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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, 2021
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: (801) 365-4600
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 | | | | | | | | |
Title of each class | Trading symbol | Name of each exchange on which registered |
| | |
Common Stock, $0.01 par value | EXR | New 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 ☒ 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 ☒ 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 | | ☒ | | Accelerated filer | | ☐ |
Non-accelerated filer | | ☐ | | Smaller reporting company | | ☐ |
| | | | 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 ☒
The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, as of November 1, 2021, was 133,891,804.
EXTRA SPACE STORAGE INC.
TABLE OF CONTENTS
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.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Extra Space Storage Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share data)
| | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
| (unaudited) | | |
Assets: | | | |
Real estate assets, net | $ | 8,272,671 | | | $ | 7,893,802 | |
Real estate assets - operating lease right-of-use assets | 229,184 | | | 252,172 | |
Investments in unconsolidated real estate entities | 373,765 | | | 397,444 | |
Investments in debt securities and notes receivable | 606,115 | | | 593,810 | |
Cash and cash equivalents | 65,565 | | | 109,124 | |
Restricted cash | 15,717 | | | 18,885 | |
Other assets, net | 145,342 | | | 130,611 | |
Total assets | $ | 9,708,359 | | | $ | 9,395,848 | |
Liabilities, Noncontrolling Interests and Equity: | | | |
Notes payable, net | $ | 5,409,828 | | | $ | 4,797,303 | |
| | | |
Revolving lines of credit | 174,000 | | | 949,000 | |
Operating lease liabilities | 234,118 | | | 263,485 | |
Cash distributions in unconsolidated real estate ventures | 63,196 | | | 47,126 | |
Accounts payable and accrued expenses | 164,674 | | | 130,012 | |
Other liabilities | 279,668 | | | 272,798 | |
Total liabilities | 6,325,484 | | | 6,459,724 | |
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, 133,819,163 and 131,357,961 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 1,338 | | | 1,314 | |
Additional paid-in capital | 3,283,848 | | | 3,000,458 | |
Accumulated other comprehensive loss | (64,155) | | | (99,093) | |
Accumulated deficit | (229,269) | | | (354,900) | |
Total Extra Space Storage Inc. stockholders' equity | 2,991,762 | | | 2,547,779 | |
Noncontrolling interest represented by Preferred Operating Partnership units, net | 170,248 | | | 172,052 | |
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests | 220,865 | | | 216,293 | |
Total noncontrolling interests and equity | 3,382,875 | | | 2,936,124 | |
Total liabilities, noncontrolling interests and equity | $ | 9,708,359 | | | $ | 9,395,848 | |
See accompanying notes to unaudited condensed consolidated financial statements.
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, | | | | |
| 2021 | | 2020 | | 2021 | | 2020 | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | |
Property rental | $ | 351,355 | | | $ | 290,423 | | | $ | 976,448 | | | $ | 856,438 | | | | | | | | | |
Tenant reinsurance | 44,258 | | | 39,294 | | | 126,211 | | | 107,985 | | | | | | | | | |
Management fees and other income | 16,879 | | | 13,307 | | | 47,320 | | | 38,299 | | | | | | | | | |
Total revenues | 412,492 | | | 343,024 | | | 1,149,979 | | | 1,002,722 | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | |
Property operations | 92,794 | | | 92,322 | | | 274,316 | | | 271,659 | | | | | | | | | |
Tenant reinsurance | 7,509 | | | 7,189 | | | 21,405 | | | 20,725 | | | | | | | | | |
General and administrative | 24,395 | | | 23,894 | | | 74,276 | | | 72,242 | | | | | | | | | |
Depreciation and amortization | 61,516 | | | 56,412 | | | 179,685 | | | 167,705 | | | | | | | | | |
Total expenses | 186,214 | | | 179,817 | | | 549,682 | | | 532,331 | | | | | | | | | |
Gain on real estate transactions | — | | | — | | | 63,883 | | | — | | | | | | | | | |
Income from operations | 226,278 | | | 163,207 | | | 664,180 | | | 470,391 | | | | | | | | | |
Interest expense | (39,670) | | | (42,213) | | | (120,605) | | | (127,610) | | | | | | | | | |
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes | — | | | (1,233) | | | — | | | (3,675) | | | | | | | | | |
Interest income | 11,729 | | | 3,145 | | | 36,871 | | | 6,488 | | | | | | | | | |
Income before equity in earnings and dividend income from unconsolidated real estate ventures and income tax expense | 198,337 | | | 122,906 | | | 580,446 | | | 345,594 | | | | | | | | | |
Equity in earnings and dividend income from unconsolidated real estate entities | 8,255 | | | 5,605 | | | 23,533 | | | 15,692 | | | | | | | | | |
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest | — | | | — | | | 6,251 | | | — | | | | | | | | | |
Income tax expense | (6,772) | | | (4,657) | | | (16,330) | | | (10,013) | | | | | | | | | |
Net income | 199,820 | | | 123,854 | | | 593,900 | | | 351,273 | | | | | | | | | |
Net income allocated to Preferred Operating Partnership noncontrolling interests | (3,529) | | | (3,248) | | | (10,647) | | | (9,498) | | | | | | | | | |
Net income allocated to Operating Partnership and other noncontrolling interests | (8,015) | | | (5,973) | | | (24,031) | | | (16,052) | | | | | | | | | |
Net income attributable to common stockholders | $ | 188,276 | | | $ | 114,633 | | | $ | 559,222 | | | $ | 325,723 | | | | | | | | | |
Earnings per common share | | | | | | | | | | | | | | | |
Basic | $ | 1.41 | | | $ | 0.89 | | | $ | 4.19 | | | $ | 2.52 | | | | | | | | | |
Diluted | $ | 1.40 | | | $ | 0.88 | | | $ | 4.19 | | | $ | 2.50 | | | | | | | | | |
Weighted average number of shares | | | | | | | | | | | | | | | |
Basic | 133,809,750 | | | 128,862,341 | | | 133,197,903 | | | 129,044,954 | | | | | | | | | |
Diluted | 140,425,269 | | | 129,871,096 | | | 139,854,881 | | | 130,066,121 | | | | | | | | | |
Cash dividends paid per common share | $ | 1.25 | | | $ | 0.90 | | | $ | 3.25 | | | $ | 2.70 | | | | | | | | | |
See accompanying notes to unaudited condensed consolidated financial statements.
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, | | |
| 2021 | | 2020 | | 2021 | | 2020 | | | | |
Net income | $ | 199,820 | | | $ | 123,854 | | | $ | 593,900 | | | $ | 351,273 | | | | | |
Other comprehensive income (loss): | | | | | | | | | | | |
Change in fair value of interest rate swaps | 8,055 | | | 11,181 | | | 36,685 | | | (83,791) | | | | | |
Total comprehensive income | 207,875 | | | 135,035 | | | 630,585 | | | 267,482 | | | | | |
Less: comprehensive income attributable to noncontrolling interests | 11,924 | | | 9,854 | | | 36,425 | | | 21,501 | | | | | |
Comprehensive income attributable to common stockholders | $ | 195,951 | | | $ | 125,181 | | | $ | 594,160 | | | $ | 245,981 | | | | | |
See accompanying notes to unaudited condensed consolidated financial statements.
Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Noncontrolling Interests | | Extra Space Storage Inc. Stockholders' Equity | | |
| | | | | | | | | Preferred Operating Partnership | | Operating Partnership | | Other | | Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Loss | | Accumulated Deficit | | Total 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) | | | | | | | | | 3,139 | | | 5,216 | | | (9) | | | — | | | — | | | — | | | — | | | 102,911 | | | 111,257 | |
Other comprehensive loss | | | | | | | | | (41) | | | (271) | | | — | | | — | | | — | | | — | | | (5,416) | | | — | | | (5,728) | |
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 | |
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) | | | — | | | — | | | — | | | — | | | — | |
Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Noncontrolling Interests | | Extra Space Storage Inc. Stockholders' Equity | | |
| | | | | | | | | Preferred Operating Partnership | | Operating Partnership | | Other | | Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Loss | | Accumulated Deficit | | Total Noncontrolling Interests and Equity |
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 income | | | | | | | | | 83 | | | 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 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noncontrolling Interest | | Extra Space Storage Inc. Stockholders' Equity | | |
| | Preferred Operating Partnership | | Operating Partnership | | Other | | Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Loss | | Accumulated Deficit | | Total Noncontrolling Interests and Equity |
Balances at December 31, 2020 | | $ | 172,052 | | | $ | 215,892 | | | $ | 401 | | | 131,357,961 | | | $ | 1,314 | | | $ | 3,000,458 | | | $ | (99,093) | | | $ | (354,900) | | | $ | 2,936,124 | |
Issuance of common stock upon the exercise of options | | — | | | — | | | — | | | 56,722 | | | — | | | 4,254 | | | — | | | — | | | 4,254 | |
Issuance of common stock in connection with share based compensation | | — | | | — | | | — | | | 89,793 | | | — | | | 3,652 | | | — | | | — | | | 3,652 | |
Restricted stock grants cancelled | | — | | | — | | | — | | | (2,499) | | | — | | | — | | | — | | | — | | | — | |
Issuance of common stock, net of offering costs | | — | | | — | | | — | | | 2,185,685 | | | 22 | | | 273,698 | | | — | | | — | | | 273,720 | |
Redemption of Operating Partnership units for stock | | — | | | (193) | | | — | | | 5,000 | | | — | | | 193 | | | — | | | — | | | — | |
Noncontrolling interest in consolidated joint venture | | — | | | — | | | (50) | | | — | | | — | | | — | | | — | | | — | | | (50) | |
Net income (loss) | | 3,680 | | | 8,828 | | | (5) | | | — | | | — | | | — | | | — | | | 202,998 | | | 215,501 | |
Other comprehensive income | | 144 | | | 956 | | | — | | | — | | | — | | | — | | | 21,913 | | | — | | | 23,013 | |
Distributions to Operating Partnership units held by noncontrolling interests | | (3,224) | | | (5,801) | | | — | | | — | | | — | | | — | | | — | | | — | | | (9,025) | |
Dividends paid on common stock at $1.00 per share | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (132,540) | | | (132,540) | |
Balances at March 31, 2021 | | $ | 172,652 | | | $ | 219,682 | | | $ | 346 | | | 133,692,662 | | | $ | 1,336 | | | $ | 3,282,255 | | | $ | (77,180) | | | $ | (284,442) | | | $ | 3,314,649 | |
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Extra Space Storage Inc.
Condensed Consolidated Statement of Noncontrolling Interests and Equity
(amounts in thousands, except share data)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noncontrolling Interest | | Extra Space Storage Inc. Stockholders' Equity | | |
| | Preferred Operating Partnership | | Operating Partnership | | Other | | Shares | | Par Value | | Additional Paid-in Capital | | Accumulated Other Comprehensive Loss | | Accumulated Deficit | | Total Noncontrolling Interests and Equity |
Issuance of common stock in connection with share based compensation | | — | | | — | | | — | | | 44,990 | | | — | | | 4,983 | | | — | | | — | | | 4,983 | |
Restricted stock grants cancelled | | — | | | — | | | — | | | (4,972) | | | — | | | — | | | — | | | — | | | — | |
Offering costs associated with previous stock issuance | | — | | | — | | | — | | | — | | | — | | | (211) | | | — | | | — | | | (211) | |
Redemption of Operating Partnership units for stock | | — | | | (2,185) | | | — | | | 58,429 | | | 1 | | | 2,184 | | | — | | | — | | | — | |
Redemption of Operating Partnership units for cash | | — | | | (113) | | | — | | | — | | | — | | | (359) | | | — | | | — | | | (472) | |
Repayment of receivable with Operating Partnership units pledged as collateral | | — | | | 411 | | | — | | | — | | | — | | | — | | | — | | | — | | | 411 | |
Noncontrolling interest in consolidated joint venture | | — | | | — | | | 150 | | | — | | | — | | | — | | | — | | | — | | | 150 | |
Net income | | 3,438 | | | 7,190 | | | 3 | | | — | | | — | | | — | | | — | | | 167,948 | | | 178,579 | |
Other comprehensive income | | 35 | | | 232 | | | — | | | — | | | — | | | — | | | 5,350 | | | — | | | 5,617 | |
Distributions to Operating Partnership units held by noncontrolling interests | | (3,223) | | | (5,751) | | | — | | | — | | | — | | | — | | | — | | | — | | | (8,974) | |
Dividends paid on common stock at $1.00 per share | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (133,777) | | | (133,777) | |
Balances at June 30, 2021 | | $ | 172,902 | | | $ | 219,466 | | | $ | 499 | | | 133,791,109 | | | $ | 1,337 | | | $ | 3,288,852 | | | $ | (71,830) | | | $ | (250,271) | | | $ | 3,360,955 | |
Issuance of common stock upon the exercise of options | | — | | | — | | | — | | | 5,600 | | | — | | | 318 | | | — | | | — | | | 318 | |
Issuance of common stock in connection with share based compensation | | — | | | — | | | — | | | 10,913 | | | — | | | 4,012 | | | — | | | — | | | 4,012 | |
Restricted stock grants cancelled | | — | | | — | | | — | | | (4,582) | | | — | | | — | | | — | | | — | | | — | |
Offering costs associated with previous stock issuance | | — | | | — | | | — | | | — | | | — | | | (151) | | | — | | | — | | | (151) | |
Redemption of Operating Partnership units for stock | | — | | | (34) | | | — | | | 858 | | | — | | | 34 | | | — | | | — | | | — | |
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Redemption of Preferred B Units in the Operating Partnership for stock | | (2,834) | | | — | | | — | | | 15,265 | | | 1 | | | 2,833 | | | — | | | — | | | — | |
Purchase of remaining equity interest in existing consolidated joint venture | | — | | | — | | | — | | | — | | | — | | | (12,050) | | | — | | | — | | | (12,050) | |
Noncontrolling interest in consolidated joint venture | | — | | | — | | | (225) | | | — | | | — | | | — | | | — | | | — | | | (225) | |
Net income | | 3,529 | | | 8,015 | | | | | — | | | — | | | — | | | — | | | 188,276 | | | 199,820 | |
Other comprehensive income | | 50 | | | 330 | | | — | | | — | | | — | | | — | | | 7,675 | | | — | | | 8,055 | |
Distributions to Operating Partnership units held by noncontrolling interests | | (3,399) | | | (7,186) | | | — | | | — | | | — | | | — | | | — | | | — | | | (10,585) | |
Dividends paid on common stock at $1.25 per share | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (167,274) | | | (167,274) | |
Balances at September 30, 2021 | | $ | 170,248 | | | $ | 220,591 | | | $ | 274 | | | 133,819,163 | | | $ | 1,338 | | | $ | 3,283,848 | | | $ | (64,155) | | | $ | (229,269) | | | $ | 3,382,875 | |
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See accompanying notes to unaudited condensed consolidated financial statements.
Extra Space Storage Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
| | | | | | | | | | | |
| For the Nine Months Ended September 30, |
| 2021 | | 2020 |
Cash flows from operating activities: | | | |
Net income | $ | 593,900 | | | $ | 351,273 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 179,685 | | | 167,705 | |
Amortization of deferred financing costs | 6,656 | | | 7,356 | |
Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes | — | | | 3,675 | |
Non-cash lease expense | 1,396 | | | 799 | |
Compensation expense related to stock-based awards | 12,647 | | | 11,316 | |
Accrual of interest income added to principal of debt securities and notes receivable | (25,871) | | | — | |
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Gain on real estate transactions | (63,883) | | | — | |
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest | (6,251) | | | — | |
Distributions from unconsolidated real estate ventures in excess of earnings | 4,640 | | | 5,097 | |
Changes in operating assets and liabilities: | | | |
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Other assets | (10,612) | | | (17,977) | |
Accounts payable and accrued expenses | 33,907 | | | 41,780 | |
Other liabilities | 3,054 | | | 12,243 | |
Net cash provided by operating activities | 729,268 | | | 583,267 | |
Cash flows from investing activities: | | | |
Acquisition of real estate assets | (589,382) | | | (151,244) | |
Development and redevelopment of real estate assets | (42,719) | | | (46,112) | |
Proceeds from sale of real estate assets and investments in real estate ventures | 196,241 | | | 234 | |
Investment in unconsolidated real estate entities | (20,834) | | | (13,937) | |
Return of investment in unconsolidated real estate ventures | 31,534 | | | 371 | |
Issuance and purchase of notes receivable | (143,270) | | | (149,750) | |
Principal payments received from notes receivable | 36,874 | | | — | |
Proceeds from sale of notes receivable | 116,822 | | | — | |
Purchase of equipment and fixtures | (3,058) | | | (3,407) | |
Net cash used in investing activities | (417,792) | | | ( |