage companies in the United States operated approximately 20.6% of the total U.S. stores, and the top 50 self-storage companies operated approximately 26.7% of the total U.S. stores. We believe this fragmentation will contribute to continued consolidation at some level in the future.
We believe that we are well positioned to compete for acquisitions. We have encountered competition when we have sought to acquire existing operating stores, especially for brokered portfolios. Competitive bidding practices have been commonplace between both public and private entities, and this will likely continue.
The industry is also characterized by fragmented ownership. According to the Almanac, the top ten self-storage companies in the United States operated approximately 19.4% of the total U.S. stores, and the top 50 self-storage companies operated approximately 28.6% of the total U.S. stores as of December 31, 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.
We are the second largest self-storage operator in the United States. We are one of five public self-storage REITs along with CubeSmart, Life Storage, National Storage Affiliates Life Storage and Public 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 sustainable long-term growth in cash flow per share in order to maximize long-term stockholder value.value both at acceptable levels of risk. We continue to evaluate a range of growth initiatives and opportunities, includingopportunities. Our primary strategies include the following:
Maximize the performance of our stores through strategic, efficient and proactive management.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’ssystems' 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.
We continually analyze our portfolio to look for long-term value-enhancing opportunities. We proactively redevelop properties to add units or modify existing unit mix to better meet the demand in a given market and to maximize revenue. We also redevelop properties to reduce their effective useful age, increase visual appeal, enhance security and to improve brand consistency across the portfolio.
Acquire self storage stores.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.
In addition to the pursuit of stabilized stores, from time to time we develop stores from the ground up and provide the construction capital. We also purchase stores at the completion of construction from third party developers, who build to our specifications. These stores purchased at completion of construction (a "Certificate of Occupancy store"), create additional long term value for our stockholders. We are typically able to acquire these assets at a lower price than a stabilized store, and


expect greater long term returns on these stores on average. However, in the short term, these acquisitions cause dilution to our earnings during the two-to-four year period required to lease up the Certificate of Occupancy stores. We expect that this trend will continue in 2020 as we continue to acquire Certificate of Occupancy stores.
Expand our management business.business
Our management business enables us to generate increased revenues through management fees andas well as expand our geographic footprint.footprint, data sophistication and scale with little capital investment. 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.
To broaden the opportunities available, we have recently implemented a bridge lending program, under which we provide financing to operating properties that we manage.  We anticipate that this program will help us increase our management business, create additional future acquisition opportunities, and strengthen our relationships with partners, all while providing interest income. The total balance of bridge loans receivable as of December 31, 2019 was $43.6 million.


Financing of Our Long-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. AllAs a REIT, we are required to distribute at least 90% of our Credit Lines are guaranteed by us (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.
REIT taxable income to our stockholders. Consequently, we require access to additional sources of capital to fund our growth. We expect to maintain a flexible approach into financing new store acquisitions.growth. We plan to finance future acquisitions through a combination ofdiverse capital optimization strategy which includes but is not limited to: cash generated from operations, borrowings under the Credit Lines, traditionalour revolving lines of credit (the "Credit Lines"), secured and unsecured mortgage financing, equity offerings, joint ventures and additionalthe sale of stores.
Credit Lines - We have two credit lines which we primarily use as short term bridge financing until we obtain longer-term financing through either debt or equity offerings.equity. As of December��31, 2019, our Credit Lines had available capacity of $790.0 million, of which $632.0 million was undrawn.
Joint Venture Financing
Secured and Unsecured Debt - Historically, we had primarily used traditional secured mortgage loans to finance store acquisitions and development efforts. More recently, we obtain unsecured bank term loans and issue unsecured private placement bonds. We will continue to utilize a combination of secured and unsecured financing for future store acquisitions and development. As of December 31, 2016,2019, we own 180had $2.2 billion of secured notes payable and $2.7 billion of unsecured notes payable and senior exchangeable notes outstanding compared to $2.9 billion of secured notes payable and $1.9 billion of unsecured notes payable and senior exchangeable notes outstanding as of December 31, 2018.
Equity - We have an active "at the market" ("ATM") program for selling stock. We sell stock under the ATM program from time to time to raise capital when we believe conditions are advantageous. During the year ended December 31, 2019, we issued 1,779,200 shares of common stock through our ATM program and received net proceeds of approximately $198.8 million. During the year ended December 31, 2018, we issued 933,789 shares of common stock through our ATM program and received net proceeds of approximately $90.2 million.
We view equity interests in our Operating Partnership as another source of capital that can provide an attractive tax planning opportunity to sellers of real estate. We issue common and preferred Operating Partnership units to sellers in certain acquisitions. Common Operating Partnership units receive distributions equal to the dividends on common stock, while preferred Operating Partnership units receive distributions at various negotiated rates. We may issue additional units in the future when circumstances are favorable.
Joint Venture Financing - As of December 31, 2019, we owned 246 of our stores through joint ventures with third parties. Our joint venture partners typically provide most of the equity capital required for the acquisition of stores owned in these joint ventures. Most joint venture agreements include buy-sell rights, as well as rights of first offer in connection with the sale of stores by the joint venture. We generally manage the day-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 forbut do not control the joint ventures,ventures.


Sale of Properties - We have not historically sold a high volume of stores, as we maintaingenerally believe we are able to optimize the right to receive between 4.0% and 80.0% of the available cash flow from operations after our joint venture partners and the Company have received a predetermined return, and between 4.0% and 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 include buy-sell rights, as well as rights of first offer in connection with the sale of stores by the joint venture.
Disposition of Stores
We will continue to review our portfolio forthrough continued operations. However, we may sell more stores or groups ofinterests in stores that are underperformingin the future in response to changing economic, financial or are not strategically located, and determine whether to dispose of these stores to fund other growth. As ofinvestment conditions. For the year ended December 31, 2016,2019 we had two parcels of land that were categorized as heldsold one store located in New York for sale.$11.3 million. For the year ended December 31, 2018, we sold one store located in California for $40.2 million.
Regulation
Generally, stores are subject to various laws, ordinances and regulations, including regulations relating to lien sale rights and procedures.procedures and the Americans with Disabilities Act of 1990. 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 of stores or other impairments to operations, which would adversely affect our financial position, results of operations or cash flows.


Under the Americans In addition, noncompliance with Disabilities Actany 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 localthese laws, also exist that may require modifications to the stores,ordinances or restrict further renovations thereof, with respect to access thereto by disabled persons. Noncompliance with the ADAregulations could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, thereby requiringrequire substantial capital expenditures. To the extent our stores are not in compliance, we are likelyexpenditures to incur additional costs to comply with the ADA.ensure compliance.
Insurance activities are subject to state insurance laws and regulations as determined by the particular insurance commissioner for each state in accordance with the McCarran-Ferguson Act, and are subject to the Gramm-Leach-Bliley Act and the privacy regulations promulgated by the Federal Trade Commission pursuant thereto.
Store management activities are oftenmay be 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 21, 2017,December 31, 2019, we had 3,2874,048 employees and believe our relationship with our employees is good. Our employees are not represented by a collective bargaining agreement.
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 the 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 revenues and net operating results are dependent upon our abilityincome can be negatively impacted by general economic factors that lead to maximize occupancy levels anda reduction in demand for rental rates in our stores. Adverse economic or other conditionsspace 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 for self-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 of self-storage or a reduction in demand for self-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.operate.
If we are unable to promptly re-let our units or if the rates upon such re-letting are significantly lower than expected, our business and results of operations would be adversely affected.
Virtually all of our leases are on a month-to-month basis. Any delay in re-letting units as vacancies arise would reduce our revenues and harm our operating results. In addition, lower than expected rental rates upon re-letting could adversely affect our revenues and impede our growth.
We depend upon our on-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 2,723 field personnel as of February 21, 2017 in the management and operation of our stores. The general professionalism of our store managers and staff are contributing factors to a store’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 property and casualty insurance policies, including liability, fire, flood, earthquake, wind (as deemedwe deem necessary or as required by our lenders), extendedumbrella coverage and rental loss insurance with respect to our stores. Certain types of losses, however, may be either uninsurable, or not economically insurable, or coverage may be excluded on certain policies, such as losses due to earthquakes, hurricanes, tornadoes, riots, acts of war, terrorism, or terrorism.social engineering. 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 taxesLegal disputes, settlement and regulatory compliancedefense costs may reducecould have an adverse effect on our income.operating results.
Costs resulting from changes in real estate tax laws generally are not passed throughFrom time to tenants directly and will affect us. Increases in income, propertytime we have to make monetary settlements or defend actions or arbitration (including class actions) to resolve tenant, employment-related or other taxes generally are not passed through to tenants under leasesclaims and may reducedisputes. Settling any such liabilities could negatively impact our net income, FFO,operating results and cash flow, financial condition, ability to pay or refinance our debt obligations, ability to make cash distributionsavailable for distribution 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 similarlyalso 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 sell, lease, selloperate 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 with asbestos-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 of asbestos-containing materials and lead-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 any non-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.encumber affected properties.
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 competitionEnvironmental compliance costs and liabilities associated with operating our stores may adversely affect our results of operations.
Under various U.S. federal, state and local laws, ordinances and regulations, a current or previous owner, developer or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances, which could be substantial. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such hazardous substances. From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions for which we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return.
Costs associated with complying with the Americans with Disabilities Act of stores1990 may result in unanticipated expenses.

Under the ADA, places of public accommodation are required to meet certain federal requirements related to access and other assets, which may impede our ability to make future acquisitions or may increase the costuse by disabled persons. A number of these acquisitions.
We compete with many other entities engaged in real estate investment activities for acquisitions of stores and other assets, including national, regionaladditional 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. 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.
There is significant competition among self-storage operators and developersfrom other storage alternatives.
Competition in the local markets in which many of stores. Theseour stores are located is significant and has affected our occupancy levels, rental rates and operating expenses. Development of self-storage facilities has increased in recent years, which has intensified competition, and we expect it will continue to do so as newly developed facilities are opened. Development of self-storage facilities by other operators could continue to increase in the future. Actions by our competitors may drive up the price we pay for storesdecrease or other assets we seek to acquire or may succeedprevent increases in acquiring those stores or assets themselves. In addition, our potential acquisition targets may findoccupancy and rental rates, while increasing 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 numberexpenses, which could adversely affect our business and results 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 in single-store acquisitions among tax-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.operations.
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:risks

competition from local investors and other real estate investors with significant capital, including other publicly-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 for clean-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 stores.
We have acquired many stores in the past, and we expect to 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 from day-to-day operations, which could impair our operating results as a whole.
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 the self-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 steps 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 material 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.
Our property taxes could increase due to reassessment or property tax rate changes.
Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change. For example, a current California law commonly referred to as Proposition 13 generally limits annual real estate tax increases on California properties to 2% of assessed value. However, under Proposition 13, property tax reassessment generally occurs as a result of a "change in ownership" of a property, as specially defined for purposes of those rules. Because the property taxing authorities may not determine whether there has been a "change in ownership" or the actual reassessed value of a property for a period of time after a transaction has occurred, we may not know the impact of a potential reassessment for a considerable amount of time following a particular transaction. Therefore, the amount of property taxes we are required to pay could increase substantially from the property taxes we currently pay or have paid in the past, including on a retroactive basis. In addition from time to time voters and lawmakers have announced initiatives to repeal or amend Proposition 13 to eliminate its application to commercial and industrial property and/or introduce split tax roll legislation. Such initiatives, if successful, could increase the assessed value and/or tax rates applicable to commercial property in California, including our stores.
Risks Related to Our Organization and Structure
Our business could be harmed if key personnel with long-standing business relationships in the self-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 the self-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 other self-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 to tax-motivated sellers than our competitors that are not structured as UPREITs. However, if other self-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 sole decision-making authority.
As of December 31, 2016, we held interests in 180 operating stores through joint ventures. Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers financial conditions and disputes between us and our co-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 sole decision-making authority regarding the property, partnership, joint venture or other entity. The decision-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 or co-venturers might become bankrupt or fail to fund their share of required capital contributions. Partners or co-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 or co-venturer would have full control over the partnership or joint venture. Disputes between us and partners or co-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 or co-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 our third-party partners or co-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 our wholly-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 our wholly-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 direct wholly-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.
Our joint venture investments could be adversely affected by our lack of sole decision-making authority.
As of December 31, 2019, we held interests in 246 operating stores through joint ventures. Some of these arrangements could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers financial conditions and disputes between us and our co-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 sole decision-making authority regarding the property, partnership, joint venture or other entity. The decision-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 is 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 or co-venturers might become bankrupt or fail to fund their share of required capital contributions. Partners or co-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 or co-venturer would have full control over the partnership or joint venture. Disputes between us and partners or co-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 or co-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 our third-party partners or co-venturers, which could harm our financial condition.
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 of self-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 yield income-producing returns, if at all, and may result in additional costs to us to comply with re-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 yield income-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 with re-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 an income-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 the self-storage industry generally may result in a decline in our stock price.
To the extent that the investing public has a negative perception of the self-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, 2016,2019, we had approximately $4.4$5.1 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. To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, determined without regard to the dividends paid deduction and excluding net capital gains, and we are subject to U.S. federal corporate income tax to the extent that we distribute less than 100% of our REIT taxable income each year, determined without regard to the deduction for dividends paid and including net capital gains.
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 leases and/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 with cross-default or cross-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, 2016,2019, we had approximately $4.4$5.1 billion of debt outstanding, of which approximately $1.3$1.1 billion, or 30.0%21.3% was subject to variable interest rates (excluding debt with interest rate swaps). This variable rate debt had a weighted average interest rate of approximately 2.3%3.1% 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, the increase in interest expense would decrease future earnings and cash flows by approximately $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.
Uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR after 2021 may affect our financial results.
In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to LIBOR for use in derivatives and other financial contracts that are currently indexed to LIBOR. ARRC has proposed a paced market transition plan to SOFR from LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to LIBOR.

We have outstanding debt and hedge contracts indexed to LIBOR. We are monitoring industry transition plans and evaluating the risks related to our debt and hedge contracts indexed to LIBOR. If a published U.S. dollar LIBOR rate is unavailable
after 2021, the interest rates on these instruments which are indexed to LIBOR will be determined using alternative methods, which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S. dollar LIBOR was available in its current form. Further, the same costs and risks that may lead to the unavailability of U.S. dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequences could have a material adverse effect on our financing costs, and as a result, our financial condition, operating results and cash flows.
Risks Related to Qualification and Operation as a REIT
To maintain our qualification as a REIT, weDividends payable by REITs may be forced to borrow funds on a short-term basis during unfavorable market conditions.
To qualify as a REIT, we generally must distribute to our stockholderstaxed 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 a short-term basis, or possibly long-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 of non-deductible capital expenditures, the creation of reserves or required debt amortization payments.higher rates.
Dividends payable by REITs generally do not qualify for reduced tax rates.
may be taxed at higher rates than dividends of non-REIT corporations. The maximum U.S. federal income tax rate for qualified dividends paid by domestic non-REIT corporations to individual U.S. stockholders that are individuals, trust or estates is generally 20%. Dividends paid by REITs however,to such stockholders are generally not eligible for that rate, but under the reduced rates. The more favorable rates2017 Tax Legislation (defined below), such stockholders may deduct up to 20% of ordinary dividends (i.e., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning after December 31, 2017 and before January 1, 2026. Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate dividends couldqualified dividends. This may cause stockholders who are individualsinvestors to perceiveview REIT investments in REITs to be relativelyas less attractive than investments in the stocks of non-REIT corporations, that pay dividends, which couldin turn may adversely affect the value of the stock of REITs, including our securities.
stock. 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 IRSInternal Revenue Service ("IRS") and the U.S. Treasury Department.Department of the Treasury. Changes to the tax laws, (which changes may havewith or without retroactive application)application, could adversely affect our stockholders. Itinvestors or us in ways we cannot be predicted whether, when, in what forms,predict. New legislation, Treasury Regulations, administrative interpretations or with what effective dates, the tax laws applicable to us orcourt decisions could significantly and negatively affect 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 ceaseability to qualify as a REIT, we would become subject tothe U.S. federal income tax on our taxableconsequences of such qualification, or the U.S. federal income tax consequences of an investment in us. Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.

The federal tax legislation enacted in December 2017, commonly known as the Tax Cuts and would no longerJobs Act (the “2017 Tax Legislation”), has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders. The legislation remains unclear in many respects and could still be requiredsubject to distribute mostamendments, technical corrections, interpretations and implementing regulations by the U.S. Department of our net taxable income to our stockholders,Treasury and the IRS, any of which may have adverse consequences oncould lessen or increase the total return to our stockholders.impact of the legislation.
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 corporate income tax at regular corporate rates;on our taxable income;
we also could be subject to the U.S. federal alternative minimum income tax for taxable years prior to 2018 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 U.S. 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. Our ability to satisfy the income tests depends on the sources and amounts of our gross income, which we may not be able to control. Also, we must make distributions to stockholders aggregating annually at least 90% of our netREIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, and we will be subject to U.S. federal corporate income tax at regular corporate rates to the extent we distribute less than 100% of our netREIT taxable income, without regard to the dividends paid deduction and including net capital gains.
We own and may acquire direct or indirect interests in entities that have elected or will elect to be taxed as REITs under the Internal Revenue Code (each, a “Subsidiary REIT”). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to us. If a Subsidiary REIT were to fail to qualify as a


REIT, then (i) that Subsidiary REIT would become subject to U.S. federal income tax, (ii) shares in such Subsidiary REIT would cease to be qualifying assets for purposes of the asset tests applicable to REITs, and (iii) it is possible that we would fail certain of the asset tests applicable to REITs, in which event we would fail to qualify as a REIT unless we could avail ourselves of certain relief provisions.
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 ServiceIRS regarding our qualification as a REIT.
We will pay some taxes.taxes, reducing cash available for stockholders.
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 TRS is subject to U.S. federal corporate income tax on its taxable REIT subsidiary is a fully taxable corporation, and may be limited in its ability to deduct interest payments made to us.income. ESM Reinsurance Limited, a wholly-owned subsidiary of Extra Space Management, Inc., generates income from insurance premiums that are subject to U.S. federal income tax and state insurance premiums tax.tax, and pays certain insurance royalties to us. In addition, we will be subject to a 100% penalty tax on certain amounts if the economic arrangements among our tenants, our taxable REIT subsidiaryTRS 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.parties. 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 do 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 subsidiaryTRS 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 forgo 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 forgo 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
None.
Item 2.     Properties
As of December 31, 2016,2019, we owned or had ownership interests in 1,0161,171 operating stores. Of these stores, 836925 are wholly-owned, five are in consolidated joint ventures, and 180241 are held in unconsolidated joint ventures. In addition, we managed an additional 411646 stores for third parties bringing the total number of stores which we own and/or manage to 1,427.1,817. These stores are located in 3840 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, 2016, we owned and/or managed approximately 107 million square feet of rentable space configured in approximately 960,000 separate storage units. Approximately 70%The majority 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 contain above-average population and income demographics for stores.centers. 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 the lease-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 prior to the January 1 of the current year.

a201910kmapportfolio.jpg
As of December 31, 2016,2019, approximately 850,0001,015,000 tenants were leasing storage units at the 1,427 operating stores that we own and/or manage, primarily on a month-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 are short-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, 2016,2019, the average length of stay was approximately 14.315.8 months.
The average annual rent per square foot for our existing customers at stabilized stores, net of discounts and bad debt, was $15.88$16.43 for the year ended December 31, 2016,2019, compared to $14.92$15.92 for the year ended December 31, 2015.2018. Average annual rent per square foot for new leases was $17.02$18.12 for the year ended December 31, 2016,2019, compared to $15.91$17.57 for the year ended December 31, 2015.2018. The average discounts, as a percentage of rental revenues, during these periods were 3.3%3.5% and 3.2%4.2%, 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.configurations. Most often sites are what we consider “hybrid” facilities, a mix of both drive-up buildings and multi-floor buildings. We have a number of multi-floor buildings with elevator access only, and a number of facilities featuring ground-floor access only.
The following table presents additional information regarding net rentable square feet and the occupancynumber of our stabilized stores by state as of December 31, 2016 and 2015. The information as of December 31, 2015, is on a pro forma basis as though all thestate:
 As of December 31, 2019
 REIT OwnedJV OwnedManagedTotal
LocationProperty Count (1)Net Rentable Square FeetProperty CountNet Rentable Square FeetProperty CountNet Rentable Square FeetProperty CountNet Rentable Square Feet
Alabama8
557,488
1
75,821
13
910,763
22
1,544,072
Arizona23
1,624,115
7
467,485
17
1,348,080
47
3,439,680
California165
12,724,410
41
3,021,716
63
5,964,562
269
21,710,688
Colorado16
1,074,636
2
186,293
27
1,967,878
45
3,228,807
Connecticut7
529,905
7
629,759
4
284,342
18
1,444,006
Delaware—
—
1
76,945
2
137,568
3
214,513
Florida91
6,997,266
30
2,503,775
83
6,417,322
204
15,918,363
Georgia63
4,869,815
5
431,377
20
1,526,485
88
6,827,677
Hawaii13
844,127
—
—
4
209,514
17
1,053,641
Idaho—
—
—
—
7
711,246
7
711,246
Illinois37
2,795,505
7
569,741
29
2,106,661
73
5,471,907
Indiana15
950,589
1
58,166
12
781,075
28
1,789,830
Kansas1
83,372
2
108,770
2
147,242
5
339,384
Kentucky11
929,737
1
51,128
4
324,228
16
1,305,093
Louisiana2
146,935
—
—
4
395,902
6
542,837
Maryland32
2,591,660
8
618,443
29
2,080,557
69
5,290,660
Massachusetts46
2,973,377
10
641,413
7
554,311
63
4,169,101
Michigan7
559,501
4
313,651
2
170,336
13
1,043,488
Minnesota5
382,342
1
85,098
10
673,538
16
1,140,978
Mississippi3
216,192
—
—
3
206,275
6
422,467
Missouri5
333,630
2
119,275
8
538,808
15
991,713
Nebraska—
—
—
—
2
193,487
2
193,487
Nevada14
1,038,318
4
473,471
5
533,505
23
2,045,294
New Hampshire2
136,135
2
83,925
1
61,535
5
281,595
New Jersey59
4,660,994
17
1,246,404
12
959,394
88
6,866,792
New Mexico11
722,875
6
349,860
12
891,040
29
1,963,775
New York27
1,969,347
18
1,510,322
18
1,061,641
63
4,541,310
North Carolina19
1,412,755
5
373,821
18
1,350,808
42
3,137,384
Ohio17
1,315,552
5
327,213
7
546,251
29
2,189,016
Oklahoma—
—
—
—
21
1,726,479
21
1,726,479
Oregon6
400,071
4
281,679
10
680,262
20
1,362,012
Pennsylvania18
1,350,202
7
511,948
23
1,719,271
48
3,581,421
Rhode Island2
130,696
—
—
1
84,665
3
215,361
South Carolina23
1,758,027
7
497,598
15
1,098,369
45
3,353,994
Tennessee17
1,418,801
12
804,021
16
1,161,611
45
3,384,433
Texas100
8,604,658
10
707,779
79
6,405,798
189
15,718,235
Utah10
710,594
—
—
18
1,343,916
28
2,054,510
Virginia46
3,683,817
7
566,223
15
1,096,668
68
5,346,708
Washington8
589,862
1
57,340
7
482,875
16
1,130,077
Washington, DC1
100,039
1
103,579
4
365,056
6
568,674
Wisconsin—
—
5
508,221
4
334,900
9
843,121
Puerto Rico—
—
—
—
8
916,924
8
916,924
Totals930
71,187,345
241
18,362,260
646
50,471,148
1,817
140,020,753
(1) REIT owned property count includes five stores owned at December 31, 2016, were under our control as of December 31, 2015.in consolidated joint ventures.
Stabilized Store Data Based on Location

14


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

The following table presents additional information regarding the occupancy of our lease-up stores by state as of December 31, 2016 and 2015. The information as of December 31, 2015, is on a pro forma basis as though all the stores owned at December 31, 2016, were under our control as of December 31, 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, 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, 2016, which may differ from unit count as of December 31, 2015, due to unit conversions or expansions.
(2)Represents net rentable square feet as of December 31, 2016, which may differ from net rentable square feet as of December 31, 2015, due to unit conversions or expansions.
(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 legal proceedings and are 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 could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations in any particular period, notwithstanding the fact that we are currently vigorously defending any legal proceedings against us.
We currently have several For more information on our legal proceedings pending against us that include causes of action alleging wrongful foreclosure, violations of various state specific self-storage statutes,accruals, refer to the Commitments 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 includedContingencies footnote in other liabilities onthe notes to the consolidated balance sheets.financial statements in Item 8 of this Form 10-K.
Item 4.     Mine Safety Disclosures
Not Applicable.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 beenis traded under the symbol “EXR” on the New York Stock Exchange (“NYSE”("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
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 21, 2017,19, 2020, the closing price of our common stock as reported by the NYSE was $78.37.$107.48. At February 21, 2017,19, 2020, we had 355371 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 on Form 10-K.
Issuer Purchases of Equity Securities

In November 2017, our board of directors authorized a three-year share repurchase program to allow us to acquire shares in aggregate up to $400.0 million. We have no current plans to repurchase shares. Any acquisition of shares will be through open market or privately negotiated transactions. There have been no repurchases since the inception of this plan.
Unregistered Sales of Equity Securities

On November 8, 2016, our Operating Partnership issued 486,244 Series D-4 Preferred Units in connection with the acquisition of a store located in Illinois. This store was acquired in exchange for the Series D-4 Preferred Units, valued at $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 store 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 are governed by the Operating Partnership’s Fourth Amended and Restated Agreement of Limited Partnership. The OP Units will be redeemable, at the option of the holders following the expiration 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.
The OP 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.

All other unregistered sales of equity securities during the year ended December 31, 20162019 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 this Form 10-K (amounts in thousands, except share and per share data).



 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


 For the Year Ended December 31,
 2019 2018 2017 2016 2015
Operating Data:         
Total revenues$1,308,454
 $1,196,604
 $1,105,009
 $991,875
 $782,270
Income from operations (1)$634,958
 $619,703
 $654,394
 $458,303
 $296,157
Earnings per share - basic$3.27
 $3.29
 $3.79
 $2.92
 $1.58
Earnings per share - diluted$3.24
 $3.27
 $3.76
 $2.91
 $1.56
Cash dividends paid per common share$3.56
 $3.36
 $3.12
 $2.93
 $2.24
Other Data         
Acquisitions - Wholly Owned$300,379
 $457,617
 $627,462
 $1,086,645
 $1,606,509
Acquisitions - Joint Venture$104,338
 $63,723
 $15,094
 $34,199
 $21,529
Total$404,717
 $521,340
 $642,556
 $1,120,844
 $1,628,038
As of December 31,As of December 31,
2016 2015 2014 2013 20122019 2018 2017 2016 2015
Balance Sheet Data                  
Total assets(2)$7,091,446
 $6,071,407
 $4,381,987
 $3,977,140
 $3,223,477
$8,532,377
 $7,847,978
 $7,460,953
 $7,091,446
 $6,071,407
Total notes payable, notes payable to trusts, exchangeable senior notes and revolving lines of credit, net(3)$4,306,223
 $3,535,621
 $2,349,764
 $1,946,647
 $1,577,599
$5,046,486
 $4,811,515
 $4,554,217
 $4,306,223
 $3,535,621
Noncontrolling interests$351,274
 $283,527
 $174,558
 $173,425
 $53,524
$381,733
 $371,698
 $373,056
 $351,274
 $283,527
Total stockholders' equity$2,244,892
 $2,089,077
 $1,737,425
 $1,758,470
 $1,491,807
$2,539,961
 $2,413,724
 $2,350,751
 $2,244,892
 $2,089,077
Other Data                  
Net cash provided by operating activities$539,263
 $367,329
 $337,581
 $271,259
 $215,879
$707,686
 $677,795
 $597,375
 $539,263
 $367,329
Net cash used in investing activities(4)$(1,032,035) $(1,625,664) $(564,948) $(366,976) $(606,938)$(621,630) $(443,898) $(353,079) $(1,048,889) $(1,626,946)
Net cash provided by financing activities$460,831
 $1,286,471
 $148,307
 $191,655
 $395,360
Net cash (used in) provided by financing activities$(88,013) $(247,251) $(215,994) $460,831
 $1,286,471

(1)The adoption of Financial Accounting Standards Board (“FASB”) ASU 2017-01 on January 1, 2017, has resulted in a decrease in acquisition related costs as our acquisition of operating stores are considered asset acquisitions rather than business combinations.
(2)
In connection with our adoption of FASB ASU 2016-02, "Leases (Topic 842)" on January 1, 2019, we began recognizing right-of-use assets and lease liabilities associated with our operating leases as of the adoption date.
(3)
In connection with our adoption of FASB ASU 2015-3, "Simplifying the Presentation of Debt Issuance Costs," in fiscal year 2016, debt issuance costs, with the exception of those related to our revolving credit facility, have been reclassified from other assets to a reduction of the carrying amount of the related debt liability. Prior year amounts have been reclassified to conform to the current period’s presentation.
(4)
In connection with our adoption of FASB ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," on January 1, 2018, we began including amounts generally described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Prior year amounts have been reclassified to conform to the current period's presentation.

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 are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Form 10-K entitled “Statements Regarding Forward-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 this Form 10-K entitled “Risk Factors.” AmountsDollar amounts in thousands, except share and per share data.
OverviewOVERVIEW
We are a fully integrated, self-administered and self-managed real estate investment trust or REIT,(“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 managedself-storage properties (“stores”). We derive substantially all of our revenues from our two segments: storage operations and tenant reinsurance. Primary sources of revenue for our storage operations


segment include rents received from tenants under leases at each of our wholly-owned stores.
At December 31, 2016, we owned, had ownership interests Our operating results depend materially on our ability to lease available self-storage units, to actively manage unit rental rates, and on the ability of our tenants to make required rental payments. Consequently, management spends a significant portion of their time maximizing cash flows from our diverse portfolio of stores. Revenue from our tenant reinsurance segment consists of insurance revenues from the reinsurance of risks relating to the loss of goods stored by tenants in or managed 1,427 operating stores in 38 states, Washington, D.C. and Puerto Rico. Of these 1,427 operating stores, we owned 836, we held joint venture interests in 180 stores, and our taxable REIT subsidiary, Extra Space Management, Inc., operated an additional 411 stores that are owned by third parties. These operating stores contain approximately 107 million square feet of rentable space in approximately 960,000 units and currently serve a customer base of approximately 850,000 tenants.stores.
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.centers. The clustering of our assets around these population centers enables us to reduce our operating costs through economies of scale. To maximize the performance of our stores, we employ industry-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 pro-actively manage revenues.
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. 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 our industry-leading technology systems. We consider a store to be in the lease-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 prior to the January 1 of the current year.
To maximize the performance of our stores, we employ industry-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 our wholly-owned stores, from management fees on the stores we manage for joint-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 available self-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 our industry-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 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:policies and estimates:
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 underUnder certain circumstances when we enter into arrangements for the formation of joint ventures, a VIE may be created under condition (i) or (ii)(b) or (ii)(c) ofcreated.  The primary factors that require the previous paragraph. For eachmost judgment in determining whether the joint venture is a VIE created,are whether the decisions that most significantly impact the entity’s economic performance were controlled by the equity holders as a group, and whether the joint venture has sufficient equity to finance its activities without additional subordinated support.
If the joint venture is determined to be a VIE, we have performedperform 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 withwithin our financial statements. Otherwise, our investment is generally accounted for under the equity method. Our ability to correctly assess the influence or control over an entity affects the presentation of the investment in our consolidated financial statements.
As of December 31, 2016,2019, we had no consolidated VIEs. Additionally,As of December 31, 2018, our Operating Partnership hashad notes payable to three trustsone trust that are VIEs under condition (ii)(a) above.was considered a VIE. Since the Operating Partnership iswas not the primary beneficiary of the trusts, these VIEs aretrust, this VIE was not consolidated.


REAL ESTATE ASSETS: Real estate assets are stated at cost, less accumulated depreciation. Direct We account for the acquisition of stores, including by merger and allowable internal costs associated with the development, construction, renovation, and improvementother acquisitions of real estate, in accordance with ASC 805-10, "Business Combinations." We use our judgment to determine if assets are capitalized. Interest, property taxes,acquired meet the definition of a business or if the acquisition should be considered an asset acquisition subsequent to our January 1, 2017 adoption of ASU 2017-01, "Business Combinations (Topic 805) - Clarifying the Definition of a Business." We must make significant assumptions and other costs associated with development incurred duringestimates in determining 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 lifefair value of the asset are capitalized and depreciated over their estimated useful lives. Depreciation is computed using the straight-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 theirand consideration transferred. These assumptions and estimates require judgment, and therefore others could come to


materially different conclusions as to the estimated fair values, which are estimated using significant unobservable inputs. The value of the tangible assets, consisting of landcould result in differences in depreciation and buildings, is determined as if vacant. Intangible assets, which represent the value of existing tenant relationships, are recorded at their fair values basedamortization expense, gains and losses on the avoided cost to replace the current leases. We measure the valuesale 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.real estate assets, and real estate and intangible asset values.
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 eight stores where the ground leases were assumed by us 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 the lease-up stage and compare actual operating results to original projections.
When we determine that an event that We may indicate impairment has occurred, we compare the carrying value of the related long-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 arenot have 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 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, we would recognize a loss on the disposal group classified as held for sale. The operations of assets held for sale or sold during the period are presented as part 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 thematerial 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 valueaffect impairment of our investmentsstores. No material impairments were recorded 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.year ended December 31, 2019.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: The accounting for changes in the fair value We hold a number of derivatives depends on the intendedderivative instruments which we 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 theour exposure to variability in expected future cash flows, mainly related to our interest rates on variable interest debt. We do not use derivatives for trading or other types of forecastedspeculative purposes. We assess our derivatives both at inception, and on an ongoing quarterly basis, for whether the derivatives used in hedging transactions are considered cash flow hedges.
Foreffective. The rules and interpretations relating to the accounting for derivatives designated as fair value hedges,are complex. Failure to apply this guidance correctly may require us to recognize all 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 on month-to-month terms. Prepaid rents are recognized on a straight-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 onwhich may materially impact our ownership interest in the earnings of each of the unconsolidated real estate entities. Interest income is recognized as earned.results.
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. IfFor any taxable year that we were to fail to meet these requirements,qualify as a REIT and for which applicable statutory relief provisions did not apply, we would be subject to federal corporate income tax.tax on all of our taxable income for at least that year and the ensuing four years. We arecould also be subject to certain statepenalties and local taxes. Provision for such taxes has been included ininterest, and our net income tax expensemay be materially different from the amounts reported in our consolidated statements of operations.financial statements.
We have elected to treat one of our corporate subsidiaries, Extra Space Management, Inc., as a taxable REIT subsidiary (“TRS”).TRS. In general, our TRS may perform additional services for tenants and generally may engage in any real estate or non-real estate related business. A TRS is subject to federal 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. If tax authorities determine that amounts paid by our TRS to us are not reasonable compared to similar arrangements among unrelated parties, we could be subject to a penalty tax on the excess payments.


RECENT ACCOUNTACCOUNTING PRONOUNCEMENTS: For a discussion of recent accounting pronouncements affecting our business, see Item 8, “Financial Statements and Supplementary Data–Recently Issued Accounting Standards.”
RESULTS OF OPERATIONS
Comparison of the Year Ended December 31, 20162019 to the Year Ended December 31, 20152018
Overview
Results for the year ended December 31, 20162019 included the operations of 1,0161,171 stores (836(925 wholly-owned, onefive in a consolidated joint venture,ventures, and 179241 in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, 2015,2018, which included the operations of 9991,111 stores (746(878 wholly-owned, onefour in a consolidated joint venture, and 252229 in joint ventures accounted for using the equity method). Material or unusual changes in the results of our operations are discussed below.


a2019cymdastorecountupdated1.jpga2019cyoccupancychart.jpg

Revenues
The following table presents information on revenues earned for the years indicated:
For the Year Ended December 31,    For the Year Ended December 31,    
2016 2015 $ Change % Change2019 2018 $ Change % Change
Revenues:              
Property rental$864,742
 $676,138
 $188,604
 27.9%$1,130,177
 $1,039,340
 $90,837
 8.7%
Tenant reinsurance87,291
 71,971
 15,320
 21.3%128,387
 115,507
 12,880
 11.2%
Management fees and other income39,842
 34,161
 5,681
 16.6%49,890
 41,757
 8,133
 19.5%
Total revenues$991,875
 $782,270
 $209,605
 26.8%$1,308,454
 $1,196,604
 $111,850
 9.3%


Property Rental—The increase in property rental revenues for the year ended December 31, 20162019 was primarily the result of an increase of $144,985$53,627 associated with acquisitions completed in 20162019 and 2015.2018. We acquired 9921 stores and added 27 leased properties (as part of a new net lease agreement) during the year ended December 31, 2019, and acquired 34 stores during the year ended December 31, 2016 and 171 stores2018. Property rental revenue also increased by $33,654 during the year ended December 31, 2015. Property rental revenue also increased by $42,171 during the year ended December 31, 20162019 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 thean increase in stores operated. We operated 1,4271,817 stores at December 31, 2016,2019, compared to 1,3471,647 stores at December 31, 2015.2018.
Management Fees and Other Income—Our TRS manages stores owned by our joint ventures and third parties. Management fees generallyand other income represent 6.0%the fee collected for our management of cash collected from stores owned by third parties and unconsolidated joint ventures. We also earn an asset managementventures and other transaction fee from the Storage Portfolio I (“SPI”) joint venture, equal to 0.50% multiplied by the total asset value, provided certain conditions are met.income. The increase in management fees isfor the year ended December 31, 2019 was primarily 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 acquisitionand transaction fees earned in 2019. As of 40December 31, 2019 we managed 892 stores from ourfor third parties and joint ventures during 2016.


compared to 769 stores as of December 31, 2018.
Expenses
The following table presents information on expenses for the years indicated:
For the Year Ended December 31,    For the Year Ended December 31,    
2016 2015 $ Change % Change2019 2018 $ Change % Change
Expenses:              
Property operations$250,005
 $203,965
 $46,040
 22.6 %$336,050
 $291,695
 $44,355
 15.2%
Tenant reinsurance15,555
 13,033
 2,522
 19.4 %29,376
 25,707
 3,669
 14.3%
Acquisition related costs and other12,111
 69,401
 (57,290) (82.5)%
General and administrative81,806
 67,758
 14,048
 20.7 %89,418
 81,256
 8,162
 10.0%
Depreciation and amortization182,560
 133,457
 49,103
 36.8 %219,857
 209,050
 10,807
 5.2%
Total expenses$542,037
 $487,614
 $54,423
 11.2 %$674,701
 $607,708
 $66,993
 11.0%


Property Operations—The increase in property operations expense consists primarily of an increase of $45,055$28,463 related to acquisitions completed in 20162019 and 2015.2018. We acquired 99 operating21 stores and added 27 leased properties (as part of a new net lease agreement) during the year ended December 31, 2019 and acquired 34 stores during the year ended December 31, 20162018. There was also an increase of $14,458 related to increases in property taxes and 171 stores during the year ended December 31, 2015.marketing expenses at stabilized stores.
Tenant Reinsurance—Tenant reinsurance expense represents the costs that are incurred to provide tenant reinsurance. The change iswas 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 decreasean increase 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")overall average payout 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.claims.

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 9921 stores and added 27 leased properties (as part of a new net lease agreement) during the year ended December 31, 2019, and acquired 34 operating stores during the year ended December 31, 2016, and 171 operating stores during the year ended December 31, 2015.


2018.
Other Income and Expenses
The following table presents information on other revenues and expenses for the years indicated:
For the Year Ended December 31,    For the Year Ended December 31,    
2016 2015 $ Change % Change2019 2018 $ 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 %
Gain on real estate transactions$1,205
 $30,807
 $(29,602) (96.1)%
Interest expense(133,479) (95,682) (37,797) 39.5 %(186,526) (178,436) (8,090) 4.5 %
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes(4,980) (3,310) (1,670) 50.5 %(4,742) (4,687) (55) 1.2 %
Interest income6,148
 3,461
 2,687
 77.6 %7,467
 5,292
 2,175
 41.1 %
Interest income on note receivable from Preferred Operating Partnership unit holder4,850
 4,850
 —
 —
Equity in earnings of unconsolidated real estate ventures12,895
 12,351
 544
 4.4 %11,274
 14,452
 (3,178) (22.0)%
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partners' interests69,199
 2,857
 66,342
 2,322.1 %
Income tax expense(15,847) (11,148) (4,699) 42.2 %(11,308) (9,244) (2,064) 22.3 %
Total other expense, net$(52,749) $(85,120) $32,371
 (38.0)%$(182,630) $(141,816) $(40,814) 28.8 %
       


Gain on Real Estate Transactions Earnout from Prior Acquisition and Sale— The gain of Other Assets— $1,205 for the year ended December 31, 2019 was a result of the sale of one property in New York for $11,272. 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 2014,2018, we recorded a liability$30,671 gain on the sale 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.one property in California.

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, 20162019 was primarily the result of a higher average debt balancesbalance when compared to the same period in the prior year. TheInformation on the total face value of our debt including our lines of credit, was $4,363,697 atand the average interest rate for each quarter during the years ended December 31, 2016 compared to $3,598,254 at2019 and December 31, 2015.2018 is set forth in the following table:

 For the Three Months Ended December 31, For the Three Months Ended September 30, For the Three Months Ended June 30, For the Three Months Ended March 31,
 2019 2018 2019 2018 2019 2018 2019 2018
Total face value of debt$5,076,501 $4,854,077 $4,844,620 $4,803,360 $5,072,936 $4,809,483 $5,039,286 $4,557,414
Average interest rate3.3% 3.5% 3.4% 3.5% 3.5% 3.4% 3.5% 3.4%
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 Notesexchangeable senior notes both havehad 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.receivable and income earned on notes receivable from preferred and common Operating Partnership unit holders. In late 2018 we began to provide bridge financing on completed properties owned by third parties that we manage. The total principal balance of bridge loans receivable as of December 31, 2019 was $43,586, compared to $13,850 as of December 31, 2018. The increase forin interest income during the year ended December 31, 2016 is related2019 was primarily to the increase in the average notes receivable balances outstanding when compared to the prior year. The majorityresult 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.earned on these bridge loans.
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. In these joint ventures, we and our joint venture partners generally receive a preferred return on our invested capital. To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits, as applicable. The increasedecrease in earnings for the year ended December 31, 20162019 related primarily to 12 properties that we purchased from joint ventures in January 2019.
Income Tax Expense— For the year ended December 31, 2019, the increase in income tax expense was the result of an increase in income earned by our taxable REIT subsidiary when 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 overalla decrease in the number of stores owned by our joint ventures, primarily duesolar tax credits when compared 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%.2018.

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, 20152018 to the Year Ended December 31, 20142017
Overview
ResultsThe results of operations for the years ended December 31, 2018 compared to December 31, 2017 was included in our Annual Report on Form 10-K for the year ended December 31, 2015, included the operations2018 on page 18, under Part II, Item 7, “Management’s Discussion and Analysis of 999 stores (747Financial Condition and Results of Operations,” 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, 2014, which included the operations of 828 stores (576 of which were consolidated and 252 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,
    
 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 $69,622 associated with acquisitions completed in 2015 and 2014. We acquired 171 operating stores during 2015 and 51 stores during 2014. In addition, revenues increased by $47,560 as a result of increases in occupancy and rental rates to new and existing customers at our stabilized stores. We saw no significant increase in overall customer renewal rates and our average length of stay was approximately 13.7 months. For existing customers we generally seek to increase rental rates approximately 7% to 10% at least annually. Rental rates to new tenants increased by approximately 8.9% over 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. In addition, we operated 1,347 stores at December 31, 2015, compared to 1,088 stores at December 31, 2014.
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 to an increase in the number of properties managed. At December 31, 2015, we managed 348 stores, compared to 260 stores at December 31, 2014.
Expenses
The following table presents information on expenses for the years indicated:
 
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 $26,236 related to acquisitions completed in 2015 and 2014. We acquired 171 operating stores during the year ended December 31, 2015 and 51 stores during the year ended December 31, 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, 2015, we owned and/or managed 1,347 stores compared to 1,088 stores at December 31, 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.
Acquisition Related Costs—These costs relate to acquisition activities during the periods indicated. The increase for the year ended December 31, 2015 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 $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 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 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, 2015, we acquired 171 stores, 161 of which we did not previously manage. During the year ended December 31, 2014, we acquired 51 stores, 30 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.
Other Income and Expenses
The following table presents information on other revenues and expenses for the years indicated:
 
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 Real Estate Transactions, 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. 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.
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.


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, 2015, our total face value of debt was $3,598,254, compared to a total face value of debt of $2,379,657 at December 31, 2014. The average interest rate was 3.1% as of December 31, 2015, compared to 3.4% as of December 31, 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. In June 2013, our Operating Partnership issued $250,000 of its 2013 Notes. In September 2015, our Operating Partnership issued $575,000 of its 2015 Notes, 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 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 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 in equity in earnings for the year ended December 31, 2015 was due primarily to increases in revenue at the stores owned by 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— 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 associatedfiled with the acquisitions that were completed during 2013.
Income Tax Expense—The increase 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 fee that we charge quarterly to our captive insurance subsidiary, which reduced the tax expense for that period.


Net Income Allocated to Noncontrolling Interests
The following table presents informationSEC on net income allocated to noncontrolling interests for the years indicated:
 
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 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%.
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 the then-payable quarterly distribution per 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 years 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 4.2% and 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, respectively. The percentage of net income allocated to the Operating Partnership noncontrolling interest increased due to OP Units issued in conjunction with acquisitions during 2015.February 26, 2019.
FUNDS FROM OPERATIONS
FFOFunds 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 impairment write-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, For the Year Ended December 31,
 2016 2015 2014 2019 2018 2017
Net income attributable to common stockholders $366,127
 $189,474
 $178,355
 $419,967
 $415,289
 $479,013
            
Adjustments:            
Real estate depreciation 155,358
 115,924
 96,819
 206,257
 193,587
 172,660
Amortization of intangibles 20,467
 11,094
 12,394
 5,957
 8,340
 13,591
(Gain) loss on real estate transactions, earnout from prior acquisition and sale of other assets (8,465) (1,501) 10,285
Gain on real estate transactions and impairment of real estate (1,205) (30,807) (112,789)
Unconsolidated joint venture real estate depreciation and amortization 4,505
 4,233
 4,395
 8,044
 7,064
 5,489
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) (2,288) (2,288) (3,119)
Income allocated to Operating Partnership noncontrolling interests 30,962
 20,064
 17,530
 31,156
 31,791
 35,306
      
Funds from operations attributable to common stockholders and unit holders $494,670
 $331,343
 $310,006
 $667,888
 $622,976
 $590,151
SAME-STORE RESULTS

Comparison of the Year Ended December 31, 2019 to the Year Ended December 31, 2018
Our same-store pool for the periods presented consists of 564821 stores that are wholly-owned and operated and that were stabilized by the first day of 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 table presents operating data for our same-store portfolio.portfolio:
 For the Year Ended December 31, Percent
 2019 2018 Change
Same-store rental revenues$1,032,821
 $998,224
 3.5%
Same-store operating expenses289,986
 276,467
 4.9%
Same-store net operating income$742,835
 $721,757
 2.9%
      
Same-store square foot occupancy as of quarter end92.4% 91.7%  
      
Properties included in same-store821
 821
  

Same-store revenues for the year ended December 31, 2019 increased due to higher rental rates for both new and existing customers. Expenses were higher for the year ended December 31, 2019, primarily due to increases in marketing expenses and property taxes.



Comparison of the Year Ended December 31, 2016 to the Year Ended December 31, 2015
The following table presents a reconciliation of same-store net operating income to net 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 in same-store rental and tenant reinsurance revenues for the three months and year ended December 31, 2016, as compared to the same periods ended December 31, 2015, were due primarily to higher rental rates for both new and 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 expenses 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, 2016, expenses were higher due to increases in property taxes and credit card processing fees. These increases in expenses were partially offset by decreases in utilities and repairs and maintenance expense.


Comparison of the Year Ended December 31, 2015 to the Year Ended December 31, 2014
The following table presents a reconciliation of same-store net operating income to income from operations as presented on ourcondensed 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  
 For the Year Ended December 31,
 2019 2018
Net Income$451,123
 $447,080
Adjusted to exclude:   
(Gain) on real estate transactions(1,205) (30,807)
Equity in earnings of unconsolidated joint ventures(11,274) (14,452)
Interest expense191,268
 183,123
Depreciation and amortization219,857
 209,050
Income tax expense11,308
 9,244
General and administrative89,418
 81,256
Management fees, other income and interest income(57,357) (47,049)
Net tenant insurance(99,011) (89,800)
Non same-store rental revenues(97,356) (41,116)
Non same-store operating expenses46,064
 15,228
Total same-store net operating income$742,835
 $721,757
    

Comparison of the Year Ended December 31, 2018 to the Year Ended December 31, 2017

The increases in same-store rental and tenant reinsurance revenuessame store results for the three months and yearyears ended December 31, 2015, as2018 compared to the same periods ended December 31, 2014, were due primarily to an increase2017 was included in occupancy, an increase in rental rates to new and existing customers, and reduced customer discounts. Expenses were higherour Annual Report on Form 10-K for the year ended December 31, 2015 due to increases in tenant reinsurance expense, credit card merchant fees2018 on page 25, under Part II, Item 7, “Management’s Discussion and property taxes. Increases were offset by decreases in utility expensesAnalysis of Financial Condition and property insurance expense.Results of Operations,” which was filed with the SEC on February 26, 2019.
CASH FLOWS
Comparison of the Year Ended December 31, 2016 to the Year Ended December 31, 2015
Cash provided byflows from operating activities was $539,263 and $367,329 forincreased as expected from our continued growth in revenues through rates along with the years ended December 31, 2016 and 2015, respectively. The change when compared to the prior year was primarily due to a $187,553 increase in net income and an increase in depreciation and amortization expense of $49,103. These increases were offset by an increase in the gain on salenumber of real estate assetsproperties we own 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.



operate. Cash flows 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 relatedrelate primarily to a decrease in proceeds from notes payable and revolving linesour acquisition, development, sales 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 principal payments on notes payable and revolving lines of 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, 2015 to the Year Ended December 31, 2014
Cash provided by operating activities was $367,329 and $337,581 for the years ended December 31, 2015 and 2014, respectively. The change when compared to the prior year was primarily due to a $13,640 increase in net income and an increase in depreciation and amortization expense of $18,381. These increases were partially offset by a decrease in the change in accounts payable and accrued liabilities of $4,812.
Cash used in investing activities was $1,625,664 and $564,948 for the years ended December 31, 2015 and 2014, respectively. The change was primarily the result of an increase of $1,200,853 paid for the acquisition of SmartStop in October 2015. There was also an increase of $55,073 in cash used to purchase/issue notes receivable. These increases in cash outflows were partially offset by an increase of $45,080 in cash received as returns ofstores, investments in unconsolidated real estate ventures.
entities and bridge loans, and fluctuate depending on our actions in those areas. Cash provided byflows from financing activities was $1,286,471depend primarily on our debt and $148,307 forequity financing activities. A summary of cash flows along with significant components are as follows:



 For the Year Ended December 31,
 2019 2018 2017
Net cash provided by operating activities$707,686
 $677,795
 $597,375
Net cash used in investing activities$(621,630) $(443,898) $(353,079)
Net cash used in financing activities$(88,013) $(247,251) $(215,994)
      
Significant components of net cash flow included:     
Net income$451,123
 $447,080
 $514,222
Depreciation and amortization$219,857
 $209,050
 $193,296
Acquisition and development of new stores$(403,211) $(487,065) $(684,931)
Gain on real estate transactions and impairment of real estate$(1,205) $(30,807) $(112,789)
Investment in unconsolidated real estate entities$(197,759) $(65,500) $(17,944)
Proceeds from the sale of common stock, net of offering costs$198,827
 $90,231
 $—
Net proceeds from our debt financing and repayment activities$205,267
 $134,244
 $217,028
Dividends paid on common stock$(458,114) $(424,907) $(393,040)

We believe that cash flows generated by operations, along with our existing cash and cash equivalents, the years ended December 31, 2015 and 2014, respectively. The net increase was due to a numberavailability of factors, including an increase of $1,204,138 in the cash proceeds received from the issuance of notes payable and revolvingfunds under our existing lines of credit, anand our access to capital markets will be sufficient to meet all of our reasonably anticipated cash needs during the next twelve months. These cash needs include operating expenses, monthly debt service payments, recurring capital expenditures, acquisitions, building redevelopments and expansions, distributions to unit holders and dividends to stockholders necessary to maintain our REIT qualification.

We expect to generate positive cash flow from operations in 2020, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations could cause us to increase of $446,877 in the cash proceeds received from the sale of common stock, and an increase of $563,500 in the net proceeds from the issuance of exchangeable senior notes. These increases in cash inflows were offset by an increase of $780,442 of cash paid for principal paymentsour reliance on notes payable and revolvingavailable funds under our existing lines of credit, an increasecurtail planned capital expenditures, or seek other additional sources of $227,212 in cash paid to repurchase existing exchangeable senior notes, and an increase of $59,211 in cash paid as dividends on our common stock.financing.


LIQUIDITY AND CAPITAL RESOURCES
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 maturities;
provisions that require recourse and cross-collateralization; and
corporate credit ratios including fixed charge coverage ratio and max secured/unsecured indebtedness.
Our indebtedness may be recourse, non-recourse, cross-collateralized, cross-defaulted, secured or unsecured. In addition, we may invest in stores subject to existing loans collateralized by mortgages or similar liens, 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.


As of December 31, 2016,2019, we had $43,858$65,746 available in cash and cash equivalents. 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 20162019 and 2015,2018, 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.
 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, 2016,2019, we had $4,363,697$5,076,501 face value of debt, resulting in a debt to total enterprise value ratio of 29.6%25.9%. As of December 31, 2016,2018, we had $4,854,077 face value of debt, resulting in a debt total enterprise value ratio of 28.4%. As of December 31, 2019, the ratio of total fixed-rate debt and other instruments to total debt was 70.0%78.7% (including $2,198,275$2,290,356 on which we have interest rate swaps that have been included as fixed-rate debt). As of December 31, 2018, the ratio of total fixed-rate debt and other instruments to total debt was 74.1% (including $2,192,550 on which we have interest rate swaps that have been included as fixed-rate debt). The weighted average interest rate of the total of fixed- and variable-rate debt at December 31, 20162019 and 2018 was 3.0%.3.3% and 3.5%, respectively.

In July 2019, we obtained a BBB/Stable rating from S&P and intend to manage our balance sheet to preserve such rating. 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, 2016.

2019.
We expect to fund our short-term liquidity requirements, including operating expenses, recurring capital expenditures, dividends to stockholders, distributions to holders of Operating Partnership units and interest on our outstanding indebtedness, out of our operating cash flow, cash on hand and borrowings under our revolving lines of credit, including undrawn portions of our unsecured facility.credit. In addition, we are pursuing additional sources of financing based on anticipated funding needs.

Our liquidity needs consist primarily of cashoperating expenses, monthly debt service payments, recurring capital expenditures, dividends to stockholders and distributions to stockholders, store acquisitions, principal payments underunit holders necessary to maintain our borrowings and non-recurring capital expenditures.REIT qualification. 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 or equity-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 Operating Partnership units as currency to fund acquisitions from self-storage owners who desire tax-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 facilitating off-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, 2016:


2019:
Payments due by Period:Payments due by Period:
  Less Than     After  Less Than     More than
Total 1 Year 1-3 Years 3-5 Years 5 YearsTotal 1 Year 1-3 Years 3-5 Years 5 Years
Operating leases$120,926
 $6,123
 $12,801
 $11,977
 $90,025
$367,376
 $28,369
 $57,279
 $57,905
 $223,823
Notes payable, notes payable to trusts and revolving lines of credit         
Notes payable, unsecured term loans, notes payable to trusts and revolving lines of credit         
Interest573,411
 127,630
 218,184
 109,191
 118,406
742,201
 158,086
 246,233
 178,503
 159,379
Principal4,363,697
 311,075
 936,309
 2,432,353
 683,960
5,076,501
 1,143,431
 440,848
 1,600,378
 1,891,844
Total contractual obligations$5,058,034
 $444,828
 $1,167,294
 $2,553,521
 $892,391
$6,186,078
 $1,329,886
 $744,360
 $1,836,786
 $2,275,046


The operating leases above include minimum futureundiscounted lease payments on leases for 2248 of our operating stores as well as leases of our corporate offices and division offices. Three ground leases include additional contingent rental payments based on the level of revenue achieved at the store.
As of December 31, 2016,2019, the weighted average interest rate for all fixed rate loans was 3.3%3.4%, and the weighted average interest rate on all variable rate loans was 2.3%3.1%.
For more information on our contractual obligations related to real estate acquisitions, refer to our commitments and contingencies footnote in the notes to the consolidated financial statements in Item 8 of this Form 10-K.
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 and cross-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 or unsecured. If the indebtedness is non-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
The self-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.7A.     Quantitative and Qualitative Disclosures About 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, 2016,2019, we had approximately $4.4$5.1 billion in total face value debt, of which approximately $1.3$1.1 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 would increase or decrease future earnings and cash flows by approximately $13.1$10.8 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.
Derivative Instruments
We use derivative instruments to help manage interest rate risk using designated hedge relationships. Interest rate swaps involve the exchange of fixed-rate and variable-rate interest payments between two parties based on a contractual underlying notional amount, but do not involve the exchange of the underlying notional amounts. See our Derivatives footnote in our Notes to consolidated financial statements in Item 8 for additional information about our use of derivative contracts.

26





Item 8.     Financial Statements and Supplementary Data
EXTRA SPACE STORAGE INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SCHEDULES
Report of Independent Registered Public Accounting Firm
4128
Consolidated Balance Sheets as of December 31, 20162019 and 20152018
4230
Consolidated Statements of Operations for the years ended December 31, 2016, 20152019, 2018 and 20142017
4331
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 20152019, 2018 and 20142017
4432
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2016, 20152019, 2018 and 20142017
4533
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 20152019, 2018 and 20142017
4836
Notes to Consolidated Financial Statements
5037
Schedule III - Real Estate and Accumulated Depreciation
8970
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.

27





Report of Independent Registered Public Accounting Firm


TheTo the Stockholders and the Board of Directors and Stockholders of Extra Space Storage, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Extra Space Storage, Inc. (the Company) as of December 31, 20162019 and 2015, and2018, the related consolidated statements of operations, comprehensive income, stockholders’stockholders' equity and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included2019, and the related notes and financial statement schedule listed in the Index at Item 8. 8 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2020 expressed an unqualified opinion thereon.

Adoption of ASU No. 2016-02

As discussed in Note 13 to the consolidated financial statements, the Company changed its method of accounting for leases in the year ended December 31, 2019 due to the adoption of ASU No. 2016-02, “Leases (Topic 842).”

Basis for Opinion

These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on thesethe Company’s financial statements and schedule based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. 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 includesmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.
In our opinion,
Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements referredthat was communicated or required to above present fairly, in allbe communicated to the audit committee and that: (1) relates to accounts or disclosures that are material respects,to the consolidated financial position of Extra Space Storage Inc. at December 31, 2016statements and 2015, and the consolidated results of their operations and their cash flows for each(2) involved our especially challenging, subjective or complex judgments. The communication of the three yearscritical audit matter does not alter in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, inany way our opinion on the related financial statement schedule, when considered in relation to the basicconsolidated financial statements, taken as a whole, presents fairly in all material respectsand we are not, by communicating the information set forth therein.critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Extra Space Storage Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2017 expressed an unqualified opinion thereon.





Accounting treatment of investments in real estate ventures
Description of the MatterAt December 31, 2019, the Company’s investments in unconsolidated real estate ventures was $292.8 million. As explained in Note 5 to the consolidated financial statements, the Company enters into real estate ventures and performs an assessment to determine whether the equity or consolidation method of accounting is appropriate.
Application and auditing of the accounting treatment of the Company’s real estate ventures, including the process of evaluating the criteria for consolidation based on the variable interest entity (VIE) model or a voting interest entity (VOE) model, is complex and requires significant judgment. This evaluation and analysis include the determination of which party, if any, has power to direct the activities most significant to the economic performance of each real estate venture and whether the venture has sufficient equity to finance its activities without additional subordinated support.
How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of relevant controls over the Company's qualitative analysis that determines whether the Company has control over the venture through voting interest or through the presence of a variable interest in a real estate venture (thus requiring consolidation if the Company is the primary beneficiary of the VIE).
For each new investment in a real estate venture, our procedures included reading the real estate venture agreement, and reviewing management’s evaluation of the applicability of the variable interest model as compared to the voting interest model. As such, we assessed whether each investee has sufficient equity to finance its activities without additional subordinated financial support and whether the equity holders, as a group, lack the characteristics of a controlling financial interest. Our testing included examining all contributions made by the Company as part of the initial formation of the real estate venture to support management’s conclusions about the sufficiency of equity to finance the venture’s activities. We also performed procedures to determine whether the Company correctly identified terms that would result in the equity holders, as a group, lacking the characteristics of a controlling financial interest, which would lead to the classification of the real estate venture as a variable interest entity. Specifically, for each new real estate venture entered into during the year, we inspected the agreement to determine whether the decisions that most significantly impact the entity’s economic performance were controlled by the equity holders as a group. In the case that the venture has sufficient equity at risk and the equity holders, as a group, do not lack the characteristics of a controlling financial interest, we evaluated whether the Company properly accounted for the investment under the voting interest model. underlying data, including the participant data provided to management’s actuarial specialists.


/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2005.
Salt Lake City, Utah
February 27, 201725, 2020

29





Extra Space Storage Inc.
Consolidated Balance Sheets
(dollars in thousands, except share data)
December 31, 2016 December 31, 2015December 31, 2019 December 31, 2018
Assets:      
Real estate assets, net$6,770,447
 $5,689,309
$7,696,864
 $7,491,831
Investments in unconsolidated real estate ventures79,570
 103,007
Real estate assets - operating lease right-of-use assets264,643
 —
Investments in unconsolidated real estate entities338,054
 125,326
Cash and cash equivalents43,858
 75,799
65,746
 57,496
Restricted cash13,884
 30,738
4,987
 15,194
Receivables from related parties and affiliated real estate joint ventures16,611
 2,205
Other assets, net167,076
 170,349
162,083
 158,131
Total assets$7,091,446
 $6,071,407
$8,532,377
 $7,847,978
Liabilities, Noncontrolling Interests and Equity:      
Notes payable, net$3,213,588
 $2,758,567
$4,318,973
 $4,137,213
Exchangeable senior notes, net610,314
 623,863
569,513
 562,374
Notes payable to trusts, net117,321
 117,191
Notes payable to trusts—
 30,928
Revolving lines of credit365,000
 36,000
158,000
 81,000
Operating lease liabilities274,783
 —
Cash distributions in unconsolidated real estate ventures45,264
 45,197
Accounts payable and accrued expenses101,388
 82,693
111,382
 101,461
Other liabilities87,669
 80,489
132,768
 104,383
Total liabilities4,495,280
 3,698,803
5,610,683
 5,062,556
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
Common stock, $0.01 par value, 500,000,000 shares authorized, 129,534,407 and 127,103,750 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively1,295
 1,271
Additional paid-in capital2,566,120
 2,431,754
2,868,681
 2,640,705
Accumulated other comprehensive income (loss)16,770
 (6,352)(28,966) 34,650
Accumulated deficit(339,257) (337,566)(301,049) (262,902)
Total Extra Space Storage Inc. stockholders' equity2,244,892
 2,089,077
2,539,961
 2,413,724
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
Noncontrolling interest represented by Preferred Operating Partnership units, net175,948
 153,096
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests205,785
 218,602
Total noncontrolling interests and equity2,596,166
 2,372,604
2,921,694
 2,785,422
Total liabilities, noncontrolling interests and equity$7,091,446
 $6,071,407
$8,532,377
 $7,847,978
See accompanying notes.notes

30





Extra Space Storage Inc.
Consolidated Statements of Operations
(dollars in thousands, except share data)
For the Year Ended December 31,For the Year Ended December 31,
2016 2015 20142019 2018 2017
Revenues:          
Property rental$864,742
 $676,138
 $559,868
$1,130,177
 $1,039,340
 $967,229
Tenant reinsurance87,291
 71,971
 59,072
128,387
 115,507
 98,401
Management fees and other income39,842
 34,161
 28,215
49,890
 41,757
 39,379
Total revenues991,875
 782,270
 647,155
1,308,454
 1,196,604
 1,105,009
Expenses:          
Property operations250,005
 203,965
 172,416
336,050
 291,695
 271,974
Tenant reinsurance15,555
 13,033
 10,427
29,376
 25,707
 19,173
Acquisition related costs and other12,111
 69,401
 9,826
General and administrative81,806
 67,758
 60,942
89,418
 81,256
 78,961
Depreciation and amortization182,560
 133,457
 115,076
219,857
 209,050
 193,296
Total expenses542,037
 487,614
 368,687
674,701
 607,708
 563,404
Gain on real estate transactions and impairment of real estate1,205
 30,807
 112,789
Income from operations449,838
 294,656
 278,468
634,958
 619,703
 654,394
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)(186,526) (178,436) (153,511)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes(4,980) (3,310) (2,683)(4,742) (4,687) (5,103)
Interest income6,148
 3,461
 1,607
7,467
 5,292
 6,736
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
451,157
 441,872
 502,516
Equity in earnings of unconsolidated real estate ventures12,895
 12,351
 10,541
11,274
 14,452
 15,331
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)(11,308) (9,244) (3,625)
Net income397,089
 209,536
 195,896
451,123
 447,080
 514,222
Net income allocated to Preferred Operating Partnership noncontrolling interests(14,700) (11,718) (10,991)(12,492) (13,995) (14,989)
Net income allocated to Operating Partnership and other noncontrolling interests(16,262) (8,344) (6,550)(18,664) (17,796) (20,220)
Net income attributable to common stockholders$366,127
 $189,474
 $178,355
$419,967
 $415,289
 $479,013
Earnings per common share          
Basic$2.92
 $1.58
 $1.54
$3.27
 $3.29
 $3.79
Diluted$2.91
 $1.56
 $1.53
$3.24
 $3.27
 $3.76
Weighted average number of shares          
Basic125,087,554
 119,816,743
 115,713,807
128,203,568
 126,087,487
 125,967,831
Diluted125,948,076
 126,918,869
 121,435,267
136,433,769
 133,159,033
 134,155,771
See accompanying notes.notes

31





Extra Space Storage Inc.
Consolidated Statements of Comprehensive Income
(amounts in thousands)
For the Year Ended December 31,For the Year Ended December 31,
2016 2015 20142019 2018 2017
Net income$397,089
 $209,536
 $195,896
$451,123
 $447,080
 $514,222
Other comprehensive income (loss):          
Change in fair value of interest rate swaps24,598
 (4,929) (12,061)(66,843) 1,430
 17,308
Total comprehensive income421,687
 204,607
 183,835
384,280
 448,510
 531,530
Less: comprehensive income attributable to noncontrolling interests32,438
 20,001
 17,120
27,929
 31,861
 35,997
Comprehensive income attributable to common stockholders$389,249
 $184,606
 $166,715
$356,351
 $416,649
 $495,533
See accompanying notes

32





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 Accumulated Deficit Total Noncontrolling Interests and Equity
    Shares Par Value 
Balances at December 31, 2016 $147,920
 $203,354
 $—
 125,881,460
 $1,259
 $2,566,120
 $16,770
 $(339,257) $2,596,166
Issuance of common stock upon the exercise of options —
 —
 —
 38,418
 —
 1,266
 —
 —
 1,266
Restricted stock grants issued —
 —
 —
 95,392
 1
 (1) —
 —
 —
Restricted stock grants cancelled —
 —
 —
 (8,179) —
 —
 —
 —
 —
Compensation expense related to stock-based awards —
 —
 —
 —
 —
 9,561
 —
 —
 9,561
Issuance of Operating Partnership units in conjunction with acquisitions —
 7,618
 —
 —
 —
 —
 —
 —
 7,618
Redemption of Operating Partnership units for cash —
 (1,238) —
 —
 —
 (1,272) —
 —
 (2,510)
Issuance of Preferred D Units in the Operating Partnership in conjunction with acquisitions 11,161
 —
 —
 —
 —
 —
 —
 —
 11,161
Noncontrolling Interest in consolidated joint venture —
 —
 216
 —
 —
 —
 —
 —
 216
Repurchase of equity portion of 2013 exchangeable senior notes —
 —
 —
 —
 —
 (6,189) —
 —
 (6,189)
Net income (loss) 14,989
 20,317
 (97) —
 —
 —
 —
 479,013
 514,222
Other comprehensive income 106
 682
 —
 —
 —
 —
 16,520
 —
 17,308
Distributions to Operating Partnership units held by noncontrolling interests (14,540) (17,432) —
 —
 —
 —
 —
 —
 (31,972)
Dividends paid on common stock at $3.12 per share —
 —
 —
 —
 —
 —
 —
 (393,040) (393,040)
Balances at December 31, 2017 $159,636
 $213,301
 $119
 126,007,091
 $1,260
 $2,569,485
 $33,290
 $(253,284) $2,723,807



Extra Space Storage Inc.
Consolidated Statements of Stockholders' Equity
(amounts in thousands, except share data)
Extra Space Storage Inc.
Consolidated Statements of Stockholders' Equity
(amounts in thousands, except share data)
Extra Space Storage Inc.
Consolidated Statements of Stockholders' Equity
(amounts in thousands, except share data)
          
Noncontrolling Interests Extra Space Storage Inc. Stockholders’ Equity  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		 Preferred Operating Partnership Operating Partnership Other     Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Noncontrolling Interests and Equity
Series A Series B Series C Series D Shares Par Value  Shares Par Value 
Balances at December 31, 2017 $159,636
 $213,301
 $119
 126,007,091
 $1,260
 $2,569,485
 $33,290
 $(253,284) $2,723,807
Issuance of common stock upon the exercise of options$—
 $—
 $—
 $—
 $—
 $—
 79,974
 $1
 $1,541
 $—
 $—
 $1,542
 —
 —
 —
 54,575
 —
 1,169
 —
 —
 1,169
Restricted stock grants issued—
 —
 —
 —
 —
 —
 174,558
 2
 —
 —
 —
 2
 —
 —
 —
 85,066
 1
 —
 —
 —
 1
Restricted stock grants cancelled—
 —
 —
 —
 —
 —
 (18,090) —
 —
 —
 —
 —
 —
 —
 —
 (11,771) —
 —
 —
 —
 —
Issuance of common stock, net of offering costs—
 —
 —
 —
 —
 —
 6,735,000
 67
 446,810
 —
 —
 446,877
 —
 —
 —
 933,789
 10
 90,221
 —
 —
 90,231
Compensation expense related to stock-based awards—
 —
 —
 —
 —
 —
 —
 —
 6,055
 —
 —
 6,055
 —
 —
 —
 —
 —
 11,176
 —
 —
 11,176
Purchase of remaining equity interest in existing consolidated joint venture—
 —
 —
 —
 —
 (822) —
 —
 (446) —
 —
 (1,268)
Repayment of receivable for preferred operating units pledged as collateral on loan 495
 —
 —
 —
 —
 —
 —
 —
 495
Issuance of Operating Partnership units in conjunction with acquisitions—
 —
 —
 —
 142,399
 —
 —
 —
 —
 —
 —
 142,399
 —
 1,877
 —
 —
 —
 —
 —
 —
 1,877
Redemption of Operating Partnership units for common stock—
 —
 —
 —
 (28,106) —
 787,850
 8
 28,098
 —
 —
 —
Redemption of Operating Partnership units for stock —
 (1,337) —
 35,000
 —
 1,337
 —
 —
 —
Redemption of Operating Partnership units for cash —
 (1,126) —
 —
 —
 (1,432) —
 —
 (2,558)
Conversion of Preferred C Units in the Operating Partnership for Common Operating Partnership Units (6,851) 6,851
 —
 —
 —
 —
 —
 —
 —
Noncontrolling interest in consolidated joint venture —
 —
 122
 —
 —
 —
 —
 —
 122
Repurchase of equity portion of 2013 exchangeable senior notes—
 —
 —
 —
 —
 —
 —
 —
 (70,112) —
 —
 (70,112) —
 —
 —
 —
 —
 (31,251) —
 —
 (31,251)
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
Net income (loss) 13,995
 17,797
 (1) —
 —
 —
 —
 415,289
 447,080
Other comprehensive income 12
 58
 —
 —
 —
 —
 1,360
 —
 1,430
Distributions to Operating Partnership units held by noncontrolling interests(7,050) (2,515) (2,074) (685) (12,179) —
 —
 —
 —
 —
 —
 (24,503) (14,191) (19,059) —
 —
 —
 —
 —
 —
 (33,250)
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
Dividends paid on common stock at $3.36 per share —
 —
 —
 —
 —
 —
 —
 (424,907) (424,907)
Balances at December 31, 2018 $153,096
 $218,362

$240
 127,103,750
 $1,271
 $2,640,705
 $34,650
 $(262,902) $2,785,422



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
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 Accumulated Deficit Total Noncontrolling Interests and Equity
    Shares Par Value 
Balances at December 31, 2018 $153,096
 $218,362

$240
 127,103,750
 $1,271
 $2,640,705
 $34,650
 $(262,902) $2,785,422
Issuance of common stock upon the exercise of options —
 —
 —
 211,057
 3
 3,060
 —
 —
 3,063
Restricted stock grants issued —
 —
 —
 109,081
 2
 —
 —
 —
 2
Restricted stock grants cancelled —
 —
 —
 (8,863) —
 —
 —
 —
 —
Issuance of common stock, net of offering costs —
 —
 —
 1,779,200
 19
 198,808
 —
 —
 198,827
Compensation expense related to stock-based awards —
 —
 —
 —
 —
 13,051
 —
 —
 13,051
Repayment of receivable for preferred operating units pledged as collateral on loan —
 1,211
 —
 —
 —
 —
 —
 —
 1,211
Redemption of Operating Partnership units for stock —
 (13,057) —
 340,182
 —
 13,057
 —
 —
 —
Issuance of Preferred D Units in the Operating Partnership in conjunction with acquisitions 28,022
 —
 —
 —
 —
 —
 —
 —
 28,022
Conversion of Preferred C Units in the Operating Partnership for Common Operating Partnership Units (4,374) 4,374
 —
 —
 —
 —
 —
 —
 —
Noncontrolling interest in consolidated joint venture —
 —
 173
 —
 —
 —
 —
 —
 173
Net income (loss) 12,492
 18,711
 (47) —
 —
 —
 —
 419,967
 451,123
Other comprehensive loss (407) (2,820) —
 —
 —
 —
 (63,616) —
 (66,843)
Distributions to Operating Partnership units held by noncontrolling interests (12,881) (21,362) —
 —
 —
 —
 —
 —
 (34,243)
Dividends paid on common stock at $3.56 per share —
 —
 —
 —
 —
 —
 —
 (458,114) (458,114)
Balances at December 31, 2019 $175,948
 $205,419
 $366
 129,534,407
 $1,295
 $2,868,681
 $(28,966) $(301,049) $2,921,694


See accompanying notes.notes

35





Extra Space Storage Inc.
Consolidated Statements of Cash Flows
(amounts in thousands)
 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) —
For the Year Ended December 31,
2019 2018 2017
Cash flows from operating activities:     
Net income$451,123
 $447,080
 $514,222
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization219,857
 209,050
 193,296
Amortization of deferred financing costs11,989
 14,286
 12,289
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes4,742
 4,687
 5,103
Non-cash lease expense1,064
 —
 —
Compensation expense related to stock-based awards13,051
 11,176
 9,561
Gain on real estate transactions and impairment of real estate(1,205) (30,807) (112,789)
Distributions from unconsolidated real estate ventures in excess of earnings6,358
 6,867
 4,567
Changes in operating assets and liabilities:     
Other assets(12,482) (1,664) (12,728)
Accounts payable and accrued expenses15,522
 2,736
 (10,515)
Other liabilities(2,333) 14,384
 (5,631)
Net cash provided by operating activities707,686
 677,795
 597,375
Cash flows from investing activities:     
Acquisition of real estate assets(349,494) (426,388) (653,185)
Development and redevelopment of real estate assets(53,717) (60,677) (31,746)
Proceeds from sale of real estate assets11,254
 52,458
 312,165
Investment in unconsolidated real estate entities(197,759) (65,500) (17,944)
Return of investment in unconsolidated real estate ventures3,982
 49,130
 581
Issuance of notes receivable(185,993) (13,850) —
Principal payments received from notes receivable157,861
 25,226
 44,869
Purchase of equipment and fixtures(7,764) (4,297) (7,819)
Net cash used in investing activities(621,630) (443,898) (353,079)
Cash flows from financing activities:     
Proceeds from the sale of common stock, net of offering costs198,827
 90,231
 —
Proceeds from notes payable and revolving lines of credit2,214,000
 1,413,030
 1,325,623
Principal payments on notes payable and revolving lines of credit(1,977,805) (1,109,854) (1,088,679)
Principal payments on notes payable to trusts(30,928) (88,662) —
Deferred financing costs(2,986) (12,302) (6,967)
Repurchase of exchangeable senior notes—
 (80,270) (19,916)
Net proceeds from exercise of stock options3,063
 1,169
 1,266
Redemption of Operating Partnership units held by noncontrolling interests—
 (2,558) (2,510)
Contributions from noncontrolling interests173
 122
 201
Dividends paid on common stock(458,114) (424,907) (393,040)
Distributions to noncontrolling interests(34,243) (33,250) (31,972)
Net cash used in financing activities(88,013) (247,251) (215,994)
Net increase (decrease) in cash, cash equivalents, and restricted cash(1,957) (13,354) 28,302
Cash, cash equivalents, and restricted cash, beginning of the period72,690
 86,044
 57,742
Cash, cash equivalents, and restricted cash, end of the period$70,733
 $72,690
 $86,044
Supplemental schedule of cash flow information     
Interest paid$174,155
 $159,474
 $136,202
Income taxes paid10,359
 730
 5,648
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$(13,057) $(1,337) $—
Common stock and paid-in capital13,057
 1,337
 —
Establishment of operating lease right of use assets and lease liabilities     
Real estate assets - operating lease right-of-use assets$277,557
 $—
 $—
Operating lease liabilities(286,914) —
 —
Accounts payable and accrued expenses9,357
 —
 —
Acquisitions of real estate assets

 

 

Real estate assets, net$21,066
 $88,842
 $51,455
Value of Operating Partnership units issued—
 (1,877) (14,428)
Notes payable assumed(17,157) (87,500) (24,055)
Investment in unconsolidated real estate ventures(2,780) 535
 (12,957)
Other noncontrolling interests—
 —
 (15)
Net liabilities assumed(1,129) —
 —
Accrued construction costs and capital expenditures     

 

 

Acquisition of real estate assets$8,497
 $2,332
 $2,799
$2,203
 $778
 $3,509
Development and redevelopment of real estate assets125
 —
 —
1,601
 554
 1,703
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
 $—
 $—
Accounts payable and accrued expenses(3,804) (1,332) (5,212)
Contribution of Preferred OP Units to unconsolidated real estate venture

 

 

Investments in unconsolidated real estate ventures(25,055) —
 —
$(28,022) $—
 $—
Disposition of real estate assets     
Real estate assets, net$(7,689) $—
 $—
Operating Partnership units redeemed7,689
 —
 —
Acquisition of noncontrolling interests     
Operating Partnership units issued$(800) $—
 $—
Other noncontrolling interests162
 —
 —
Additional paid-in capital638
 —
 —
Value of Preferred Operating Partnership units issued28,022
 —
 —
Issuance of Preferred OP Units for additional investment in unconsolidated real estate venture

 

 

Preferred OP Units issued$—
 $—
 $(4,351)
Investment in unconsolidated real estate ventures—
 —
 4,351
Conversion of Preferred OP Units to common OP Units

 

 

Preferred OP Units$4,374
 $6,851
 $—
Common OP Units(4,374) (6,851) —

See accompanying notes.notes

36

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






1.     DESCRIPTION OF BUSINESS
Extra Space Storage Inc. (the “Company”) is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”), formed as a Maryland Corporationcorporation on April 30, 2004, to own, operate, manage, acquire, develop and redevelop professionally managed self-storage properties located throughout the United States. The Company continueswas formed to continue the business of Extra Space Storage LLC and its subsidiaries, which had engaged in the self-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 acquiring wholly-owned stores or by acquiring an equity interest in real estate entities. At December 31, 2016,2019, the Company had direct and indirect equity interests in 1,0161,171 storage facilities. In addition, the Company managed 411646 stores for third parties bringing the total number of stores which it owns and/or manages to 1,427.1,817. These stores are located in 3840 states, Washington, D.C. and Puerto Rico.
The Company operates in three distinct segments: (1) rental operations; (2)also offers tenant reinsurance;reinsurance at its owned and (3) property management, acquisition and development. The rental operations activities include rental operations ofmanaged stores in whichthat insures the 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 lossvalue 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.storage units.
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 its wholly- or majority-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 enters into arrangements for the formation of joint ventures or when entering into a new bridge loan agreement, 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. As of December 31, 2019 and 2018, the Company had no consolidated VIEs. Additionally, the Operating Partnership has noteshad a note payable to three trustsa trust that are VIEswas a VIE under condition (ii)(a) above. Since the Operating Partnership iswas not the primary beneficiary of the trusts, these VIEs aretrust, this VIE was 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.

37

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


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.
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 observable market-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, 2016,2019, 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, 2016,2019, aggregated by the level in the fair value hierarchy within which those measurements fall.
   Fair Value Measurements at Reporting Date Using
DescriptionDecember 31, 2019 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$6,214
 $—
 $6,214
 $—
Other liabilities - Cash flow hedge swap agreements$31,400
 $—
 $31,400
 $—
   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, 2016.2019. The Company did not have any significant assets or liabilities that are re-measured on a recurring basis using significant unobservable inputs as of December 31, 20162019 or 2015.2018.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Long-lived assets held for use are evaluated for impairment when events or circumstances indicate 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 the lease-up stage and compares actual operating results to original projections.

38

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


When the Company determines that an event that may indicate impairment has occurred, the Company compares the carrying value of the related long-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. The Company compares the carrying value of the related long-lived assets to the undiscounted future net operating cash flows attributable to the assets (categorized within Level 3 of the fair value hierarchy). 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, the Company would recognize a loss on the assets held for sale. The operations of assets held for sale or sold during the period are presented as part 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 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, 20162019 and 2015,2018, 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 and notes receivable, revolving lines of credit and other liabilities reflected in the consolidated balance sheets at December 31, 20162019 and 2015,2018, approximate fair value.
The fair values of the Company’s notes receivable from Preferred Operating Partnership unit holders and 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’s fixed-rate assets and liabilities were as follows for the periods indicated:
 December 31, 2019 December 31, 2018
 Fair
Value		 Carrying
Value		 Fair
Value		 Carrying
Value
Notes receivable from Preferred and Common Operating Partnership unit holders$116,184
 $118,524
 $115,467
 $119,735
Fixed rate notes payable and notes payable to trusts$3,511,151
 $3,417,928
 $2,985,731
 $3,022,414
Exchangeable senior notes$673,831
 $575,000
 $620,149
 $575,000
 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

39

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


computed using the straight-line method over the estimated useful lives of the buildings and improvements, which are generally between five and 39 years.
In connection withStores purchased at the Company’s acquisitiontime of operatingcertificate of occupancy issuance and stores purchased subsequent to the Company's adoption of ASU 2017-01 on January 1, 2017 are considered asset acquisitions. As such, the purchase price is allocated to the tangible and intangiblereal estate assets and liabilities acquired based on their relative 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 relative 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 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 transactions costs are capitalized as part of the purchase price.


Intangible lease rights represent: (1) purchase price amounts allocated to leases on three3 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 eight8 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.
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.
Investments in Unconsolidated Real Estate VenturesEntities
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)
AmountsThe Company evaluated its investments in thousands, except storepreferred stock of non-public real estate entities and share data, unless otherwise stated


determined it did not have significant influence over the entity, and the investment in preferred stock does not have a readily determinable fair value, therefore it has been recorded at the transaction price. The Company periodically evaluates the investment for impairment. No impairment indicators were noted as of December 31, 2019.
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, loan collateral, operating reserves and insurance and capital expenditures.

40

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


Other Assets
Other assets consist of equipment and fixtures, rents receivable byfrom our tenants, bridge loan receivables, investments in trusts notes receivable,and other receivables, other intangible assets, deferred tax assets, prepaid expenses and the fair value of interest rate swaps. Depreciation of equipment and fixtures is computed on a straight-line basis over 3three to 5five years.
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 three3 main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk on its interest-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.
Revenue and Expense Recognition
Rental revenues are recognized as earned based upon amounts that are currently due from tenants. Leases are generally on month-to-month terms. Prepaid rents are recognized on a straight-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 and 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 entitiesventures is recognized based on the Company's ownership interest in the earnings of each of the unconsolidated real estate entities. Interest income is recognized as earned.
The Company's management fees are earned subject to the terms of the related management services agreements ("MSAs"). These MSAs provide that the Company will perform management services, which include leasing and operating the property and providing accounting, marketing, banking, maintenance and other services. These services are provided in exchange for monthly management fees, which are based on a percentage of revenues collected from stores owned by third parties and unconsolidated joint ventures. MSAs generally have original terms from three to five years, after which management services are provided on a month-to-month basis unless terminated. Management fees are due on the last day of each calendar month that management services are provided.
The Company accounts for the management services provided to a customer as a single performance obligation which are rendered over time each month. The total amount of consideration from the contract is variable as it is based on monthly revenues, which are influenced by multiple factors, some of which are outside the Company's control. Therefore, the Company

41

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


recognizes the revenue at the end of each month once the uncertainty is resolved. Due to the standardized terms of the MSAs, the Company accounts for all MSAs in a similar, consistent manner. Therefore, no disaggregated information relating to MSAs is presented.
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.estimates. 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 thousand2,000 dollars to ten thousand10,000 dollars of insurance coverage in exchange for a monthly fee. As of December 31, 2016,2019, the average insurance coverage for tenants was approximately two thousand eight hundred3,300 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 SalesFor the years ended December 31, 2019, 2018 and 2017, the number of claims made were 9,059, 8,091 and 6,214, respectively. The following table presents information on the portion of the Company’s unpaid claims liability, which is included in other liabilities on the Company's consolidated balance sheets, that relates to tenant insurance for the periods indicated:
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.
 For the Year Ended December 31,
Tenant Reinsurance Claims:2019 2018 2017
Unpaid claims liability at beginning of year$7,326
 $5,167
 $3,896
Claims and claim adjustment expense for claims incurred in the current year16,280
 15,800
 11,700
Claims and claim adjustment expense (benefit) for claims incurred in the prior years98
 107
 (203)
Payments for current year claims(11,352) (11,010) (8,895)
Payments for prior year claims(4,243) (2,738) (1,331)
Unpaid claims liability at the end of the year$8,109
 $7,326
 $5,167

Advertising Costs
The Company incurs advertising costs primarily attributable to internet, directorydigital and other advertising. These costs are expensed as incurred. The Company recognized $12,867, $10,528,$25,106, $16,153 and $8,843$14,410 in advertising expense for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, 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.Code of 1986, as amended (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. IfFor any taxable year that the Company werefails to fail to meet these requirements, it qualify as a REIT and for which applicable statutory relief provisions did not apply, we

42

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


would be subject to federaltaxed at the regular corporate rates on all of our taxable income tax.for at least that year and the ensuing four years. 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, 2016,2019, 0% (unaudited) of all distributions to stockholders qualified as a return of capital.
The Company owns and may acquire direct or indirect interests in entities that have elected or will elect to be taxed as REITs under the Internal Revenue Code (each, a “Subsidiary REIT ”). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to the Company. If a Subsidiary REIT were to fail to qualify as a REIT, then (i) that Subsidiary REIT would become subject to U.S. federal income tax, (ii) shares in such Subsidiary REIT would cease to be qualifying assets for purposes of the asset tests applicable to REITs, and (iii) it is possible that the Company would fail certain of the asset tests applicable to REITs, in which event the Company would fail to qualify as a REIT unless it could avail itself of certain relief provisions.
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 or non-real estate related business. A TRS is subject to federal corporate federal income tax. ESM Reinsurance Limited, a wholly-owned subsidiary of ESMI, generates income from insurance premiums that are subject to federal 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, 20162019 and 2015,2018, there were no0 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, 20162019 and 2015,2018, the Company had no0 interest or penalties related to uncertain tax provisions.
Stock-Based Compensation
The measurement and recognition of compensation expense for all share-based payment awards to employees and directors are based on estimated fair values. Awards granted are valued at fair value and any compensation elementexpense 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 together with the Series A Units, Series B Units and Series C Units, the “Preferred OP 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, 2016, 20152019, 2018 and 2014,2017, options to purchase approximately 88,552, 62,254,0, 36,075, and 27,37445,286 shares of common stock, respectively, were excluded from the computation of earnings per share as their effect would have been anti-dilutive.
    

43

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


For the purposes of computing the diluted impact of the potential exchange of the Preferred Operating PartnershipOP 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, Thethe Company divided the total liquidation value of the Preferred Operating Partnership unitsOP Units by the average share price of $83.81$106.57 for the year ended December 31, 2016.2019.
The following table presents the number of weighted OP Units and Preferred Operating Partnership units,OP 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,
 2019 2018 2017
 Equivalent Shares (if converted) Equivalent Shares (if converted) Equivalent Shares (if converted)
Series B Units393,189
 464,033
 533,174
Series C Units (1)—
 312,075
 377,135
Series D Units1,081,369
 1,019,524
 —
 1,474,558
 1,795,632
 910,309

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


(1)The Operating Partnership had $63,170 of its 2.375% Exchangeable Senior Notes due 2033 (the “2013 Notes”) issued and outstanding as of December 31, 2016. The 2013 Notes could potentially have a dilutive impact on the Company’s earnings per share calculations. The 2013 Notes are exchangeable by holders into sharesremainder of the Company’s common stock under certain circumstances per the terms of the indenture governing the 2013 Notes. The exchange price of the 2013 Notes was $54.09 per share as of December 31, 2016, and could change over time as described in the indenture. The Company has irrevocably agreedSeries C Units were converted to pay only cash for the accreted principal amount of the 2013 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.OP Units on April 25, 2019.
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, 2016.2019. 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$91.76 per share as of December 31, 2016,2019, 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 years ended December 31, 2016, 20152019 and 2014, 309,7302018, the Company had repaid the principal and accrued interest of its Exchangeable Senior Notes due 2033 (the “2013 Notes”), and therefore, 0 shares 513,040relating to the 2013 Notes were included in the computation of diluted earnings per share. For the year ended December 31, 2017, 344,430 shares and 130,883 shares, respectively, related to the 2013 Notes were included in the computation forof diluted earnings per share. For the year ended December 31, 2019, 993,114 shares related to the 2015 Notes were included in the computation of diluted earnings per share. For the years ended December 31, 2016, 2015,2018 and 2014,2017, no shares related to the 2015 Notes were included in the computation forof diluted earnings per share as the exchange price exceeded the per share price of the Company’s common stock during this period.these periods.
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$101,700 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$101,700 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.

44

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






The computation of earnings per share is as follows for the periods presented:
 For the Year Ended December 31,
 2019 2018 2017
Net income attributable to common stockholders$419,967
 $415,289
 $479,013
Earnings and dividends allocated to participating securities(680) (723) (975)
Earnings for basic computations419,287
 414,566
 478,038
Earnings and dividends allocated to participating securities680
 723
 —
Income allocated to noncontrolling interest - Preferred Operating Partnership Units and Operating Partnership Units23,727
 22,831
 30,088
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)(2,288) (2,288) (3,119)
Net income for diluted computations$441,406
 $435,832
 $505,007
      
Weighted average common shares outstanding:     
Average number of common shares outstanding - basic128,203,568
 126,087,487
 125,967,831
OP Units6,006,114
 5,675,547
 5,590,831
Series A Units875,480
 875,480
 875,480
Series D Units—
 —
 1,081,561
Unvested restricted stock awards included for treasury stock method212,402
 244,215
 —
Shares related to exchangeable senior notes and dilutive stock options1,136,205
 276,304
 640,068
Average number of common shares outstanding - diluted136,433,769
 133,159,033
 134,155,771
Earnings per common share     
Basic$3.27
 $3.29
 $3.79
Diluted$3.24
 $3.27
 $3.76
 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 FASBFinancial Accounting Standards Board ("FASB") issued ASU 2014-9, “Revenue from Contracts with Customers,” ("Topic 606") 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 2014-9Topic 606 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 2014-9 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. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB approved a one-year deferral of the effective date of the standard. The new standard will now becomeTopic 606 became effective for annual and interim periods beginning after December 15, 2017 with early adoption on the original effective date permitted.2017. The Company has determined that its property rental revenue and tenant reinsurance revenue willare not be subject to the guidance in ASU 2014-9,Topic 606, as they qualify as lease contract and insurance contracts, which are excluded from its scope. The Company's management fee revenue will beis included in the scope of ASU 2014-9, however, based on the Company's initial assessment, it appears thatTopic 606, and revenue recognized under ASU 2014-9 willthe standard does not differ materially from revenue recognized under existingprevious guidance. We continue to assess all potential impacts of ASU 2014-9. The Company anticipates adoptingadopted the standard using the modified retrospective transition method as of January 1, 2018.
In April 2015, the FASB issued ASU 2015-3, “Interest—Imputation The Company's adoption of Interest: Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs relatedTopic 606 did not result in a cumulative catch-up adjustment or any significant changes 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.line items.
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 requirerequires 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 isbecame effective for annual and interim periods beginning after December 15, 2018. The Company is currently assessingadopted the standard using the modified retrospective approach as of January 1, 2019. The Company elected the package of practical expedients upon adoption, which allows for the application of the standard solely to the transition period in 2019 but does not require application to prior fiscal comparative periods presented. The Company also elected the practical expedient provided in a subsequent amendment to ASU 2016-02 that removed the requirement to separate lease and nonlease components. The

45

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


Company did not record a significant cumulative catch-up adjustment upon the adoption of ASC 2016-02. The primary impact was related to the Company's 22 operating ground leases and 2 corporate facility leases under which it served as lessee as of the adoption date. The Company recognized lease liabilities totaling $104,863 and right-of-use assets related to operating leases totaling $95,506 as of the adoption date. Refer to footnote 13 for further discussion of the Company's leases.
In October 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which requires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this guidance as of January 1, 2018, and now presents restricted cash along with cash and cash equivalents in its consolidated statements of cash flows. Prior periods were reclassified to conform to this presentation.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-022016-13 changes how entities measure credit losses for most financial assets. This standard requires an entity to estimate its lifetime "expected credit loss" and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. In November 2018, the FASB issued ASU 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," which clarified that receivables arising from operating leases are within the scope of the leasing standard (ASU 2016-02), and not within the scope of ASU 2016-13. This new standard was effective for the Company on January 1, 2020. The Company does not expect this new standard to have a material impact on the Company's consolidated financial statements.
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, 2019 December 31, 2018
Land - operating$1,935,551
 $1,825,133
Land - development3,372
 7,359
Buildings, improvements and other intangibles7,047,654
 6,743,355
Right of use asset - finance lease8,050
 —
Intangible assets - tenant relationships122,489
 119,557
Intangible lease rights12,443
 12,443
 9,129,559
 8,707,847
Less: accumulated depreciation and amortization(1,473,852) (1,262,438)
Net operating real estate assets7,655,707
 7,445,409
Real estate under development/redevelopment41,157
 46,422
Net real estate assets$7,696,864
 $7,491,831
Real estate assets held for sale included in net real estate assets$2,947
 $13,032

 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, 2016,2019, the Company had two parcels1 parcel of undeveloped land classified as held for sale. The estimated fair value less selling costs of each of these assetsthis asset 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 recorded related to this asset. Assets held for sale are included in the property management, acquisition and developmentself-storage operations 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 a straight-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 $21,133, $11,695,$6,614, $9,050, and $12,996$14,349 for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, respectively. The remaining balance of the unamortized lease rights will be amortized over the next 2 yearsnine to 4542 years. Accumulated amortization related to intangibles was $127,712 and $121,238 as of December 31, 2019 and 2018, respectively.

46

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


4.     PROPERTY ACQUISITIONS AND DISPOSITIONS


The following table shows the Company’s acquisitions of operating stores for the years ended December 31, 20162019 and 2015.2018. The table excludes purchases of raw land or improvements made to existing 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
   Consideration PaidTotal
QuarterNumber of Stores Total Cash Paid Loan AssumedInvestments in Real Estate VenturesNet Liabilities/ (Assets) AssumedValue of OP Units IssuedNumber of OP Units IssuedReal estate assets
Q4 20195
$51,278
 $51,058
 $—
$—
$220
$—
—
$51,278
Q3 20191 16,937
 16,941
 —
—
(4)—
—
16,937
Q2 20191 8,424
 8,424
 —
—
—
—
—
8,424
Q1 201914 223,740
 202,890
 17,157
2,780
913
—
—
223,740
 21
(1) 
$300,379
 $279,313
 $17,157
$2,780
$1,129
$—
—
$300,379
             
Q4 20186
$74,852
 $74,868
 $—
$—
$(16)$—
—
$74,852
Q3 20186
74,694
 71,989
 —
—
2,705
—
—
74,694
Q2 201817 237,284
 148,650
 87,500
(1,024)281
1,877
21,768
237,284
Q1 20185 70,787
 70,171
 —
489
127
—
—
70,787
 34
(2) 
$457,617
 $365,678
 $87,500
$(535)$3,097
$1,877
21,768
$457,617


(1)Store acquisitions during the year ended December 31, 2019 include the acquisition of 12 stores previously held in joint ventures where the Company held a noncontrolling interest. The Company purchased its partners' remaining equity interests in the joint ventures, and the properties owned by the joint ventures became wholly owned by the Company. No gain or loss was recognized as a result of these acquisitions.
(2)
Store acquisitions during the year ended December 31, 2018 include the acquisition of 15 stores previously held in joint ventures where the Company held a noncontrolling interest. The Company purchased its partners' remaining equity interests in the joint ventures, and the properties owned by the joint ventures became wholly owned by the Company. No gain or loss was recognized as a result of these acquisitions.

Store Disposals

On April 11, 2019, the Company closed on the sale of a store located in New York that had been classified as held for sale for $11,272 in cash. The Company recorded a gain on the sale of $1,205.

On August 16, 2018, the Company sold a store located in California that had been classified as held for sale for $40,235 in cash. The Company recorded a gain on the sale of $30,671.

On November 30, 2017, the Company sold 36 stores located in various states that had been classified as held for sale for an aggregate sales price of $295,000. The buyer of these properties was Storage Portfolio II JV, LLC ("SP II"), a newly formed joint venture in which the Company has a 10.0% equity interest. The Company recognized a gain of $118,776 related to this disposition, which represented 90.0% of the total gain. This amount is included in Gain on real estate transactions and impairment of real estate on the Company's consolidated statements of operations. The Company deferred 10.0% of the gain due to the fact that it held an equity interest in the buyer, which resulted in a reduction in the carrying value of the Company's investment in SP II.

On September 13, 2017, the Company closed on the sale of a parcel of land located in New York that had been classified as held for sale for $19,000 in cash. This parcel of land had been written down to its fair value less selling costs during the six months ended June 30, 2017, and a loss of $3,500 was recorded. Therefore, no additional gain or loss was recorded related to this sale at the time of closing.

47

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 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, 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)On September 16, 2016, the Company acquired 23 stores from its ESS PRISA II LLC joint venture ("PRISA II") in a 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 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 $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 joint venture partners’ interest in Extra Space of Sacramento 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 owned one store located in California. Prior to the acquisition date, the Company accounted for its interest in Sacramento One as an 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 $365 and is included in consideration transfered. The Company recognized a non-cash gain of $1,629 as a result of remeasuring the fair value of its equity
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 store is consolidated subsequent to the acquisition as the Company owns 100% of the store.

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 Excluded 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 December 31, 2016, the remaining principal balance was $52,201. These loans receivable are included in Other assets on the Company’s consolidated balance sheets.
Pro Forma Information
During the year ended December 31, 2016, the Company acquired 99 operating stores. The following pro forma financial information includes 66 of the 99 operating stores acquired. 33 stores were excluded as it was impractical to obtain the historical information from the previous owners and in total they represent and immaterial amount of total revenues. The following pro forma financial information is based on the combined historical financial statements of the Company and 66 of the stores acquired, and presents the Company’s results as if the acquisitions had occurred as of January 1, 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 99 stores acquired during 2016 since their acquisition dates, which are included in the Company’s consolidated statements of operations for the year ended December 31, 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 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, 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 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.

5.     INVESTMENTS IN UNCONSOLIDATED REAL ESTATE VENTURESENTITIES
Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures consistrepresent the Company's interest in preferred stock of SmartStop Self Storage REIT, Inc. ("SmartStop") and the Company's noncontrolling interest in real estate joint ventures that own stores. The Company accounts for its investment in SmartStop preferred stock, which does not have a readily determinable fair value, at the transaction price less impairment, if any. The Company accounts for its investments in joint ventures using the equity method of accounting. The Company initially records these investments at cost and subsequently adjusts for cash contributions, distributions and net equity in income or loss, which is allocated in accordance with the provisions of the following:
 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


applicable partnership or joint venture agreement.
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/cash or 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/cash or profits, as applicable, than its equity interest.
The Company separately reports investments with net equity less than zero in cash distributions in unconsolidated real estate ventures in the consolidated balance sheets. The net equity of certain joint ventures is less than zero because distributions have exceeded the Company's investment in and share of income from these joint ventures. This is generally the result of financing distributions, capital events or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization while distributions do not.
Net Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures consist of the following:
 Number of StoresEquity Ownership % Excess Profit % (1) December 31,
 2019 2018
PRISA Self Storage LLC854% 4% $9,133
 $9,334
Storage Portfolio II JV LLC3610% 30% (4,827) (4,233)
Storage Portfolio I LLC2434% 49% (38,345) (38,129)
VRS Self Storage, LLC1645% 54% 17,639
 18,281
ESS-NYFL JV LP1116% 24% 13,320
 —
WICNN JV LLC (3)1010% 25% 36,552
 26,885
Extra Space Northern Properties Six LLC1010% 35% (2,091) (1,700)
Alan Jathoo JV LLC910% 10% 7,977
 8,180
PR EXR Self Storage, LLC525% 40% 59,391
 19,841
ESS Bristol Investments LLC810% 28% 3,046
 2,331
GFN JV, LLC (3)510% 30% 12,168
 10,586
Extra Space West Two LLC (4)—5% 40% —
 3,818
Extra Space West One LLC (4)—5% 40% —
 (1,038)
Other minority owned stores2210-50% 19-50% 28,827
 25,973
SmartStop Self Storage REIT, Inc. Preferred Stock (2)n/an/a n/a 150,000
 —
Net Investments in and Cash distributions in unconsolidated real estate entities241    $292,790
 $80,129

(1)Includes pro-rata equity ownership share and promoted interest.
(2)
In October 2019, the Company invested $150,000 in shares of newly issued convertible preferred stock of SmartStop, with an additional commitment to purchase up to $50,000 of the preferred shares over the 12 months after the original purchase. The dividend rate for the preferred shares is 6.25% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SmartStop. Dividend income from this investment is included on the management fees and other income line on the Company's consolidated statements of operations.

48

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


(3)The Company had $31,500 and $10,335 of preferred equity in the WICNN JV LLC and GFN JV, LLC joint ventures, respectively, as of December 31, 2019. The Company earns an 8.0% return on its preferred equity in these joint ventures, which has priority over other distributions.
(4)In January 2019, the Company purchased its joint venture partners' interests in the Extra Space West One LLC and Extra Space West Two LLC joint ventures, which owned a total of 12 stores. The Company paid $172,505 of cash to acquire the equity interests, and subsequent to this acquisition, the Company owned 100.0% of the joint ventures and the related stores.
In accordance with ASC 810, the Company reviews all of its joint venture relationships quarterlyannually to ensure that there are no entities that require consolidation. As of December 31, 2016,2019, there were no previously unconsolidated entities that were required to be consolidated as a result of this review.
The Company has entered into several new unconsolidated real estate ventures. The Company accounts for its investment in the following ventures under the equity method of accounting. Information about these new real estate ventures is summarized as follows:
 Number of Stores Equity ownership % Total initial investment
For the Year Ended December 31, 201916 10.0%-50.0% $19,663
For the Year Ended December 31, 201828 10.0% -50.0% $63,723
For the Year Ended December 31, 201739 10.0% - 25.0% $13,341

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, 2014,2019, the Company recordedcontributed a gaintotal of $584 as$104,338 to its joint ventures (new and existing) for the purchase of 15 operating stores and 9 stores acquired at the issuance of certificate of occupancy.

On April 30, 2018, the Company acquired its partner's interest in the WCOT Self Storage LLC joint venture. The Company paid cash of $115,797 and assumed a resultloan of $87,500. The 14 properties owned by this joint venture became wholly-owned properties of the final cash distributions received from the other five joint ventures associated with the acquisitions that were completed during 2013.
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


Company subsequent to this acquisition.
Equity in earnings of unconsolidated real estate ventures consists of the following:
 For the Year Ended December 31,
 2019 2018 2017
Equity in earnings of PRISA Self Storage LLC$2,327
 $2,338
 $2,430
Equity in earnings of Storage Portfolio II JV LLC291
 79
 33
Equity in earnings of Storage Portfolio I LLC1,809
 1,886
 2,684
Equity in earnings of VRS Self Storage, LLC3,583
 3,640
 3,562
Equity in earnings of ESS-NYFL JV LLC(96) —
 —
Equity in earnings of WICNN JV LLC1,373
 622
 —
Equity in earnings of Extra Space Northern Properties Six LLC1,091
 1,014
 918
Equity in earnings of Alan Jathoo JV LLC(47) (12) —
Equity in earnings of Bristol Investments LLC(262) (152) —
Equity in earnings of GFN JV, LLC450
 22
 —
Equity in earnings of PR EXR Self Storage, LLC(443) (75) (105)
Equity in earnings of WCOT Self Storage LLC—
 359
 1,033
Equity in earnings of Extra Space West Two LLC—
 1,042
 1,210
Equity in earnings of Extra Space West One LLC—
 2,526
 2,502
Equity in earnings of other minority owned stores1,198
 1,163
 1,064
 $11,274
 $14,452
 $15,331


49

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
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 VRScertain of our joint ventures includes the amortization of the Company’s excess purchase price of $26,806$27,867 of these equity investments over its original basis. The excess basis is amortized over 40 years.

Information (unaudited) relatedThe Company provides management services to thecertain joint ventures for a fee. Management fee revenues for affiliated real estate ventures’ debt at December 31, 2016, is presented below:
 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 VRS, PREXR, SP I, PRISA, ESW II, PRISA II, WCOT, ESW and ESNPS as of December 31, 2016 and 2015, andjoint ventures for the years ended December 31, 2016, 20152019, 2018 and 2014, follows:
 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 located in New York2017 were $14,624, $14,123 and recorded a gain of $60,495.
The Company had no consolidated VIEs for the years ended December 31, 2016 or 2015.$12,650, respectively.
6.     NOTES PAYABLE AND REVOLVING LINES OF CREDIT
The components of notes payable are summarized as follows:
Notes PayableDecember 31, 2019 December 31, 2018 Fixed Rate Variable Rate Basis Rate (2) Maturity Dates
Secured fixed rate notes payable (1)$1,365,408
 $2,032,414
 2.53% - 6.00%     September 2020 - February 2030
Secured variable rate notes payable (1)878,093
 834,835
   3.01% - 3.31% Libor plus 1.3% - 1.6% April 2020 - August 2028
Unsecured fixed rate notes payable2,052,521
 990,000
 2.80% - 4.39%     October 2023 - October 2029
Unsecured variable rate notes payable47,480
 310,000
   2.76% - 3.31% Libor plus 1.0% - 1.6% January 2025 - June 2026
Total4,343,502
 4,167,249
        
Less: unamortized debt issuance costs(24,529) (29,936)        
Total$4,318,973
 $4,137,313
        
            
(1) The loans are collateralized by mortgages on real estate assets and the assignment of rents.
(2) 30-day USD LIBOR
           

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 July 1, 2019, and December 20, 2019, the Company executed amendments to the credit agreement originally entered into on October 14, 2016 and amended and restated as of December 7, 2018 (the "Credit Agreement"), which sets forth the terms of the revolving credit facility and loans comprising the Company's "Credit Facility." The July 1 amendment increased total commitments in the Credit Facility by creating two new term loan tranches (the "Tranche 3 Term Loan Facility" and the "Tranche 4 Term Loan Facility"), which total $245 million and $255 million, respectively, and mature January 2025 and June 2026, respectively. The proceeds from these new tranches were used to pay off existing secured debt. The December 20th amendment changed the requirements for the Investment Grade Election and increased the limit of total maximum potential borrowings under the facility to $2.5 billion from $2.0 billion at December 31, 2018. As part of the Investment Grade Election which the company completed on December 20, 2019, on December 27, 2019, the Company entered into a credit agreement (the “Credit Agreement”) which providesreleased all but 4 Guarantors under the Credit Facility.

At December 31, 2019, the amended Credit Facility provided for aggregate borrowings of up to $1.15$1.85 billion consisting of a senior unsecured four-year revolving credit facility of $500$650 million maturing January 2023 (the “Revolving Credit Facility”), a senior unsecured five-year term loan of up to $430$480 million maturing January 2024 (the “Five-Year"Tranche 1 Term Loan Facility”) and, a senior unsecured seven-year term loan of up to $220 million maturing October 2023 (the “Seven-Year“Tranche 2 Term Loan Facility” and, together withFacility), the Revolving Credit Facility and the Five-YearTranche 3 Term Loan Facility of $245 million, and the “Credit Facility”).Tranche 4 Term Loan Facility of $255 million. The Company may request an increase in the amountextension 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 two2 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

As of each loan.

AmountsDecember 31, 2019, amounts outstanding under the Credit Facility bearbore 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%. ThePer the Credit Agreement, the applicable Eurodollar rate margin will rangeand applicable base rate margin are based on the Company’s achieved debt rating pursuant to the ‘Investment Grade Election,’ with the Eurodollar rate margin ranging from 1.35%0.75% to 2.50%2.25% per annum and the applicable base rate margin will rangeranging from 0.35%0.0% to 1.50%1.3% per annum,annum.


50

EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in each case depending on the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement,thousands, except store 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.share data, unless otherwise stated



The Credit Agreement is guaranteed by the Company and is not secured by any assets of the Company.

The Company is subject to certain restrictive covenants relating to its outstanding debt. As of December 31, 2016,2019, the Company was in compliance with all of its financial covenants.

The following table summarizes the scheduled maturities of notes payable, excluding available extensions, at December 31, 2016:2019:
  
2020$568,431
2021252,053
2022150,796
2023767,405
2024712,972
Thereafter1,891,845
 $4,343,502
  
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 secured loans. Of the Company’s $3,240,938$4,343,502 principal amount inof notes payable outstanding at December 31, 2016, $2,660,814 were2019, $2,012,791 was 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, 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, 2019      
Revolving Lines of CreditAmount Drawn Capacity Interest Rate Origination Date Maturity Basis Rate (1)
Credit Line 1 (2)$38,000
 $140,000
 3.2% 6/4/2010 7/1/2021 LIBOR plus 1.45%
Credit Line 2 (3)(4)120,000
 650,000
 2.7% 12/7/2018 1/29/2023 LIBOR plus 0.9%
 $158,000
 $790,000
        
(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, 2019. Rate is subject to change based on our investment grade rating.
 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 making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

51

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


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 income (“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, 2016, 20152019, 2018 and 2014,2017, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. During 2017,2020, the Company estimates that an additional $9,244$4,374 will be reclassified as an increase to interest expense.
The following table summarizes the terms of the Company’s 3124 derivative financial instruments, which have a total combined notional amount of $2,109,486$2,354,609 as of December 31, 2016:2019:
 
Hedge Product  Range of Notional
Amounts		  Strike  Effective Dates  Maturity Dates
Swap Agreements   $4,873$30,943 - $267,431  0.84%1.13% - 3.84%4.60%  10/3/20111/1/2014 - 10/3/20167/29/2019  9/20/201814/2020 - 2/1/20246/29/2026


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, 2019 December 31, 2018
Derivatives designated as hedging instruments:Fair Value
Other assets$6,214
 $42,324
Other liabilities$31,400
 $2,131
 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:
 
  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 2019 2018 2019 2018 2017
Swap Agreements $(54,680) $9,889
 Interest expense $12,322
 $8,258
 $(8,853)
  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, 2016,2019, 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 $2,836.$30,269. As of December 31, 2016,2019, the Company had not posted any collateral related to these agreements. If the Company had breached any of these provisions as of December 31, 2016,2019, it could have been required to cash settle its obligations under these agreements at their termination value of $2,836.$32,245.

52
8.     NOTES PAYABLE TO TRUSTS

During July 2005, ESS Statutory Trust III (the “Trust III”), a newly formed Delaware statutory trust and a wholly-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 the three month LIBOR plus 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 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 a wholly-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 in8.     NOTES PAYABLE TO TRUSTS

During 2005, the form of a note to theCompany's Operating Partnership (“Note 2”). Note 2 had a fixed rate of 6.7% through June 30, 2010, and then was payable at a variable rate equal to the three month LIBOR plus 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 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,formed 3 wholly-owned unconsolidated subsidiaries: ESS Statutory Trust I (the “Trust”(“Trust"), a newly formed Delaware statutory trust ESS Statutory Trust II, (“Trust II”) and a wholly-owned, unconsolidated subsidiary ofESS Statutory Trust III (“Trust III,” and together with Trust and Trust II, the Operating Partnership of the Company"Trusts"). The Trusts issued an aggregate of $35,000 of trust preferred securities which mature on June 30, 2035. In addition, the Trust issued 1,083 of Trustto third parties and common securities to the Operating Partnership for a purchase price of $1,083. On April 8, 2005,Partnership. The Trust loaned the proceeds from the sale of the trust preferred and common securities of $36,083 were loanedto the Operating Partnership in the form of a note to the Operating Partnership (the “Note”).notes. The Note has a variable rate equal to the three month LIBOR plus 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 5.1% 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”) areTrusts were VIEs because the holders of the equity investment at risk (the trust(that is the Trusts' preferred securities) dodid not have the power to direct the activities of the entities that most significantly affectaffected the entities’ economic performance because ofdue to 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 iswas not considered to be an equity investment at risk. The Operating Partnership’s investment in the Trusts iswas 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 bewas not the primary beneficiary of the Trusts. Since the Company iswas not the primary beneficiary of the Trusts, they havewere not been consolidated. A debt obligation has beenwas recorded in the form of notes for the proceeds as discussed above, for the proceeds, which arewere owed to the Trusts by the Company.Trusts. The Company hashad also recordedincluded its investment in the Trusts’ common securities asin other assets.assets on the Company's consolidated balance sheets.
During the year ended December 31, 2018, the Company repaid a total principal amount of $88,662 of the notes payable to Trusts, representing all of the notes payable to Trust III, all of the notes payable to Trust II, and all but $30,928 of the notes payable to Trust. The Trusts used the proceeds from these repayments to redeem their preferred and common securities. In January 2019, the Company hasrepaid the remaining balance of $30,928 of notes payable to Trust.
During the time they were outstanding, the Company did not providedprovide 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 iswas 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 iswas equal to the notes payable that the Trusts oweowed 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 ofCompany had no consolidated VIEs during the years ended 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 of2019 or December 31, 2016:2018.
 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 assetsexchangeable senior notes, net, 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, 20162019 was approximately 10.5610.90 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 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 sheets. The 2013 Notes 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 bear interest at 2.375% per annum and contain an exchange settlement feature, which provides that the 2013 Notes may, under certain circumstances, be exchangeable for cash (for the principal amount of the 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 exchange rate of the 2013 Notes as of December 31, 2016 was approximately 18.49 shares of the Company’s common stock per $1,000 principal amount of the 2013 Notes.

Additionally, the 2013 Notes 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

53

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


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, 2016.2019.
On June 21, 2013, the Operating Partnership issued $250,000 of its 2013 Notes at a 1.5% discount, or $3,750. Costs incurred to issue the 2013 Notes were approximately $1,672. These costs were amortized as an adjustment to interest expense over five years, which represented the estimated term based on the first available redemption date. The 2013 Notes bore interest at 2.375% per annum and contained an exchange settlement feature. The Operating Partnership may redeem theredeemed all remaining outstanding 2013 Notes 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 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 2013 Notes. The holders of the 2013 Notes have the right to require the Operating Partnership to repurchase the 2013 Notes 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 plus accrued and unpaid interest. Certain events are considered “Events of Default,” as defined in the indenture governing the 2013 Notes, which may result in the accelerated maturity of the 2013 Notes.2018.
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 componentscomponent of the 2013 Notes and 2015 Notes separately. The equity components are included in paid-in capital in stockholders’ equity in the consolidated balance 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 components are treated as original issue discount for purposes of accounting for the debt components. The discounts arediscount is being amortized as interest expense over the remaining period of the debt through its first redemption date, July 1, 2018 for the 2013 Notes and October 1, 2020 for the 2015 Notes. The effective interest rate on the liability components 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 2015 Notes, including the total carrying amountamounts of the equity component, the principal amount of the liability component, itsthe unamortized discount and its net carrying amount, werewas as follows for the periods indicated:
 December 31, 2019 December 31, 2018
Carrying amount of equity component$22,597
 $22,597
Principal amount of liability component$575,000
 $575,000
Unamortized discount - equity component(3,675) (8,417)
Unamortized debt issuance costs(1,812) (4,209)
Net carrying amount of liability component$569,513
 $562,374

 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 and 2015 Notes waswere as follows for the periods indicated:
 For the Year Ended December 31,
 2019 2018 2017
Contractual interest$17,968
 $18,106
 $19,303
Amortization of discount4,742
 4,687
 5,103
Total interest expense recognized$22,710
 $22,793
 $24,406
 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 year ended December 31, 2018, the Company repurchased a total principal amount of $2,555$49,259 of the 2013 Notes.Notes, which represented all of the remaining principal amount outstanding. The Company paid cash of $80,270 for the total of the principal amount and issued a total of 18,031 shares of common stock valued at $1,686 for the exchange value in excess of the principal amount.
During February 2016,the year ended December 31, 2017, the Company repurchased a total principal amount of $19,639$13,911 of the 2013 Notes. The Company paid cash of $20,042 for the total of the 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

54

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


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:
 For the Year Ended December 31,
  2018 2017
Principal amount repurchased $49,259
 $13,911
     
Amount allocated to:    
  Extinguishment of liability component $49,019
 $13,692
  Reacquisition of equity component 31,251
 6,350
Total consideration paid for repurchase $80,270
 $20,042
Exchangeable senior notes repurchased $49,259
 $13,911
Extinguishment of liability component (49,019) (13,692)
Discount on exchangeable senior notes (230) (184)
Related debt issuance costs (10) (35)
Gain/(loss) on repurchase $—
 $—
 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, 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 unpaid claims liability are claims related to the Company’s tenant reinsurance program. For the years ended December 31, 2016, 2015 and 2014, the number of claims made were 4,055, 3,959 and 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 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 0.5% 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 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, 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, 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's Chief Executive 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, 2016, 2015 and 2014, the Company paid SpenAero $1,180, $1,163 and $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.
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, 2016, 125,881,4602019, 129,534,407 shares of common stock were issued and outstanding, and no0 shares of preferred stock were issued or outstanding.


All holders of the Company's common stock are entitled to receive dividends and to one1 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 August 28, 2015,May 15, 2019, 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$500,000 "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 five9 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,$500,000, 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 year ended December 31, 2019, the Company sold 550,0001,779,200 shares of common stock under its "at the current “at the market”market" equity program at an average sales price of $92.04$113.19 per share, resulting in net proceeds of $50,062.$198,827. At December 31, 2016,2019, the Company had $349,375$298,621 available for issuance under the existingcurrent equity distribution agreements.


From January 1, 2016, through May 6, 2016,During the year ended December 31, 2018, the Company sold 831,300933,789 shares of common stock under its prior "at the previous “at the market”market" equity program at an average sales price of $89.66$97.93 per share, resulting in net proceeds of $73,360.$90,531.

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 6,325,000 shares of its common stock in a public offering at a price of $68.15 per share. The Company received gross proceeds of $431,049. The underwriting discount and transaction costs were $14,438, resulting in net proceeds of $416,611.
13.11.     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.

55

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


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
At December 31, 2019 and 2018, the noncontrolling interests represented by the Preferred OP Units
On June 15, 2007, qualified for classification as permanent equity on the Operating Partnership entered into a Contribution Agreement with various limited partnerships affiliated with AAAAA Rent-A-Space to acquire ten stores in exchange for 989,980 Series A Units. The stores are located in California and Hawaii.
Company's consolidated balance sheets. The partnership agreement of the Operating Partnership (as amended, the “Partnership Agreement”"Partnership Agreement") provides for the designation and issuance of the OP Units. Noncontrolling interests in Preferred OP Units were presented net of notes receivable from preferred Operating Partnership unit holders of $100,000 and $108,644 as of December 31, 2019 and 2018, respectively, as more fully described below.
Series A Units. Participating Redeemable Preferred 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,were issued in June 2007. Series A Units in the amount of $115,000$101,700 bear a fixed priority return of 5.0%2.3%, and haveoriginally had 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. As a result of the redemption of 114,500 Series A Units in October 2014, the remaining fixed liquidation value was reduced to $101,700 which represents 875,480 Series A Units. On April 18, 2017, the holder of the Series A Units and the Operating Partnership agreed to reduce the fixed priority return on the Series A Units from 5.0% to 2.3% in exchange for a reduction in the interest rate of the related loan, as more fully described below.
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.
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%2.1%. During 2013,On April 18, 2017, a loan amendment was signed extendingmodifying the maturity date of the loan to September 1, 2020.the later of the death of the Series A Unit holder or his spouse and also lowering the interest rate of the loan from 4.9% to 2.1%. The loan amendment was determined to be a loan modification under GAAP, and therefore no change in value was recognized. 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 additionalNaN future redemption of Series A Units can be made without repayment ofunless the loan.loan secured by the Series A Units is also repaid. 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.
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 were issued in 2013 and 2014 and have a liquidation value of $25.00 per unit for a current fixed liquidation value of $41,903.$41,902 which represents 1,676,087 Series B Units. 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. 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.
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 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 havewere issued in 2013 and 2014 and had a liquidation value of $42.10 per unit for a fixed liquidation value of $29,639.unit. From issuance to the fifth anniversary of issuance, each Series C Unit holder will receivereceived quarterly distributions equal to the quarterly distribution for

56

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


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 arewere cumulative. The Series C Units will becomebecame redeemable at the option of the holder one year from the date of issuance, which redemption obligation maycould be satisfied at the Company’s option in cash or shares of its common stock. The Series C Units will also becomewere 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 expiresexpired 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 notesnote receivable, which arewas collateralized by the Series C Units, bearbears interest at 5.0% and maturematures on December 15, 2024. The Series C Units arewere shown on the balance sheet net of the $20,230 loan because the borrower under the loan receivable iswas also the holder of the Series C Units.
On December 1, 2018, certain holders of the Series C Units converted their Series C Units into common OP Units, with a total of 407,996 Series C Units being converted into a total of 373,113 common OP Units. As part of this conversion, the holders of the Series C Units agreed to pledge the common OP Units received in the conversion as collateral on the loan receivable to replace the Series C Units that were converted. As of December 31, 2018, the total outstanding balance of the loan receivable was $19,735, of which $8,644 was shown as a reduction of the noncontrolling interests related to the Series C Units and $11,091 was shown as a reduction of the noncontrolling interests related to the common OP Units on the Company's consolidated balance sheets. On April 25, 2019, the remaining 296,020 Series C Units were converted into 270,709 OP Units. The remaining outstanding balance of the loan receivable of $18,524 is shown as a reduction of the noncontrolling interests related to the OP Units as of December 31, 2019. See footnote 12 for further discussion of noncontrolling interests.
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 Units") 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 been issued at various times from 2014 to 2019. During the year ended December 31, 2019, the Operating Partnership issued a total of 1,120,924 Series D Units valued at $28,023 in conjunction with joint venture acquisitions. During the year ended December 31, 2017, the Operating Partnership issued 446,420 Series D Units valued at $11,161 in conjunction with wholly-owned and joint venture acquisitions.

The Series D Units have a liquidation value of $25.00 per unit, for a current fixed liquidation value of $80,903.$120,086 which represents 4,803,445 Series D Units. Holders of the Series D Units receive distributions at an annual rate between 3.5%3.0% 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. In addition, certain of the D-3Series D 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 forissuance, with the number of common OP Units.Units to be issued equal to $25.00 per Series D Unit, divided by the value of a share of common stock as of the exchange date.

57
14.     

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


12.NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS
Noncontrolling interest in Operating Partnership
The Company’s interest in its stores is held through the Operating Partnership. ESS Holding Business Trust I, a wholly-owned subsidiary of the Company, is the sole general partner of the Operating Partnership. ESS Business Trust II, also a wholly-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 91.2%90.7% majority ownership interest therein as of December 31, 2016.2019. The remaining ownership interests in the Operating Partnership (including Preferred Operating Partnership units)OP Units) of 8.8%9.3% are held by certain former owners of assets acquired by the Operating Partnership.
The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company. In conjunction withOP Units are redeemable at the formationoption of the Company and as a result of subsequent acquisitions, certain persons and entities contributing interestsholder, which redemption may be satisfied at the Company's option in stores to the Operating Partnership received limited partnership units in the form of OP 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 (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 a one-for-one basis, subject to anti-dilution adjustments provided in the Operating Partnership agreement. The ten-day average closing stock price at December 31, 2016,2019, was $74.87$104.18 and there were 5,608,0385,924,778 OP Units outstanding.
Assuming that all of the OP Unit holders exercised their right to redeem all of their OP Units on December 31, 20162019 and the Company elected to pay the OP Unit holders cash, the Company would have paid $419,874$617,243 in cash consideration to redeem the units.
During the years ended December 31, 2016, 2015, and 2014, a total of 23,850 OP Units, 787,850 OP Units, and 18,859 OP Units, respectively, were redeemed in exchangeUnit activity is summarized as follows for the Company’s common stock.periods presented:
During November 2016, 6,760 OP Units were redeemed for $506 in cash.
 For the Year Ended December 31,
 201920182017
OP Units redeemed for common stock340,182
35,000
—
OP Units redeemed for cash—
30,000
33,896
Cash paid for OP Units redeemed$—
$2,558
$2,510
OP Units issued in conjunction with acquisitions—
21,768
90,228
Value of OP Units issued in conjunction with acquisitions$—
$1,877
$7,618
OP Units issued upon redemption of Series C Units270,709
373,113
—

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 purchased one store located in Georgia. As part of the consideration for this acquisition, 13,764December 1, 2018, 373,113 common OP Units were issued with a total valuein the conversion of $1,200.
On May 31, 2016, the Company purchased 50% undivided interest in vacant land in California. As part of the consideration for this acquisition, 2,230407,996 Series C Units. These newly issued OP Units were issued withpledged as collateral on the existing loan receivable to the Series C Unit holders. As a total valueresult, noncontrolling interests in the Operating Partnership was reported net of $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$11,091 of the consideration for this acquisition, 91,434loan receivable as of December 31, 2018, which represents the portion of the note receivable that is collateralized by the OP Units. The remaining 296,020 Series C Units were converted into 270,709 OP Units were issued with a total value of $7,221.
On October 1, 2015,on April 25, 2019 and the Company acquired SmartStop. As partremainder of the consideration for this acquisition, 376,848loan receivable was reported net with the OP Units. The remaining total outstanding balance of the loan receivable of $18,524 is shown as a reduction of the noncontrolling interests related to the OP Units were issued with a total valueas of $28,656.
On June 18, 2015, the Company purchased one store located in Florida. As part of the consideration for this 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 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.December 31, 2019.
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.

15.     OTHER NONCONTROLLING INTERESTS
58

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


Other Noncontrolling Interests
Other noncontrolling interests represent the ownership interest of a third partyparties in one2 consolidated joint ventureventures as of December 31, 2016. This2019. One joint venture owns 2 operating stores in Texas and 2 operating stores in Colorado, and the other owns an operating store in Texas.Pennsylvania and a development property in New Jersey. The voting interestinterests of the third-party owner isowners are between 5.0% and 20.0%. Other noncontrolling interests
13.LEASES

The Company adopted ASC 842, "Leases," effective January 1, 2019 on a modified retrospective basis as allowed under the standard and thus prior periods have not been restated. The Company elected the package of transition practical expedients, and has therefore (1) not reassessed whether any expired or existing contracts are included inor contain leases, (2) not reassessed the stockholders’ equity sectionlease classification for any expired or existing leases, and (3) not reassessed initial direct costs for any expired or existing leases.
Lessee Accounting
The Company recognized right-of-use assets related to operating leases totaling $95,506 and lease liabilities of $104,863 as of the adoption date, January 1, 2019. These are presented as “Operating lease liabilities” and “Real estate assets-operating lease right-of-use assets” on the Company’s consolidated balance sheets.
In June and August 2019, the Company entered into new triple-net lease agreements to lease land and buildings at 22 and 5 operating stores, respectively. These leases are categorized as operating leases, and have contractual lease terms of 25 years, but have termination options after 10 years that result in lease terms of 10 years under ASC 842. The incomeCompany recorded new operating lease right-of-use assets and operating lease liabilities of $127,532 and $52,224, respectively, in conjunction with these new lease agreements.
The Company is lessee under several types of lease agreements. Generally, these leases fall into the following categories:
Leases of real estate at 49 stores classified as wholly-owned. These leases generally have original lease terms between 10-67 years. Under these leases, the Company typically has the option to extend the lease term for additional terms of 5-35 years.
Leases of its corporate offices and call center. These leases have original lease terms between 5.3 and 12.1 years, with no extension options.
Leases of 13 regional offices. These leases have original lease terms between three and five years. The Company has the option on 5 of these leases to extend the lease term for three additional years.
Leases of small district offices. These leases generally have terms of 12 months or losses attributableless. The Company has made an election to this third-party owneraccount for these under the short-term lease exception outlined under ASC 842. Therefore, no lease assets or liabilities are recorded related to these leases.

The Company has included lease extension options in the lease term for calculations of its right-of-use assets and liabilities related to the real estate asset leases at its stores when it is reasonably certain that the Company plans to extend the lease terms as the options arise.

Several of the leases of real estate at the Company’s stores include escalation clauses based on an index or rate, such as the Consumer Price Index (CPI). The Company included these lease payments in its ownership percentage are reflectedcalculations of right-of-use assets and liabilities based on the prevailing index or rate as of the adoption date. The Company will recognize changes to these variable lease payments in net income allocated to Operating Partnership and other noncontrolling interestsearnings in the period of change.
One of the real estate leases includes variable lease payments that are based upon a percentage of gross revenues. Certain other leases include additional variable payments relating to a percentage of sales in excess of a specified amount, common area maintenance, property taxes, and similar items. These payments are variable lease payments that do not depend on an index or rate and are excluded from the measurement of the lease liabilities and right-of-use-assets for these leases. The Company will recognize costs from these variable lease payments in the period in which the obligation for those payments is incurred.
The Company has signed a lease agreement for a store in New Jersey. The store is currently under construction by the lessor, and the Company will take possession of the leased asset upon completion of construction, which is estimated to be completed in early to mid-2020. The lease term is 75 years from the lease commencement date, with 3 10-year extension options. The Company has also signed a lease agreement for a store in California. The store is under construction by the lessor,

59

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


and the Company will take possession of the leased asset upon completion of construction, which is estimated to be completed in late 2020. The lease term is 15 years from the lease commencement date, with 3 10-year extension options and 1 5-year extension option. The Company has not recorded right-of-use assets or lease liabilities related to these leases as of December 31, 2019 as the lease term has not yet commenced for either lease. The lease commencement date will occur when the Company takes possession of the leased asset, and the Company will recognize a lease liability and right-of-use asset relating to the leases at that time.
As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease commencement date in determining the present value of lease payments. These discount rates vary depending on the term of the specific leases.

60

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


Following is information on our total lease costs as of the period indicated:
 For the Year Ended December 31,
 2019
  
Finance lease cost: 
     Amortization of finance lease right-of-use assets$168
     Interest expense related to finance lease liabilities290
Operating lease cost20,268
Variable lease cost5,068
Short-term lease cost164
          Total lease cost$25,958
  
  
Cash paid for amounts included in the measurement of lease liabilities 
    Operating cash outflows for finance lease payments$231
    Operating cash outflows for operating lease payments19,226
Total cash flows for lease liability measurement$19,457
  
Right-of-use assets obtained in exchange for new operating lease liabilities$277,557
Right-of-use assets obtained in exchange for new finance lease liabilities$8,050
  
Weighted average remaining lease term - finance leases (years)46.9
Weighted average remaining lease term - operating leases (years)14.7
Weighted average discount rate - finance leases6.07%
Weighted average discount rate - operating leases3.65%

The Company recorded lease expense of $8,229 and $6,898 related to operating leases in the years ended December 31, 2018 and 2017, respectively.
The following table presents information about the Company’s undiscounted cash flows on an annual basis for operating and finance leases, including a reconciliation of the undiscounted cash flows to the finance lease and operating lease liabilities recognized in the Company’s consolidated balance sheets:
 Operating Finance Total
2020$28,369
 $232
 $28,601
202128,628
 237
 28,865
202228,651
 255
 28,906
202328,707
 255
 28,962
202429,198
 255
 29,453
Thereafter223,823
 16,522
 240,345
Total$367,376
 $17,756
 $385,132
Present value adjustments(92,593) (12,918) (105,511)
Lease liabilities$274,783
 $4,838
 $279,621



61

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


The Company elected the package of practical expedients upon adoption of ASC 842, which allows for the application of the standard solely to the transition period in 2019 and does not require application to prior fiscal comparative periods presented. Disclosures required under the previous leasing standard are presented for prior years. The following table summarizes future minimum lease payments required under operating leases as of December 31, 2018:
2019$8,203
20208,307
20218,137
20227,837
20237,021
Thereafter111,653
 $151,158



Lessor Accounting

The Company's property rental revenue is primarily related to rents received from tenants at its operating stores. The Company's leases with its self-storage tenants are generally on month-to-month terms, include automatic monthly renewals, allow flexibility to increase rental rates over time as market conditions permit, and provide for the collection of contingent fees such as late fees. These leases do not include any terms or conditions that allow the tenants to purchase the leased space. All self-storage leases for which the Company acts as lessor have been classified as operating leases. The real estate assets related to the Company's stores are included in "Real estate assets, net" on the Company's condensed consolidated balance sheets and are presented at historical cost less accumulated depreciation and impairment, if any. Rental income related to these operating leases is included in Property rental revenue on the Company's condensed consolidated statements of operations.
On August 1, 2016,operations, and is recognized each month during the Company purchased its joint venture partner's remaining 3.3% interestmonth-to-month terms at the rental rate in an existing joint venture in exchange for 8,889 OP Units, valued at $800. This joint venture owned one store located in California, and as a result of this purchase, this store became wholly-owned by the Company. Prior to this acquisition, the partner's interest was reported in other noncontrolling interests. Since the Company retained its controlling interest in the 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 carrying value of the noncontrolling interest was recorded as an adjustment to equity attributable to the Company.
On June 11, 2015, the Company purchased its joint venture partner’s remaining 1% interest in the HSRE joint venture for $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. Since the Company retained its controlling 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 Company.

place during each month.
16.14.     STOCK-BASED COMPENSATION

As ofDecember 31, 20162019, 1,934,7351,438,073 shares were available for issuance under the Company’s 2015 Incentive Award Plan (the “Plan”).
EXTRA SPACE STORAGE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts in thousands, except store and share data, unless otherwise stated


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 a four-year period beginning on the date of grant. Each option will be exercisable once it has vested. Options are exercisable at such times and subject to such terms as determined 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. Beginning in 2017, the CNG Committee decided to the replace stock options granted to executives with performance based stock units for executive compensation. See the "Performance-Based Stock Units" section below.
Also as defined under the terms of the 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 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 a four-year period beginning on the date of grant.

62

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


Option Grants
A summary of stock option activity is as follows:
OptionsNumber of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value as of December 31, 2019
Outstanding at December 31, 2016510,574
 $30.60
    
Exercised(38,418) 32.94
    
Outstanding at December 31, 2017472,156
 $30.41
    
Exercised(54,575) 21.45
    
Outstanding at December 31, 2018417,581
 $31.58
    
Exercised(211,057) 14.65
    
Outstanding at December 31, 2019206,524
 $48.88
 3.43 $11,719
        
Vested and Expected to Vest206,460
 $48.87
 3.43 $11,717
Ending Exercisable197,576
 $47.20
 3.30 $11,543

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 20162019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2016.2019. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock.
The weighted average fairtotal intrinsic value of stockoptions exercised for the years ended December 31, 2019, 2018 and 2017 was $18,089, $3,693 and $1,786, respectively.
There have been 0 options granted in 2016, 2015 and 2014, was $20.30, $16.89 and $12.03, respectively.since 2016. The fair value of each option grant iswas estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:
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
model. The Black-Scholes model incorporates assumptions to value stock-based awards. The risk-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 a weighted-average of 5.0%7.4% of unvested options outstanding as of December 31, 2016,2019, 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, 2016,2019, is as follows:
  Options Outstanding Options Exercisable
Exercise Price Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Weighted Average Exercise Price
$12.21 - $12.21 77,400
 0.18 $12.21
 77,400
 $12.21
$38.40 - $38.40 8,085
 3.14 38.40
 8,085
 38.40
$47.50 - $47.50 9,800
 4.13 47.50
 9,800
 47.50
$65.36 - $65.36 15,647
 5.15 65.36
 15,647
 65.36
$65.45 - $65.45 11,960
 5.13 65.45
 11,960
 64.45
$73.52 - $73.52 50,000
 5.58 73.52
 50,000
 73.52
$85.99 - $85.99 33,632
 6.15 85.99
 24,684
 85.99

 206,524
 3.42 $48.88
 197,576
 $47.20
  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 $729, $510$364, $570 and $456$649 in general and administrative expense for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, respectively. Total cashNet proceeds received for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, related to option exercises was $1,444, $1,542$3,063, $1,169 and $3,095,$1,266, respectively. At December 31, 2016,2019, there was $1,442 of total0 unrecognized compensation expense related to non-vested stock options under the Plan. That cost is expected to be recognized over a weighted-average period of 2.30 years. The

63

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


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, 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 $7,316, $5,545$9,173, $8,733 and $4,528$7,232 of expense in general and administrative expense in its statement of operations related to outstanding shares of commonrestricted stock awards granted to employees and directors for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, respectively. The forfeiture rate, which is estimated at a weighted-average of 10.1%9.7% of unvested awards outstanding as of December 31, 2016,2019, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimates. At December 31, 20162019 there was $14,141$11,712 of total unrecognized compensation expense related to non-vested restricted stock awards under the Plan. That cost is expected to be recognized over a weighted-average period of 2.372.17 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 GrantsShares Weighted-Average Grant-Date Fair Value
Unreleased at December 31, 2016299,585
 $70.57
Granted95,392
 74.49
Released(120,323) 63.95
Cancelled(8,179) 77.25
Unreleased at December 31, 2017266,475
 $74.76
Granted85,066
 86.14
Released(116,656) 72.38
Cancelled(11,771) 80.96
Unreleased at December 31, 2018223,114
 $80.02
Granted109,081
 101.52
Released(110,724) 79.58
Cancelled(8,863) 90.11
Unreleased at December 31, 2019212,608
 $90.85



64

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

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

Performance-based Stock Units
In 2017, the CNG Committee changed its compensation for executives to issue performance-based stock units (the "PSUs") as a replacement for stock option awards. The PSUs granted to executives represent the right to earn shares of the Company's common stock. These awards have two financial performance components: (1) the Company's core FFO performance ("FFO Target"), and (2) the Company's total stockholder return relative to the performance of a defined group of peers ("TSR Target"). Each of these performance components are weighted 50% and are measured over the performance period, which is defined as the three-year period ending December 31 from the year of grant. At the end of the performance period, the financial performance components are reviewed to determine the number of shares actually granted to executives, which can be as low as 0 shares and up to a maximum of 2 shares issued for each PSU. A summary of the PSU activity is as follows:
Performance-Based Stock Units Units Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2016 —
 $—
Granted 30,071
 83.84
Unvested at December 31, 2017 30,071
 $83.84
Granted 28,735
 96.19
Unvested at December 31, 2018 58,806
 $89.87
Granted 49,334
 103.18
Unvested at December 31, 2019 108,140
 $95.94
The Company recorded $3,514, $1,873 and $840 of expense in general and administrative expense in its statement of operations related to PSUs granted to employees and directors for the years ended December 31, 2019, 2018 and 2017, respectively. The Company estimated the fair value of the PSUs as of the grant date, using the closing trading price of the Company's common stock on the grant date to value the FFO Target portion. A Monte Carlo simulation model was used to calculate the fair value of the TSR Target portion of the PSUs, using the following assumptions:
  For the Year Ended December 31,
  2019 2018 2017
Intrinsic value $6,211 $5,321 $2,630
Risk-free rate 2.53% 2.37% 1.62%
Volatility 20.7% 22.6% 21.4%
Expected term (in years) 2.8 2.9 2.8
Dividend yield —% —% —%
Unrecognized compensation cost $4,315 $2,739 $1,681
Term over which compensation cost recognized 3 3 3

Under the terms of the PSUs, dividends for the entire measurement period are paid in cash when the shares are issued, so a dividend yield of 0 was used. The valuation model applied in this calculation utilizes subjective assumptions that could potentially change over time, including the probabilities associated with achieving the FFO Targets (categorized within Level 3 of the fair value hierarchy). Therefore, the amount of unrecognized compensation expense at December 31, 2019 noted above does not necessarily represent the expense that will ultimately be realized by the Company in the statement of operations.
17.15.     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 60% of their annual salary, subject to a statutory prescribed annual limit. For the years ended December 31, 2016, 20152019, 2018 and 2014,2017, the Company made matching contributions to the plan of $1,944, $1,680$3,355, $2,833 and $1,529,$2,212, respectively, based on 100% of the first 3% and up to 50% of the next 2% of an employee’s compensation.

65
18.

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


16.     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 one1 of its corporate subsidiaries, Extra Space Management, Inc., as a taxable REIT subsidiary.TRS. In general, the Company’s TRS may perform additional services for tenants and generally may engage in any real estate or non-real estate related business. A TRS is subject to federal 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 the Tax-Law-Ordering approach to determine when excess tax benefits will be realized.


The income tax provision for the years ended December 31, 2016, 20152019, 2018 and 2014,2017, is comprised of the following components:
 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, 2015For the Year Ended December 31, 2019
Federal       State       Total      Federal State Total
Current expense$3,736
 $1,640
 $5,376
$10,164
 $2,936
 $13,100
Tax credits/true-up274
 —
 274
(3,633) (30) (3,663)
Change in deferred benefit7,016
 (1,518) 5,498
Change in deferred expense/(benefit)1,787
 84
 1,871
Total tax expense$11,026
 $122
 $11,148
$8,318
 $2,990
 $11,308
 
For the Year Ended December 31, 2014For the Year Ended December 31, 2018
Federal       State       Total      Federal State Total
Current expense$6,020
 $1,374
 $7,394
$9,136
 $2,426
 $11,562
Tax credits/true-up(2,176) —
 (2,176)(5,841) (175) (6,016)
Change in deferred benefit803
 1,549
 2,352
Change in deferred expense3,730
 (32) 3,698
Total tax expense$4,647
 $2,923
 $7,570
$7,025
 $2,219
 $9,244
 For the Year Ended December 31, 2017
 Federal State Total
Current expense$5,677
 $1,662
 $7,339
Tax credits/true-up(5,573) (383) (5,956)
Change in deferred benefit1,700
 542
 2,242
Total tax expense$1,804
 $1,821
 $3,625

A reconciliation of the statutory income tax provisions to the effective income tax provisions for the periods indicated is as follows:
 For the Year Ended December 31,
 2019 2018 2017
Expected tax at statutory rate$97,110
 21.0 % $95,828
 21.0 % $186,274
 35.0 %
Non-taxable REIT income(82,717) (17.9)% (83,022) (18.2)% (170,811) (32.1)%
State and local tax expense - net of federal benefit2,837
 0.6 % 2,385
 0.5 % 2,306
 0.4 %
Change in valuation allowance(207) — % (1,052) (0.2)% 159
 — %
Tax credits/true-up(3,663) (0.8)% (6,016) (1.3)% (5,956) (1.1)%
Remeasurement of deferred balances—
 — % —
 — % (8,460) (1.6)%
Miscellaneous(2,052) (0.4)% 1,121
 0.2 % 113
 — %
Total provision$11,308
 2.5 % $9,244
 2.0 % $3,625
 0.6 %



66
 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, 2019 December 31, 2018
Deferred tax liabilities:   
Fixed assets$(23,805) $(20,907)
Operating lease right-of-use assets(2,475) —
Other(84) (96)
State deferred taxes(3,405) (3,076)
Total deferred tax liabilities(29,769) (24,079)
    
Deferred tax assets:   
Captive insurance subsidiary312
 324
Accrued liabilities2,006
 1,772
Stock compensation2,118
 1,604
Operating lease liabilities2,478
 —
SmartStop TRS219
 219
Other50
 53
State deferred taxes7,250
 7,196
Total deferred tax assets14,433
 11,168
    
Valuation allowance(3,665) (3,872)
    
Net deferred income tax liabilities$(19,001) $(16,783)
 December 31, 2016 December 31, 2015
Deferred tax liabilities:   
Fixed assets$(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 20172020 and 2034.2037. The valuation allowance is associated with the state income tax net operating losses. The tax years 20122015 through 20152018 remain open related to the state returns, and 20132016 through 20152018 for the federal returns.
19.17.     SEGMENT INFORMATION

The Company operates in three distinctCompany’s segment disclosures present the measure used by the chief operating decision makers ("CODMs") for purposes of assessing each segment’s performance. The Company’s CODMs are comprised of several members of its executive management team who use net operating income ("NOI") to assess the performance of the business for the Company’s reportable operating segments. NOI for our self-storage operations represents total property revenue less direct property operating expenses. NOI for our tenant reinsurance segment represents tenant reinsurance revenues less tenant reinsurance expense.

The Company’s segments are comprised of 2 reportable segments: (1) rental operations;self-storage operations and (2) tenant reinsurance; and (3)reinsurance. The self-storage operations activities include rental operations of wholly-owned stores. The Company's consolidated revenues equal total segment revenues plus property management acquisitionfees and development. Managementother income. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the stores operated by the Company. Excluded from segment revenues and net operating income is property management fees collected for wholly-owned storesand other income.

For all periods presented, substantially all of our real estate assets, intangible assets, other assets, and accrued and other liabilities are eliminated in consolidation.associated with the self-storage operations segment. Financial information for the Company’s business segments is set forth below:



67
 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




 Year Ended December 31,
 2019 2018 2017
Revenues:     
     Self-Storage Operations$1,130,177
 $1,039,340
 $967,229
     Tenant Reinsurance128,387
 115,507
 98,401
          Total segment revenues$1,258,564
 $1,154,847
 $1,065,630
      
Operating expenses:     
     Self-Storage Operations$336,050
 $291,695
 $271,974
     Tenant Reinsurance29,376
 25,707
 19,173
          Total segment operating expenses$365,426
 $317,402
 $291,147
      
Net operating income:     
     Self-Storage Operations$794,127
 $747,645
 $695,255
     Tenant Reinsurance99,011
 89,800
 79,228
          Total segment net operating income:$893,138
 $837,445
 $774,483
      
Total segment net operating income$893,138
 $837,445
 $774,483
Other components of net income (loss):     
Property management fees and other income49,890
 41,757
 39,379
General and administrative expense(89,418) (81,256) (78,961)
Depreciation and amortization expense(219,857) (209,050) (193,296)
Gain on real estate transactions and impairment of real estate1,205
 30,807
 112,789
     Interest expense(186,526) (178,436) (153,511)
Non-cash interest expense related to the amortization of discount on equity component of exchangeable senior notes(4,742) (4,687) (5,103)
     Interest income7,467
 5,292
 6,736
     Equity in earnings of unconsolidated real estate entities11,274
 14,452
 15,331
     Income tax expense(11,308) (9,244) (3,625)
          Net income$451,123
 $447,080
 $514,222

 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)
      

20.18.     COMMITMENTS AND CONTINGENCIES
The Company has operating leases on its corporate offices and owns 22 stores that are subject to leases. At December 31, 2016, future minimum rental payments under these non-cancelable operating leases were as follows (unaudited):
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 three of the ground leases include contingent rental payments based on the level of revenue achieved at the stores. The Company recorded expense of $4,578, $3,858 and $3,406 related to these ground leases in the years ended December 31, 2016, 2015 and 2014, respectively.
The Company is involved in various legal proceedings and is 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 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 fact 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 included2019, the Company was involved in other liabilitiesvarious legal proceedings and was subject to various claims and complaints arising in the ordinary course of business. In the opinion of management, such litigation, claims and complaints are not expected to have a material adverse effect on the consolidated balance sheets.Company’s financial condition or results of operations.

68

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, 2016,2019, the Company was under contractagreement to acquire four operating3 stores and 12 stores to be acquired upon the completion of construction. Theat a total purchase price of all stores with commitments was $183,581.$27,400. Of these stores, seven2 are scheduled to close in 2017. The remaining stores will2020 at a purchase price of $16,000, and 1 is scheduled to close upon completionin 2021 at a purchase price of construction, expected to occur on various dates in 2018 and 2019.$11,400. Additionally, the Company is under contractagreement to acquire 167 stores in 2020 with joint venture partners, for a nettotal 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.$25,095.
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. 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.
21.19.     SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED)
 
 For the Three Months Ended
 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019
Revenues$311,546
 $323,602
 $337,505
 $335,801
Cost of operations163,069
 165,609
 174,867
 171,156
Revenues less cost of operations$148,477
 $157,993
 $162,638
 $164,645
Net income$102,160
 $112,689
 $115,995
 $120,279
Net income attributable to common stockholders$94,770
 $104,828
 $108,087
 $112,282
Earnings per common share—basic$0.74
 $0.82
 $0.84
 $0.87
Earnings per common share—diluted$0.74
 $0.81
 $0.83
 $0.86
 For the Three Months Ended
 March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018
Revenues$285,485
 $296,813
 $306,953
 $307,353
Cost of operations151,573
 152,097
 153,362
 150,676
Revenues less cost of operations$133,912
 $144,716
 $153,591
 $156,677
Net income$95,430
 $102,713
 $139,687
 $109,250
Net income attributable to common stockholders$88,256
 $95,153
 $130,418
 $101,462
Earnings per common share—basic$0.70
 $0.75
 $1.03
 $0.80
Earnings per common share—diluted$0.70
 $0.75
 $1.02
 $0.80


69
 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 two stores for a total of $25,500. These stores are located in Georgia and Illinois.
On February 1, 2017, the Company 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)
As of December 31, 2019

     Building and Improvements Initial Cost Adjustments and Costs to Land and Building Subsequent to Acquisition Gross carrying amount at December 31, 2019 
Self - Storage Facilities by State:Store Count  Land Initial Cost  Building and Improvements Accumulated Depreciation
 Debt Land Total
AL8$29,567
$7,690
$42,770
$3,693
$7,691
$46,462
$54,153
$8,277
AZ2321,845
27,535
117,304
9,574
27,533
126,880
154,413
24,239
CA165531,406
539,355
1,166,591
109,246
540,043
1,275,149
1,815,192
264,874
CO1630,432
16,809
71,894
16,652
17,527
87,828
105,355
19,546
CT723,557
9,875
50,966
4,766
9,874
55,733
65,607
9,934
FL91263,634
163,455
588,353
56,727
163,919
644,616
808,535
134,121
GA6385,820
83,742
406,477
27,502
83,726
433,995
517,721
60,262
HI1331,029
17,663
133,870
6,025
17,663
139,895
157,558
25,676
IL3750,669
45,435
234,396
25,785
44,888
260,728
305,616
43,160
IN1510,987
12,447
58,247
5,850
12,447
64,097
76,544
11,698
KS1—
366
1,897
866
366
2,763
3,129
1,087
KY1134,066
8,640
68,679
18,260
9,412
86,167
95,579
12,296
LA2—
6,114
8,541
1,312
6,115
9,852
15,967
4,221
MA46105,046
73,544
270,243
50,778
73,725
320,840
394,565
80,863
MD32118,007
99,147
284,253
16,756
97,180
302,976
400,156
70,387
MI75,792
9,583
51,359
3,239
9,583
54,598
64,181
5,740
MN5—
7,377
50,057
514
7,377
50,571
57,948
2,585
MO5—
4,129
15,444
4,107
4,086
19,594
23,680
7,392
MS3—
2,420
20,849
1,450
2,420
22,299
24,719
2,635
NC1928,221
31,969
104,104
7,379
31,967
111,485
143,452
11,241
NH25,938
754
4,054
1,278
817
5,269
6,086
2,388
NJ59155,754
134,032
560,512
41,422
137,258
598,708
735,966
129,970
NM1117,689
32,252
71,142
5,049
32,252
76,191
108,443
9,373
NV1437,557
15,252
74,376
4,671
15,252
79,047
94,299
10,422
NY2743,218
121,945
230,875
34,801
122,680
264,941
387,621
59,450
OH1734,470
17,788
50,493
6,733
17,787
57,227
75,014
13,318
OR630,267
7,906
39,576
2,042
7,906
41,618
49,524
7,545
PA1834,475
24,297
149,144
12,297
23,589
162,149
185,738
24,480
RI211,841
3,191
6,926
1,253
3,191
8,179
11,370
2,939
SC2343,543
37,075
135,760
10,029
37,076
145,788
182,864
22,598
TN1745,601
25,938
91,497
8,750
25,938
100,247
126,185
18,046
TX100213,291
169,160
648,128
57,365
169,012
705,641
874,653
112,790
UT1013,181
9,008
39,295
2,247
9,008
41,542
50,550
9,854
VA46163,675
139,318
414,335
19,385
139,319
433,719
573,038
69,063
WA820,345
12,528
47,645
2,694
12,530
50,337
62,867
11,380
DC18,762
14,394
18,172
429
14,394
18,601
32,995
1,824
Other corporate assets
—
—
2,202
138,483
—
140,685
140,685
40,298
Intangible tenant relationships and lease rights —
—
132,000
2,932
—
134,932
134,932
127,712
Construction in Progress/Undeveloped Land —
5,978
—
39,788
3,372
42,394
45,766
—
Right of use asset - finance lease (1) —
—
—
8,050
—
8,050
8,050
168
Totals (1)930$2,249,685
$1,938,111
$6,462,425
$770,180
$1,938,923
$7,231,793
$9,170,716
$1,473,852


(1) No right-of-use assets related to operating leases are included in the ending net real estate assets information above. As of December 31, 2019, there was a right-of-use asset relating to a finance lease in the amount of $8,050 included in net real estate assets on the Company's consolidated balance sheets.

70


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



Extra Space Storage Inc. Schedule III (continued)

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)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




Activity in real estate facilities during the years ended December 31, 2016, 20152019, 2018 and 20142017 is as follows:
2016 2015 20142019 2018 2017
Operating facilities          
Balance at beginning of year$6,392,487
 $4,722,162
 $4,126,648
$8,709,315
 $8,158,741
 $7,649,448
Acquisitions1,159,304
 1,609,608
 557,158
303,588
 459,223
 628,391
Improvements92,480
 46,696
 32,861
68,459
 64,336
 71,090
Transfers from construction in progress26,400
 19,971
 12,308
59,614
 49,449
 19,079
Dispositions and other(21,223) (5,950) (6,813)(11,418) (22,434) (209,267)
Balance at end of year$7,649,448

$6,392,487

$4,722,162
$9,129,558
 $8,709,315
 $8,158,741
Accumulated depreciation:          
Balance at beginning of year$728,087
 $604,336
 $496,754
$1,262,438
 $1,060,060
 $900,861
Depreciation expense174,906
 123,751
 109,531
212,202
 203,030
 185,903
Dispositions and other(2,132) —
 (1,949)(789) (652) (26,704)
Balance at end of year$900,861

$728,087

$604,336
$1,473,851
 $1,262,438
 $1,060,060
Real estate under development/redevelopment:          
Balance at beginning of year$24,909
 $17,870
 $6,650
$44,954
 $33,750
 $21,860
Current development23,404
 27,010
 23,528
55,817
 60,677
 33,484
Transfers to operating facilities(26,400) (19,971) (12,308)(59,614) (49,449) (19,079)
Dispositions and other(53) —
 —
—
 (24) (2,515)
Balance at end of year$21,860

$24,909

$17,870
$41,157
 $44,954
 $33,750
Net real estate assets$6,770,447
 $5,689,309
 $4,135,696
Net non-lease real estate assets (1)$7,696,864
 $7,491,831
 $7,132,431
The(1) No right-of-use assets related to operating leases leases are included in the ending net real estate assets information above. As of December 31, 2019, there was a right-of-use asset relating to a finance lease in the amount of $8,050 included in net real estate assets on the Company's consolidated balance sheets.
As of December 31, 2019, the aggregate cost of real estate for U.S. federal income tax purposes is $6,513,574.was $7,721,422.

71





Item 9.     Changes in anand 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” in Rule 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 the cost-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 in Rule 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 (2013 framework). Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2016.2019. 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.
Opinion on Internal Control over Financial Reporting

We have audited Extra Space Storage, Inc.’s internal control over financial reporting as of December 31, 2016,2019, based on criteria established in Internal Control-IntegratedControl—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Extra Space Storage, Inc.’s (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.



We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, 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, 2019, and the related notes and financial statement schedule listed in the Index at Item 8 and our report dated February 25, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’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’sCompany’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.



We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. 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.

Definition and Limitations of Internal Control Over Financial Reporting

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, 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, 2016 and 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, 2016 of Extra Space Storage Inc. and our report dated February 27, 2017 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Salt Lake City, Utah
February 27, 201725, 2020


(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 Act Rule 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.

73





PART III
 
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“Information about our 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, 2016.2019.
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 of Form 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 400,300, Salt Lake City, Utah 84121, Attn: Jeff Norman or by telephoning (801) 365-4600.
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, 2016.2019.
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, 2016.2019.
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, 2016.2019.
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, 2016.2019.

74





PART IV
 
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 on 10-K are included in Item 8—“Financial Statements and Supplementary Data” of this Annual Report on 10-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 of Form 8-K filed on May 11, 2005).
2.2
  Agreement 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).
2.3
  Amendment 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 of Form 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 of Form 8-K filed on August 29, 2013).
3.4
 Articles of Amendment of Extra Space Storage Inc., dated May 21, 2014 (incorporated by reference to Exhibit 3.1 of Form 8-K filed on May 28, 2014).
3.5
Second Amended and Restated Bylaws of Extra Space Storage Inc.(incorporated by reference to Exhibit 3.1 of Form 8-K filed on May 26, 2009)January 17, 2018)
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).
3.6
  Fourth Amended and Restated Agreement of Limited Partnership of Extra Space Storage LP (incorporated by reference to Exhibit 10.1 of Form 8-K filed on December 6, 2013).
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 of Form 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 of Form 8-K filed on August 2, 2005).
4.3
  Junior Subordinated Note (incorporated by reference to Exhibit 4.3 of Form 10-K filed on February 26, 2010)
4.4
  Trust Preferred Security Certificates (incorporated by reference to Exhibit 4.4 of Form 10-K filed on February 26, 2010)
4.6Indenture, 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 of Form 8-K filed on June 21, 2013).
4.7
4.5
  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).
4.6
Description of Securities(2)
10.1
  Registration Rights Agreement, by and among Extra Space Storage Inc. and the parties listed on Schedule I thereto.(1)



Exhibit
Number
  Description
10.2
  Joint Venture Agreement, dated June 1, 2004, by and between Extra Space Storage LLC and Prudential Financial, Inc.(1)
10.3
  Registration Rights Agreement, dated June 20, 2005, among Extra Space Storage Inc. and the investors named therein (incorporated by reference to Exhibit 10.110.2 of Form 8-K filed on June 24, 2005).
10.4
  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 of Form 8-K filed on August 2, 2005).
10.5
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 of Form 8-K filed on March 28, 2007).
10.6  Promissory Note, dated June 25, 2007, among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.2 of Form 8-K filed on June 26, 2007).
10.7
10.6
  Pledge Agreement, dated June 25, 2007, among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.3 of Form 8-K filed on June 26, 2007).
10.8
10.7
  Registration Rights Agreement among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe. (incorporated by reference to Exhibit 10.26 of Form 10-K filed on February 26, 2010).
10.9
10.8
  Membership Interest Purchase Agreement, dated as of April 13, 2012, between Extra Space Properties Sixty Three LLC and PRISA III Co-Investment LLC (incorporated by reference to Exhibit 10.1 of Form 8-K filed on April 16, 2012).
10.10
10.9
  Extra Space Storage Inc. Executive Change in Control Plan (incorporated by reference to Exhibit 10.1 of Form 8-K filed on August 31, 2011)2010).
10.11Registration 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 of Form 8-K filed on June 21, 2013).
10.12
10.10
  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*
10.11
Letter Agreement, dated April 18, 2017, amending the Promissory Note and Waiving a Portion of the Series A Preferred Priority Return, among Extra Space Storage LP, ESS Holdings Business Trust I, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.1 of Form 10-Q filed on May 5, 2017).
10.12*
  2015 Incentive Award Plan (incorporated by reference to the Definitive Proxy Statement on Schedule 14A filed on April 14, 2015)
10.13*
Form of 2015 Incentive Award Plan Performance Stock Award Agreement(2)
10.14
  Registration 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).
10.15
  Credit 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 filed on October 17, 2016).
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 2004 Non-Employee Directors’ Share Plan (incorporated by reference to Exhibit 10.22 of Form 10-K/A filed on March 22,20, 2007).
10.23
Note Purchase Agreement, dated as of June 29, 2017, by and among Extra Space Storage Inc., Extra Space Storage LP and the purchasers named therein (incorporated by reference to Exhibit 10.1 of Form 8-K filed on June 30, 2017).
10.24
Note Purchase Agreement, dated as of May 25, 2018, by and among Extra Space Storage Inc., Extra Space Storage LP and the purchasers named therein (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 31, 2018).


Exhibit
Number
Description
10.25
Amended and Restated Credit Agreement, dated as of December  7, 2018, 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 and lead arrangers and book runners, and certain lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 10, 2018).
10.26
Amendment No. 1, dated as of July 1, 2019, to the Amended and Restated Credit Agreement, dated as of December 7, 2018, 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 and lead arrangers and book runners, and certain lenders party thereto (incorporated by reference to Exhibit 10.1 of Form 8-K filed on July 8, 2019).
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 the Sarbanes-Oxley Act of 2002.(2)
31.2
  Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(2)


Exhibit32.1
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 the Sarbanes-Oxley Act of 2002.(2)
101  The following financial information from Registrant’s Annual Report on Form 10-K for the period ended December 31, 2014,2019, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 20142019 and 2013;2018; (ii) Consolidated Statements of Operations for the years ended December 31, 2014, 20132019, 2018 and 2012;2017; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 20132019, 2018 and 2012;2017; (iv) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2014, 20132019, 2018 and 2012;2017; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2014, 20132019, 2018 and 2012;2017; and (vi) Notes to Consolidated Financial Statements(2).
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).


*     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.



Item 16.     Form 10K Summary

None.

77



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.
  EXTRA SPACE STORAGE INC.
Date: February 27, 201725, 2020 By: /S/s/ JOSEPH D. MARGOLIS
    
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: February 27, 201725, 2020 By: /S/s/ JOSEPH D. MARGOLIS
    
Joseph D. Margolis
Chief Executive Officer
(Principal Executive Officer)
     
Date: February 27, 201725, 2020 By: /S/s/ P. SCOTT STUBBS
    
P. Scott Stubbs
Executive Vice President and Chief Financial Officer
Officer (Principal(Principal Financial Officer)
     
Date: February 27, 201725, 2020 By: /S/s/ GRACE KUNDE
    
Grace Kunde
Senior Vice President, Accounting and Finance
(Principal Accounting Officer)
     
Date: February 27, 201725, 2020 By: /S/s/ KENNETH M. WOOLLEY
    
Kenneth M. Woolley
Executive Chairman of the Board
     
Date: February 27, 201725, 2020 By: /S/ KARL HAASs/ JOSEPH J. BONNER
    
Karl Haas
Director
Date: February 27, 2017By:/S/ SPENCER F. KIRK
Spencer F. KirkJoseph J. Bonner
Director
     
Date: February 27, 201725, 2020 By: /S/ DENNIS LETHAMs/ ASHLEY DREIER
    
Dennis Letham
Ashley Dreier
Director
     
Date: February 27, 201725, 2020 By: /S/ DIANE OLMSTEADs/ SPENCER F. KIRK
    
Diane Olmstead
Spencer F. Kirk
Director
     
Date: February 27, 201725, 2020 By: /S/ ROGER B. PORTERs/ DENNIS LETHAM
    
Roger B. Porter
Dennis Letham
Director
     
Date: February 27, 201725, 2020 By: /S/ K. FRED SKOUSENs/ DIANE OLMSTEAD
    
K. Fred Skousen
Diane Olmstead
Director
Date: February 25, 2020By:/s/ ROGER B. PORTER
Roger B. Porter
Director



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