exr-20200930
false2020Q3000128949012/310.011100012894902020-01-012020-09-30xbrli:shares00012894902020-10-30iso4217:USD00012894902020-09-3000012894902019-12-31iso4217:USDxbrli:shares00012894902020-07-012020-09-3000012894902019-07-012019-09-3000012894902019-01-012019-09-300001289490exr:PreferredOperatingPartnershipMember2018-12-310001289490exr:CommonOperatingPartnershipMember2018-12-310001289490exr:NonControllingInterestOtherMember2018-12-310001289490us-gaap:CommonStockMember2018-12-310001289490us-gaap:AdditionalPaidInCapitalMember2018-12-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001289490us-gaap:RetainedEarningsMember2018-12-3100012894902018-12-310001289490us-gaap:CommonStockMember2019-01-012019-03-310001289490us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-3100012894902019-01-012019-03-310001289490exr:CommonOperatingPartnershipMember2019-01-012019-03-310001289490exr:PreferredOperatingPartnershipMember2019-01-012019-03-310001289490exr:NonControllingInterestOtherMember2019-01-012019-03-310001289490us-gaap:RetainedEarningsMember2019-01-012019-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310001289490exr:PreferredOperatingPartnershipMember2019-03-310001289490exr:CommonOperatingPartnershipMember2019-03-310001289490exr:NonControllingInterestOtherMember2019-03-310001289490us-gaap:CommonStockMember2019-03-310001289490us-gaap:AdditionalPaidInCapitalMember2019-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-310001289490us-gaap:RetainedEarningsMember2019-03-3100012894902019-03-310001289490us-gaap:CommonStockMember2019-04-012019-06-300001289490us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-3000012894902019-04-012019-06-300001289490exr:CommonOperatingPartnershipMember2019-04-012019-06-300001289490exr:PreferredOperatingPartnershipMember2019-04-012019-06-300001289490exr:NonControllingInterestOtherMember2019-04-012019-06-300001289490us-gaap:RetainedEarningsMember2019-04-012019-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001289490exr:PreferredOperatingPartnershipMember2019-06-300001289490exr:CommonOperatingPartnershipMember2019-06-300001289490exr:NonControllingInterestOtherMember2019-06-300001289490us-gaap:CommonStockMember2019-06-300001289490us-gaap:AdditionalPaidInCapitalMember2019-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300001289490us-gaap:RetainedEarningsMember2019-06-3000012894902019-06-300001289490us-gaap:CommonStockMember2019-07-012019-09-300001289490us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300001289490exr:CommonOperatingPartnershipMember2019-07-012019-09-300001289490exr:NonControllingInterestOtherMember2019-07-012019-09-300001289490exr:PreferredOperatingPartnershipMember2019-07-012019-09-300001289490us-gaap:RetainedEarningsMember2019-07-012019-09-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300001289490exr:PreferredOperatingPartnershipMember2019-09-300001289490exr:CommonOperatingPartnershipMember2019-09-300001289490exr:NonControllingInterestOtherMember2019-09-300001289490us-gaap:CommonStockMember2019-09-300001289490us-gaap:AdditionalPaidInCapitalMember2019-09-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-300001289490us-gaap:RetainedEarningsMember2019-09-3000012894902019-09-300001289490exr:PreferredOperatingPartnershipMember2019-12-310001289490exr:CommonOperatingPartnershipMember2019-12-310001289490exr:NonControllingInterestOtherMember2019-12-310001289490us-gaap:CommonStockMember2019-12-310001289490us-gaap:AdditionalPaidInCapitalMember2019-12-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001289490us-gaap:RetainedEarningsMember2019-12-310001289490us-gaap:CommonStockMember2020-01-012020-03-310001289490us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-3100012894902020-01-012020-03-310001289490us-gaap:RetainedEarningsMember2020-01-012020-03-310001289490exr:CommonOperatingPartnershipMember2020-01-012020-03-310001289490exr:PreferredOperatingPartnershipMember2020-01-012020-03-310001289490exr:NonControllingInterestOtherMember2020-01-012020-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001289490exr:PreferredOperatingPartnershipMember2020-03-310001289490exr:CommonOperatingPartnershipMember2020-03-310001289490exr:NonControllingInterestOtherMember2020-03-310001289490us-gaap:CommonStockMember2020-03-310001289490us-gaap:AdditionalPaidInCapitalMember2020-03-310001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001289490us-gaap:RetainedEarningsMember2020-03-3100012894902020-03-310001289490us-gaap:CommonStockMember2020-04-012020-06-300001289490us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-3000012894902020-04-012020-06-300001289490us-gaap:RetainedEarningsMember2020-04-012020-06-300001289490exr:CommonOperatingPartnershipMember2020-04-012020-06-300001289490exr:PreferredOperatingPartnershipMember2020-04-012020-06-300001289490exr:NonControllingInterestOtherMember2020-04-012020-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001289490exr:PreferredOperatingPartnershipMember2020-06-300001289490exr:CommonOperatingPartnershipMember2020-06-300001289490exr:NonControllingInterestOtherMember2020-06-300001289490us-gaap:CommonStockMember2020-06-300001289490us-gaap:AdditionalPaidInCapitalMember2020-06-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001289490us-gaap:RetainedEarningsMember2020-06-3000012894902020-06-300001289490us-gaap:CommonStockMember2020-07-012020-09-300001289490us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001289490us-gaap:RetainedEarningsMember2020-07-012020-09-300001289490exr:CommonOperatingPartnershipMember2020-07-012020-09-300001289490exr:PreferredOperatingPartnershipMember2020-07-012020-09-300001289490exr:NonControllingInterestOtherMember2020-07-012020-09-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001289490exr:PreferredOperatingPartnershipMember2020-09-300001289490exr:CommonOperatingPartnershipMember2020-09-300001289490exr:NonControllingInterestOtherMember2020-09-300001289490us-gaap:CommonStockMember2020-09-300001289490us-gaap:AdditionalPaidInCapitalMember2020-09-300001289490us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001289490us-gaap:RetainedEarningsMember2020-09-300001289490exr:ContributionOfPreferredOperatingPartnershipUnitstoEquityMethodInvestmentMember2020-01-012020-09-300001289490exr:ContributionOfPreferredOperatingPartnershipUnitstoEquityMethodInvestmentMember2019-01-012019-09-30exr:storeexr:state0001289490us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001289490us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001289490us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001289490us-gaap:SubsequentEventMember2020-10-012020-11-060001289490srt:ScenarioForecastMember2020-10-012021-03-310001289490us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-09-300001289490us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-09-300001289490us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310001289490us-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-310001289490us-gaap:EmployeeStockOptionMember2019-07-012019-09-300001289490us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001289490us-gaap:EmployeeStockOptionMember2019-01-012019-09-300001289490us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001289490us-gaap:CommonStockMember2020-07-012020-09-300001289490us-gaap:CommonStockMember2019-07-012019-09-300001289490us-gaap:CommonStockMember2020-01-012020-09-300001289490us-gaap:CommonStockMember2019-01-012019-09-300001289490exr:SeriesAUnitsMember2020-07-012020-09-300001289490exr:SeriesAUnitsMember2019-07-012019-09-300001289490exr:SeriesAUnitsMember2020-01-012020-09-300001289490exr:SeriesAUnitsMember2019-01-012019-09-300001289490exr:SeriesBUnitsMember2020-07-012020-09-300001289490exr:SeriesBUnitsMember2019-07-012019-09-300001289490exr:SeriesBUnitsMember2020-01-012020-09-300001289490exr:SeriesBUnitsMember2019-01-012019-09-300001289490exr:SeriesDUnitsMember2020-07-012020-09-300001289490exr:SeriesDUnitsMember2019-07-012019-09-300001289490exr:SeriesDUnitsMember2020-01-012020-09-300001289490exr:SeriesDUnitsMember2019-01-012019-09-300001289490exr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2020-09-30xbrli:pure0001289490exr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2020-07-012020-09-300001289490exr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2020-01-012020-09-300001289490exr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2019-07-012019-09-300001289490exr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2019-01-012019-09-300001289490exr:SeriesAUnitsMember2020-09-30exr:property0001289490exr:PREXRSelfStorageLLCMember2020-09-300001289490exr:PREXRSelfStorageLLCMember2019-12-310001289490exr:WICNNJVLLCMember2020-09-300001289490exr:WICNNJVLLCMember2019-12-310001289490exr:VRSSelfStorageLLCMember2020-09-300001289490exr:VRSSelfStorageLLCMember2019-12-310001289490exr:ESSNYFLJVLPMember2020-09-300001289490exr:ESSNYFLJVLPMember2019-12-310001289490exr:GFNJVLLCMember2020-09-300001289490exr:GFNJVLLCMember2019-12-310001289490exr:PRISASelfStorageLLCMember2020-09-300001289490exr:PRISASelfStorageLLCMember2019-12-310001289490exr:AlanJathooJVLLCMember2020-09-300001289490exr:AlanJathooJVLLCMember2019-12-310001289490exr:StoragePortfolioIIIJVLLCMember2020-09-300001289490exr:StoragePortfolioIIIJVLLCMember2019-12-310001289490exr:ESSBristolInvestmentsLLCMember2020-09-300001289490exr:ESSBristolInvestmentsLLCMember2019-12-310001289490exr:ExtraSpaceNorthernPropertiesSixLLCMember2020-09-300001289490exr:ExtraSpaceNorthernPropertiesSixLLCMember2019-12-310001289490exr:StoragePortfolioIIJVLLCMember2020-09-300001289490exr:StoragePortfolioIIJVLLCMember2019-12-310001289490exr:StoragePortfolioILLCMember2020-09-300001289490exr:StoragePortfolioILLCMember2019-12-310001289490exr:OtherMinorityOwnedPropertiesMember2020-09-300001289490srt:MinimumMember2020-09-300001289490srt:MaximumMember2020-09-300001289490exr:OtherMinorityOwnedPropertiesMember2019-12-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2020-09-300001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2019-12-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2019-10-012019-10-310001289490exr:SmartStopSelfStorageREITIncSeriesAConvertiblePreferredStockMember2019-10-310001289490us-gaap:SubsequentEventMember2020-10-26exr:subsidiary00012894902017-12-310001289490us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:TrustPreferredSecuritiesSubjectToMandatoryRedemptionMember2018-01-012018-12-310001289490us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:TrustPreferredSecuritiesSubjectToMandatoryRedemptionMember2018-12-310001289490us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:TrustPreferredSecuritiesSubjectToMandatoryRedemptionMember2019-01-012019-01-31exr:joint_ventureexr:derivative0001289490us-gaap:OtherAssetsMember2020-09-300001289490us-gaap:OtherAssetsMember2019-12-310001289490us-gaap:OtherLiabilitiesMember2020-09-300001289490us-gaap:OtherLiabilitiesMember2019-12-310001289490us-gaap:InterestRateSwapMember2020-07-012020-09-300001289490us-gaap:InterestRateSwapMember2019-07-012019-09-300001289490us-gaap:InterestRateSwapMember2020-01-012020-09-300001289490us-gaap:InterestRateSwapMember2019-01-012019-09-300001289490exr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2016-03-310001289490exr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2015-09-012015-09-300001289490us-gaap:SeniorNotesMemberexr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2020-09-300001289490us-gaap:SeniorNotesMemberexr:ExchangeableSeniorNotesThreePointOneTwoFivePercentDueTwoThousandAndThirtyFiveMember2019-12-310001289490us-gaap:SubsequentEventMemberus-gaap:DebtInstrumentRedemptionPeriodOneMember2020-10-012020-10-010001289490us-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:SubsequentEventMember2020-11-022020-11-020001289490us-gaap:DebtInstrumentRedemptionPeriodThreeMemberus-gaap:SubsequentEventMember2020-11-022020-11-020001289490exr:AtTheMarketEquityDistributionAgreementMember2019-05-152019-05-15exr:sales_agent00012894902019-05-152019-05-150001289490exr:AtTheMarketEquityDistributionAgreementMember2020-01-012020-09-300001289490exr:AtTheMarketEquityDistributionAgreementMember2020-09-3000012894902017-11-082017-11-0800012894902017-11-080001289490us-gaap:SubsequentEventMember2020-10-150001289490exr:SeriesAUnitsMember2014-10-310001289490exr:SeriesAUnitsMember2017-04-182017-04-180001289490exr:SeriesAUnitsMember2007-06-300001289490exr:SeriesAUnitsMemberexr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMember2014-10-012014-10-310001289490exr:SeriesAUnitsMemberexr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMember2007-06-250001289490exr:SeriesAUnitsMemberexr:HoldersOfSeriesAPreferredOperatingPartnershipUnitsMember2017-04-182017-04-180001289490exr:SeriesBUnitsMember2020-09-300001289490exr:SeriesBUnitsMember2020-01-012020-09-300001289490exr:SeriesBUnitsMember2020-08-172020-08-170001289490exr:SeriesCUnitsMember2020-09-300001289490exr:SeriesCUnitsMember2020-01-012020-09-3000012894902014-12-012014-12-310001289490exr:SeriesCUnitsMember2018-12-012018-12-010001289490exr:CommonOperatingPartnershipMember2018-12-012018-12-010001289490exr:SeriesCUnitsMember2019-04-252019-04-250001289490exr:CommonOperatingPartnershipMember2019-04-252019-04-250001289490exr:SeriesDUnitsMember2019-01-012019-09-300001289490exr:SeriesDUnitsMember2020-09-300001289490exr:SeriesDUnitsMembersrt:MinimumMember2020-01-012020-09-300001289490srt:MaximumMemberexr:SeriesDUnitsMember2020-01-012020-09-300001289490exr:SeriesDUnitsMember2020-05-012020-06-300001289490exr:CommonOperatingPartnershipMember2020-05-012020-06-300001289490exr:CommonOperatingPartnershipMember2020-09-300001289490us-gaap:CommonStockMember2020-01-012020-09-300001289490exr:NonControllingInterestOtherMember2020-09-300001289490exr:JointVentureOneMemberexr:NonControllingInterestOtherMember2020-09-300001289490exr:JointVentureTwoMemberexr:NonControllingInterestOtherMember2020-09-30exr:segment0001289490exr:SelfStorageOperationsMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300001289490exr:SelfStorageOperationsMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300001289490exr:SelfStorageOperationsMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300001289490exr:SelfStorageOperationsMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2020-07-012020-09-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2019-07-012019-09-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2020-01-012020-09-300001289490us-gaap:OperatingSegmentsMemberexr:TenantReinsuranceMember2019-01-012019-09-300001289490us-gaap:OperatingSegmentsMember2020-07-012020-09-300001289490us-gaap:OperatingSegmentsMember2019-07-012019-09-300001289490us-gaap:OperatingSegmentsMember2020-01-012020-09-300001289490us-gaap:OperatingSegmentsMember2019-01-012019-09-300001289490exr:CommitmentToAcquireRetailSpaceMember2020-09-300001289490exr:CommitmentToAcquireRetailSpaceExpectedToCloseRemainderOfFiscalYearMember2020-09-300001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersMember2020-09-300001289490exr:CommitmentToAcquireRetailSpaceWithJointVenturePartnersExpectedToCloseNextFiscalYearMember2020-09-300001289490exr:CommitmentToAcquireRetailSpaceExpectedToCloseNextFiscalYearMember2020-09-300001289490us-gaap:SubsequentEventMemberexr:RealEstateSubjectToLeaseMember2020-10-012020-11-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
or
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 300
Salt Lake City, Utah 84121
(Address of principal executive offices)

Registrant’s telephone number, including area code: (801365-4600

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934
Title of each classTrading symbolName of each exchange on which registered
Common Stock, $0.01 par valueEXRNew York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  x    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer x  Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company

1


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 number of shares outstanding of the registrant’s common stock, par value $0.01 per share, as of October 30, 2020, was 129,235,329.
2

Table of Contents
EXTRA SPACE STORAGE INC.

TABLE OF CONTENTS
 

3


STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information presented 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 II. Item 1A. Risk Factors” below and in “Part I. Item 1A. Risk Factors” included in our most recent Annual Report on Form 10-K. Such factors include, but are not limited to:
 
adverse changes in general economic conditions, the real estate industry and 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;
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;
impacts from the COVID-19 pandemic or the future outbreak of other highly infectious or contagious diseases, including reduced demand for self-storage space and ancillary products and services such as tenant reinsurance, and potential decreases in occupancy and rental rates and staffing levels, which could adversely affect our results;
increased interest rates;
reductions in asset valuations and related impairment charges;
our lack of sole decision-making authority with respect to our joint venture investments;
the effect of recent or future changes to 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.
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 report to reflect new information, future events or otherwise.
4


PART I.     FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Extra Space Storage Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share data)
 
September 30, 2020December 31, 2019
(unaudited)
Assets:
Real estate assets, net$7,755,947 $7,696,864 
Real estate assets - operating lease right-of-use assets256,154 264,643 
Investments in unconsolidated real estate entities347,786 338,054 
Cash and cash equivalents74,803 65,746 
Restricted cash5,771 4,987 
Other assets, net320,643 162,083 
Total assets $8,761,104 $8,532,377 
Liabilities, Noncontrolling Interests and Equity:
Notes payable, net$4,611,222 $4,318,973 
Exchangeable senior notes, net575,000 569,513 
Revolving lines of credit94,000 158,000 
Operating lease liabilities267,093 274,783 
Cash distributions in unconsolidated real estate ventures46,527 45,264 
Accounts payable and accrued expenses153,838 111,382 
Other liabilities245,602 132,768 
Total liabilities 5,993,282 5,610,683 
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, 129,094,900 and 129,534,407 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
1,291 1,295 
Additional paid-in capital2,889,592 2,868,681 
Accumulated other comprehensive loss(108,708)(28,966)
Accumulated deficit(392,891)(301,049)
Total Extra Space Storage Inc. stockholders' equity2,389,284 2,539,961 
Noncontrolling interest represented by Preferred Operating Partnership units, net 171,738 175,948 
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests206,800 205,785 
Total noncontrolling interests and equity2,767,822 2,921,694 
Total liabilities, noncontrolling interests and equity$8,761,104 $8,532,377 

See accompanying notes to unaudited condensed consolidated financial statements.
5


Extra Space Storage Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except share data)
(unaudited)

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Property rental$290,423 $290,917 $856,438 $841,504 
Tenant reinsurance39,294 33,588 107,985 95,086 
Management fees and other income13,307 13,000 38,299 36,063 
Total revenues343,024 337,505 1,002,722 972,653 
Expenses:
Property operations92,322 88,653 271,659 248,288 
Tenant reinsurance 7,189 7,644 20,725 21,593 
General and administrative23,894 22,519 72,242 68,548 
Depreciation and amortization56,412 56,051 167,705 165,116 
Total expenses179,817 174,867 532,331 503,545 
Gain on real estate transactions   1,205 
Income from operations163,207 162,638 470,391 470,313 
Interest expense(42,213)(46,908)(127,610)(141,716)
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes(1,233)(1,186)(3,675)(3,533)
Interest income3,145 2,799 6,488 5,905 
Income before equity in earnings of unconsolidated real estate ventures and income tax expense122,906 117,343 345,594 330,969 
Equity in earnings and dividend income from unconsolidated real estate entities5,605 2,704 15,692 8,455 
Income tax expense(4,657)(4,052)(10,013)(8,580)
Net income123,854 115,995 351,273 330,844 
Net income allocated to Preferred Operating Partnership noncontrolling interests(3,248)(3,088)(9,498)(9,379)
Net income allocated to Operating Partnership and other noncontrolling interests(5,973)(4,820)(16,052)(13,780)
Net income attributable to common stockholders$114,633 $108,087 $325,723 $307,685 
Earnings per common share
Basic $0.89 $0.84 $2.52 $2.40 
Diluted $0.88 $0.83 $2.50 $2.37 
Weighted average number of shares
Basic128,862,341 128,776,549 129,044,954 127,830,272 
Diluted129,871,096 137,318,475 130,066,121 136,164,299 
Cash dividends paid per common share$0.90 $0.90 $2.70 $2.66 

See accompanying notes to unaudited condensed consolidated financial statements.
6

Extra Space Storage Inc.
Condensed Consolidated Statements of Comprehensive Income
(amounts in thousands)
(unaudited)

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Net income$123,854 $115,995 $351,273 $330,844 
Other comprehensive income (loss):
   Change in fair value of interest rate swaps11,181 (16,762)(83,791)(82,057)
Total comprehensive income135,035 99,233 267,482 248,787 
   Less: comprehensive income attributable to noncontrolling interests9,854 7,109 21,501 19,191 
Comprehensive income attributable to common stockholders$125,181 $92,124 $245,981 $229,596 


See accompanying notes to unaudited condensed consolidated financial statements.
7

Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)


 Noncontrolling InterestsExtra Space Storage Inc. Stockholders' Equity 
 Preferred Operating PartnershipOperating PartnershipOtherSharesPar ValueAdditional Paid-in CapitalAccumulated Other Comprehensive IncomeAccumulated DeficitTotal Noncontrolling Interests and Equity
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— — — 169,021 3 1,754 — — 1,757 
Restricted stock grants issued— — — 35,022 — — — — — 
Restricted stock grants cancelled— — — (1,244)— — — — — 
Compensation expense related to stock-based awards— — — — — 2,954 — — 2,954 
Redemption of Operating Partnership units for stock— (3,310)— 85,501 — 3,310 — — — 
Issuance of Preferred D Units in the Operating Partnership in conjunction with acquisitions23,447 — — — — — — — 23,447 
Net income (loss)3,164 4,235 (9)— — — — 94,770 102,160 
Other comprehensive loss(147)(1,003)— — — — (22,843)— (23,993)
Distributions to Operating Partnership units held by noncontrolling interests(3,296)(5,116)— — — — — — (8,412)
Dividends paid on common stock at $0.86 per share
— — — — — — — (109,523)(109,523)
Balances at March 31, 2019$176,264 $213,168 $231 127,392,050 $1,274 $2,648,723 $11,807 $(277,655)$2,773,812 
8

Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)

 Noncontrolling InterestsExtra Space Storage Inc. Stockholders' Equity 
 Preferred Operating PartnershipOperating PartnershipOtherSharesPar ValueAdditional Paid-in CapitalAccumulated Other Comprehensive IncomeAccumulated DeficitTotal Noncontrolling Interests and Equity
Balances at March 31, 2019$176,264 $213,168 $231 127,392,050 $1,274 $2,648,723 $11,807 $(277,655)$2,773,812 
Issuance of common stock upon the exercise of options— — — 17,042 — 468 — — 468 
Restricted stock grants issued— — — 53,789 2 — — — 2 
Restricted stock grants cancelled— — — (4,786)— — — — — 
Issuance of common stock, net of offering costs— — — 930,000 9 98,787 — — 98,796 
Compensation expense related to stock-based awards— — — — — 3,998 — — 3,998 
Redemption of Operating Partnership units for stock— (4,823)— 125,000 — 4,823 — — — 
Issuance of Preferred D Units in the Operating Partnership in conjunction with acquisitions4,575 — — — — — — — 4,575 
Noncontrolling interest in consolidated joint venture— — 50 — — — — — 50 
Conversion of Preferred C Units in the Operating Partnership for Common Operating Partnership Units(4,374)4,374 — — — — — — — 
Net income (loss)3,129 4,754 (22)— — — — 104,828 112,689 
Other comprehensive loss(254)(1,765)— — — — (39,283)(41,302)
Distributions to Operating Partnership units held by noncontrolling interests(3,232)(5,473)— — — — — — (8,705)
Dividends paid on common stock at $0.90 per share
— — — — — — — (115,572)(115,572)
Balances at June 30, 2019$176,108 $210,235 $259 128,513,095 $1,285 $2,756,799 $(27,476)$(288,399)$2,828,811 
Issuance of common stock upon the exercise of options— — — 14,850 — 605 — — 605 
Restricted stock grants issued— — — 5,099 — — — — — 
Restricted stock grants cancelled— — — (1,269)— — — — — 
Issuance of common stock, net of offering costs— — — 849,200 9 100,047 — — 100,056 
Compensation expense related to stock-based awards— — — — — 3,035 — — 3,035 
Repayment of receivable for preferred operating units pledged as collateral on loan— 1,211 — — — — — — 1,211 
Redemption of Operating Partnership units for stock— (1,125)— 29,118 — 1,125 — — — 
Noncontrolling interest in consolidated joint venture— — 96 — — — — — 96 
Net income (loss)3,089 4,828 (9)— — — — 108,087 115,995 
Other comprehensive loss(101)(698)— — — — (15,963)— (16,762)
Distributions to Operating Partnership units held by noncontrolling interests(3,178)(5,440)— — — — — — (8,618)
Dividends paid on common stock at $0.90 per share
— — — — — — — (116,440)(116,440)
Balances at September 30, 2019$175,918 $209,011 $346 129,410,093 $1,294 $2,861,611 $(43,439)$(296,752)$2,907,989 
9

Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)



Noncontrolling InterestExtra Space Storage Inc. Stockholders' Equity
Preferred Operating PartnershipOperating PartnershipOtherSharesPar ValueAdditional Paid-in CapitalAccumulated Other Comprehensive IncomeAccumulated DeficitTotal Noncontrolling Interests and Equity
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 
Issuance of common stock upon the exercise of options— — — 77,400 1 943 — — 944 
Issuance of common stock in connection with share based compensation— — — 73,602 1 2,979 — — 2,980 
Restricted stock grants cancelled— — — (1,767)— — — — — 
Buyback of common stock, net of offering costs— — — (653,597)(7)— — (52,197)(52,204)
Redemption of Operating Partnership units for stock— (330)— 8,862 — 330 — — — 
Net income (loss)3,112 4,877 (6)— — — — 108,179 116,162 
Other comprehensive loss(563)(3,807)— — — — (84,874)— (89,244)
Distributions to Operating Partnership units held by noncontrolling interests(3,178)(5,327)— — — — — — (8,505)
Dividends paid on common stock at $0.90 per share
— — — — — — — (117,197)(117,197)
Balances at March 31, 2020$175,319 $200,832 $360 129,038,907 $1,290 $2,872,933 $(113,840)$(362,264)$2,774,630 
Issuance of common stock upon the exercise of options— — — 13,610 — 726 — — 726 
Issuance of common stock in connection with share based compensation— — — 60,032 1 4,883 — — 4,884 
Restricted stock grants cancelled— — — (889)— — — — — 
Buyback of common stock, net of offering costs— — — (172,600)(1)— — (15,614)(15,615)
Redemption of Operating Partnership units for stock— (3,675)— 100,000 1 3,674 — — — 
Redemption of Preferred D Units in the Operating Partnership for Stock(2,724)— — 30,495 — 2,724 — — — 
Noncontrolling interest in consolidated joint venture— — 68 — — — — — 68 
Net income (loss)3,138 5,216 (9)— — — — 102,911 111,256 
Other comprehensive loss(40)(271)— — — — (5,416)— (5,727)
Distributions to Operating Partnership units held by noncontrolling interests(3,151)(5,235)— — — — — — (8,386)
Dividends paid on common stock at $0.90 per share
— — — — — — — (116,318)(116,318)
Balances at June 30, 2020$172,542 $196,867 $419 129,069,555 $1,291 $2,884,940 $(119,256)$(391,285)$2,745,518 
10

Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)

Noncontrolling InterestExtra Space Storage Inc. Stockholders' Equity
Preferred Operating PartnershipOperating PartnershipOtherSharesPar ValueAdditional Paid-in CapitalAccumulated Other Comprehensive IncomeAccumulated DeficitTotal Noncontrolling Interests and Equity
Balances at June 30, 2020$172,542 $196,867 $419 129,069,555 $1,291 $2,884,940 $(119,256)$(391,285)$2,745,518 
Issuance of common stock upon the exercise of options— — — 18,605 — 1,200 — — 1,200 
Issuance of common stock in connection with share based compensation— — — 8,289 — 3,452 — — 3,452 
Restricted stock grants cancelled— — — (949)— — — — — 
Buyback of common stock, net of offering costs— — — (600)— — — (54)(54)
Repayment of receivable with Preferred operating units pledged as collateral on loan— 8,226 — — — — — — 8,226 
Redemption of Preferred B Units in the Operating Partnership for cash(1,000)— — — — — — — (1,000)
Net income (loss)3,248 5,986(13)— — — — 114,633 123,854 
Other comprehensive loss83 550 — — — — 10,548 — 11,181 
Distributions to Operating Partnership units held by noncontrolling interests(3,135)(5,235)— — — — — — (8,370)
Dividends paid on common stock at $0.90 per share
— — — — — — — (116,185)(116,185)
Balances at September 30, 2020$171,738 $206,394 $406 129,094,900 $1,291 $2,889,592 $(108,708)$(392,891)$2,767,822 



See accompanying notes to unaudited condensed consolidated financial statements.
11


Extra Space Storage Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)

 For the Nine Months Ended September 30,
 20202019
Cash flows from operating activities:
Net income$351,273 $330,844 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization167,705 165,116 
Amortization of deferred financing costs7,356 8,912 
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes3,675 3,533 
Non-cash lease expense799  
Compensation expense related to stock-based awards11,316 9,987 
Gain on real estate transactions (1,205)
Distributions from unconsolidated real estate ventures in excess of earnings5,097 4,752 
Changes in operating assets and liabilities:
Other assets(17,977)(11,153)
Accounts payable and accrued expenses41,780 29,310 
Other liabilities12,243 4,370 
Net cash provided by operating activities583,267 544,466 
Cash flows from investing activities:
Acquisition of real estate assets(151,244)(287,114)
Development and redevelopment of real estate assets(46,112)(34,413)
Proceeds from sale of real estate assets234 11,254 
Investment in unconsolidated real estate entities(13,937)(33,661)
Return of investment in unconsolidated real estate ventures371 3,982 
Issuance and purchase of notes receivable(149,750)(162,677)
Principal payments received from notes receivable 151,211 
Purchase of equipment and fixtures(3,407)(4,959)
Net cash used in investing activities(363,845)(356,377)
Cash flows from financing activities:
Proceeds from the sale of common stock, net of offering costs 198,852 
Proceeds from notes payable and revolving lines of credit1,419,000 1,508,000 
Principal payments on notes payable and revolving lines of credit(1,192,750)(1,503,686)
Principal payments on notes payable to trusts (30,928)
Deferred financing costs(