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, 2022 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 ...

Financial Data and Key Metrics Changes - Life Storage reported core funds from operations (FFO) of $1.65 per share for Q2 2022, representing a 37.5% increase year-over-year [7][11] - Same store revenue increased by 18.9% compared to Q2 2021, primarily driven by increased rental rates [12] - Same store net operating income (NOI) margin expanded by 370 basis points to 73%, with a year-over-year growth in same store NOI of 25.4% for the quarter [16] Business Line Data and Key Metrics Changes - Same store achieved rate growth was 20% over the previous year, with occupancy averaging 94% during the quarter, a 40 basis point increase from Q1 [7][13] - The company acquired 13 wholly owned stores for $262.6 million and added 17 stores to its third-party management platform [8][10] - The wholly owned portfolio grew close to 18% from one year ago, with over 75% of acquisitions being stabilized properties [9] Market Data and Key Metrics Changes - The acquisition pipeline remains strong with an additional $258 million under contract, and the third-party management portfolio grew 13% year-over-year to 385 stores [10] - Street rates during the quarter were almost 8% higher than the previous year, but showed a slight decline in July compared to last July [47] Company Strategy and Development Direction - The company is focused on strategic growth through acquisitions and enhancing its third-party management platform [8][9] - Life Storage plans to increase its wholly owned acquisition guidance to between $800 million to $1 billion for the year [11] - The company is leveraging technology and data analytics to optimize revenue management and improve operational efficiencies [51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a potential slowdown in the housing market due to rising mortgage rates but noted that this could lead to increased demand for storage solutions [36][38] - The company anticipates double-digit revenue growth in the second half of the year, despite tough comparisons from the previous year [31][32] - Management expressed confidence in the strength of consumer demand and the company's ability to maintain pricing power [42][43] Other Important Information - The company refinanced its credit facility, increasing it from $500 million to $1.25 billion, providing significant liquidity through January 2027 [18][19] - The net-debt-to-recurring EBITDA ratio improved to 4.6x, down from 5.0x a year ago, indicating a stronger balance sheet [19] Q&A Session Summary Question: How does management view the balance between rate and occupancy moving forward? - Management has built a normal cyclical trend into guidance, expecting occupancy to drop about 250 basis points from July to year-end, with rates potentially declining 0% to 5% below last year [22][23] Question: What is the outlook for acquisitions in the Sunbelt region? - Management noted a pause in seller activity due to challenging debt markets but remains active in pursuing acquisitions, with some portfolios retrading [27][28] Question: How does management view the impact of the housing market slowdown? - Management believes that a slowdown in home sales could lead to increased demand for storage, as consumers may opt for storage solutions instead of moving [36][38] Question: What are the expectations for same store revenue in Q4 and 2023? - Management anticipates double-digit revenue growth in the second half of the year, with a strong start expected for 2023 [31][32][40] Question: Are there any signs of weakness in customer income levels or regions? - Management reported no significant regional differences in customer behavior, noting that demand remains strong despite inflationary pressures [42][43] Question: What is the outlook for occupancy levels transitioning into 2023? - Management expects occupancy to end the year above historical norms, in the range of 91% to 92% [45]

[STATEMENT ON FORWARD-LOOKING INFORMATION](index=4&type=section&id=STATEMENT%20ON%20FORWARD-LOOKING%20INFORMATION) [Forward-Looking Statements and Risks](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risks) This section details forward-looking statements, highlighting their reliance on current expectations and susceptibility to various material risks and uncertainties - Forward-looking statements are based on current expectations and assumptions, and are subject to risks and uncertainties[7](index=7&type=chunk)[8](index=8&type=chunk)[10](index=10&type=chunk) - Key risks include adverse changes in general economic conditions, competition, regulatory environment, credit and financial markets, COVID-19 impacts, reliance on information technologies, increased interest rates, and potential impairment charges[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS (unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) This section provides unaudited condensed consolidated financial statements, offering a snapshot of the company's financial position and performance Condensed Consolidated Balance Sheets (amounts in thousands) | Assets/Liabilities | June 30, 2022 | December 31, 2021 | | :----------------------------------------------------- | :------------ | :------------------ | | **Assets:** | | | | Real estate assets, net | $9,135,464 | $8,834,649 | | Investments in unconsolidated real estate entities | $544,771 | $457,326 | | Cash and cash equivalents | $58,729 | $71,126 | | Total assets | $11,038,767 | $10,474,477 | | **Liabilities:** | | | | Notes payable, net | $1,288,487 | $1,320,755 | | Unsecured term loans, net | $1,742,995 | $1,741,926 | | Unsecured senior notes, net | $2,757,158 | $2,360,066 | | Revolving lines of credit | $599,000 | $535,000 | | Total liabilities | $7,145,527 | $6,688,501 | | Total liabilities, noncontrolling interests and equity | $11,038,767 | $10,474,477 | Condensed Consolidated Statements of Operations (amounts in thousands, except share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------------------------------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $474,988 | $378,630 | $918,550 | $737,487 | | Total expenses | $213,572 | $181,801 | $421,824 | $363,468 | | Net income | $247,834 | $178,579 | $465,551 | $394,080 | | Net income attributable to common stockholders | $232,130 | $167,948 | $435,709 | $370,946 | | Basic Earnings per common share | $1.73 | $1.25 | $3.24 | $2.79 | | Diluted Earnings per common share | $1.73 | $1.25 | $3.24 | $2.79 | | Cash dividends paid per common share | $1.50 | $1.00 | $3.00 | $2.00 | Condensed Consolidated Statements of Cash Flows (amounts in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------------------------------------------------------------------------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $640,387 | $463,688 | | Net cash used in investing activities | $(570,028) | $(145,302) | | Net cash used in financing activities | $(76,387) | $(386,646) | | Net decrease in cash, cash equivalents, and restricted cash | $(6,028) | $(68,260) | | Cash, cash equivalents, and restricted cash, end of the period | $70,166 | $59,749 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) [Condensed Consolidated Statements of Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) [Condensed Consolidated Statement of Noncontrolling Interests and Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Noncontrolling%20Interests%20and%20Equity) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=13&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering organization, policies, assets, debt, equity, and contingencies - The Company is a self-administered and self-managed REIT, operating through its Operating Partnership, with direct and indirect equity interests in **1,313 stores** and managing an additional **864 stores** for third parties as of June 30, 2022[35](index=35&type=chunk)[36](index=36&type=chunk) - The Company adopted ASU 2020-04 for Reference Rate Reform, applying hedge accounting expedients for LIBOR-indexed cash flows and contract modifications, and has begun transitioning debt to SOFR[38](index=38&type=chunk) - Goodwill of **$170.811 million** was recorded as of June 30, 2022, primarily due to the acquisition of Bargold Storage Systems, LLC[56](index=56&type=chunk)[68](index=68&type=chunk) [1. ORGANIZATION](index=13&type=section&id=1.%20ORGANIZATION) [2. BASIS OF PRESENTATION](index=13&type=section&id=2.%20BASIS%20OF%20PRESENTATION) [3. FAIR VALUE DISCLOSURES](index=14&type=section&id=3.%20FAIR%20VALUE%20DISCLOSURES) [4. REAL ESTATE ASSETS](index=16&type=section&id=4.%20REAL%20ESTATE%20ASSETS) [5. OTHER ASSETS](index=16&type=section&id=5.%20OTHER%20ASSETS) [6. EARNINGS PER COMMON SHARE](index=17&type=section&id=6.%20EARNINGS%20PER%20COMMON%20SHARE) [7. ACQUISITIONS AND DISPOSITIONS](index=18&type=section&id=7.%20ACQUISITIONS%20AND%20DISPOSITIONS) [8. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES](index=20&type=section&id=8.%20INVESTMENTS%20IN%20UNCONSOLIDATED%20REAL%20ESTATE%20ENTITIES) [9. INVESTMENTS IN DEBT SECURITIES AND NOTES RECEIVABLE](index=21&type=section&id=9.%20INVESTMENTS%20IN%20DEBT%20SECURITIES%20AND%20NOTES%20RECEIVABLE) [10. DEBT](index=22&type=section&id=10.%20DEBT) [11. DERIVATIVES](index=24&type=section&id=11.%20DERIVATIVES) [12. STOCKHOLDERS' EQUITY](index=25&type=section&id=12.%20STOCKHOLDERS'%20EQUITY) [13. NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS](index=26&type=section&id=13.%20NONCONTROLLING%20INTEREST%20REPRESENTED%20BY%20PREFERRED%20OPERATING%20PARTNERSHIP%20UNITS) [14. NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS](index=27&type=section&id=14.%20NONCONTROLLING%20INTEREST%20IN%20OPERATING%20PARTNERSHIP%20AND%20OTHER%20NONCONTROLLING%20INTERESTS) [15. SEGMENT INFORMATION](index=28&type=section&id=15.%20SEGMENT%20INFORMATION) [16. COMMITMENTS AND CONTINGENCIES](index=29&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=31&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial condition and results, covering accounting policies, business overview, property portfolio, performance, FFO, and liquidity - The Company operates two primary segments: storage operations (rents from wholly-owned stores) and tenant reinsurance (insurance revenues)[144](index=144&type=chunk) - As of June 30, 2022, the Company owned or had ownership interests in **1,313 operating stores** (**1,009 wholly-owned**, **304 in unconsolidated joint ventures**) and managed an additional **864 stores** for third parties, totaling **2,177 stores** across 41 states and Washington, D.C[149](index=149&type=chunk) Revenue Performance (amounts in thousands) | Revenue Category | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | % Change (3M) | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | % Change (6M) | | :----------------------------------- | :----------------------------- | :----------------------------- | :------------ | :----------------------------- | :----------------------------- | :------------ | | Property rental | $408,044 | $321,500 | 26.9% | $787,852 | $625,093 | 26.0% | | Tenant reinsurance | $46,427 | $42,334 | 9.7% | $90,224 | $81,953 | 10.1% | | Management fees and other income | $20,517 | $14,796 | 38.7% | $40,474 | $30,441 | 33.0% | | **Total revenues** | **$474,988** | **$378,630** | **25.4%** | **$918,550** | **$737,487** | **24.6%** | Same-Store Operating Data | Metric | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | Percent Change | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | Percent Change | | :--------------------------------------- | :----------------------------- | :----------------------------- | :------------- | :----------------------------- | :----------------------------- | :------------- | | Same-store rental revenues | $362,192 | $297,601 | 21.7% | $704,081 | $578,591 | 21.7% | | Same-store operating expenses | $83,471 | $76,346 | 9.3% | $168,328 | $155,825 | 8.0% | | Same-store net operating income | $278,721 | $221,255 | 26.0% | $535,753 | $422,766 | 26.7% | | Same-store square foot occupancy (quarter end) | 95.9% | 96.9% | | 95.9% | 96.9% | | Funds From Operations (FFO) (amounts in thousands) | Metric | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | | :------------------------------------------------------------------------------------------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to common stockholders | $232,130 | $167,948 | $435,709 | $370,946 | | Funds from operations attributable to common stockholders and unit holders | $303,589 | $232,313 | $590,045 | $442,372 | [CAUTIONARY LANGUAGE](index=31&type=section&id=CAUTIONARY%20LANGUAGE) [CRITICAL ACCOUNTING POLICIES](index=31&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) [OVERVIEW](index=31&type=section&id=OVERVIEW) [COVID-19 UPDATE](index=32&type=section&id=COVID-19%20UPDATE) [PROPERTIES](index=32&type=section&id=PROPERTIES) [RESULTS OF OPERATIONS](index=34&type=section&id=RESULTS%20OF%20OPERATIONS) [FUNDS FROM OPERATIONS](index=37&type=section&id=FUNDS%20FROM%20OPERATIONS) [SAME-STORE RESULTS](index=37&type=section&id=SAME-STORE%20RESULTS) [CASH FLOWS](index=39&type=section&id=CASH%20FLOWS) [LIQUIDITY AND CAPITAL RESOURCES](index=39&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) [OFF-BALANCE SHEET ARRANGEMENTS](index=40&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) [SEASONALITY](index=40&type=section&id=SEASONALITY) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=40&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section quantifies the company's market risk exposure, specifically interest rate risk, and its potential impact on earnings and cash flows - As of June 30, 2022, the Company had approximately **$6.4 billion** in total face value of debt, with **$1.6 billion** subject to variable interest rates[197](index=197&type=chunk) - A **100 basis point** increase or decrease in LIBOR or SOFR would impact annual interest expense, and thus future earnings and cash flows, by approximately **$16.2 million**[197](index=197&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=41&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2022[200](index=200&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent quarter[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=42&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in various legal proceedings, with management accruing for probable losses while acknowledging potential additional exposure - The Company is involved in various legal proceedings and claims, with outcomes inherently unpredictable[203](index=203&type=chunk) - Management establishes accrued liabilities for probable and reasonably estimable loss contingencies, but there may be exposure to losses in excess of these amounts[203](index=203&type=chunk) [ITEM 1A. RISK FACTORS](index=42&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers to the Annual Report on Form 10-K for comprehensive risk factors, noting no material changes in the current period - No material changes to the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2021, have occurred[204](index=204&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=42&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) On June 1, 2022, the company issued common and Series D Preferred OP Units in a private placement for the Bargold acquisition, redeemable in cash or stock - On June 1, 2022, the Company issued **91,743 common OP Units** (**$16.0 million**) and **240,000 Series D Units** (**$6.0 million**) in a private placement for the acquisition of Bargold[205](index=205&type=chunk) - Both OP Units and Series D Units are redeemable by holders, with the Company having the option to settle in cash or common stock[206](index=206&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=42&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities occurred during the reporting period [ITEM 4. MINE SAFETY DISCLOSURES](index=42&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company [ITEM 5. OTHER INFORMATION](index=42&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other information is reported under this item [ITEM 6. EXHIBITS](index=43&type=section&id=ITEM%206.%20EXHIBITS) [Exhibits List](index=43&type=section&id=Exhibits%20List) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and XBRL financial statements - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[211](index=211&type=chunk) - The Condensed Consolidated Balance Sheets, Statements of Operations, Comprehensive Income, Noncontrolling Interests and Equity, and Cash Flows are formatted in XBRL[211](index=211&type=chunk) [SIGNATURES](index=44&type=section&id=SIGNATURES) [Report Signatures](index=44&type=section&id=Report%20Signatures) This section contains the signatures of the CEO and CFO, certifying the report on August 5, 2022 - The report is signed by Joseph D. Margolis, Chief Executive Officer, and P. Scott Stubbs, Executive Vice President and Chief Financial Officer, on August 5, 2022[214](index=214&type=chunk)

June 2022 Investor Presentation Life Storage Forward Looking Statements 2 This presentation may contain forward looking statements as defined in Section 27A of the Securities Act of 1933, and in Section 21E of the Securities Exchange Act of 1934. Forward looking statements address matters that are subject to a number of risks and uncertainties. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained herein. Any forw ...

JUNE 2022 WWWWW annomann TI ExtraSpace Storage COMPANY PRESENTATION FORWARD LOOKING STATEMENTS. Certain information set forth in this release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements include statements concerning the benefits of store acquisitions, developments, favorable market conditions, our outlook and estimates for the year and other statements concerning our plans, objectives, goals, strategies, future events, future revenues o ...

[STATEMENT ON FORWARD-LOOKING INFORMATION](index=4&type=section&id=STATEMENT%20ON%20FORWARD-LOOKING%20INFORMATION) This section clarifies that the report contains forward-looking statements based on current expectations and assumptions, which are subject to various risks and uncertainties [Forward-Looking Statements and Risks](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risks) This section clarifies that the report contains forward-looking statements based on current expectations and assumptions, which are subject to various risks and uncertainties. It disclaims any obligation to publicly update these statements and advises readers to consider the listed risk factors - Forward-looking statements are identified by terminology such as 'believes,' 'expects,' 'estimates,' 'may,' 'will,' 'should,' 'anticipates,' or 'intends' and are based on current expectations and assumptions[7](index=7&type=chunk)[8](index=8&type=chunk) - The company disclaims any duty or obligation to update or revise any forward-looking statements to reflect new information, future events, or otherwise[12](index=12&type=chunk) - Key risks that could cause actual results to differ materially include adverse changes in economic conditions, competition, potential liability for uninsured losses, regulatory impacts, disruptions in financial markets, impacts from the COVID-19 pandemic, reliance on information technologies, increased interest rates, and economic uncertainty due to natural disasters, war, or terrorism[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS (unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, comprehensive income, noncontrolling interests and equity, and cash flows, providing a snapshot of the company's financial performance and position for the reported interim periods [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | March 31, 2022 (unaudited) (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------------- | :---------------------------------------- | :------------------------------- | | Total Assets | $10,591,750 | $10,474,477 | | Total Liabilities | $6,713,586 | $6,688,501 | | Total Extra Space Storage Inc. Stockholders' Equity | $3,210,215 | $3,116,496 | | Total Liabilities, Noncontrolling Interests and Equity | $10,591,750 | $10,474,477 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | | Total Revenues | $443,562 | $358,857 | | Total Expenses | $208,252 | $181,667 | | Net Income | $217,717 | $215,501 | | Net Income Attributable to Common Stockholders | $203,579 | $202,998 | | Basic EPS | $1.52 | $1.54 | | Diluted EPS | $1.51 | $1.53 | | Cash Dividends Paid Per Common Share | $1.50 | $1.00 | [Condensed Consolidated Statements of Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | | Net Income | $217,717 | $215,501 | | Change in Fair Value of Interest Rate Swaps | $51,649 | $23,013 | | Total Comprehensive Income | $269,366 | $238,514 | | Comprehensive Income Attributable to Common Stockholders | $252,582 | $224,911 | [Condensed Consolidated Statement of Noncontrolling Interests and Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Noncontrolling%20Interests%20and%20Equity) | Metric | Balances at December 31, 2021 (in thousands) | Balances at March 31, 2022 (in thousands) | | :--------------------------------------- | :----------------------------------------- | :---------------------------------------- | | Total Noncontrolling Interests and Equity | $3,785,976 | $3,878,164 | | Issuance of Common Stock in Connection with Share Based Compensation | — | $4,542 | | Redemption of Operating Partnership Units for Cash | — | $(2,672) | | Redemption of Preferred B Units for Cash | — | $(3,375) | | Issuance of Common Stock in Conjunction with Acquisitions | — | $40,965 | | Net Income | $217,717 | $217,717 | | Other Comprehensive Income | — | $51,649 | | Dividends Paid on Common Stock | $(128,245) | $(202,527) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | | Net Cash Provided by Operating Activities | $287,465 | $203,880 | | Net Cash Provided by (Used in) Investing Activities | $(121,372) | $42,595 | | Net Cash Used in Financing Activities | $(169,621) | $(311,689) | | Net Decrease in Cash, Cash Equivalents, and Restricted Cash | $(3,528) | $(65,214) | | Cash, Cash Equivalents, and Restricted Cash, End of Period | $72,666 | $62,795 | [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=13&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering the company's organization, accounting policies, fair value disclosures, real estate assets, earnings per share, acquisitions, investments, debt, derivatives, equity, noncontrolling interests, segment information, and commitments and contingencies [1. ORGANIZATION](index=13&type=section&id=1.%20ORGANIZATION) The company operates as a self-administered REIT, owning and managing a large portfolio of self-storage properties across multiple states - Extra Space Storage Inc. is a fully integrated, self-administered and self-managed real estate investment trust (REIT) focused on owning, operating, managing, acquiring, developing, and redeveloping self-storage properties[35](index=35&type=chunk) - As of March 31, 2022, the Company had direct and indirect equity interests in **1,283 stores** and managed an additional **847 stores** for third parties, totaling **2,130 stores** across 41 states and Washington, D.C[36](index=36&type=chunk) [2. BASIS OF PRESENTATION](index=13&type=section&id=2.%20BASIS%20OF%20PRESENTATION) The unaudited condensed consolidated financial statements adhere to U.S. GAAP for interim reporting, incorporating specific hedge accounting expedients for reference rate reform - The accompanying unaudited condensed consolidated financial statements are presented in accordance with U.S. GAAP for interim financial information and instructions to Form 10-Q[37](index=37&type=chunk) - The Company elected to apply hedge accounting expedients related to probability and effectiveness assessments for future LIBOR-indexed cash flows, as provided by ASU 2020-04 and ASU 2021-01, to manage reference rate reform[38](index=38&type=chunk) [3. FAIR VALUE DISCLOSURES](index=14&type=section&id=3.%20FAIR%20VALUE%20DISCLOSURES) This section outlines the company's fair value measurements for financial instruments, particularly interest rate swaps, and discloses assets held for sale - The Company uses interest rate swaps to manage interest rate risk, with valuations determined using discounted cash flow analysis and observable market-based inputs, primarily classified within Level 2 of the fair value hierarchy[40](index=40&type=chunk)[42](index=42&type=chunk) - As of March 31, 2022, the Company had two operating stores classified as held for sale, with their estimated fair value less selling costs exceeding their carrying value, resulting in no impairment loss[48](index=48&type=chunk) Financial Instrument Fair and Carrying Values | Financial Instrument | Fair Value (March 31, 2022, in thousands) | Carrying Value (March 31, 2022, in thousands) | | :------------------------------------------------------- | :------------------------------------------ | :-------------------------------------------- | | Notes receivable from Preferred and Common Operating Partnership unit holders | $98,054 | $101,900 | | Fixed rate notes receivable | $1,248 | $1,251 | | Fixed rate debt | $4,780,095 | $4,860,356 | [4. REAL ESTATE ASSETS](index=16&type=section&id=4.%20REAL%20ESTATE%20ASSETS) This section details the composition of the company's net operating real estate assets, including land, buildings, and properties under development Real Estate Assets Breakdown | Asset Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------------- | :---------------------------- | :------------------------------- | | Land | $2,186,751 | $2,151,319 | | Buildings, improvements and other intangibles | $8,347,651 | $8,227,094 | | Right of use asset - finance lease | $114,668 | $117,718 | | Intangible assets - tenant relationships | $135,535 | $134,577 | | Intangible lease rights | $12,443 | $12,443 | | Less: accumulated depreciation and amortization | $(1,929,716) | $(1,867,750) | | Net operating real estate assets | $8,867,332 | $8,775,401 | | Real estate under development/redevelopment | $73,392 | $59,248 | | Real estate assets, net | $8,940,724 | $8,834,649 | | Real estate assets held for sale included in real estate assets, net | $23,742 | $8,436 | [5. EARNINGS PER COMMON SHARE](index=16&type=section&id=5.%20EARNINGS%20PER%20COMMON%20SHARE) This section provides the calculation of basic and diluted earnings per common share, detailing net income and average shares outstanding Earnings Per Common Share Calculation | Metric | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :--------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income attributable to common stockholders | $203,579 | $202,998 | | Earnings for basic computations | $203,293 | $202,686 | | Net income for diluted computations | $214,414 | $214,008 | | Average number of common shares outstanding - basic | 134,180,175 | 132,007,556 | | Average number of common shares outstanding - diluted | 141,581,862 | 139,676,548 | | Basic EPS | $1.52 | $1.54 | | Diluted EPS | $1.51 | $1.53 | [6. STORE ACQUISITIONS](index=18&type=section&id=6.%20STORE%20ACQUISITIONS) This section details the company's store acquisition activities, including the number of properties acquired and the associated cash and equity consideration Store Acquisition Summary | Quarter | Number of Stores | Cash Paid (in thousands) | Investments in Real Estate Ventures (in thousands) | Net Liabilities/Assumed Value (in thousands) | Value of OP Units Issued (in thousands) | Total Real Estate Assets (in thousands) | | :------ | :--------------- | :----------------------- | :------------------------------------------------- | :------------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Q1 2022 | 14 | $185,910 | $747 | $274 | $40,965 | $227,896 | | Q1 2021 | 9 | $148,940 | — | $2,944 | — | $151,884 | [7. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES](index=18&type=section&id=7.%20INVESTMENTS%20IN%20UNCONSOLIDATED%20REAL%20ESTATE%20ENTITIES) This section outlines the company's equity investments in unconsolidated real estate entities, including joint ventures and preferred stock holdings - The Company's investments in unconsolidated real estate entities include preferred stock of SmartStop Self Storage REIT, Inc. and noncontrolling interests in real estate joint ventures, accounted for using the equity method[64](index=64&type=chunk) - During the three months ended March 31, 2022, the Company contributed **$4,321 thousand** in cash to its joint ventures, including its pro-rata portion of the purchase price of two operating stores[71](index=71&type=chunk) Investments in Unconsolidated Real Estate Entities | Investment | Number of Stores | Equity Ownership % | Excess Profit % | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------------------------- | :--------------- | :----------------- | :-------------- | :---------------------------- | :------------------------------- | | PRISA Self Storage LLC | 85 | 4% | 4% | $8,746 | $8,792 | | SmartStop Self Storage REIT, Inc. Preferred Stock | n/a | n/a | n/a | $200,000 | $200,000 | | Net Investments in and Cash distributions in unconsolidated real estate entities | 288 | | | $410,785 | $393,744 | [8. INVESTMENTS IN DEBT SECURITIES AND NOTES RECEIVABLE](index=19&type=section&id=8.%20INVESTMENTS%20IN%20DEBT%20SECURITIES%20AND%20NOTES%20RECEIVABLE) This section provides an overview of the company's investments in debt securities and notes receivable, including bridge loans and mezzanine debt - In February 2022, the Company sold its senior mezzanine note receivable for **$103,315 thousand** in cash, recognizing the remaining unamortized discount as interest income[75](index=75&type=chunk) - During the three months ended March 31, 2022, the Company sold **$39,718 thousand** in mortgage bridge loans to third parties and closed on **$134,408 thousand** in new mortgage bridge loans[76](index=76&type=chunk) Debt Securities and Notes Receivable | Investment | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------------- | :---------------------------- | :------------------------------- | | Debt securities - NexPoint Series A Preferred Stock | $200,000 | $200,000 | | Debt securities - NexPoint Series B Preferred Stock | $100,000 | $100,000 | | Notes Receivable-Bridge Loans | $348,185 | $279,042 | | Notes Receivable-Senior Mezzanine Loan, net | — | $102,079 | | Dividends Receivable | $45,922 | $38,066 | | Total | $694,107 | $719,187 | [9. DEBT](index=20&type=section&id=9.%20DEBT) This section details the company's debt structure, including secured and unsecured, fixed and variable rate obligations, and recent senior note issuances - In March 2022, the Operating Partnership issued **$400.0 million** principal amount of 3.900% Senior Notes due 2029[79](index=79&type=chunk) - As of March 31, 2022, the Company was in compliance with all financial covenants related to its unsecured debt[87](index=87&type=chunk) Debt Structure | Debt Type | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Fixed Rate | Variable Rate | Maturity Dates | | :--------------------------------------- | :---------------------------- | :------------------------------- | :--------- | :------------ | :------------------------------------------------------- | | Secured fixed-rate | $929,980 | $930,830 | 2.46% - 4.50% | | October 2022 - February 2030 | | Secured variable-rate | $368,038 | $392,679 | | 1.29% - 1.95% | October 2022 - September 2030 | | Unsecured fixed-rate | $3,930,376 | $3,575,000 | 1.40% - 4.39% | | February 2024 - March 2032 | | Unsecured variable-rate | $594,624 | $550,000 | | 1.40% | February 2024 - October 2026 | | Total | $5,823,018 | $5,448,509 | | | | [10. DERIVATIVES](index=22&type=section&id=10.%20DERIVATIVES) This section describes the company's use of interest rate swaps as cash flow hedges to manage interest rate risk and stabilize interest expense - The Company uses interest rate swaps as cash flow hedges to manage exposure to interest rate movements, aiming to stabilize interest expense[90](index=90&type=chunk) - As of March 31, 2022, the Company held **19 derivative financial instruments** with a total combined notional amount of **$1,934,369 thousand**[93](index=93&type=chunk) Derivative Gains and Losses | Derivative Type | Gain (loss) recognized in OCI for the Three Months Ended March 31, 2022 (in thousands) | Gain (loss) reclassified from OCI into income for the Three Months Ended March 31, 2022 (in thousands) | | :--------------------------------------- | :--------------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | Swap Agreements | $42,741 | $(8,912) | [11. STOCKHOLDERS' EQUITY](index=23&type=section&id=11.%20STOCKHOLDERS'%20EQUITY) This section details changes in stockholders' equity, including common stock issuances for acquisitions and the status of the share repurchase program - On January 7, 2022, the Company issued **186,766 shares** of common stock, valued at **$40,965 thousand**, to acquire two stores[99](index=99&type=chunk) - The Company has an authorized share repurchase program of up to **$400,000 thousand**, but no shares have been repurchased under this program to date[102](index=102&type=chunk) [12. NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS](index=24&type=section&id=12.%20NONCONTROLLING%20INTEREST%20REPRESENTED%20BY%20PREFERRED%20OPERATING%20PARTNERSHIP%20UNITS) This section outlines the characteristics of noncontrolling interests represented by various series of preferred operating partnership units - Noncontrolling interests represented by Preferred OP Units are classified as permanent equity on the condensed consolidated balance sheets[104](index=104&type=chunk)[105](index=105&type=chunk) - Series A Units have a fixed priority return of **2.3%** and a fixed liquidation value of **$101,700 thousand**, redeemable at the holder's option in cash or common stock[108](index=108&type=chunk) - Series B Units have a liquidation value of **$25.00 per unit**, receive cumulative distributions at an annual rate of **6.0%**, and **135,000 Series B Units** were redeemed for **$3,375 thousand** in cash on February 15, 2022[111](index=111&type=chunk)[112](index=112&type=chunk) - Series D Units have a liquidation value of **$25.00 per unit**, receive cumulative distributions at an annual rate between **3.0% and 5.0%**, and are redeemable or exchangeable for OP Units[115](index=115&type=chunk) [13. NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS](index=26&type=section&id=13.%20NONCONTROLLING%20INTEREST%20IN%20OPERATING%20PARTNERSHIP%20AND%20OTHER%20NONCONTROLLING%20INTERESTS) This section clarifies the company's ownership in the Operating Partnership and the redeemable nature of outstanding operating partnership units - The Company held a **94.0% ownership interest** in the Operating Partnership as of March 31, 2022[117](index=117&type=chunk) - OP Units are redeemable at the option of the holder for cash or common stock; as of March 31, 2022, redeeming all **6,515,408 outstanding OP Units** for cash would require **$1,300,801 thousand**[118](index=118&type=chunk) [14. SEGMENT INFORMATION](index=26&type=section&id=14.%20SEGMENT%20INFORMATION) This section presents financial performance data for the company's two reportable segments: self-storage operations and tenant reinsurance - The Company has two reportable segments: self-storage operations and tenant reinsurance, with Net Operating Income (NOI) used as the key performance measure[123](index=123&type=chunk) Segment Performance | Segment | Revenues (March 31, 2022, in thousands) | Revenues (March 31, 2021, in thousands) | Operating Expenses (March 31, 2022, in thousands) | Operating Expenses (March 31, 2021, in thousands) | Net Operating Income (March 31, 2022, in thousands) | Net Operating Income (March 31, 2021, in thousands) | | :--------------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------------------------------ | :------------------------------------------------ | :-------------------------------------------------- | :-------------------------------------------------- | | Self-Storage Operations | $379,808 | $303,593 | $103,542 | $92,367 | $276,266 | $211,226 | | Tenant Reinsurance | $43,797 | $39,619 | $7,042 | $7,161 | $36,755 | $32,458 | | Total Segment | $423,605 | $343,212 | $110,584 | $99,528 | $313,021 | $243,684 | [15. COMMITMENTS AND CONTINGENCIES](index=28&type=section&id=15.%20COMMITMENTS%20AND%20CONTINGENCIES) This section outlines the company's involvement in legal proceedings and details future commitments for property acquisitions - The Company is involved in various legal proceedings and claims, with outcomes inherently unpredictable, and accrues liabilities when losses are probable and estimable[126](index=126&type=chunk) - As of March 31, 2022, the Company was under agreement to acquire **18 wholly-owned stores** for **$266,595 thousand** and **four joint venture stores** for **$13,010 thousand**, with closings scheduled for 2022 and 2023[127](index=127&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=29&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and results of operations, including an overview of its business, the impact of COVID-19, property portfolio details, a detailed analysis of revenues and expenses, Funds From Operations (FFO), same-store results, cash flows, and liquidity and capital resources [CAUTIONARY LANGUAGE](index=29&type=section&id=CAUTIONARY%20LANGUAGE) This section advises readers to review the discussion alongside the financial statements and forward-looking information for comprehensive understanding - The discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the 'Statement on Forward-Looking Information' for a complete understanding[130](index=130&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=29&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) The preparation of financial statements relies on estimates and judgments, which, if different, could materially impact reported financial results - Preparation of financial statements requires estimates, judgments, and assumptions, which are believed to be appropriate and correct based on available information, but material differences could affect reported financials[131](index=131&type=chunk) [OVERVIEW](index=29&type=section&id=OVERVIEW) This section provides an overview of the company's REIT business model, focusing on self-storage operations and dynamic revenue management strategies - The Company is a REIT that owns, operates, manages, acquires, develops, and redevelops self-storage properties, deriving substantially all revenues from storage operations and tenant reinsurance[133](index=133&type=chunk) - The Company employs industry-leading revenue management systems to analyze, set, and adjust rental rates in real time, aiming to maximize cash flows from its diverse portfolio[134](index=134&type=chunk) - The self-storage business experiences seasonal fluctuations, with occupancy generally higher in summer months due to increased moving activity[135](index=135&type=chunk) [COVID-19 UPDATE](index=30&type=section&id=COVID-19%20UPDATE) This section addresses the ongoing impact of the COVID-19 pandemic on the economy, company operations, and potential effects on customers - The COVID-19 pandemic continues to impact the U.S. and world economies, leading the Company to implement measures like 'work from home' and contactless rental processes[137](index=137&type=chunk) - Customers may still be impacted by the pandemic and related governmental responses, potentially affecting their ability to pay rent or renew leases, and the business may face additional governmental restrictions[137](index=137&type=chunk) [PROPERTIES](index=30&type=section&id=PROPERTIES) This section details the company's extensive property portfolio, including owned, joint venture, and managed self-storage stores, and rental rate trends - As of March 31, 2022, the Company owned or had ownership interests in **1,283 operating stores** (**995 wholly-owned**, **288 in unconsolidated joint ventures**) and managed an additional **847 stores** for third parties, totaling **2,130 stores**[138](index=138&type=chunk) - The average annual rent per square foot for existing customers at stabilized stores was **$20.04** for Q1 2022, up from **$16.21** for Q1 2021, while for new leases it was **$19.68** for Q1 2022, up from **$16.54** for Q1 2021[140](index=140&type=chunk) Property Portfolio by Location | Location | REIT Owned Property Count | REIT Owned Net Rentable Square Feet | Joint Venture Owned Property Count | Joint Venture Owned Net Rentable Square Feet | Managed Property Count | Managed Net Rentable Square Feet | Total Property Count | Total Net Rentable Square Feet | | :--------------------------------------- | :------------------------ | :---------------------------------- | :--------------------------------- | :------------------------------------------- | :--------------------- | :------------------------------- | :------------------- | :----------------------------- | | California | 175 | 13,438,621 | 49 | 3,594,254 | 82 | 7,696,360 | 306 | 24,729,235 | | Florida | 110 | 8,389,054 | 37 | 3,057,198 | 111 | 8,840,510 | 258 | 20,286,762 | | Texas | 102 | 8,371,945 | 23 | 1,843,882 | 78 | 6,769,854 | 203 | 16,985,681 | | Totals | 995 | 75,971,028 | 288 | 21,882,717 | 847 | 66,296,873 | 2,130 | 164,150,618 | [RESULTS OF OPERATIONS](index=32&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a comprehensive analysis of the company's operational performance, including store count and key financial drivers [Overview](index=32&type=section&id=Overview_Results_of_Operations) This overview summarizes the total number of wholly-owned and joint venture stores operated by the company during the period - For the three months ended March 31, 2022, the Company operated **1,283 stores** (**995 wholly-owned**, **288 in joint ventures**), an increase from **1,206 stores** in the prior year period[146](index=146&type=chunk) [Revenues](index=32&type=section&id=Revenues_Results_of_Operations) This section analyzes the changes in total revenues, driven by increases in property rental, tenant reinsurance, and management fees - The increase in property rental revenues was primarily due to a **$62,695 thousand increase** at stabilized stores from higher average rates and an **$18,897 thousand increase** from acquisitions[147](index=147&type=chunk) - Tenant reinsurance revenues increased due to an increase in the number of stores operated (**2,130 stores** at March 31, 2022 vs. **1,969** at March 31, 2021)[148](index=148&type=chunk) Revenue Breakdown | Revenue Type | March 31, 2022 (in thousands) | March 31, 2021 (in thousands) | Change (in thousands) | % Change | | :--------------------------------------- | :---------------------------- | :---------------------------- | :-------------------- | :------- | | Property rental | $379,808 | $303,593 | $76,215 | 25.1% | | Tenant reinsurance | $43,797 | $39,619 | $4,178 | 10.5% | | Management fees and other income | $19,957 | $15,645 | $4,312 | 27.6% | | Total revenues | $443,562 | $358,857 | $84,705 | 23.6% | [Expenses](index=33&type=section&id=Expenses_Results_of_Operations) This section details the changes in operating expenses, including property operations, general and administrative, and depreciation - Property operations expense increased primarily due to **$7,053 thousand** from acquisitions and **$5,912 thousand** at stabilized stores, partially offset by **$2,101 thousand decrease** from property sales[151](index=151&type=chunk) - General and administrative expenses increased due to higher corporate payroll and other expenses, reflecting nationwide wage growth and the management of additional stores[153](index=153&type=chunk) Expense Breakdown | Expense Type | March 31, 2022 (in thousands) | March 31, 2021 (in thousands) | Change (in thousands) | % Change | | :--------------------------------------- | :---------------------------- | :---------------------------- | :-------------------- | :------- | | Property operations | $103,542 | $92,367 | $11,175 | 12.1% | | Tenant reinsurance | $7,042 | $7,161 | $(119) | (1.7)% | | General and administrative | $29,762 | $23,540 | $6,222 | 26.4% | | Depreciation and amortization | $67,906 | $58,599 | $9,307 | 15.9% | | Total expenses | $208,252 | $181,667 | $26,585 | 14.6% | [Other Revenues and Expenses](index=33&type=section&id=Other%20Revenues%20and%20Expenses_Results_of_Operations) This section analyzes other revenues and expenses, including gains on real estate transactions, interest income and expense, and equity earnings - Interest expense increased due to a higher weighted average interest rate and debt balance[156](index=156&type=chunk) - Interest income increased primarily from bridge loans, notes receivable, and the repayment of a senior mezzanine note receivable[158](index=158&type=chunk) Other Revenues and Expenses Summary | Item | March 31, 2022 (in thousands) | March 31, 2021 (in thousands) | Change (in thousands) | % Change | | :--------------------------------------- | :---------------------------- | :---------------------------- | :-------------------- | :------- | | Gain on real estate transactions | $— | $63,883 | $(63,883) | —% | | Interest expense | $(42,538) | $(40,695) | $(1,843) | 4.5% | | Interest income | $18,989 | $12,304 | $6,685 | 54.3% | | Equity in earnings and dividend income from unconsolidated real estate entities | $9,097 | $6,956 | $2,141 | 30.8% | | Income tax expense | $(3,141) | $(4,137) | $996 | (24.1)% | | Total other revenues & expenses, net | $(17,593) | $38,311 | $(55,904) | (145.9)% | [FUNDS FROM OPERATIONS](index=34&type=section&id=FUNDS%20FROM%20OPERATIONS) This section defines and presents Funds From Operations (FFO) as a supplemental measure of operating performance, adjusting for non-cash real estate items - Funds from operations (FFO) is presented as a supplement to net earnings, providing relevant information about operating performance by excluding gains/losses on sales of operating stores and impairment write-downs, plus real estate-related depreciation and amortization[161](index=161&type=chunk) Funds From Operations Attributable to Common Stockholders and Unit Holders | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | | Net income attributable to common stockholders | $203,579 | $202,998 | | Real estate depreciation | $62,692 | $55,815 | | Amortization of intangibles | $2,766 | $693 | | Gain on real estate transactions | $— | $(63,883) | | Unconsolidated joint venture real estate depreciation and amortization | $3,853 | $2,505 | | Funds from operations attributable to common stockholders and unit holders | $286,456 | $210,059 | [SAME-STORE RESULTS](index=35&type=section&id=SAME-STORE%20RESULTS) This section provides key performance indicators for the company's stabilized same-store property pool, including revenues, expenses, and occupancy - The same-store pool consists of **870 wholly-owned and operated stores** stabilized by the first day of the earliest calendar year presented[165](index=165&type=chunk) - Same-store expenses increased due to higher payroll, credit card processing fees, repairs and maintenance (snow removal), and insurance, partially offset by lower marketing expense[165](index=165&type=chunk) Same-Store Performance | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | Percent Change | | :--------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | :------------- | | Same-store rental revenues | $341,888 | $280,990 | 21.7% | | Same-store operating expenses | $84,857 | $79,480 | 6.8% | | Same-store net operating income | $257,031 | $201,510 | 27.6% | | Same-store square foot occupancy as of quarter end | 94.5% | 95.3% | | | Properties included in same-store | 870 | 870 | | [CASH FLOWS](index=36&type=section&id=CASH%20FLOWS) This section summarizes the company's cash flows from operating, investing, and financing activities, highlighting key drivers of change - Cash flows from operating activities increased due to continued total revenue growth[168](index=168&type=chunk) - Cash flows used in investing activities primarily relate to the acquisition and development of REIT and joint venture assets, as well as bridge loan program activity[168](index=168&type=chunk) Cash Flow Summary | Cash Flow Activity | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :--------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------- | | Net cash provided by operating activities | $287,465 | $203,880 | | Net cash provided by (used in) investing activities | $(121,372) | $42,595 | | Net cash used in financing activities | $(169,621) | $(311,689) | | Acquisition and development of real estate assets | $(210,521) | $(175,838) | | Proceeds from issuance of public bonds, net | $400,000 | $— | | Dividends paid on common stock | $(202,527) | $(132,540) | [LIQUIDITY AND CAPITAL RESOURCES](index=37&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section assesses the company's liquidity and capital resources, including cash, debt metrics, credit ratings, and covenant compliance - As of March 31, 2022, the Company had **$65,978 thousand** in cash and cash equivalents and a debt to total enterprise value ratio of **17.1%**[172](index=172&type=chunk)[173](index=173&type=chunk) - The ratio of total fixed-rate debt and other instruments to total debt was **80.4%** at March 31, 2022, with a weighted average interest rate of **2.8%** on total debt[173](index=173&type=chunk) - The Company maintains **BBB/Stable (S&P)** and **Baa2 (Moody's)** credit ratings and was in compliance with all financial covenants at March 31, 2022[173](index=173&type=chunk)[176](index=176&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=38&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) The company confirms it has no material off-balance sheet arrangements or guarantees with unconsolidated entities - The Company does not have any material relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements, nor has it guaranteed any obligations of such entities[179](index=179&type=chunk) [SEASONALITY](index=38&type=section&id=SEASONALITY) The self-storage business experiences seasonal fluctuations, with higher revenues and occupancy typically occurring in summer months - The self-storage business is subject to seasonal fluctuations, with a greater portion of revenues and profits realized from May through September, and highest occupancy typically at the end of July[180](index=180&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=38&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's exposure to market risks, particularly interest rate risk, and quantifies the potential impact of changes in interest rates on its financial performance [Market Risk](index=38&type=section&id=Market%20Risk) Market risk encompasses potential losses from adverse changes in market prices and interest rates, affecting future income and financial instrument fair values - Market risk refers to the risk of loss from adverse changes in market prices and interest rates, which can impact the Company's future income, cash flows, and fair values of financial instruments[181](index=181&type=chunk) [Interest Rate Risk](index=38&type=section&id=Interest%20Rate%20Risk) This section quantifies the company's exposure to interest rate risk, detailing the portion of debt subject to variable rates and the impact of hypothetical rate changes - As of March 31, 2022, approximately **$1.2 billion** of the Company's **$6.0 billion** total debt was subject to variable interest rates[182](index=182&type=chunk) - A hypothetical **100 basis point increase or decrease** in LIBOR would increase or decrease future earnings and cash flows by approximately **$11.8 million** annually[182](index=182&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section addresses the effectiveness of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [(1) Disclosure Controls and Procedures](index=39&type=section&id=(1)%20Disclosure%20Controls%20and%20Procedures) The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2022[187](index=187&type=chunk) [(2) Changes in internal control over financial reporting](index=39&type=section&id=(2)%20Changes%20in%20internal%20control%20over%20financial%20reporting) There were no material changes in internal control over financial reporting during the most recent quarter - There were no changes in internal control over financial reporting during the most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[188](index=188&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=40&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section discloses the company's involvement in various legal proceedings and claims arising in the ordinary course of business, noting the inherent unpredictability of litigation outcomes - The Company is involved in various legal proceedings and claims in the ordinary course of business, with outcomes that cannot be determined with certainty[190](index=190&type=chunk) - Management establishes an accrued liability for litigation when loss contingencies are probable and reasonably estimable, but there may be exposure to losses in excess of accrued amounts[190](index=190&type=chunk) [ITEM 1A. RISK FACTORS](index=40&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers readers to the comprehensive discussion of risk factors in the company's most recent Annual Report on Form 10-K, stating that no material changes have occurred since that filing - Readers should carefully consider the risk factors discussed in 'Part I. Item 1A. Risk Factors' in the Annual Report on Form 10-K for the year ended December 31, 2021[191](index=191&type=chunk) - There have been no material changes to the risk factors described in the Annual Report on Form 10-K[191](index=191&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=40&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section reports on the issuance of common stock in an unregistered sale for the acquisition of properties - On January 7, 2022, the Company issued **186,766 shares** of common stock, valued at **$40,965 thousand**, in a private placement to acquire two stores[192](index=192&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=40&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states that there were no defaults upon senior securities - None[193](index=193&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=40&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section indicates that mine safety disclosures are not applicable to the company - Not Applicable[194](index=194&type=chunk) [ITEM 5. OTHER INFORMATION](index=40&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section states that there is no other information to report - None[195](index=195&type=chunk) [ITEM 6. EXHIBITS](index=41&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed as part of the Form 10-Q, including various indentures, certifications, and XBRL formatted financial data - Exhibits include indentures related to senior notes (4.1, 4.2, 4.3, 4.4), certifications of the Chief Executive Officer and Chief Financial Officer (31.1, 31.2, 32.1), and XBRL formatted financial statements (101, 104)[197](index=197&type=chunk)[198](index=198&type=chunk) [SIGNATURES](index=42&type=section&id=SIGNATURES) This section contains the official signatures of the company's authorized officers, certifying the accuracy and completeness of the report [Report Signatures](index=42&type=section&id=Report%20Signatures) This section contains the required signatures of the registrant's authorized officers, certifying the filing of the report - The report is duly signed on behalf of Extra Space Storage Inc. by Joseph D. Margolis, Chief Executive Officer, and P. Scott Stubbs, Executive Vice President and Chief Financial Officer, on May 6, 2022[200](index=200&type=chunk)

Extra Space Storage Inc. (NYSE:EXR) Q1 2022 Earnings Conference Call May 4, 2022 1:00 PM ET Company Participants Jeff Norman - Senior Vice President of Capital Markets and Investor Relations Joseph Margolis - Chief Executive Officer Scott Stubbs - Executive Vice President and Chief Financial Officer Conference Call Participants Jeffrey Spector - Bank of America Merrill Lynch Michael Goldsmith - UBS Juan Sanabria - BMO Capital Markets Todd Thomas - KeyBanc Capital Markets Inc. Samir Khanal - Evercore ISI Kee ...

Life Storage, Inc. (LSI) Q4 2021 Earnings Conference Call February 25, 2022 9:00 AM ET Company Participants Alex Gress - Vice President Joseph Saffire - Chief Executive Officer Andrew Gregoire - Chief Financial Officer Conference Call Participants Todd Thomas - KeyBanc Elvis Rodriguez - Bank of America Samir Khanal - Evercore Juan Sanabria - BMO Capital Markets Smedes Rose - Citi Keegan Carl - Berenberg Capital Markets Mike Mueller - JPMoran Kevin Stein - Stifel Operator Good day, ladies and gentlemen and w ...

September 2021 Investor Presentation (■) Life Storage 2 availability of debt and equity which could have a negative impact on our capital and growth plans; the Company's ability to evaluate, finance and integrate acquired self-storage facilities into the Company's existing business and operations; the Company's ability to effectively compete in the industry in which it does business; and other such factors as set forth in the Company's 10-K for the year ended December 31, 2020 as filed with the Securities a ...

Life Storage, Inc. (LSI) Q3 2021 Earnings Conference Call November 3, 2021 9:00 AM ET Company Participants David Dodman - Senior Vice President, Investor Relations and Strategic Planning Joseph Saffire - Chief Executive Officer Andrew Gregoire - Chief Financial Officer Conference Call Participants Juan Sanabria - BMO Todd Thomas - KeyBanc Elvis Rodriguez - Bank of America Samir Khanal - Evercore ISI David Balaguer - Green Street Operator Good day, ladies and gentlemen and welcome to the Life Storage Third Q ...